Digital Industries - The Vision and the Reality A status ...€¦ · of Ownership (TCO) New Service...

“We Accelerate Growth” 1

Digital Industries - The Vision and the Reality

A status check on the evolving opportunities for manufacturing

“We Accelerate Growth”

Digital

Industries 1

Connected

Supply Chain 2

3 Industry Use

Cases

4 Future Impact &

Key findings

The Vision The Reality


*Source: DFKI (2011)

3

Services 2.0 Supply Chain Disruptions Industry Convergence:

IT-OT

The Industry 4.0 Business

Ecosystem

Convergence disrupts,

collapses and transforms

markets and industry

structures.

Selling performance

as against products.

Product-as-a-service

models emerge.

Digital tapestry re-shapes

value-chain networks

paradigm and drive

responsive performance.

Power of Two: Building

strategic partnership

ecosystems is vital to

sustenance

Digital Transformation of Industries Industry 4.0 is not a market in itself but will be the basis for novel business approaches across all vertical markets

IT-OT = Information Technology-operational Technology; ICT = Information and communication Technology

The functional facets of Industry 4.0 will influence the design and conception of new technologies and

business models of future industrial ecosystem


Convergence IT-OT: New Growth Markets and Revenue-making Opportunities

OT INDUSTRIAL

CONSUMER

BUSINESS

SUPPLY-CHAIN

IT

APPLICATIONS

ANALYTICS

INFRASTRUCTURE

BIG DATA

CLOUD

IIoT SOLUTIONS


Companies are increasingly adopting the operational asset service provider model, however, the penetration remains low

Service Model Transition

REACTIVE SERVICES PREDICTIVE AND PREVENTIVE SERVICES

Hardware-Based Business Model Operational Asset Services Model

Reactive Maintenance

Episodic data gathering

Performance Data Lag

Personnel Errors

Expensive 3rd Party Technical Support

Data Exfiltration

On-site Monitoring and Maintenance

Preventive and Predictive Maintenance

Periodic/interval-based data gathering

Complete Historical Data Log

Automated and Updated

Immediate Technical Support

Data Security

Remote Monitoring and Maintenance

Source: Frost & Sullivan Analysis


It’s easy to measure, easy to quantify, and also it’s easy to

implement, so it’s a system. But the problem is that there are

different software companies, different hardware makers, and it’s

very difficult to implement

-- A leading Automotive Service Provider

Industry 4.0/IIoT and the End-user: The Pulse that Matters End-users show reticence to adopt Industry 4.0 over Return-on-Investment

Reduced Total Cost of Ownership (TCO)

New Service Models

Agile Supply Chains Mass

Personalization

Sustainable Production

Modularization

Industry 4.0/IIoT: End-user Expectations Industry 4.0/IIoT: End-user Apprehensions

Value and ROI The Lack of

Standardization

Risk of Cyber Threats

Legacy Systems Integration

“Industry 4.0 means to save money by reducing wastage,

reducing time and making the system more efficient“

- A leading CPG manufacturer


Digital

Industries 1

Connected

Supply Chain 2

3 Industry Use

Cases

4 Future Impact &

Key findings



Source: Frost & Sullivan Key: CAGR: Compounded Annual Growth Rate; MRO: Maintenance, Repair, and Operations

Connected Supply Chain – An Introduction Industry 4.0 will convert manufacturing supply chain from a cost centre to a competitive differentiator, stimulating new business

models centred around its efficient utilisation.

The high penetration of smartphones (5 years CAGR of

14.7%) enables personnel across the supply chain a cost-

effective means to monitor key metrics and streamline MRO

related activities.

The influx of Big Data across the supply chain, in particular

unstructured data, has resulted in key value chain

participants looking for state-of-the-art analytical platforms to

convert raw data into actionable insights that improve the

overall operational efficiency.

In addition to the adoption of SCM software used to oversee

key supply chain operations, solution providers are targeting

niche areas such as workforce optimization and fleet

management (5 years CAGR of 20%–25%) to improve the

overall customer experience.

Anytime , Anywhere Access

Product Traceability

Demand Responsiveness

Beyond Traditional SCM

Platforms

01

02

04

05

Compliance with regulatory mandates across vertical

markets and geographies has paved the way for wide-scale

acceptance of track and trace solutions that allow key

stakeholders to authenticate product at various transit points

across the supply chain

The high growth of wireless sensors (5 years CAGR of

45%–50%), coupled with the breadth of applications using

cellular communication, has provided diverse value chain

participants a means to monitor their movable assets.

Embedded Intelligence 03

Key personnel/ Stakeholder/Value chain participant refers to

raw material vendors/ manufacturers/ distributors/warehouse

agents involved in the supply chain


Source: Frost & Sullivan

Connected Supply Chain – Key Benefits Industry 4.0 will strengthen manufacturing supply chain by transforming its current operational bottlenecks into core capabilities for

handling mass customisation demands.

MATERIAL SOURCING

Reduced Inventory cost with accurate

demand forecasting

Delivering right product at the

right time

PRODUCTION PLANNING

Improved ease of integration

with new software tools

and legacy enterprise systems

AI algorithms for accurate demand

planning, scheduling and

forecasting

SALES & OPERATIONAL

PLANNING

Enhanced transactional transparency

between operations,

business units and extended supply chain participants

Superior network response to

handle fluctuations in

supply demand patterns

SUPPLY CHAIN NETWORK

DESIGN

Simplified networks even in the presence of higher process

variables

Single unified platform to

consolidate data from multiple

systems

LOGISTICS PLANNING

Capacity optimization for plants, vehicles,

and other logistical

operations

Identifying best-fit transportation

modes; most cost-effective

routes

WORKFORCE MANAGEMENT

Optimized utilization of supply chain

resources

Work hour flexibility for

employees to work around

schedules and contracts

Proposed Benefits of Implementation

“We Accelerate Growth” 10

Product –as-a-service Manufacturers are increasingly looking for ways to offer product as a

service with value added fucntionality customised to the user‘s

requiements

The E-commerce Supply chain Manufacturers are swiftly expanding presence into online retailing of

parts, products and services to cater to a global customer base

which will evade multiple traditional supply chain functions

Open innovation and collaboration Collaboration amongst global product development and supply

chain managers will increase product realisation and improve time

to market for new products.

Cognitive software for future plant scalability Artificial algorithms will dominate internal plant supply chain leading

to a self driven in-house supply chain in the future.

Time based revenue models Commission-based and transaction time-based supply chain

models will redefine manufacturing revenue streams.

Highlights

1

2

3

4

5

Connected Supply Chain- New Business Models Industry 4.0 is enabling manufacturers to generate new revenue streams and improve operating costs of supply chain while

transitioning from a crowd supply model to demand customization model.


Digital

Industries 1

Connected

Supply Chain 2

3 Industry Use

Cases

4 Future Impact &

Key findings



Linking Industrial Robots with Jasper at ABB A robust IT infrastructure is imperative for the efficient management of production processes.

Sensors

Network

Real-time analysis

Predictive diagnostics

Data collection

Data storage

Technology Partners

Using IoT, ABB has materialized a platform for remote monitoring and predictive maintenance of its global base of industrial robots, hinting penetration into service

oriented business models in the future

On-site robots connected to ABB via Jasper Control Centre

Perform predictive maintenance and preempt downtime

Solution

Automated alerts to avert potential downtime

Real time relay of robot work status to identify malfunction

Unplanned downtime at customer site due to robot stoppage

Production loss until issue communicated to ABB

Reactive maintenance approach slowing industry response

Key Concern

Sources: Cisco Jasper and Frost & Sullivan


Mass Customization with 3D Technology at Honda Improve customized product delivery by leveraging 3D printing technology without compromising design and built quality for

enhanced customer satisfaction.

Traditional CNC product development cycle involved continuous manpower involvement, high safety

requirements and incurred heavy cost potentially threatening time to market

Honda Access manufactures customized accessories for Honda cars and two-wheelers inline with the consumers’ regional

preferences.

Accessories play a significant role in differentiating global sales and the number of accessories for any

Honda model range between two and three hundred items

CONTEXT

Partnering with the 3D printing solution provider Stratasys, Honda Access was able to shift from

traditional CNC production to efficient 3D technology.

Allows for rapid prototyping and functional testing with improved safety and quality of the overall product development process

Ability to create and verify critical fine details enables realization of ideas in a very short

time and cost-effective manner

Allows synchronization between the development cycle of vehicle and OEM accessories enhancing time-to-market

Source: Stratasys, Frost & Sullivan


A Smartwatch Solution at Robert Bosch Adopting proactive approach by executing maintenance activities through handheld devices thereby preventing production

downtime.

Machine stoppages occur due to feeder jams and other specific faults

Buzzers inform operators of problems, but this meant the

machine had already ceased working

Operator response time increases thereby resulting in increased wastage of time and money

A Typical Production Floor – How it Used to be?

Production line

Machine stops

Red Lights & Buzzers go off

PLC Apple iPhone Pebble Smart Watch

Installed on each assembly

line communicating with the central

server

iPhone connected to the

server and communicating

through messages (SMS)

Miniature watch compatible with iOS and Android

devices

For every 3 production days, one hour of downtime is eliminated. This is 122 hours of additional production per year.

Bosch is planning on additional multiple Smartwatches on the same line for more production efficiency.

Benefits of Mobility

Key Convergence of Technology

Robert Bosch’s

Anderson Plant

Source: Bosch, Frost & Sullivan

Detection of problems before its

occurrence

Receives SMS from the server and relays

message via Bluetooth to all Pebbles

Technical fixes the fault before the

line stops


Machine Tool Manufacturer Invests in Digital Infrastructure Data accessibility and plant visibility expedites decision-making process, maximizes asset utilization and promotes product

quality.

40 multiproduct manufacturing lines

Higher cost of labor than standard cost

Maintaining quality standards

Managing resources on shift basis

Higher operation cost

Lack of transparency on production and

scheduling

Real-Time Location System (RTLS)

Wi-Fi infrastructure and plant wide Ethernet

Greater visibility for immediate action

10% increase in production throughput

Inventory cost reduced by 10% Reduce repetitive activities with better ergonomics

Digital transformation…

Key Benefits Achieved…

Increase in OEE*

24% Enhance labor utilization

92% 16% Reduce DPMO**

Technology Partners

Leve

ragi

ng

IIO

T…

Key Challenges

Efficiently manage massive scale of production and reduce manufacturing complexity at the Mexico plant through connected factory

Source: Cisco and Frost & Sullivan *OEE - Overall Equipment Effectiveness, **DPMO – Defects per million opportunities

Cisco and Stanley Black & Decker Partnership


Edge Analytics for Industrial Application Leveraging analytical tools for better data interpretation and facilitate effective decisions with no delay.

Honeywell RTU2020

IBM Statistical Analysis

Niagara Analytics Framework

Limited bandwidth

Higher cost of transmitting data

Intermittent connectivity

Challenges

Results

23%

21%

96%

Defects and re-work

Scrap rate

First pass yield

Proactive monitoring with enhanced traceability

Identify process deviations

Data visualization

Models to manage bands

• Access to critical variables - gas flow, voltage, and temperature

• Eliminate manual efforts to collect data

• Smooth plant operations with the accessibility to make adjustments to processes incase of deviations

• Data models to control tolerance bands • Eliminates the scope for errors, defects

and re-work

Source: Honeywell and Frost & Sullivan

Honeywell IIOT solution in collaboration with IBM and Niagara for the industrial market


Managing connected complex devices

from fleet around the world

Real-time video streaming without

compromising information security

Efficient and automatic switching

between data plans while crossing

countries.

KEY CHALLENGES

Camera

Network

Real-time analysis

Video Capture

Data storage

IoT is believed to be the right platform to provide value added services and aid swift

growth

Technology Partners

SOLUTION

RAAMS – Remote Automated Asset Management System Sources: Microsoft and Frost & Sullivan

Cisco Jasper Control

Centre enables

Intelligent Telematics to

securely connect and

control their global

fleet.

Improving Fleet Safety in Supply Chain Using Cisco Jasper Control centre, Intelligent telematics is able to monitor vehicle behaviour in real time as high

definition video in order to prevent accidents and cut vehicle insurance cost

“IoT plays a critical role in keeping costs down. If a third party takes hold of a claim, costs spiral

out of control,” --Head of International Business and Strategic Development at Intelligent

Telematics.

1. High quality video is captured

by in-vehicle cameras in

response to trigger events such

as collisions, near misses, rapid

acceleration and hard braking.

2. Cellular connectivity over a

secure 3G network to instantly

alert customers and upload

footage, enabling them to take

action quickly.


Ericsson’s technology has allowed Maersk’s fleet of

cold containers’ to transmit vital statistics via satellite,

such as temperature, location and power supply. This

information is loaded onto the cloud and analyzed in the

central office.

Source: IBM and Frost & Sullivan

Bringing visibility in Maersk’s logistics infrastructure to enable real time

tracking of containers in transit.

In 2012 Maersk teamed up with Ericsson to install real-

time monitoring system across its fleet with Ericsson’s

mobile and satellite communication technology

Increased safety for port staff, as containers now require less manual inspection

Using the data made available through RCM for constantly analyzing the running condition, expensive pre trip inspection of containers are eliminated

60 % of containers undergo only visual inspection after a trip reducing costs, improving turn times, better resource utilization and reduced CO2 emissions.”

OPPORTUNITY

The Remote Container Management (RCM) system relies

on three components: a GPS unit to track the ship’s

location, a 3G SIM card capable of operating at high

temperatures, and a GSM antenna to transmit the

required data.

Cloud Storage

Container

data

Data is

Analyzed at

Maersk Central

Office

Fleet condition

status for next

assignment

Real- Time Fleet Monitoring for Maersk Maersk and Ericsson collaborate to track information about vessel operation, fuel consumption and electric conditions and content

monitoring


Improving spare part inventory management for out-of-production aircraft for faster service delivery

60Hz

Longer lead time for spare

part production

Finding spare parts for out

of production aircrafts

High levels of dead stock

Limited communication

between spare part

management and service

engineers

KE

Y C

HA

LL

EN

GE

S

$100 million of cost savings against inventory

Average request response time has been reduced from four hours to five minutes.

Creating new revenue streams by selling “dead” inventory

BENEFITS

The manufacturer’s data

team brought together 15

data sources comprised

of both structured and

semi-structured data

sources.

Data sources included

email communications

between the aircraft

manufacturers and airline

engineers, part catalog

description, maintenance log

information, and specialized

part sources (including third-

party spare part suppliers).

1. Using similarity analysis

parts which require repair or

replacement are anticipated

with respect to inventory

levels.

2. Issues with stock parts are

also identified from previous

communications from airline

operators..

1 2

Source: Mesh Systems & Frost & Sullivan

Spare Parts Lookup in Aircraft Manufacturing Aircraft manufacturer anticipates which spare part would fail before an issue is communicated, leading to better inventory planning,

supply chain decision making and reduction in operating costs.

3

1. The system employs an API to

connect an intelligence platform to

the aircraft manufacturer’s user

interface (UI).

2. When a query is made, the

application makes calls against API

and shows the query results in a text-

based form.

4


Additional Use-cases: Energy Industry and Pumps Market

+

Pro

duct/S

erv

ice

Go to Market Strategy

Digital Services

Services

ENERNOC’s

Product Line

TESLA’s Product

Line

Combined

Benefits

Offering Energy Intelligence

Software

Energy Storage

+

Energy Management Powerwall

Energy Efficiency

Wholesale

Procurement +

Demand Response

Emergency

Backup

Avoiding Peak Pay

Rates Energy

Management as a

Service

Informed Decision

Making

Business Model Example I:

Energy Storage + Energy Management Software

Business Model Example II:

Pumps + Sensors + Predictive Analytics

+ +

Pro

duct/S

erv

ice

Go to Market Strategy

Digital Services

Services

FLOWSERVE’s

Product Line

HP + Spark

Cognition

Combined

Benefits

Offering Pumps – Point

Solutions

Alternate

monetization:

~10x more

opportunity over

the pump’s

lifecycle

HP EDGE Line

servers

Spark’s algorithms

Spare parts,

Maintenance

Operational

efficiency,

Predictive

Maintenance

strategy

Machine Learning,

Reliable data,

pattern recognition

Predicting failure

with minimum false

calls

XaaS platform +

add-on options

Lifecycle services,

Pump optimization


Additional Use-cases: Efficiency-as-a-service

Cellular Data

3rd Party monitoring

Customer site Customer site

Insights

Business Model Example IV:

Sensors + Steam Traps + Communications + Analytics


Digital

Industries 1

Connected

Supply Chain 2

3 Industry Use

Cases

4 Future Impact &

Key findings




Connected Supply Chain- Enabling New Market Opportunities Industry 4.0 will have the biggest impact in the way supply chain network services are designed, conceived and executed in

manufacturing.

Smart Products

Control-on-the-go

Track and Trace

Advanced SCM

Big Data and Analytics

Advanced Logistics

Market Drivers Emerging Applications

Sensor penetration, wireless intelligence, remote

assets, and communication

Cargo tracking, tank monitoring, and energy

monitoring

Smartphone penetration and costs associated

with service-related downtime

Supply chain KPI monitoring, field service

maintenance, and operator training

Product authentication, custody transfer

validation and vertical market regulatory

mandates

Product traceability and recipe management

Intricate supply chain operations and

requirements for enterprise-wide operational

visibility

Workforce management, supplier performance

management, and risk management

Multiple process variables, diverse data

structures, and analysis of KPI’s

Consumer insights and remote asset

management

Cost and time associated with transport and

freight optimization

Fleet management and decision support systems


Emergence of Subscription-based Business Models

SaaS Multi-year SaaS

Enterprise SaaS

Perpetual License

Outcome-based

Services

Gain-share

Services

Zero-cost Licensing

Model

Existing Business Models Emerging Business Models

Low-risk, low-returns Moderate to high-risk, high-returns

Seat license based Usage-based, asset-based, performance-

based, etc.


Key Takeaways

Industry 4.0 will generate multiple growth opportunities across vital supply chain activities by seamlessly interlinking manufacturing, logistics, retail and service sectors.

Algorithm based regional demand and shipment forecasts will aid manufacturers in deploying resources and last mile support.

Supply chain innovations in manufacturing will be driven by the conceptual culmination of connectivity, cloud platforms, data analytics and industrial mobility.

Collating and analyzing unrelated data blocks in the supply chain will leverage industrial cloud platforms to enhance internal and external operational strategies.

Industry 4.0: Insights for the Future


While mission-critical data such as safety, financial, and operational ones still have stringent data ownership with manufacturers, non-critical data is progressively being farmed out to supply chain solution providers.


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Digital Industries - The Vision and the Reality A status ...€¦ · of Ownership (TCO) New Service...

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