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HfSBlueprintGuide:Industry4.0Services1

HfSBlueprintGuide:Industry4.0ServicesExcerptforAccentureApril2017|Author: PareekhJain,ResearchSeniorVP,EngineeringServices;andTanmoyMondal,KnowledgeAnalyst,HfSResearch

WhatYouNeedtoKnowAboutIndustry4.0

Inthe last fewcenturies, theworldhasexperiencedthree industrial revolutionsthathaveshapedourindustrialprocesses.Inthefirstindustrialrevolution,labor-centricproductionprocessesweremechanizedthroughtheuseofwaterandsteampower.Thesecondwasdrivenbymovingassemblylinesandmassproductiondrivenbyelectricity.Thethirdwasdrivenbyelectronicsandtheapplicationofinformationtechnology and increased automated production. The fourth revolution sees technology embed itselffurther insocietywithdigitaltechnologicaladvancesconnectingallthemajorstakeholders inthecoremanufacturingactivities.

Industry4.0isacombinedintegratedseamlessconnectednetworkofmachines,productionprocesses,andthemanufacturingcontrolsystems.Itisadigitalmanufacturingenterprisewiththephysicalproductat the core driven by information from an integrated information network among the internalstakeholders,aswellasexternalentities,suchascustomers,suppliers,etc.Thisdigitizationofphysicalassets andmanufacturing activities alongwith a network of digital communications is fundamentallychanging the manufacturing industry landscape. This end-to-end digitization is improving processefficiency, quality management, and productivity along with real-time insights into the wholemanufacturinglandscape,buildingadigitalbusinessmodelthatsupportsdata-drivendecision-makingandintegratedplatform-basedservices.

The use cases of Industry 4.0 include supply chain, marketing, and services, R&D of manufacturingengineeringservices,andotherareas,butmostoftheopportunitiesandinteresttodayareinthecoremanufacturingactivities.Therefore,thisreportfocusesspecificallyonmanufacturers’shopflooractivities.



Industry4.0Framework:TheDigitalOneManufacturingOrganization

Digital OneManufacturing is the abxility to do mass customization at scale so that manufacturingenterprises manufacture for one customer economically and efficiently. This is possible whenmanufacturing enterprises achieve a significant increase in cost efficiency, time productivity, andflexibility,byaligningandintegratingtheirmanufacturingprocessesandtechnologylandscape,whichisthevisionofIndustry4.0.

Exhibit1:DigitalOneManufacturingFramework

Source:HfSResearch,2017

Industry4.0isallaboutsmartermanufacturing—theuseoftechnologysothesub-processeswithinthemanufacturing system make adaptive and predictive decisions. We developed our DigitalOneManufacturing framework that defines the DNA of digital connected plants that includes anintelligent,automatedcentralizedcontrolsystemwithasminimalhumaninterventionaspossible.



Thisframeworkincludesthreepillars:thedigitalunderbelly(technologiesinvolvedinIndustry4.0),scope(areasinwhichdigitalprocesseswillbeeffective),andintelligentdigitalprocesses(manufacturingprocessenablementareas).DigitalOneManufacturingrepresentsanintegratedmanufacturingoperationcenterthathasdigitalprowessforamanufacturertomeetfuturemanufacturingcomplexities.

In brief, Digital OneManufacturing is the platform onwhich digital technologiesmeetmanufacturingengineeringtechnologiesandcontrolsamanufacturinglandscapeinrealtimetoserveclients.It’swherealltheprocesselementsarecombined:Connectivity,theprocesses,andtheintelligencecometogetherasoneintegratedunit,withonesetofunifiedbusinessoutcomestiedtomanufacturingorganizations.

ThethreepillarsofDigitalOneManufacturingaredescribedbelow.

DigitalUnderbelly:Weidentified13majortechnologiesthatareshapingIndustry4.0.ThesetechnologiesincludeManufacturingDataAnalytics,Robots,ManufacturingAutomation,DigitalCloneorSimulation,Three-Dimensional (3D) Printing, Manufacturing Internet of Things (IoT), Plant Cybersecurity,ManufacturingonCloud,VirtualRealityinManufacturing,AugmentedRealityinManufacturing,ArtificialIntelligenceinManufacturing,VisualAnalyticsinManufacturing,andSmallBatchManufacturing.

Weusedthefollowingdefinitionsforthesetechnologies:

» Manufacturing Data Analytics: The systematic analysis of production and shop floor data tooptimizemanufacturingoperations.

» Robots:Machines thatcanautomaticallycarryoutgroupsofcomplicatedactionsandthatcancollaboratewithhumans.

» ManufacturingAutomation:Implementationofcontrolsystemstoenableshopfloorprocessestoworkwithminimalornohuman intervention.This includes integrationofdisparateenterprisesystemsusedinmanufacturingforseamlessdataandinformationflow.

» DigitalCloneor Simulation: Implementationof a virtualmanufacturingenvironment, inwhichoperations are configured, tested, and optimized by creating a digital clone of the actualproductionline.

» 3DPrinting:Additivemanufacturing isusedforprototypes,spares,actualparts,andultimatelyentireproducts.



» Manufacturing IoT: The Internet of Things (IoT) is a network in which physical devicescommunicate and pass on data. The Manufacturing IoT exploits sensor data collected frommachinesonthemanufacturingshopfloor.

» Plant Cybersecurity: Security management of information technology (IT) and operationtechnology(OT)inmanufacturingandplantoperations.

» ManufacturingonCloud:ImplementationofmanufacturingandproductionsystemsonSaaS-andIaaS-basedcloudplatforms.

» AugmentedRealityinManufacturing:Theaugmentationofareal-worldviewofmanufacturingoperations,assets,andpeoplewithadditionalcomputer-generatedpictures.Inmanufacturingandplantoperations,augmentedrealitycanbeusedtohelpthedevelopmentprocessbyvisualizingaproduct in situ before conception or in a factory setting by showing an engineer additionalinformation, such as thermal characteristics or schematics, while the engineer views the realobject.

» VirtualRealityinManufacturing:Theuseofsoftwaretocreateimagesandsoundsforimaginaryorlifelikemanufacturingplantsorfactories.Virtualrealityinmanufacturingandplantoperationsis used for many applications, including plant construction, plant maintenance, and operatortraining.

» Artificial Intelligence inManufacturing: In this context, artificial intelligence refers towhen acomputer is used to mimic human cognitive functions, such as complex problem solving andlearning.Useofartificial intelligence,machine learning inmanufacturing,andplantoperationsincludessettingtheparametersfortheplantoperationsandrecognizingimagesandvisualsusingmachinelearning.

» VisualAnalytics inManufacturing: The scienceand technologyof analyzing visual informationfrompicturesandvideostoaidreasoninganddecisionmaking.Useofimageanalyticswithinthemanufacturing sphere includesmachine vision and video analytics inmanufacturing and plantoperations.

» SmallBatchManufacturing:Implementingsolutionsthatenablemanufacturerstocost-effectivelymanufactureinsmallquantities.

Scope:TheseIndustry4.0technologiescanbeimplementedonthemanufacturingshopflooratfivelevels:smartcomponent,smartmachine,digitalfactory,connectedfactories,andIndustry4.0enterprise.



» Level 1 - Smart Component: A smart component is one that responds to feedback based onsensoryinformationandmakespredictiveoradaptivedecisions.Machinecomponentsaremadesmart,productive,andefficientby implementing technologiesat thecomponentorsubsystemlevel.

» Level2 -SmartMachine:Asmartmachine isacombinationof several smartcomponentsandexhibitsthesameautonomousfeaturesasasmartcomponent.Asmartmachinecancontrolitsoperationandmakepredictiveoradaptivedecisionsbyrespondingtofeedbackbasedonsensoryinformation.Machinesaremadesmart,productive,andefficientbyimplementingtechnologiesatthemachineandsystemlevels.

» Level3-DigitalFactory:Adigitalfactoryisacombinationofvarioussmartmachinesintheplantandexhibitsthesameautonomousfeaturesasasmartcomponentorasmartmachine.Thewholeplantismadesmart,productive,andefficientbyimplementingtechnologiesattheplantorfactorylevel.Inadigitalfactory,machinesandproductionsystemsaresmartindividuallyandcollectively.

» Level4-ConnectedFactories:Connectedfactoriesarecombinationofvariousdigitalfactoriesthatmaybespreadacrosscountriesorregions.Theseconnectedfactoriescanbemanagedthroughcentralizedconnecteddigitalplantsoperationsrangingfromproductdesigntomanufacturingandon-premiselogisticsmanagement.

» Level5-Industry4.0Enterprise:AnIndustry4.0enterpriseintegratesitsconnectedfactorieswithotherstakeholders,suchassuppliers,customers,productdesigners,andservicepersonnel.Inthisway,anIndustry4.0enterprisecanalignmanufacturingprocesseswithotherbusinessprocesses,suchassupplychain,procurement,productdevelopment,customerrelations,andaftermarketservices.

IntelligentDigitalProcesses:Theseprocessesenablesmarterandmore intelligentmanufacturing.Wehave conceptualized three functions that are enabled by digital manufacturing processes: analysis,visualization,andcontrol.

» Analysis:Theabilitytogenerateandanalyzeshopfloordataanduseittomanage,improve,andoptimizemanufacturingprocesses,efficiency,productivity,quality,andflexibility.Theabilitytopredictmanufacturingeventsandprescribethebestcourseofactionfortheabove.

» Visualization:Theabilitytosimulateandvisualizeprototypes,machines,productionlines,plants,andfinishedproducts.Simulationcanbedonepre-orpost-production,andvisualizationcanbe



doneinrealtime.Thiscanhelpinplanning,improving,andoptimizingproductionlines,andthus,inimprovingtheproductqualityandmakingtheproductionflexible.

» Control:Theabilitytocontrolanddriveproductionandshopflooractivitiesinrealtimewiththeuse of data, analysis, artificial intelligence, visualization, and control functions with minimumhumanintervention.

LeversofIndustry4.0

In our Digital OneManufacturing framework, we defined the components (the digital underbelly andintelligentdigitalprocesses)requiredforamanufacturingenterprise’sIndustry4.0journey.Howdoesthedigital underbelly aid intelligent digital processes in an enterprise? The links between the digitalunderbellyandintelligentdigitalprocessesarethefollowingcapabilitiesorlevers:

» Cyber-PhysicalSystem:Industry4.0connectsallthemanufacturingcomponentsandecosystems,including processes, sub-systems,machines, customers, supplier networks, etc. Because everyphysical system has a digital existence in Industry 4.0, all themanufacturing activities can becontrolledthroughasoftwareinterface.Thisinterfacegivesabetterviewoftheentiresystem,providesinterconnecteddatatomoreclearlyseesysteminterdependencies,helpsstreamlinethemanufacturingactivities,andincreasesthemachineuptime.

» Smart Machines: The application of smarter control mechanisms to robots and artificialintelligence(AI)-enabledmachineswilldifferentiateIndustry4.0manufacturing.Todate,robotshavebeen restricted to repeatable step-based taskswithoutautonomyor self-controlorhavebeendeployedinarestrictedscopeandnotonthemainassemblyline.Industry4.0smartrobotswillworkhand-in-handwithhumansusinghuman–machineinterfaces.Inaddition,machineswillbe connected to the cloud with automated decision-making loops. These machines willcommunicate in real time with a central IT system and can be controlled accordingly. Thisapplicationwillimproveproductivityandmonitorassetseasily.

» DataFlow:Industry4.0willgeneratelargeamountsofreal-timedata.Partofthenewchallengeistostoreandprocessthedataeffectivelytomakereal-timedecisions.Enterpriseshavetoidentifywhatdataneeds immediateprocessingandwhatdataneeds tobeuploaded to thecloudandprocessedforfurtheranalysis.Becausewholeenterprisescannotbetakenintothecloud,tomakedecisionsinrealtimeandeffectivelycontrolthisdataflow,manufacturersneedtodeployedgeanalytics.



» MassCustomization:Asmachines’decision-makingcapabilitiesbecomemoresophisticated,themachineswillbeabletorespondautomaticallyinaproductionstepandwillbeabletoadjustfordifferentdesignparameters.Todate,3Dprintinghasbeenusedtodevelopprototypes,butwiththeadoptionofincreasinglyintelligentmachines,morecustomdesignswillbepossible,makingmasscustomizationanoptionformanufacturers.

» Virtual Manufacturing: Through digital simulation, any product or plant design will beconceptualizedinavirtualenvironment.Aftertheinitialdesignchange,theproductorplantcanbe tested and verified. In addition, advanced visualization techniques, such as virtual andaugmented reality, help develop precise digital clones. Therefore,when the physicalmodel isestablishedbasedonthevirtualdesign,thescopeoferrororfailureislow,savingalotofmoneyandtime.

» LeanManufacturingandResourceManagement:Industry4.0dataanalysisexaminestheentiremanufacturingprocesschainofactivitiesindetailandcanbeusedtoidentifyareasforadditionalautomation,qualityimprovement,andotherimportantfactorsatthesub-processlevel.ThiswillmakebetterresourcemanagementpossiblethroughIndustry4.0alongwithleanmanufacturingasidentifyingtheassethealthatthecomponentlevelhelpswithwastemanagement.

ThelinkoftheseIndustry4.0leverstothedigitalunderbellyandintelligentdigitalprocessesisshowninExhibit2.

Exhibit2:DigitalUnderbellyLinkwithIntelligentDigitalProcessesbyIndustry4.0Levers

Analysis Visualization Control

DataFlow SmartMachines

LeanManufacturing

VirtualManufacturing

Cyber-PhysicalSystem

MassCustomization

ManufacturingDataAnalytics

Robots ManufacturingAutomation

DigitalCloneorSimulation



3DPrinting ManufacturingIoT

PlantCybersecurity

ManufacturingonCloud

VirtualRealityinManufacturing

AugmentedRealityinManufacturing

AIinManufacturing

VisualAnalyticsinManufacturing

SmallBatchManufacturing


Industry4.0TransformationJourney

In our Digital OneManufacturing framework, we mentioned the scope of Industry 4.0. It is atransformation journey toconnect thewholeenterprisewithdigitizedmanufacturingoperations forgreaterautonomyandflexibility.ThetransformationjourneyisconceptualizedinExhibit3.



Exhibit3:Industry4.0TransformationJourney

TheIndustry4.0Journey


AdvantagesofIndustry4.0

InourDigitalOneManufacturingframework,wementionedtheintelligentdigitalprocessesofIndustry4.0.Duringourinteractionswithmanufacturingorganizationsandcasestudiesofserviceproviders,weidentified business outcomes influenced by these intelligent digital processes. Exhibit 4 shows thebusinessoutcomemappingwiththeintelligentdigitalprocessesforIndustry4.0implementationandthefundamentalbusinessimpactofeachprocess.

Exhibit4:IntelligentDigitalProcessesMappingwithBusinessOutcomesandFundamentalBusinessImpact

IntelligentDigitalProcesses

BusinessOutcomesFundamentalBusinessImpact

Cost Time Quality

Analysis

Operationalimprovementinmanufacturingprocesses

SavingsinOPEXthroughenhancedforecastingandpredictiveanalytics



Identificationofbottlenecksandoptimizationofworkload

Increasedoperatorefficiency

Increasedenergyefficiency

Improvedmaterialhandlingthroughreducederrorandwastemanagement

Visualization

Optimizationthroughsimulationofplantdesign,productprototyping,andproduction

Operatorstrainedinthevirtualenvironment

ImprovedassetmaintenancethroughARenvironment

Improvementinproducttesting

Increasedoperatorsafety

Control

Plantmanagementfromremotelocations

Higherproductqualityandcompliancemanagement

Harmonizationandconsolidationofmanufacturingprocessesacrossplants

Enhancedsecurityofoperations

Implementationofflexibleproduction,including3Dprinting,smallbatchmanufacturing,etc.

Increasedmachineandplantreliability

Reducedtimetomanufacturefornewandexistingproducts




By combining these business outcomes and impacts, manufacturing organizations that implementIndustry 4.0 will benefit from significant competitive advantages. We identified the following list ofcompetitiveadvantagesamanufacturingfirmcanexpectfromtheimplementationofIndustry4.0:

» ManufacturingProcessOptimization:Industry4.0providesreal-timedataonphysicalassetsthatcanbeusedtomonitorandcontrolAI-enabledautomation.AIautomationprovidesself-learningand autonomy within parameters, with central control dictating tasks and priorities. A fullyintegrated and automated shop floor can be designed, in which all the machines in themanufacturingprocesscanbeconnectedwithautomateddecision-makingandadjustmentfacilitybasedonkeyperformanceindicators(KPIs).Themanufacturingplantthenadjuststheprocessestomaintainanoptimizedproductionthroughout.

» Streamlined Supply Chain: As manufacturing execution system (MES) applications becomeintegratedwithIndustry4.0,thesupplychaincanbealignedwithreal-timeproductiondata.Thisintegrationwill helpdevelopanautomated logistic ecosystem thatwill adapt automatically toproductionneeds.

» Improved InventoryManagement: In Industry 4.0, themachines are self-optimizedwith self-learning and decision-making capabilities. Thismeans themachines can sense unfinished andimperfect products and can flag the necessary stakeholders if a malfunction occurs in themanufacturingprocess.Thishelps inwastemanagementandenablestheprocesstorunattheminimuminventorylevel.

» BetterResourceManagement:ThroughManufacturing IoTsolutions, themachinedatacanbetrackedinminutedetail.Thistrackinghelpsidentifywhetherresourceshaveanyidletimeandtheactivitiesthatcanbeautomatedorhandledbytheroboticsystems,enhancingtheplanningandschedulingofmanufacturingactivities.Therefore,themanufacturingresourcescanbeoptimizedandmanagedbetter.

» End-User-CentricManufacturing:Themanufacturing industry isenteringamasscustomizationmodeinwhichsmallbatcheswillbemanufacturedwithfrequentchangesindesign.Industry4.0facilitates this trend with 3D printing and digital simulation, reducing the cost of developingprototypesandperformancechecksbeforebuildingphysicalmodels.Inaddition,manufacturerswill have the capability to develop an increasing number of versions and variations of theirproducts.



AboutThisBlueprintMarketGuide

TheIndustry4.0marketisanemergingarea,andmostserviceproviderspointedtoproof-of-concept(PoC)and very small project engagementswith clients rather than to any large-scale implementations. Theservicesmarketforthisnewtechnologyisstillevolvingandhasyettoenjoythebenefitsofscale.Throughconsulting-ledtechnologyprojects,serviceprovidersarehelpingmanufacturersstartontheirIndustry4.0journey.Academicinstitutionsandoriginalequipmentmanufacturers(OEMs)havegeneratedagreatdealofthoughtleadershipforIndustry4.0.However,duetotheactiveinvolvementofemergingtechnologies,gettingfromtheorytorealityrequiresadditionalskillsetstheserviceprovidersareabletoprovide.ThisisleadingtoanumberofcollaborationsbetweenserviceprovidersandOEMsandacademicinstitutions.

Atthispoint,manyoftheleadingplayersinthemanufacturingindustryarestartingtolearnfromandadoptIndustry4.0.Manufacturersstill inwatchmodemuststarttoinvestigatenowsotheyaren’tleftbehind.ThepurposeofthisBlueprintGuideistohelpmanufacturingfirmsthinkthroughtheimplicationsIndustry4.0willhaveinthenearfutureandtogiveapreliminaryoverviewoftheserviceprovidersweseeofferingIndustry4.0services.

Industry4.0ServicesValueChainAnalysis

ThisBlueprintGuideprovidesacapabilityanalysisoftheservicesofIndustry4.0serviceproviders.WefocusedthisanalysisexclusivelyontheIndustry4.0servicesvaluechainofR&D,Plan,Implement,andOperate across 13 technologies or the digital underbelly of Industry 4.0. The 13 technologies werepreviouslydescribed,andthevaluechainisdescribedinExhibit5.

Exhibit5:Industry4.0ServicesValueChain


R&D

� OEMProductR&D� OEMSolutionR&D� InternalR&D

Plan

� ITSystemsConsulting� TechnologyConsulting� BusinessConsulting

Implement

• ITImplementation• TechnologyImplementation• DigitalFactoryImplementation

Operate

� IToperation� BPOoperation� As-a-ServiceOperation



R&D:TheseengineeringandR&DprojectsareundertakenbyserviceproviderseitherforinternaltoolandplatformdevelopmentorforOEMstosupporttheirIndustry4.0solutions.TherearethreetypesofR&Dprojects:

» OEM Product R&D: R&D projects that include Industry 4.0–related product design anddevelopmentforOEMs’coreproducts.Forexample,severalmanufacturingindependentsoftwarevendors (ISVs) have started leveraging service providers in developing Industry 4.0–specificfunctionalities.

» OEMSolutionR&D:R&DprojectsthatincludejointsolutiondevelopmentwithOEMsforspecificIndustry4.0usecasesandbusinessoutcomes.OEMsleveragepartnershipswithserviceprovidersto extend the solutions reach, and service providers develop specific applications for OEMs’productsandplatforms.Forexample,GEandSiemensareengagingnumerousserviceproviderstodevelopappsonthefirms’platforms.

» InternalR&D:Industry4.0–relatedinternalproducts,tool,technologies,andintellectualproperty(IP) development projects by service providers that can help enterprises in their Industry 4.0journey.AlmostallserviceprovidersareengagedinIndustry4.0–relatedinternalR&Dwork.

Plan:TheseconsultingservicesareprovidedbyserviceproviderstomanufacturingenterprisestohelpthemplantheirIndustry4.0journey.Therearethreetypesofconsultingservices:

» ITSystemsConsulting:ProvidingITstrategyservicesthathelptorethinktheenterprise’soverallITarchitecture to implementanew Industry4.0 technologyandtohelppredictandovercomeintegrationchallenges.

» Technology Consulting: Advising clients on implementing or upgrading specificmanufacturingtechnologiestoachievethedesiredbusinessoutcome.Inaddition,developingamanufacturingtechnologyroadmapforclientsispartoftechnologyconsulting.

» Business Consulting: Formulating an Industry 4.0 transformation strategy and roadmap at theenterpriselevel,whichincludesbusinessplanning,wholesaleprocessimprovement,andchangemanagement.



Implement:TheseprojectexecutionengagementsincludeITimplementationworkandsingleandmulti-technologyimplementationwork.

» IT Implementation: Manufacturing IT implementation work that includes the IoT, analytics,automation,AI,andcloud-relatedengagements.

» TechnologyImplementation:Engineeringtechnologyimplementationworkthatincludesrobots,3Dprinting,augmentedreality,andvirtualreality–relatedengagements.

» DigitalFactoryImplementation:Transformationofthemanufacturingenvironmentattheplantor factory level through a combination of IT and multiple engineering technologiesimplementations.

Operate: These long-term annuity-based engagements help enterprises run their manufacturingoperationsintheIndustry4.0environment:

» ITOperation:ITsupportandmaintenanceforapplications,cloud,etc.,tohelprununinterruptedoperations.

» BPO Operation: Manufacturing specific business process operations and management forproductivitymanagementandperformanceimprovement.

» As-a-ServiceOperation:Intelligent,automatedservicesinwhichserviceprovidershaveincreasedresponsibility for the outcomes. This can be achieved by offering services on platforms thatleveragecollaborativepricingthatreducesriskandincreasesthevalueforcustomers.

TheCurrentStateoftheIndustry4.0ServicesLandscape

Wetalkedtothe12serviceprovidersthatparticipatedinthisstudyandanalyzedtheir500+customercasestudiestounderstandthecurrentstateoftheIndustry4.0serviceslandscape.WeanalyzedIndustry4.0servicesusecasesand Industry4.0services trendsacross technologies,geographies, services,andverticals.Theseinsightsarecriticalforallthreestakeholders:enterprises,OEMs,andIndustry4.0serviceproviders.

Ourresearchrevealedseveral interestingusecasesfor Industry4.0. InExhibit6,we list theusecasesundereachofthe13technologiesrelatedtoIndustry4.0.



Exhibit6:UseCasesforIndustry4.0Technologies

Technology UseCases

ManufacturingDataAnalytics • Businessanalyticsplatformtotrackproductiondataforoptimizingmanufacturingprocesses

• Predictivemaintenancemodelingbyanalyzingreal-timemachinedata

• Developingsmartmanufacturingusecasesforqualitymanagementfromassetdatamonitoring

Robots • Testingandvalidationofproductsthroughroboticinspections• Precisionmanufacturing,suchasdrilling,riveting,etc.,andother

criticalrequirementshandledbyrobots• In-houseautonomouslogisticsusingaroboticfleetthatcan

interactwithhumansandotherelements

ManufacturingAutomation • Regulatorycompliancemanagementthroughautomateddatacollection

• Automatedworkflowformanualdataentryandmachinecontrol• Acentralrepositoryofdataandimprovedreporting,drivingthe

standardizationofoperationperformanceandeasybenchmarking

DigitalCloneorSimulation • Improvedproductdesignandprocessimprovementthroughvirtualmodeling

• Simulationsoftwareforlessphysicaltestsandvalidationofmanufacturedproducts

• Performanceanalysisbysimulatingreal-lifescenariosthroughdigitalsimulations

3DPrinting • Reductioninthenumberofassembliesandweightreductionofcomponents

• Designinnovationthrough3Dprinting• Usageof3Dprintersinmanufacturingfollowsthelean

manufacturingprinciple

ManufacturingIoT • Remotemonitoringofmanufacturingassetsonabroadnumberofparametersrangingfromsmallfootprintembeddeddevicestolargedistributedcontrolsystems

• Improvedmachinedesignbasedontheextensivedatacollectedforcriticalmachineparameters

• Theshiftintheassetmaintenancesystem,i.e.,fromcalendar-basedmaintenancetocondition-basedmaintenance

PlantCybersecurity • Cybersecuritysolutiontoprotectplantsandtheinfrastructurethatincludesensors,communicationanddataplatforms,andsoftwareapplications

• Securitysolutiontocomplywithindustrystandards,andgovernance



ManufacturingonCloud • Centralizedserializationandgenealogysolutionfordifferentmanufacturingpartsofassemblylinesforfuturereference

• Digitalcollaborationamongdifferentplantsthroughacloud-basedhostingsolution

• Trackingandaccessingsensordataacrossthemanufacturingvaluechain


• Virtualreality–enabledengineeringplatformtodevelopnewproductsorvirtualfactorylayoutswithanimprovedandinteractivevisualaid

• Trainingoffactoryoperatorsandotherprofessionalsinareal-timeviewofactualsurroundingscombinedwithanoverlayofintelligentvirtualobjects


• ARassistedin-serviceproductperformancemonitoringandmaintenancesystemthatcanbeconnectedtoaremotesystemforinteractiveassistance

• AR-enabledgeo-fencingapplicationstoidentifythemateriallocationswheretherightmaterialisavailableforthemachineoroperation

AIinManufacturing • Cognitiveanalysisofmachinedataandtoidentifyprocessparametersresponsibleforplantproductivityandproductquality

• Derivinginsightsfromunstructureddataandfeedingthedatatotheproductdevelopmentstage

• Processoptimization,includingautomationthroughoperationaldataanalysis


• VisualAnalytics–basedsolutionforinspectingcomponentsanddetectingdefectsonashopfloor

• Visual-enabledinteractiveconsoleapplicationforimagesandexportresultsanalysis,toprovidereal-timemonitoringandalertfunctionalities

SmallBatchManufacturing • Planninganddevelopmentofprocessesthatenablesmall-batchmanufacturing

• Implementationofsmall-batchmanufacturingtechnologies


Weclassified the13 technologiesassociatedwith Industry4.0 into threecategories—GoodAdoption,BuildingCapabilities,andNicheAreas—basedon thenumberofcasestudies foreach technologyandvalidatedtheclassificationswithdiscussionswiththeserviceprovidersandbuyers.



The Good Adoption category includes three technologies that have beenmastered by almost all theserviceproviders.TheBuildingCapabilitiescategorycontainsfivetechnologiesthatarestillevolvingandthatthemajorityoftheserviceprovidershaveyettomaster.TheNicheAreasincludefivetechnologiesthat are provided by only a few service providers and can be a differentiating factor in Industry 4.0offeringstoday.Exhibit7showsthetechnologyclassificationbasedonthenumberofcasestudies,andExhibit8showsthepercentageofcasestudiesforeachtechnology.

Exhibit7:SegmentationofIndustry4.0Technologies


NicheAreas:AR,VR,

VisualAnalytics,PlantCybersecurity,


BuildingCapabilities:3DPrinting,Robots,AIinManufacturing,ManufacturingIoT,Manufacturingon

Cloud

GoodAdoption:ManufacturingDataAnalytics,DigitalCloneorSimulation,

ManufacturingAutomation



Exhibit8:DistributionofIndustry4.0EngagementsAcross13Technologies


InExhibit8,themostfrequentlyusedtechnologiesaremanufacturingdataanalyticsandmanufacturingautomation.Digitalcloneorsimulationisalsoincreasinglyusedforergonomicsstudy,plantoutletdesign,andotherpurposes.ThereisstronginterestintheManufacturingIoTamongserviceproviders,buttherearenotmanyshopfloorIoTcasestudies.3Dprintingisahottopicformaterialandcomponentresearch,prototypes, and spares, butwe found fewcase studiesof 3Dprinting inproduction lines.Robots areincreasinglyvisibleinmainproductionlinesandareworkingeffectivelyintandemwithoperators.Serviceproviders are offering cloud capabilities in manufacturing, but it has yet to gain popularity amongenterprises. As enterpriseswill requiremore automated intelligent decision-making capabilities, AI inmanufacturingwillevolveandcouldbeamajordifferentiatingfactorforserviceproviders.

Geography wise, North American manufacturing organizations are at the forefront of Industry 4.0adoptionfollowedbyEuropeanandAPACenterprisesasshowninExhibit9.

2%

3%

3%

4%

4%

5%

5%

6%

6%

11%

13%

19%

19%


PlantCybersecurity


VRinManufacturing

ARinManufacturing

AIinManufacturing

Robots


3DPrinting

ManufacturingIoT






Exhibit9:DistributionofIndustry4.0EngagementsAcrossGeographies


In Exhibit 9, the rest of theworld (ROW) primarily includes countries from Latin America. The early-adoptercountriesof Industry4.0aretheUnitedStates,theUnitedKingdom,Germany,France,Japan,Russia,China,India,Brazil,Australia,etc.ThenumberofgreenfieldIndustry4.0implementationsisverylow,andmostimplementationsoccurintheexistingmanufacturingplantlandscape.

Theautomotive,aerospace,andindustrialequipmentverticalsaretheleadingverticalsforIndustry4.0servicesasshowninExhibit10.

54% 31%

13% 2%

NorthAmerica Europe APAC ROW



Exhibit10:DistributionofIndustry4.0EngagementsAcrossVerticals


Intheautomotiveandaerospaceverticals,asignificantnumberofengagementswereprevalentamongtheautopartsandaerospacepartssuppliers.AlthoughatpresentIndustry4.0adoptionisonthelowersideinhigh-techandconsumerelectronicsdomain,weexpecttheadoptionratewillbehigherinthenearfuture.

InExhibit11,weshowtheadoptionrateofIndustry4.0technologiesbygeography.Clearly,NorthAmericaleadsthepackinall13technologiesfollowedbyEurope.ClientsinAPACandROWcountriesconstitutealargerpercentageinnicheareasinIndustry4.0.

2%

3%

5%

9%

10%

15%

16%

17%

21%

Others

Semiconductor&Telecom

Pharmaceutical&MedicalDevices

CPG&FoodProcessing

HiTech&ConsumerElectronics

Energy,Chemical&ProcessIndustries

Aerospace

IndustrialEquipment

Automotive



Exhibit11:Industry4.0TechnologyDistributionforIndustry4.0EngagementsAcrossGeographies


Exhibit12showsouranalysisoftheadoptionof Industry4.0technologiesacrossverticalmarkets.Foreachofthe13technologies,thetopthreeverticalswereidentified.Theautomotive,industrialequipment,andaerospaceindustrieshaveadoptedall13technologiesatvaryingpercentages.

40%

50%

50%

43%

44%

57%

33%

57%

64%

54%

50%

56%

64%

40%

25%

25%

29%

33%

29%

50%

30%

27%

8%

33%

33%

27%

20%

25%

25%

29%

22%

14%

17%

13%

9%

38%

17%

11%

9%

VRinManufacturing



Robots

PlantCybersecurity


ManufacturingIoT




ARinManufacturing

AIinManufacturing

3DPrinting

NorthAmerica Europe APAC&ROW



Exhibit12:Industry4.0TechnologyDistributionforIndustry4.0EngagementsAcrossIndustries


InExhibit13,weclassifiedtheIndustry4.0engagementsbyoverallengagementtypesuchasProofofConcepts(PoCs),singletechnologyengagements,andmulti-technologyimplementations.

27%

14%

25%

29%

27%

23%

19%

38%

31%

29%

25%

13%

14%

18%

32%

21%

23%

36%

25%

19%

36%

19%

13%

15%

22%

21%

18%

14%

15%

26%

22%

14%

25%

14%

11%

21%

24% 13%

11%

18%

43%

25%

44%

43%

18%

30%

36%

51%

28%

31%

44%

47%

VRinManufacturing



Robots

PlantCybersecurity


ManufacturingIoT




ARinManufacturing

AIinManufacturing

3DPrinting

Automotive IndustrialEquipment Aerospace

Energy,Chemical&ProcessIndustries HiTech&ConsumerElectronics CPG&FoodProcessing

Pharmaceutical&MedicalDevices Others



Exhibit13:DistributionofIndustry4.0EngagementsAcrossEngagementTypes


ThechartshowsthatmostoftheIndustry4.0engagementsweresingletechnologyorientedfollowedbyPoCandmulti-technology implementation.Mostof thesingle technologyprojectswere IT technologyoriented.PoCsarerelatedtoengineeringtechnologies.

Exhibit14 shows theproportionof Industry4.0engagement’s foreach category in the services valuechain.

Exhibit14:DistributionofIndustry4.0EngagementsAcrosstheValueChain


55% 27%

18%

SingleTechImplementation PoC MultiTechImplementation

70%

17%

7% 6%

Implement Plan R&D Operate



ThechartshowsthatthehighestandlowestnumberofengagementswereintheImplementandOperatephases, respectively.Todate, serviceprovidershavebeen lessactive in theR&Dphase, implying thatmanufacturingOEMsarestillkeepingresearchin-houseandoutsourcingasmalleramountofwork.Eachphaseofthevaluechainisfurtheranalyzedbelow.

ForeachofthevaluechainelementsshowninExhibit14wehavedividedeachvaluechainnodeintosub-categories,theseareshowninExhibit15toExhibit18.Exhibit15showstheR&D-relatedprojects.

Exhibit15:DistributionofR&D-RelatedIndustry4.0Engagements


ThechartshowsthatserviceprovidersaremostlyinvolvedinIndustry4.0R&DassignmentsinsolutionR&DwithmanufacturingOEMsand in theirown internalR&Dprojects.OEMproductR&D isnot thatprevalent.FormanufacturingOEMs,Industry4.0researchisstillastrategicinterest;thus,theseOEMsarekeepingalargepartofproductresearchin-houseandco-innovatingwithserviceprovidersinsolutionsR&Dforspecificusecasesandbusinessoutcomes.InternalR&Disveryimportantforserviceprovidersastheyneedtodeveloptools,platforms,andIPthatdifferentiatethefirmsandcanbeleveragedforrapiddeploymentofIndustry4.0solutions.

Exhibit16showstheplan-relatedsubcategories.

57% 33%

10%

OEMSolutionR&D InternalR&D OEMProductR&D



Exhibit16:DistributionofPlan-RelatedIndustry4.0Engagements


ThechartshowsthatmostoftheconsultingengagementswereITsystemsconsultingorientedfollowedby technology consulting and business consulting. In general, IT system consulting assignments arefollowed by project implementation. Typically, technology consulting engagements are related to thefeasibilitystudy,cost-benefitanalysis,andotheraspectsprimarilyforengineeringtechnologies.Businessconsultingprojects involveroadmapsandbusinessplans,andglobalserviceprovidersleadinthisareamorethantheirIndiancounterparts.

Exhibit17showstheimplement-relatedsub-categories.

83%

14% 3%

ITSystemsConsulting TechnologyConsulting BusinessConsulting



64%

24%

12%

IToperation BPOoperation As-a-ServiceOperation

Exhibit17:DistributionofImplement-RelatedIndustry4.0Engagements


YoucanseefromthechartthatmostoftheimplementationengagementsareITheavyimplementationsfollowedbytechnologyimplementationsanddigitalfactoryimplementations.Industry4.0isacentralizedsolution,andthecontrolsystem(thus,systemconnectivityandmonitoring)isthefirstpriority.Forthatreason,ITimplementationisthefirststepfollowedbyintegrationoftheengineeringtechnology.Mostoftheengineeringtechnologysolutionsactaspointsolutions.Adigital factorysignifies thetruestateofsmartmanufacturingthat istheamalgamationofmostofthe13technologies.Veryfewengagementsthatarethetruespiritofadigitalfactorywerefound.

Exhibit18:DistributionofOperate-RelatedIndustry4.0Engagements


66%

33%

1%

ITImplementation TechnologyImplementation DigitalFactoryImplementation



Overall,thenumberofIndustry4.0Operateengagementswasverylow.AsshowninExhibit18,mostofthesupportprojectswerepure-playIToperationsupport.Businessprocessoperations(BPO)operationsupportengagementswerefoundmainlyforIoTandanalyticsprojects.TheAs-a-Servicemodelistheidealstate of Industry 4.0 operations, and these types of offerings demandmore enterprise and solutionsmaturityoftheserviceproviders.Weobservedsomeearlyexamplesinthisarea,butthevolumewaslow.

ThescopeoftheIndustry4.0engagementsdifferedacrossthelevelsofmanufacturingoperations(refertotheDigitalOneManufacturingframework).ThedistributionofIndustry4.0engagementsacrosssmartcomponents,smartmachines,thedigitalfactory,andconnectedfactoriesisdescribedinExhibit19.

Exhibit19:DistributionofIndustry4.0EngagementsAcrossLevels


Thechartshowsthatmostoftheengagementsareobservedatthesmartmachineandsmartcomponentlevelsfollowedbydigitalfactoryengagements.Todate,connectedfactoriesarerareasmanufacturingenterprisesarestillconceptualizingIndustry4.0.Atthesmartmachinelevel,theIoTisthemostimportanttechnologywhereasat thedigital factory level, analytics, automation,AI, anddigital clone/simulationtechnologiesaremostlyused.

Inourdescriptionof theDigitalOneManufacturing framework,wediscussedhow Industry4.0canbeeffectiveforadigitalconnectedenterprisebyenablingintelligentdigitalprocesses.

Exhibit20showsthedistributionofIndustry4.0engagementsacrossintelligentdigitalprocesses.

49%

25%

22%

4%

SmartMachines SmartComponents DigitalFactory ConnectedFactories



Exhibit20:DistributionofIndustry4.0EngagementsAcrossIntelligentDigitalProcesses


Exhibit20showsthattheobjectivesofmostoftheengagementswererelatedtoanalysisfollowedbyvisualization.Whenanalysisandvisualizationprocessesareintegratedinthedecisionsupportmodelforautomated decision-making with minimum human intervention, then we will have real controlcapabilities.

ServiceProviders’StrategyforIndustry4.0Duringourresearch,wecameacrossdifferentIndustry4.0growthandinvestmentstrategiesforthe12serviceprovidersweevaluated,whichwediscussindetailhere.WeanalyzedthistrendanddiscussthetopstrategiesadoptedbytheserviceproviderstoexpandtheirIndustry4.0business,keydifferentiatorsasaproviderofIndustry4.0services,andthemajorchangesrecentlyimplementedtoboostIndustry4.0servicescapabilities.TheseinsightsarecriticalforenterprisesandIndustry4.0serviceproviders.Theseserviceproviderscanusethese insights tocompareandbenchmarktheirstrategies, investments,anddifferentiationwiththeirindustrypeersandidentifyareasforimprovement.TheenterprisescanalsousetheseinsightstocompareandbenchmarktheirinternalIndustry4.0capabilitiesandinvestments.

Exhibit 21 shows the different strategies employed by service providers to grow their Industry 4.0business.

75%

20%

5%

Analysis Visualization Control



Exhibit21:DistributionofServiceProviders’GrowthStrategyInIndustry4.0


Consulting and PoC-led engagement and verticalized platform–based solutions are the top growthstrategiesfollowedbyIndustry4.0innovationcentersandcollaborationwithdigitalinitiatives.

Asstartingthemanufacturingtransformationjourneyisabigdecisionforclients,theroleofconsultingandPoCisveryimportant.Themanufacturingprocessesofdifferentindustriesvary,soserviceprovidersare developing Industry 4.0–specific offerings. Industry 4.0 requires the integration of many digitaltechnologies; thus,digital collaboration isnecessarywitha focusonemerging technologies related toIndustry4.0.

WhenweaskedserviceprovidersabouttheirdifferentiationinIndustry4.0services,theygaveinterestingresponses,andtherewerea fewcommonthreads.Exhibit22showsthekeydifferentiatorsofserviceprovidersinIndustry4.0services.

8%

17%

17%

42%

42%

42%

50%

50%

58%

58%

Newbusinessmodeladoption

AcquistionforIndustry4.0capability

Rapidimplementationfocus

Workforceexpansion&capabilitydevelopment

End-to-endsolutionsprovider

Strongpartnerecosystem&thoughtleadership

Industry4.0Innovationcenters

Collaborationwithdigitalinitiatives

Verticalizedplatformbasedsolution

Consulting&PoCledengagement



Exhibit22:DistributionforKeyDifferentiatorsofServiceProvidersinIndustry4.0ServiceOfferings


ManufacturingindustryexperienceisakeydifferentiatorfollowedbyIndustry4.0–relatedconsultinganddeliveryexpertiseandstronginnovationfocus.

PreviousexperienceinmanufacturingchallengesandconsultingandtechnologyexpertiseenableserviceproviderstodrawaroadmapandimplementIndustry4.0effectively.InnovationhasstrongvisibilityforvendorsasIndustry4.0involvesseveralemergingtechnologiesthatneedtobeusedeffectivelyaccordingtothebusinessusecases.Astrongpartnerecosystem,anend-to-endsolutionsprovider,andadedicatedIndustry4.0talentpoolarealsoimportantdifferentiators.

Exhibit 23 shows how service providers are changing operational organization plans to account forIndustry4.0services.

8%

17%

25%

33%

33%

42%

50%

67%

75%

83%

Flexiblebusinessmodel

Rapidimplementationfocus

VerticalizedIndustry4.0solutions

Globaldeliverypresence

Industry4.0talentpool

End-to-endtransformationpartner

Strongpartnershipecosystem&thoughtleadership

Stronginnovationfocus

Industry4.0consulting&technologyexpertise

Manufacturingindustryexperience



Exhibit23:DistributionofServiceProviders’OrganizationalCapabilityPlansforIndustry4.0Services


Establishingaglobalcenterofexcellence(CoE)forinnovationandexecutionisthekeyagendaforserviceprovidersfollowedbyadedicatedpartnershipecosystemandthedevelopmentofverticalized/platform-basedsolution.

Aglobalcenterofexcellence(CoE)forIndustry4.0isimperativeforbuildingcapabilitiesinengineering,analytics,theIoT,andotherareas.ManyoftheIndustry4.0usecasesdemandtheoreticalresearchandcorebusinessknowledge;thus,partnershipswithenterprisesandinstitutionsarenecessary.Inthefuture,onceIndustry4.0matures,andthebenefitscanbeeasilyrealized,industry-basedIndustry4.0solutionswillemerge.Thus,serviceprovidershavealreadystartedtoaddressthatpoint.

WhyareclientsnotmovingfastonIndustry4.0?Whatchallengesarecustomersfacing?Exhibit24showsclientchallengesinIndustry4.0implementation.

25%

42%

42%

58%

83%

92%

Investmentinsalesenablement

Workforceskillupgradation

Industry4.0consultingcapabilitydevelopment

Verticalized/Platformbasedsolutiondevelopment

Dedicatedpartnershipswithvendors&institutions

GlobalCoEforinnovation&execution



Exhibit24:DistributionofClientChallengesforIndustry4.0Implementation


LowIndustry4.0readinessisthebiggestclientchallengefollowedbythelackofdigitalmaturityandpoordataqualityoralackofdatainsights.

LowIndustry4.0readinessincludesuncertaintyaboutthescaleofbenefits,lackofclarityaboutIndustry4.0benefits,confusionoverinternalbuy-inacrossthevariousbusinessunits,andpeople’sperceptionoffewerjobsforIndustry4.0implementation.DigitizationofmanufacturingactivitiesisamustforIndustry4.0,butmostclientsarenotwillingtomodernizelegacysystemsorinfrastructureverysoon.Industry4.0generatesahugeamountofdata,andenterprisesarenotsurehowtoconverttheinformationanddataintousefulbusinessinsightstounlockoperationalresults.Thus,poordatainsightremainsabigconcernforclients.Theotherfactorsincludealackofstandards,datasecurity,thelackofvastskillsforIndustry4.0,andtheopennessofnewbusinessmodels.

WhatinternalchallengesareserviceprovidersfacingforIndustry4.0?Exhibit25showsthechallengesforserviceprovidersinIndustry4.0business.

33%

42%

42%

42%

50%

58%

67%

92%

OpennesstoNewBusinessModels

Talentshortage

DataprotectionandITsecurity

Lackofstandards

HighInvestmentRequirements

Poordataqualityorlackofdatainsights

LackofDigitalMaturity

LowIndustry4.0readiness



Exhibit25:DistributionofInternalChallengesofServiceProvidersinGrowingIndustry4.0ServicesBusiness


CollaborationamonginternalteamsandanexternalecosystemposesthebiggestchallengesfollowedbyashortageofspecializedtalentandclientreadinessandIndustry4.0adoption.

As CoE teams and innovation centers are located across the globe, internal integrationwith externalpartners is necessary.Workforce skills and retention are also important. To date, a large number ofmanufacturers have yet to commit to Industry 4.0, and this is leading to the slowadoptionof digitalmanufacturing.Althoughsomeclientsaretestingthewaters,theengagementsareverysmall,andserviceprovidersarenotgettingthebenefitofeconomiesofscale.

RecommendationsforBuyers

InadditiontothevariousrecommendationsandpotentialinsightsforbuyersimplicitintheothersectionsofthisBlueprintGuide,buyersshouldconsiderthefollowingspecificrecommendations:

» StarttheIndustry4.0journeywithsmallengagements:MostoftheclientexamplesprovidedbytheserviceproviderswesurveyedwerePoCsandsmall implementationprojects,whichmakessense given how quickly Industry 4.0 is emerging as a manufacturing transformation driver.However, these experimental engagements do not signify that Industry 4.0 is still a dream.

8%

17%

25%

33%

33%

50%

58%

58%

Salesalignmentwithdelivery

AbilitytoIntegrateITandOT

InvestmentcommitmentforIndustry4.0

ProductizationofServices

Smallprojectengagements

Clientreadiness&Industry4.0adoption

Specializedtalentshortage

Collaborationamonginternalteams&partnerecosystem



Buyersneedtodig intowhat’spossible fromabusinessmodelperspective, froma technologyperspective,andfromagovernanceperspective.Althoughthefirstmoverswillreapthebenefitsearly,experimentationisstillaviableoption.However,buyersneedtostrategizetheirgoalsatthecorporatelevelandimplementthesameasabusinessfunctionbasis.Later,theycanevaluateaspecificoutcomeorbusinessresult.Thiswillhelpbuyersrevisittheirvisionsandreprioritizetheirgoalsalongwiththeareaofexperimentation.

» Prepare for radical change: Industry 4.0 will be a radical change for all manufacturingorganizations.Itwillfundamentallytransformhowmanufacturingprocessesaremanagedandwillinfluencethevaluechainthroughdigitization.Manufacturingcontrolwillbemoreautomatedanddrivenbymoretechnologyandchangeduserexpectations.Thus,buyersshouldoptforserviceproviders that can support them to understand and embrace these radical changes and helpinnovateinternalprocessesandprovideexternalplug-and-playservicesthataddresstheimpactsofdigitalsmartmanufacturing,findinganewbalanceandinterplaybetweeninternalandexternalcapabilities.

» Beawareofyouropportunitiesandgoals:Matureconnecteddigitalmanufacturingcancreatebusinessadvantagesifitisalignedwithabroaderproductandcorporatestrategy.ItispossibletounlockthevalueoftheIndustry4.0services,butdoingsorequiresaclearstrategyandgoals.Manyserviceprovidershavetechnicalexecutionskillsbutarelightonbusinessacumenincreatingandrealizingvaluefromsmartandconnectedmanufacturingobjects.

» Leverage serviceproviders’ expertise toassess Industry4.0maturity:Many serviceprovidershave developed frameworks to help their clients assess digital manufacturing and customerexperiencematurityandwilloftentakeaconsultativeapproachtohelpclientsunderstandwheretheyareandwheretheyneedtobe.

» End-to-endsecurityisessential:AsIndustry4.0standardsandusecasesarestillevolving,concernremainsaboutdatabreachesofhardwareandsoftwarecomponents.Industry4.0’sextensiveuseof IoT components provides dangerous physical opportunities in addition to data theft unlesscarefulthoughtisgiventoallstagesofconnectivityandoperation.

» Integratedbroaderdataflowsolutionsareneededratherthanpointsolutions:Gatheringdatafromallthedigitalelementswillnotsolveproblemsformanufacturingactivities.Therealchallengeistointegrateallthedatapointsandtoextractactionableinsights.Thus,buyersmustwatchforservice providers based on their ability to provide deep expertise and capabilities in data andinformationmanagementtosupportallmanufacturingactivities.



» Look to service providers beyond cost and efficiency: Because Industry 4.0 is still in the verynascent stage, buyersmust look for strategic partnerships for a long timehorizon rather thanshort-termbenefits,suchascostreductionandefficiencyimprovement.Thus,buyersmustaligntheirfuturegoalswithserviceprovidersthatmentionmilestonesateverytimeinterval.Thiswillhelpservicesbuyersachieveamanufacturingtransformationthatwillmatureinthecomingyears.

» Increase the trust factor: In Industry 4.0, service providers retain the manufacturing controlsystems.Thus,forexecutionandfutureinnovation,buyersandserviceprovidersneedtobemorecollaborativeandinclusive.Bothpartiesneedtodiscussbusinesschallengesatregularintervalsandproactivelybringupinnovativeideastoimprovebusinessoutcomes.

» Develop collaborative pricing models and KPIs for Industry 4.0 adoption: Industry 4.0 willtransformthepricingmodelthatcanbedefinedbasedonthenumberofconnecteddevicesonaplatform,thedatavolume,thebusinessoutcome,orothersimilarmetrics.Thus,buyersshouldworkcloselywithserviceproviderstodeveloppricingmodelsandKPIsthatincentivizethemodels.

Industry4.0ServicesBlueprint:TheGridGiventhenewnessofthisspace,HfSdidnotdevelopafullBlueprintatthistime.However,wehaveaperspectiveonwherethevendorsstandandhowthey’repositionedfor futuresuccess.TogiveyouapictureofhowHfSseesthemarketlandscapeatthemomenttoevaluatethesecapabilitieswithinIndustry4.0serviceproviders,welookedattwoprimaryareas:

Execution

» “Skininthegame”intheformofR&D,otherimpactfulinvestments,andallotherrelevantindicationsof sustained commitment to this capability area. These indications might include crafting anassociated business case and roadmap, co-creating use cases with customers, pursuing relevantacquisitions,effectivelyarticulatinganIndustry4.0visionandhavingablueprintforexecutingonit,orbringingthe13technologycapabilitiesindifferentshopfloorbusinessoperations.Anyrelevantcustomer examples provided, notwithstanding the relative newness of this capability area,wereheavilyconsideredinourdetailedscoringmodel.

Weanalyzedtheexecutioncapabilityofeachserviceproviderbasedonthefollowingparameters:

» SolutionOfferings

» CaseStudies



» Customers

Innovation

» Innovationstartswiththeserviceprovider’sexistingandplannedexamplesoftechnologyinnovation(oreveninnovativethinking)inthiscapabilityarea,includingthedepthoftheirsurroundinganalysis.Service providers often get very excited about new offerings and tout them as the end-to-endsolutionproviderthatencompassallthebusinesschallenges,whileleavingittoclientstoenvisionhowthat technologymightbeappliedtotheirspecificbusinessproblems.Thus,wealsocreditedprovidersthatcouldexplainthebusinessvalueandthepotentialofthenewcapabilitiesinwaysthatwouldresonatewithbuyers(andwithus)overvendorswithmoregrandiosebutperhapsnotverytangibleideasabouthowtoprogressinthisarea.Theecosystem,partnerships,investments,tools,andthoughtleadershipactivitiesareveryimportantinIndustry4.0,andwetookthemintoaccountwhileevaluatingtheserviceproviders’currentinnovationcapabilities.

Weanalyzedtheinnovationcapabilityofeachserviceproviderbasedonthefollowingparameters:

» Strategy

» Tools,Technology,IP

» InvestmentsandOrganizationalCapabilities

» BusinessOutcomes

» Partnerships

» Acquisitions

» IndustryGroups

» ThoughtLeadership

HfSemploysaweighted(evaluationfactor)scoringmodel,witheighttotencriteriaforInnovationandExecution.Weightingsarebasedona combinationof responses frommore than1,300crowdsourcedsurveyparticipantsandintelgatheredincustomercallsaboutwhatisdrivingorimpedingbusinessvalue.Weusea1–10scoreforeachcriterionandthenrankwithineachscoredcriteriontoconfirmtheinternalconsistencyofourthoughtprocessandtheapplicationofthatthoughtprocess.



Thedata-gatheringeffortforthisBlueprintGuideincludedvendorbriefingsandanabbreviatedrequestfor information (RFI) process, reviewing vendor collateral (including case studies), and evaluating theinformation presented in relevant third-party presentations (e.g., on YouTube).We also interviewedseveralenterprisecustomersandindustryexpertsinournetworktovalidatesomeofthefindings.

Exhibit26:Industry4.0ServicesGrid




BlueprintGuideGridSummaryTomake it into theWinner’sCircleofanHfSBlueprintMarketGuide,avendororganizationneeds todemonstrateanabilitytoconsistentlydeliverexcellenceinExecutionandInnovationwithinthecapabilityarea covered. Given that Industry 4.0 services are still in the early stages of evolution and customerdeployment,sevenofthe13serviceprovidershaveshownahighnumberofpromisingsolutionsandthusqualified for theHfSWinner’sCircle:Accenture,HCL, IBM, Infosys, L&TTechnologyServices,TCS,andWipro.FourofthevendorswereevaluatedasHighPotentials:Altran,Atos,Cognizant,andTechMahindra.GenpactisrankedasaHighPerformerinthisBlueprintGuide.

Overall,however,ifastandarddeviationtestwereappliedtoassessthedegreeofvariabilitybetweenthevendor scores (and ultimately grid placement), it would reveal only amodest variability, particularlybetweentheWinner’sCircleandHighPerformersgroups.

Youshouldseethisgridasastartingpoint.Withoutquestion,buyersandvendorswillstarttoseemoreproofpointsandthenmorecapabilitiesaddedovertime.Differentserviceproviderswillemergeasbeingout in frontatdifferenttimes, including in first-to-marketways. Itwouldbepureconjecturetoassertwhichoneswillbeleadinginthiscapabilityareatwotothreeyearsdowntheroad,butthevendorsthatdemonstratedacontinuingcommitmenthavedonesoforgoodreasons,andthatwilldrivefutureIndustry4.0investmentsandinnovations.



Industry4.0ServiceProviderProfilesKey:Agoodnumberofusecasesvalidatedbyanumberofcustomercasestudies

Absenceoralownumberofusecasesandcustomercasestudies

AccentureWinner’sCircle

TechnologyAreasinIndustry4.0

ManufacturingDataAnalyticsRobots



3DPrinting

ManufacturingIoT

PlantCybersecurity




ArtificialIntelligenceinManufacturing



Strengths • Accenture has a deep understanding ofmanufacturingwith clients across thesector and has used its experience to develop Industry 4.0–related tools andframeworks. In addition, the company’s integration of digital capabilities inIndustry4.0solutionshasprovidedadifferentiator.Accenturehasstrongdeliverycapabilities across the Industry 4.0 value chain and is focusing its workforcetrainingonemerging technologies, suchas robotics,augmentedreality,virtualreality,etc.

• AccenturehasdemonstratedstrongthoughtleadershipintheIndustry4.0spacebypublishingamongthehighestnumbersofIndustry4.0–relatedarticlesinthelast12months.Inaddition,thecompanyisassociatedwithanumberofindustry



bodies and participates in keynote presentations at conferences and forumsthroughouttheyear.

• Accenture leads in scale for Industry 4.0 services. It has had more than 500Industry4.0clientsandengagements,amongthehighestoftheserviceprovidersevaluated for this study.Many engagements are very large spanningmultiplemanufacturing locations across continents. In addition, Accenture has long-standingstrategicpartnershipswithalmostallofthekeyplayersintheIndustry4.0space,suchasGEandSiemens,andthefirmhasbuiltextensivelibrariesofframeworks,APIs,andotherassetsforthem.

Challenges • Accenture'sIndustry4.0servicesofferingsincludetheoverlapofseveralbusinessunitswithinthecompany.AstheIndustry4.0marketisstillevolving,customerswillexpectflexibilityfromAccenturetodeliverserviceofferingsthatovercomeorganization complexity and can streamline project execution for large andmedium-sizeclients.

• Thewar for talent in thismarket isheatingup.Asextensivenicheexpertise isneeded for Industry 4.0 technical competencies, service providers, includingAccenture,couldbenefitfromgreaterdepthsofexpertise.AsAccentureisrapidlyexpanding its Industry4.0clientportfolio, talentreadinessandretentionareachallengeforthecompany.Accentureisaddressingtalentreadinessbyleveragingitsacquisitionsinthedigitalandengineeringspace.

KeyPartnerships ABB,Amazon,Aras,AutomationAnywhere,BluePrism,Cisco,Dassault,ExOne,GE,Google,Hortonworks,Intel,IPsoft,Microsoft,PTC,Oracle,OSIsoft,RethinkRobotics,RoboValley, SAP, SAS, Schneider Electric, Siemens, Splunk, Softbank Robotics,Stratasys,Tableau,Tanium,andVoxeljet

Tools/Platforms/Frameworks/IP AccentureAIEngine,AccentureCloudPlatform,AccentureCyberDefensePlatform,AccentureDigitalPlant,AccentureDigitalPlantRefreshServices,AccentureDigitalTurnaround Solution, Accenture Echo Platform, Accenture Insights Platform,Accenture IoT Reference Architecture, Accenture Printability AssessmentFramework,AccentureSmartOperatingProcedures,andAccentureVideoAnalyticsServicePlatform

KeyCustomers ABB,Airbus,AmazonWebServices,Bombardier,GE,Google,Marathon,Microsoft,ThyssenKruppCSA,andWoodside

Examples/Results• Supporting an automotive Tier 1 manufacturer in transforming its global

manufacturingoperationstobecomeaglobalagilemanufacturer

• Working with a leading household appliances manufacturer to integrate 3Dprintingintheclient’ssupplychainoperationmodel

• Developingaugmentedrealitysolutionsforanaircraftmanufacturertoimproveitsprocessesandforbettervisualization



• Engagedwith amajor petrochemical company for industrial cybersecurity andcompliancewithqualityassurancestandards

• Workingwithanenergycompanytobuildadigitalsimulationsolutiontoimproveoperationalperformancerangingfrommaintenancetocompliancemanagement

InBrief Accenture’s Industry X.0 Practice spans all five Accenture businesses (Strategy,Consulting,Digital,Technology,andOperations)andintegratestheknow-howandexpertise of more than 10,000 professionals across Accenture businesses. Thecompanyhas integrated several digital initiatives, suchasblockchain, security,AI,etc.,withIndustry4.0offeringsalongwiththecapabilitiesofanumberofacquiredorganizations specializing in these areas. Accenture’s broad consulting skills,marquee customer list, and complexmulti-country technology implementation ofIndustry4.0haveprovidedanedgeovertheothercompanies.WewillwatchhowAccenturemanagesthegrowthofitsIndustryX.0PracticeandcontinuesitsglobalIndustry4.0leadership.



WhattoWatch

» Industry4.0buzzhasbeenaroundthemarketforquitesometime,butnowweareobservingtractioninthemanufacturingindustry.AlthoughenterprisesarefollowingaphasedapproachfortheimplementationofIndustry4.0,weexpectasignificantinvestmentplaninthecomingyears.DevelopedcountriesinNorthAmericaandEuropehavetakentheleapinimplementingIndustry4.0,butAsiancountries,suchasJapan,China,andSouthKorea,arealsocomingupfasterinthisspace. The front-runner enterprises in this spacewill reap the first-mover advantage in digitalproductsandservices.

» DataanalyticsisatthecoreofasuccessfulimplementationoutcomeforIndustry4.0.Thewholedigital ecosystem is dependenton the actionable insightsderived fromdata analysis. Todate,enterprisesareusingsocialdataanalyticstoidentifytrends,associations,andpatterns;however,forIndustry4.0engineering,dataanalyticsistheneedofthehour.Datainterpretationmustbealignedwiththephysicalworldtounderstandthemachinebehaviorandpredictthefuturestateofmanufacturing.Thus,enterprisesmustidentifyspecializeddataanalystswithknowledgeofcoreengineeringactivities.

» ManufacturingperformanceimprovementthroughIndustry4.0isevolvingfromtalktoaction.Enterprises that have successfully implemented Industry 4.0 are realizing benefits, such asinventorymanagementthroughleanmanufacturing,assetconnectivityandmonitoring,AI-baseddecision-making through real-time data analysis, augmented reality– or virtual reality–baseddigitalsimulationofmanufacturingactivitiesandproductprototypes,componentdesignthrough3Dprinting,etc.

» TheorganizationalcultureisthemaindriverofIndustry4.0adoption.Enterpriseslackadigitalcultureintheirorganizations,andthisiscreatingaroadblockforIndustry4.0implementationasemployeesneeddigitalskillstodrivedigitalmanufacturingprocesses.Thus,enterprisesneedtofocus on building the digital culture and train employees who are comfortable in the digitalecosystem.

» ThematurityofIndustry4.0islargelydependentonthesecurityeffortandgovernance.AsthedataflowinIndustry4.0startsfromthesensorlevel,thesecurityfirewallmustencompassthehardwarecomponents,communicationprotocols,softwareplatform,andfront-endapplications.BecausesupplychainandlogisticsnetworksareincreasinglyintertwinedwithIndustry4.0,inthefutureregulatorybodiesmustfigureoutsharedinformation,suchascustomerinformationfromtheservicesplatform.



InSummaryThe Industry4.0servicescapabilityareathat is thefocusof this researchgenerallystartedslowlyandconservatively in terms of investment from most vendors and customers. Large manufacturingorganizationsareusingsomeoftheIndustry4.0technologiesinisolation,butthetruepotentialofsmartmanufacturing will be achieved when all the technologies are leveraged in tandem. The main openquestionishowlongitwilltakebeforemanufacturingorganizationstakeIndustry4.0adoptiontothenextlevel,thatis,thedigitalfactoryandthenconnectedfactories.TheIndustry4.0implementationcostsintermsoftimeandeffortarenot insignificant,butenterprisescouldstartwithamodest investmentoftimeandeffort.Thatsecondwaveofearlyadopterscanthengofurtherintothisrealmwhenthebusinessimpactsareobvious.Intime,HfSbelievestheywillbe,andearlyadoptersoftenholdontocompetitiveadvantageoncetheyhaveit.



AbouttheAuthorsPareekhJain

PareekhJainisSeniorVicePresidentandManagingDirectorIndiaatHfSResearch.Heisalsotheleadanalystforengineeringservices,IoT,telecom,and manufacturing. He established the global engineering servicespracticeatHfSResearchwhichcoversmechanicalengineering services,embeddedengineering services, softwareproductengineering services,PLMservices,andIndustry4.0.His IoTcoverageincludestheConsumerIoT, the Industrial IoT, and smart cities. He also tracks telecom andmanufacturing verticals. He has authored various industry-leadingengineeringservicesresearchreports,includingHfSengineeringservices

blueprints,HfSengineeringservicestop20,HfSengineeringservicesquarterlytrends,etc.Heisregularlyquoted in themediaonengineering services, IoT, andoutsourcing trends, includingHarvardBusinessReview(HBR),NDTV,TimesofIndia,EconomicTimes,BusinessStandard,Hindu,BusinessLine,Livemint,FinancialExpress,Rediff,VoiceofAmerica,andBusinessInsider.

Aseasonedoutsourcingconsultant,Pareekhhasseentheengineeringservicesoutsourcingindustryfromthreeperspectives:serviceprovider,advisor,andbuyer.HestartedhiscareerasasoftwareengineerwithGeometric,whichgavehim the serviceproviderperspective.Hewas thenwithneoIT, anoutsourcingadvisory firm. At neoIT, hewas a key contributor in a number of engagements with leading US andEuropeanclients,whichspannedtheoutsourcinglifecycle.HealsoproducedneoIT’sseminalreportoncitycompetitivenessforoutsourcing.Inhislastassignment,hegainedtheperspectiveofanoutsourcingbuyerashe led strategicplanning, salesplanning,productplanning,andR&D initiatives for theAPACregionofEmersonNetworkPower—aFortune100manufacturingmultinationalwhoseAPACoperationsarebasedinKualaLumpur,Malaysia.

Pareekh is a thought leader, having authored various publications on topics related to outsourcing,engineeringservices,technology,andregionalcompetitivenessinoutsourcing.Helovesbusinessfictionwritinginhisfreetime,andhisfirstnovel,WhoIsThatLady?.

PareekhreceivedhisMBAfromtheIndianInstituteofManagement(IIM),BangaloreandhisBachelorofTechnologydegreefromtheIndianInstituteofTechnology(IIT)Delhi.

Pareekhcanbereachedatpareekh.jain@hfsresearch.com.Followhimontwitter@pareekhjain.



TanmoyMondalTanmoyMondalisaKnowledgeAnalystatHfSResearch,identifyingglobaltrends in engineering services from the industry and technologyperspectives,trackingglobaloutsourcingdealsandinvestments(includingpartnership agreements and R&D announcements in the sector), andsupportingthedomainleadsinsecondaryresearch,dataanalysis,PoVs,andresearchwriting.

Tanmoy has more than four years of research, pre-sales, and marketintelligenceexperienceatTCS,HCL,andTracxn.InhisTCSandHCLroles,

heworkedonpreparingRFPresponses, includingsolutionconstructsandcommercialpropositions.HewasresponsibleforanalyzingthebusinessscenarioforERPimplementationfordifferentindustryverticalsand participated in several Enterprise Transformation projects across domains to optimize the ITlandscape,increasingITintegrationamongclientbusinessverticals,improvingproductivity,andreducingbusinessincidents.AtTracxn,hewaspartoftheemergingtechnologyteamthathelpsfindcompanies(startups)specializing inupcomingtechnologies (virtual/augmentedreality,drone,etc.) foracquisitionandportfolioinvestmentsforPEandVCfirms.

TanmoyholdsaMasterinBusinessAdministrationdegreefromIIFT(IndianInstituteofForeignTrade)andaBachelorofEngineeringdegreefromJadavpurUniversity,Kolkata.

Tanmoyispassionateaboutfootballandlovestoreadeconomics-relatedbooksandarticles.

Tanmoycanbereachedattanmoy.mondal@hfsresearch.com.Followhimontwitter@17_mondal.



HfSResearch:TheServicesResearchCompany™

HfSResearchisTheServicesResearchCompany™—theleadinganalystauthorityandglobalcommunityforbusinessoperationsandITservices.Thefirmhelpsorganizationsvalidateand improvetheirglobaloperations with world-class research, benchmarking, and peer networking. HfS Research was namedIndependentAnalystFirmoftheYearfor2016bytheInstituteofIndustryAnalystRelationswhichvotedon170otherleadinganalysts.HfSChiefAnalystPhilFershtwasnamedAnalystoftheYearin2016forthethirdtime.

HfScoinedtheterms“TheAs-a-ServiceEconomy”and“OneOffice™,”whichdescribeHfSResearch’svisionforthefutureofglobaloperationsandtheimpactofcognitiveautomationanddigitaltechnologies.HfS’visioniscenteredoncreatingthedigitalcustomerexperienceandanintelligent,singleofficetoenableandsupportit.HfS’coremissionisabouthelpingclientsachieveanintegratedsupportoperationthathasthedigital prowess to enable its organization tomeet customerdemand—asandwhen thatdemandhappens. With specific practice areas focused on the digitization of business processes and designthinking,intelligentautomationandoutsourcing,HfSanalystsapplyindustryknowledgeinhealthcare,lifesciences,retail,manufacturing,energy,utilities,telecommunications,andfinancialservicestoformarealviewpointofthefutureofbusinessoperations.

HfSfacilitatesathrivinganddynamicglobalcommunitythatcontributestoitsresearchandstagesseveralOneOffice™ Summits each year, bringing together senior service buyers, advisors, providers, andtechnologysuppliersinanintimateforumtodevelopcollectiverecommendationsfortheindustryandadddepthtothefirm’sresearchpublicationsandanalystofferings.

Nowinitstenthyearofpublication,HfSResearch’sacclaimedblogHorsesforSourcesisthemostwidelyreadandtrusteddestinationforunfetteredcollectiveinsight,research,andopendebateaboutsourcingindustryissuesanddevelopments.

HfSwasnamedAnalystFirmoftheYear for2016,alongsideGartnerandForrester,by leadinganalystobserverInfluencerRelations.