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“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
“We Accelerate Growth”
*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
“We Accelerate Growth”
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
“We Accelerate Growth”
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
“We Accelerate Growth”
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
“We Accelerate Growth”
Digital
Industries 1
Connected
Supply Chain 2
3 Industry Use
Cases
4 Future Impact &
Key findings
The Vision The Reality
“We Accelerate Growth”
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
“We Accelerate Growth”
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.
“We Accelerate Growth”
Digital
Industries 1
Connected
Supply Chain 2
3 Industry Use
Cases
4 Future Impact &
Key findings
The Vision The Reality
“We Accelerate Growth”
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
“We Accelerate Growth”
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
“We Accelerate Growth”
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
“We Accelerate Growth”
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
“We Accelerate Growth”
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
“We Accelerate Growth”
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.
“We Accelerate Growth”
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
“We Accelerate Growth”
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
“We Accelerate Growth”
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
“We Accelerate Growth”
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
“We Accelerate Growth”
Digital
Industries 1
Connected
Supply Chain 2
3 Industry Use
Cases
4 Future Impact &
Key findings
The Vision The Reality
“We Accelerate Growth”
Source: Frost & Sullivan
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
“We Accelerate Growth”
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.
“We Accelerate Growth”
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
Source: Frost & Sullivan
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.