THE DRIVING FORCE BEHIND THE FOURTH INDUSTRIAL REVOLUTION

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Tracy Parks
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1 TECNALIA INDUSTRY AND TRANSPORT INDUSTRY 4.0 THE DRIVING FORCE BEHIND THE FOURTH INDUSTRIAL REVOLUTION

INDUSTRY 4.0 A SMART SOLUTION THE DRIVING FORCE BEHINDTHE FOURTH INDUSTRIAL REVOLUTION THE SMARTEST SOLUTION TO SOCIO-ECONOMIC CHALLENGES /4 THE OPPORTUNITY THAT INDUSTRY 4.

3 INDUSTRY 4.0 A SMART SOLUTION THE DRIVING FORCE BEHINDTHE FOURTH INDUSTRIAL REVOLUTION THE SMARTEST SOLUTION TO SOCIO-ECONOMIC CHALLENGES /4 THE OPPORTUNITY THAT INDUSTRY 4.0 REPRESENTS FOR COMPANIES FROM TECNALIA'S POINT OF VIEW Industry 4.0 will have a positive impact on your profit and loss account. Does that ring a bell? Obtaining benefits from efficiency of production, cost reduction, safety or maintenance are well known and have been longed for by companies for years. So why, then, when we talk about Industry 4.0 do we speak in terms of a Revolution? The key is in the magnitude of the impact. An impact that is exponentially higher, forcing us to reinvent traditional manufacturing and production models in order to continue being competitive. And Industry 4.0 is the smart solution to achieve this. /5

4 THE OPPORTUNITY According to the latest McKinsey report on Industry 4.0, the potential economic impact on the most relevant policy areas will be seen as: BENEFITS FOR COMPANIES +15% -30% -30% -15% PRODUCTION EFFICIENCY _ Increase in productivity from 10% to 25%. PREDICTIVE MAINTENANCE _ Reduction in costs of between 10% and 40% linked to production service assets to improve performance, identifying and acting in time to make it more economical. INVENTORY OPTIMISATION _ Reduction in costs of between 20% and 50% from inventories to improve balance through optimum reorganisations, monitoring assets and adding environmental intelligence. HEALTH AND SAFETY _ Reduction in costs of between 10% and 25% on safety through a more efficient and safer interaction of people with technology, smart PPE and data analytics. Thus, knowledge of the challenges and trends in the sectors in which we operate, the potential impact that technology has on the business activity of our customers, their demands and intense and extensive joint work have resulted in the consolidation of TECNALIA's own 4.0 intervention strategy aimed at achieving 8 main benefits: Tailoring supply to demand Optimising the necessary human resources Optimising consumption for production Optimising asset use Maximising quality Optimising after-sales services Maximising health and safety in the workplace Improving corporate social responsibility The expected impact is materialised in substantially higher rates than the current ones. Therefore, this is a new milestone in industrial development that will undoubtedly mark important social changes in the coming years in the digital transformation of all production units in the economy, to develop more efficient, safer and more environmentally-friendly companies both in manufacturing and the supply chain. But how do I identify the BENEFITS of Industry 4.0 for MY COMPANY? And... how do I prioritise actions within the implementation strategy? A transformation that TECNALIA undertakes with technology as a lever for growth. / 6 / 7

HOW WE APPROACH THE DEPLOYMENT OF STRATEGY 4.0 IN COMPANIES A OUR DIAGNOSTIC AND IMPACT MODEL We have a flexible and adaptable action solution to create a 4.

5 HOW WE APPROACH THE DEPLOYMENT OF STRATEGY 4.0 IN COMPANIES A OUR DIAGNOSTIC AND IMPACT MODEL We have a flexible and adaptable action solution to create a 4.0 strategy and assess the degree of the company's relationship with the different enabling technologies. PHASE 1 OF THE ROADMAP DIAGNOSIS OF DIGITAL MATURITY * A TECHNOLOGICAL DIAGNOSIS (technology driven) We analyse the company: offer, market structure, business models, technological level, etc. We visit the plant with technology managers to gain knowledge of critical processes. PHASE 2 OF THE ROADMAP DESIGN AND DEPLOYMENT OF THE 4.0 ROADMAP ** A PRIORITISATION OF SOLUTIONS We carry out a cost-benefit analysis of each of the improvement lines identified, taking into account the development of pilots and their scale-up, in order to prioritise projects with the greatest economic impact for the company. WHEN THE COMPANY DOES NOT HAVE A DEFINED 4.0 STRATEGY WHEN THE COMPANY HAS A DEFINED 4.0 STRATEGY B IMPACT DIAGNOSIS (impact driven) We carry out a detailed analysis with open-ended questions related to the potential technical solutions to be implemented. We hold individual and/or group meetings with department heads and managers of the different areas related to the most relevant aspects identified. B 4.0 ROADMAP IN DETAIL We define a detailed technical report for each project, identifying deadlines, personnel responsible and necessary alliances, as well as expected results. * This phase results in a report on the situation and lines of improvement. ** This phase results in a report with the prioritisation, sizing and deployment of actions. We work hand-in-hand with companies in defining and implementing their INDUSTRY 4.0 strategy. AREAS OF ANALYSIS PRODUCT / CUSTOMER COMPANY PRODUCTION LINE MACHINE OPERATOR A B B 4.0 PROJECTS IN WHICH ENABLING TECHNOLOGIES ARE DEPLOYED DIAGNOSTIC AND IMPACT MODEL 4.0 PROJECTS FOR THE DEPLOYMENT OF HIGH-IMPACT TECHNOLOGIES We develop 4.0 projects to efficiently deploy enabling technologies in companies that generate results and make them more competitive, in order to realise the 8 benefits in which TECNALIA has a priority impact. We provide cover from the concept and design of the solution, the deployment of pre-industrial pilots and the scale-up of industrial solutions. / 8 / 9

6 OUR TECHNOLOGICAL EXPERTISE, THE FOUNDATION ON WHICH PROJECTS WITH COMPANIES ARE BASED THE DEPLOYMENT OF TECHNOLOGIES PUTS COMPANIES AT THE FOREFRONT OF SECTORS INDUSTRIAL IoT BIG DATA ANALYTICS PREDICTIVE MAINTENANCE MACHINE TOOLS AND CAPITAL GOODS With this cyber-physical systemenabling technology, we digitise industrial assets, generating and connecting digital information linked to them. We process on a massive scale and extract knowledge from digital data captured using IoT technologies. We include learning algorithms and artificial intelligence. To avoid faults and defects in machinery in the early stages to prevent them from causing emergency shut-downs and downtime, producing a negative financial impact. OIL & GAS AUTOMOTIVE INDUSTRY ADVANCED INTERACTION We deploy human-system interface solutions adapted to the mobility, intelligence and personalisation requirements of the information and multi-device as required by Industry 4.0. ADVANCED SENSORS AND INSTRUMENTATION We develop smart instrumentation solutions tailored to each case, including advanced monitoring and distributed diagnosis possibilities. ARTIFICIAL VISION We use smart image capture and processing systems based on artificial intelligence algorithms for dimensional control and quality inspection. AGRI-FOOD INDUSTRY TECHNOLOGICAL EXPERTISE, THE FOUNDATION ON WHICH PROJECTS WITH COMPANIES ARE BASED AEROSPACE COLLABORATIVE, FLEXIBLE ROBOTICS AUGMENTED/VIRTUAL REALITY CYBERSECURITY IRON & STEEL INDUSTRY RAILWAY We develop smart automation systems that are flexible to the type of product, as well as being able to interact safely with operators. We use this digital operator assistance technology by projecting digital information onto the field of vision. We develop techniques to secure IT/OT systems against external cyber attacks. / 10 / 11

WHY TECNALIA Due to our ability to turn good ideas into reality from technological excellence We have extensive experience in the design and deployment of 4.0 Strategies for our customers.

7 WHY TECNALIA Due to our ability to turn good ideas into reality from technological excellence We have extensive experience in the design and deployment of 4.0 Strategies for our customers. WE HAVE A TEAM OF TALENTED, SPECIALIST, FOCUSED PEOPLE THAT COMBINE AND BRING KNOWLEDGE TOGETHER ON THE TECHNOLOGIES OF THE SECTORS IN WHICH WE OPERATE IN A UNIQUE MANNER Our differential value lies in a unique combination of talent. We develop a holistic approach regarding the profiles we use in our 4.0 projects. We have experts in computer and electronic engineering and specialists in computer engineering and specific industrial areas, which, together with our sound strategic foundation oriented towards the profit and loss account of our customers, makes us the most comprehensive alternative. 197 Multidisciplinary people working in Industry DATA SCIENCE SPECIALISTS IN DATA ENGINEERING International Excellence Group 75 Industry 4.0 diagnostics carried out >110 Presentations on Industry 4.0 in business forums of relevance and public administrations 28M Business with companies in Industry 4.0 projects STRATEGIC FOUNDATION Machine Learning Signal processing Data mining Meta-heuristics A DOZEN TECHNOLOGICAL AND BUSINESS STRATEGISTS 60 IT SPECIALISTS IN COMPUTER AND ELECTRONIC ENGINEERING Sensors BigData IT SW Integration Visual Analytics 107 MANUFACTURING ENGINEERING CONTROL MATERIALS SPECIALISTS IN SPECIFIC INDUSTRIAL AREAS Experts in the industrial field in the following sectors: Iron and Steel Industry Machine-Tooling and Robotics Aerospace Industry Automotive Industry Railway Industry Data at January 1, 2018 / 12 / 13

8 REFERENCES 4.0 Numerous customers have placed their trust in us to collaborate in the design and deployment of their 4.0 Strategy achieving an impact on their profit and loss account in terms of: Substantial increase in the safety of personnel carrying out plant maintenance tasks; Predictive maintenance and value-added services for the end user; In-depth knowledge of the machine in operation; Predictive maintenance and optimisation of asset operation in the wind and rail sectors; Reduction in dimensional and superficial defects; Optimisation of the cutting process and complete traceability of production; Increase the safety of your employees; Zero manufacturing defects in your production: and in-depth knowledge of your processes. / 14 / 15

9 TECNALIA IS AN APPLIED RESEARCH AND TECHNOLOGICAL DEVELOPMENT CENTRE SERVICE OFFER UNIVERSITIES AND PUBLIC RESEARCH CENTRES COMPANIES Advanced technological services specialised in the evaluation and diagnosis of products, processes and materials. TECHNOLOGICAL SERVICES YOUR PROJECT INVESTMENT OPPORTUNITIES Development of technological assets ready to generate new business. R&D AND INNOVATION PROJECTS TECNALIA R&D and Innovation projects for the development of new products and processes or for the improvement of existing ones. SCIENTIFIC-TECHNOLOGICAL CHALLENGES Basic Research Applied Research Experimental Development FROM SCIENCE TO MARKET ADVANCED MANUFACTURING LOW-CARBON ENERGY HEALTH AND AGEING MISSION We transform technology into GDP We turn technology into wealth to obtain beneficial visible results for companies, society, our environment and in sum, for people. New insights for the "Industry and Factory of the Future" which will be smart and connected, automated and cognitive, flexible as well as sustainable, social and collaborative. DIGITAL AND HYPERCONNECTED WORLD We continue to evolve towards an increasingly connected and interactive world. We are working in this context to give due response to the challenges of the Digital Economy and Cyber-Physical Systems. Clean technologies and renewable energy play a key role in advancing towards a more sustainable and efficient low-carbon society. URBAN HABITAT We are committed to smart places and cities, because we believe in their potential for progress, their innovation catalyst role and their ability to become an economic development driver. Technology can play a key role in improving the quality of life of many people with physical disabilities or health problems. We are committed to developing new devices, systems and products that encourage business activity in this sector. CLIMATE CHANGE AND SHORTAGE OF RESOURCES Climate change impacts are already a reality. We need to implement solutions and actions to minimise their effects: valorisation of waste and critical materials, emission reduction, circular economy, bioeconomy, etc. / 16 / 17

11 WE CAN DO SO MUCH TOGETHER Our work is not understood without yours; we want to work together so your company can compete better. Because together, we can develop technologies that transform the present. The future is technological, let's share it! blogs.tecnalia.com TECNALIA Parque Científico y Tecnológico de Gipuzkoa Mikeletegi Pasealekua 2 E-20009, Donostia-San Sebastián. Gipuzkoa (Spain) Tel.: Contact Industry 4.0 Mikel Niño industria@tecnalia.com

CUSTOMISED SOLUTIONS THROUGH COLLABORATIVE WORK.

CUSTOMISED SOLUTIONS THROUGH COLLABORATIVE WORK. COMPANY PROFILE INDEX ADDING KNOWLEDGE Working for you INDUSTRY APPLICATIONS Specialised in parts for cutting-edge sectors THE OFFER THAT MAKES A DIFFERENCE The option chosen by the most demanding clients