Roadmap to Industry 4.0 What it takes to build the factory of the future Bangkok, July 20, 2017 Note: this presentation leverages findings from the BCG study: "The Factory of the Future"; for the full study, please click here
BCG deeply involved in driving Industry 4.0 worldwide Manufacturers I4.0 suppliers Governments How to make the most of Industry 4.0? What will the market need in the future? How to prepare the economy for the future? Source: BCG TMA - Roadmap to Industry 4.0 - presentation - vff.pptx 1
We operate our own I4.0 model factories to drive research and offer clients an immersive learning experience Aachen Kaiserslautern Paris Stuttgart Boston Singapore Coming soon Source: BCG TMA - Roadmap to Industry 4.0 - presentation - vff.pptx 2
Agenda CONTEXT what is it & what makes it so disruptive? ROADMAP what does it take to get it done? ENABLERS what are key success factors? TMA - Roadmap to Industry 4.0 - presentation - vff.pptx 3
Agenda CONTEXT what is it & what makes it so disruptive? ROADMAP what does it take to get it done? ENABLERS what are key success factors? TMA - Roadmap to Industry 4.0 - presentation - vff.pptx 4
It's no longer science fiction BUILDING BLOCKS OF THE DIGITAL REVOLUTION UBIQUITOUS CONNECTIVITY COLLABORATIVE ROBOTS SHIFT TO THE CLOUD INNOVATIVE USER INTERFACES / AR IOT / CONNECTED DEVICES + SENSORS AI / COGNITIVE COMPUTING 3D SCANNING AND PRINTING Source: BCG SOCIAL, LOCAL, MOBILE BIG DATA + ADVAN- CED ANALYTICS Mass market maturity + Performance + Ease of use + Flexibility + Safety + Cost TMA - Roadmap to Industry 4.0 - presentation - vff.pptx 5
THE FACTORY OF THE FUTURE Integrating the value chain from raw material to customer From isolated, optimized cells Integrated auto value chain Suppliers Component manufacturing Press, body, and paint shops Final assembly Customers Reduced conversion cost Improved flexibility Higher quality standards Safety Source: BCG analysis...to fully integrated data & product flows across borders New business models TMA - Roadmap to Industry 4.0 - presentation - vff.pptx 6
EXAMPLE USE CASE Self-driving logistics vehicles Source: company information TMA - Roadmap to Industry 4.0 - presentation - vff.pptx 7
Powerful enough to ring in fourth industrial revolution 4. Industrial revolution 3. Industrial revolution 1. Industrial revolution 2. Industrial revolution Automated industrial robots in manufacturing Connection between physical and digital systems Digitally integrated value chain Ford Model T mass production IT and (rigid) automation Historical loom Electricity, division of work Mechanization, water & steam power Late 18th century Early 20th century Early 1970s Today / near future Source: BCG analysis TMA - Roadmap to Industry 4.0 - presentation - vff.pptx 8
What makes Industry 4.0 so disruptive? Massive impact Impact on conversion cost Now is the time Automotive Component mfg. Press shop 30% 40% 50% New revenues Body shop Paint shop 25% 25% Global 'equalizer' Final assembly Engineered products 40% 50% Strong interest Process industries 25% Source: BCG TMA - Roadmap to Industry 4.0 - presentation - vff.pptx 9
What makes Industry 4.0 so disruptive? Massive impact More sensor data than ever in real time Now is the time New revenues Algorithms to make sense of all that data Global 'equalizer' Strong interest Simple, affordable hardware to link algorithms back to reality Source: BCG TMA - Roadmap to Industry 4.0 - presentation - vff.pptx 10
What makes Industry 4.0 so disruptive? Massive impact Now is the time New revenues Besides cost, flexibility, quality, and safety opportunity to expand business from selling 'only' products to selling services Global 'equalizer' Strong interest From selling tractors to selling end-2-end yield optimization services Source: BCG TMA - Roadmap to Industry 4.0 - presentation - vff.pptx 11
What makes Industry 4.0 so disruptive? Massive impact Mature economies now can compete on cost Now is the time New revenues Global 'equalizer' Strong interest Developing economies now can compete on quality??? Source: BCG TMA - Roadmap to Industry 4.0 - presentation - vff.pptx 12
What makes Industry 4.0 so disruptive? Massive impact Now is the time Govts. eagerly seeking ways to support companies E.g. New revenues Global 'equalizer' Strong interest Companies developing first Industry 4.0 concepts 47% of auto players with first I4.0 concepts Source: BCG TMA - Roadmap to Industry 4.0 - presentation - vff.pptx 13
Agenda CONTEXT what is it & what makes it so disruptive? ROADMAP what does it take to get it done? ENABLERS what are key success factors? TMA - Roadmap to Industry 4.0 - presentation - vff.pptx 14
FROM POSSIBILITY TO REALITY Despite high ambitions, industry struggles to build momentum BCG wanted to find out why, and to make it real, we've asked 750 85% 74% We can benefit from Industry 4.0 Plans to implement in next 5 years production managers from leading industrial companies in three sectors: Automotive Engineered products Process industries 25% Achieved related targets last year Source: BCG (BCG Perspectives: The Factory of the Future) TMA - Roadmap to Industry 4.0 - presentation - vff.pptx 15
Transforming into the Factory of the Future really means the combination of changes along three dimensions PLANT STRUCTURE PLANT DIGITIZATION PLANT PROCESSES Important? Important? Important? 43% 86% 13% 70% 70% 97% Today 2030 Today 2030 Today 2030 Source: BCG (BCG Perspectives: The Factory of the Future) TMA - Roadmap to Industry 4.0 - presentation - vff.pptx 16
PLANT STRUCTURE Three key themes for the future plant structure % "Important by 2030" Multi-directional plant layout 80% Modular production lines 92% Sustainable production 85% Products placed on driverless transport systems coordinated autonomously Inter-changeable line modules, configurable machinery that is multi purpose and simple Focus on energy and material efficiency, e.g., lighting, cooling, production processes AUDI R8, Heilbronn, Germany Toyota factories, Mexico and China Webasto factory, Arad, Romania Source: BCG (BCG Perspectives: The Factory of the Future) TMA - Roadmap to Industry 4.0 - presentation - vff.pptx 17
PLANT DIGITIZATION Seven dominant technologies for I4.0 use cases % "Important by 2030" Big data & analytics 72% Smart / flexible robots 85% Additive manufacturing 72% Production simulation 81% 80% Decentralized production steering Collaborative robots 85% Augmented reality 65% By now, it is use cases that matter, not the underlying digital technologies Source: BCG (BCG Perspectives: The Factory of the Future) TMA - Roadmap to Industry 4.0 - presentation - vff.pptx 18
PLANT DIGITIZATION Seven dominant technologies for I4.0 use cases % "Important by 2030" Big data & analytics 72% Smart / flexible robots 85% Additive manufacturing 72% Production simulation 81% Mercedes Benz test 600 cylinder head production quality drivers Changan Ford 18 sec change over for welding of six models BMW 10,000 parts for Rolls Royce Phantom Faurecia test changes to material flow to evaluate options 80% Decentralized production steering Bosch tools understand location / context, adjust actions Collaborative robots Volkswagen support screw tightening in difficult places 85% Augmented reality Volkswagen 3D glasses to facilitate logistics (order picking) 65% By now, it is use cases that matter, not the underlying digital technologies Source: BCG (BCG Perspectives: The Factory of the Future) TMA - Roadmap to Industry 4.0 - presentation - vff.pptx 19
PLANT PROCESSES Lean production lifted to the next level through I4.0 Lean production principles lifted to next level through digital Customer centricity Better understanding of customer needs through big data Higher degree of customization enabled by integrated value chain Continuous improvement Substantially more data due to vast number of connected sensors Advanced analytics algorithms to identify optimization potential Source: BCG (BCG Perspectives: The Factory of the Future) TMA - Roadmap to Industry 4.0 - presentation - vff.pptx 20
PLANT PROCESSES Lean production lifted to the next level through I4.0 Lean production principles lifted to next level through digital Customer centricity Better understanding Daimler of customer needs through big data Aims to allow customers to make last minute modifications, e.g., changes to Higher degree of customization color while on the way into paint shop enabled by integrated value chain Continuous improvement Substantially more data due to vast Bosch number of connected sensors Builds continuous improvement functionality right into its production Advanced analytics algorithms to identify machinery optimization for fuel potential injectors Source: BCG (BCG Perspectives: The Factory of the Future) TMA - Roadmap to Industry 4.0 - presentation - vff.pptx 21
Agenda CONTEXT what is it & what makes it so disruptive? ROADMAP what does it take to get it done? ENABLERS what are key success factors? TMA - Roadmap to Industry 4.0 - presentation - vff.pptx 22
What do practitioners think are the key challenges to overcome in order to put I4.0 in place by 2030? "Major challenge by 2030?" 35% Strategy & leadership Industry 4.0 affects the whole organization, not just the technology dept. 38% Employee skills At the highest level: from routine jobs to flexible judgement 40% Safe and ubiquitous IT infrastructure The technologies are there, the implementation not yet, and safety is a major concern Source: BCG (BCG Perspectives: The Factory of the Future) TMA - Roadmap to Industry 4.0 - presentation - vff.pptx 23
STRATEGY & LEADERSHIP I4.0 needs to be part of the overall business strategy Strategy & roadmap Clear vision + Clear strategy, anchored in overall business strategy + Commonly understood roadmap Org / governance Org structure + Clear roles and responsibilities + Change mgmt. process to control implementation Leadership style More 'advisory' leadership + More team focused leadership Less 'authoritarian' style directions ~33% ~33% ~40% say this will be a major challenge by 2030 Source: BCG (BCG Perspectives: The Factory of the Future) TMA - Roadmap to Industry 4.0 - presentation - vff.pptx 24
EMPLOYEE SKILLS It's (not just) about IT / programming skills x Percentage points Technical competencies Social competencies Important today vs. 2030? Important today vs. 2030? +57 +33 +14 +29 +14 +33 +17-19 38 95 90 88 61 55 74 55 65 98 98 84 93 90 79 73 IT skills Mechatronical skills Electronic skills Mechanical skills Learning capacity Teamwork Taking responsibility Problem solving Source: BCG (BCG Perspectives: The Factory of the Future) TMA - Roadmap to Industry 4.0 - presentation - vff.pptx 25
EMPLOYEE SKILLS Shift from routine jobs to jobs requiring flexible judgement Existing jobs New jobs Machine operators Data scientists Robot coordinators Key activities Today Transfer WIP products into and monitor 1 machine Check WIP products quality Clean and conduct physical checks of machine Perform SOP activities Perform simple data extraction and analysis (using Excel) Conduct manual analysis typically from silo sources of data N/A I4.0 Transfer WIP products into and monitor multiple machines Run QC queries on system Resolve downtime after automated diagnosis (via AR or remote instructions) Run big data analysis collating unstructured realtime data from multiple sources Identify patterns such as bottlenecks and make actionable recommendations Oversee several robots in production Carry out routine and emergency maintenance Mitigate production downtime by introducing alternative robots in case of robot failure Source: BCG Analysis TMA - Roadmap to Industry 4.0 - presentation - vff.pptx 26
EMPLOYEE SKILLS How do manufacturers aim to answer these skill challenges? "How to overcome skill gap?" Training 53% What type of training will be important? (%) +56 +66-7 83 80 66 27 39 32 Learning by doing E-learning +59 Immersive training Traditional training Recruiting 29% Reeducation 18% Do you expect net / net to hire or fire? IT -12 50 Maintenance Quality control Prod. planning Logistics -17-12 -17-29 32 28 25 25 Supply chain -12 12 (%) Source: BCG (BCG Perspectives: The Factory of the Future) TMA - Roadmap to Industry 4.0 - presentation - vff.pptx 27
IT INFRASTRUCTURE Two topics dominate practitioners' concerns I4.0 requires plant-wide connectivity & data storage Data is poised to become evermore valuable under I4.0 Issues today: lack of network standards + poor network infrastructure Concerns today: general data security + uncertainty about ownership of data Source: BCG (BCG Perspectives: The Factory of the Future) TMA - Roadmap to Industry 4.0 - presentation - vff.pptx 28
ROADMAP What production managers expect Preparation / pilots Implementation Cont. improvement Short term 2016-2020 Medium term 2020-2025 Long term 2025-2030 Plant structure Modular production line Sustainable production Multidirectional layout Plant digitization Plant processes Big data & analytics Collaborative robots Production simulation Augmented reality Decentralized steering Smart robots Additive mfg. Overall Source: BCG (BCG Perspectives: The Factory of the Future) TMA - Roadmap to Industry 4.0 - presentation - vff.pptx 29
ACCELERATING THE START BCG proposes to start with a holistic I4.0 health check Comprehensive I4.0 health check at plant level PROJECT EXAMPLE Source: BCG TMA - Roadmap to Industry 4.0 - presentation - vff.pptx 30
ACCELERATING THE START followed by selecting from already proven use cases Simulation New product line simulation Autonomous robots Self-driving logistics vehicles Software integration Smart supply network Novel software allows for virtual assembly line simulation & optimization Industrial internet Predictive maintenance Fully automated transportation systems navigate smartly within the factory Self-organizing production Monitoring of entire supply network allows for better supply decisions Big Data and analytics Big Data-driven quality control Remote monitoring via sensors allows for repair prior to breakdown Source: BCG Line automatically coordinates and optimizes utilization asset-by-asset Algorithms reduce product failures by correlating outcome to quality data TMA - Roadmap to Industry 4.0 - presentation - vff.pptx 31
Please reach out in case you have any questions, comments, or would like to discuss the topic further Thank you! Benjamin Fingerle Principal, Bangkok Industrial Goods & I4.0 fingerle.benjamin@bcg.com TMA - Roadmap to Industry 4.0 - presentation - vff.pptx 32
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