how to survive the fourth industrial revolution: a guide to digital manufacturing for sme decision...
TRANSCRIPT
How to survive the Fourth Industrial Revolution
a 15-minute guide to Digital Manufacturing for SME decision makers
Briefing at a glance
Manufacturing is a major contributor to the UK economy.
We all agree that Manufacturing is vital to the health and prosperity of the UK economy. But a new wave of digital technologies are about to transform the sector. This will bring both challenges and opportunities.
As a decision maker within a Manufacturing SME or micro-enterprise,
it is crucial that you understand how these disruptive changes will impact
your business.
Trying to get to grips with all this detail can be a daunting task. So I have put together this short guide to Digital Manufacturing for busy managers and executives of SMEs and micro-enterprises.
This briefing encapsulates all of the key ideas that you need to begin preparing your manufacturing business for the agile, data-driven, world of the future. Good luck with the journey!
Bill Harpley Founder and Principal Consultant [email protected]
©2017 Astius Technology Systems Ltd 2 15th February 2017
The Fourth Industrial Revolution
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A remarkable range of new technologies are evolving towards commercialisation.
These technologies will provide the basis for the jobs and industries of the future.
Advanced manufacturing processes will play a key role in delivering social, economic and environmental benefits.
Many commentators refer to this transformation as the Fourth Industrial Revolution.
UK Government policy
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UK Industrial Strategy
• Digital Manufacturing will play an important role in Government strategy for innovation, exports and regional economic growth
• The Green Paper published in January 2017 sets out the case for a new industrial strategy
• Promotion of manufacturing excellence is supported by a number of Government funded organisations.
• These provide Industry with: • Partnerships and collaboration • Funding opportunities • Academic research
Two bold visions
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The Industrial Internet Consortium was founded in March 2014 by a number of major global companies:
Cisco, IBM, Intel, General Electric
It aims to foster the development of industrial Internet applications and technologies
Its activities span a broad range of industrial sectors such as Energy, Transport and Manufacturing
Industrie 4.0 started life as a research programme to promote the shift to digital manufacturing by German industry. It is concerned solely with the needs of
Manufacturing industry
The initiative has enjoyed broad support within the EU and other industrialised regions of the world
‘Industry 4.0’ will be the focus of this briefing as it is highly relevant to developing the digital manufacturing capabilities of SMEs within the UK
Why Industry 4.0 is important
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Did you know that the American city of Cincinnati has declared itself to be an “Industry 4.0 Demonstration City”? An official proclamation was signed by John Cranley, Mayor of Cincinnati
Major Industry 4.0 initiatives are happening in industrial centres around the world – U.S. , China, Japan, Germany, Brazil – to name but a few
Here are just a few of the many reasons which Industry 4.0 is so important to the future of Manufacturing
Flexible and data-driven production processes will foster innovation and enable mass customisation
Smart Products will allow the manufacturer to understand how products perform in a customer environment
It enables higher productivity, improvements in quality, shorter time to market and new types of business models
Digitization of the entire value chain will lead to the ‘upgrade’ of entire sectors (e.g. Automotive, Aerospace)
Why we need Industry 4.0 in the UK
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UK businesses can play a lead role in both developing and deploying Industry 4.0 technologies and systems
Industry 4.0 will help UK manufacturing companies remain competitive in both domestic and export markets
The efficiency gains from Industry 4.0 may make it feasible to ‘reshore’ activities currently performed in low-cost countries
If UK manufacturers were to invest as much in Industry 4.0 as their German counterparts, they could boost their revenues by £20bn 1
1 Source: GAMBICA
GAMBICA View the infographic
‘Industry 4.0 – the opportunity for UK Manufacturing’
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OK, it all sounds vaguely interesting. So what are the benefits to me and my business?
Turn the page and discover why major Manufacturers have embraced Digital Manufacturing.
The benefits of Transformation
Increased Revenues
Greater Customer
Satisfaction
Highly Skilled Workforce
Agile Business Processes
Growth Mindset
Improved Decision
Outcomes
Better Quality Products
Greater Brand Value
These are just a few of the glittering prizes which can arise from successful transformation to Digital Manufacturing.
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Digital Manufacturing
What does it look like?
The building blocks of Digital Manufacturing
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Digital Manufacturing
Digital Technologies
The core pillars of
Industry 4.0
New Business Models
Culture and Strategy
Let’s take a look at each of these in turn
Digital Technologies
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Technology Drivers
Robotics
Simulation
Digital Communications
Cloud Computing
Additive Manufacturing
Virtual / Augmented
Reality
Big Data and
Analytics
Sensors and Data
Acquisition
Novel Materials
These are the key technologies which are driving Manufacturing towards the Fourth Industrial Revolution
The core pillars of Industry 4.0
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Advanced
Automation
Seamless
Connectivity
Sophisticated
Data Analytics
Industrial
Cybersecurity
Industry 4.0 takes automation to new heights. Intelligent machines and smart components work together to create a highly efficient workflow.
Machines, databases and production plants are all connected together via a digital network. This enables efficient scheduling and co-ordination across the entire value chain.
Production plants generate vast quantities of data. Analytics enables engineers and managers to exploit the hidden value in data. For example, to predict failure of equipment.
Greater levels of connectivity increase the risk of cyber-attacks. Cyber-physical security is a core element of Industry 4.0. Assess level of threat and implement effective policies.
New business models
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Customers
Suppliers
Internal Stakeholders
Partners
Product
Product Service
Service
Product only
Service only
Product + Service
Designing intelligence into products opens up the possibility of using data to create new revenue streams and business models.
EXPLORE NEW WAYS TO CREATE VALUE.
Culture and Strategy
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“Culture eats strategy for breakfast.”
• Strategy exists on paper • Culture determines how
things really get done
Value Propositions
Business Models
Customers
Markets
Products
Always remember that for your Industry 4.0 strategy to succeed, it needs to be accompanied by a programme of change management for: • Organisational culture • Processes • Skills and responsibilities
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OK, I’m with you so far. But how do I get started with transforming my business into a Digital Manufacturing company?
Turn the page and discover how to take your first steps on the road to a Digital Manufacturing future.
Where are you on the journey?
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“Where do I begin?”
“We are thinking about it.”
“We have just launched our first pilot project.”
“We’ve just transitioned our first pilot to Production.”
“We are extremely proud of what we have achieved!”
“It’s of no interest to me or my company.”
“We have a plan!”
Let’s learn more about Industry 4.0
The six capabilities of Industry 4.0
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Use these key capabilities to assess your readiness for Industry 4.0
Strategy, organisation and culture are crucial to adoption of Digital Manufacturing
STRATEGY AND
ORGANISATION
Highly automated distributed manufacturing processes are at the heart of the Smart Factory concept
SMART FACTORY
Efficient workflow is enabled by building ‘intelligence’ into both machines and components
SMART
OPERATIONS
Physical products are equipped with sensors and connectivity to enable value-added services
Data-driven processes are used to design new business models and revenue streams
Developing a skilled and well qualified workforce is essential to implementation
SMART
PRODUCTS BUSINESS
MODELS
WORKFORCE
EXPERTISE
Assess your current capabilities
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Each key Industry 4.0 capability is composed of a set of business functions
You can use the Industry 4.0 capability wheel to create your own scorecard in order to set a baseline for improvement
Assess your current state of readiness with the help of an external consultant or use the free Impulse online assessment tool
Your long-term goal should be to build a complete set of Industry 4.0 capabilities across your Manufacturing business
Source: adapted from Impulse Industrie 4.0 readiness model
Now get ready to define your current state of Industry 4.0 readiness
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In the next slide you will see a table which allows
you to estimate your current level of readiness for
Industry 4.0
• It takes each of the key capabilities which you have just learned about and allows you to assign a score to each of them
• Scores are in the range of 0 to 5, each indicating how far you are along the road to successful implementation of Industry 4.0
Industry 4.0 capability matrix
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CAPABILITY
LEVEL Strategy &
Organisation
Smart
Factory
Smart
Operation
Smart
Products
Business
Models
Workforce
Expertise LEVEL
0 Bystander
1 Beginner
2 Intermediate
3 Experienced
4 Expert
5 Leader
• Level 0 is for companies which have so far done nothing to prepare for Industry 4.0 • Level 5 is for companies which have successfully implemented all Industry 4.0 activities
Source: adapted from Impulse Industrie 4.0 readiness model
Defining the ‘new normal’
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Select a capability which needs improvement
Develop an hypothesis
Design your experiment
Run your experiment
Evaluate the outcome
If hypothesis is correct, this becomes the new desired operating state
Choose either of:
•Refine the hypothesis and repeat the experiment
•Accept hypothesis is false and abandon experiment
Start here SMEs tend to have limited expertise and resources. So how do you improve your Industry 4.0 capabilities?
The answer is ‘experiments’
• Select a capability which needs improvement
• If you could achieve this level of performance, it would become the
‘new normal’
Design a set of experiments which will test the feasibility of your idea
• Run the experiments and evaluate the results
• If it is a success, this will be the ‘new normal’ mode of operation
• If it fails, refine and repeat the trial or move on to the next experiment
An example: predicting failure
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CAPABILITY:
“I want to provide my customers with Smarter products.”
HYPOTHESIS:
“If I monitor Big Pump using sensors, I will be able
to predict failures.”
DESIGN EXPERIMENT
- Install vibration sensors on Big Pump
- Collect the data
- Analyse the data
Run the experiment for six weeks
Analyse the data and verify your
initial hypothesis
YES, the experiment has shown we can
predict possible failures of Big Pump.
Choose either of:
•NO, experiment has clearly shown that is not feasible to predict failure of Big Pump
• MAYBE, let’s tweak the experiment and run it again
Start here Running these types of experiments brings many benefits: Increased skills and
knowledge Measurable outcomes Great feeling of confidence
CONGRATULATIONS If you were to engage in such a successful experiment then you would have increased your Industry 4.0 ‘Smart Products’ capability rating
Level 0 (Bystander)
Level 1 (Beginner)
Track your progress
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CAPABILITY
LEVEL Strategy &
Organisation
Smart
Factory
Smart
Operation
Smart
Products
Business
Models
Workforce
Expertise LEVEL
0 Bystander
1 Beginner
2 Intermediate
3 Experienced
4 Expert
5 Leader
As your expertise and confidence grows, use the capability matrix to track your progress
towards complete Industry 4.0 implementation
Let’s talk about skills
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Building new digital capabilities for your
business requires investment in Skills
You need to initiate a programme of talent
acquisition and development
The benefits of doing this are legion:
Opportunities to create apprenticeships for young people
Attract a more diverse workforce
Create high-quality career opportunities for engineers, managers and executive staff
Enhance the reputation of your business as a forward-thinking organisation
Take a balanced approach
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DOWNSIDE
There are significant challenges and risks associated with the move to Industry 4.0
UPSIDE
A programme of managed change will transform your organisation into a 21st century Digital Manufacturing business
Using the scorecard approach described in this document will maximise your chances of
implementing a successful programme and contain the risks within identifiable bounds.
The benefits of Industry 4.0
Increased Revenues
Greater Customer
Satisfaction
Highly Skilled Workforce
Agile Business Processes
Growth Mindset
Improved Decision
Outcomes
Better Quality Products
Greater Brand Value
We have seen this slide earlier in the presentation. But now you understand the basic ideas
behind Industry 4.0, it will repay a second viewing.
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OK, you’ve convinced me! But for an SME, it looks like a huge challenge. Where can I get help with my Industry 4.0 initiative?
Turn the page and discover how to get help with your project.
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Digital Manufacturing
Get help with your Industry 4.0 project
How to survive the
Fourth Industrial Revolution
However, we never said it
would be easy …
Go it alone if you want to.
• But remember that failure is always an option!
• A skilled consultant can bring vision, impartiality and vital expertise to the project
But which partner to choose?
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We hope you feel inspired to
pursue your dream
Learn about Industry 4.0 Commit to a plan Implement your pilot project Design your new business model Transition into production Track your progress ……
Now it starts to look complicated!
Why choose
Astius Technology for your project?
How to choose a
Consulting Partner
Deep knowledge of Industry 4.0
Three things to look for Three things to avoid
Visionary thinking
Narrow focus on ‘automation’
Understands challenges faced by SMEs in Manufacturing sector
Clear vision of how digital manufacturing will transform your business
Solutions which lock you in to a particular vendor
Lacks candour and tells you only what they think you want to hear
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Brilliant technology
Design for people
Business focused
Take an independent view
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The Engineering Employers Federation (EEF) have many useful resources on the subject of Digital Manufacturing and the ‘Fourth Industrial Revolution’ https://www.eef.org.uk/campaigning/campaigns-and-issues/current-campaigns/industrial-strategy
Read the IMechE and BDO report from June 2016 ‘Lack of understanding of Industry 4.0 will hold back UK manufacturing’
Manufacturing matters
©2017 Astius Technology Systems Ltd 35 15th February 2017
Talk to us We are ready to help 01273 906507 [email protected]
Manufacturing
business will
experience
monumental change
over the next decade.
With our visionary
thinking and
technology know-how,
we can help you make
the most of this
remarkable
opportunity.
Digital Manufacturing matters even more