Manufacturing Business Transformation

with ICT technology

2015.11.06

PTC Korea

Bong Ki Lee (bolee@ptc.com)

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Manufacturing Business Transformation with ICT technology

Smart Connected Product

Smart Factory

Smart City

Internet of Things Big Data

Predictive Analytics

Machine Learning

Virtual Reality

Augmented Reality

Connectivity

Digital Twin

Mobile

Cloud

Industry 4.0

Manufacturing

Innovation 3.0

Deep Learning

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PHYSICAL

WORLD

Traditional Reality: DISTINCT AND SEPARATE

DIGITAL

WORLD

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New Reality: DISTINCT BUT INSEPARABLE

Digital World Physical World

INTERNET OF THINGS

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5

System Of Systems Product System Smart, Connected

Product Smart

Product Product

Tillers Planters

Tractors

Farm

Equipment

System

Combine

Harvesters

Weather Data

System

Irrigation

System

Seed Optimization

System

Farm Equipment

System

Farm

Management

System Platform

Rain, humidity,

temperature sensors

Weather

maps

Weather

forecasts

Weather data

application

Farm performance

database

Seed database

Seed optimization

application

Field sensors

Irrigation

nodes

Irrigation

application

THINGS are Changing

The changing nature of products is disrupting value chains, forcing companies to rethink and retool nearly everything they do internally.” “

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New PRODUCT DEFINITION and TECHNOLOGY STACK

Digital PRODUCT CLOUD

Physical PRODUCT

COMMUNICATIONS Identity &

Security

External

Information

Sources

Integration

with

Business

Systems

Smart Product Applications

Rules/Analytics Engine

Application Platform

Product Data Database

Network Communication

Product Software

Product Hardware

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• Design becomes a systems engineering problem with increased IT and R&D collaboration

• Software-driven product variability enables new low-cost options

• Design enables evergreen products that can be continually upgraded, often remotely

• New user interfaces and augmented reality reduce the need for controls on the product itself

• Continuous monitoring of real-world performance data enables ongoing quality management

• Product designs can allow remote service and support new business models

• Products of broader systems require system interoperability and codesign

New Principles of Product Design

Configurable

Engine

Transforms PRODUCT DEVELOPMENT

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New Production Requirements and Opportunities

• Manufacturing goes beyond physical production via a cloud-based system for continuous

product operations

• Industrie 4.0 and Smart Manufacturing network machines to automate and optimize

production

• Shift from mechanical parts to software eliminates and simplifies physical components and

production steps

• Reconfigure assembly processes so product design changes and customization can be

incorporated later, even after delivery

Transforms MANUFACTURING/OPERATIONS

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New Service Delivery Approaches

Elevator / Escalator Manufacturer

Urban Mobility Solutions

Transforms AFTER-SALES SERVICE

• Technicians can diagnose problems remotely to enable one-stop service

• Shift from reactive to proactive and remote service and potential to optimize or disrupt

service channels and providers

• Predictive analytics can anticipate problems and enable preventative service

• Augmented-reality-supported service increase service efficiency and effectiveness

• Service expands to new value added services via the new data, connectivity, and analytics

available

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26 KEY IOT USE CASES Across Business Functions

MARKETING /

SALES

PRODUCT

DEVELOPMENT

OPERATIONS /

MANUFACTURING

SERVICE /

SUPPORT

INFORMATION /

OPERATIONAL

TECHNOLOGY

CUSTOMER

Rapid IoT Application

Development

Customer Insights

and Opportunities

Connected Product

Usage Analysis

Flexible Billing and

Pricing Models

New Value Added

Services

Connected Product

Quality Analysis

Connected Software

Management

Customer

Self-Service

Usage and

Performance

Dashboard

Product

Personalization

Connected

Operations Intelligence

Unified Key

Performance Indicators

Real-Time Asset Health

Monitoring

Operations Management

Improvements

Asset and Material

Tracking

Monitoring and

Diagnostics

Remote Service

Condition-Based

Predictive Maintenance

Automated Service

Execution

Warranty Cost

Management

Connected Service

Parts Planning

Flexible Product and

Asset Connectivity

Identity and Security

Management

Scalable IoT Operations

Management

Seamless IoT Data

Integration

Automated Analytics and

Actions

11 VALUE

New Ways to CAPTURE VALUE

Opt im ize Per f o rmance

Improve R isk Management

Reduce Produc t and Serv ice Cos ts

New Revenue S t reams

Operational

Di f f e ren t ia te O f fe r ing

Quickly deliver compelling, differentiated offerings that meet or anticipate customer demands

Eleva te Cus tomer Re la t ionsh ip

Make offerings smarter, easier to update, and more personalized to elevate customer experience

Strategic

Combine real-time data from assets, enterprise systems, and people to increase availability and operational efficiency

Improve ability to proactively identify and mitigate problems that represent financial, safety, environmental and regulatory compliance risk

Implement proactive service, limit warranty costs and risks, and optimize service and product development processes

Realize new value-add opportunities and revenue streams with incremental services and offerings

Subs t i t u te O f fe r ings

Breakthrough new offerings that capture demand from traditional products and services

New Bus iness Mode ls

Maximize revenue opportunities and value capture from new services or business models

Disruptive

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The DEFINITIVE ARTICLES on the Internet of Things

Smart, connected products will give rise to the

next era of IT-driven productivity growth at a

time when the impact of earlier waves of IT has

largely played itself out. – November 2014

Jim Heppelmann

President and CEO,

PTC

Michael Porter

Harvard Business

School

Smart, connected products are transforming

how companies design, manufacture, operate

and service products, and ultimately, how they

organize to create and capture value. – October 2015

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Enables Breakthroughs in both DIFFERENTIATION and

OPERATIONAL EFFECTIVENESS

• Smart, connected products and the data they generate enable 4 new categories of

capabilities, where each category builds on the preceding

• These new capabilities enable companies to create both:

– Differentiation (e.g. New and unique value-added services)

– Operational Effectiveness (e.g. Monitor products to improve service efficiency)

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1

2

3

4

5 6

7

8

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10 Which product capabilities to pursue?

Functionality: embedded in the

product vs. the cloud?

Open or closed system?

Technology development:

internal or outsource?

What data to capture? How to manage data rights

and access?

Disintermediate distribution

or service channels?

Change the business

model?

Sell data to outside parties?

Expand scope?

New STRATEGIC CHOICES for Companies

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• Data now stands with people, technology, and capital as a core asset

• Product data value increases exponentially when integrated with other data

• Companies unearth powerful insights directly from the product or by identifying patterns with new data analytics tools

• To better understand the rich new data companies are also beginning to deploy a “digital twin”

Creates NEW SOURCES OF DATA and VALUE UNLOCKED

BY ANALYTICS

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Requires a New ORGANIZATONIAL STRUCTURE

Organizational structures are in rapid flux, but a number of important shifts are

becoming evident

– IT & R&D Collaboration: Reflecting the new need for IT in product development

– Unified Data Organization: Handles enterprise-wide data management and analytics

– Dev-Ops: Oversees ongoing product updates and efforts to shorten product-release cycles

– Customer Success Management: Ensures customers gain ongoing value to reduce churn

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Business Transformation in manufacturing business

Manufacturing business can be transformed in terms of its business model and processes by

new paradigm of current era : Internet of Thing

Transform business processes Predictive maintenance, better asset

utilization, higher productivity, smart factory

Enable new business models e.g. : remote monitoring enables

anything-as-a-service, lease business, rev. share Traditional

Manufacturing

& Business

Internet of

Things

Industry Transformation enabler Types of new opportunity

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PTC Technology Platforms & Enterprise Applications

TECHNOLOGY PLATFORMS

IoT Application Enablement & Integration

ENTERPRISE APPLICATIONS

Augmented Reality*

Digital Twin*

*Beta

Big Data Analytics

CAD

PLM

ALM

SLM