1. Advanced Manufacturing - Trends, Drivers and Opportunities in the UK Perry Le Dain Vilhelmiina Vekkeli Finpro UK

2. FINPRO Summary It is predicted that the amount of previously outsourced production returning to the UK could be worth 30 billion to the UK's economy. Offshore manufacturing will cease to offer significant advantages and a substantial number of new jobs will be created by re-shoring production. Advanced manufacturing IP can be located anywhere. This will be a key driver for re-shoring. The rising costs of manufacturing in China may push manufacturing back to the UK. The costs of Chinas currency and shipping rises 5% per annum and wages increase by 30% per annum. This will be a driver for re shoring. At the core of Advanced Manufacturing will be cyber-physical systems made up of software, sensors, processors and communication technologies. In order to leverage the full potential of advanced manufacturing, the issues concerning management and control, security, standardization and infrastructure need to be addressed. Technologies will be embedded into materials, parts and machines so they can communicate with one another in real time and exchange commands in the supply chain thus creating the smart factory. Lean and agile supply and value chains will be a key benefit and driver for investment. This will drive the need for flexible and dynamic business processes that can react in real time so that decisions will be taken automatically to optimise the production process. Fewer people will be required in the advanced manufacturing process (lean model). A key benefit will be reduction of low-skilled labour due to automated processes enabling the employment of highly-skilled knowledge workers. Software will replace labour in advanced manufacturing environments and synthesise information to improve and accelerate decision making. Entrants with strong digital expertise and an engineer-friendly cultures will attract the best talent. A challenge to manufacturers will be the recruitment of next-generation advanced manufacturing talent. There will probably be a scarcity of resource due to their desirability within the manufacturing industry. Without the right talent it will be difficult to develop software-driven IP business models and an organistation that is fit for purpose in order to develop the Industry 4.0 processes. The UK government has selected robotics and autonomous systems as one of the eight great technologies that the government believes deserves particular support. A key driver for the Internet of Things is the ubiquity of smart devices, falling costs of components such as microchips, network connectivity, processing power, standardisation of protocols, affordable cloud computing services, underpinned by vast increases in storage capacity in the cloud. These must be addressed in order to drive adoption. Security and reliability are keys issue that must be addressed. For IOT to become a reality, energy consumption needs to reduce dramatically in order for batteries and equipment to last longer, thus avoiding the cost and inconvenience of replacing devices. Battery life for connected devices will need to be extended to years of uninterrupted use. Without extended battery life the IOT will not be able to reach its full potential. This is a key driver for innovation. 3. FINPRO Summary (2) IOT will enable value chains to disaggregate e.g in-sourcing third parties such as logistics and e-commerce providers easily and seamlessly into the value chain. The new found flexibility and agility will lower the barriers to new market entry for manufacturers (by sector and geography). Service design in high value manufacturing will help a manufacturer lower barriers to adoption of their product. This is because service design creates an excellent service model not simply a traditional manufacturing process. This will be underpinned by the new business and organisational models that will vastly improve agility, flexibility and speed to market (velocity). Citi Group has listed 4D printing (as well as robotics) among its 10 disruptive innovations that will change the world. A key driver for 4D printing is in the fast commercialization of products. This will enable shorter production runs, and better services to manage the life-cycle of products. Industry gains possibilities in the prolonged life-cycle of products, for example in repair and customization. This will provide individualised and tailored output with speed. Big trends in robotics are drones, cheap and easy to use home robots, and intelligent robots that can learn about their surroundings. SPARC, a funding programme targeted for robotics innovations, has recently been launched by the European Commission. This 2.8 billion euro investment by the EC and the robotics industry is meant to create 240 000 new jobs. According to the ECs estimation, the robotics industry will be worth around 60 billion euros a year by 2020. The use of robots is especially effective in dangerous, or hand to reach environments. This is a key driver for adoption. Because of the sheer amount of big data, traditional data warehouses may not be able to store and process all of this. Further complications arise from the unstructured and varied nature of the data sources. Because of this, new technologies are needed to process the gathered data in tolerable time. There are clear opportunities for organisations that can codify Big Data to ensure relevant and timely delivery particularly at point of experience, e.g. the connected or driverless car, supply chains and logistics. Insurance is a key driver for development of the connected car Black box technology will be used to monitor the car in real time to analyse driving behaviour and track incidents. This will reduce insurance fraud and enable insurance companies to react immediately to claims as the data will be stored in the car (enhanced QoS). Premiums could be weighted in real-time to encourage safe driving. This is an opportunity for insurance and safe driving apps. Security issues are a concern for the development of the connected car. The more the car is connected to the cloud, the greater the risk of hostile intrusion. What can be done to improve security? The challenge of embedding technology in cars is fossilisation. How can in-car technology be software defined to ensure forward compatibility? 4. FINPRO Manufacturing in the UK Manufacturing contributes 6.7tr to the global economy. UK manufacturing is strong with the UK currently the 11th largest manufacturing nation in the world (the UK ranks second in aerospace manufacturing) Manufacturing makes up 11% of UK GVA and 54% of UK exports and directly employs 2.6 million people. Manufacturing contributed 25% of UK GDP. The UK-based auto industry exported a record-breaking 84% of its production in 2013 and the chemical and pharmaceutical industries add 20m per day to the UK balance of trade. On average annual productivity increases by 3.6%. www.themanufacturer.com/uk-manufacturing- statistics/#sthash.hnDxSkR5.dpuf 5. Industry 4.0 6. FINPRO The 4th Industrial Revolution The first industrial revolution commenced at the end of the 18th century with the introduction of mechanical manufacturing. The second industrial revolution continued early in the 20th century with the introduction of electrically powered machinery used for mass production. The third industrial revolution occurred during the 1970s with the use of information technologies to automate production processes. This dramatically reduced the need for manual tasks and replaced them with intellectual tasks. The fourth industrial revolution is now emerging. Industry 4.0 basically describes the fourth stage of industrial development, with increasingly smart systems being formed in ever more closely integrated value chains. The Industry 4.0-compliant production facility is thus a completely integrated smart environment. Industry 4.0 will encompass not only value creation, but also organisation and business models. This will be achieved by using IT to link production, logistics and resources via the integration of cyber-physical systems and the internet of things and services in industrial processes. 7. FINPRO Cyber Physical Systems Industry 4.0 (integrated and advanced manufacturing) will have a significant impact on industrial capabilities. Automation and agile processes are vital in a modern, global, competitive environment. Industry 4.0 will enable the integration of electronics, electrical engineering, mechanical engineering and information technology. There will be increasing levels of intelligence in devices that are used in industrial environments. At the core will be cyber-physical systems made up of software, sensors, processors and communication technologies. Applications of cyber-physical systems - digital manufacturing - smart energy grid systems - smart transportation systems - smart consumer electronics - smart medical monitoring/sensing devices The UK has historically been an industrial heavyweight. A reverse migration of off- shored manufacturing is occurring. Industry 4.0 is expected to improve the UKs competitiveness globally and will address problems related to the shifting supply of labour. It is predicted that the amount of previously outsourced production returning to the UK could be worth 30 billion to the UK's economy. Offshore manufacturing will cease to offer significant advantages and a substantial number of new jobs will be created by re-shoring production. Industry 4.0 will eliminate low-cost labour as a prerequisite for a successful manufacturing economy. 8. FINPRO The Smart Factory Industry 4.0 will integrate Big Data analytics, cloud computing, cyber-physical systems, RFID, Internet of things, machine-to-machine communications, and service design and delivery using communications technologies to optimise production and manage a product's end-to-end lifecycle. But in order to leverage the full potential, the issues concerning management and control, security, standardization and infrastructure need to be addressed. Many of the individual technologies that lay the foundation for Industry 4.0 have emerged during the last decade. These pre-existing technologies can be embedded into materials, parts and machines so they can communicate with one another in real time and exchange commands as products make their way down the production line thus creating the smart factory. A key focus is on smart products and smart production (efficient processes and procedures). McKinsey and Company2014 9. FINPRO The Smart Factory (2) In the smart factory there will be direct communication between man, machine and resources. Smart products will know their manufacturing processes and future application and will actively support the production process and the documentation (when was I made, which parameters am I to be given, where I am supposed to be delivered.). With an interface to smart mobility, smart logistics and smart grids the smart factory is an important element of future smart infrastructures. Conventional value chains will thereby be refined and totally new business models will become established. Industry 4.0 will link the isolated elements of production chains. Data network technology such as RFID will gather data and map the entire production flow from supplier to customer. Each product will be embedded with unique digital information that it will wirelessly share with machines as it moves along the production line. Production runs can be tailored to customers' requirements at every step on the production line. Industry 4.0 technologies will facilitate product strategies that expand into the field, monitoring the requirements of customers long after a shipment has left the factory. Key beneifts of the Smart Factory: Increased productivity through automation. Reduced capital due to the optimisation of capex and opex Reduced energy costs due to the smart control of facilities. Reduction of low-skilled labour due to automated processes enabling the employment of highly-skilled knowledge workers. Lean and agile value chains and value teams (e.g. supplier relationship) Predictive maintenance through improved system monitoring Logistics optimisation and supply chain tracking and tracing 10. FINPRO Drivers for Innovation Business processes will be flexible and dynamic. Factories will self organise and production processes will react in real time to fluctuations in demand or failures in the supply chain. Production will be then reorganised autonomously and intelligent industrial devices will communicate with each other. Seamless data collection will dramatically reduce lead times and enable the rapid use of production-relevant data for near- term decision-making regardless of the location. This means Industry 4.0 users can reduce market lead times for innovations. Start-up firms in particular are presented with especially attractive options by Industry 4.0. By using intelligent control methods and taking input from sensors, other machines and systems, real-time decisions will be taken automatically to optimise the production process. Industry 4.0 allows the incorporation of individual customer-specific criteria concerning design, configuration, ordering, planning, production and operation as well as enabling modifications to be made at short notice. Industry 4.0 will enable rapid and inexpensive low-volume production runs. Smart production will be underpinned by new technologies such as 3D- printing. There has been a particular increase in customer expectations in the automotive sector when it comes to customising a vehicle. This is placing demand on the production environment, which means factories will be able to mass customise. In April 2013 the UK government selected robotics and autonomous systems as one of the eight great technologies that the government believes the UK will excel in and deserve particular support. Consequently, the UK government awarded the research field 15m in a bid to increase research into Industry 4.0. According to a review by McKinsey and Co of major on shoring initiatives in the past two years the vast majority of on shoring initiatives were in manufacturing. This development is primarily due to a rebound in domestic demand for goods such as machinery and automobiles that are typically assembled close to final demand. In addition, in the price of natural gas since 2008 is attracting some manufacturing industries to re shore. (Source Rebalancing your sourcing strategy, McKinsey and Co). 11. Internet of Things 12. FINPRO The Internet of Things describes devices or sensors that are smart and connected and have the ability to collect and share data. The data coming from those devices and sensors is combined and analyzed with other types of data. Other terms used to describe this market include: Connected Devices; Embedded Connectivity, Embedded Intelligence; Industrial Internet; Internet of Everything; Remote Asset Management; Pervasive Computing; Pervasive Internet. The Industrial sector covers industrial asset monitoring and tracking, involving discrete monitoring of assets or devices to ensure uptime performance, version control, and location analysis for a wide range of factory processes. The costs of components such as microchips, cloud services, GPS devices, connectivity have fallen and, processing power is becoming more affordable, and cloud computing services are increasingly available. This is a key driver for IOT. In order to support the growing number of connected devices in the UK, a dedicated Internet of Things network rolled out in the UK during 2015. The connected devices will range from smart energy meters and washing machines that can be controlled remotely, to wearable devices that monitor health and fitness. This is the first step in the UK of creating smart cities, smart manufacturing and intelligent buildings. The national network will be built by BT subsidiary Arqiva. It will consist of ultra- narrowband technology which is particularly suited to connecting objects over long distances where a long battery life and low cost are required. Ultra-narrowband technology allows the transmission of small amounts of data thus providing capacity for the considerable number of connected devices throughout the UK. The network will become part of the SIGFOX global IOT network. SIGFOX networks are already deployed in France, Germany, the Netherlands, Russia and Spain. A challenge for the IOT network rollout in the UK is how to find a way to support all of these devices in a cost-effective way. In order for the IOT to become a reality, energy consumption needs to reduce dramatically in order for batteries and equipment to last longer, thus avoiding the cost and inconvenience of replacing devices. It is expected that battery life for connected devices will need to be extended to years of uninterrupted use. Without extended battery life the IOT will not be able to reach its full potential. 13. FINPRO Applications IOT is starting to become a reality aided by the widespread availability of smartphones and tablets that provide a suitable user interface. The widespread adoption of IOT will be enabled by advancements in chip technology, computing power, battery life, wireless technology and the mandatory standardisation of communication protocols. This will enable the collection of data from devices. This is underpinned by vast increases in storage capacity in the cloud. IOT networks will connect data from products, assets and the operating environment (e.g. supply chain). This will facilitate enhanced analysis of the data which in turn will improve decision making significantly. Common applications for IOT are expected to be: Tracking. When products are embedded with sensors, companies can track the movements of these products and even monitor interactions with them. Business models can be fine-tuned to take advantage of this behavioral data. Some insurance companies, for example, are offering to install location sensors in customers cars and the price of policies are influenced in real time based on how a car is driven and where it travels. RFID tags placed on products moving through supply chains will improve inventory management while reducing working capital and logistics costs. Car manufacturers are using networked sensors to send continuous data on product wear and tear thus enabling proactive fault management and maintenance. The aerospace industry will use sensors to monitor engine performance in real time. Environmental awareness. Sensors deployed in roads and buildings will provide a heightened awareness of real-time events, particularly when the sensors are used with advanced display or visualization technologies. Logistics managers can get real- time knowledge of weather conditions, traffic patterns, and vehicle locations. The system can then make automatic routing adjustments to reduce congestion costs and increase efficiency. 14. FINPRO Applications (2) Automation. Data collected through IOT can be converted into instructions to automatically modify processes. Productivity will be increased because the systems will react and adjust automatically to complex situations and make avoid any human interventions. Process optimization. Sensors will be used to alter the progress of a product during assembly ensuring that it arrives an optimum position without disrupting or damaging the assembly line. This will create major reductions in waste, energy costs, and human intervention. This will include automated temperature adjustments in pulp and paper manufacturing. Autonomous systems. The most demanding use of IOT involves the rapid, real-time sensing of unpredictable conditions and instantaneous responses guided by automated systems. IOT will enable immediate and real-time machine decision making and reactions thus empowering machines to mimics human intervention at enhanced performance levels. The connected car will avoid collisions and deploy automatic braking systems. Multiple factors are coming together to create the climate for major, worldwide adoption. Consider the following: 15. FINPRO Drivers for Adoption Multiple factors are coming together to create the climate for major, worldwide adoption. Consider the following: Control. IOT is starting to become a reality, aided by the widespread use of smartphones and tablets that can act as user control panels for networked devices. There are now many cloud platforms that can collate and manage the huge volume of data from large numbers of networked devices and use data analytics to extract useful information for decision making and systems control. Costs are falling. The costs of the Internet of Things components such as microchips, cloud services, GPS devices, accelerometers, connectivity, and other technologies have fallen and are now within reach for most organizations. In addition, processing power is becoming more affordable, and cloud computing services are increasingly available, vastly expanding the capability to crunch very large data sets. Connected device demand is accelerating. As more companies and consumers realize the value of connected things, the market is swelling into the billions and beyond. Device options are expanding. Everything from light bulbs and washing machines to point-of- sale terminals is becoming connected, and that connectivity is also greatly improved, whether its wired, wireless, Wi-Fi, Bluetooth, cellular, or something else. And components are becoming more powerfultiny microchips are now capable not only of connectivity but also of running much more advanced software than ever before. 16. FINPRO Drivers for Adoption (2) Business, regulatory and technical issues must be resolved before IOT is widely embraced. Early adopters will need to prove that the new sensor-driven business models create superior value. Industry groups and government regulators should study rules on data privacy and data security, particularly for uses that touch on sensitive consumer information. Legal liability frameworks for the bad decisions of automated systems will have to be established by governments, companies, and risk analysts, in consort with insurers. The cost of sensors and actuators must fall to levels that will encourage widespread adoption. Networking technologies and the standards that support them must enable data to flow uninhibited between devices, sensors, network infrastructure and computers. Software to aggregate and analyze data, as well as graphic display techniques, must process and visualise huge volumes of data in order to empower human decision making or guide automated systems precisely and timely. Within companies, big changes in information patterns will have implications for organizational structures. This will impact the way decisions are made; operations are managed; and processes are conceived. Product development, for example, will need to reflect far greater possibilities for capturing and analyzing information. Manufacturers can begin taking steps now to position themselves for these changes by using the new technologies to optimise business processes in which traditional approaches have not brought satisfactory returns. Energy consumption efficiency and process optimisation are good early targets. Experiments with the emerging technologies should be conducted in development labs and in small-scale pilot trials, and established companies can seek co-creation partnerships with innovative technology suppliers creating IOT capabilities for target industries. 17. FINPRO A Driver for Change The rising costs of manufacturing goods in China are pushing off-shored manufacturing back to developed countries. Currently, the costs of Chinas currency and shipping rises 5% per annum and wages increase by 30% per annum. By 2015 it may cost the same to make goods in the UK than to manufacture them in China and ship them to the UK. What will determine the location of many future factories will be things such as quality, faster lead times, proximity to local markets, technical competence, workforce skills, lower shipping costs and simplified supply chains. Furthermore, IOT technologies are making production a less labor intensive business. Key technologies are converging. Intelligent software allows products to be designed, tested and put into production more easily. New materials, like carbon fibre and nanoparticles, are changing the way things are made, often with less assembly required. More dexterous and cheaper robots reduce operational and capital costs. A host of online manufacturing services now allow anyone with a computer to become a manufacturer. Additive manufacturing (commonly referred to as 3D printing) will enable bespoke manufacturing on a large-scale basis. 3D printing pays little heed to economies of scale. 18. FINPRO Industry Transformation IOT will enable value chains to disaggregate e.g in-sourcing third parties such as logistics and e-commerce providers easily and seamlessly into the value chain. This will create openings for focused, fast-moving competitors and new entrants. Digitisation of the manufacturing process will lower entry barriers and new entrants will be able scale up rapidly at lower cost than legacy players, and returns will grow rapidly. This may be key driver for re-shoring. Software will replace labour in advanced manufacturing environments. IOT will encroach on a growing number of knowledge roles within companies as algorithms crunch big data and automate many middle management jobs and synthesise information to improve and accelerate decision making. Faster and efficient decision making will improve performance throughout the supply chain. Operational risks will be reduced by sensing wear and tear on equipment. New operating models will facilitate peer-to-peer product innovation and co-creation, crowdsourcing could replace expensive R&D, 3-D printers will make JIT manufacture of products on demand a reality. Entrants with strong digital expertise and an engineer- friendly cultures will attract the best talent. This will challenge capital- and labor-intensive operating models. But manufacturers may struggle to find the right talent in areas that cannot be automated such as artificial-intelligence programmers or data scientists, digital strategists and developers of digital business designs. A key challenge will be reallocating the savings from automation to the talent needed to implement IOT strategies. Strategicprinciplesfor competingin the digital age. McKinsey and Company2014 19. FINPRO Internet of Things UK Infrastructure Investment BT has teamed up with open source machine-to-machine (M2M) equipment supplier Neul to supply a city-wide test-bed for IOT applications in Milton Keynes. This will provide low cost, high reach, wide area connectivity for IOT. It has invited interested parties to get in touch with project ideas. http://www.neul.com/neul/?p=5164 The Milton Keynes system is based on the Weightless open communications standard for the IoT. The standard has attracted over 1,400 companies and is backed by ARM and Accenture. Weightless was developed specifically for IOT. Open standards and ecosystem collaboration are a requirement to make the IoT a reality. The first of 1,000 planned sensors will be installed in June and connected by an initial 12 base stations that cover most of Milton Keynes. Backing for the project comes from the Connected Digital Economy Catapult, Future Cities Catapult, Milton Keynes Council and The Open University. Arqiva http://www.arqiva.com/ is setting up a 10-city IoT network. The cities in the Arqiva network includes Birmingham, Bristol, Edinburgh, Glasgow, Leeds, Leicester, Liverpool, London, Manchester and Sheffield. Arqiva regularly collaborates with a number of in order to identify overlaps . UK tech start-up Senaptic www.senaptic.com announced plans to build specialised, cellco-free IoT networks for specific customers and segments. IoT initiatives are likely to pose a threat to mobile network operators such as Vodafone and Telefnica who are targeting the M2M market. The cellco community will need to respond to these developments with a network that is better suited to IoT applications than LTE in its current form. 20. Advanced Manufacturing Case Study Catapult High Value Manufacturing https://hvm.catapult.org.uk/home Dick Elsy, CEO. 21. FINPRO Catapult High Value Manufacturing Case Study Dick is a passionate believer in the value of creation through technology. He holds of a Silver Medal from the Royal Academy of Engineering for his outstanding contribution to British engineering. He is also a Chartered Engineer, a Fellow of the Institution of Mechanical Engineers and a past director and trustee of Engineering UK. High Value Manufacturing Catapult was established by the UK government as a catalyst for the future growth and success of manufacturing in the UK. It aims to revitalise the manufacturing industry in the UK. The HVM Catapult's long-term goal is to stimulate growth in the manufacturing sector and more than double the sector's contribution to UK GDP. This will be achieved by accelerating new concepts to commercial reality. More specifically, the HVM Catapult gives scientists, engineers and entrepreneurs access to a pool of expertise and experience within academia, research, industry and government. It bridges the gap between early innovation, where the UK has traditionally been strong, and industrial-scale manufacturing, where real wealth is created and the UK is relatively uncompetitive. This allows progressive businesses and organisations from large conglomerates to SMEs - to build new partnerships and products with significantly reduced risks. Catapult provides UK business with a gateway to access the best manufacturing talent and facilities in the country. It is also a two-way communication channel to the heart of government and a valuable conduit for funding from both the public and private sectors for projects and initiatives. HVM Catapult's network consists of seven technology and innovation centres, established and overseen by the Technology Strategy Board, with over 200 million of government investment. These centres are an important part of the UK's innovation system. They allow businesses to access equipment and expertise that would otherwise be out of reach. They also help businesses access new funding streams and point them towards the potential of emerging technologies. They bridge the gap between universities and businesses, helping to commercialise the outputs of Britain's research base. 22. FINPRO Catapult High Value Manufacturing Case Study (2) The Technology Strategy Board has created seven Catapults in the following areas: High Value Manufacturing Cell therapy Offshore renewable energy Satellite applications Connected digital economy Future cities Transport systems HVM Catapults turnover for 2013 was 220m. It employs 1200 people in the seven centres. Revenue is derived from three sources; Government funding Industry investment R&D collaboration 45% of income is derived from commercial operations e.g. Rolls Royce leasing equipment and R&D facilities. 30% is derived from European research funding e.g. Horizon 2020 http://ec.europa.eu/programmes/horizon2020/en HVM Catapults operational and business model is very similar to VTT in Finland. Dick works closely with VTT on joint initiatives. A key driver is to bridge the gap between the research and commercial worlds in the UK in order to commercialise innovation and enable SMEs to scale up at low risk. Until Catapult HMW this was missing from the UK landscape. The UK is traditionally good on research but poor on converting the research to value added manufacturing. Re-shoring is an important part of Catapult HMWs mission. In particular the mission is to reduce UK intellectual talent going abroad and losing the value of that intellect domestically. A key focus is on white collar value (brain not brawn). 23. FINPRO Catapult High Value Manufacturing Case Study (3) UK manufacturers are typically risk averse. Catapult HMW key service offering is the investment in new equipment that companies can lease in order to test innovation and share the risk of investing in new technologies e.g. aerospace equipment leased by Rolls Royce to test new metal cutting methods in order to develop new manufacturing processes that reduce time and operational and capital overheads. This enables manufacturers to reduce the risk of innovation and reduce the investment costs while driving innovation within their businesses. Government funding is used to purchase the new equipment. HVM Catapult also facilitates co-creation between manufacturers. This is particularly useful for driving innovation within the supply chain between the manufacturer and their suppliers. Dick describes this as bringing people together and working smarter together. A sister Catapult is Connected Digital Economy https://cde.catapult.org.uk/ The Connected Digital Economy Catapult builds platforms for UK SMEs to innovate on at speed and at reduced risk, so new digital products and services can be accelerated to market. They bring together a wide range of partners interested in the success of the digital economy. The Digital Catapult is not a funding agency. It works with build platforms for a large number of SMEs to use. They will open a new innovation centre during 2014. Key focus areas are IOT and Industry 4.0. A key challenge for HVM Catapult is how to attract SMEs. Large manufacturers clearly see the value of HVM Catapult because they inhabit a large ecosystems of suppliers and strategic partners with whom they can share the risk. SMEs do not have access to this ecosystem. Dick needs to address this by understanding how to evangelise HVM Catapult to SMEs in order to reach out to them with a clear message that will have value to them and persuade them to make the leap of faith and invest in high-value manufacturing. It is also a challenge to filter out the relevant SME manufacturers for whom HVM Catapult will have value e.g. now to find the innovators within the SMEs. It is often difficult for innovative companies to deploy solutions in the UK due to a fragmented vision of how to take advantage of smart technologies and a reluctance to deploy untested but innovative products and services. UK SMEs often have to go abroad in order to deploy pilot projects due an unwillingness for companies to trial their products and technology. 24. FINPRO Catapult High Value Manufacturing Case Study (4) It is important that the UK develops capability in creating collaboration and co-creation between industry and academia stakeholders in the value chain. A key focus needs to be on business models and deployment. This will make it easier to deploy innovative products and services. But, the development and adoption of new business models is the most difficult concept to grasp. More often than not these come from "left field" and it's difficult to develop a standard process to encourage them. The best that a country can do is to encourage them and take a firm line on protectionism and anti-competitive behaviour. Recent examples are the controversy over Taxi apps and the AIRB&B model. The UK has particular strengths in design, research, finance, and engineering services which could account for up 25% of the total smart technology market. Smart technologies will provide opportunities for new services to inhabitants of urban environments. Recent estimates indicate that 80% of global GDP is generated in cities. Rapid urbanization needs to be understood by cities. Cities are also the hubs of innovation. Cities represent an opportunity for suppliers and consumers of smart technologies that will optimise resource consumption and improve services through better management of demand and supply. A recent survey found that utility companies could save between $7.1 billion and $12.5 billion each year by using smart energy solutions. The market potential for smart products is large and these smart solutions provide a catalyst for further growth in traditional design and engineering services and new services. The global market for smart city solutions and the additional services is estimated to be $408 billion by 2020. For example, these solutions will create the physical and digital infrastructure for parking management and guidance, smart ticketing and traffic management, road design and big data analytics. Successful deployment of smart technologies within urban environments will require collaboration between multiple actors in the value chain. This could be a barrier in some verticals where there is little incentive for established players to change. According to Dick, business leaders need to be signposted to examples of breakthroughs achieved by embracing new technology. The "norm" is for companies to incrementally improve through small steps. This of course can lead to success with low risk, however these companies assume that to get a step change they need to outsource or go offshore. A focus on innovation can yield a result which will eclipse those of off shoring. A good example of this is Rolls Royce and the work HVM Catapult did with them on disc machining - a process which had been uneconomic in the UK and was heading overseas. Rolls-Royce used the Advanced Manufacturing Research Centre's expertise to develop an Rolls-Royce's latest family of large Civil Gas Turbines. A joint team used cutting edge machining, tooling and modelling technologies to deliver a step change improvement to work content, productivity and quality, compared to industry standard methods. The manufacture of full scale demonstrator components at the AMRC validated the new approach in readiness for the launch of a new high technology disc factory. Rolls-Royce has drawn upon the Advanced Manufacturing Research Centre's (AMRC) expertise to develop an advanced manufacturing method for gas turbine disc components for Rolls-Royce's latest family of large Civil Gas Turbines. 25. FINPRO Catapult High Value Manufacturing Case Study (5) The key issue here is that the thing that has made this stick in the UK is the knowledge gained from the technology not the pursuit of a low cost economy. Joint work with the HVM Catapult on a technology breakthrough halved the machining time, and thus cast by far the biggest positive shadow on the cost. Rolls Royce has now built a UK facility using this technology with a complete supply chain behind this. Successful HVM Catapult case studies of how HVM Catapult has helped SMEs develop advanced manufacturing processes are: PLAXICA. Plaxica is a spin-off from Imperial College London and specialises in the production of bioplastics plastics made from natural feedstock such as sugar and cellulosic based materials. Plaxica's aim is to reduce the reliance upon oil-based products by using processes that are more sustainable and environmentally friendly. Plaxica need to develop and scale up the production process for their product, conducting trials on a larger scale to confirm the scalability of the process. Plaxica utilised HVM Catapults laboratory facilities and extensive technical and analytical support. This enabled Plaxica to commercialise strong IP in low cost, high performance bioplastics. The product is a greener, cleaner and stronger form of plastic made from natural feedstock such as sugar and corn starch, and can be used for a variety of consumer packaging and clothing applications. After early stage trials were successful, the company approached HVM Catapult with a view to expanding and taking the work to the next level. With assistance from HVM Catapult scientists the trials have been successfully taken from bench to pilot scale. Plaxica now runs two laboratories and they have recently launched their own pilot plant on site. They now employ a multi-disciplinary team of around 30 people at two sites in the UK, consisting of chemists, technicians and engineers. 26. FINPRO Catapult High Value Manufacturing Case Study (6) SANDWELL UK. Sandwell UK is a specialist SME focusing on coatings and shot peening - a process that blasts beads onto a component to strengthen it. The process is used in a wide-range of different critical high-stress components, for example the suspension arms of Formula One racing cars and on high-pressure systems for the oil and gas industry. Consistency and accuracy are critical (length of time, speed of movement etc) for the process to work most effectively. This required consistency makes it ideal for robotic units, but in the past this hasn't been possible due to the low volume and bespoke nature of each application. Using the HVM Catapult R&D facilities Sandwell developed software that scans the components and uses direct design data to drive the robot in a specific path of direction suitable for each individual component. This has achieved a 20 percent increase in efficiency for Sandwell. According to Sandwell, SMEs cannot afford the risk of buying the necessary equipment to develop the robotics. HVM Catapult enabled access to robotics and the support required to develop the process. Sandwell is now able to invest in new robots and scanning equipment. NEWBURGH ENGINEERING. Newburgh Engineering is working with the Nuclear AMRC (an HVM Catapult Centre) to optimise production in the nuclear supply chain. Newburgh has been working for several years with an overseas customer to produce large components for the energy industry. These parts require significant machining on large-bed machines. Traditionally in a production environment engineers do not have time to do detailed tests. This prohibits benchmarking and optimisation of equipment and resources in the supply and value chain. Test facilities at Nuclear AMRC enabled them to do necessary analysis and develop best processes in order to create proper data. Newburgh also used the academic resources of the centre to optimise and improve their production methods for nuclear new build. 27. FINPRO Catapult High Value Manufacturing Case Study (7) THE CENTRE FOR PROCESS INNOVATION (CPI) is leading a consortium of major companies to create a UK supply chain to enable the widespread adoption of low cost, near field communication (NFC) devices using printable electronics. The project is a 10 million collaborative project involving businesses and the Governments Advanced Manufacturing Supply Chain Initiative (AMSCI). The project will build manufacturing capacity, develop manufacturing skills and demonstrate application deployment. The project brings together the UKs world-class strength in print, electronics and design in a collaborative consortium to open- up a globally competitive UK supply-chain in printed NFC components. Many smartphones are enabled with NFC, allowing the user to interact with a diverse range of supported devices. This capability is already used widely in applications such as contactless payment. This project will extend NFCs use so that smartphones can interact with printed items such as labels, posters, documents and product packaging. It will also allow retailers and manufacturers to manage their supply chains more efficiently. CPI is the process element of the UK governments national manufacturing strategy, dubbed the High Value Manufacturing Catapult. The initiative is tasked with stimulating growth within manufacturing sectors throughout the UK. CPI is focused on the development, scale-up and commercialisation of a number of key enabling technologies including printable electronics. CPIs National Printable Electronics Centre, based at NETPark in Co. Durham is equipped with an extensive range of assets specifically chosen and developed to allow clients to understand how their products and processes perform under industrial scale manufacturing conditions. The project will also look at how Immersive Virtual Reality Technology can give innovations a competitive advantage e.g. improve operational efficiency; transform value chain performance; improve factory layouts; improve collaborative working; reduce programme developments costs. This project is in collaboration with the sister Catapult Manufacturing Technology Centre www.the-mtc.or. According to Dick Virtual Reality is one of the most promising development areas in manufacturing and the technology behind virtual reality has evolved to mean its now user friendly and accessible for all businesses small or large. 3D technologies enable businesses to quickly explore, design, validate or communicate new products and operational initiatives, which provides businesses with valuable economic benefits 28. Advanced Manufacturing Case Study 2 Imperial College London Royal College of Art http://www3.imperial.ac.uk/ www.rca.ac.uk Nicholas Coutts 29. FINPRO Imperial College London Case Study Nicholas Coutts lectures at The School of Service Design http://www.rca.ac.uk/schools/school-of- design/service-design/ The implementation of a service design methodology in high value manufacturing enables manufacturers to bypass traditional engineering processes and develop design-led processes. In high value manufacturing, the intellectual property of the manufacturer becomes a design process not an engineering process. Consequently, service design in manufacturing is underpinned by software- driven modelling. This empowers agility in the manufacturing process and everything can become a prototype. This agility creates granularity in the design and manufacturing process and small changes can be made to the product design in real-time thus enabling mass production of unique products. This is inconceivable in the old manufacturing model. Service design in high value manufacturing is more about the organisation than the technology. It will create huge organisational change and enable new business models. This will improve efficiency, effectiveness and adaptability. Fewer people will be required in the manufacturing process (lean model). IP can be located anywhere. This will be a key driver for re-shoring. The new found flexibility and agility will lower the barriers to new market entry for manufacturers (by sector and geography). Service design in high value manufacturing will help a manufacturer lower barriers to adoption of their product. This is because service design creates an excellent service model not simply a traditional manufacturing process. This will be underpinned by the new business and organisational models that will vastly improve agility, flexibility and speed to market (velocity). 30. FINPRO Imperial College London Case Study (2) Service design extends the supply chain and creates transparency. This will enable manufacturers to fully exploit their manufacturing capacity and effectiveness at reduced cost. But, the extended nature of the supply chain will force manufacturers to focus on reliability and redundancy in the supply chain in the event of disruption and failure. This is particularly important as software modelling will enable high value manufacturers to be flexible in the widespread location of their operations. Manufacturers must be able to rapidly repair or re-direct operations in the event of failure in order to protect the supply chain and ensure 100% up-time. What is the value of Advanced Manufacturing to the customer not just the manufacturer? What are the benefits to the customer? E.g. Improved choice of configuration Velocity / just in time manufacturing and delivery Using the design process to identify routes to additional value for the customer Service design will be a key factor on the return of investment of assets. Services will determine the return on assets. For example: equipment maintenance; design and development of advanced manufacturing processes; training in advanced manufacturing equipment and processes; marketing of the capability are all services. So, how well these services are designed will have a big if not critical impact on the value that the advanced manufacturing assets can generate and hence the return on assets and the return on investment. A challenge to manufacturers will be the recruitment of next-generation advanced manufacturing talent. There will probably be a scarcity of resource due to their desirability within the manufacturing industry. Without the right talent it will be difficult to develop software-driven IP business models and an organistation that is fit for purpose in order to develop the Industry 4.0 processes. 31. FINPRO Imperial College London Case Study (3) Advanced manufacturers must consider the resources for innovation as a set of services: for example, a laser cutting service which can be found, booked and paid for via a web or mobile service. Or a subject matter expert, who can be located quickly. Key drivers: Easy access to innovation resources Improve use of innovation resources Reduce innovation risks 32. FINPRO Imperial College London Case Study (4) The advanced manufacturer sets up a managed service platform that supports easy access to innovation resources and services, with systems for collaboration and sharing information, to avoid duplication of resources and provide effective support and processes for innovation teams. The manufacturer can then apply a Routes to Value process in order to drive Innovation within the organisation Turning resources into services will make access to innovation resources easy. It will improve the use of innovation resources and reduce innovation risks. By taking this initiative, an advanced manufacturer can evolve and adapt innovation services as needs change and apply a sustainable business model. 33. FINPRO Imperial College London Case Study (5) Nick is founder of Genesys Hub in the UK http://www.genesysnetwork.org/ Genesys is a London-based hub created to position the UK with clear specialisation in advanced manufacturing which will turn the UK into a pole for foreign investment attraction and industrial capabilities. A key focus of Genesys is: The ability to for the UK to manufacture high technology products, introduce innovative techniques in production and to develop new processes and manufacturing technologies. Assist manufacturers to identify additonal routes to value via the design process Consolidation of the industrial field specialised in the development of high technology, which will allow to maintain and promote the industry and to turn UK in an attraction pole for foreign investment, allowing the location and creation of new innovative companies. Development of the high technology industrial field that dominates enabling technologies. To give an answer to new initiatives derived from scientific activities. Talent and specialised training attraction pole with a clear industrial orientation, which ensures a flexible, innovative and with multidisciplinary skills work force and that will have a positive impact in job creation. Genesys offers a three year sponsored programme to build a pipeline of innovative ventures. Up to 500,000 annually. Its network of industry and academic partners can help you transform your ventures into global businesses. 34. 4D Printing 35. FINPRO 3D Printing 3D printing has grown in sophistication since the late 1970s. 3D printing works similarly to 2D printing, but has noses that can spray material in layers, thus creating 3D objects. 3D printing creates flexibility in product design, as models can be produced and tested easily, making also the manufacturing of the final product speedier. In addition the quality of the finished product is higher because of the precision of the layer-by-layer production. If the internet made everyone a publisher, 3D printing can make everyone a manufacturer. Even today an individual can get their own 3D model printed. With the help of crowdsourcing these models can then be manufactured in larger quantities Because of the cost-effectiveness of 3D printing, even small batches of a specialized product can be produced. This is relevant for example in the luxury product industry. The fastness of the 3D printing means that products can be made on-demand. Customers can instantly print the products they want. The technology also allows for mass customization, where mass-made products can easily be customized for clients needs and wants. In retail for example, this would mean the production of individually made, fitting clothes and shoes. 36. FINPRO 4D printing uses the 3D printing technique, but adds the element of change to the process. 4D objects will be generated from 2D templates that self-assemble when heated or subjected to another stimulus such as pressure or water, without the intervention of any other process. 4D printing could form the basis of the next big revolution in manufacturing. 4D printing uses regular plastic together with a smart material, in order to create adaptable objects. The smart material reacts to water -or other source such as heath, vibration, or sound- which acts as energy for the material to transform itself to a new form. The rigid material becomes a structure and the other layer is the force that can start bending and twisting it. From 3D to 4D Printing 37. FINPRO 4D Printing Citi Group has listed 4D printing (as well as robotics) among its 10 disruptive innovations that will change the world. A report by Markets and Markets predicts that market of 3D and 4D technology will be worth over $400 billion by the year 2020. 4D printing and self-assembling materials will fundamentally re-envision manufacturing and supply chains. The roles of for example labour power and energy consumption will change. The real opportunity is in the fast commercialization of the new technologies. This will enable shorter production runs, and better services to manage the life-cycle of products. Changes in the future may mean that the profit margin of manufacturing decreases, but simultaneously the service industry gains possibilities in the prolonged life-cycle of products, for example in repair and customization. This will provide individualised and tailored output with speed. Asda is the first supermarket in the UK to offer 3D printed figurines for sale. The service, which is being tested in York, allows the customers to create detailed models of themselves or family members. The client is first scanned with a camera, the 3D model is then created, and the shopper can collect the figurine on their next weekly shopping. Doctors at Southampton University Hospitals have created a 3D printed titanium hip replacement. The patients hip was scanned and modelled, and a unique replacement was made using 3D printing and stem cells. Also, in Germany a 3D printed skull implant was recently given to a patient. 38. FINPRO Applications for 4D Printing Printing perfectly fitting clothes Furniture that comes packaged flat and self assembles Self-repairing cars, bikes, and buildings Shoes that can adjust their own ventilation Tires that change shape or traction depending on conditions Water pipes that can adjust their capacity to reflect the water flows Repairs in difficult locations such as underwater. Airplane wings that change shape in flight to enhance performance Self-healing materials such as aircraft, roads, and bridges that can fix their own cracks Buildings that erect themselves 39. Robotics 40. FINPRO Robotics Imperial College has extensive robotics activity, forming one of the largest European robotics research networks http://www3.imperial.ac.uk/robot Imperial College is a partner of Finpro in the UK. Finpro UK works closely with the Service Design Team. Imperial College Research covers various aspects of basic and applied robotics research including mechatronics systems design and control, autonomous systems and artificial intelligence. Laboratories with significant robotics activities are located in the departments of aeronautics, bioengineering, computing, electrical and electronic engineering and mechanical engineering. The UK government has dubbed robotics one of eight great technologies to focus on. James Dyson invested 5million into a robotics laboratory at Imperial College London to look at the next generation of intelligent computing for the home and work. Researchers at the Dyson Robotics Laboratory at Imperial College will develop computer vision programs that will enable robots to move beyond controlled environments and successfully navigate the real world. Developing robots that can process visual information in real-time could lead to a new range of handy and helpful robots for around the home and in industry. The development of the Centre is part of Dysons plans to develop new robotic technology. It comes at a time when major technology companies such as Google, Amazon and Microsoft are buying up artificial intelligence and robotics companies in an effort to move toward the next generation of intelligent computing. 41. FINPRO Robotics (2) Big trends in robotics are drones, cheap and easy to use home robots, and intelligent robots that can learn about their surroundings. SPARC, a funding programme targeted for robotics innovations, has recently been launched by the European Commission. This 2.8 billion euro investment by the EC and the robotics industry is meant to create 240 000 new jobs. According to the ECs estimation, the robotics industry will be worth around 60 billion euros a year by 2020. The use of robots is especially effective in dangerous, or hand to reach environments. In Australia two robots are being used to keep the Sydney Harbor Bridge clean. In the UK OC Robotics, a Bristol based firm, supplies snake-arm robots that can inspect dangerous or difficult places such as nuclear plants or the insides of airplane wings. At Imperial College London researchers are building a robot that mimics the qualities of the swiftlet. Swiftlet is a bird that builds nests using its own saliva. The flying Micro Aerial Vehicle carries two chemicals that it mixes to polyurethane foam, and a 3D printing module which can deliver the foam. This robot can be used for repairs, or building new simple components. 42. Robotics Case Study Robofold http://www.robofold.com/ Gregory Epps, CTO and CEO 43. FINPRO Robofold Case Study Gregory is an industrial engineering graduate from The Innovation Design Engineering Department at the Royal College of Art and Imperial College London. He founded Robofold in 2008 with funding and incubation from Design London. The key focus was on robotics simulation for the automated cutting and folding of metal. Greg invented the first industrial example of curved metal with robots. In 2010 Robofold received a Knowledge Connect grant from Imperial College to research finite element modelling. In 2011 Robofold purchased ABB robots in order to establish automated manufacturing processes and to transform traditional metal manufacturing intto a fully digital and automated cutting and folding process. Robofold is located in Brixton, London. Robofold has a key focus on researching both the software and hardware for robotic metal folding. They have to consider both the technical and commercial issues in order to develop appropriate solutions that have a need and can be supported by a viable business model. They have to consider what can be made from their combined software and hardware technology. 44. FINPRO Robofold Case Study (2) Gregory is an industrial engineering graduate from The Innovation Design Engineering Department at the Royal College of Art and Imperial College London. He founded Robofold in 2008 with funding and incubation from Design London. The key focus was on robotics simulation for the automated cutting and folding of metal. Greg invented the first industrial example of curved metal with robots. In 2010 Robofold received a Knowledge Connect grant from Imperial College to research finite element modelling. In 2011 Robofold purchased ABB robots in order to establish automated manufacturing processes and to transform traditional metal manufacturing intto a fully digital and automated cutting and folding process. Robofold is located in Brixton, London. Robofold has a key focus on researching both the software and hardware for robotic metal folding. They have to consider both the technical and commercial issues in order to develop appropriate solutions that have a need and can be supported by a viable business model. They have to consider what can be made from their combined software and hardware technology. 45. FINPRO Robofold Case Study (3) They have worked with the automotive industry (BMW / Bentley). They considered this to be an ideal match as the automotive industry lacks sufficient tooling technology and expertise to form metal in an automated process. BMW is developing the GINA car that uses fabric to create a fluid and changeable design. Roboform worked with BMWs innovation team to see if Robofold could replicate the fabric with metal (http://www.bmw.co.uk/en_GB/topics/discover-bmw/concept- cars/gina.html).. But they discovered that automotive OEMs are very conservative and there was a lack of communication and collaboration between the design department and the engineering department. The automotive innovation process is slow moving and resistant to change. In order to embrace Robofold, BMW would have needed to speed up its innovation process and this was clearly a significant challenge and learning experience for BMW. Architecture has proven to be a desirable market for Robofold. There is demand for metal folding for use in building facades, internal installations, and furniture. Robofold can help architects to visualise, simulate and build what they design. Traditionally, this process is provided by modelling which is time consuming and expensive which makes it prohibitive. Robofold enables architects to visualise their concept by using 3D CAD modelling to create prototypes which can be produced easily and quickly. This is very useful for architects because their work is typically unique and one-off. This is not a mass manufacturing process. To support this, Robfold has had to develop a lean and agile production model. In 2012 Zaha Hadid Architects displayed a complete at the Venice Biennale. Robofold create the metal centre piece, (pictured). 46. FINPRO Robofold Case Study (4) The Robofold business model had evolved from fully digital, automated and streamlined manufacturing production to a value-based service model. They now have three key business models: 1) Metal folding manufacturing 2) Leasing of hardware and software to third parties 4) Consulting Their business model has migrated from market push to market pull. Currently, there is considerable demand for their consulting service. They did not expect to create revenues from sharing their IP and knowledge to third parties but now it is their main revenue stream. Their license model provides blueprints for robotics. The package includes, training, hardware recommendations, provision of software to control the robots, simulation and folding technology. For example, Bangor University in Wales licenses the Roboform solution in their innovations centre and sub lets to SMEs in order to the latter to prototype products in their labs. This provides low-cost access for SMEs. The whole manufacturing process is digitised. Because the process is fully digital end-to-end it is easy for Roboform to customise components on demand for either single orders or mass production. This is a key USP for robotics. For example, they can create personalised seats for wheel chairs by producing 3D scans of the individual. The software then instructs the robot to mould the seat. This process makes it easy to customise components to demand in a mass production environment. 47. FINPRO Robofold Case Study (5) A key driver for the adoption of robotics is the reduction in price. This will be it accessible to SME manufacturers for whom robotics was previously prohibitive. This will enable SMEs to react quickly to demand (pilot and pivot) and replace a costly workforce. The SMEs can rent the equipment from Roboform or Bangor University rather than make their own investment. There will be a demand for reskilling the workforce in order to meet the increasing demand for robotics and to meet expected production capacity. But the reskilling will be exclusive to knowledge-based workers not blue collar. 48. Big Data Analytics 49. FINPRO Big Data Analytics Big data analytics is the process of uncovering patterns, unveiling correlations, and extracting information from large amounts of different data types. The data sources can be web server logs, internet clicking data, social media activities, and other digital data. By analyzing big data companies can gain competitive advantages in the market, through for example more targeted marketing and increased sales. A key driver for Big Data analytics is the continual lowering of the price of cloud storage. Because of the sheer amount of big data, traditional data warehouses may not be able to store and process all of this. Further complications arise from the unstructured and varied nature of the data sources. Because of this, new technologies are needed to process the gathered data in tolerable time. There are clear opportunities for organisations that can codify Big Data to ensure relevant and timely delivery particularly at point of experience, e.g. the connected or driverless car, supply chains and logistics. Possible difficulties in big data analytics for companies are lack of internal analytics skills, the expensiveness of external analytics professionals and the above mentioned technical complications in combining analytics and data warehouses. 50. FINPRO Big Data Analytics (2) Big data offers many possibilities even for SMEs, especially in helping them to grow fast and internationalize their business. SMEs might not have the resources to analyze big data on their own, but they can make use of services that are based on big data analysis. Trends, such as the annual influenza wave, can be monitored by pharmacists by looking at data from internet clicking and searches. Big data analytics could also be used in cases such as a small vendor selling fans and air conditioners looking to access weather forecast data, up-to-date consumer preferences on social media, and customer location tracked by mobile phones. Big Data will be critical for the development of agile supply chain processes. Big Data will be critical for the development of the driverless car. A major need to dispel concerns over privacy of sensitive data, will be the development of Big Data security e.g. encryption. 51. The Connected Car 52. FINPRO UK Automotive Industry Two out of the top 10 selling cars for 2013, the Vauxhall Astra (4th) and the Nissan Qashqai (6th), are made in the UK. 1.58m vehicles manufactured in the UK in 2013 (81% exported) and 2.5m engines (62% exported). 2,350 automotive suppliers in the UK, employ 82,000 people. Typically 55bn annual turnover. The Society of Motor Manufacturers and Traders is predicting that the UK will become Europes third biggest car manufacturer after Germany and Spain. The biggest car manufacturers in the UK are: Nissan 500,000, Land Rover 340,000, Toyota 179,000, Mini 174,000, Honda 138,000, Jaguar 78,000 and Vauxhall 73,000. Toyota, and Nissan are incorporating telematics as standard into many post-2012 models. 53. FINPRO The increased demand for wireless connectivity, demonstrated by the high level of penetration of smartphones and tablets, is driving the automotive industry to incorporate in-vehicle infotainment (IVI) connectivity solutions that offer the opportunity to substitute functions of the on board computer (dashboard) with smartphones and tablets. These factors offer the opportunity to automotive OEMs, aftermarket service providers, software developers and Telematics Services Providers to provide a broad range of new services that will drive new revenue streams and customer loyalty. The infotainment technologies market encompasses information and audio visual entertainment systems for the purpose of navigation, safety, security, communications, environmental issues and leisure. In the UK in-vehicle infotainment has seen substantial growth with the increased popularity of smartphones and tablets. IVI in its current form has been around since the 1990s but improvements in computing technology and the wireless infrastructure have resulted in new possibilities. Meanwhile consumer expectations are also changing ensuring steady growth of demand, forcing vehicle manufacturers to offer advanced infotainment systems in their cars. Currently infotainment systems feel dated and under developed compared to consumer smart devices. Development times for vehicles are much longer than consumer technology. Carmakers have so far integrated existing automotive technology in a touch-screen unit that resembles a smart device resulting in systems that provide little gain in usability and do not offer any additional functions or benefits. Using a hand-held mobile phone while driving a car has been illegal in the UK since 2003. This is a key driver for IVI. Information will be accessed with minimum searching or button pushing due to voice commands. According to Accenture, the three key areas driving the connected car are: security, environmental protection and entertainment Jaguar Land Rover is partnering with Intel to develop their in vehicle technologies. The connected car will allow manufacturers to improve customer loyalty, as customers become used to the analytical insight into how they can save money through behavioural driving modifications. For example BMWs MINI Connected turns the Mini into a wired telecommunications and infotainment control centre. It lets the customer listen to a smart radio, sync iOS, use google maps, interact with the car, a Driving Excitement app scans the car and displays car analysis The Connected Car 54. FINPRO The Connected Car Key Drivers A key driver for telematics is usage based insurance to reduce premiums by influence safe driving. Insurance and safety are a key issue in the UK. Half a million insurance policies are expected to be using telematics in the UK by next year, according to the British Insurance Broker Association. Consumers will demand insurance discounts if telematics devices are to be implemented in their vehicles (More than 20 per cent of consumers would require at least a 47 per cent discount if they were to have a telematics device in their car for insurance purposes). There are concerns about the safety risks of using infotainment systems while driving. Regulations about the use of infotainment will certainly create some challenge but most will not be difficult to overcome. Consumers will demand IVI systems in their cars so regulations can only limit the types of use but are unlikely to outlaw it completely. Furthermore, many infotainment systems will rely on voice-activation, a technology that decreases driver distraction significantly. Increase in fuel prices will drive the need for infotainment apps that monitor the car and driving habits to inform how to improve fuel efficiency. In-car telematics is expected to be further boosted by the introduction of mandatory safety systems such as eCall in Europe from 2014, involving direct communication between the car and emergency or recovery services, in the event of an accident or breakdown. The European Commission has proposed that cars will be installed with the "eCall" system that automatically calls the nearest emergency centre. Even if no passenger is able to speak, e.g. due to injuries, a 'Minimum Set of Data' is sent, which includes the exact location of the crash site. Shortly after the accident, emergency services therefore know that there has been an accident, and where exactly. 55. FINPRO The Connected Car BMW is building a data warehouse in order to handle the estimated one terabyte of data per day it expects to be generated by users of its ConnectedDrive system by 2018. ConnectedDrive will track where consumers go, how they behave and how they use products, browse the internet and travel destinations via GPS. For vehicle manufacturers there is potential for managing customer relationships. Telematics will deliver data on driving style, routes and individual driving preferences (e.g most listened-to radio stations and unused dashboard functions). Vehicle manufacturers will not add significant value by simply duplicating smartphone apps in the car. However, the app for everything consumer attitude and government restrictions on smartphone usage while driving are forcing vehicle manufacturers to develop solutions that will allow safe access to some of the users favourite apps such as internet radio and social networking. As the capability of phones continues to increase, it is becoming inevitable that smartphone integration in car will be necessary. The key question for vehicle manufacturers is to decide how much information they are willing to share with smartphones and whether they want to develop their own app stores and in-car platforms. It is expected IVI will be a cloud-based service. The driver's contacts, email and calendar can all be accessed in-car, and with text-to- speech and voice recognition technology, the car will read emails and messages and replies can be dictated in return. Drivers will be able to browse, download and install any useful apps to customise their experience. Drivers will even be able to log mileages and fuel consumption up in the cloud. Proprietary, closed systems (e.g. QNX and Microsoft) may have a short lifespan. Cars have a much longer lifecycle than a tablet or smartphone, so even though a six-year-old car has plenty of life left in it, its infotainment OS may be obsolete. This may drive the need for open source IVI platforms. 56. FINPRO The Connected Car Insurance is a key driver for development of services. Black box technology will be used to monitor the car in real time to analyse driving behaviour and track incidents. This will reduce insurance fraud and enable insurance companies to react immediately to claims as the data will be stored in the car (enhanced QoS). Premiums could be weighted in real-time to encourage safe driving. Opportunity for insurance and safe driving apps. Security issues are a concern. The more the car is connected to the cloud, the greater the risk of hostile intrusion. What can be done to improve security? The challenge of embedding technology in cars is fossilisation. How can in-car technology be software defined to ensure forward compatibility? 57. Connected Car Case Study BMW www.bmw.co.uk Ken McCrorie, Technical Director, BMW Group UK Headquarters 58. FINPRO BMW UK Case Study Remote monitoring: From 2014 all BMW cars will have an embedded SIM card interfaced with the control unit in partnership with T-Mobile. The SIM will enable the car to communicate proactively with the BMW service centre who will deploy telematics to continuously communicate with the car. This will enable BMW to monitor 24x7 and warn the driver of mechanical failure (e.g. brakes). Safety is a key driver for technology R&D at BMW. This will replace the key reader. Safety is considered essential in order to maintain customer loyalty. There is a need to develop dashboard data displays at BMW service centres that show relevant real-time data to the agents. This is still in the infancy stage. There is a need for applications that will consolidate and display the plethora of data generated by telematics for each car. Navigation: BMW app will enable the driver to plot out the days journey in advance onto a smart device. The smart device will interface with the cars navigation system and automatically plot out the pre-programmed journey. There is opportunity for application development to enhance this feature which is designed for professional who travel on the road frequently to many destinations. Could gamification technology be deployed here? Connected Drive: (1) SOS button connected to BMW service centre activated in event of accident or when the air bag is deployed. The driver can automatically communicate verbally if necessary. The car will automatically be located for emergency services. (2) NFC: Information about local business (e.g. restaurants) will automatically be sent to the IVI system. The data will be predictive according to preferences and behaviour. This will include navigation details. NFC will also identify local parking availability on arrival at a destination. What can be done to improve smart phone integration and the interface with big data to improve NFC functionality and relevance to the driver? 59. FINPRO BMW UK Case Study (2) Active Cruise Control will predict road conditions and alter the behaviour of the car accordingly without driver intervention. It can also be pre-set to maintain a safe distance from other cars. Head up display: The windscreen will interface with the smart device and display email, calendar etc. Navigation information will also be displayed. All dashboard information will be displayed on the windscreen. Data streaming to the car from the cloud will increasingly be vital to communications. This is a major investment by BMW. What can be done to improve the communications interface? How to ensure communications are available everywhere, even areas with low telecoms infrastructure? 100% connectivity at all times is vital as IVI will be a fundamental component of the car. The car will increasingly become wireless. The smart device will increasingly become interoperable and vital to the communications in the next generation of BMWs (entertainment, navigation, security, unified communications). How to ensure extended battery life for the smart device if it is a critical component in the cars communication. This is a key issue to be solved. The car will become a hub for big data collection. This will provide opportunities to develop video technology, telecoms interfaces with devices, sensors and the cloud.. The smart device will interface with a sensor on the car that will be activated by swiping. This will be used for car pooling and enhanced security. Electric cars are a major investment by BMW R&D. Data will be streamed to the cars control unit while charging.