In partnership with:

Using Industry 4.0 & tech to

Presented by NZMEA Chief Executive Dieter Adam

15 September 2017

improve productivity

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NZMEA / Callaghan Innovation Industry 4.0 study tourGermany 23 April – 5 May 2017• Three days at the worlds largest industrial

technology fair Hannover Messe

• Visiting leading German industrial technology companies:

- Bosch

- Festo

- Sew Eurodrive

- Cirp

- Bechoff

- Trumpf

- Trilux

- Fraunhofer

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Contents1. Establishing the need

2. Advanced manufacturing technologies (Overview)

3. Industry 4.0 – networked manufacturing:

4. Industry 4.0 – products and beyond

5. AR / VR

6. Keeping skills development in line with technology

7. Bringing your people along

8. A plan for New Zealand

0.1 Establishing the need

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Seasonally adjusted sales of machinery and equipment - including transport

Photo: Supplied pic.2,100

2,200

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Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar

2012 2017

In our monthly business survey, manufacturers regularly report export sales >50% of total

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OECD June 2017Labour productivity continues to lag

1. Population-weighted average for the top 17 OECD countries for labour productivity, calculated using 2010 purchasing power parity exchange rates.Source: OECD (2017), Productivity database; OECD (2017), Economic Policy Reforms: Going for Growth 2017.

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Labour productivity – country comparison

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Working harder not smarter

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How to grow an economy without increasing wealthFigure 3. Potential GDP Growth

Source: Looking at the Stars – Speech by John McDermott, Assistant Governor and Head of Economics, RBNZ (26 July 2017)

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And… manufacturing is performing poorly by comparison

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Annu

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Multifactor Productivity

Primary industries

Manufacturing

Transport equipment, machinery and equipment manufacturing

Service industries

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What is the rate of defects in welding fabrication?

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New Zealand as 1.3 million FTE of employment

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Working harder not smarter

The Barista Effect

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Manufacturing is becoming more complicated at an accelerating rate

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The eroding margins of New Zealand manufacturingChallenge:• Globalisation

- Variable and unpredictable demand

- Price pressure from low cost economies

- Complicated supply chains

• Diversified

- Low volumes per variant

• Customer

- Short runs / batch size of one

• Demand

Challenge:• Shortened

- Increased investment in R&D required

• Product

• Life cycles

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The eroding margins of New Zealand manufacturingOur response:• Niche manufacturing

- Agile

- Responsive

- Innovative

The consequence:• Loss of scale (not that we had much)

• Increased cost

- Eroding margins and productivity

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The challenges and levers

Challenges:• To build and sustain globally competitive manufacturing

businesses

Levers:• Productivity (value created per hour Profitability

• Delighting the customer through excellent product and services

0.2 Advanced manufacturing technologies (overview)

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Advanced manufacturing technologies

• Additive manufacturing (3D printing) – plastics and metals

• Industry 4.0 (IIoT) – digitally networked manufact-uring

• Industry 4.0 (IIoT) – new products / services / business models

• Augmented reality / virtual reality

0.3 Industry 4.0 (IIoT) –digitally networked manufacturing

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Industry 4.0 (IIoT) – digitally networked manufact-uring

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Current methods to improve productivityAlready rely heavily on data acquisition and effective communication

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Industry 4.0 productivity improvement opportunitiesNetworked Manufacturing - more robust, and more efficient digital connection across all manufacturing assets and processes allows:• Acquisition of real-time performance information

• Optimisation of production planning and scheduling

• Real-time / early QA/QC

• Increased people flexibility in assembly

• Flexible production schedules (batch size = 1)

• Preventative maintenance and reduced downtime (Bosch Fellbach)

• Process optimisation

- Energy consumption FESTO Scharnhausen

- Fully automatic / self-organising production systems (FESTO; SEW Eurodrive)

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Acquisition of real-time performance information

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The concept of digital twin

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Optimisation of production planning and schedulingAxoom – a nice illustration of networked manufacturing

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Real-time / early QA/AC

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Increased people flexibility in assembly

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Flexible production schedules (batch size = 1)View Bosch Rexroth video: https://youtu.be/DrE0FShBfF4

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Preventative maintenance and reduced down time and process optimisation

AP

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Networked production architecture of the future

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Sew Eurodrive assembly cell

View video: https://www.youtube.com/watch?v=PY2TF3ZF0Kk

Assembly Cell

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Nothing new under the sun?

Gearbox assembly in SEW Eurodrive’s Graben-Neudorf factory, using CIM (Computer Integrated Manufacturing) in 1985

0.3 Industry 4.0 (IIoT) –new products / services / business models

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Industry 4.0 (IIoT) – new products / services / business models

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Out there, doin’ it already

0.4 Augmented reality / virtual reality

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AR-assisted assembly, servicing and repair

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DAQRI smart helmet

View video: https://youtu.be/t5ixBsHPMxk

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The future of manufacturing?

0.6 Keeping skills development in line with technology

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Jürgen Bechtloff

0.7 Bringing your people along

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Results from a 2016 survey of 1,500 workers across a range of industries in Germany

What role are new digital technologies playing in your work environment today?

Have these technologies made your life at work easier or harder?

0.8 A plan for New Zealand

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It’s about defending and building globally competitive manufacturing companiesNew Zealand manufacturers will:

• Have to ensure that they are not falling behind their competitors in terms of productivity gains and/or improved customer experience

• Evaluate and implement where appropriate Advanced Manufacturing Technologies to improve productivity and enable them to provide better products and services to their customers

• Only need to change & adopt new technologies to the extent required to stay globally competitive – but that could be a lot (and over what period of time?!)

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Conclusions1. Benefit assessment for these technologies is challenging, and

benefit realisation uncertain. Technology vendors usually fail to assist when it comes to preparing the business case

2. Vendor-independent assessment of Advanced Manufacturing Technologies will be a challenge for many manufacturers individually (shortage of time, skills/knowledge and senior management attention)

3. A major part of this assessment process is pre-competitive and hence best done collaboratively

4. Peer-to-peer learning has already proved to be a powerful tool to over-come the scale challenge we all face

5. There are opportunities to create additional scale benefits by working with parallel efforts in Australian manufacturing

6. There is a key role for government to support our efforts

7. Advanced Manufacturing Technologies will primarily benefit those who have already optimised their processes using existing approaches (LEAN, etc)

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Where to from here?• The NZMEA will continue to take a lead in supporting NZ

manufacturers in accessing new manufacturing technologies to build and sustain globally competitive manufacturing businesses

• Our role is to act as technology scouts, connectors and advocates in negotiating government support

• We are well down the track to form the Advanced Manufacturing Initiative (AMI), a virtual network of NZMEA members and others

• In and through the AMI, we’ll connect

- Manufacturers to create peer-to-peer learning opportunities

- New Zealand manufacturers with leading research facilities, technology developers and industry groups internationally

- NZ manufacturers as a group with similar industry-government initiatives overseas (e.g. IMCRC in Australia)

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Past and current activities

• Workshops with Dr Wagner, Fraunhofer Institute (June 2016)

• Established relationships with CSIRO and IMCRC (Aug. 2016)

• Conducted industry-readiness survey with AKL University and Callaghan Innovation (Feb. 2017)

• Organised study tour to Germany with Callaghan Innovation (April/May 2017)

• Preparing 2-day visit to Australia (use cases and research facilities) for November 2017

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Next

• Complete recruitment into the AMI

• Organise schedule of peer-to-peer learning events

• Set up database of existing / developing use cases in New Zealand

• Set up capability database for New Zealand (manufact-urers, consultants, research institutes and vendors)

• Work with IMCRC to organise visits by Fraunhofer experts

• Explore opportunities for ‘crowd-funded’ pilots, co-funded by Callaghan Innovation

• Work with govt agencies to set up Learning Factory