HfS Blueprint Guide: Industry 4.0 Services€¦ · Industry 4.0 is a combined integrated seamless connected network of machines, production processes, and the manufacturing control
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Inthe last fewcenturies, theworldhasexperiencedthree industrial revolutionsthathaveshapedourindustrialprocesses.Inthefirstindustrialrevolution,labor-centricproductionprocessesweremechanizedthroughtheuseofwaterandsteampower.Thesecondwasdrivenbymovingassemblylinesandmassproductiondrivenbyelectricity.Thethirdwasdrivenbyelectronicsandtheapplicationofinformationtechnology and increased automated production. The fourth revolution sees technology embed itselffurther insocietywithdigitaltechnologicaladvancesconnectingallthemajorstakeholders inthecoremanufacturingactivities.
Industry4.0isacombinedintegratedseamlessconnectednetworkofmachines,productionprocesses,andthemanufacturingcontrolsystems.Itisadigitalmanufacturingenterprisewiththephysicalproductat the core driven by information from an integrated information network among the internalstakeholders,aswellasexternalentities,suchascustomers,suppliers,etc.Thisdigitizationofphysicalassets andmanufacturing activities alongwith a network of digital communications is fundamentallychanging the manufacturing industry landscape. This end-to-end digitization is improving processefficiency, quality management, and productivity along with real-time insights into the wholemanufacturinglandscape,buildingadigitalbusinessmodelthatsupportsdata-drivendecision-makingandintegratedplatform-basedservices.
The use cases of Industry 4.0 include supply chain, marketing, and services, R&D of manufacturingengineeringservices,andotherareas,butmostoftheopportunitiesandinteresttodayareinthecoremanufacturingactivities.Therefore,thisreportfocusesspecificallyonmanufacturers’shopflooractivities.
Digital OneManufacturing is the abxility to do mass customization at scale so that manufacturingenterprises manufacture for one customer economically and efficiently. This is possible whenmanufacturing enterprises achieve a significant increase in cost efficiency, time productivity, andflexibility,byaligningandintegratingtheirmanufacturingprocessesandtechnologylandscape,whichisthevisionofIndustry4.0.
Exhibit1:DigitalOneManufacturingFramework
Source:HfSResearch,2017
Industry4.0isallaboutsmartermanufacturing—theuseoftechnologysothesub-processeswithinthemanufacturing system make adaptive and predictive decisions. We developed our DigitalOneManufacturing framework that defines the DNA of digital connected plants that includes anintelligent,automatedcentralizedcontrolsystemwithasminimalhumaninterventionaspossible.
In brief, Digital OneManufacturing is the platform onwhich digital technologiesmeetmanufacturingengineeringtechnologiesandcontrolsamanufacturinglandscapeinrealtimetoserveclients.It’swherealltheprocesselementsarecombined:Connectivity,theprocesses,andtheintelligencecometogetherasoneintegratedunit,withonesetofunifiedbusinessoutcomestiedtomanufacturingorganizations.
DigitalUnderbelly:Weidentified13majortechnologiesthatareshapingIndustry4.0.ThesetechnologiesincludeManufacturingDataAnalytics,Robots,ManufacturingAutomation,DigitalCloneorSimulation,Three-Dimensional (3D) Printing, Manufacturing Internet of Things (IoT), Plant Cybersecurity,ManufacturingonCloud,VirtualRealityinManufacturing,AugmentedRealityinManufacturing,ArtificialIntelligenceinManufacturing,VisualAnalyticsinManufacturing,andSmallBatchManufacturing.
» ManufacturingAutomation:Implementationofcontrolsystemstoenableshopfloorprocessestoworkwithminimalornohuman intervention.This includes integrationofdisparateenterprisesystemsusedinmanufacturingforseamlessdataandinformationflow.
» DigitalCloneor Simulation: Implementationof a virtualmanufacturingenvironment, inwhichoperations are configured, tested, and optimized by creating a digital clone of the actualproductionline.
» Manufacturing IoT: The Internet of Things (IoT) is a network in which physical devicescommunicate and pass on data. The Manufacturing IoT exploits sensor data collected frommachinesonthemanufacturingshopfloor.
» Plant Cybersecurity: Security management of information technology (IT) and operationtechnology(OT)inmanufacturingandplantoperations.
» AugmentedRealityinManufacturing:Theaugmentationofareal-worldviewofmanufacturingoperations,assets,andpeoplewithadditionalcomputer-generatedpictures.Inmanufacturingandplantoperations,augmentedrealitycanbeusedtohelpthedevelopmentprocessbyvisualizingaproduct in situ before conception or in a factory setting by showing an engineer additionalinformation, such as thermal characteristics or schematics, while the engineer views the realobject.
» VirtualRealityinManufacturing:Theuseofsoftwaretocreateimagesandsoundsforimaginaryorlifelikemanufacturingplantsorfactories.Virtualrealityinmanufacturingandplantoperationsis used for many applications, including plant construction, plant maintenance, and operatortraining.
» Artificial Intelligence inManufacturing: In this context, artificial intelligence refers towhen acomputer is used to mimic human cognitive functions, such as complex problem solving andlearning.Useofartificial intelligence,machine learning inmanufacturing,andplantoperationsincludessettingtheparametersfortheplantoperationsandrecognizingimagesandvisualsusingmachinelearning.
» VisualAnalytics inManufacturing: The scienceand technologyof analyzing visual informationfrompicturesandvideostoaidreasoninganddecisionmaking.Useofimageanalyticswithinthemanufacturing sphere includesmachine vision and video analytics inmanufacturing and plantoperations.
» Level 1 - Smart Component: A smart component is one that responds to feedback based onsensoryinformationandmakespredictiveoradaptivedecisions.Machinecomponentsaremadesmart,productive,andefficientby implementing technologiesat thecomponentorsubsystemlevel.
» Level2 -SmartMachine:Asmartmachine isacombinationof several smartcomponentsandexhibitsthesameautonomousfeaturesasasmartcomponent.Asmartmachinecancontrolitsoperationandmakepredictiveoradaptivedecisionsbyrespondingtofeedbackbasedonsensoryinformation.Machinesaremadesmart,productive,andefficientbyimplementingtechnologiesatthemachineandsystemlevels.
IntelligentDigitalProcesses:Theseprocessesenablesmarterandmore intelligentmanufacturing.Wehave conceptualized three functions that are enabled by digital manufacturing processes: analysis,visualization,andcontrol.
» Control:Theabilitytocontrolanddriveproductionandshopflooractivitiesinrealtimewiththeuse of data, analysis, artificial intelligence, visualization, and control functions with minimumhumanintervention.
LeversofIndustry4.0
In our Digital OneManufacturing framework, we defined the components (the digital underbelly andintelligentdigitalprocesses)requiredforamanufacturingenterprise’sIndustry4.0journey.Howdoesthedigital underbelly aid intelligent digital processes in an enterprise? The links between the digitalunderbellyandintelligentdigitalprocessesarethefollowingcapabilitiesorlevers:
» Cyber-PhysicalSystem:Industry4.0connectsallthemanufacturingcomponentsandecosystems,including processes, sub-systems,machines, customers, supplier networks, etc. Because everyphysical system has a digital existence in Industry 4.0, all themanufacturing activities can becontrolledthroughasoftwareinterface.Thisinterfacegivesabetterviewoftheentiresystem,providesinterconnecteddatatomoreclearlyseesysteminterdependencies,helpsstreamlinethemanufacturingactivities,andincreasesthemachineuptime.
» Smart Machines: The application of smarter control mechanisms to robots and artificialintelligence(AI)-enabledmachineswilldifferentiateIndustry4.0manufacturing.Todate,robotshavebeen restricted to repeatable step-based taskswithoutautonomyor self-controlorhavebeendeployedinarestrictedscopeandnotonthemainassemblyline.Industry4.0smartrobotswillworkhand-in-handwithhumansusinghuman–machineinterfaces.Inaddition,machineswillbe connected to the cloud with automated decision-making loops. These machines willcommunicate in real time with a central IT system and can be controlled accordingly. Thisapplicationwillimproveproductivityandmonitorassetseasily.
» DataFlow:Industry4.0willgeneratelargeamountsofreal-timedata.Partofthenewchallengeistostoreandprocessthedataeffectivelytomakereal-timedecisions.Enterpriseshavetoidentifywhatdataneeds immediateprocessingandwhatdataneeds tobeuploaded to thecloudandprocessedforfurtheranalysis.Becausewholeenterprisescannotbetakenintothecloud,tomakedecisionsinrealtimeandeffectivelycontrolthisdataflow,manufacturersneedtodeployedgeanalytics.
» Virtual Manufacturing: Through digital simulation, any product or plant design will beconceptualizedinavirtualenvironment.Aftertheinitialdesignchange,theproductorplantcanbe tested and verified. In addition, advanced visualization techniques, such as virtual andaugmented reality, help develop precise digital clones. Therefore,when the physicalmodel isestablishedbasedonthevirtualdesign,thescopeoferrororfailureislow,savingalotofmoneyandtime.
In our Digital OneManufacturing framework, we mentioned the scope of Industry 4.0. It is atransformation journey toconnect thewholeenterprisewithdigitizedmanufacturingoperations forgreaterautonomyandflexibility.ThetransformationjourneyisconceptualizedinExhibit3.
InourDigitalOneManufacturingframework,wementionedtheintelligentdigitalprocessesofIndustry4.0.Duringourinteractionswithmanufacturingorganizationsandcasestudiesofserviceproviders,weidentified business outcomes influenced by these intelligent digital processes. Exhibit 4 shows thebusinessoutcomemappingwiththeintelligentdigitalprocessesforIndustry4.0implementationandthefundamentalbusinessimpactofeachprocess.
By combining these business outcomes and impacts, manufacturing organizations that implementIndustry 4.0 will benefit from significant competitive advantages. We identified the following list ofcompetitiveadvantagesamanufacturingfirmcanexpectfromtheimplementationofIndustry4.0:
» ManufacturingProcessOptimization:Industry4.0providesreal-timedataonphysicalassetsthatcanbeusedtomonitorandcontrolAI-enabledautomation.AIautomationprovidesself-learningand autonomy within parameters, with central control dictating tasks and priorities. A fullyintegrated and automated shop floor can be designed, in which all the machines in themanufacturingprocesscanbeconnectedwithautomateddecision-makingandadjustmentfacilitybasedonkeyperformanceindicators(KPIs).Themanufacturingplantthenadjuststheprocessestomaintainanoptimizedproductionthroughout.
» Streamlined Supply Chain: As manufacturing execution system (MES) applications becomeintegratedwithIndustry4.0,thesupplychaincanbealignedwithreal-timeproductiondata.Thisintegrationwill helpdevelopanautomated logistic ecosystem thatwill adapt automatically toproductionneeds.
» Improved InventoryManagement: In Industry 4.0, themachines are self-optimizedwith self-learning and decision-making capabilities. Thismeans themachines can sense unfinished andimperfect products and can flag the necessary stakeholders if a malfunction occurs in themanufacturingprocess.Thishelps inwastemanagementandenablestheprocesstorunattheminimuminventorylevel.
» End-User-CentricManufacturing:Themanufacturing industry isenteringamasscustomizationmodeinwhichsmallbatcheswillbemanufacturedwithfrequentchangesindesign.Industry4.0facilitates this trend with 3D printing and digital simulation, reducing the cost of developingprototypesandperformancechecksbeforebuildingphysicalmodels.Inaddition,manufacturerswill have the capability to develop an increasing number of versions and variations of theirproducts.
TheIndustry4.0marketisanemergingarea,andmostserviceproviderspointedtoproof-of-concept(PoC)and very small project engagementswith clients rather than to any large-scale implementations. Theservicesmarketforthisnewtechnologyisstillevolvingandhasyettoenjoythebenefitsofscale.Throughconsulting-ledtechnologyprojects,serviceprovidersarehelpingmanufacturersstartontheirIndustry4.0journey.Academicinstitutionsandoriginalequipmentmanufacturers(OEMs)havegeneratedagreatdealofthoughtleadershipforIndustry4.0.However,duetotheactiveinvolvementofemergingtechnologies,gettingfromtheorytorealityrequiresadditionalskillsetstheserviceprovidersareabletoprovide.ThisisleadingtoanumberofcollaborationsbetweenserviceprovidersandOEMsandacademicinstitutions.
ThisBlueprintGuideprovidesacapabilityanalysisoftheservicesofIndustry4.0serviceproviders.WefocusedthisanalysisexclusivelyontheIndustry4.0servicesvaluechainofR&D,Plan,Implement,andOperate across 13 technologies or the digital underbelly of Industry 4.0. The 13 technologies werepreviouslydescribed,andthevaluechainisdescribedinExhibit5.
» OEM Product R&D: R&D projects that include Industry 4.0–related product design anddevelopmentforOEMs’coreproducts.Forexample,severalmanufacturingindependentsoftwarevendors (ISVs) have started leveraging service providers in developing Industry 4.0–specificfunctionalities.
» OEMSolutionR&D:R&DprojectsthatincludejointsolutiondevelopmentwithOEMsforspecificIndustry4.0usecasesandbusinessoutcomes.OEMsleveragepartnershipswithserviceprovidersto extend the solutions reach, and service providers develop specific applications for OEMs’productsandplatforms.Forexample,GEandSiemensareengagingnumerousserviceproviderstodevelopappsonthefirms’platforms.
» InternalR&D:Industry4.0–relatedinternalproducts,tool,technologies,andintellectualproperty(IP) development projects by service providers that can help enterprises in their Industry 4.0journey.AlmostallserviceprovidersareengagedinIndustry4.0–relatedinternalR&Dwork.
» ITSystemsConsulting:ProvidingITstrategyservicesthathelptorethinktheenterprise’soverallITarchitecture to implementanew Industry4.0 technologyandtohelppredictandovercomeintegrationchallenges.
» Technology Consulting: Advising clients on implementing or upgrading specificmanufacturingtechnologiestoachievethedesiredbusinessoutcome.Inaddition,developingamanufacturingtechnologyroadmapforclientsispartoftechnologyconsulting.
» Business Consulting: Formulating an Industry 4.0 transformation strategy and roadmap at theenterpriselevel,whichincludesbusinessplanning,wholesaleprocessimprovement,andchangemanagement.
» DigitalFactoryImplementation:Transformationofthemanufacturingenvironmentattheplantor factory level through a combination of IT and multiple engineering technologiesimplementations.
Operate: These long-term annuity-based engagements help enterprises run their manufacturingoperationsintheIndustry4.0environment:
» BPO Operation: Manufacturing specific business process operations and management forproductivitymanagementandperformanceimprovement.
» As-a-ServiceOperation:Intelligent,automatedservicesinwhichserviceprovidershaveincreasedresponsibility for the outcomes. This can be achieved by offering services on platforms thatleveragecollaborativepricingthatreducesriskandincreasesthevalueforcustomers.
The Good Adoption category includes three technologies that have beenmastered by almost all theserviceproviders.TheBuildingCapabilitiescategorycontainsfivetechnologiesthatarestillevolvingandthatthemajorityoftheserviceprovidershaveyettomaster.TheNicheAreasincludefivetechnologiesthat are provided by only a few service providers and can be a differentiating factor in Industry 4.0offeringstoday.Exhibit7showsthetechnologyclassificationbasedonthenumberofcasestudies,andExhibit8showsthepercentageofcasestudiesforeachtechnology.
InExhibit8,themostfrequentlyusedtechnologiesaremanufacturingdataanalyticsandmanufacturingautomation.Digitalcloneorsimulationisalsoincreasinglyusedforergonomicsstudy,plantoutletdesign,andotherpurposes.ThereisstronginterestintheManufacturingIoTamongserviceproviders,buttherearenotmanyshopfloorIoTcasestudies.3Dprintingisahottopicformaterialandcomponentresearch,prototypes, and spares, butwe found fewcase studiesof 3Dprinting inproduction lines.Robots areincreasinglyvisibleinmainproductionlinesandareworkingeffectivelyintandemwithoperators.Serviceproviders are offering cloud capabilities in manufacturing, but it has yet to gain popularity amongenterprises. As enterpriseswill requiremore automated intelligent decision-making capabilities, AI inmanufacturingwillevolveandcouldbeamajordifferentiatingfactorforserviceproviders.
Geography wise, North American manufacturing organizations are at the forefront of Industry 4.0adoptionfollowedbyEuropeanandAPACenterprisesasshowninExhibit9.
In Exhibit 9, the rest of theworld (ROW) primarily includes countries from Latin America. The early-adoptercountriesof Industry4.0aretheUnitedStates,theUnitedKingdom,Germany,France,Japan,Russia,China,India,Brazil,Australia,etc.ThenumberofgreenfieldIndustry4.0implementationsisverylow,andmostimplementationsoccurintheexistingmanufacturingplantlandscape.
ThechartshowsthatmostoftheconsultingengagementswereITsystemsconsultingorientedfollowedby technology consulting and business consulting. In general, IT system consulting assignments arefollowed by project implementation. Typically, technology consulting engagements are related to thefeasibilitystudy,cost-benefitanalysis,andotheraspectsprimarilyforengineeringtechnologies.Businessconsultingprojects involveroadmapsandbusinessplans,andglobalserviceprovidersleadinthisareamorethantheirIndiancounterparts.
Overall,thenumberofIndustry4.0Operateengagementswasverylow.AsshowninExhibit18,mostofthesupportprojectswerepure-playIToperationsupport.Businessprocessoperations(BPO)operationsupportengagementswerefoundmainlyforIoTandanalyticsprojects.TheAs-a-Servicemodelistheidealstate of Industry 4.0 operations, and these types of offerings demandmore enterprise and solutionsmaturityoftheserviceproviders.Weobservedsomeearlyexamplesinthisarea,butthevolumewaslow.
Exhibit20showsthattheobjectivesofmostoftheengagementswererelatedtoanalysisfollowedbyvisualization.Whenanalysisandvisualizationprocessesareintegratedinthedecisionsupportmodelforautomated decision-making with minimum human intervention, then we will have real controlcapabilities.
Consulting and PoC-led engagement and verticalized platform–based solutions are the top growthstrategiesfollowedbyIndustry4.0innovationcentersandcollaborationwithdigitalinitiatives.
Asstartingthemanufacturingtransformationjourneyisabigdecisionforclients,theroleofconsultingandPoCisveryimportant.Themanufacturingprocessesofdifferentindustriesvary,soserviceprovidersare developing Industry 4.0–specific offerings. Industry 4.0 requires the integration of many digitaltechnologies; thus,digital collaboration isnecessarywitha focusonemerging technologies related toIndustry4.0.
As CoE teams and innovation centers are located across the globe, internal integrationwith externalpartners is necessary.Workforce skills and retention are also important. To date, a large number ofmanufacturers have yet to commit to Industry 4.0, and this is leading to the slowadoptionof digitalmanufacturing.Althoughsomeclientsaretestingthewaters,theengagementsareverysmall,andserviceprovidersarenotgettingthebenefitofeconomiesofscale.
» StarttheIndustry4.0journeywithsmallengagements:MostoftheclientexamplesprovidedbytheserviceproviderswesurveyedwerePoCsandsmall implementationprojects,whichmakessense given how quickly Industry 4.0 is emerging as a manufacturing transformation driver.However, these experimental engagements do not signify that Industry 4.0 is still a dream.
» Prepare for radical change: Industry 4.0 will be a radical change for all manufacturingorganizations.Itwillfundamentallytransformhowmanufacturingprocessesaremanagedandwillinfluencethevaluechainthroughdigitization.Manufacturingcontrolwillbemoreautomatedanddrivenbymoretechnologyandchangeduserexpectations.Thus,buyersshouldoptforserviceproviders that can support them to understand and embrace these radical changes and helpinnovateinternalprocessesandprovideexternalplug-and-playservicesthataddresstheimpactsofdigitalsmartmanufacturing,findinganewbalanceandinterplaybetweeninternalandexternalcapabilities.
» Leverage serviceproviders’ expertise toassess Industry4.0maturity:Many serviceprovidershave developed frameworks to help their clients assess digital manufacturing and customerexperiencematurityandwilloftentakeaconsultativeapproachtohelpclientsunderstandwheretheyareandwheretheyneedtobe.
» End-to-endsecurityisessential:AsIndustry4.0standardsandusecasesarestillevolving,concernremainsaboutdatabreachesofhardwareandsoftwarecomponents.Industry4.0’sextensiveuseof IoT components provides dangerous physical opportunities in addition to data theft unlesscarefulthoughtisgiventoallstagesofconnectivityandoperation.
» Integratedbroaderdataflowsolutionsareneededratherthanpointsolutions:Gatheringdatafromallthedigitalelementswillnotsolveproblemsformanufacturingactivities.Therealchallengeistointegrateallthedatapointsandtoextractactionableinsights.Thus,buyersmustwatchforservice providers based on their ability to provide deep expertise and capabilities in data andinformationmanagementtosupportallmanufacturingactivities.
» Look to service providers beyond cost and efficiency: Because Industry 4.0 is still in the verynascent stage, buyersmust look for strategic partnerships for a long timehorizon rather thanshort-termbenefits,suchascostreductionandefficiencyimprovement.Thus,buyersmustaligntheirfuturegoalswithserviceprovidersthatmentionmilestonesateverytimeinterval.Thiswillhelpservicesbuyersachieveamanufacturingtransformationthatwillmatureinthecomingyears.
» Increase the trust factor: In Industry 4.0, service providers retain the manufacturing controlsystems.Thus,forexecutionandfutureinnovation,buyersandserviceprovidersneedtobemorecollaborativeandinclusive.Bothpartiesneedtodiscussbusinesschallengesatregularintervalsandproactivelybringupinnovativeideastoimprovebusinessoutcomes.
» Develop collaborative pricing models and KPIs for Industry 4.0 adoption: Industry 4.0 willtransformthepricingmodelthatcanbedefinedbasedonthenumberofconnecteddevicesonaplatform,thedatavolume,thebusinessoutcome,orothersimilarmetrics.Thus,buyersshouldworkcloselywithserviceproviderstodeveloppricingmodelsandKPIsthatincentivizethemodels.
» “Skininthegame”intheformofR&D,otherimpactfulinvestments,andallotherrelevantindicationsof sustained commitment to this capability area. These indications might include crafting anassociated business case and roadmap, co-creating use cases with customers, pursuing relevantacquisitions,effectivelyarticulatinganIndustry4.0visionandhavingablueprintforexecutingonit,orbringingthe13technologycapabilitiesindifferentshopfloorbusinessoperations.Anyrelevantcustomer examples provided, notwithstanding the relative newness of this capability area,wereheavilyconsideredinourdetailedscoringmodel.
» Innovationstartswiththeserviceprovider’sexistingandplannedexamplesoftechnologyinnovation(oreveninnovativethinking)inthiscapabilityarea,includingthedepthoftheirsurroundinganalysis.Service providers often get very excited about new offerings and tout them as the end-to-endsolutionproviderthatencompassallthebusinesschallenges,whileleavingittoclientstoenvisionhowthat technologymightbeappliedtotheirspecificbusinessproblems.Thus,wealsocreditedprovidersthatcouldexplainthebusinessvalueandthepotentialofthenewcapabilitiesinwaysthatwouldresonatewithbuyers(andwithus)overvendorswithmoregrandiosebutperhapsnotverytangibleideasabouthowtoprogressinthisarea.Theecosystem,partnerships,investments,tools,andthoughtleadershipactivitiesareveryimportantinIndustry4.0,andwetookthemintoaccountwhileevaluatingtheserviceproviders’currentinnovationcapabilities.
Thedata-gatheringeffortforthisBlueprintGuideincludedvendorbriefingsandanabbreviatedrequestfor information (RFI) process, reviewing vendor collateral (including case studies), and evaluating theinformation presented in relevant third-party presentations (e.g., on YouTube).We also interviewedseveralenterprisecustomersandindustryexpertsinournetworktovalidatesomeofthefindings.
BlueprintGuideGridSummaryTomake it into theWinner’sCircleofanHfSBlueprintMarketGuide,avendororganizationneeds todemonstrateanabilitytoconsistentlydeliverexcellenceinExecutionandInnovationwithinthecapabilityarea covered. Given that Industry 4.0 services are still in the early stages of evolution and customerdeployment,sevenofthe13serviceprovidershaveshownahighnumberofpromisingsolutionsandthusqualified for theHfSWinner’sCircle:Accenture,HCL, IBM, Infosys, L&TTechnologyServices,TCS,andWipro.FourofthevendorswereevaluatedasHighPotentials:Altran,Atos,Cognizant,andTechMahindra.GenpactisrankedasaHighPerformerinthisBlueprintGuide.
Overall,however,ifastandarddeviationtestwereappliedtoassessthedegreeofvariabilitybetweenthevendor scores (and ultimately grid placement), it would reveal only amodest variability, particularlybetweentheWinner’sCircleandHighPerformersgroups.
Youshouldseethisgridasastartingpoint.Withoutquestion,buyersandvendorswillstarttoseemoreproofpointsandthenmorecapabilitiesaddedovertime.Differentserviceproviderswillemergeasbeingout in frontatdifferenttimes, including in first-to-marketways. Itwouldbepureconjecturetoassertwhichoneswillbeleadinginthiscapabilityareatwotothreeyearsdowntheroad,butthevendorsthatdemonstratedacontinuingcommitmenthavedonesoforgoodreasons,andthatwilldrivefutureIndustry4.0investmentsandinnovations.
Strengths • Accenture has a deep understanding ofmanufacturingwith clients across thesector and has used its experience to develop Industry 4.0–related tools andframeworks. In addition, the company’s integration of digital capabilities inIndustry4.0solutionshasprovidedadifferentiator.Accenturehasstrongdeliverycapabilities across the Industry 4.0 value chain and is focusing its workforcetrainingonemerging technologies, suchas robotics,augmentedreality,virtualreality,etc.
bodies and participates in keynote presentations at conferences and forumsthroughouttheyear.
• Accenture leads in scale for Industry 4.0 services. It has had more than 500Industry4.0clientsandengagements,amongthehighestoftheserviceprovidersevaluated for this study.Many engagements are very large spanningmultiplemanufacturing locations across continents. In addition, Accenture has long-standingstrategicpartnershipswithalmostallofthekeyplayersintheIndustry4.0space,suchasGEandSiemens,andthefirmhasbuiltextensivelibrariesofframeworks,APIs,andotherassetsforthem.
Challenges • Accenture'sIndustry4.0servicesofferingsincludetheoverlapofseveralbusinessunitswithinthecompany.AstheIndustry4.0marketisstillevolving,customerswillexpectflexibilityfromAccenturetodeliverserviceofferingsthatovercomeorganization complexity and can streamline project execution for large andmedium-sizeclients.
• Thewar for talent in thismarket isheatingup.Asextensivenicheexpertise isneeded for Industry 4.0 technical competencies, service providers, includingAccenture,couldbenefitfromgreaterdepthsofexpertise.AsAccentureisrapidlyexpanding its Industry4.0clientportfolio, talentreadinessandretentionareachallengeforthecompany.Accentureisaddressingtalentreadinessbyleveragingitsacquisitionsinthedigitalandengineeringspace.
InBrief Accenture’s Industry X.0 Practice spans all five Accenture businesses (Strategy,Consulting,Digital,Technology,andOperations)andintegratestheknow-howandexpertise of more than 10,000 professionals across Accenture businesses. Thecompanyhas integrated several digital initiatives, suchasblockchain, security,AI,etc.,withIndustry4.0offeringsalongwiththecapabilitiesofanumberofacquiredorganizations specializing in these areas. Accenture’s broad consulting skills,marquee customer list, and complexmulti-country technology implementation ofIndustry4.0haveprovidedanedgeovertheothercompanies.WewillwatchhowAccenturemanagesthegrowthofitsIndustryX.0PracticeandcontinuesitsglobalIndustry4.0leadership.
» Industry4.0buzzhasbeenaroundthemarketforquitesometime,butnowweareobservingtractioninthemanufacturingindustry.AlthoughenterprisesarefollowingaphasedapproachfortheimplementationofIndustry4.0,weexpectasignificantinvestmentplaninthecomingyears.DevelopedcountriesinNorthAmericaandEuropehavetakentheleapinimplementingIndustry4.0,butAsiancountries,suchasJapan,China,andSouthKorea,arealsocomingupfasterinthisspace. The front-runner enterprises in this spacewill reap the first-mover advantage in digitalproductsandservices.
» DataanalyticsisatthecoreofasuccessfulimplementationoutcomeforIndustry4.0.Thewholedigital ecosystem is dependenton the actionable insightsderived fromdata analysis. Todate,enterprisesareusingsocialdataanalyticstoidentifytrends,associations,andpatterns;however,forIndustry4.0engineering,dataanalyticsistheneedofthehour.Datainterpretationmustbealignedwiththephysicalworldtounderstandthemachinebehaviorandpredictthefuturestateofmanufacturing.Thus,enterprisesmustidentifyspecializeddataanalystswithknowledgeofcoreengineeringactivities.
» ManufacturingperformanceimprovementthroughIndustry4.0isevolvingfromtalktoaction.Enterprises that have successfully implemented Industry 4.0 are realizing benefits, such asinventorymanagementthroughleanmanufacturing,assetconnectivityandmonitoring,AI-baseddecision-making through real-time data analysis, augmented reality– or virtual reality–baseddigitalsimulationofmanufacturingactivitiesandproductprototypes,componentdesignthrough3Dprinting,etc.
» TheorganizationalcultureisthemaindriverofIndustry4.0adoption.Enterpriseslackadigitalcultureintheirorganizations,andthisiscreatingaroadblockforIndustry4.0implementationasemployeesneeddigitalskillstodrivedigitalmanufacturingprocesses.Thus,enterprisesneedtofocus on building the digital culture and train employees who are comfortable in the digitalecosystem.
InSummaryThe Industry4.0servicescapabilityareathat is thefocusof this researchgenerallystartedslowlyandconservatively in terms of investment from most vendors and customers. Large manufacturingorganizationsareusingsomeoftheIndustry4.0technologiesinisolation,butthetruepotentialofsmartmanufacturing will be achieved when all the technologies are leveraged in tandem. The main openquestionishowlongitwilltakebeforemanufacturingorganizationstakeIndustry4.0adoptiontothenextlevel,thatis,thedigitalfactoryandthenconnectedfactories.TheIndustry4.0implementationcostsintermsoftimeandeffortarenot insignificant,butenterprisescouldstartwithamodest investmentoftimeandeffort.Thatsecondwaveofearlyadopterscanthengofurtherintothisrealmwhenthebusinessimpactsareobvious.Intime,HfSbelievestheywillbe,andearlyadoptersoftenholdontocompetitiveadvantageoncetheyhaveit.
PareekhJainisSeniorVicePresidentandManagingDirectorIndiaatHfSResearch.Heisalsotheleadanalystforengineeringservices,IoT,telecom,and manufacturing. He established the global engineering servicespracticeatHfSResearchwhichcoversmechanicalengineering services,embeddedengineering services, softwareproductengineering services,PLMservices,andIndustry4.0.His IoTcoverageincludestheConsumerIoT, the Industrial IoT, and smart cities. He also tracks telecom andmanufacturing verticals. He has authored various industry-leadingengineeringservicesresearchreports,includingHfSengineeringservices
blueprints,HfSengineeringservicestop20,HfSengineeringservicesquarterlytrends,etc.Heisregularlyquoted in themediaonengineering services, IoT, andoutsourcing trends, includingHarvardBusinessReview(HBR),NDTV,TimesofIndia,EconomicTimes,BusinessStandard,Hindu,BusinessLine,Livemint,FinancialExpress,Rediff,VoiceofAmerica,andBusinessInsider.
Aseasonedoutsourcingconsultant,Pareekhhasseentheengineeringservicesoutsourcingindustryfromthreeperspectives:serviceprovider,advisor,andbuyer.HestartedhiscareerasasoftwareengineerwithGeometric,whichgavehim the serviceproviderperspective.Hewas thenwithneoIT, anoutsourcingadvisory firm. At neoIT, hewas a key contributor in a number of engagements with leading US andEuropeanclients,whichspannedtheoutsourcinglifecycle.HealsoproducedneoIT’sseminalreportoncitycompetitivenessforoutsourcing.Inhislastassignment,hegainedtheperspectiveofanoutsourcingbuyerashe led strategicplanning, salesplanning,productplanning,andR&D initiatives for theAPACregionofEmersonNetworkPower—aFortune100manufacturingmultinationalwhoseAPACoperationsarebasedinKualaLumpur,Malaysia.
Pareekh is a thought leader, having authored various publications on topics related to outsourcing,engineeringservices,technology,andregionalcompetitivenessinoutsourcing.Helovesbusinessfictionwritinginhisfreetime,andhisfirstnovel,WhoIsThatLady?.
TanmoyMondalTanmoyMondalisaKnowledgeAnalystatHfSResearch,identifyingglobaltrends in engineering services from the industry and technologyperspectives,trackingglobaloutsourcingdealsandinvestments(includingpartnership agreements and R&D announcements in the sector), andsupportingthedomainleadsinsecondaryresearch,dataanalysis,PoVs,andresearchwriting.
Tanmoy has more than four years of research, pre-sales, and marketintelligenceexperienceatTCS,HCL,andTracxn.InhisTCSandHCLroles,
heworkedonpreparingRFPresponses, includingsolutionconstructsandcommercialpropositions.HewasresponsibleforanalyzingthebusinessscenarioforERPimplementationfordifferentindustryverticalsand participated in several Enterprise Transformation projects across domains to optimize the ITlandscape,increasingITintegrationamongclientbusinessverticals,improvingproductivity,andreducingbusinessincidents.AtTracxn,hewaspartoftheemergingtechnologyteamthathelpsfindcompanies(startups)specializing inupcomingtechnologies (virtual/augmentedreality,drone,etc.) foracquisitionandportfolioinvestmentsforPEandVCfirms.
HfSResearchisTheServicesResearchCompany™—theleadinganalystauthorityandglobalcommunityforbusinessoperationsandITservices.Thefirmhelpsorganizationsvalidateand improvetheirglobaloperations with world-class research, benchmarking, and peer networking. HfS Research was namedIndependentAnalystFirmoftheYearfor2016bytheInstituteofIndustryAnalystRelationswhichvotedon170otherleadinganalysts.HfSChiefAnalystPhilFershtwasnamedAnalystoftheYearin2016forthethirdtime.
HfScoinedtheterms“TheAs-a-ServiceEconomy”and“OneOffice™,”whichdescribeHfSResearch’svisionforthefutureofglobaloperationsandtheimpactofcognitiveautomationanddigitaltechnologies.HfS’visioniscenteredoncreatingthedigitalcustomerexperienceandanintelligent,singleofficetoenableandsupportit.HfS’coremissionisabouthelpingclientsachieveanintegratedsupportoperationthathasthedigital prowess to enable its organization tomeet customerdemand—asandwhen thatdemandhappens. With specific practice areas focused on the digitization of business processes and designthinking,intelligentautomationandoutsourcing,HfSanalystsapplyindustryknowledgeinhealthcare,lifesciences,retail,manufacturing,energy,utilities,telecommunications,andfinancialservicestoformarealviewpointofthefutureofbusinessoperations.
HfSfacilitatesathrivinganddynamicglobalcommunitythatcontributestoitsresearchandstagesseveralOneOffice™ Summits each year, bringing together senior service buyers, advisors, providers, andtechnologysuppliersinanintimateforumtodevelopcollectiverecommendationsfortheindustryandadddepthtothefirm’sresearchpublicationsandanalystofferings.