www.csiro.au
Industry 4.0State of the Sector, Opportunities and How to get started
Dr Nico Adams | Senior Research ScientistTwitter: @nicoadamsLinkedIn: https://au.linkedin.com/in/nicoadams
Where are we?
Non-functioning B2B Business Process Data Exchange
• Typing: 120 AUD/hour• 1 hour to process order• 200 orders a month
Advanced Manufacturing and Digital Transformation - Session 4 | Dr Nico Adams3 |
Advanced Manufacturing and Digital Transformation - Session 4 | Dr Nico Adams4 |
Advanced Manufacturing and Digital Transformation - Session 4 | Dr Nico Adams
Low Use of Internet in Manufacturing
5 |
A Profusion of Standards and Systems
Advanced Manufacturing and Digital Transformation - Session 4 | Dr Nico Adams6 |
Non-functioning B2B Business Process Data Exchange
• Typing: 120 AUD/hour• 1 hour to process order• 200 orders a month
Advanced Manufacturing and Digital Transformation - Session 4 | Dr Nico Adams7 |
Non-functioning Engineering Data Exchange
• Not just business process data…engineering data too…• Problem replicated again and again and again….• Extrapolation over manufacturing sector: between 1 and 10 billion AUD lost productivity
Courtesy of Dr Steve Dowey, Sutton Tools
Advanced Manufacturing and Digital Transformation - Session 4 | Dr Nico Adams8 |
Business Aspects
9 |
• (Manufacturing) companies do not have digital strategies• (Manufacturing) companies do not understand business models enabled by digital• (Manufacturing) companies do not know how to take advantage of IoT
• Lack of skills• Want: Capability Discovery over an Industrial Internet Innovation Ecosystem
cf. Germany:80 % of value chains digitised by 2020
Advanced Manufacturing and Digital Transformation - Session 4 | Dr Nico Adams
It’s a Journey
Advanced Manufacturing and Digital Transformation - Session 4 | Dr Nico Adams10 |
Focus on Industry 4.0/Industrial Internet/IoT
Def(IoT)
“Sensors and actuators, connected by networks to computing systems. These systems can monitor or manage the health and actions of connected objects and machines. Connected sensors can also monitor the natural world, people and animals.”
Source: McKinsey Global Institute, “The Internet of Things: Mapping the Value Beyond the Hype” (2015)
Terminology Confusion
Applying IoT + …+…. to Manufacturing
“Industry 4.0”
(Germany)”
“Industrial Internet (of Everything)”
(GE)
Industry 4.0
Advanced Manufacturing and Digital Transformation - Session 4 | Dr Nico Adams 14
Industry 4.0
Autonomous Robots
System Integration
Internet of Things
Simulation
Additive Manufacturin
g
Cloud Computing
Augmented Reality
Big Data
Cybersecurity
But please….
Advanced Manufacturing and Digital Transformation - Session 4 | Dr Nico Adams 15
Forget the technology……..
Industry 4.0/Industrial Internet
16
….concepts that denote the digitisation of industrial value chains……
“…the (real-time) intelligent integration of humans, machines and objects towards a management of
systems…..”
Why is the Digitisation of Value Chains so Important?
Value Capture Changes in Digital Manufacturing
Traditional (Manufacturing) Mindset
Digital (Manufacturing) Mindset
Value Creation Customer Needs Service existing needs,reactive
Address real time + emergent needs in a predictive manner
Offering Product obsolescence as a function of time
Product refresh via software update, partial physical upgrade, synergistic
Role of Data Single data point to define futureproducts
Use data to create product experience, enable services, synergies with other systems
Value Capture Profit Creation Sell the next/more of product Enable recurring revenue
Control Points IP ownership, brand, commodity advantage
Personalisation, context, network effects
Capability Use existing core competence,resources and processes
Systems thinking, n-sided markets, platforms
Manufacturing and Digital Transformation | Dr Nico Adams17 |
Platform Economics….
Products > Services > Platforms
Source: Adrian Turner, Data61
Manufacturing and Digital Transformation | Dr Nico Adams18 |
Industry 4.0
• German strategic initiative
• 2006: Germany launches “High Tech Strategy 2020”
• 2012: Germany government passes “High Tech Strategy Action Plan”• Identifies 10 future focus areas
• Includes Industry 4.0
• Goal: to become an international leader of cyber-physical systems by 2020
• Builds on Germany’s national strength in embedded systems
Produces detailed reference architecture, policy, working towards testbeds etc
19
Industrial Internet Consortium
Presentation title | Presenter name20 |
• Founded in March 2014 by• AT&T• CISCO• GE• IBM• Intel
• Mission: to catalyze and coordinate the priorities and enabling technologies of the industrial Internet
• 245 Members (May 2016)• Reference architecture• Testbeds• Publicity and outreach
IIC vs I4.0
Presentation title | Presenter name21 |
Energy
Healthcare
Manufacturing
Public Domain
Transportation
...
IIC
I 4.0
What does that mean for Australia?
Presentation title | Presenter name22 |
What are the Opportunities?
Business Opportunities in Digital Manufacturing….
Advanced Manufacturing and Digital Transformation - Session 4 | Dr Nico Adams24 |
https://reports.weforum.org/industrial-internet-of-things/general-findings/2-2-the-four-phases-of-the-industrial-internet-evolution/
• Better visibility into factory• Better visibility into supply chain• Better HSE outcomes
• Servitisation• Predictive/preventative maintenance• “Pay per laugh”
• On demand, hyperlocal manufacturing of customised products for audiences of one
• Self-assembling factories• Self-configuring factories
Which Business Problems does I4.0/II address? - Horizon 1
Presentation title | Presenter name25 |
• Better factory visibility (and therefore actuation and control)
• Better supply chain visibility (and therefore actuation and control)
• Better HSE outcomes• Better resource management• Servitisation
Horizon 3 – Outcome EconomyTumpf (Germany)
Advanced Manufacturing and Digital Transformation - Session 4 | Dr Nico Adams26 |
Building Platform Business….
https://www.trumpf.com
Horizon 3 – Outcome EconomyWittenstein (Germany)
Advanced Manufacturing and Digital Transformation - Session 4 | Dr Nico Adams27 |
Factories as good neighbours……
https://www.wittenstein.de/de-de/
Horizon 4 – Pull Economy
Advanced Manufacturing and Digital Transformation - Session 4 | Dr Nico Adams28 |
“Pull approaches, in contrast, tend to be implemented on "platforms"
designed to flexibly accommodate diverse providers and consumers of
resources. These platforms are much more open-ended and designed to
evolve based on the learning and changing needs of the participants.
Once again, we do not mean to use platforms in the literal sense of a
tangible foundation, but in a broader, metaphorical sense to describe
frameworks for orchestrating a set of resources that can be configured
quickly and easily to serve a broad range of needs. ”
Horizon 4 – Pull Economy
Advanced Manufacturing and Digital Transformation - Session 4 | Dr Nico Adams29 | http://www.maketime.io
In the Short Term…
Advanced Manufacturing and Digital Transformation - Session 4 | Dr Nico Adams30 |
https://reports.weforum.org/industrial-internet-of-things/general-findings/2-3-key-near-term-opportunities-and-benefits/
So how to respond?
Dual Strategy
&LeadingAdoptor
LeadingSupplier
Advanced Manufacturing and Digital Transformation - Session 4 | Dr Nico Adams32 |
How to get started….
33
• Step 1: Develop a Digital Strategy and lay the groundwork• What business outcomes do I want to achieve and how can digital help?• Which new products and services do I want to develop and what is the role of
digital?• What is the digital maturity of my company?
• Which capabilities (systems, tools, digital skills etc) do exist in my company to get me closer to my business goals? Which ones do I need to invest in/find partners for?
• Which structures, processes and talents in my company support digital innovation? Which ones do I need to put in place?
• Which culture in my company supports digital innovation? Which mindsets and behaviours are in place and which ones do I need to nurture and/or change?
• Step 2: Learn from Peers and Collaborate with Peers• Find peers that already work with I4.0/II technologies and learn from them• Collaborate on pre-competitive activities• Reach out to research providers (CSIRO, universities), CRCs, Growth Centres and
industry associations (e.g. AiG) to find connections
Advanced Manufacturing and Digital Transformation - Session 4 | Dr Nico Adams
How to get started….
Advanced Manufacturing and Digital Transformation - Session 4 | Dr Nico Adams 34
• Step 3: Experiment Bottom Up and Scale Slowly• low cost, low risk• e.g. find summer students or interns with the required capabilities (e.g. using the
Ribit platform) and work on proving an IoT enabled business case/tech case with them (also gets new capability into the company)
• Take advantage of researcher in business• Be agile in your experimentation• …
• Step 4: Invest Systematically once Business Case has been proven• Funding is potentially available through• IMCRC• AMGC• CRC-p• CSIRO Innovation Fund• …..
www.csiro.au
Data61Dr Nico AdamsSenior Research Scientist
t +61 3 9545 2222e [email protected] or
[email protected] www.csiro.au
Thank you