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HfSBlueprintGuide:Industry4.0Services1
HfSBlueprintGuide:Industry4.0ServicesExcerptforAccentureApril2017|Author: PareekhJain,ResearchSeniorVP,EngineeringServices;andTanmoyMondal,KnowledgeAnalyst,HfSResearch
WhatYouNeedtoKnowAboutIndustry4.0
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.
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Industry4.0Framework:TheDigitalOneManufacturingOrganization
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.
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Thisframeworkincludesthreepillars:thedigitalunderbelly(technologiesinvolvedinIndustry4.0),scope(areasinwhichdigitalprocesseswillbeeffective),andintelligentdigitalprocesses(manufacturingprocessenablementareas).DigitalOneManufacturingrepresentsanintegratedmanufacturingoperationcenterthathasdigitalprowessforamanufacturertomeetfuturemanufacturingcomplexities.
In brief, Digital OneManufacturing is the platform onwhich digital technologiesmeetmanufacturingengineeringtechnologiesandcontrolsamanufacturinglandscapeinrealtimetoserveclients.It’swherealltheprocesselementsarecombined:Connectivity,theprocesses,andtheintelligencecometogetherasoneintegratedunit,withonesetofunifiedbusinessoutcomestiedtomanufacturingorganizations.
ThethreepillarsofDigitalOneManufacturingaredescribedbelow.
DigitalUnderbelly:Weidentified13majortechnologiesthatareshapingIndustry4.0.ThesetechnologiesincludeManufacturingDataAnalytics,Robots,ManufacturingAutomation,DigitalCloneorSimulation,Three-Dimensional (3D) Printing, Manufacturing Internet of Things (IoT), Plant Cybersecurity,ManufacturingonCloud,VirtualRealityinManufacturing,AugmentedRealityinManufacturing,ArtificialIntelligenceinManufacturing,VisualAnalyticsinManufacturing,andSmallBatchManufacturing.
Weusedthefollowingdefinitionsforthesetechnologies:
» Manufacturing Data Analytics: The systematic analysis of production and shop floor data tooptimizemanufacturingoperations.
» Robots:Machines thatcanautomaticallycarryoutgroupsofcomplicatedactionsandthatcancollaboratewithhumans.
» 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.
» 3DPrinting:Additivemanufacturing isusedforprototypes,spares,actualparts,andultimatelyentireproducts.
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» 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.
» ManufacturingonCloud:ImplementationofmanufacturingandproductionsystemsonSaaS-andIaaS-basedcloudplatforms.
» 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.
» SmallBatchManufacturing:Implementingsolutionsthatenablemanufacturerstocost-effectivelymanufactureinsmallquantities.
Scope:TheseIndustry4.0technologiescanbeimplementedonthemanufacturingshopflooratfivelevels:smartcomponent,smartmachine,digitalfactory,connectedfactories,andIndustry4.0enterprise.
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» 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.
» Level3-DigitalFactory:Adigitalfactoryisacombinationofvarioussmartmachinesintheplantandexhibitsthesameautonomousfeaturesasasmartcomponentorasmartmachine.Thewholeplantismadesmart,productive,andefficientbyimplementingtechnologiesattheplantorfactorylevel.Inadigitalfactory,machinesandproductionsystemsaresmartindividuallyandcollectively.
» Level4-ConnectedFactories:Connectedfactoriesarecombinationofvariousdigitalfactoriesthatmaybespreadacrosscountriesorregions.Theseconnectedfactoriescanbemanagedthroughcentralizedconnecteddigitalplantsoperationsrangingfromproductdesigntomanufacturingandon-premiselogisticsmanagement.
» Level5-Industry4.0Enterprise:AnIndustry4.0enterpriseintegratesitsconnectedfactorieswithotherstakeholders,suchassuppliers,customers,productdesigners,andservicepersonnel.Inthisway,anIndustry4.0enterprisecanalignmanufacturingprocesseswithotherbusinessprocesses,suchassupplychain,procurement,productdevelopment,customerrelations,andaftermarketservices.
IntelligentDigitalProcesses:Theseprocessesenablesmarterandmore intelligentmanufacturing.Wehave conceptualized three functions that are enabled by digital manufacturing processes: analysis,visualization,andcontrol.
» Analysis:Theabilitytogenerateandanalyzeshopfloordataanduseittomanage,improve,andoptimizemanufacturingprocesses,efficiency,productivity,quality,andflexibility.Theabilitytopredictmanufacturingeventsandprescribethebestcourseofactionfortheabove.
» Visualization:Theabilitytosimulateandvisualizeprototypes,machines,productionlines,plants,andfinishedproducts.Simulationcanbedonepre-orpost-production,andvisualizationcanbe
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doneinrealtime.Thiscanhelpinplanning,improving,andoptimizingproductionlines,andthus,inimprovingtheproductqualityandmakingtheproductionflexible.
» 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.
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» MassCustomization:Asmachines’decision-makingcapabilitiesbecomemoresophisticated,themachineswillbeabletorespondautomaticallyinaproductionstepandwillbeabletoadjustfordifferentdesignparameters.Todate,3Dprintinghasbeenusedtodevelopprototypes,butwiththeadoptionofincreasinglyintelligentmachines,morecustomdesignswillbepossible,makingmasscustomizationanoptionformanufacturers.
» 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.
» LeanManufacturingandResourceManagement:Industry4.0dataanalysisexaminestheentiremanufacturingprocesschainofactivitiesindetailandcanbeusedtoidentifyareasforadditionalautomation,qualityimprovement,andotherimportantfactorsatthesub-processlevel.ThiswillmakebetterresourcemanagementpossiblethroughIndustry4.0alongwithleanmanufacturingasidentifyingtheassethealthatthecomponentlevelhelpswithwastemanagement.
ThelinkoftheseIndustry4.0leverstothedigitalunderbellyandintelligentdigitalprocessesisshowninExhibit2.
Exhibit2:DigitalUnderbellyLinkwithIntelligentDigitalProcessesbyIndustry4.0Levers
Analysis Visualization Control
DataFlow SmartMachines
LeanManufacturing
VirtualManufacturing
Cyber-PhysicalSystem
MassCustomization
ManufacturingDataAnalytics
Robots ManufacturingAutomation
DigitalCloneorSimulation
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3DPrinting ManufacturingIoT
PlantCybersecurity
ManufacturingonCloud
VirtualRealityinManufacturing
AugmentedRealityinManufacturing
AIinManufacturing
VisualAnalyticsinManufacturing
SmallBatchManufacturing
Source:HfSResearch,2017
Industry4.0TransformationJourney
In our Digital OneManufacturing framework, we mentioned the scope of Industry 4.0. It is atransformation journey toconnect thewholeenterprisewithdigitizedmanufacturingoperations forgreaterautonomyandflexibility.ThetransformationjourneyisconceptualizedinExhibit3.
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Exhibit3:Industry4.0TransformationJourney
TheIndustry4.0Journey
Source:HfSResearch,2017
AdvantagesofIndustry4.0
InourDigitalOneManufacturingframework,wementionedtheintelligentdigitalprocessesofIndustry4.0.Duringourinteractionswithmanufacturingorganizationsandcasestudiesofserviceproviders,weidentified business outcomes influenced by these intelligent digital processes. Exhibit 4 shows thebusinessoutcomemappingwiththeintelligentdigitalprocessesforIndustry4.0implementationandthefundamentalbusinessimpactofeachprocess.
Exhibit4:IntelligentDigitalProcessesMappingwithBusinessOutcomesandFundamentalBusinessImpact
IntelligentDigitalProcesses
BusinessOutcomesFundamentalBusinessImpact
Cost Time Quality
Analysis
Operationalimprovementinmanufacturingprocesses
SavingsinOPEXthroughenhancedforecastingandpredictiveanalytics
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Identificationofbottlenecksandoptimizationofworkload
Increasedoperatorefficiency
Increasedenergyefficiency
Improvedmaterialhandlingthroughreducederrorandwastemanagement
Visualization
Optimizationthroughsimulationofplantdesign,productprototyping,andproduction
Operatorstrainedinthevirtualenvironment
ImprovedassetmaintenancethroughARenvironment
Improvementinproducttesting
Increasedoperatorsafety
Control
Plantmanagementfromremotelocations
Higherproductqualityandcompliancemanagement
Harmonizationandconsolidationofmanufacturingprocessesacrossplants
Enhancedsecurityofoperations
Implementationofflexibleproduction,including3Dprinting,smallbatchmanufacturing,etc.
Increasedmachineandplantreliability
Reducedtimetomanufacturefornewandexistingproducts
Source:HfSResearch,2017
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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.
» BetterResourceManagement:ThroughManufacturing IoTsolutions, themachinedatacanbetrackedinminutedetail.Thistrackinghelpsidentifywhetherresourceshaveanyidletimeandtheactivitiesthatcanbeautomatedorhandledbytheroboticsystems,enhancingtheplanningandschedulingofmanufacturingactivities.Therefore,themanufacturingresourcescanbeoptimizedandmanagedbetter.
» 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.
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AboutThisBlueprintMarketGuide
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.
Atthispoint,manyoftheleadingplayersinthemanufacturingindustryarestartingtolearnfromandadoptIndustry4.0.Manufacturersstill inwatchmodemuststarttoinvestigatenowsotheyaren’tleftbehind.ThepurposeofthisBlueprintGuideistohelpmanufacturingfirmsthinkthroughtheimplicationsIndustry4.0willhaveinthenearfutureandtogiveapreliminaryoverviewoftheserviceprovidersweseeofferingIndustry4.0services.
Industry4.0ServicesValueChainAnalysis
ThisBlueprintGuideprovidesacapabilityanalysisoftheservicesofIndustry4.0serviceproviders.WefocusedthisanalysisexclusivelyontheIndustry4.0servicesvaluechainofR&D,Plan,Implement,andOperate across 13 technologies or the digital underbelly of Industry 4.0. The 13 technologies werepreviouslydescribed,andthevaluechainisdescribedinExhibit5.
Exhibit5:Industry4.0ServicesValueChain
Source:HfSResearch,2017
R&D
� OEMProductR&D� OEMSolutionR&D� InternalR&D
Plan
� ITSystemsConsulting� TechnologyConsulting� BusinessConsulting
Implement
• ITImplementation• TechnologyImplementation• DigitalFactoryImplementation
Operate
� IToperation� BPOoperation� As-a-ServiceOperation
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R&D:TheseengineeringandR&DprojectsareundertakenbyserviceproviderseitherforinternaltoolandplatformdevelopmentorforOEMstosupporttheirIndustry4.0solutions.TherearethreetypesofR&Dprojects:
» 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.
Plan:TheseconsultingservicesareprovidedbyserviceproviderstomanufacturingenterprisestohelpthemplantheirIndustry4.0journey.Therearethreetypesofconsultingservices:
» 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.
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Implement:TheseprojectexecutionengagementsincludeITimplementationworkandsingleandmulti-technologyimplementationwork.
» IT Implementation: Manufacturing IT implementation work that includes the IoT, analytics,automation,AI,andcloud-relatedengagements.
» TechnologyImplementation:Engineeringtechnologyimplementationworkthatincludesrobots,3Dprinting,augmentedreality,andvirtualreality–relatedengagements.
» 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:
» ITOperation:ITsupportandmaintenanceforapplications,cloud,etc.,tohelprununinterruptedoperations.
» 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.
TheCurrentStateoftheIndustry4.0ServicesLandscape
Wetalkedtothe12serviceprovidersthatparticipatedinthisstudyandanalyzedtheir500+customercasestudiestounderstandthecurrentstateoftheIndustry4.0serviceslandscape.WeanalyzedIndustry4.0servicesusecasesand Industry4.0services trendsacross technologies,geographies, services,andverticals.Theseinsightsarecriticalforallthreestakeholders:enterprises,OEMs,andIndustry4.0serviceproviders.
Ourresearchrevealedseveral interestingusecasesfor Industry4.0. InExhibit6,we list theusecasesundereachofthe13technologiesrelatedtoIndustry4.0.
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Exhibit6:UseCasesforIndustry4.0Technologies
Technology UseCases
ManufacturingDataAnalytics • Businessanalyticsplatformtotrackproductiondataforoptimizingmanufacturingprocesses
• Predictivemaintenancemodelingbyanalyzingreal-timemachinedata
• Developingsmartmanufacturingusecasesforqualitymanagementfromassetdatamonitoring
Robots • Testingandvalidationofproductsthroughroboticinspections• Precisionmanufacturing,suchasdrilling,riveting,etc.,andother
criticalrequirementshandledbyrobots• In-houseautonomouslogisticsusingaroboticfleetthatcan
interactwithhumansandotherelements
ManufacturingAutomation • Regulatorycompliancemanagementthroughautomateddatacollection
• Automatedworkflowformanualdataentryandmachinecontrol• Acentralrepositoryofdataandimprovedreporting,drivingthe
standardizationofoperationperformanceandeasybenchmarking
DigitalCloneorSimulation • Improvedproductdesignandprocessimprovementthroughvirtualmodeling
• Simulationsoftwareforlessphysicaltestsandvalidationofmanufacturedproducts
• Performanceanalysisbysimulatingreal-lifescenariosthroughdigitalsimulations
3DPrinting • Reductioninthenumberofassembliesandweightreductionofcomponents
• Designinnovationthrough3Dprinting• Usageof3Dprintersinmanufacturingfollowsthelean
manufacturingprinciple
ManufacturingIoT • Remotemonitoringofmanufacturingassetsonabroadnumberofparametersrangingfromsmallfootprintembeddeddevicestolargedistributedcontrolsystems
• Improvedmachinedesignbasedontheextensivedatacollectedforcriticalmachineparameters
• Theshiftintheassetmaintenancesystem,i.e.,fromcalendar-basedmaintenancetocondition-basedmaintenance
PlantCybersecurity • Cybersecuritysolutiontoprotectplantsandtheinfrastructurethatincludesensors,communicationanddataplatforms,andsoftwareapplications
• Securitysolutiontocomplywithindustrystandards,andgovernance
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ManufacturingonCloud • Centralizedserializationandgenealogysolutionfordifferentmanufacturingpartsofassemblylinesforfuturereference
• Digitalcollaborationamongdifferentplantsthroughacloud-basedhostingsolution
• Trackingandaccessingsensordataacrossthemanufacturingvaluechain
VirtualRealityinManufacturing
• Virtualreality–enabledengineeringplatformtodevelopnewproductsorvirtualfactorylayoutswithanimprovedandinteractivevisualaid
• Trainingoffactoryoperatorsandotherprofessionalsinareal-timeviewofactualsurroundingscombinedwithanoverlayofintelligentvirtualobjects
AugmentedRealityinManufacturing
• ARassistedin-serviceproductperformancemonitoringandmaintenancesystemthatcanbeconnectedtoaremotesystemforinteractiveassistance
• AR-enabledgeo-fencingapplicationstoidentifythemateriallocationswheretherightmaterialisavailableforthemachineoroperation
AIinManufacturing • Cognitiveanalysisofmachinedataandtoidentifyprocessparametersresponsibleforplantproductivityandproductquality
• Derivinginsightsfromunstructureddataandfeedingthedatatotheproductdevelopmentstage
• Processoptimization,includingautomationthroughoperationaldataanalysis
VisualAnalyticsinManufacturing
• VisualAnalytics–basedsolutionforinspectingcomponentsanddetectingdefectsonashopfloor
• Visual-enabledinteractiveconsoleapplicationforimagesandexportresultsanalysis,toprovidereal-timemonitoringandalertfunctionalities
SmallBatchManufacturing • Planninganddevelopmentofprocessesthatenablesmall-batchmanufacturing
• Implementationofsmall-batchmanufacturingtechnologies
Source:HfSResearch,2017
Weclassified the13 technologiesassociatedwith Industry4.0 into threecategories—GoodAdoption,BuildingCapabilities,andNicheAreas—basedon thenumberofcasestudies foreach technologyandvalidatedtheclassificationswithdiscussionswiththeserviceprovidersandbuyers.
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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.
Exhibit7:SegmentationofIndustry4.0Technologies
Source:HfSResearch,2017
NicheAreas:AR,VR,
VisualAnalytics,PlantCybersecurity,
SmallBatchManufacturing
BuildingCapabilities:3DPrinting,Robots,AIinManufacturing,ManufacturingIoT,Manufacturingon
Cloud
GoodAdoption:ManufacturingDataAnalytics,DigitalCloneorSimulation,
ManufacturingAutomation
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Exhibit8:DistributionofIndustry4.0EngagementsAcross13Technologies
Source:HfSResearch,2017
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.
2%
3%
3%
4%
4%
5%
5%
6%
6%
11%
13%
19%
19%
SmallBatchManufacturing
PlantCybersecurity
VisualAnalyticsinManufacturing
VRinManufacturing
ARinManufacturing
AIinManufacturing
Robots
ManufacturingonCloud
3DPrinting
ManufacturingIoT
DigitalCloneorSimulation
ManufacturingAutomation
ManufacturingDataAnalytics
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HfSBlueprintGuide:Industry4.0Services19
Exhibit9:DistributionofIndustry4.0EngagementsAcrossGeographies
Source:HfSResearch,2017
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.
Theautomotive,aerospace,andindustrialequipmentverticalsaretheleadingverticalsforIndustry4.0servicesasshowninExhibit10.
54% 31%
13% 2%
NorthAmerica Europe APAC ROW
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HfSBlueprintGuide:Industry4.0Services20
Exhibit10:DistributionofIndustry4.0EngagementsAcrossVerticals
Source:HfSResearch,2017
Intheautomotiveandaerospaceverticals,asignificantnumberofengagementswereprevalentamongtheautopartsandaerospacepartssuppliers.AlthoughatpresentIndustry4.0adoptionisonthelowersideinhigh-techandconsumerelectronicsdomain,weexpecttheadoptionratewillbehigherinthenearfuture.
InExhibit11,weshowtheadoptionrateofIndustry4.0technologiesbygeography.Clearly,NorthAmericaleadsthepackinall13technologiesfollowedbyEurope.ClientsinAPACandROWcountriesconstitutealargerpercentageinnicheareasinIndustry4.0.
2%
3%
5%
9%
10%
15%
16%
17%
21%
Others
Semiconductor&Telecom
Pharmaceutical&MedicalDevices
CPG&FoodProcessing
HiTech&ConsumerElectronics
Energy,Chemical&ProcessIndustries
Aerospace
IndustrialEquipment
Automotive
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HfSBlueprintGuide:Industry4.0Services21
Exhibit11:Industry4.0TechnologyDistributionforIndustry4.0EngagementsAcrossGeographies
Source:HfSResearch,2017
Exhibit12showsouranalysisoftheadoptionof Industry4.0technologiesacrossverticalmarkets.Foreachofthe13technologies,thetopthreeverticalswereidentified.Theautomotive,industrialequipment,andaerospaceindustrieshaveadoptedall13technologiesatvaryingpercentages.
40%
50%
50%
43%
44%
57%
33%
57%
64%
54%
50%
56%
64%
40%
25%
25%
29%
33%
29%
50%
30%
27%
8%
33%
33%
27%
20%
25%
25%
29%
22%
14%
17%
13%
9%
38%
17%
11%
9%
VRinManufacturing
VisualAnalyticsinManufacturing
SmallBatchManufacturing
Robots
PlantCybersecurity
ManufacturingonCloud
ManufacturingIoT
ManufacturingDataAnalytics
ManufacturingAutomation
DigitalCloneorSimulation
ARinManufacturing
AIinManufacturing
3DPrinting
NorthAmerica Europe APAC&ROW
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HfSBlueprintGuide:Industry4.0Services22
Exhibit12:Industry4.0TechnologyDistributionforIndustry4.0EngagementsAcrossIndustries
Source:HfSResearch,2017
InExhibit13,weclassifiedtheIndustry4.0engagementsbyoverallengagementtypesuchasProofofConcepts(PoCs),singletechnologyengagements,andmulti-technologyimplementations.
27%
14%
25%
29%
27%
23%
19%
38%
31%
29%
25%
13%
14%
18%
32%
21%
23%
36%
25%
19%
36%
19%
13%
15%
22%
21%
18%
14%
15%
26%
22%
14%
25%
14%
11%
21%
24% 13%
11%
18%
43%
25%
44%
43%
18%
30%
36%
51%
28%
31%
44%
47%
VRinManufacturing
VisualAnalyticsinManufacturing
SmallBatchManufacturing
Robots
PlantCybersecurity
ManufacturingonCloud
ManufacturingIoT
ManufacturingDataAnalytics
ManufacturingAutomation
DigitalCloneorSimulation
ARinManufacturing
AIinManufacturing
3DPrinting
Automotive IndustrialEquipment Aerospace
Energy,Chemical&ProcessIndustries HiTech&ConsumerElectronics CPG&FoodProcessing
Pharmaceutical&MedicalDevices Others
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HfSBlueprintGuide:Industry4.0Services23
Exhibit13:DistributionofIndustry4.0EngagementsAcrossEngagementTypes
Source:HfSResearch,2017
ThechartshowsthatmostoftheIndustry4.0engagementsweresingletechnologyorientedfollowedbyPoCandmulti-technology implementation.Mostof thesingle technologyprojectswere IT technologyoriented.PoCsarerelatedtoengineeringtechnologies.
Exhibit14 shows theproportionof Industry4.0engagement’s foreach category in the services valuechain.
Exhibit14:DistributionofIndustry4.0EngagementsAcrosstheValueChain
Source:HfSResearch,2017
55% 27%
18%
SingleTechImplementation PoC MultiTechImplementation
70%
17%
7% 6%
Implement Plan R&D Operate
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HfSBlueprintGuide:Industry4.0Services24
ThechartshowsthatthehighestandlowestnumberofengagementswereintheImplementandOperatephases, respectively.Todate, serviceprovidershavebeen lessactive in theR&Dphase, implying thatmanufacturingOEMsarestillkeepingresearchin-houseandoutsourcingasmalleramountofwork.Eachphaseofthevaluechainisfurtheranalyzedbelow.
ForeachofthevaluechainelementsshowninExhibit14wehavedividedeachvaluechainnodeintosub-categories,theseareshowninExhibit15toExhibit18.Exhibit15showstheR&D-relatedprojects.
Exhibit15:DistributionofR&D-RelatedIndustry4.0Engagements
Source:HfSResearch,2017
ThechartshowsthatserviceprovidersaremostlyinvolvedinIndustry4.0R&DassignmentsinsolutionR&DwithmanufacturingOEMsand in theirown internalR&Dprojects.OEMproductR&D isnot thatprevalent.FormanufacturingOEMs,Industry4.0researchisstillastrategicinterest;thus,theseOEMsarekeepingalargepartofproductresearchin-houseandco-innovatingwithserviceprovidersinsolutionsR&Dforspecificusecasesandbusinessoutcomes.InternalR&Disveryimportantforserviceprovidersastheyneedtodeveloptools,platforms,andIPthatdifferentiatethefirmsandcanbeleveragedforrapiddeploymentofIndustry4.0solutions.
Exhibit16showstheplan-relatedsubcategories.
57% 33%
10%
OEMSolutionR&D InternalR&D OEMProductR&D
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HfSBlueprintGuide:Industry4.0Services25
Exhibit16:DistributionofPlan-RelatedIndustry4.0Engagements
Source:HfSResearch,2017
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.
Exhibit17showstheimplement-relatedsub-categories.
83%
14% 3%
ITSystemsConsulting TechnologyConsulting BusinessConsulting
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HfSBlueprintGuide:Industry4.0Services26
64%
24%
12%
IToperation BPOoperation As-a-ServiceOperation
Exhibit17:DistributionofImplement-RelatedIndustry4.0Engagements
Source:HfSResearch,2017
YoucanseefromthechartthatmostoftheimplementationengagementsareITheavyimplementationsfollowedbytechnologyimplementationsanddigitalfactoryimplementations.Industry4.0isacentralizedsolution,andthecontrolsystem(thus,systemconnectivityandmonitoring)isthefirstpriority.Forthatreason,ITimplementationisthefirststepfollowedbyintegrationoftheengineeringtechnology.Mostoftheengineeringtechnologysolutionsactaspointsolutions.Adigital factorysignifies thetruestateofsmartmanufacturingthat istheamalgamationofmostofthe13technologies.Veryfewengagementsthatarethetruespiritofadigitalfactorywerefound.
Exhibit18:DistributionofOperate-RelatedIndustry4.0Engagements
Source:HfSResearch,2017
66%
33%
1%
ITImplementation TechnologyImplementation DigitalFactoryImplementation
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HfSBlueprintGuide:Industry4.0Services27
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.
ThescopeoftheIndustry4.0engagementsdifferedacrossthelevelsofmanufacturingoperations(refertotheDigitalOneManufacturingframework).ThedistributionofIndustry4.0engagementsacrosssmartcomponents,smartmachines,thedigitalfactory,andconnectedfactoriesisdescribedinExhibit19.
Exhibit19:DistributionofIndustry4.0EngagementsAcrossLevels
Source:HfSResearch,2017
Thechartshowsthatmostoftheengagementsareobservedatthesmartmachineandsmartcomponentlevelsfollowedbydigitalfactoryengagements.Todate,connectedfactoriesarerareasmanufacturingenterprisesarestillconceptualizingIndustry4.0.Atthesmartmachinelevel,theIoTisthemostimportanttechnologywhereasat thedigital factory level, analytics, automation,AI, anddigital clone/simulationtechnologiesaremostlyused.
Inourdescriptionof theDigitalOneManufacturing framework,wediscussedhow Industry4.0canbeeffectiveforadigitalconnectedenterprisebyenablingintelligentdigitalprocesses.
Exhibit20showsthedistributionofIndustry4.0engagementsacrossintelligentdigitalprocesses.
49%
25%
22%
4%
SmartMachines SmartComponents DigitalFactory ConnectedFactories
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HfSBlueprintGuide:Industry4.0Services28
Exhibit20:DistributionofIndustry4.0EngagementsAcrossIntelligentDigitalProcesses
Source:HfSResearch,2017
Exhibit20showsthattheobjectivesofmostoftheengagementswererelatedtoanalysisfollowedbyvisualization.Whenanalysisandvisualizationprocessesareintegratedinthedecisionsupportmodelforautomated decision-making with minimum human intervention, then we will have real controlcapabilities.
ServiceProviders’StrategyforIndustry4.0Duringourresearch,wecameacrossdifferentIndustry4.0growthandinvestmentstrategiesforthe12serviceprovidersweevaluated,whichwediscussindetailhere.WeanalyzedthistrendanddiscussthetopstrategiesadoptedbytheserviceproviderstoexpandtheirIndustry4.0business,keydifferentiatorsasaproviderofIndustry4.0services,andthemajorchangesrecentlyimplementedtoboostIndustry4.0servicescapabilities.TheseinsightsarecriticalforenterprisesandIndustry4.0serviceproviders.Theseserviceproviderscanusethese insights tocompareandbenchmarktheirstrategies, investments,anddifferentiationwiththeirindustrypeersandidentifyareasforimprovement.TheenterprisescanalsousetheseinsightstocompareandbenchmarktheirinternalIndustry4.0capabilitiesandinvestments.
Exhibit 21 shows the different strategies employed by service providers to grow their Industry 4.0business.
75%
20%
5%
Analysis Visualization Control
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HfSBlueprintGuide:Industry4.0Services29
Exhibit21:DistributionofServiceProviders’GrowthStrategyInIndustry4.0
Source:HfSResearch,2017
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.
WhenweaskedserviceprovidersabouttheirdifferentiationinIndustry4.0services,theygaveinterestingresponses,andtherewerea fewcommonthreads.Exhibit22showsthekeydifferentiatorsofserviceprovidersinIndustry4.0services.
8%
17%
17%
42%
42%
42%
50%
50%
58%
58%
Newbusinessmodeladoption
AcquistionforIndustry4.0capability
Rapidimplementationfocus
Workforceexpansion&capabilitydevelopment
End-to-endsolutionsprovider
Strongpartnerecosystem&thoughtleadership
Industry4.0Innovationcenters
Collaborationwithdigitalinitiatives
Verticalizedplatformbasedsolution
Consulting&PoCledengagement
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HfSBlueprintGuide:Industry4.0Services30
Exhibit22:DistributionforKeyDifferentiatorsofServiceProvidersinIndustry4.0ServiceOfferings
Source:HfSResearch,2017
ManufacturingindustryexperienceisakeydifferentiatorfollowedbyIndustry4.0–relatedconsultinganddeliveryexpertiseandstronginnovationfocus.
PreviousexperienceinmanufacturingchallengesandconsultingandtechnologyexpertiseenableserviceproviderstodrawaroadmapandimplementIndustry4.0effectively.InnovationhasstrongvisibilityforvendorsasIndustry4.0involvesseveralemergingtechnologiesthatneedtobeusedeffectivelyaccordingtothebusinessusecases.Astrongpartnerecosystem,anend-to-endsolutionsprovider,andadedicatedIndustry4.0talentpoolarealsoimportantdifferentiators.
Exhibit 23 shows how service providers are changing operational organization plans to account forIndustry4.0services.
8%
17%
25%
33%
33%
42%
50%
67%
75%
83%
Flexiblebusinessmodel
Rapidimplementationfocus
VerticalizedIndustry4.0solutions
Globaldeliverypresence
Industry4.0talentpool
End-to-endtransformationpartner
Strongpartnershipecosystem&thoughtleadership
Stronginnovationfocus
Industry4.0consulting&technologyexpertise
Manufacturingindustryexperience
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HfSBlueprintGuide:Industry4.0Services31
Exhibit23:DistributionofServiceProviders’OrganizationalCapabilityPlansforIndustry4.0Services
Source:HfSResearch,2017
Establishingaglobalcenterofexcellence(CoE)forinnovationandexecutionisthekeyagendaforserviceprovidersfollowedbyadedicatedpartnershipecosystemandthedevelopmentofverticalized/platform-basedsolution.
Aglobalcenterofexcellence(CoE)forIndustry4.0isimperativeforbuildingcapabilitiesinengineering,analytics,theIoT,andotherareas.ManyoftheIndustry4.0usecasesdemandtheoreticalresearchandcorebusinessknowledge;thus,partnershipswithenterprisesandinstitutionsarenecessary.Inthefuture,onceIndustry4.0matures,andthebenefitscanbeeasilyrealized,industry-basedIndustry4.0solutionswillemerge.Thus,serviceprovidershavealreadystartedtoaddressthatpoint.
WhyareclientsnotmovingfastonIndustry4.0?Whatchallengesarecustomersfacing?Exhibit24showsclientchallengesinIndustry4.0implementation.
25%
42%
42%
58%
83%
92%
Investmentinsalesenablement
Workforceskillupgradation
Industry4.0consultingcapabilitydevelopment
Verticalized/Platformbasedsolutiondevelopment
Dedicatedpartnershipswithvendors&institutions
GlobalCoEforinnovation&execution
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HfSBlueprintGuide:Industry4.0Services32
Exhibit24:DistributionofClientChallengesforIndustry4.0Implementation
Source:HfSResearch,2017
LowIndustry4.0readinessisthebiggestclientchallengefollowedbythelackofdigitalmaturityandpoordataqualityoralackofdatainsights.
LowIndustry4.0readinessincludesuncertaintyaboutthescaleofbenefits,lackofclarityaboutIndustry4.0benefits,confusionoverinternalbuy-inacrossthevariousbusinessunits,andpeople’sperceptionoffewerjobsforIndustry4.0implementation.DigitizationofmanufacturingactivitiesisamustforIndustry4.0,butmostclientsarenotwillingtomodernizelegacysystemsorinfrastructureverysoon.Industry4.0generatesahugeamountofdata,andenterprisesarenotsurehowtoconverttheinformationanddataintousefulbusinessinsightstounlockoperationalresults.Thus,poordatainsightremainsabigconcernforclients.Theotherfactorsincludealackofstandards,datasecurity,thelackofvastskillsforIndustry4.0,andtheopennessofnewbusinessmodels.
WhatinternalchallengesareserviceprovidersfacingforIndustry4.0?Exhibit25showsthechallengesforserviceprovidersinIndustry4.0business.
33%
42%
42%
42%
50%
58%
67%
92%
OpennesstoNewBusinessModels
Talentshortage
DataprotectionandITsecurity
Lackofstandards
HighInvestmentRequirements
Poordataqualityorlackofdatainsights
LackofDigitalMaturity
LowIndustry4.0readiness
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HfSBlueprintGuide:Industry4.0Services33
Exhibit25:DistributionofInternalChallengesofServiceProvidersinGrowingIndustry4.0ServicesBusiness
Source:HfSResearch,2017
CollaborationamonginternalteamsandanexternalecosystemposesthebiggestchallengesfollowedbyashortageofspecializedtalentandclientreadinessandIndustry4.0adoption.
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.
RecommendationsforBuyers
InadditiontothevariousrecommendationsandpotentialinsightsforbuyersimplicitintheothersectionsofthisBlueprintGuide,buyersshouldconsiderthefollowingspecificrecommendations:
» 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.
8%
17%
25%
33%
33%
50%
58%
58%
Salesalignmentwithdelivery
AbilitytoIntegrateITandOT
InvestmentcommitmentforIndustry4.0
ProductizationofServices
Smallprojectengagements
Clientreadiness&Industry4.0adoption
Specializedtalentshortage
Collaborationamonginternalteams&partnerecosystem
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HfSBlueprintGuide:Industry4.0Services34
Buyersneedtodig intowhat’spossible fromabusinessmodelperspective, froma technologyperspective,andfromagovernanceperspective.Althoughthefirstmoverswillreapthebenefitsearly,experimentationisstillaviableoption.However,buyersneedtostrategizetheirgoalsatthecorporatelevelandimplementthesameasabusinessfunctionbasis.Later,theycanevaluateaspecificoutcomeorbusinessresult.Thiswillhelpbuyersrevisittheirvisionsandreprioritizetheirgoalsalongwiththeareaofexperimentation.
» 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.
» Beawareofyouropportunitiesandgoals:Matureconnecteddigitalmanufacturingcancreatebusinessadvantagesifitisalignedwithabroaderproductandcorporatestrategy.ItispossibletounlockthevalueoftheIndustry4.0services,butdoingsorequiresaclearstrategyandgoals.Manyserviceprovidershavetechnicalexecutionskillsbutarelightonbusinessacumenincreatingandrealizingvaluefromsmartandconnectedmanufacturingobjects.
» 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.
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HfSBlueprintGuide:Industry4.0Services35
» 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.
Industry4.0ServicesBlueprint:TheGridGiventhenewnessofthisspace,HfSdidnotdevelopafullBlueprintatthistime.However,wehaveaperspectiveonwherethevendorsstandandhowthey’repositionedfor futuresuccess.TogiveyouapictureofhowHfSseesthemarketlandscapeatthemomenttoevaluatethesecapabilitieswithinIndustry4.0serviceproviders,welookedattwoprimaryareas:
Execution
» “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.
Weanalyzedtheexecutioncapabilityofeachserviceproviderbasedonthefollowingparameters:
» SolutionOfferings
» CaseStudies
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HfSBlueprintGuide:Industry4.0Services36
» Customers
Innovation
» 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.
Weanalyzedtheinnovationcapabilityofeachserviceproviderbasedonthefollowingparameters:
» Strategy
» Tools,Technology,IP
» InvestmentsandOrganizationalCapabilities
» BusinessOutcomes
» Partnerships
» Acquisitions
» IndustryGroups
» ThoughtLeadership
HfSemploysaweighted(evaluationfactor)scoringmodel,witheighttotencriteriaforInnovationandExecution.Weightingsarebasedona combinationof responses frommore than1,300crowdsourcedsurveyparticipantsandintelgatheredincustomercallsaboutwhatisdrivingorimpedingbusinessvalue.Weusea1–10scoreforeachcriterionandthenrankwithineachscoredcriteriontoconfirmtheinternalconsistencyofourthoughtprocessandtheapplicationofthatthoughtprocess.
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HfSBlueprintGuide:Industry4.0Services37
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.
Exhibit26:Industry4.0ServicesGrid
Source:HfSResearch,2017
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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.
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Industry4.0ServiceProviderProfilesKey:Agoodnumberofusecasesvalidatedbyanumberofcustomercasestudies
Absenceoralownumberofusecasesandcustomercasestudies
AccentureWinner’sCircle
TechnologyAreasinIndustry4.0
ManufacturingDataAnalyticsRobots
ManufacturingAutomation
DigitalCloneorSimulation
3DPrinting
ManufacturingIoT
PlantCybersecurity
ManufacturingonCloud
AugmentedRealityinManufacturing
VirtualRealityinManufacturing
ArtificialIntelligenceinManufacturing
VisualAnalyticsinManufacturing
SmallBatchManufacturing
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.
• AccenturehasdemonstratedstrongthoughtleadershipintheIndustry4.0spacebypublishingamongthehighestnumbersofIndustry4.0–relatedarticlesinthelast12months.Inaddition,thecompanyisassociatedwithanumberofindustry
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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.
KeyPartnerships ABB,Amazon,Aras,AutomationAnywhere,BluePrism,Cisco,Dassault,ExOne,GE,Google,Hortonworks,Intel,IPsoft,Microsoft,PTC,Oracle,OSIsoft,RethinkRobotics,RoboValley, SAP, SAS, Schneider Electric, Siemens, Splunk, Softbank Robotics,Stratasys,Tableau,Tanium,andVoxeljet
Tools/Platforms/Frameworks/IP AccentureAIEngine,AccentureCloudPlatform,AccentureCyberDefensePlatform,AccentureDigitalPlant,AccentureDigitalPlantRefreshServices,AccentureDigitalTurnaround Solution, Accenture Echo Platform, Accenture Insights Platform,Accenture IoT Reference Architecture, Accenture Printability AssessmentFramework,AccentureSmartOperatingProcedures,andAccentureVideoAnalyticsServicePlatform
KeyCustomers ABB,Airbus,AmazonWebServices,Bombardier,GE,Google,Marathon,Microsoft,ThyssenKruppCSA,andWoodside
Examples/Results• Supporting an automotive Tier 1 manufacturer in transforming its global
manufacturingoperationstobecomeaglobalagilemanufacturer
• Working with a leading household appliances manufacturer to integrate 3Dprintingintheclient’ssupplychainoperationmodel
• Developingaugmentedrealitysolutionsforanaircraftmanufacturertoimproveitsprocessesandforbettervisualization
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• Engagedwith amajor petrochemical company for industrial cybersecurity andcompliancewithqualityassurancestandards
• Workingwithanenergycompanytobuildadigitalsimulationsolutiontoimproveoperationalperformancerangingfrommaintenancetocompliancemanagement
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.
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WhattoWatch
» 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.
» ThematurityofIndustry4.0islargelydependentonthesecurityeffortandgovernance.AsthedataflowinIndustry4.0startsfromthesensorlevel,thesecurityfirewallmustencompassthehardwarecomponents,communicationprotocols,softwareplatform,andfront-endapplications.BecausesupplychainandlogisticsnetworksareincreasinglyintertwinedwithIndustry4.0,inthefutureregulatorybodiesmustfigureoutsharedinformation,suchascustomerinformationfromtheservicesplatform.
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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.
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AbouttheAuthorsPareekhJain
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?.
PareekhreceivedhisMBAfromtheIndianInstituteofManagement(IIM),BangaloreandhisBachelorofTechnologydegreefromtheIndianInstituteofTechnology(IIT)Delhi.
Pareekhcanbereachedatpareekh.jain@hfsresearch.com.Followhimontwitter@pareekhjain.
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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.
TanmoyholdsaMasterinBusinessAdministrationdegreefromIIFT(IndianInstituteofForeignTrade)andaBachelorofEngineeringdegreefromJadavpurUniversity,Kolkata.
Tanmoyispassionateaboutfootballandlovestoreadeconomics-relatedbooksandarticles.
Tanmoycanbereachedattanmoy.mondal@hfsresearch.com.Followhimontwitter@17_mondal.
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HfSResearch:TheServicesResearchCompany™
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.
Nowinitstenthyearofpublication,HfSResearch’sacclaimedblogHorsesforSourcesisthemostwidelyreadandtrusteddestinationforunfetteredcollectiveinsight,research,andopendebateaboutsourcingindustryissuesanddevelopments.
HfSwasnamedAnalystFirmoftheYear for2016,alongsideGartnerandForrester,by leadinganalystobserverInfluencerRelations.