Industry 4.0: A new industrial model - Siemens Türkiye · Industry 4.0 can be understood as the...

Siemens Digitalization in Food & Beverage Presentation Dr. Kai-Stefan Schober

Istanbul, May 24, 2017

Industry 4.0 – Challenge for the F&B industry in Turkey, advantage or competitive disadvantage?

2 170523_KS_ Industrie 4 0_Presentation_Siemens_Turkey.pptx

Roland Berger is the only strategic consultancy of European origin – We provide strategic advice to the world's top decision makers

Roland Berger: Company overview – Top global management consulting

Source: Roland Berger

Founded in 1967 in Germany by Roland Berger

50 offices in 36 countries, with approximately 2,400 employees

220 RB Partners currently serving

~1,000 international clients

Austria, Vienna; Bahrain, Manama; Belgium, Brussels; Brazil, São Paulo; Canada, Montreal; Croatia, Zagreb; Czech Republic, Prague; France, Paris;

Germany, Berlin, Düsseldorf, Frankfurt, Hamburg, Munich, Stuttgart; Greater China, Beijing, Guangzhou, Hong Kong, Shanghai, Taipei; Hungary, Budapest;

India, Mumbai, New Delhi, Pune; Indonesia, Jakarta; Italy, Milan; Japan, Tokyo; Lebanon, Beirut; Malaysia, Kuala Lumpur; Morocco, Casablanca;

Netherlands, Amsterdam; Nigeria, Lagos; Poland, Warsaw; Portugal, Lisbon; Qatar, Doha; Romania, Bucharest; Russia, Moscow; Singapore;

South Korea, Seoul; Spain, Madrid; Sweden, Gothenburg, Stockholm; Switzerland, Zurich; Thailand, Bangkok; Turkey, Istanbul; Ukraine, Kyiv;

United Arab Emirates, Dubai; United Kingdom, London; USA, Boston, Chicago, Detroit


Content

A. Industry 4.0: from global buzz to reality

B. Industry 4.0 readiness of F&B in Turkey

C. Turkey to prepare for Industry 4.0 – Next steps



The global manufacturing industry is gearing up for the next level of industrial revolution - Industry 4.0

Development stages of industrial manufacturing

Source: Bitkom/Fraunhofer, DFKI, Roland Berger

A

First industrial revolution

Second industrial revolution Third industrial revolution

Fourth industrial revolution?

Mechanical weaving loom

Introduction of mechanical

production assets based

on water and steam power

Introduction of a "moving"

assembly line at Ford

Motors

Introduction of mass

production based on division

of labor and electrical energy

First programmable logic

controller (PLC)

Introduction of electronics

and IT for higher auto-

matization of production

Real time, self optimizing

connected systems

Introduction of intelligent

machines, embedded cyber-

physical sensors, collaborative

technologies, and networked

processes

1784 1923 1969 2014

Drivers of this development

> Large amount of data

available

> Rising demand for (mass)

customized products

> Advanced algorithms

allowing better real-time

and large data analysis

> More affordable

sensor/actor technologies

> Increasing prevalence of

communication including

wireless technology in the

factory

4.0 3.0 2.0 1.0


Industry 4.0 can be understood as the full integration and digitalization of the industrial value creation

Source: Plattform Industry 4.0, MIT Sloan Management Review, Roland Berger

Definition of Industry 4.0 (not exhaustive)

> Digital transformation refers to the changes associated with the application of digital technologies in all aspects of human society

> Industry 4.0 is the industrial application of the concepts applied in the digital transformation, key elements are:

– Complete connectivity with real-time ability

– Decentralized, intelligent and self optimizing / organizing

– Modular and reconfigurable

> Assessment of Industry 4.0 impact needs to take analogies from digital transformation and specifics of the manufacturing industry into account

> The digital transformation in the consumer goods sector is much more advanced than the industrial application

Digital transformation

Industry 4.0

Mobile devices

E-Commerce

Car sharing

Apps

Contactless pay

Home robotics

Wearables

Smart Home

Cloud data

Smart handbooks

Private robots

Self-optimizing systems

Self-learning robots

Predictive Maintenance

A


Interlinking of real (physical) and virtual (cyber) world will lead to so called cyber-physical systems that determine Industry 4.0 solutions

Schematic interlinking of physical and virtual world - Examples

Cyber world Physical world Industry 4.0 solutions


> Machine learning

> High-performance hardware

> Robotics

> Automation equipment

Self-learning robots

> Embedded systems

> Real-time image processing (e.g. OCR)

> Data storage hardware

> Traditional machinery

> RFID

> Automation equipment

Self-reconfiguring machines

> Advanced data analytics

> Database mgmt. systems

> Cloud computing

> Traditional machinery

> Traditional & semiconductor based sensors

Predictive maintenance

> Real-time image processing

> Advanced data analytics


> Camera & imaging systems

> Visual sensors

> Traditional sensors

Smart environ-ment recognition

Characteristics/Goals

> Connectivity as the key factor is linking both worlds in each solution

> Enable Individualized or mass

customized products Highly flexible

production Integration of

customers and value adding partner into value creation

Coupling of production and high-value services

Cost and efficiency benefits and quality improvements


A


Industry 4.0 combines a wide set of technologies becoming well known

Source : Roland Berger

A

MONITORING / CONTROL

2

Precision MANUFACTURING OPERATIONS

3

WORK ORGANIZATION

5

CAO, IAO

Flexibility

Traceability

SERVICES (INTEGRATION, MAINTENANCE)

CFAO

Virtual industrialization

Centralized planning and management of machines

Interconnected machines & plants

"Smart" machine (self-correction)

Precision engineering

Additive manufacturing Cobotics

Multi-support and multi-operation machines

Per piece RFID tracking

Active sensors

Retrofit

Conditional maintenance

Machine installation

Task specialization

Duty organization

Augmented operator

Learning organization

4

Monitoring, command

Flow management

Automated logistics / Internet of Things

Automated internal logistic

Available maturity / Industrial diffusion

Emerging maturity / Limited diffusion

Future maturity / Precursors

PRODUCT DESIGN / PROCESS

1

"virtual manufacturing plant" digitalized, production process simulation

Remote monitoring, mobile app, shared databases Thermal, hygrometric,

counting sensors...

Shared GPAO

Laser sensors, vibra switches, corrective programs

3D printing, Intelligent Assist Devices

Big data, télémaintenance

PLM MES Gravage laser, flashcode, puces

Lean Manufacturing

GPAO, PLM, RFID GV grinding,

laser cutting, HFwelding

Transfer center

SNC, programs, multi-spindle, etc.

Programmed / De-programmed machines

Batch management

Digitalization of order- flow

Numerical command

Traditional techniques


Most industrial players have launched Industry 4.0 pilots to test those solutions in legacy plants – F&B industry is catching up

Intelligent logistic bins

Augmented reality

Smart production

Humanoid robotic

Source: press review, companies websites, Roland Berger

Collaborative robotics

3D food printing

Conditional maintenance

A

MOST INDUSTRY 4.0 TECHNOLOGY BRICKS ARE EXISTING Traceability

Arla/Käseproduktion:

Innerhalb einer Produktionszeile stehen verschiedene Maschinen verschiedener Hersteller. Über die IT können die Maschinen zusammengeschaltet werden. (a) die Maschinen können nur aufgrund der IT als "integrierte Fabrik" behandelt werden und (b) je nach Bedarf können die Maschinen mittels IT zur Produktionszeile dazu geschaltet werden –durch die individuellen Kombinations-möglichkeiten der einzelnen Maschinen ergeben sich quasi unterschiedliche Produktionszielen, die bei Bedarf schnell einzurichten sind

Thijs/Sortierung belgischer Waffeln:

3 verschiedene Roboterarme arbeiten im Akkord. Sie greifen je 2 Waffeln vom Fließband. Eine Kamera sagt ihnen, wo die Waffeln liegen. Die IT ermöglicht, dass die Roboter sich frei bewegen können indem sie für Kollisionsfreiheit sorgt

Barilla/3D Pasta-printing:

Im besten Fall wird von einem Kunden z.B. online die gewünschte Pasta-Form eingegeben. Diese wird durch die IT direkt weiter an die Produktion geleitet. Aktuell muss man die Form noch individuell eingeben, aber die Automatisierung ist nur der finale Schritt

Danish Crown/Traceability von Fleischprodukten:

Jedem Bauern kann ein bestimmter Barcode zugewiesen werden. Wenn das Fleisch in Teile zerlegt wird, bleibt der Code mit den Einzelteilen verknüpft. Die IT speichert, wo welches Fleischteil wann war und kann im Fall von Qualitätsmängeln das Einzelstück zum Ursprung und durch die gesamte Fabrik zurückverfolgen


The goal of 'Industry 4.0' is the intelligent factory which is characterized by adaptability, efficiency and a full digital integration

Source : Roland Berger

A

Factory 4.0 – Overview

SUPPLIERS

CLUSTER OF SUPPLIERS

CLUSTER OF PLANTS

PLANT OF THE FUTURE B PLANT OF THE FUTURE A

3D PRINTING / ADDITIVE MANUFACTURING

SENSORS

NANOTECHNOLOGY / ADVANCED MATERIALS

> Zero default / deviation > Reactivity > Traceability > Predictability

> Scrap elimination > Mass customization > Rapid prototyping

> Smart value added products > Technical differentiation > Connectivity

ROBOT

CLOUD COMPUTING

> Stronger protection for internet based manufacturing

> Technology products with longer life cycle

CYBERSECURITY > Give sense to complexity > Creativity > Collaborative manufacturing

> Cyber Physical Systems (CPS) > Numerical command

– Full automation – Totally interconnected systems – Machine to machine communication

LOGISTICS 4.0

> Fully integrated supply chain

> Interconnected systems > Perfect coordination

BIG DATA

ADVANCED MANUFACTURING

SYSTEMS

CLIENTS

AUTONOMOUS VEHICLE

> Customer & marketing intimacy > Flexibility > Perfect match with customer's

needs with production mass efficiency

> On demand manufacturing

MASS CUSTOMIZATION

INTERNET OF THINGS

> Object tagging > Internet-object communication via

low power radio > Real time data capture > Optimized stocks > Reduced wastes

> Real time - Autonomy - Productivity > Full transparency on data reporting

> Flow optimization > Increased security > Lower costs

RESOURCES OF THE FUTURE

WIND ALTERNATIVE / NON CONVENTIONAL SOLAR GEOTHERMIC

> Clean and renewable energies everywhere

> Energy Storage > Alternative raw materials

> Characteristics

> Smart robots and machines – Multipurpose "intelligent" robots able to adapt, communicate, and interact with each other and with humans based on remote control

> Big Data – New methods to handle huge amounts of data and tap into the potential of cloud computing

> Cyber-physical systems (CPS) and marketplace – IT systems built around machines, storage systems and supplies linked up as CPS

> New quality of connectivity – Connection of digital and real worlds with constant exchange of information between machines, work pieces, systems and human beings

> Energy efficiency and decentralization – Energy decentralization for plants due to climate change and scarcity of resources


Data and communication will be the backbone of Industry 4.0 – Some players with already wide offering and new players entering

Positioning of different players for Industry 4.0 – Factory view


Players1)

Data/ Funct.1)

ERP System MES System Sensors/Automation Building Automation 3D Data Big Data Services

1) Not exhaustive; examples only

> All transaction data > Asset data > Price/cost data

> Shopfloor transaction data > Machine data > Maintenance data > Logistic data

> Sensor status like pressure, position etc., communication with other sensors

> Machine control data

> Status of all building data, e.g. temp., light, access control, ventilation

> Product 3D data > Factory 3D data > PLM data

> Storage capacity > Algorithms and analytics > Connectivity

Client

M

M M

M

Controls & Automation

MES System

MES System

ERP System

Factory 4.0

Building automation

"Virtual" Production routing

New players

A


Industry 4.0 is changing the paradigm of manufacturing strategy

Industry 4.0 – Characteristics

From mass production to mass customization 1 Flexible production, short production lead time enabling new business

models emergence and affordable customization

From volume scale effect to localized & flexible units 2 From large factories specialized per product in LCC to smart factories with high

technological equipment enabling to produce at competitive cost everywhere

From planned make to stock to dynamic make to order 3 From an organized production, based on planning and forecast and supported

by stocks, to dynamic production and yield management, on demand

4 From product to usage

Integrated conception, services being a key element of the business model/ decision factor

From cost driven to ROCE driven 5 Higher ROCE for lower Capital employed as complexity is transferred on

numeric

From taylorism to flexible work organization 6 Remote work (augmented reality, permanent connectivity), Tasks parallelism,

flexible organization and management

From hard working conditions to attractive work space 7 Development of complex artisanal production, with clean/ highly connected

work space, white collars intensive

A



Industry 4.0 will significantly change business rules; It offers enormous opportunities to new winners but kills non-innovators…

Industry 4.0 – Expected benefits


A

Design and manufacture better products – Industry 4.0 will enable adaptation of manufacturing methods by region e.g. automated zero defect manufacturing 1 Improve process efficiency and save costs – It would connect digital and real processes to identify and address manufacturing issues in advance, e.g. a quality issue 2 Create new business models – Industry 4.0 would disintermediate value chains or change the business rules itself e.g. Value chain will become more visible and need for intermediaries might be eliminated 3 Generate additional business – New 'Industry 4.0' comers would be the future game changers e.g. 3D bio-printing for fabricating biological constructs to produce soft tissues and artificial bones would help in generating additional business

4 Unleash innovation – It would free up additional creativity to fully leverage digital potential e.g. demand for business-model innovation is currently rising 5 Rethink organizations – Industry 4.0 would make organizations more responsive and flexible e.g. R&D teams would be able to leverage on global expertise at a faster rate 6


Countries have prioritized Industry 4.0 in their future plans – Turkey also identified smart production as a key enabler for future growth

Source: European Commission, TÜBITAK, Roland Berger

Selected initiatives supporting advanced manufacturing and ICT in Europe

1) Federal Ministry of Education and Research

Issuer Program (content, funding volume) BMBF1) Future Project Industry 4.0 EUR 200 m

Future Inventions Fund for Digital Society EUR 150 m

Warwick Manufacturing Group EUR 229 m University of Warwick

Catapult Centers EUR 370 m

Innovate UK

MIP Cleantech Vlaanderen n.a.

EUR 8 m

Factories of the Future 4.0 Made different

EUR 41 m Intelligent factories clusters CFI

Min. of Science, Ind. & Techn. + TÜBITAK

Industry 4.0 (Decree 2016/101) tbd

A

TÜBITAK Technology & Innovation Grant Programs Directorate

EUR 260 m

SAN-TEZ program EUR 110 m

Support German industry for future challenges

Monetary support for R&D on embedded systems, big data and integrated objects

Different research initiatives focused on automotive & ICT

Double manufacturing contribution to GDP

Innovative cleantech and transition economy projects

Support the development of 'Factories of the future"

Structure Italian manufacturing community to develop & leverage research, with 4 projects

Drive the shift to intelligent/smart production systems & increase the share of high-tech production of the Turkish industry

Support project-based R&D activities of Turkish firms

Stimulate R&D co-operation between firms &universities by supporting graduate project on technology-based products

Min. of Science, Industry & Techn.

The 10th Development Plan (2014-18), the National Science, Technology, and Innovation Strategy (2011-16) and Industrial Policy Strategy (2011-14) build the foundation for promoting Industry 4.0 in Turkey by strengthening manufacturing to boost medium- and high-tech exports


B. Industry 4.0 readiness of F&B in Turkey


Digital transformation is basis for implementing Industry 4.0 – the race in which Turkey needs to come from behind

Technology absorption at company level

Innovation capability

International patents, apps/million of people

Internet usage for B2B

Internet usage for B2C

Employee training and development

Business Usage

#36

#83

#40

#47

#49

#102

Turkey's ranking

#56

"Underperformer" "Leader"

Source: WEF Global Information Technology Report 2016, Roland Berger

Turkey's ranking in "Business Usage Index"

B


The manufacturing industry has lost importance due to the de-indus-trialization – Turkey's manufacturing share above global average

CZECH REPUBLIC

27% 26%

GREECE

11% 9%

ITALY

20%

15%

SPAIN

13%

18%

GERMANY

23% 23%

FRANCE

11%

16%

UK

11%

16%

Manufacturing share of gross value added in selected countries, 2000 vs. 2014 [%]

1) 2004 vs. 2014

Source: UNCTAD, Roland Berger

USA

15% 12%

RUSSIA

15%

22%

CHINA1)

28%

32%

JAPAN

19% 21%

CYPRUS

5% 9%

AUSTRALIA

7% 12%

B

Global Average 2000: 17%

2014: 16%

TURKEY

18% 21%


Initiatives to push manufacturing drive absolute growth of sector – F&B sector with potentials resulting from Industry 4.0

Sector-wise contribution to GVA [bn USD at current prices, %]

9%

18%

2009

710

8%

65%

9%

18%

2013

729

8%

65%

9%

17%

2012

703

9%

64%

9%

17%

2011

687

9%

64%

558

9%

66%

Agriculture

17%

2000

250

Services

11%

9%

9% 21%

Other industry

(incl. Construc-

tion etc.)

Manufacturing

2014

59%

Sector-wise contribution to GVA and F&B production index [bn EUR, %, Index]

Source: UNCTAD, Roland Berger GVA = Gross Value Added = GDP + subsidies – taxes on products

Food & Beverage Manufacturing Production Index, 2005-2015 [Index, 2010 = 100]

B

122

90

80

112

90

81

0

50

100

150

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Food Beverages

Production of food & beverages increased by around 25%-pts. between 2009-2015

Manufacturing GVA grew by 36%-pts. between 2009-2014


Food & Beverages are a comparatively strong pillar of Turkey's ex-port strategy – Growing export surplus despite large domestic market

F&B import and export revenues, 2010-2015 [bn USD]

Food exports as % of merchandise exports; Food imports and exports [bn EUR]

Source: WTO, Turkish Statistical Institute, Roland Berger

France

5.6

7.6

Italy

Turkey

8.6

11.5

Portugal

Austria

12.4

Germany

20.9 Greece

16.4 Spain

12.5

F&B exports1) as a % of merchandise exports, 2015

B

11.2

5.6

3.4

5.2

3.3

8.9

5.5

10.2

6.7

10.7

5.4

9.5

5.1 5.1

5.1 4.0

4.4

4.9

1) Including food, beverages and tobacco Imports Exports

2015 2014 2013 2012 2011 2010


But Turkey with currently a very low Industry 4.0 readiness Index – Approach to increase readiness to be defined…

Manufacturing

share

[% GDP; index]

Greece

Luxemburg

Germany

Romania

Norway

Cyprus

Belgium Finland

Netherlands

Bulgaria

Lithuania Hungary

Czech Republic

Sweden

France

UK

Italy Slovenia Spain

Estonia Portugal

Denmark

Poland

Latvia

Croatia

Austria

Slovakia

Frontrunners

Traditionalists

Hesitators


Roland Berger

Industry 4.0

Readiness Index1)

Industry 4.0 readiness – Positioning European countries for Industry 4.0

High

Low

Low High

Potentialists

1) Based on industrial excellence (production process sophistication, degree of automation, readiness workforce and innovation intensity) and value network (focus on high value add, industry openness, innovation network, internet sophistication)

B

Turkey


C. Turkey to prepare for Industry 4.0 – Next steps


Approach for Turkey to take on Industry 4.0

Turkey will require an enhanced approach to prepare and increase its readiness for Industry 4.0 revolution – Increase manufacturing


> The Government would need to support in creating a suitable ecosystem by investing in infrastructure, power, data connectivity

> Turkish companies will have to show readiness to adopt new technologies

Government/ Regional support 1

C

> Public and private partners have to collaborate closely to boost innovation

> Transfer R&D knowledge to industry

> In Turkey, industrial bodies need to take the lead in promoting innovation by providing avenues for stakeholders to come to a common forum

Accelerate Innova- tion 2

> Industries need to adopt the global best practices in four major domains:

– Business Model

– Value Chain

– Financial Base

– Knowledge base

> Widespread adoption of global practices will ensure overall growth

Adoption of best Practices 3

> The digital aspect has become mission-critical for many products and services

> Therefore, "new" industry needs a competitive environment that fosters dynamic telecommunications and Internet usage

Establish Infrastruc-ture 4

> Besides infrastructure, this dynamic digital environment also needs to foster new talent

> Backward looking education policies and ancient content will need to be radically changed to enable adoption of Industry 4.0

Foster New Talent 5

> Each company needs to identify the objective and potential of Industry 4.0 for their firm and develop a tailored strategy accordingly

> Top down organization change is required to implement the strategy and generate buy in across all levels

Develop a Road- map 6


Roland Berger suggests a 4-step approach to define Industry 4.0 vision, priorities and develop a tailor-made roadmap

ad 6. Approach to define Industry 4.0 roadmap What is your

company's

objective?

1. What are the

opportunities for your

company?

2. What is the potential

for

your company ?

3. Which

way to

excellence ?

4.

> List of priority improvement levers

> Financial target impact on CAPEX, WCR,

Gross margin

> Detail of impacts on job and skills

(resource shift, new skills to capture)

> Operational roadmap

including key milestones

> Adjusted budget including

program financial impacts

> Governance structure

> Internal diagnosis of company current

4.0 performance

> Review of current initiatives

> Defined target for the company

> Gap analyses to target

> Validated list of

priority objectives

to cover through

the program

Key

d

eliv

erab

les

C


Implementation roadmap and program governance

Customer needs / differentiation

Disruptive new technological solutions

Internal performance

diagnosis

2

3

4

Prioritization of levers

Quantification of full potential (financial, skills …) & impacts

Mapping of building blocks (regulations, technology, cyber security, standards, …)

Priority Objectives

1

5

6

7

Opportunity identification


Industry 4.0 will improve Turkey F&B brand image as innovation driven, technologically advanced, high quality & safe manufacturing base

Impact on Turkey's F&B brand image

How Industry 4.0 will upgrade "Made in Turkey" brand

Good quality

Cost effective

Innovative

Safe

High-tech

C



28

Your Roland Berger contact person – Looking forward to your call/questions


> Engineering

> Machinery

> Infrastructure/Construction

> Construction materials/chemicals

> Industrial services

> Strategy/market analysis

> Production

> Restructuring

> Marketing efficiency/Sales-Up

> Improvement programs

Dr. Kai-Stefan Schober

Senior Partner

Core competencies

kai-stefan.schober@ rolandberger.com

Telephone: +49 160 7448 372

Contact details

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