McKinsey’s Digital Capability Centers (DCC) are a global network of Industry 4.0-focused capability centers that drive the transformation of companies around the world. Offering services ranging from experiential learning and capability-building, to piloting new technologies, the DCC supports companies at every stage of their digital transformation journey.
The DCC network includes facilities in Aachen (Germany), Beijing, Chicago, Singapore and Venice (Italy). Each center was founded in partnership with a leading industry consortium, government organization, or research institution.
The Singapore facility is a collaboration with the Advanced Remanufacturing and Technology Center (ARTC) to develop digital manufacturing and industrial design expertise in Southeast Asia.
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Disruption is now a daily reality for companies, yet today’s world of rapid technological change also presents opportunities for leaders. To realize the benefits of disruptive change, even the most successful organizations must continually reinvent themselves. McKinsey’s network of digital capability centers was designed with this challenge in mind.
Dominic Barton Global Managing Partner McKinsey & Company
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Industry 4.0:A key disruptive force that will have enormous impact
~1760s ~1870s ~1960s ~2010s to now
~50 billion interconnected machines by 2030compared to 1 billion people connected today
$1.2 to $3.7 trillion value from IoT in factories from using the Internet of Things (IoT) in factories to enable real time process optimization
44% of work activitieshave the technical potential to be automated
Data, computational power and connectivityMachine-to-machine and machine-to-product connectivity will help realize mass personalization
Analytics and intelligenceAdvanced analytics will enable a shift from detection to prediction, and then to prevention
Advanced production methodsAdditive manufacturing will integrate and accelerate prototyping and manufacturing (e.g. 3D printing)
Human machine interactionUse of collaborative robots that interact with humans in the workplace
Integrated digital thread Seamless flow of information across the value chain in procurement, production and the supply chain
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This next phase of digitization will radically transform companies across industries
Power
Oil & Gas
Mining
Consumer
Aerospace
Semi-conductor
Automotive
~45% reduction in maintenance costs
using predictive maintenance
30-50% redeployment of Full Time Employees (FTEs)digitizing oil drilling, field development and operations
3% increase in mining yield using advanced analytics
20-50% reduction in inventory-management cost through smart inventory and automated ordering
4 weeks shorter LTA cycle and 2-3% higher revenue using advanced analytics to forecast demand for aircraft components
90% redeployment of operator FTE 30-50% production ramp-up through automated real-time dispatching
Decreased machine downtime and 10-20% reduction in quality cost using real-time data analytics
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To capture the opportunity, companies need to reinvent their operating model
Key elements of Adaptive Operating Model
Harness disruptive Industry 4.0 technologies through digital transformation along the value chain
1.
Redefine core activities and business models to capture the impact of Industry 4.0 technologies
2.
Evolve into agile organizations able to react in the face of rapid change
3.
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Companies need to adapt their technical, management and people systems to the new digital environment
Technical SystemsLeverage disruptive technologies, i.e., data and connectivity, advanced analytics, additive manufacturing and human-robot collaboration along the value chain to:
� Speed up existing processes including decision making
� Increase accuracy of decisions and processes
� Increase flexibility through dynamic optimization of processes in real-time
Digital � Securely connect machines,
products, suppliers and customers
� Acquire, integrate and visualize data in an insightful way
� Use collected data to redesign processes, products and customers’ experiences
Management Systems � Revise KPI structures to
enforce revised processes
� Leverage granularity of insights for fact-based performance dialogue
� Evolve daily roles: from data collection to managing actions
� Develop the critical capability to become an agile organization
People Systems � Encourage disruption
and “learn fast, fail fast,” with leadership from top management
� Empower people to take charge of KPIs and base decisions on data
� Build capability across the organization, both around new skills (e.g., data scientists) and dual skill profiles
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Companies face multiple challenges along the digital transformation journey of companies have made real
progress in implementing Industry 4.0 in 2016
of Asian companies feel less prepared for Industry 4.0, compared to 30% in the US, and Germany
Close to 80% of companies globally spend
of their capex on Industry 4.0
42%
>50%
<20%
Technical system
Management system
People system
Elements of digital transformation Key challenges faced by companies
� Uncertainty about insourcing versus outsourcing
� Lack of strategy to decide which technologies to prioritize
� Lack of a clear business case to justify investments in technologies
� Difficulty with data integration and ownership that hamper integrated performance management
� Cybersecurity concerns with third-party providers
� Lack of coordination across different organizational units to implement digital strategy
� Lack of courage to push through radical transformation initiatives
� Lack of necessary talent and capabilities, e.g., data scientists
McKinsey interviewed over 300 manufacturers and suppliers in four key markets (United States, Germany, Japan, China) and found that:
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McKinsey’s Industry 4.0-focused Digital Capability Centers (DCCs) will help companies prepare for their digital journey
Digital Capability CenterAachen
Digital Capability CenterChicago
Digital Capability CenterBeijing
Digital Capability CenterVenice
Digital Capability CenterSingapore
Key features
� Realistic production environment of a digitized gearbox manufacturer
� Digital showcases on Industry 4.0 technologies with opportunity to pilot tools
� Experiential capability-building workshops covering technical, management and people systems, as well as digital enablers
Additional partnerships
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DCC Singapore is a realistic production environment, simulating the digital thread of a gearbox manufacturer
Translate orders into unique RFID tags that dictate product parameters to use in production, from material to delivery
Customer specific orders
Product development Procurement
Use advanced analytics to evolve key design parameters
Combine design thinking and design-to-value to create a unique value proposition
Create value through digitized workflow and advanced analytics
E-procurement (e-sourcing, e-auction, e-catalogue)
Collaborative platform and supplier screening tools
Headquartered in Singapore, with
8 plants worldwide
$2 billion revenue
8,000 employees
70% Industrial
(wind, industrial, oil & gas, power)
DCC Singapore: Introducing GearboxCo.
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Suppliers Production (incl. planning) Customer service
Field data drives continuous improvement
Dynamic network configuration and real-time material tracking
Digital warehouse with automated guided vehicles, pick-up, and inventory optimization
Mass personalization without waste
Process re-invention through advanced analytics
Advanced production methods
Human-machine interaction
Real-time access to product usage and condition data
Track failure information back to key drivers
Predictive replenishment
Industrial
30% Automotive
Automotive
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The DCC offers a series of workshops on Industry 4.0’s latest technologies and how to evaluate their potential for your company
Half-day workshops for CEOs
� Showcase Industry 4.0 concepts and understand the potential impact that can be achieved as a company moves from a lean state to an Industry 4.0 state
� Build awareness of Industry 4.0 technologies and key success factors for digital transformation
� Explore avenues to identify potential at your own premises and measure Return on Investment (ROI)
1-day workshops for CXOs
What is the technology about
How relevant is it - what is the business case
How to implement it on a real-life example
How to scale up across lines and multiple sites
How to ensure sustainability
Key take-aways from deep-dive workshops
1.
2.
3.
4.
5.
What does Industry 4.0 look like in a real-life example
How relevant are selected key technologies to your industry
How can a diagnostic help identify the productivity / business model potential for your company
Key take-aways from CEO and CXO workshops
1.
2.
3.
� Deep-dive experiential workshops for industry practitioners on key Industry 4.0 themes (e.g., predictive maintenance, digital supply chain, IoT etc.)
� Understand what the technology is about, how it is relevant and how it can be implemented
Deep-dive workshops (1 day or more)
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Digital showcases on four key themes
Predictive MaintenanceLearn about identifying the right maintenance strategy and begin on the journey towards predictive maintenance through condition monitoring and advanced analytics, to uncover complex insights about machine health, behavior and remaining useful life.
Digital Performance ManagementLearn how you can enable OEE improvement through faster, real-time performance management and problem solving through digitization, with real-time visualization of performance and health information on a digital platform and big-data based generation of productivity losses.
Digital ProcurementLearn about solutions across the Source 2 Pay value chain that can be deployed to conduct comprehensive costs that clarify drivers and levers, improve supply market analysis and sourcing strategies, and drive more effective negotiations and supplier management.
Digital Supply ChainLearn about solutions which can be deployed across each step of the supply chain to optimize demand planning, rationalize network and transportation costs and improve warehousing and inventory policies.
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DCC Singapore will offer 20+ world-class experiential learning modules to help companies harness the powerful technological changes brought about by Industry 4.0
Digital manufacturing
Resources � Yield and throughput using advanced
analytics � Energy optimization using advanced
analytics
Processes � Application of additive manufacturing (e.g.,
3D printing) � Process and layout design using digital
twin � Batch size determination and design for
line flexibility � Line balancing and smart routing in real
time
Assets � Predictive maintenance using advanced
analytics � Remote maintenance to improve labor and
maintenance efficiency � Use of augmented reality (AR) and virtual
reality (VR) to improve maintenance efficiency
Labor � Use of wearables - visual aids, exoskeleton,
gloves, prosthetics - to enhance productivity
� Use of autonomous vehicles � Introduction of human / robot collaboration � Workforce management – resizing and
redeployment � Integrated digital performance
management
Planning and inventory � Production planning, scheduling and
demand levelling � Intelligent material storage with production
sequence-linked storage and inventory levels
Quality � Optimization of equipment working
parameters using advanced analytics to limit defect generation
� Adaptive quality assurance (QA) including new sensing and defect identification
Technical SystemsDigital Procurement
End-to-end performance management � One-stop repository and workflow for source-to-pay
value chain by category
Spend visibility � Advanced spend intelligence & automated sourcing
insights
Collaborative and advanced sourcing � Category-specific analytics solutions based on IoT
and advanced analytics based optimization engines � Cleansheet & “Should-cost analyses” for cost
estimations � Portals for cross-functional collaboration and
exchange � Supplier qualification and selection � eRFX, eCatalogs, eAuctions tools to facilitate
sourcing events with suppliers � Supplier collaboration platforms to foster supplier
collaboration and innovation
Procure to pay (PTP) � PTP process workflows and approval support � Automated compliance and claims management for
vendors, contracts, buyers
Digital outbound supply chain
Service � Demand planning through predictive analytics � Closed-loop demand and supply planning � Order to fulfilment process optimization through
automated root cause analyses � Real-time replanning of the production schedule
and replenishment
Logistics costs � Network optimization through advanced analytics � Vehicle tracking and dynamic routing based on real-
time information � Autonomous and smart vehicles
Inventory � (Semi) Automation of ware-housing with advanced
robotics solutions for improved picking and self-guiding shelf-to-picker robots
� 3D printing for slow-moving Stock Keeping Units (SKUs) and spares
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Please contact our experts to learn more about DCC Singapore
Oliver Tonby
Senior Partner and Managing Partner, Southeast Asia
Matteo Mancini
Partner and Managing Partner, Operations Practice, Southeast Asia
Tomas Koch
Senior Partner and Managing Partner,McKinsey Ventures, Asia
Alpesh Patel
Associate Partner and Director, McKinsey Innovation Campus
Michele Pani
Partner and Managing Partner, Electric Power & Natural Gas Practice, Southeast Asia
Lalith Nambirajan
Expert Associate Partner, Operations Practice, Southeast Asia
Jan P Hartmann
Associate Partner,Operations Practice, Southeast Asia
� Impact of digitized processes on KPI structure
� Digitized performance dialogs and root-cause problem solving
� New daily roles from data collection to managing actions
� Agile organization of the digitized enterprise of the future
Management System
� IoT stack configuration, platform and tools
� Cybersecurity for integrated network � End-to-end product traceability and
automated flow
Digital Essentials
� Skills of the future and capability building
� Mindset shift to enable Industry 4.0 transformation in the workplace
People System