Prof. Hyunbo Cho, Ph.D.hcho@postech.ac.kr

Industrial & Management EngineeringPohang University of Science & Technology

City of Pohang, Korea

Industry 4.0 and its Impact on International

Trade

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Issues in International Trade

Data Requirements for International Trade

Industry 4.0 Technologies for International Trade

Conclusion & Benefits

List of Talks

Issues in International Trade

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Issues in International Trade

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Costs of Cross-Border Trade

India: 6 days to export while 13 days to importSouth Asia: 7-8 days to export while 20 or so days to import

Data Requirements for International Trade

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SCM and Buyer’s Criteria

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Price

Quality

InnovativeCustomizableSustainable

DifferentiatedConnected

Value

Cost Price

Cost Price

Product 2

CostPriceProduct 3

Product 1Quality

Quality

Quality

Value

Value

Value

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Long Road to Industry 4.0

Cost Focus Quality Focus Value Focus

Industry 2.0 Industry 3.0 Industry 4.0

1900 1970 2015

Identical products Product of high quality High valued products

Economies of ScalePush Policy

Just In TimeKanban, Pull Policy

Digital Technology, IoT, Big Data, AI, 3D Printing

Mass Production Lean Production Smart Factory, Smart SCM, Smart Product

Policy-driven Data-driven

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Product with IoT – Smart Product

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CommercialIoT

Car: Engine, Brakes, Tires

Car: ECS, ABS, Rain-sensor

Car: LTE port, IEEE 802.11 WAVE for V2V

Mechanical partsElectrical parts

PhysicalComponents

SensorsMicroprocessors

Data storageS/W

SensoryComponents

PortsAntennae

Com Protocols

ConnectivityComponents

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Smart Product Examples

Productwith

Physical Components

Product with

Sensory Components

SmartProduct

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Machine with IoT – Smart Machine

Mechanical partsElectrical parts

PhysicalComponents

SensorsMicroprocessors

Data storageS/W

SensoryComponents

PortsAntennae

Com Protocols

ConnectivityComponents

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IndustrialIoT

Robot: Arm, Axis, Tool mount

Robot: Ethernet/IP ControlNet

Robot: Camera, Torque sensor

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Internet of Things (IoT) Industrial IoT (IIoT) – design, materials, production, logistics, etc.

Commercial IoT (CIoT) – channels, usages, services, complaints, etc.

Digitalization Article 8, Framework agreement on facilitation of cross-border

paperless trade in Asia and the Pacific

Trade-related data & documents – payloads, locations, customs, etc.

Smart Everything

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PhysicalSensory

ConnectivityIIoT IIoT IIoT IIoT CIoT

PhysicalSensory

Connectivity

PhysicalSensory

Connectivity

PhysicalSensory

Connectivity

PhysicalSensory

Connectivity

Emerging Technologies for International Trade

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Emerging Technologies with IoT & Digitalization

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Big Data

PhysicalSensory

Connectivity

Information Sharing Cloud Computing

Among stakeholders (makers, port authorities, customs,

users, etc.) operating environments, etc.

By performing some functions of the product

outside the physical device

Artificial IntelligenceMachine Learning

Data AnalyticsCyber Physical System

PhysicalSensory

Connectivity

PhysicalSensory

Connectivity

PhysicalSensory

Connectivity

PhysicalSensory

ConnectivityIIoT IIoT IIoT IIoT CIoT

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Business Benefits with Emerging Technologies

Applications

Edge

Platform

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Big Data

PhysicalSensory

ConnectivityIoT IoT IoT IoT IoT

PhysicalSensory

Connectivity

PhysicalSensory

Connectivity

PhysicalSensory

Connectivity

PhysicalSensory

Connectivity

Production Planning

Predictive Maintenance

Quality Optimization

Energy & Environment

Supply Chain Optimization

Global Logistics

New Business

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Business Case - Komatsu’s Komtrax Plus

Production PlanningDiagnostics

Theft Protection

Forecasting

Free remote monitoring system

Applications

Edge

Platform - Planning Spare Parts

- Cause of Failure- Schedule of Oil Change

- Location- Operating Status- Jobs Done

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Big Data

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Business Case - GE’s Jet Engine

Predictive Maintenance

Maintenance Planning

Turbulence Free Route

New Engine Design

Sensors: 5000

Applications

Edge

Platform Design update- Diagnosis- Prediction- Flight records

- Engine Status- Engine Efficiency

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Big Data

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Integrated digital platform Single window digital platform to link all stakeholders to perform the

whole product lifecycle

Reduces delays and the number of trade documents

Integrated trade & logistics policy Creating streamlined interactions with multiple stakeholders such as

port authorities, customs, shipping lines, other government agencies

Measure performance With this, policy makers identify what needs to be done to create a

“seamless environment”

Ex) loading/unloading time at a factory, the number of inter-state border checks

Recommendations

Conclusion & Benefits

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Background on Industry 4.0 Not just cost minimization and quality maximization

Data-driven value maximization via customization, differentiation

Scope & Goal End to End (Design to Delivery)

All the business data are collected and analyzed to extract knowledge and insights

o Indirect revenue: Operational excellence in international trade for lead time minimization, traceability, visibility

o Direct revenue: Data driven new business model – integrated digital platform

Industry 4.0 & Cross-Border Trade

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Qualitative Benefits

(End-To-End) Minimize Lead Time

Traceability of Defects

Manufacturability

Usability of Defined Product

Visibility of Progress

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Quantitative BenefitsSOURCE: McKinsey Industry 4.0 after the initial hype(2016)