How to survive the Fourth Industrial Revolution: a guide to Digital Manufacturing for SME decision makers

How to survive the Fourth Industrial Revolution

a 15-minute guide to Digital Manufacturing for SME decision makers

Briefing at a glance

Manufacturing is a major contributor to the UK economy.

We all agree that Manufacturing is vital to the health and prosperity of the UK economy. But a new wave of digital technologies are about to transform the sector. This will bring both challenges and opportunities.

As a decision maker within a Manufacturing SME or micro-enterprise,

it is crucial that you understand how these disruptive changes will impact

your business.

Trying to get to grips with all this detail can be a daunting task. So I have put together this short guide to Digital Manufacturing for busy managers and executives of SMEs and micro-enterprises.

This briefing encapsulates all of the key ideas that you need to begin preparing your manufacturing business for the agile, data-driven, world of the future. Good luck with the journey!

Bill Harpley Founder and Principal Consultant [email protected]

©2017 Astius Technology Systems Ltd 2 15th February 2017

15th February 2017 ©2017 Astius Technology Systems Ltd 3

Digital Manufacturing

What’s it all about?

The Fourth Industrial Revolution


A remarkable range of new technologies are evolving towards commercialisation.

These technologies will provide the basis for the jobs and industries of the future.

Advanced manufacturing processes will play a key role in delivering social, economic and environmental benefits.

Many commentators refer to this transformation as the Fourth Industrial Revolution.

UK Government policy


UK Industrial Strategy

• Digital Manufacturing will play an important role in Government strategy for innovation, exports and regional economic growth

• The Green Paper published in January 2017 sets out the case for a new industrial strategy

• Promotion of manufacturing excellence is supported by a number of Government funded organisations.

• These provide Industry with: • Partnerships and collaboration • Funding opportunities • Academic research

https://www.gov.uk/government/consultations/building-our-industrial-strategy

https://www.gov.uk/government/consultations/building-our-industrial-strategy

https://hvm.catapult.org.uk/

Innovate UK

https://www.epsrc.ac.uk/

Two bold visions


The Industrial Internet Consortium was founded in March 2014 by a number of major global companies:

Cisco, IBM, Intel, General Electric

It aims to foster the development of industrial Internet applications and technologies

Its activities span a broad range of industrial sectors such as Energy, Transport and Manufacturing

Industrie 4.0 started life as a research programme to promote the shift to digital manufacturing by German industry. It is concerned solely with the needs of

Manufacturing industry

The initiative has enjoyed broad support within the EU and other industrialised regions of the world

‘Industry 4.0’ will be the focus of this briefing as it is highly relevant to developing the digital manufacturing capabilities of SMEs within the UK

http://www.iiconsortium.org/

Why Industry 4.0 is important


Did you know that the American city of Cincinnati has declared itself to be an “Industry 4.0 Demonstration City”? An official proclamation was signed by John Cranley, Mayor of Cincinnati

Major Industry 4.0 initiatives are happening in industrial centres around the world – U.S. , China, Japan, Germany, Brazil – to name but a few

Here are just a few of the many reasons which Industry 4.0 is so important to the future of Manufacturing

Flexible and data-driven production processes will foster innovation and enable mass customisation

Smart Products will allow the manufacturer to understand how products perform in a customer environment

It enables higher productivity, improvements in quality, shorter time to market and new types of business models

Digitization of the entire value chain will lead to the ‘upgrade’ of entire sectors (e.g. Automotive, Aerospace)

http://www.imscenter.net/IMS_news/Industry 4.0 Proclamation.pdf

Why we need Industry 4.0 in the UK


UK businesses can play a lead role in both developing and deploying Industry 4.0 technologies and systems

Industry 4.0 will help UK manufacturing companies remain competitive in both domestic and export markets

The efficiency gains from Industry 4.0 may make it feasible to ‘reshore’ activities currently performed in low-cost countries

If UK manufacturers were to invest as much in Industry 4.0 as their German counterparts, they could boost their revenues by £20bn 1

1 Source: GAMBICA

GAMBICA View the infographic

‘Industry 4.0 – the opportunity for UK Manufacturing’

http://www.gambica.org.uk/resourceLibrary/industry-4-0---vital-for-uk-manufacturing-growth.html

http://www.gambica.org.uk/resourceLibrary/industry4-gambica-themanufacturer-pdf.html







OK, it all sounds vaguely interesting. So what are the benefits to me and my business?

Turn the page and discover why major Manufacturers have embraced Digital Manufacturing.

The benefits of Transformation

Increased Revenues

Greater Customer

Satisfaction

Highly Skilled Workforce

Agile Business Processes

Growth Mindset

Improved Decision

Outcomes

Better Quality Products

Greater Brand Value

These are just a few of the glittering prizes which can arise from successful transformation to Digital Manufacturing.




What does it look like?

The building blocks of Digital Manufacturing



Digital Technologies

The core pillars of

Industry 4.0

New Business Models

Culture and Strategy

Let’s take a look at each of these in turn

Digital Technologies


Technology Drivers

Robotics

Simulation

Digital Communications

Cloud Computing

Additive Manufacturing

Virtual / Augmented

Reality

Big Data and

Analytics

Sensors and Data

Acquisition

Novel Materials

These are the key technologies which are driving Manufacturing towards the Fourth Industrial Revolution

The core pillars of Industry 4.0


Advanced

Automation

Seamless

Connectivity

Sophisticated

Data Analytics

Industrial

Cybersecurity

Industry 4.0 takes automation to new heights. Intelligent machines and smart components work together to create a highly efficient workflow.

Machines, databases and production plants are all connected together via a digital network. This enables efficient scheduling and co-ordination across the entire value chain.

Production plants generate vast quantities of data. Analytics enables engineers and managers to exploit the hidden value in data. For example, to predict failure of equipment.

Greater levels of connectivity increase the risk of cyber-attacks. Cyber-physical security is a core element of Industry 4.0. Assess level of threat and implement effective policies.

New business models


Customers

Suppliers

Internal Stakeholders

Partners

Product

Product Service

Service

Product only

Service only

Product + Service

Designing intelligence into products opens up the possibility of using data to create new revenue streams and business models.

EXPLORE NEW WAYS TO CREATE VALUE.

Culture and Strategy


“Culture eats strategy for breakfast.”

• Strategy exists on paper • Culture determines how

things really get done

Value Propositions

Business Models

Customers

Markets

Products

Always remember that for your Industry 4.0 strategy to succeed, it needs to be accompanied by a programme of change management for: • Organisational culture • Processes • Skills and responsibilities


OK, I’m with you so far. But how do I get started with transforming my business into a Digital Manufacturing company?

Turn the page and discover how to take your first steps on the road to a Digital Manufacturing future.



Let’s get started

Where are you on the journey?


“Where do I begin?”

“We are thinking about it.”

“We have just launched our first pilot project.”

“We’ve just transitioned our first pilot to Production.”

“We are extremely proud of what we have achieved!”

“It’s of no interest to me or my company.”

“We have a plan!”

Let’s learn more about Industry 4.0

The six capabilities of Industry 4.0


Use these key capabilities to assess your readiness for Industry 4.0

Strategy, organisation and culture are crucial to adoption of Digital Manufacturing

STRATEGY AND

ORGANISATION

Highly automated distributed manufacturing processes are at the heart of the Smart Factory concept

SMART FACTORY

Efficient workflow is enabled by building ‘intelligence’ into both machines and components

SMART

OPERATIONS

Physical products are equipped with sensors and connectivity to enable value-added services

Data-driven processes are used to design new business models and revenue streams

Developing a skilled and well qualified workforce is essential to implementation

SMART

PRODUCTS BUSINESS

MODELS

WORKFORCE

EXPERTISE

Assess your current capabilities


Each key Industry 4.0 capability is composed of a set of business functions

You can use the Industry 4.0 capability wheel to create your own scorecard in order to set a baseline for improvement

Assess your current state of readiness with the help of an external consultant or use the free Impulse online assessment tool

Your long-term goal should be to build a complete set of Industry 4.0 capabilities across your Manufacturing business

Source: adapted from Impulse Industrie 4.0 readiness model

Now get ready to define your current state of Industry 4.0 readiness

https://www.industrie40-readiness.de/?sid=62931&lang=en

https://www.industrie40-readiness.de/?lang=en


In the next slide you will see a table which allows

you to estimate your current level of readiness for

Industry 4.0

• It takes each of the key capabilities which you have just learned about and allows you to assign a score to each of them

• Scores are in the range of 0 to 5, each indicating how far you are along the road to successful implementation of Industry 4.0

Industry 4.0 capability matrix


CAPABILITY

LEVEL Strategy &

Organisation

Smart

Factory

Smart

Operation

Smart

Products

Business

Models

Workforce

Expertise LEVEL

0 Bystander

1 Beginner

2 Intermediate

3 Experienced

4 Expert

5 Leader

• Level 0 is for companies which have so far done nothing to prepare for Industry 4.0 • Level 5 is for companies which have successfully implemented all Industry 4.0 activities

Source: adapted from Impulse Industrie 4.0 readiness model

https://www.industrie40-readiness.de/?lang=en

Defining the ‘new normal’


Select a capability which needs improvement

Develop an hypothesis

Design your experiment

Run your experiment

Evaluate the outcome

If hypothesis is correct, this becomes the new desired operating state

Choose either of:

•Refine the hypothesis and repeat the experiment

•Accept hypothesis is false and abandon experiment

Start here SMEs tend to have limited expertise and resources. So how do you improve your Industry 4.0 capabilities?

The answer is ‘experiments’

• Select a capability which needs improvement

• If you could achieve this level of performance, it would become the

‘new normal’

Design a set of experiments which will test the feasibility of your idea

• Run the experiments and evaluate the results

• If it is a success, this will be the ‘new normal’ mode of operation

• If it fails, refine and repeat the trial or move on to the next experiment

An example: predicting failure


CAPABILITY:

“I want to provide my customers with Smarter products.”

HYPOTHESIS:

“If I monitor Big Pump using sensors, I will be able

to predict failures.”

DESIGN EXPERIMENT

- Install vibration sensors on Big Pump

- Collect the data

- Analyse the data

Run the experiment for six weeks

Analyse the data and verify your

initial hypothesis

YES, the experiment has shown we can

predict possible failures of Big Pump.

Choose either of:

•NO, experiment has clearly shown that is not feasible to predict failure of Big Pump

• MAYBE, let’s tweak the experiment and run it again

Start here Running these types of experiments brings many benefits: Increased skills and

knowledge Measurable outcomes Great feeling of confidence

CONGRATULATIONS If you were to engage in such a successful experiment then you would have increased your Industry 4.0 ‘Smart Products’ capability rating

Level 0 (Bystander)

Level 1 (Beginner)

Track your progress


CAPABILITY

LEVEL Strategy &

Organisation

Smart

Factory

Smart

Operation

Smart

Products

Business

Models

Workforce

Expertise LEVEL

0 Bystander

1 Beginner

2 Intermediate

3 Experienced

4 Expert

5 Leader

As your expertise and confidence grows, use the capability matrix to track your progress

towards complete Industry 4.0 implementation

Let’s talk about skills


Building new digital capabilities for your

business requires investment in Skills

You need to initiate a programme of talent

acquisition and development

The benefits of doing this are legion:

Opportunities to create apprenticeships for young people

Attract a more diverse workforce

Create high-quality career opportunities for engineers, managers and executive staff

Enhance the reputation of your business as a forward-thinking organisation

Take a balanced approach


DOWNSIDE

There are significant challenges and risks associated with the move to Industry 4.0

UPSIDE

A programme of managed change will transform your organisation into a 21st century Digital Manufacturing business

Using the scorecard approach described in this document will maximise your chances of

implementing a successful programme and contain the risks within identifiable bounds.

The benefits of Industry 4.0

Increased Revenues

Greater Customer

Satisfaction

Highly Skilled Workforce

Agile Business Processes

Growth Mindset

Improved Decision

Outcomes

Better Quality Products

Greater Brand Value

We have seen this slide earlier in the presentation. But now you understand the basic ideas

behind Industry 4.0, it will repay a second viewing.



OK, you’ve convinced me! But for an SME, it looks like a huge challenge. Where can I get help with my Industry 4.0 initiative?

Turn the page and discover how to get help with your project.



Get help with your Industry 4.0 project

How to survive the

Fourth Industrial Revolution

However, we never said it

would be easy …

Go it alone if you want to.

• But remember that failure is always an option!

• A skilled consultant can bring vision, impartiality and vital expertise to the project

But which partner to choose?


We hope you feel inspired to

pursue your dream

Learn about Industry 4.0 Commit to a plan Implement your pilot project Design your new business model Transition into production Track your progress ……

Now it starts to look complicated!

Why choose

Astius Technology for your project?

How to choose a

Consulting Partner

Deep knowledge of Industry 4.0

Three things to look for Three things to avoid

Visionary thinking

Narrow focus on ‘automation’

Understands challenges faced by SMEs in Manufacturing sector

Clear vision of how digital manufacturing will transform your business

Solutions which lock you in to a particular vendor

Lacks candour and tells you only what they think you want to hear


Brilliant technology

Design for people

Business focused

Take an independent view


The Engineering Employers Federation (EEF) have many useful resources on the subject of Digital Manufacturing and the ‘Fourth Industrial Revolution’ https://www.eef.org.uk/campaigning/campaigns-and-issues/current-campaigns/industrial-strategy

Read the IMechE and BDO report from June 2016 ‘Lack of understanding of Industry 4.0 will hold back UK manufacturing’

https://www.eef.org.uk/campaigning/campaigns-and-issues/current-campaigns/industrial-strategy











http://www.imeche.org/news/news-article/new-report-lack-of-understanding-of-industry-4.0-will-hold-back-uk-manufacturing



Manufacturing matters


Talk to us We are ready to help 01273 906507 [email protected]

Manufacturing

business will

experience

monumental change

over the next decade.

With our visionary

thinking and

technology know-how,

we can help you make

the most of this

remarkable

opportunity.

Digital Manufacturing matters even more

Advanced System Technologies in Urban Spaces™
