key trends in industry 4.0 to watch · technology in the industry 4.0 revolution industry 4.0 will...
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Key Trends in Industry 4.0 to WatchJustinas Liuima, Lead Industry Analyst
Justinas Lašinskas, Senior Industry Analyst
September, 2018
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OVERVIEW
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1. Internet of Things2. Supply chain effectiveness3. Hi-tech goods industry recovery4. Cybersecurity5. Machine-to-Machine traffic6. Supply chain, production process tracking7. Interconnected devices growth8. Augmented reality
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IoT will be key technology in Industry 4.0
INTRODUCTION TO IOT IN MANUFACTURING SECTOR
Digital factory
FactorySuppliers
Logistics
Computer/server
Smart products
Virtual production
Custom products
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IoT will be key technology in Industry 4.0 (cont.)
INTRODUCTION TO IOT IN MANUFACTURING SECTOR
IoT is set to be a pivotal technology in the Industry 4.0 revolution
Industry 4.0 will lead to rising usage of advanced production machinery, sensors and communication with manufacturers and suppliers
Industry 4.0 will require that billions of devices in the supply and production chain will be interconnected
IoT
Autonomous
Robots
3D Printing
Augmented
Reality
Simulation
Big Data Analytics
Cybersecurity
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Three pillars of IoT
INTRODUCTION TO IOT IN MANUFACTURING SECTOR
IoT helps to connect physical systems and devices with each other and create large, interconnected network
Currently consumer side of IoT is the main target, but manufacturing operations provide significant future growth opportunities
The primary target is more effective production methods, that will require connectivity services
Infrastructure is another major business IoT segment. Manufacturers can track their energy, transportation and other networks, minimizing operational costs
18th
c.
18th
c.1900s 1970s
IoT
Consumer IoT
• Consumer electronics• Domestic appliances
• Smart home
Infrastructure IoT
• Energy• Transportation systems
• Logistics systems
Business IoT
• Industrial robots• Customer service
• Process management
Pillars relevant to manufacturing industries
OVERVIEW
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1. Internet of Things2. Supply chain effectiveness3. Hi-tech goods industry recovery4. Cybersecurity5. Machine-to-Machine traffic6. Supply chain, production process tracking7. Interconnected devices growth8. Augmented reality
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Effect on supply chain
SUPPLY CHAIN EFFECTIVENESS
Hi-tech goods turnover in the USA
B2B costs Value-added
Domestic consumption Trade margins
DomesticProduction Imports
mu
ltip
lic
ati
on
Increases turnover
Increases value-added
Drives B2B spending
B2B costs group Share
Hi-tech Goods 20.5%
Metal Products 11.1%
Business Services 8.6%
Information and Communications
2.9%
Finance and Insurance 2.6%
Rubber and Plastic 2.5%
Other 51.8%
Hi-tech goods industry‘s B2B costs group in the USA, 2017
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30-40% lower machinery maintenance costs
Global industry’s global cost savings could total USD140 billion per year
Total savings in global hi-tech goods industry could total USD12 billion per year
Benefits to manufacturing sector
SUPPLY CHAIN EFFECTIVENESS
0 50 100 150
Energy
Rubber and Plastic
Business Services
Information and Communications
Construction and Real Estate
Machinery
Chemical Products
Forestry, Wood and Paper
Retail and Wholesale
Metal Products
Food, Beverages and Tobacco
Utilities and Recycling
Transport Equipment
Agriculture
Hi-tech Goods
Largest spenders on machinery, 2017
USD Billion
OVERVIEW
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1. Internet of Things2. Supply chain effectiveness3. Hi-tech goods industry recovery4. Cybersecurity5. Machine-to-Machine traffic6. Supply chain, production process tracking7. Interconnected devices growth8. Augmented reality
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Business products become a haven
OPPORTUNITIES FOR HI-TECH GOODS INDUSTRY
Developed countriesseek new growth
prospects:Western Europe: 0% CAGR North America: 1% CAGR
Asia Pacific: 4% CAGR
*over 2012-2017
Consumer electronics market cools Consumer electronics demand shifts east
-100 0 100 200
Portable Computers
Imaging Devices
Home Video
Desktops
Peripherals
Wearable Electronics
Smartphones
Retail value RSP growth 2012-2017, USD billion
Invest incomponents
making
Transformsto solutionscompanies
Seek M&As
3.0%
0.5%
0.8%
-1.8% -1.5%
-3.7%
-2.5%
Retail value RSP, CAGR 2012-2017
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Industry 4.0 to kick start hi-tech goods industry
OPPORTUNITIES FOR HI-TECH GOODS INDUSTRY
CAGR 3.2% in 2012-2017 to reach USD6.1 trillion
CAGR 4.8% in 2018-2030 to reach USD11.2 trillion
Key growth areas:
Sensors
Process control equipment
Video, sound, M2M communication systems
Software
0
2,000
4,000
6,000
8,000
10,000
12,0002
01
2
20
14
20
16
20
18
20
20
20
22
20
24
20
26
20
28
20
30
USD
bil
lio
n
Hi-tech goods Production Value
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What‘s behind the growth?
OPPORTUNITIES FOR HI-TECH GOODS INDUSTRY
Electronic componentswill account for 29% of hi-tech goods growth in 2017-2030.
Batteries to post the largest growth rate, thanks to autonomous vehicles and demand for mobile power.
Consumer-oriented industries continue growing, yet undergo transition.
OVERVIEW
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1. Internet of Things2. Supply chain effectiveness3. Hi-tech goods industry recovery4. Cybersecurity5. Machine-to-Machine traffic6. Supply chain, production process tracking7. Interconnected devices growth8. Augmented reality
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In 2017, global computer services revenue stood at USD2.7 trillion
Spending on computer software will grow as manufacturing companies will face growing cybersecurity issues
Computer services industry is forecast to expand by 122% over 2018-2030 to total USD5.9 trillion
Cybersecurity will be the future challenge for manufacturers
M2M traffic is expected to surge at 70% CAGR over 2016-2021, driving
demand for cyber insurance services
CYBER CHALLENGES FOR COMPANIES
0
20
40
60
80
100
120
0 50 100 150
Cy
be
r in
sura
nce
re
ven
ue
, U
SD
bil
lio
n
Number of companies in the US
2013:10 companies, USD 40 billion
2016:50 companies, USD 84 billion
2020:USD 113
billion
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Cybersecurity threats
CYBER CHALLENGES FOR COMPANIES
Operational systems protection
Threat to production process
Theft of data
Logistics system protection
Misinformation about processes
Business contamination affecting multiple clients
Data protection
Theft of data
Theft of business know-how
Consumers protection
Personal data loss
Distortion of consumer data
Threats to be contained to ensure smooth IoT usage in business operations:
OVERVIEW
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1. Internet of Things2. Supply chain effectiveness3. Hi-tech goods industry recovery4. Cybersecurity5. Machine-to-Machine traffic6. Supply chain, production process tracking7. Interconnected devices growth8. Augmented reality
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Surging data traffic – key component
INDUSTRY 4.0 AND THE M2M TRAFFIC
0
100
200
300
400
500
600
700
800
900
2017 2018 2019 2020 2021
M2
M t
raff
ic, p
etab
yte
s
Machine-to-machine traffic across regions, 2017-2021
Western Europe North America
Asia Pacific Eastern Europe
Latin America Middle East and Africa
100-150bn devices expected to be
connected to IoT by 2030
2-3bn devices are connected to IoT today
Consumer Traffic
Corporate Traffic
20-30%+ CAGR expected over
2017-2030
Source: Euromonitor International from Cisco
Mobile Telephony
Household Vehicles Industrial
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Industry 4.0 encompasses all:
Telecom companies converge with industrialenterprises
INDUSTRY 4.0 AND THE M2M TRAFFIC
5G Internet
Broadband Connection
Smart Vehicles
and Transport
Online Media
Control of Smart
Devices
Internet of Things (IoT)
• 5G internet to driveIndustry 4.0 revolution
• Telecom companies –well positioned forIndustry 4.0
• Content grows inrelevance, benefitsboth telecom and industrial companies
• IT-telecomconvergence to driveindustrialautomation
OVERVIEW
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1. Internet of Things2. Supply chain effectiveness3. Hi-tech goods industry recovery4. Cybersecurity5. Machine-to-Machine traffic6. Supply chain, production process tracking7. Interconnected devices growth8. Augmented reality
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Transportation network overhaul to benefit customers
SUPPLY CHAIN, PRODUCTION PROCESS TRACKING
• More transparency in pricing, delivery tracking
• Real time facility and transport tracking
• Time savings
Customer
Manufacturer
Retailer
Logistics
Supplier
100% Manufacturing
90%
80%
Retail and Wholesale
70%
60% Construction and Real Estate
50% Energy, Utilities and Recycling
40% Government, Health and Education
Business Services
30% Primary Materials
Other
20%
10%
Top Logistics Services Buyers Globally
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Digital production to help reduce errors
SUPPLY CHAIN, PRODUCTION PROCESS TRACKING
Around USD1.5 billion worth of food products are wasted in manufacturing process in the UK alone
On global scale, food and beverage waste losses would equate to USD64 billion
The most common causes of food waste are machinery breakages and errors in the manufacturing process
Digital production
Ingredients
0 2,000 4,000 6,000 8,000
Household Goods
Pharmaceuticals and Medical…
Rubber and Plastic
Forestry, Wood and Paper
Non-metalic Mineral Products
Textile and Leather Products
Machinery
Chemical Products
Transport Equipment
Hi-tech Goods
Metal Products
Food, Beverages and Tobacco
Top 10 Global Manufacturing Industries, USD Billion, 2017
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Benefits for manufacturers
SUPPLY CHAIN, PRODUCTION PROCESS TRACKING
Cost Reduction
• Lower labour costs• More flexible
supply chains• Digitization helps
to track inefficiencies
Flexibility
• Ability to produce on demand = less stock in warehouse
• Customisation and diversified product mix
Higher Precision
• Less errors in production process
• Lower aftersales cost
OVERVIEW
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1. Internet of Things2. Supply chain effectiveness3. Hi-tech goods industry recovery4. Cybersecurity5. Machine-to-Machine traffic6. Supply chain, production process tracking7. Interconnected devices growth8. Augmented reality
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Prerequisites for IoT adoption in industries
INTERCONNECTED DEVICES
Industry’s sophistication
Higher
value-added
Supply chain
Financialstrength
Profitability
Presence of large
companies
Investments in innovations
Industry’s spending on digitization
efforts (machinery,
computers, IT systems, etc.)
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Leading economic sectors
INTERCONNECTED DEVICES
0.0 0.1 0.2 0.3 0.4 0.5 0.6
Primary Materials
Hotels and Restaurants
Government, Health andEducation
Personal and RecreationalServices
Construction and Real Estate
Retail and Wholesale
Business Services
Manufacturing
Transport andCommunications
Finance and Insurance
Energy, Utilities and Recycling
Best Positioned Sectors to Use IoT Energy, utilities and recycling
Benefit from strong financial backup from countries’ governments, and relatively
universal activities throughout the world simplifying the sector’s transition to IoT
Services-related sectors
Strong financial standing and high value-added created within the sectors drive
competition in the technology department. Digitalization effort is a key factor driving the
transition to IoT
Manufacturing
Manufacturers and governments seek to boost sectors productivity
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Energy and Utilities: using IoT to handle renewable energy
INTERCONNECTED DEVICES
Data Collection
Energy companies can increase efficiency by using IoT:
Equipment monitoring
Data analytics can forecast peak demand/supply
Lower reaction times
Infrastructure control
Infrastructure effectiveness to increase:
Communication between different equipment
Smart meters, sensors
Creation of smart grid
By 2030 power generation from renewable sources in EU is expected to reach 30%.Smart systems will have to be implemented to handle this.
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Autonomous cars – future growth area
INTERCONNECTED DEVICES
Businesses operating in closed environments (agriculture, mining)
Road freight transport and taxi companies bring autonomous cars on the road
Private consumers adopt new technology
USD216 billion globallyautomotive industry’s spending on hi-tech goods in 2017
Key growth sectors:
SensorsEnvironment recognition,
hazard detection
Signal EquipmentAntennas, data transfer
Movement Control Units
Steering, driving, torque controls
Comfort Equipment
Infotainment systems
Time 2018 2025 2030 2035
Autonomous cars’ evolution
30 million of autonomous cars of various levels
on the road
OVERVIEW
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1. Internet of Things2. Supply chain effectiveness3. Hi-tech goods industry recovery4. Cybersecurity5. Machine-to-Machine traffic6. Supply chain, production process tracking7. Interconnected devices growth8. Augmented reality
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Virtual reality
Industry 4.0 expands reality to improve processes
AUGMENTED REALITY CHANGES MANUFACTURING PROCESSES
Augmented reality
Mixed reality
Industry 4.0 offers several virtualization layers
Fully digital visualization
Digital-reality visualization
Digital-reality-experience visualization
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Reinvesting manufacturing process
AUGMENTED REALITY CHANGES MANUFACTURING PROCESSES
Introduction of the„Digital Twin“
Physical inspection
Proactivemaintenance
Reactive maintenance
Limited geographicaldependency
Geographicaldependency
Minimized humanerror possibility
High human errorprobability
Modelled aproachCalculated guessing
Minimized costsHigh waste due to
errors
• Higher efficiency
• Safer environment
• Lower costs
• New products launch
• Stronger quality control
• Deeper employee training
Thank You
Justinas Liuima, Lead Industry Analyst
Tel: +370 5 243 1577 EXT [email protected]
Justinas Lašinskas, Senior Industry Analyst
Tel: +370 5 243 1577 EXT [email protected]