industry 4 · sensors and actuators, connected by networks to computing systems. these systems can...

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Industry 4.0State of the Sector, Opportunities and How to get started

Dr Nico Adams | Senior Research ScientistTwitter: @nicoadamsLinkedIn: https://au.linkedin.com/in/nicoadams

Where are we?

Non-functioning B2B Business Process Data Exchange

• Typing: 120 AUD/hour• 1 hour to process order• 200 orders a month

Advanced Manufacturing and Digital Transformation - Session 4 | Dr Nico Adams3 |

Advanced Manufacturing and Digital Transformation - Session 4 | Dr Nico Adams4 |

Advanced Manufacturing and Digital Transformation - Session 4 | Dr Nico Adams

Low Use of Internet in Manufacturing

5 |

A Profusion of Standards and Systems

Advanced Manufacturing and Digital Transformation - Session 4 | Dr Nico Adams6 |

Non-functioning B2B Business Process Data Exchange

• Typing: 120 AUD/hour• 1 hour to process order• 200 orders a month

Advanced Manufacturing and Digital Transformation - Session 4 | Dr Nico Adams7 |

Non-functioning Engineering Data Exchange

• Not just business process data…engineering data too…• Problem replicated again and again and again….• Extrapolation over manufacturing sector: between 1 and 10 billion AUD lost productivity

Courtesy of Dr Steve Dowey, Sutton Tools

Advanced Manufacturing and Digital Transformation - Session 4 | Dr Nico Adams8 |

Business Aspects

9 |

• (Manufacturing) companies do not have digital strategies• (Manufacturing) companies do not understand business models enabled by digital• (Manufacturing) companies do not know how to take advantage of IoT

• Lack of skills• Want: Capability Discovery over an Industrial Internet Innovation Ecosystem

cf. Germany:80 % of value chains digitised by 2020

Advanced Manufacturing and Digital Transformation - Session 4 | Dr Nico Adams

It’s a Journey

Advanced Manufacturing and Digital Transformation - Session 4 | Dr Nico Adams10 |

Focus on Industry 4.0/Industrial Internet/IoT

Def(IoT)

“Sensors and actuators, connected by networks to computing systems. These systems can monitor or manage the health and actions of connected objects and machines. Connected sensors can also monitor the natural world, people and animals.”

Source: McKinsey Global Institute, “The Internet of Things: Mapping the Value Beyond the Hype” (2015)

Terminology Confusion

Applying IoT + …+…. to Manufacturing

“Industry 4.0”

(Germany)”

“Industrial Internet (of Everything)”

(GE)

Industry 4.0

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Industry 4.0

Autonomous Robots

System Integration

Internet of Things

Simulation

Additive Manufacturin

g

Cloud Computing

Augmented Reality

Big Data

Cybersecurity

But please….

Advanced Manufacturing and Digital Transformation - Session 4 | Dr Nico Adams 15

Forget the technology……..

Industry 4.0/Industrial Internet

16

….concepts that denote the digitisation of industrial value chains……

“…the (real-time) intelligent integration of humans, machines and objects towards a management of

systems…..”

Why is the Digitisation of Value Chains so Important?

Value Capture Changes in Digital Manufacturing

Traditional (Manufacturing) Mindset

Digital (Manufacturing) Mindset

Value Creation Customer Needs Service existing needs,reactive

Address real time + emergent needs in a predictive manner

Offering Product obsolescence as a function of time

Product refresh via software update, partial physical upgrade, synergistic

Role of Data Single data point to define futureproducts

Use data to create product experience, enable services, synergies with other systems

Value Capture Profit Creation Sell the next/more of product Enable recurring revenue

Control Points IP ownership, brand, commodity advantage

Personalisation, context, network effects

Capability Use existing core competence,resources and processes

Systems thinking, n-sided markets, platforms

Manufacturing and Digital Transformation | Dr Nico Adams17 |

Platform Economics….

Products > Services > Platforms

Source: Adrian Turner, Data61

Manufacturing and Digital Transformation | Dr Nico Adams18 |

Industry 4.0

• German strategic initiative

• 2006: Germany launches “High Tech Strategy 2020”

• 2012: Germany government passes “High Tech Strategy Action Plan”• Identifies 10 future focus areas

• Includes Industry 4.0

• Goal: to become an international leader of cyber-physical systems by 2020

• Builds on Germany’s national strength in embedded systems

Produces detailed reference architecture, policy, working towards testbeds etc

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Industrial Internet Consortium

Presentation title | Presenter name20 |

• Founded in March 2014 by• AT&T• CISCO• GE• IBM• Intel

• Mission: to catalyze and coordinate the priorities and enabling technologies of the industrial Internet

• 245 Members (May 2016)• Reference architecture• Testbeds• Publicity and outreach

IIC vs I4.0

Presentation title | Presenter name21 |

Energy

Healthcare

Manufacturing

Public Domain

Transportation

...

IIC

I 4.0

What does that mean for Australia?

Presentation title | Presenter name22 |

What are the Opportunities?

Business Opportunities in Digital Manufacturing….

Advanced Manufacturing and Digital Transformation - Session 4 | Dr Nico Adams24 |

https://reports.weforum.org/industrial-internet-of-things/general-findings/2-2-the-four-phases-of-the-industrial-internet-evolution/

• Better visibility into factory• Better visibility into supply chain• Better HSE outcomes

• Servitisation• Predictive/preventative maintenance• “Pay per laugh”

• On demand, hyperlocal manufacturing of customised products for audiences of one

• Self-assembling factories• Self-configuring factories

Which Business Problems does I4.0/II address? - Horizon 1

Presentation title | Presenter name25 |

• Better factory visibility (and therefore actuation and control)

• Better supply chain visibility (and therefore actuation and control)

• Better HSE outcomes• Better resource management• Servitisation

Horizon 3 – Outcome EconomyTumpf (Germany)

Advanced Manufacturing and Digital Transformation - Session 4 | Dr Nico Adams26 |

Building Platform Business….

https://www.trumpf.com

Horizon 3 – Outcome EconomyWittenstein (Germany)

Advanced Manufacturing and Digital Transformation - Session 4 | Dr Nico Adams27 |

Factories as good neighbours……

https://www.wittenstein.de/de-de/

Horizon 4 – Pull Economy

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“Pull approaches, in contrast, tend to be implemented on "platforms"

designed to flexibly accommodate diverse providers and consumers of

resources. These platforms are much more open-ended and designed to

evolve based on the learning and changing needs of the participants.

Once again, we do not mean to use platforms in the literal sense of a

tangible foundation, but in a broader, metaphorical sense to describe

frameworks for orchestrating a set of resources that can be configured

quickly and easily to serve a broad range of needs. ”

Horizon 4 – Pull Economy

Advanced Manufacturing and Digital Transformation - Session 4 | Dr Nico Adams29 | http://www.maketime.io

In the Short Term…

Advanced Manufacturing and Digital Transformation - Session 4 | Dr Nico Adams30 |

https://reports.weforum.org/industrial-internet-of-things/general-findings/2-3-key-near-term-opportunities-and-benefits/

So how to respond?

Dual Strategy

&LeadingAdoptor

LeadingSupplier

Advanced Manufacturing and Digital Transformation - Session 4 | Dr Nico Adams32 |

How to get started….

33

• Step 1: Develop a Digital Strategy and lay the groundwork• What business outcomes do I want to achieve and how can digital help?• Which new products and services do I want to develop and what is the role of

digital?• What is the digital maturity of my company?

• Which capabilities (systems, tools, digital skills etc) do exist in my company to get me closer to my business goals? Which ones do I need to invest in/find partners for?

• Which structures, processes and talents in my company support digital innovation? Which ones do I need to put in place?

• Which culture in my company supports digital innovation? Which mindsets and behaviours are in place and which ones do I need to nurture and/or change?

• Step 2: Learn from Peers and Collaborate with Peers• Find peers that already work with I4.0/II technologies and learn from them• Collaborate on pre-competitive activities• Reach out to research providers (CSIRO, universities), CRCs, Growth Centres and

industry associations (e.g. AiG) to find connections

Advanced Manufacturing and Digital Transformation - Session 4 | Dr Nico Adams

How to get started….

Advanced Manufacturing and Digital Transformation - Session 4 | Dr Nico Adams 34

• Step 3: Experiment Bottom Up and Scale Slowly• low cost, low risk• e.g. find summer students or interns with the required capabilities (e.g. using the

Ribit platform) and work on proving an IoT enabled business case/tech case with them (also gets new capability into the company)

• Take advantage of researcher in business• Be agile in your experimentation• …

• Step 4: Invest Systematically once Business Case has been proven• Funding is potentially available through• IMCRC• AMGC• CRC-p• CSIRO Innovation Fund• …..

www.csiro.au

Data61Dr Nico AdamsSenior Research Scientist

t +61 3 9545 2222e nico.adams@csiro.au or

nico.adams@imcrc.orgw www.csiro.au

Thank you