capgemini [s pov on industry 4.0 and its business ...technology innovations advanced analytics...
TRANSCRIPT
TRANSFORM TOGETHER
Capgemini’s PoV on Industry 4.0 and its business implications for Siemens Siemens Digital Transformation Executive Forum
June 5th 2014, Udo Lange
Contents
Copyright © 2014 Capgemini Consulting. All rights reserved.
2
▶ INDUSTRY 4.0: Drivers for an industry on the verge into a new industrial era of connected enterprises
▶ FROM SMART FACTORY TO AGILE SUPPLY CHAINS: How technology solutions are shaping the future industry value chain
▶ THE CAPGEMINI FRAMEWORK FOR INDUSTRY 4.0: Business & Technology Transformation in the digital age
▶ TRANSFORM TOGETHER: Business Opportunities for Siemens to nurture the value chain
Industry 4.0 is considered the fourth industrial revolution – materializing Digital Transformation in the Manufacturing Industry
Digital Transformation in Manufacturing: The fourth industrial revolution
Copyright © 2014 Capgemini Consulting. All rights reserved.
3
Digital Transformation is a value-adding challenge that drives future
manufacturing competitiveness
First mechanical loom, 1784
First assembly line Cincinnati slaughter houses, 1870
First Industrial Revolution
through the intro-duction of mechanical production facilities with help of water and steam power
Second Industrial Revolution
through the intro-duction of a division of labour and mass production with the help of electrical energy
Third Industrial Revolution
through the use of electronic and IT systems that further automate production
Fourth Industrial Revolution
through the use of cyber-physical systems
Degree of complexity
1800 1900 2000 Time
First programmable logic controller (PLC), Modicon 084, 1969
Digital maturity, by industry 2012 1
1 Capgemini Consulting: The Digital Advantage: How Digital Leaders Outperform Their Peers in Every Industry 2 Capgemini Consulting: The Internet of Things: Are Organizations Ready For A Multi-Trillion Dollar Prize?
Our study revealed that in 2012 Manufacturing companies were rather laggards in regards of Digital Transformation
With the appearance of Internet-of-Things, Industrial Manufacturing companies are stepping up the maturity ladder.2
Market challenges and Technology Innovations
Companies are leveraging technology innovations to respond to the Paradox of contradicting market challenges: increasing performance vs. reduced costs
4
Copyright © 2014 Capgemini Consulting. All rights reserved.
Technology Innovations
Advanced Analytics
Internet of Things and Services
Decentralization and autonomous
control
Virtual and Augmented Reality
Machine Intelligence
& Robotics
Cloud
M2M*
Mobility
Big data/ analytics
Additive Manufacturing
Social media
*Machine-to-Machine communication
Global markets and global manufacturing networks
Increasing organization complexity
Increasing product complexity
Expectation for instant (real-time) response
Need for more customization
New competitors and cost pressure
MARKET CHALLENGES: THE PARADOX
Contents
Copyright © 2014 Capgemini Consulting. All rights reserved.
5
▶ INDUSTRY 4.0: Drivers for an industry on the verge into a new industrial era of connected enterprises
▶ FROM SMART FACTORY TO AGILE SUPPLY CHAINS: How technology solutions are shaping the future industry value chain
▶ THE CAPGEMINI FRAMEWORK FOR INDUSTRY 4.0: Business & Technology Transformation in the digital age
▶ TRANSFORM TOGETHER: Business Opportunities for Siemens to nurture the value chain
Through the emergence of cyber-physical systems together with other technology trends, the future manufacturing process will be organized and orchestrated differently
The core element: the Cyber Physical System (CPS)
Copyright © 2014 Capgemini Consulting. All rights reserved.
6
The virtual model of the CPS serves as simulation object, in order to enable decision making
Sensors and actuators provide real-time information and control options during production and field usage
Interfaces and communication platforms enable M2M communication and human influence across different product lifecycle stages
M2M Device
M2M GatewayM2M Area
Network
M2M Device
M2M Communication
Network
M2M Server
platform
Business application
Device domain Network domain Application domain
Agent
CYBER-PHYSICAL SYSTEMS (CPS) ARE …
Physical object with embedded system possessing own machine intelligence (CPU, memory)
Additional sensors and actuators
Connectivity via standardized interfaces to other IT or CPS (M2M-communication)
Connecting all relevant physical objects with virtual (“cyber”) counterparts
… THE LINKING ELEMENT OF AN INDUSTRY 4.0 ENVIRONMENT
Virtual Model
Physical/ Mechanical Systems
Embedded Systems
Sensors & actuators
Electronic hardware
Software
Human-Machine interface
Interface to other
systems
IT Systems
Intranet/ Internet
The combination of Cyber-Physical Systems in lead to the concept of the Smart Factory where products and systems are interacting and taking decentralized decisions
Smart Factory
Copyright © 2014 Capgemini Consulting. All rights reserved.
7
Augmented human operator
Cyber-Physical Production
Systems
IT Systems
C-P Machine 1 Embedded Electronics
Sensors & actuators
Electronic hardware Software
Human interface
Machine interface
Intranet/ Internet
Cyber-physical Transport
System
C-P Vehicle Embedded Electronics
Sensors & actuators
Electronic hardware Software
Human interface
Machine interface
Secured data
exchange
10101101011100101101
Cyber-physical Product
C-P Product
Electronic hardware Software
Human interface
Machine interface
SMART FACTORY
Central integrated business planning for demand management
Order-specific variants (“lot-size 1”) to enable customization
Machine-to-Machine communication between Cyber-Physical-Products and Cyper-Physical Production-Systems
Embedded analytics
Decentralized decision making for production control
Real-time decision making
Multi-agent technology
Corrective actions based on quality data analytics
Extending the concept of the smart factory across the whole value chain, creates agile end-to-end processes leveraging multiple internal and external business services
From Smart Factory to Agile Value Chains
Copyright © 2014 Capgemini Consulting. All rights reserved.
8
Service-oriented Business Architecture Business functions as self-contained/
independent services (internal and external)
Cross-company, flexible process flow Process instances (products/orders) as
self-organized ‘agents’ Standardized or common interfaces/
protocols A common 'data lake‘ as platform for
analytics functions (Big Data) Supply-Chain-Control tower providing
extended supply chain transparency
Development
Services (Product/
Production System)
Production Services
Assembly Services
Purchasing Services
Maintenance Services
Erection & Installation
Services
Delivery Services
Production Systems
Product definition
Quality Mgmt.
Services
'Data lake'
Industry 4.0 is characterized by maximized efficiency, interconnectivity and highly dynamic environments
Summary: Characteristics and Benefit Potentials of Industry 4.0
Copyright © 2014 Capgemini Consulting. All rights reserved.
9
Active/ autonomous cyber-physical objects (products and production systems)
Decentralized decision making
Process flexibility to enable customer-specific solutions (‘lot-size-1’)
Vertical integration from ERP and Planning to individual sensors
Cross-factory and cross-company process flow (horizontal integration)
Virtual model and integrated/ embedded analytics capabilities
COMMON CHARACTERISTICS OF INDUSTRY 4.0
Increased revenues through new services and business models
Better utilization of production capacities across global manufacturing networks
Elimination/ reduction of logistic costs
Improved profitability/ reduced costs for small batch sizes
Improved quality / reduced quality costs
Reduced lead-times
Increased flexibility
Improved customer value and satisfaction
“Cisco and GE estimate that the size of
the IoT pie is over $10 trillion.”1
BENEFIT POTENTIALS
1 Capgemini Consulting: The Internet of Things: Are Organizations Ready For A Multi-Trillion Dollar Prize?
Vertical integration and networked manufacturing systems
Horizontal integration through value networks
End-to-end digital integration of engineering across the entire value chain
Manage the people, culture and leadership transfor-mation (‘People 2.0’)
In order to achieve the Industry 4.0 target scenario, several key elements need to be resolved/ established
Challenges on the way to Industry 4.0
Copyright © 2014 Capgemini Consulting. All rights reserved.
10
Product
Production
Machine
Service
Company 1 Company 2 Company 3
Goods flow
Financial flow
Information flow
Agile Value Chain
As fundamental challenges, data security and communication standards are to be established.
Contents
Copyright © 2014 Capgemini Consulting. All rights reserved.
11
▶ INDUSTRY 4.0: Drivers for an industry on the verge into a new industrial era of connected enterprises
▶ FROM SMART FACTORY TO AGILE SUPPLY CHAINS: How technology solutions are shaping the future industry value chain
▶ THE CAPGEMINI FRAMEWORK FOR INDUSTRY 4.0: Business & Technology Transformation in the digital age
▶ TRANSFORM TOGETHER: Business Opportunities for Siemens to nurture the value chain
Industry 4.0 is essentially empowered by digital technologies. Manufacturing companies can drive growth and efficiency by addressing 8 key value drivers
Copyright © 2014 Capgemini Consulting. All rights reserved.
12
The Capgemini Consulting Industry 4.0 Framework
Future Manufacturing Business Model
Technology Enabler (Selection)
Agile Operation Model (Decentralized, Modular, Flexible, Boundless)
Infrastructure (connects Cyber-Physical Systems)
Go
vern
ance
&
Pro
cess
es
Peo
ple
Lea
der
ship
&
Ch
ange
Smart Solutions
Smart Products
Smart Services
Customer Integration
Collaborative Innovation
After Sales Integration
Smart Supply Chain
Agile Collaboration
Network
Connected Supply Chain
Smart Factory
Decentralized Production
Control
Data-driven Operational Excellence
Mobile Cloud Analytics M2M Social Robotics
EFFICIENCY DRIVER GROWTH DRIVER
Industry 4.0 is essentially empowered by digital technologies. Manufacturing companies can drive growth and efficiency by addressing 8 key value drivers
Copyright © 2014 Capgemini Consulting. All rights reserved.
13
The Capgemini Consulting Industry 4.0 Framework
Future Manufacturing Business Model
Technology Enabler (Selection)
Agile Operation Model (Decentralized, Modular, Flexible, Boundless)
Infrastructure (connects Cyber-Physical Systems)
Go
vern
ance
&
Pro
cess
es
Peo
ple
Lea
der
ship
&
Ch
ange
Smart Solutions
Smart Products
Smart Services
Customer Integration
Collaborative Innovation
After Sales Integration
Smart Supply Chain
Agile Collaboration
Network
Connected Supply Chain
Smart Factory
Decentralized Production
Control
Data-driven Operational Excellence
Mobile Cloud Analytics M2M Social Robotics
EFFICIENCY DRIVER GROWTH DRIVER
Presented as Case example in breakout
Example: Collaborative Innovation
For a world-class aircraft and rocket engine manufacturer we established an end-to-end engineering platform to enable extended-enterprise engineering collaboration
Benefits Global transparency about demand and
resource availability through consolidation across all levels of the network
Validation of plans by checking sales plans against network planning quantities
Reservation of agreed quantities to ensure delivery reliability
Triggering the investment process at an early stage
Solution Implementation of a collaborative platform
to share configurations and digital mock up with external partners and suppliers
Definition of product data model Reengineering of modification processes in
order to find the right balance about the rhythm of evolution into digital mock up and PLM corresponding configurations
Background Need to globally collaborate all along
product life cycle with more suppliers and partners
Real time collaboration of internal and external users around digital mock up must be improved
Communication must be facilitated Partners and suppliers don’t have a direct
access to product configuration
Copyright © 2014 Capgemini Consulting. All rights reserved.
14
Horizontal Integration: Supply-Chain Control Tower
Manufacturing companies can target supply chain complexity by connecting physical commodity flows with digital platforms
Copyright © 2014 Capgemini Consulting. All rights reserved.
15
Tracking & Tracing System
Master Data Supply Chain Event Management
Supplier Logistic service provider Internal Logistic service provider
ASN & GPS
GPS RFID & GPS
RFID & GPS
ASN & GPS
ASN
ASN RFID
RFID
Increased transparency and
improved remote accessibility Real-time processing and
improves network monitoring Increased flexibility and
improved decision-making
Digital platform integration backbone
Electronic interfaces Big data analysis Instant cloud access
Cyber-physical supply chains interconnect and map value networks and thus provide a transparent and unique view for breaking down operational issues.
Example ‘Connected Supply Chain’: Supply Chain Control Tower
Using a Control Tower provides E2E supply chain visibility, reduces transport costs and increases supply chain and LSP control
Benefits More efficient, integrated organisation Increases load efficiency Improved tracking and customer services Improved customer satisfaction Improved transport efficiency using best-in-
class carriers and redesign transport solutions (e.g. x-border domestic)
Improved Performance Measurement and Freight
Solution Integrated management organisation (LSP ‘s and
Samsung) for steering, planning & controlling IT product flow from Port-to-Customer
Develop and implement logistics buying function for procurement and contract management of warehousing and transport services
Set up new administrative organisation in such a way that all required cost data is captured automatically
Carrier (selection, evaluation, invoicing) and inbound (terminal planning, customs status) integration
Background Warehouse and distribution activities are
outsourced; further supply chain optimisation within current organisation is complex
Purpose is to increase E2E supply chain control, improve efficiency by using best-in-class carriers and become less dependent on their LSP’s
Activities on the tactical level (e.g. carrier management, high level planning, contracting) will be executed by a Control Tower
Copyright © 2014 Capgemini Consulting. All rights reserved.
16
With the help of digital technologies, integrated business planning transforms counteracting functional goals into an overall value orientation for the entire organization
Vertical Integration: Integrated business planning
Copyright © 2014 Capgemini Consulting. All rights reserved.
17
IBP consolidates planning activities of supply chain, marketing, production and finance and optimizes operational performance as well as capital costs.
Cloud
Big data/ analytics
Operations
Cross-functional resource allocation and capacity planning enhances
workforce management
Improved planning and forecasting due to cross-
functional connection leads to an increased EBIT
Market simulation leads to improved portfolio decision-making
Strategy insights for R&D provide orientation
on profitability
Cascading strategy across the organization enhances trust
Real-time operational decision-making optimizes performance
and capital costs
Example ‘Vertical Integration’: Integrated Business Planning
For a global component manufacturer we established a platform for integrated business planning in order to enable optimized demand and production planning
Benefits Accelerated order confirmation and
improved on-time-delivery Reduced inventory levels and order lead-
times Reduction of transport costs due to
improved material availability
Solution The entire S&OP process was re-designed,
following an IBP logic and based on the principle “one plan - one number”
Development of an integrated business planning (IBP) process aligning all sales and supply activities with financial planning
Implementation of IT solution to support integrated planning process from Demand- to Production Planning (modules: DP, SNP, PP/DS, gATP)
Background Customer was operating in an optimized
global supply chain network Delivery performance was below industry
standard Low degree of supply chain planning
process integration Supply chain cost transparency was
missing, the “real” logistic costs were not taken into account although they were forming a crucial part of the total costs
Copyright © 2014 Capgemini Consulting. All rights reserved.
18
Contents
Copyright © 2014 Capgemini Consulting. All rights reserved.
19
▶ INDUSTRY 4.0: Drivers for an industry on the verge into a new industrial era of connected enterprises
▶ FROM SMART FACTORY TO AGILE SUPPLY CHAINS: How technology solutions are shaping the future industry value chain
▶ THE CAPGEMINI FRAMEWORK FOR INDUSTRY 4.0: Business & Technology Transformation in the digital age
▶ TRANSFORM TOGETHER: Business Opportunities for Siemens to nurture the value chain
Future Manufacturing Business Model
Technology Enabler (Selection)
Agile Operation Model(Decentralized, Modular, Flexible, Boundless)
Infrastructure(connects Cyber-Physical Systems)
Go
vern
ance
&
Pro
cess
es
Peo
ple
Lea
der
ship
&
Ch
ange
Smart Solutions
Smart Products
Smart Services
Customer Integration
Collaborative Innovation
After Sales Integration
Smart Supply Chain
Agile Collaboration
Network
Connected Supply Chain
Smart Factory
Decentralized Production
Control
Data-driven Operational Excellence
Mobile Cloud Analytics M2M Social Robotics
EFFICIENCY DRIVERGROWTH DRIVER
To exploit the opportunities of Industry 4.0, the various Siemens divisions should evaluate all dimensions of the Industry 4.0 framework
Implications for Siemens Business
Copyright © 2014 Capgemini Consulting. All rights reserved.
20
Products
Services
Process & Organization
People & Culture
IT & Technology
Integration & Standards
Review the product portfolio and determine the level of integration (e.g. sensor vs. turbine vs. control system)
Implement multi-agent technologies
Develop and establish stan-dards for M2M-communi-cation across the portfolio
Develop and establish security standards capable for Industry 4.0 scenarios
Establish cross-enterprise integration platforms (e.g. 3D-printing grid)
Leverage and develop more cloud-based solutions to increase flexibility
Establish Industry 4.0 processes in own factories
New services reaching out to end-customers (B-2-B-C) e.g. healthcare or drives
Evaluate value chain for data driven business models (e.g. energy efficiency management)
Establish stable digital process management to ensure fast response and process compliance
Establish agile team culture Enable agile and decentralized
decision making Prevent ‘not-invented-here’
culture
Leveraging our broad cross-discipline capabilities, Capgemini is committed to support Siemens in the exploitation of the business potential of Industry 4.0
How can Capgemini support Siemens in this Transition?
Copyright © 2014 Capgemini Consulting. All rights reserved.
21
Definition & establishment of security and communications standards (e.g. security solution on device level and corporate M2M-communication standards)
Assess your digital maturity and market potential
Identify and develop business opportunities
Design the business model
Develop the roadmap towards Industry 4.0
STRATEGY & ROADMAP
Review of the product and service portfolio for adaptation requirements
Re-engineering of product portfolio to CPS
Service innovation and implementation
Apply customer value analtics to improve revenue and profit
PRODUCT & SERVICE
Design, implementation and operation of digital platforms (e.g. the service cloud) and infrastructure
Integration platforms (vertical and horizontal integraztion)
Referenzarchitekturen
Design and implemen-tation of digital business processes
OPERATIONAL EXECUTION
People and culture transformation
Leadership skills transformation
Transform towards end-to-end engineering integration
TRANSFORMATION
Copyright © 2014 Capgemini Consulting. All rights reserved.
22
Thank you for our attention!