1 industry 4.0 insights by khalid sulami.pdf (1)-compressed

4. Industry 4.0 Strategy
(NIDLP-Industry 4.0)
The allocation of a
ﬁnancing program
worth 3 billion Saudi
Riyals to accelerate
the implementation of
investments in the Fourth
Industrial Revolution
in the Kingdom and
increase the competitive
advantage of existing
local industries
375374
National Industrial Development & Logistics Program
By: Eng.Khalid Sulami

• Overview and scope
The program of developing national industries and logistics aims at developing
various industries and encouraging the local production of the energy, mining,
logistics and industry sectors. Part of the program mission is to develop an industrial
strategy for the new industrial era, known as “The industry 4.0” to implement the
kingdom’s plan for the NIDLP sectors.
King Abdulaziz City for Science and Technology had been assigned to be the entity
responsible for leading and coordinating activities among the various concerned
parties. It identified the enabling mechanisms for the industry 4.0 and suggested
strategic themes and key initiatives that would allow the adoption of the industry
4.0 in the kingdom.
4. A. Pillars Of The Industry 4.0 Strategy
• What is the industry 4.0?
The industry 4.0 is based on implementing a group of modern technologies on the
production value chains that would increase production efficiency and establish
new business models that are consistent with the targeted transformational
achievements.
The industry 4.0 focuses on future sectors and includes a wide group of the following
advanced technologies in modern robotic applications:
1. 3D printed products
2. 3D printing tooling
3. 3D scanning of parts
4. Automated Guided Vehicles/Robots/ Carts
5. Flexible machines
6. Collaborative robots
7. Robots
8. Vision systems (for quality control)
9. Packaging automation
10. Analytics Driven Quality Management
11. Yield, Energy, Throughput Optimization
12. Analytics Driven Demand Forecasting
13. Predictive maintenance
14. Remote Monitoring and control
15. Augmented reality
16. Digital Performance management
17. Digital quality management
18. Product Lifecycle Management and Digital Simulation
19. Automation of Knowledge Work
20. Track-and-Trace
21. Smart energy consumption
22. Scheduling and Shift Planning
An initiative was added to support the establishment of a technological system
aiming at encouraging companies manufacturing original tools, by granting them
tax exemptions and offering investment support, to build factories and research and
development centers in the kingdom.
Thetechnologiesoftheindustry4.0canbeimplementedinmultiplesectorsincluding
the industry, energy, mining and logistics sectors. In order to encourage companies
to adopt those technologies, some foundational elements must be provided, such as
regulatory frameworks, financing, education and infrastructure.
This new model will be a primary source for future competitiveness. The traditional
distinguishing elements in operational excellence (like the application of lean
manufacturing,outsourcingandautomation)willdisappearastheleadingcompanies
in the industry sector will seek new opportunities for a better performance. The
industry 4.0 will replace the traditional mechanisms that are currently being on
the production value chains. This will have the companies give a second thought to
their work implementation methodology to meet the new prospects of operational
efficiency.
The first industrial revolution was based on steam, steam power generated by
water and production through mechanical mechanisms (in the 1860s). Then came
the second industrial revolution that was all about workforce distribution and
benefitting from electricity and large-scale production (in the 1870s). After that, came
the third industrial revolution that relied on electronics, computers and automation
in their initial levels (in the 1970s). The industry 4.0 will be built on smart technology
elements embedded in the traditional systems (around year 2010).
376 377

The industry 4.0 is based on the scientific revolutions and the latest
technologies that distinguish countries:
• Scientific revolutions are directly connected to data (for example, the number of
sensors has increased from 4.2 billion in 2012 to 50 billion in 2017), networking
(morethan50billionmachineswillbeconnectedtonetworksby2025),computing
power (the computing power for each millimeter square chip has multiplied
as much as thousand times in the last seven years) and robots (growth in the
number of industrial robots is estimated to reach 63% between 2015- 2019)
• These scientific revolutions were the cornerstone for a new model of technologies
such as data, computing power, networking (big data, internet and cloud
computing), data analysis, artificial intelligence (digital transformation and
advanced analysis), transformation from the digital world to physical one
(advanced robots and 3D printing) and machine interaction with humans (touch
interaction/ virtual reality/ augmented reality).
• This new model is conveyed as a new value to the countries that focus on
upgrading the competitiveness of their current sectors by lowering costs,
increasing productivity and safety, and providing a competitive edge to empower
new sectors and establish an environmental system for the technologies of the
industry 4.0.
The latest technology used in
the Fourth Industrial Revolution
Industry 4.0 Innovations
The industry 4.0 is based on the scientific revolution and on cutting-edge
technologies. It offers threefold the added value for countries.
Value
Scientific Revolution
From Digital to Physical
(Advanced robots and 3D
printing)
Data, Computing Power
and Networking
(Big data, internet of things
and cloud computing)
Data Analysis and
Artificial Intelligence
(Digital transformation
and advanced analysis)
Finding a competitive advantage
to empower new sectors
Developing the competitive
advantage of existing sectors
Establishing an environmental
system for industry 4.0 technologies
Human-Machine Interaction
(Touch interaction and virtual
reality/ augmented reality)
Technologies
in the
industry 4.0
The computing power
of every millimeter of
chips has increased by a
thousand times over the
last 7 years
Industrial robots have
increased by 63%
between 2015 and 2019
More than 50 billion
machines are to be
connected to networks
by 2025
Sensors: The number of
sensors has increased
from 4.2 billion in 2012 to
50 billion in 2017
Robots
Computing
Power
NetworkingData
Productivity SafetyCost
378 379

We have studied benchmark models on the industry 4.0 strategy in the largest 10
industrial countries (classified according to the actual market share of the global
industrial sector for 2015). 8 countries have been identified to launch a industry 4.0
national strategy and initiatives.
• Context and Basis
Country Industry 4.0 initiatives
Launching
year
China Made in China 2025 2015
United States The first initiative by the Digital
Manufacturing and Design Innovation
Institute, The National Human
Genome Research Institute
2012
Japan Industrial Value Chain Initiative 2015
Germany
Industry 4.0
2011
Brazil No strategy adopted yet -
South Korea Creative Economy 2014
India No integrated strategy between public
and private sectors
-
Italy Smart Factory Cluster 2012
France The New Era of French Industry 2013
Russia Advanced Manufacturing Technologies 2017
Countries have devised national initiatives to tackle the major challenges hindering
the industry 4.0 transformation. These challenges are:
• Lackofknowledgeamongcompaniesandindividualsofindustry4.0opportunities
• Lack of vision for seizing these opportunities and developing a roadmap for the
industry 4.0 transformation
• Insufficient competencies and limited accessibility to local and global ones
• Lack of appropriations to finance the industry 4.0 transformation, whether
financial grants for research, development and innovation, or loans for upgrading
equipment and machines
Considering the above challenges, countries launched the industry 4.0 program in
order to achieve three main goals:
• Increasing the competitive advantage for existing industries
• Expanding existing value chains and developing new ones
• Developing the environmental system for industry 4.0 technologies
Leading Economy 1
Automation in 2018 (%) 2
Optimistic 2030 3
Japan
Germany
United States
China
Main Ideas
Automation is affected by various factors:
• Availability of technological techniques
• Economic health of a country
• Rate of industrial technology adoption
leading economies will adopt
automation by around 45%.
6.2% 54%
6.2% 48%
5.7% 45%
1.7% 40%
The Kingdom of Saudi Arabia can aim at
tapping into 100% of its potentials by:
• Implementing all sorts of economic use
• Supportingadoptionthroughfinancing
andincentives
• Developing the industry 4.0 technology
domestically
1-Leading economies refer to the main industrialized countries that enjoy the highest levels of automation readiness (innovative environment,
educational policies and labor market policies) 2-Defined in terms of the manpower layoff percentage 3- Visualizing an adoption scenario/
optimistic adoption Source: McKinsey & Co, The Economist, interviews with experts
380 381

In addition to aforementioned, the level of the government intervention varies
according to goals and countries. The following exhibits present some examples:
Level of government intervention
Low
Increasing
competitivity in
existing industries
Expanding existing value
chains and developing
new ones
Developing the
environmental system for
industry 4.0 technologies
High
Goals
The level of the government intervention varies according to
goals and countries
Exhibit 4.4: Level of government intervention
1
2
3
The use of robots in industrial processes
The level of the government intervention varies according to
goals and countries
* It includes naval engineering equipment, manufacturing high-tech tankers, advanced railways equipment, energy-
saving mechanisms, new energy methods, electric equipment, agricultural machines and equipment, new materials,
biopharmaceuticals and advanced medical services
Goals Picked Examples Chinese Example
Increasing
competitivity
in existing
industries
1. Applying of ﬁnancial instruments to support priority industries
including:
• Financial support up to SAR 5.6 billion in 2016 for smart industries projects
• Loans from state banks with preferential conditions (deferred payment)
• Government-supported funds (780 state funds in 2015 worth SAR 1.3
trillion)
• Reduction of corporate taxes by 1525%- for some priority industries
(advanced technologies)
• Encouragement of private sector fund expansion to invest in private
ownership shares and venture capitals and to support the industry 4.0
2. Encouraging government procurement of local industries and
products (information technology, renewable- energy powered
busses and biopharmaceuticals)
3. Offering pioneering solutions in industrial events (the 18th China
International Industry Fair)
4. Devising a 30 month strategy with the help of 150 experts
2
Expanding
existing
value chains and
developing new
ones
1. Developing a detailed roadmap for ten priority sectors* including
the new generation of information technologies, high-tech control
equipment, robots, aviation and space equipment
3
Developing the
environmental
system for
industry 4.0
technologies
1. Launching funds to acquire foreign tech companies (China-Sweden
Technology and Innovation Fund worth SAR 5.5 billion, Canyon
Bridge Capital that suggested acquiring the American company
Lattice Semiconductor specialized in manufacturing electronic
chips, and Haiyin Capital that launched the industry 4.0 portfolio
(ﬂying cars))
2. Planning to reach around 40 industrial innovation centers by 2025,
as well as the establishment of engineering innovation centers in
institutes of higher education, and training college students
3. Encouraging cooperation between tech companies and colleges
(Haier Group, Tsinghua University and Fraunhofer Institute who
collaborated to launch Haier Intelligence Institute)
1
382 383

Government intervention level varies according to goals and
countries
Goals Selected Examples French Example
Increasing
competitivity
in existing
industries
1. Applying several financial instruments including:
• Loan offerings to small and medium-sized enterprises
investing in the industry 4.0 equipment (around SAR 14
billion for 2 years)
• Tax incentives (around SAR 11 billion)
• Finance of ownership shares for the development of
industry 4.0 businesses (around SAR 19 billion)
2. Having more than 2000 small and medium- sized
enterprises benefit from the industry 4.0 elaborate
roadmap and presentation, by the help more than 300
industry 4.0 experts, as well as organizing more than 2300
events to encourage the industry 4.0, within a theme
entitled Industry Week
3. Establishing an integrated electronic platform that
specifies the details of more than 30 approved projects,
more than 7 educational models for basic techniques and
detailed step-by-step tools for applying the industry 4.0
to small and medium sized enterprises.
Expanding
existing
value
chains
and
developing
new ones
1. Seeking to apply 9 industrial technologies in conformity
with existing strengths, data economy, smart food
choices, digital trust, smart devices, future medications,
future means of transportation, transportation by
ecofriendly means, smart cities and new resources
Developing the
environmental system
for industry 4.0
technologies
1. Offering financial grants for technical support (around
SAR 8 billion between years 20132016-) to support
industry 4.0 research, development and innovation
projects and using innovations commercially
2. Partnering with Germany, founding the French-German
Institute for Industry of the Future, enhancing PPPs
between technology providers and state universities
(Healthcare camp and smart electric energy city)
1
2
3 *In manufacturing, infrastructure, cybersecurity and healthcare sectors
**Includes some other institutes specialized in industrial materials, energy, manufacturing, innovations and technology
Government intervention level varies according to goals and
countries
Goals Chosen Examples American Example
Increasing
competitivity in
existing industries
1. Taking a limited number of initiatives:
• Aiming at training around 5 million university students*
throughout the five coming years (including advanced
industries training)
• Updating the educational curriculum of community
colleges (around SAR 1.8 billion, half of which are allocated
to advanced industries)
• Investing in the next generation of robots through NASA’s
projects (around 260 million SAR)
Expanding existing
value chains and
developing new ones
• Nothing special
Developing the
environmental system
for industry 4.0
technologies
1. Launching the National Network for Manufacturing
Innovation (NNMI) that
• comprised 9 institutes in year 2017 (Digital
Manufacturing and Design Innovation Institute
(DMDII)**)
• 45 more institutes are expected to join by 2025, with
allocated funds amounting to SAR 7.5 billion of the State
budget.
2. Allocating up to SAR 37 billion per year from taxes to
support research projects (not all are industry 4.0
projects)
1
2
3
384 385

Considering the Kingdom’s state and ambition, its Industry 4.0 Strategy will focus
on increasing the competitive advantage of current value chains and developing the
environmental system for industry 4.0 technologies to achieve the following:
1. Increasing the competitive advantage in existing industries within the sectors of
the NIDLP
2. Expanding existing value chains and developing new ones
3. Mitigating the impact of major reforms in the fields of energy, natural gas and
system of labor and workers
4. Developing the environmental system for industry 4.0 technologies
5. Creating new high-skill jobs that attract the national labor force
The Kingdom’s vision of the industry 4.0 can be summarized as follows:
“The industry 4.0 seeks to increase the competitive advantage in industries existing
in the Kingdom of Saudi Arabia, expand existing value chains, mitigate the impact of
major reforms in the fields of energy, natural gas and system of labor and workers,
locally develop the technical suppliers system and create new high-skill jobs that
attract the national labor force.”
• Strategy
The latest virtual reality glasses used in medical field
Foundational
Elements
Advantages of global experiences
Countries that
implemented that
Awareness
• Launching a promotional brand for the industry 4.0
national strategy
• Organizing several local and international exhibitions to
support the switching to the industry 4.0, attract talents
and join efforts via an electronic platform
Competency and
Education
• Investing in refining talents of national personnel by
reshaping public and higher educational curricula, in
addition to upgrading qualifying the existing labor force
• Encouraging practical application and vocational
training for students to fill market gaps in terms of
talents.
Institutional
Accreditation
• Investing in institutional accreditation to build
confidence in the industry 4.0 system, support the
leading role all along the value chain and offer further
clarification for local and global actors
Legal Frameworks
• Specifying the most important laws (data law,
accountability law, intellectual property rights and
incentives) that are influenced by the industry 4.0, and
working on the legal aspects related to the industry 4.0
Financial incentives
• Perceiving them as one of the main axes to activate the
work ecosystem, especially in government-run models
(China), in which the governments use various forms of
support (loans, financial grants and funds) to achieve
multiple goals (industry 4.0 transformation, research,
development and innovation and growth)
Networks, Data and
Cybersecurity
• Manufacturing requires advanced communication
infrastructure and high levels of information protection
to guarantee production viability in the industry 4.0
Research, Development
and Innovation
• Focusing on research, development and innovation
to build a competitive advantage for target sectors or
technologies (France), and to enable implementing
research, development and innovation in the country
(China)
Incentives
• Providing laboratories for industry 4.0 technologies
to use the latest technologies or to produce industrial
prototypes
• Holding training courses that combine theoretical and
practical education materials
• Developing laboratories that simulate work models that
are consistent with industry 4.0 production lines
The first countries to switch to the industry 4.0 have developed strategies based
on a few foundational elements supporting and stimulating this orientation
Table 4386 387

These elements can be summed up in the following diagram:
The objectives of the industry 4.0 can be met through a group of major elements
underlying the work ecosystem and encouraging further application of this concept
Goals
Mitigating the impact of
major reforms in the fields
of energy, natural gas and
system of labor and workers
Expanding existing value
chains and developing new
ones
Increasing the competitivity
of existing industries
Creating new high-skill
jobs that attract the
national labor force
Developing the
environmental system for
industry 4.0 technologies
Foundational
elements
initiatives
Establishing
environmental
system for the
industry 4.0
Technology
Acquisition
Contributes to
accelerating
knowledge
transfer, settling
and developing
industry 4.0
techniques
Institutional
accreditation
Legal frameworks
Networks, data
and cybersecurity
Competency
and education
Financial
incentives
Awareness
Incentives
Increases the
transitioning rates to the
industry 4.0
Laboratories
for the
demonstration
of technology
Transformation
Academies
Industry 4.0
Capabilities Centers
Research,
Development
& Innovation
National
productivity
program
Exhibit 4.5: Goals
1
4 5
2 3
Concerning the Kingdom, the industry 4.0 goals can be achieved via two groups of initiatives. The first group is to build a set
of foundational elements that establish the work system. The second is to establish capacity-building centers that encourage
adopting industry 4.0 technologies, as well as the establishing the national productivity program.The latter supports the private
industrial sector, in order to speed up the productivity increase process, by applying industry 4.0 technologies to transform 50-
100 existing factories. These initiatives are further explained and summarized in the following table:
Initiative Elements Details of Initiative
Competency and
Education
• Public education: Adding out-of-class materials and activities as well as summer programs
allocated for the industry 4.0
• Vocational education and higher education: enhancing materials on the industry 4.0, making
them available through open source e-learning and encouraging this career path in professional
events
Labor Force Development
• Retraining the existing labor force with the help of fourth industrial generation capacity-
building centers, universities and vocational colleges with support from Human Resources
Development Fund (HRDF)
Awareness
• Establishing a promotional title for the industry 4.0 like (smart manufacturing), to encourage
adopting it and join efforts of the stakeholders
• Establishing a digital gateway for the industry 4.0 information and creating a forum that
bridges between stakeholders across Kingdom
• Holding promotional events for the industry 4.0, such as exhibitions, conferences and
workshops
Institutional
Accreditation
• Setting standards of compliance to the requirements of the industry 4.0
• Granting certifications of industrial revolution requirements compliance those interested in
receiving financial incentives to adopt the industry 4.0 technologies
Legal Framework
• Developing all legal frameworks regulating the industry 4.0 technologies to increase users trust
and protect all parties; such laws include: laws of responsibility for self-propelled machines and
data breach laws, etc.
Proper Communication
Infrastructure for the
Industry 4.0
• Securing adequate network coverage for all industrial cities and NIDLP sector sites
• Securing local cloud computing services sufficient to cover the needs of the NIDLP
Policies and Measures for
Cybersecurity
• Providing cybersecurity measures and necessary policies to protect users of the industry 4.0
technologies
Financial incentives
• Establishing a short-term fund to finance the national productivity program, in aims at
facilitating adopting the industry 4.0 in 100 existing factories
• Guaranteeing preferential incentives to encourage adopting the industry 4.0 technologies
through the main Saudi Industrial Development Fund program
National productivity
program
• Transforming 100 existing factories into models emulated in the application of the industry 4.0
technologies using the short-term fund affiliated to the Industrial Development Fund
• Choosing ideal factories covering high priority industrial sectors in various geographical regions
Environmental system-
attracting international
companies
• Encouraging local production of industry 4.0 technologies by prompting companies to establish
development centers and factories in the Kingdom
• Offering, for example, temporary tax exemptions, investment support, low-priced lands, etc.
equity financing
• Establishing a government venture capital fund for direct investment in local companies that
develop industry 4.0 technologies
• Supporting local entrepreneurs, starting from establishment and reaching sustained growth
Environmental
system- supporting
innovation, research and
development
• Establishing a financial grants program to support local developers of fourth industrial generation
technologies
• Establishing a program for purchasing industry 4.0 foundational technologies from international
sources, and offering them to local developers to complete developing their products
capacity-building centers
• Establishing government centers for building industry 4.0 capacities to encourage adopting its
technologies in the Kingdom, these centers include:
• Centers for technology demonstration (demonstrating each technology on its own, in addition to
integrated production lines)
• Transformation academies (offering training, building models, and consultation for SMEs)
• Research, development and innovation centers (building centers for developing industry 4.0
technologies and applications)
388 389

We studied both new and old industrial assets while assessing the possibility of
adopting the industry 4.0
• Impacts and Aspiration
Assets Methodology
Existing industrial
assets (Brownfield)
Transferring existing factories to the industry 4.0
• Studying all industrial companies recorded in the industrial database of the Ministry
of Energy, Industry and Mineral Resources
• Assessing the operating income and technological cost of transferring the existing
industrial base to the industry 4.0
• Determining major initiatives driving existing automation operations
New industrial assets
(Greenfield)
Ensuring new factories are compliant with the industry 4.0
• Estimated impact of new factories in line with the growth of NIDLP by 2030
• Estimating the operating income and technological cost of integrating the industry
4.0 technologies in factories
• Introducing new regulations and legislation to encourage the use of the industry 4.0
technologies in new factories (to be done in a phased manner)
Cybersecurity is a key element in the industry 4.0. An initiative was devised especially
for the cybersecurity of the program. Appropriate measures and policies are to be
developed in aims at implementing the initiative. These measures include the
following elements:
1. Governance and coordination
2. Preventive measures (policies and regulations)
3. Awareness (specifying the necessary infrastructure and identifying weaknesses…)
4. Recovery and response plan (cybersecurity elasticity, national response…)
5. Efficient information exchange plan
We began with the current industrial landscape
in the Kingdom of Saudi Arabia
Target Sectors
More than 7000 existing factories
More than 40 industrial regions
More than 100 industrial activities
More than SAR 1 trillion of capital value
of #
companies
Capitalization1
(Billion SAR)
NIDLP Sector3
(And sub-sectors)
Archetypes
Manufacturing
type
Rationale
• Chemicals
• Pharma
Chemicals
and pharma
Continuous
Manufacturing
Industry
4.0levers have
varying impact
depending
on the
manufacturing
process
• O&G adjacent
industries
• Downstream mining
• Other manufacturing
- Cement
- Metal Products
- Wood chips & panels
- Starch
- Non-Metallic Mineral
- Ropes and nets
- Plastics
- Paper
- Rubber
Basic
materials
Archetypes
were defined
based on
common
manufacturing
processes
• Food processing
Food &
Beverage
NIDLP sectors
were mapped
to archetypes
- Textiles
Textiles
• Utility providers
Other
continuous
• Machinery &
equipment
• Automotive
• Airplane industries
• Military industries
• Medical supplies
- Electrical and electronics
Advanced
industriesDiscrete
Manufacturing
- Furniture
- Apparel
Basic
industries
403
(35٪)
4,002
(53٪)
496
(43٪)
72
(7٪)
7
(1٪)
89
(8٪)
46
(4٪)
26
(2٪)
96
(1٪)
8
(0.1٪)
786
(10٪)
1.095
(14٪)
671
(9٪)
173
230
957
(13٪)
NIDLP sectors were classified according to the manufacturing processes, in aims at
assessing the industry 4.0 cost and impact at the level of each model.
390 391

According to each model, we calculated the annual operating income improvement
and the total technological cost based on industry 4.0 use cases. We have estimated
the annual income improvement and the technological cost of each model based on
pre-industry 4.0 cases. The annual income improvement was estimated according to
the rate of increase in revenue and decrease in costs in past cases:
Industry 4.0 use cases:
Advanced
industries
• 3D printing
• Flexible machines (CNCs)
• Robots
• Augmented Reality
Basic
industries
• Yield improvement
• Predictive maintenance
• Digital performance mgt
• Vision systems
Food &
Beverages
• Analytics Driven QM
• Digital QM
• Smart energy consumption
• Automation of knowledge work
Chemicals
and pharma
• Packaging automation
• Analytics driven demand forecasting
• Remote monitoring and control
Basic
materials
• Robots
• Remote monitoring and control
• Vision systems
Textiles
• Digital QM
Other
continuous
• Predictive maintenance
• Digital performance
• Analytics Driven Demand Forecasting
Evaluating impact
• Improving the annual operating income of the existing assets
• Total required technological cost
GDP growth rate
2018-2030
Adoption rate
2018-2030
Use of modern technology in gene preview
392 393

Industry 4.0 levers
3D
scanningand
Printing
1. 3D printed products
2. 3D printing tooling
3. 3D scanning of parts
Machinery/
automation
4. Automated Guided Vehicles/Robots/Carts
5. Flexible machines (CNCs)
6. Collaborative robots
7. Robots (Traditional)
8. Vision Systems (For Quality Control)
9. Packaging Automation
10. Analytics Driven Quality Mgmt
11. Yield, Energy, Throughput Optimization
Advanced
Analytics
12. Analytics Driven Demand Forecasting
13. Predictive maintenance
14. Remote Monitoring and control
15. Augmented reality (AR)
16. Digital Performance management
17. Digital quality management
Digital
Management
18. Product Lifecycle Management and Digital Simulations
19. Automation of Knowledge Work
20. Track-and-Trace
21. Smart energy consumption
22. Scheduling and Shift Planning
Operating income improvement as ٪ of archetype revenue
Continuous manufacturing Discrete manufacturing
Advanced
Industries
Basic
industries
Chemicalsand
Pharma
Basicmaterials
Food and
Beverage
Textiles
Other
continuous
1-Includes both brownﬁeld and greenﬁeld projects
Source: Industry database from MEIM, MODON, MGI, HIS, Expert interviews
Size of bubble indicates operating income improvement (٪)
Low impact in 2030 improvement areas High impact improvement areas
--------------------------------------------------------------------------------------------------------------------------- ---------------
--------------------------------------------------------------------------------------------------------------------------- ---------------
--------------------------------------------------------------------------------------------------------------------------- ---------------
--------------------------------------------------------------------------------------------------------------------------- ---------------
--------------------------------------------------------------------------------------------------------------------------- ---------------
--------------------------------------------------------------------------------------------------------------------------- ---------------
--------------------------------------------------------------------------------------------------------------------------- ---------------
--------------------------------------------------------------------------------------------------------------------------- ---------------
--------------------------------------------------------------------------------------------------------------------------- ---------------
--------------------------------------------------------------------------------------------------------------------------- ---------------
--------------------------------------------------------------------------------------------------------------------------- ---------------
--------------------------------------------------------------------------------------------------------------------------- ---------------
--------------------------------------------------------------------------------------------------------------------------- ---------------
--------------------------------------------------------------------------------------------------------------------------- ---------------
--------------------------------------------------------------------------------------------------------------------------- ---------------
--------------------------------------------------------------------------------------------------------------------------- ---------------
--------------------------------------------------------------------------------------------------------------------------- ---------------
--------------------------------------------------------------------------------------------------------------------------- ---------------
--------------------------------------------------------------------------------------------------------------------------- ---------------
--------------------------------------------------------------------------------------------------------------------------- ---------------
--------------------------------------------------------------------------------------------------------------------------- ---------------
--------------------------------------------------------------------------------------------------------------------------- ---------------
7% 7%
2% 2% 2% 2%
1% 1% 1% 1% 1% 1%
1% 1%
1% 1% 1%
1%
2% 2% 2% 2%
3% 3%
3%
6%
3%
2% 2%
3%
394 395

Applyingtheindustry4.0notonlyaffectstheGDP,butalsooffersnewjobopportunities
to highly-skilled individuals in the national manpower. The following table shows an
exampleoftheconstructionsector:
The Kingdom’s privileged industry status
• TheKingdomhasalimitedindustrialbase,yetitaspirestoanindustrialexpansion
thatwillleadtocreatingjobs
• Applying the industry 4.0 is expected to lead to:
1. Replacing workers in low-skilled and occupied jobs with non-Saudis.
2. Providing highly-skilled and special jobs (data scientists, digital interference
designers) that shall attract national talents and increase Saudi women’s
participation in the labor market.
The industry 4.0 impact on local jobs
• Creating highly-qualified jobs for nationals working in the NIDLP sectors (data
scientist, big data analyzer, automation engineer)
• SAR 1.5 M Opex savings
• SAR 3M technology cost
• ~2 year payback period
• ~80%+ productivity increase
Context Baseline FTEs Industry 4.0 levers
Opportunities
(automated FTEs)
• Conducted
site visit at
ceramics
manufacturer
(Basic
industries
archetype)
and focused
on water
heater plant
-Boiler cap
forming
-Heater unit
-Packing line
Boiler cap
and tank
• Automation of
loading system and
unloading procedure
• Advanced analytics
for welding
optimization
• Digital performance
management
Heater
unit
assembly
line
• Robotics for anode
assembly
• Automation – vision
systems
Packing
line
• Robotics (for manual
assembly and
to remove parts
from conveyor and
package)
• Advanced analytics
– real-time line
balancing
Total
22
5
10
37
11
4
8
23
50٪
80٪
50٪
62٪
We have estimated the annual income improvement and the technological cost of
each model based on pre-industry 4.0 cases. The annual income improvement was
estimated according to the rate of increase in revenue and decrease in costs in past
cases:
Exhibit 4.8:
0.5% (30%)
The industry 4.0 is expected to have an impact on all NIDLP sectors (according to the
following explained details)
• Integration and Requirements
1. A device used for measuring the actual mass of an object 2. A real time demonstration of production processes
3. Such as the transmission temperature and vibration
Foundational
Elements
Applying Industry 4.0 case technology
model
Impact
Industry
• Replacing coordinate measuring
machines (CCM) with 3-D scanning
machines to provide high-precision
quality control
• Using an online digital twin
technology connected to all
sites via the internet, allowing
comprehensive monitoring of
operational performance
• 50-80% improvement in quality control
precision and 100% increase in number of
measurements
• 30-40% average cost saving, 20-30%
increase in production and 75% decrease
in malfunctions
Mining
• Applying preventive maintenance
according to the current state
of equipment, and offering
notification of critical aspects based
on sensor data
• Using an autonomous vehicle fleet
in the mining sector that improves
routes and reduces waiting time
• 70% decrease in work interruptions
caused by transmission malfunction, and
a 340 thousand dollar saving through
proactive malfunction prevention
• Freight costs reduced to 40%
Energy
• Installing smart meters that reduce
energy demand
• Using digital signage in
performance management, in
order to provide clear information
and improvement opportunities
(general equipment performance,
malfunction analysis and quality
losses)
• Sweden has installed 1 million smart
meters that reduced energy demand by
around 3%.
• 18% increase in asset utilization over 18
months
Logistics
• Using robots to pick products
off the shelves and give them to
employees instead of having the
latter go search for them in the
warehouse
• Making fact-based decisions via an
automatic platform that models
purchasing, supply, stock and
tracking (internet of things, cloud
computing and analysis)
• Amazon saved around 30-40% of the cost.
• 20% improvement in productivity, 5%
cost savings in supply chain processes
coordination of and 5% improvement in
on-time delivery
396 397

The national productivity program and the industry 4.0 capacity-building centers
initiatives are hoped to play a vital role in implementing the industry 4.0 technologies
all across the Kingdom, through:
1. Helping companies understand the industry 4.0 technologies by providing live
examples
2. Empowering entrepreneurs in companies to identify the opportunities of
benefitting from the Industry 4.0
3. Training the human cadres that will be responsible for designing and developing
the transformation plans for the Industry 4.0 in companies
4. Bringing industrial technology suppliers and beneficiaries together under one
roof
5. Implementing the industry 4.0 technologies and the operational excellence
principles in existing factories
Studying the best international practices suggests presenting similar production
patterns for local industries at capacity-building centers and bringing together all
the concerned entities, which are:
1. Technology partners
2. Final users (major companies, SMEs, and startup companies)
3. Research institutes
4. Concerned industrial and vocational organizations
5. Concerned government entities
• Game Chaning Elements Industry 4.0 capacity-building centers work on three main motivational factors at the
same time.These factors are:
1. Technology labs for experimenting the industry 4.0 technologies including the
primary industrial models
• Exploring, experiencing and learning by employing the industry 4.0 technologies
• Developing and producing small amounts of the primary industrial models by
using the available technology from pioneering companies in each and every
field of the industry 4.0 fields
2. Training Academy combining theoretical and practical education models
• Providing training at various levels that suit the executive administration, middle
management, and regular staff levels by using both theoretical and practical
education
3. Production lines display labs that use the industry 4.0 technologies
• Displaying production lines that simulate actual factories and clarify the benefits
of transforming from conventional production methods to the Industry 4.0
The industry 4.0 innovation center at King Abdulaziz City for Science and Technology
in Riyadh already has a industry 4.0 capacity-building center. This center must
expand its activities to simulate the best international models. Similar centers are
set to be established in other areas in the Kingdom in collaboration with Modon and
the Industrial Clusters Program.
The national productivity program that was presented as part of the National
Industrial Strategy, aims at helping industrial companies in achieving the highest
productive efficiency rates by implementing the operational excellence principles
and the industry 4.0 technologies in 100 existing factories, thus turning them into
a beacon for other factories, and encouraging other manufacturers to implement
these principles and technologies.
398 399

5. Existing Initiatives
(NIDLP-Industry 4.0)
Invest more than 3 billion
Saudi riyals to accelerate
the fourth industrial
revolution in the Kingdom
401400

5.A Initiatives Portfolio
Strategic
Pillar/
Cluster
Initiative
Number
Initiative Name Leading Entity
Industry 4.0 N-17-07-000 Initiative of the Environmental System
of the Fourth Industrial Revolution -
Equity Financing
• King Abdulaziz City for Science
and Technology
Industry 4.0 N-17-07-001 Initiative of the Environmental System
Support for Innovation, Research and
Development
and Technology
Industry 4.0 N-17-07-002 Centers of Industrial Capacities of the
Fourth Industrial Revolution
and Technology
Industry 4.0 N-17-12-001 Financial Incentives Initiative for the
• Saudi Industrial Development
Fund
Industry 4.0 N-17-13-001 National productivity programs • Saudi Authority for Industrial
Cities and Technology Zones
(Modon)
Industry 4.0 N-17-14-001 Initiative of the environmental system
- for the Fourth Industrial Revolution -
attracting international companies
• National Industrial Clusters
Development Program
Industry 4.0 N-17-28-002 Awareness initiative for the Fourth
• Ministry of Energy, Industry and
Mineral Resources
Industry 4.0 N-17-28-004 Initiative of Legal Frameworks for the
• MEIM - Industrial Affairs
Agency
Industry 4.0 N-17-28-005 Initiative of the Fourth Industrial
Revolution infrastructure
• Ministry of Communications
and Information Technology
Industry 4.0 N-17-28-006 Initiative of the electronic security
policy and measures for the Fourth
• Ministry of Communications
and Information Technology
Industry 4.0 N-19-00-001 Initiative of Competencies and
Education of the Fourth Industrial
Revolution
• Ministry of Education
Strategic
Pillar/
Cluster
Initiative
Number
Financial
Enablement
N-17-07-001 Initiative of the Environmental System
Support for Innovation, Research and
Development
and Technology
Financial
Enablement
N-17-13-001 National productivity programs • Saudi Authority for Industrial
Cities and Technology Zones
(Modon)
Strategic
Pillar/
Cluster
Initiative
Number
Industry 4.0 N-19-20-003 Institutional Accreditation Initiative of
• Saudi Standards, Metrology
and Quality Organization
Industry 4.0 N-19-28-002 Manpower Development initiative for
• Ministry of Education
5.C. Selecting Game-Changers
402 403

1 industry 4.0 insights by khalid sulami.pdf (1)-compressed

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Similar to 1 industry 4.0 insights by khalid sulami.pdf (1)-compressed

Similar to 1 industry 4.0 insights by khalid sulami.pdf (1)-compressed (20)

Recently uploaded

Recently uploaded (20)

1 industry 4.0 insights by khalid sulami.pdf (1)-compressed