Digital Transformation in Industrial Automation

1. Thorsten Schröer
Director Electronics Industry Europe
thorsten.schroeer@de.ibm.com
December 2015
Düsseldorf, Germany
Digitale Transformation
Status Quo – Beispiele - Ausblick

2. 2
Thorsten Schröer
Director IBM Europe Electronics Industry
Work Experience
IBM Electronics Industry
IBM Business Consulting
Ryder Supply Chain Solutions
Fraunhofer Institute Dortmund
Education:
Dipl. Ing. Maschinenbau, TU Dortmund
Masters Industrial Engineering, Atlanta
Privat:
Married, 2 sons
Sports, BvB, Tennis

3. Digitale Transformation
Warum?

4. “Otherwise others which are leading in the digital area will take
the industrial production away from us.”
German Chancellor Angela Merkel calls for a faster merger
of Industry and Digitization.

5. Mai 2015

9. IDC November 2015

10. Digitale Transformation
Was ist das…?

14. https://www.youtube.com/watch?v=Zu65kiRfnnQ

15. Digitalisierung
Gewinner & Verlierer

17. CxOs expect industry convergence to have the
biggest impact on their business
Total CEO CFO CHRO CIO CMO COO
70%
60%
50%
40%
30%
20%
10%
0%
Industry convergence
The “anywhere” workplace
Rising cyber risk
The redistribution of
consumer purchasing power
The sustainability imperative
Alternative finance and
financing mechanisms
The sharing economy
Top trends to impact business (in 3 to 5 years)
IBM Institute of Business Value 2015

18. 1943:
"I think there is a
world market for
maybe five
computers.”
Thomas J. Watson,
IBM CEO (1914-1956)

19. Digitalisierung
Industrie 4.0 / IoT
Cloud
Mobile
Analytics
Social
Security
“One more Thing”

20. Industrie 4.0

21. © 2015 IBM Corporation
• Versatile production
process
• Higher specialization
towards specific
client needs
• Increased
competitiveness
across the value
chain
• Ability to create new
markets by
establishing new
services and
business models
Industry 4.0
Benefits
What is the 4th Industrial Revolu3on?
creating new opportunities to achieve levels of productivity and specialization
not previously possible – enabling innovation and differentiation.
Source: Recommendations for implementing the strategic initiative INDUSTRIE 4.0 - Final report of the Industrie 4.0 Working Group

22. © 2015 IBM Corporation
http://www.plattform-i40.de/I40/Navigation/Karte/SiteGlobals/Forms/Formulare/karte-anwendungsbeispiele-formular.html;jsessionid=045B67EE1A24367530C8185B1826AA62?oneOfTheseWords=Suchbegriff+eingeben
Siemens 23
Bosch 18
SAP 15
ABB 10
Telekom 9
Festo 4
Trumpf 1

23. 23
SmartFactoryKL Demonstrator 2015
Fast setup and change of manufacturing lines
Lotsize 1 with +ROI
+ROI in high labour country
Provides and organizes the partner network
www.smartfactory-kl.de
I4.0 – Smart Factory

25. Industrie 4.0 – Personal Observations
§ Industry 4.0 is omnipresent everywhere
§ Cloud/Analytics/Mobile is accepted
§ Security & Data ownership the concern
§ Focus is on Smart Factory- Business Model Innovation lacks progression
§ AsiaPac invests in Greenfield Manufacturing
§ Contract Manufacturers become turnkey provider and manufacturing
consultants

26. In Summary – The Manufacturing To-Do list
§ Develop IoT / I4.0 Strategy
§ Factory
§ Product/Engineering
§ Supply Chain
§ Think security & data ownership
§ Look for partners / shape the ecosystem
§ Implement cloud & analytics
§ Build digital skills
§ Pilot, learn, pilot again – become “AGILE”

27. 3D Print

28. 3 key software enabled trends will drive towards a software
defined supply chain in the future.

29. • Click to edit Master text styles
– Second level
• Third level
– Fourth level
» Fifth level
Click to edit Master title style
Digital Customer Experience B/S/H/
© 2014 IBM Corporation
FULL REPORT & MODEL NOW
AVAILABLE ONLINE AND ON YOUR
MOBILE DEVICE
58% of the total product value of a washing machine will
be 3D Printable in ten years – impact service business!!!
T0 Traditional T0 Digital T1 Digital T2 Digital
$0
$50
$100
$150
$200
$250
$300
$350
$400
$368 $368
$336
$243
Washing Machine Unit Manufacturing Cost Curve

30. Mobile

31. 2005
2013

32. Mobile in Manufacturing

33. 33

34. Mobile Manufacturing Workforce Management

35. gettyimage

36. IBM Transparent Supply Chain designed for an App

37. Cloud

38. © 2015 IBM CorporationIBM Institute for Business Value
38
Why Cloud? Cloud adoption helped electronics industry to innovate,
increase demand and improve process efficiencies
Clients have realized significant benefits as a result of cloud adoption during the last two years
Source: Economist Intelligence Unit Cloud survey commissioned by IBM, unpublished industry data, 2015, Question: 12. What business benefits has your company realized as a result of
using cloud technologies during the last two years?, n=100
61,0%
52,0%
51,0%
49,0%
48,0%
43,0%
40,0%
30,0%
17,0%
Speed delivery of new IT services and capabilities
Reduce costs and/or liabilities
Boost customer demand
Expand sales channels (eg. web, mobile)
Improve internal business-process efficiency
Increase innovation
Speed entry into new markets
Improve data access, analysis and utilisation
Work with partners and suppliers more easily

39. © 2015 IBM CorporationIBM Institute for Business Value
39
Why Cloud? Cloud has also delivered significant financial benefits.
Cloud has enabled electronic companies tackle
specific business problems and improve financial
performance
§ Electronic companies are able to increase their
revenues, while drastically reducing their
operational expenditure
§ Cloud has also reduced the need for capital
investments by eliminating capital expense
Financial gains by cloud implementation
68,0%
61,0%
52,0%
32,0%
21,0%
1,0%
Revenue growth
Operating expense reduction
Operating expense avoidance
Profit growth
Capital expense avoidance
No financial benefits
Source: Economist Intelligence Unit Cloud survey commissioned by IBM, unpublished industry data, 2015, Question: 13. Which of the following financial benefits has your organization
realized because of cloud technologies during the last two years?, n=100

40. 1. Merger, Acquisition or Divestiture
2. Unexpected service interruption
3. Building an agile edge
4. Step change in IT Productivity
5. Creating a private cloud
6. Launch of an innovation initiative
When Cloud?

41. Business Model

42. • Pay per use model
• Cloud driven
• Transforma4on to provider of mobility
• Always connected - pick up / drop off in different loca4ons
• Smartphone based, unique user experience, near real-4me

43. Kuka gets paid by the welding point.
gettyimage

44. Hospital get charged by # of x-rays taken
(Managed Service)
gettyimage

45. Light charged by hours provided
(Managed Service)
gettyimage

46. gettyimage

47. Big Data & Analytics

48. 12%
of all available data
is being leveraged
today.
80% of all data is
unstructured today.
gettyimage

49. Critical Parts Supply after Social Listening

50. I4.0 – Analytics – Deployed Control Points

51. Security

52. © 2015 IBM Corporation
BSI* Lagebericht 2015 – IT Security Report 2015
52
*Bundesamt für Sicherheit in der Informationstechnik

53. © 2015 IBM Corporation
Upcoming: Business goes Mobile
and creates
The trend shifts
Business
into
Mobile
factors
Risk
1.Device risks
2.Content risks
3.Application risks
4.Transaction risks
53 © 2015 IBM Corporation

54. There is one more thing…

55. Watson is cognitive computing, analyses structured and unstructured
data, is self learning and answering questions posed in natural
language.
Digital business + digital intelligence=
The cognitive era

56. § Optimize time with support
§ Increase First Time Fix
§ Optimize Onsite Repair Time
§ Less machine downtime
Watson @ IBM Technical Support Service

57. Watson @ Direct Procurement
iSuppliBing - Bloomberg
Supplier info
Industry news
Mfg stock chart
Web news
CAPEX graph
DocumentsQuotes Contracts
Alternate MPN
Cost vs. Resale
Historical spend
MPN entity details
Watson
Explorer
Cloud
Activities Tagging Shared Spaces
Open PO table

58. 1977
When?

59. https://www.youtube.com/watch?v=mxPWyuiBQ-c

60. Und nun IT?

61. Disrupt or be disrupted
IT?

62. Einige Ideen

63. Thorsten Schröer
Director Electronics Industry Europe
thorsten.schroeer@de.ibm.com
December 2015
Düsseldorf, Germany
Digitale Transformation
Status Quo – Beispiele- Ausblick