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Global Research: The Connected Industrial Workforce

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By bringing machines and artificial intelligence into the workforce, digital is enabling an increasingly adaptable, change-ready, and responsive working environment in manufacturing: A new Connected Industrial Workforce.

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Global Research: The Connected Industrial Workforce

  1. 1. Global Research The Connected Industrial Workforce April 2016
  2. 2. 2Copyright © 2016 Accenture All rights reserved. • Background • About the research • Executive summary • Key findings • Recommendations • Connect with us to know more • Appendix – Country highlights 2 Agenda
  3. 3. 3Copyright © 2016 Accenture All rights reserved. Digital revolution is transforming manufacturing By bringing machines and artificial intelligence into the workforce, digital is enabling an increasingly adaptable, change-ready, and responsive working environment: a Connected Industrial Workforce in which men and machines, working together, reinvent the production and service processes by which manufacturing outcomes are achieved. The Connected Industrial Workforce promises to boost manufacturing productivity exponentially, as well as improving operational efficiency, and enhancing safety and risk management. But are manufacturers ready to embrace it? Accenture conducted a survey to research the awareness and perceptions, challenges and readiness of industrial companies to implement a Connected Industrial Workforce. The findings are based on the self- perceptions of the executives surveyed.
  4. 4. 4Copyright © 2016 Accenture All rights reserved. About the research COUNTRIES (n) China 101 France 100 Germany 100 Japan 100 Switzerland 10 United States 101 INDUSTRIES % Industrial Equipment 51% Construction Equipment 25% Automotive 24% FUNCTIONS % CEO 6% CIO 9% COO/CSCO 10% CTO 9% Director/Head of industrial Engineering 9% Director/Head of Digital Strategy/ Chief Digital Officer 7% Director/Head of IT Department or Deputy 9% Director/Head of Research & Development 8% HR Manager (Concerned with Digital topics) 8% Other managerial positions concerned with Digital 9% Factory Director 8% Operations Manager 9% REVENUES % Over $10 bn 6% Between $5.1 bn and $10 bn 19% Between $1.1 bn and $5 bn 42% Between $500 m and $1 bn 33% EMPLOYEES % More than 50,000 employees 8% 10,001 up to 50,000 13% 5,001 up to 10,000 27% 2,001 up to 5,000 43% 1,501 up to 2,000 6% 1,000 up to 1,500 3%
  5. 5. 5Copyright © 2016 Accenture All rights reserved. Executive summary In the next 5 years, the manufacturing environment will significantly evolve: from human- to human-machine- centric. Manufacturing executives believe that the main benefits of this Connected Industrial Workforce will be an exponential improvement in manufacturing productivity, improved operational efficiency, and enhanced safety and risk management. To realize the identified potential, companies today spend on average 18% of their R&D budget on the Connected Industrial Workforce. In 5 years, this is expected to increase to on average 24%. Collaborative robots are the preferred technology to achieve the desired productivity improvements: 63% of the investigated companies already employ collaborative robots to boost productivity. Shortage of skilled labor, data security and system vulnerability are the major challenges that have to be overcome. Digital Leaders are already implementing Connected Industrial Workforce solutions, strong action plans and higher investments.
  6. 6. 6Copyright © 2016 Accenture All rights reserved. Key findings
  7. 7. 7Copyright © 2016 Accenture All rights reserved. Awareness of a Connected Industrial Workforce
  8. 8. 8Copyright © 2016 Accenture All rights reserved. In 5 years, respondents expect the focus of technology in the production environment to evolve from human- to human-machine-centric The Augmentation-Automation spectrum Manual Autonomous Human-centric Machine-centric Today Future Human with Tools 27% 4% -23 pts Machine Augmenting Human 35% 11% -24 pts Collaborative Machines 24% 29% +5 pts Human Augmenting Machine 11% 30% +19 pts Autonomous Machine 3% 26% +23 pts 5 year difference Q: Which of the following best describes your understanding of the Connected Industrial Workforce today, and how do you think it will be described in 2020?
  9. 9. 9Copyright © 2016 Accenture All rights reserved. Today, 94% of executives consider a Connected Industrial Workforce essential to their business strategy, but only 22% have taken steps to implement it Connected Industrial Workforce and business strategy Q: Do you consider the Connected Industrial Workforce to be an important component of your business strategy today? Q: Which statement best describes what drives how the Connected Industrial Workforce is formulated within your business strategy? Q: Which statement best describes the maturity of your company’s Connected Industrial Workforce strategy? 94% say Connected Industrial Workforce is an essential element of their business strategy 62% of those companies want to actively set the agenda for the Connected Industrial Workforce But only 22% have already implemented Connected Industrial Workforce measures
  10. 10. 10Copyright © 2016 Accenture All rights reserved. Workforce evolution leads companies to dedicate a higher portion of their R&D budget to a Connected Industrial Workforce Current and future Connected Industrial Workforce budget Q: Please estimate your current investment requirements and requirements in the next 5 years associated with the Connected Industrial Workforce within your company. Please state the amount as a percentage of the overall R&D (Research & Development) spending of your company. Today, companies spend on average 17.6% of their R&D budget on Connected Industrial Workforce. In 5 years, companies will spend on average 23.6% of their R&D budget for Connected Industrial Workforce. Connected Industrial Workforce budget as % of annual R&D spend
  11. 11. 11Copyright © 2016 Accenture All rights reserved. Benefits of a Connected Industrial Workforce
  12. 12. 12Copyright © 2016 Accenture All rights reserved. The majority of respondents expect benefits in the areas of improved productivity, operational efficiency and safety and risk management Top 5 benefits of adopting the Connected Industrial Workforce Q: Over the next five years, what are the biggest benefits that will drive adoption of the Connected Industrial Workforce within your industry? % ranked in top 3 Improved productivity Improved operational efficiency Improved safety and risk management Optimized asset utilization Additional competitive advantage 51 % 36 % 35 % 33% 30% 49 % 46 % 32% 32% 24% 53 % 53 % 29% 26% 30% 52 % 47 % 31% 29 % 28% Automotive (n=123) Industrial Equipment (n=263) Total (n=512) Construction Equipment (n=126)
  13. 13. 13Copyright © 2016 Accenture All rights reserved. Exemplary Case 1: How the Connected Industrial Workforce helps to unlock the value potential of digital along the OEM value chain Partial Digitization Strategy – EBITDA Potentials per Digitization Lever Note: This Exhibit is based on a fictitious automotive brand with an industry average of 50.0 b€ in revenue and 5.0 b€ in EBITDA. Its product portfolio only consists of passenger cars. Source: Accenture Strategy. Digital Value Creation in the Automotive Industry. Accenture Research Analysis. Manufacturing & Supply Marketing & Sales Research & Development 715 m€115 m€ 415 m€ Aftersales 225 m€ 05. Asset Efficiency 01. Analytics-based PLM Improvement 65 02. Virtual Product Deve- lopment & Prototyping 04. Digital-enabled Manufacturing 250 03. Digital Supply Chain Management 125 50 40 50 b€ Brand Revenue impact = EBITDA potential of 6.50 % (130 m€) Cost impact = EBITDA potential of 23.0 % (460 m€) 08. Analytic-based Media Spend Optimization 10. POS Digitalization 25 11. Online Sales 55 09. Centralized Digital Content Management 100 07. Digital-enabled Lead Management 195 06. Predictive & Personalized Offers 235 100 5 14. Digitization of Face-2- Face Experience 16. Over the Air Features 17. Digital-enabled Workforce 30 15. 3D Printing of Spare Parts 5 13. Personalized After Sales Offers 90 12. Predictive Maintenance 30 10 25 18. Aftersales Online Store 35 Connected Industrial Workforce as a value lever to unlock the full potential Example: According to our respondents, improved operational efficiency and optimized asset utilization are two of the most important benefits of the CIW. Our survey results and analysis indicate that the Connected Industrial Workforce is able to leverage an EBITDA potential of almost 500 m€ $
  14. 14. 14Copyright © 2016 Accenture All rights reserved. Exemplary Case 2: For the automotive supplier, the Connected Industrial Workforce impacts 8 value levers with an EBITDA potential of 220m€ Partial Digitization Strategy – EBITDA Potentials per Digitization Lever Note: This Exhibit is based on a fictitious automotive supplier with an industry average of 20.0 b€ in revenue and 2.0 b€ in EBITDA. Its product portfolio is limited to automotive. . Source: Accenture Strategy. Digital Value Creation in the Automotive Industry. Manufacturing & Supply Marketing & Sales Research & Development 19 m€150 m€ 250 m€ Aftersales 33 m€ 01. Analytics-based PLM Improvement 20 02. Virtual Product Deve- lopment & Prototyping 05. Digital Supply Chain Management 60 20 b€ Brand Revenue impact = EBITDA potential of 7.25 % (145 m€) Cost impact = EBITDA potential of 22.0 % (440 m€) Connected Industrial Workforce as a value lever to unlock the full potential Our survey results and analysis indicate that the Connected Industrial Workforce is able to leverage an EBITDA potential of more than 250m€ $ 03. Model based Product Development 04. Virtual Product Development 20 65 40 5 07. Connected Machines 06. Assisted Operators 30 09. Smart Factory 10. Virtual Testing 10 08. Connected Products 70 50 20 10 Example: Together with Collaborative robots or AGV’s the smart factory will come to alive. According to our respondents, these are the most important productivity levers which the CIW implementation promises. 12. Digital Marketing 13 11. Digital Customer Management 6 14. Analytics for aftersales (OEM, Wholesaler, SC) 14 13. B2C Online store 4 15. Warranty Analytics (OEM & Wholesaler) 15
  15. 15. 15Copyright © 2016 Accenture All rights reserved. Collaborative robots are the preferred technology to achieve the desired productivity improvements Top 5 applied technologies/devices Q: Which technologies are most important for productivity improvement in your industry? Collaborative robots (e.g., Baxter or YuMi) Automated Guided Vehicles (AGVs) (e.g. unit loads) Augmented reality devices (e.g. Smart Helmets) Tablets Smart Watches 71 % 72 % 56 % 39 % 31% Automotive (n=123) 56 % 45 % 52 % 49 % 33 % 62 % 49 % 48 % 52 % 40 % Industrial Equipment (n=263) 63 % 54 % 51 % 48 % 36 % Total (n=512) Construction Equipment (n=126) Collaborative Robots Automated Guided Vehicles Smart Devices
  16. 16. 16Copyright © 2016 Accenture All rights reserved. Today, injection molding is commonly assigned to collaborative robots, but respondents see the highest future potential in assembling Assigned tasks to collaborative robots* Q: Which tasks does your company currently assign or plan to assign to collaborative robots in the next 5 years? *Note: Only Respondents who employ collaborative robots Today, injection molding is the most commonly assigned task to collaborative robots. The highest potential is seen in assembling with 39% of companies planning to assign this task in the next 5 years. In the next 5 years, gluing and welding will be the most common task assigned to collaborative robots with 72%.
  17. 17. 17Copyright © 2016 Accenture All rights reserved. Challenges in the adoption of a Connected Industrial Workforce
  18. 18. 18Copyright © 2016 Accenture All rights reserved. More than two thirds of companies are concerned about the availability of the right skills and about data and system vulnerability Importance of each risk associated with the Connected Industrial Workforce Q: How do you assess the importance of each of the following potential risks associated with the Connected Industrial Workforce? 27% 29% 30% 32% 36% 38% 31% 42% 44% 34% 35% 40% 29% 25% 30% Medium Risk No RiskHigh Risk Shortage of skilled workers Data vulnerability (e.g. privacy threats, corporate data security) System vulnerability (e.g. system breakdowns due to complexity) Employment legislation or labor union objections to Connected Industrial Workforce Job losses
  19. 19. 19Copyright © 2016 Accenture All rights reserved. Security concerns are seen as the most important challenge when it comes to adopting a Connected Industrial Workforce within a company Challenges for adoption Q: What are the 3 greatest challenges of adopting the Connected Industrial Workforce within your company? % ranked in top 3 Q: What are the 3 most important security challenges for your company when you think of the Connected Industrial Workforce? % ranked in top 3 Top 3 Challenges Top 3 Security Challenges Security concerns Implementation complexity Legacy equipment (e.g. no connectivity or embedded sensors) Network security Corporate data security Cloud security 34% 31% 28% 42% 39% 35%
  20. 20. 20Copyright © 2016 Accenture All rights reserved. Readiness to implement a Connected Industrial Workforce
  21. 21. 21Copyright © 2016 Accenture All rights reserved. Automotive companies consider themselves to be leaders in digitization Industry assessment Q: How would you assess the current degree of digital or digitization for your industry overall? Note: Digital Laggards (1-6); Digital Followers (7-8); Digital Leaders (9-10) 24% 24% 23% 23% 51% 55% 58% 55% 25% 21% 19% 22% The automotive business is already disrupted from several angles. It is already realizing the huge potential of a digital automotive industry. Automotive (n=123) Industrial Equipment (n=263) Construction Equipment (n=126) Total (n=512) Digital Leaders (9-10)Digital Followers (7-8)Digital Laggards (0-6) In 2020, we estimate that the Connected Industrial Workforce could be helping to unlock as much as €500 million in profitability for an automotive manufacturer with annual revenues of €50 billion.
  22. 22. 22Copyright © 2016 Accenture All rights reserved. Automotive is investing more than other industries in the Connected Industrial Workforce Budget allocation in current and future Connected Industrial Workforce adoption and implementation Q: Please estimate your current investment requirements and requirements in the next 5 years associated with the Connected Industrial Workforce within your company. Please state the amount as a percentage of the overall R&D (Research & Development) spending of your company. The Automotive industry is leading in investing in the Connected Industrial Workforce and will extend its lead over the next 5 years. Connected Industrial Workforce budget as % of annual R&D spend
  23. 23. 23Copyright © 2016 Accenture All rights reserved. Digital Leaders dedicate more of their R&D budget to a Connected Industrial Workforce and will continue to raise the bar over the next 5 years Budget allocation in current and future Connected Industrial Workforce adoption and implementation Q: Please estimate your current investment requirements and requirements in the next 5 years associated with the Connected Industrial Workforce within your company. Please state the amount as a percentage of the overall R&D (Research & Development) spending of your company. 14% 19% 23% 19% 25% 29% Today, companies leading in digitization spend almost double the amount than digital laggards. In the next 5 years, digital followers risk lagging further behind due to the continued increase in investment of those already in the lead. Connected Industrial Workforce budget as % of annual R&D spend Today Next 5 years LeadersFollowersLaggards
  24. 24. 24Copyright © 2016 Accenture All rights reserved. In the next 5 years, Digital Leaders plan to implement a Connected Industrial Workforce strategy, whereas Digital Followers will still invest in defining it Current and future investments in Consulting Services Q: Please estimate your current investment requirements and requirements in the next 5 years associated with the Connected Industrial Workforce within your company. Please state the amount as a percentage of the overall R&D (Research & Development) spending of your company. Q: In which kind of technology or professional service do you plan to invest? 28% 32% 27% 38% 33% 25% Digital Leaders Digital Followers Digital Laggards % of companies investing in consulting services to implement their Connected Industrial Workforce strategy 38% 20% 23% 39% 30% 22% Digital Leaders Digital Followers Digital Laggards % of companies investing in consulting services to define a Connected Industrial Workforce strategy Digital Leaders are already one step ahead and will increase investments in consulting services to implement the Connected Industrial Workforce from 28% to 38%. The share of Digital Followers investing in consulting services to define their Connected Industrial Workforce strategy will increase from 20% to 30% within the next 5 years. Today Next 5 years
  25. 25. 25Copyright © 2016 Accenture All rights reserved. In the next 5 years, more Digital Leaders will increase their investments in collaborative robots and augmented reality devices Current and future investments of Digital Leaders in Hardware Q: Please estimate your current investment requirements and requirements in the next 5 years associated with the Connected Industrial Workforce within your company. Please state the amount as a percentage of the overall R&D (Research & Development) spending of your company. Q: In which kind of technology or professional service do you plan to invest? Today, half of the Digital Leaders invest in autonomous guided vehicles. In the next five years, more Digital Leaders will start investing in collaborative robots and augmented reality devices.
  26. 26. 26Copyright © 2016 Accenture All rights reserved. Digital Leaders recognize the urgency and have the confidence to drive adoption of the Connected Industrial Workforce How to embrace the Connected Industrial Workforce Support from leadership Hiring new talent External companies to help Training & new roles 0% 20% 40% 60% 80% 100% Digital Leaders and Followers have a strong and balanced agenda to embrace the Connected Industrial Workforce within their company. Digital Laggards lack determination in closing the gap to benefit from the Connected Industrial Workforce. Tactical importance of actions to embrace Connected Industrial Workforce Digital Leaders Digital FollowersDigital Laggards High importanceLow importance Q: How important will the following be to help your employees embrace the Connected Industrial Workforce?
  27. 27. 27Copyright © 2016 Accenture All rights reserved. Over 80% of Digital Leaders have taken action to connect the workforce in terms of hardware, software and people Measures to “connect” the workforce Q: To what extent does your company take any of the following measures to “connect” or “digitize” the existing workforce? 51% 46% 46% 39% 32% 33% 41% 36% 45% 51% 16% 13% 18% 16% 17% Upgrading existing IT hardware infrastructure Increasing the level of automation Increasing the number of connected tools Upgrading existing software landscape Developing new modes of job-related training and skills Measures taken by Digital Leaders to connect the workforce Have started to use this measure on a pilot-program basis Have fully functional programs using this measure Have not started with pilots or have not planned to implement More than 80% of companies leading in digitization have already implemented or are currently piloting relevant measures. Half of Digital Leaders have already invested in upgrading their IT hardware infrastructure and in connecting their devices.
  28. 28. 28Copyright © 2016 Accenture All rights reserved. Recommendations
  29. 29. 29Copyright © 2016 Accenture All rights reserved. Envision the full promise of the Connected Industrial Workforce to get started on your journey Define the specific benefits that apply to you. Be bold in your thinking. Leading companies already are. Identify and address what’s holding you back. Is it Legacy IT systems, data and systems security or the skills gap? Raise your game. Dedicate higher proportions of your R&D budget to build a Connected Industrial Workforce. Define your journey and who owns it. Gain senior leadership support, engage all stakeholders in the strategic plan, identify the value you expect to drive and track it appropriately. Identify new job profiles. Build, train or hire to acquire the right skills.
  30. 30. 30Copyright © 2016 Accenture All rights reserved. Connect with us to learn more René Wiedemann Industrial Equipment Industry Lead, Switzerland rene.wiedemann@accenture.com Christian Hauke Connected Industrial Workforce Study Lead christian.hauke@accenture.com @AccentureInd Read the full report www.accenture.com/connectedworkforce Eric Schaeffer Global lead for Industrial eric.schaeffer@accenture.com Research Team Georg Berger Connected Industrial Workforce Research georg.berger@accenture.com Matthias Wahrendorff Industrial Research Lead matthias.wahrendorff@accenture.com
  31. 31. 31Copyright © 2016 Accenture All rights reserved. Appendix
  32. 32. 32Copyright © 2016 Accenture All rights reserved. Country highlights
  33. 33. 33Copyright © 2016 Accenture All rights reserved. US company executives believe they are leading the way The results clearly indicate that the US is already working on its transformation of the industrial workforce. US companies realize that the Connected Industrial Workforce will play a huge role in staying ahead of the competition within the industrial sector. 28% of their R&D budget is spent already on Connected Industrial Workforce. In 5 years, it will be 40%. 28% of US companies can be seen as Digital Leaders. 53% of US companies have already implemented Connected Industrial Workforce measures. IT Security is considered the most important challenge in adopting the Connected Industrial Workforce in the US. IT Security is considered the most important challenge in adopting the Connected Industrial Workforce in the US.
  34. 34. 34Copyright © 2016 Accenture All rights reserved. German company executives reveal they need to boost their efforts German companies are aware that the Connected Industrial Workforce is key to driving future business in the industrial sector. Many companies are piloting Connected Industrial Workforce measures but they are currently hesitant to implement them. 15% of their R&D budget is spent on a Connected Industrial Workforce. In 5 years, it will be 20%. Only 10% of German companies can be seen as Digital Leaders. 71% of German companies are currently piloting Connected Industrial Workforce measures, but only 10% have already implemented solutions. Implementation complexity is considered the most important challenge in adopting the Connected Industrial Workforce. Legal issues will not pose a challenge in adopting Connected Industrial Workforce measures.
  35. 35. 35Copyright © 2016 Accenture All rights reserved. French company executives reveal they are yet to connect their workforce Most French companies say that they’re currently piloting Connected Industrial Workforce measures. Only 12% are first movers and have already connected their industrial workforce. 14% of their R&D budget is spent on a Connected Industrial Workforce. In 5 years, it will be 19%. Only 8% of French companies can be seen as Digital Leaders. 65% of French companies are currently piloting Connected Industrial Workforce measures, but only 12% have already implemented solutions. IT Security concerns are considered the most important challenge in adopting the Connected Industrial Workforce. Difficulty of migration/installation will not pose a challenge in adopting Connected Industrial Workforce measures.
  36. 36. 36Copyright © 2016 Accenture All rights reserved. 18% of their R&D budget is spent on a Connected Industrial Workforce. In 5 years, it will be 23%. 25% of Chinese companies can be seen as Digital Leaders. 73% of Chinese companies are currently piloting Connected Industrial Workforce measures, 20% have already implemented solutions. Legacy Equipment is considered the most important challenge in adopting the Connected Industrial Workforce. Legal issues will not pose a challenge in adopting Connected Industrial Workforce measures. Chinese executives believe they are moving with confidence 20% of Chinese executives say they have already implemented Connected Industrial Workforce solutions. 73% are piloting Connected Industrial Workforce measures or reviewing their pilots. There is a high proportion of digital leaders among Chinese companies and these are driving the digital agenda in their respective industries.
  37. 37. 37Copyright © 2016 Accenture All rights reserved. Japan’s industrial executives reveal they are yet to realize the benefits Most Japanese companies say that they are currently piloting Connected Industrial Workforce measures. Only 11% are first movers who have already implemented solutions. 13% of their R&D budget is spent on Connected Industrial Workforce. In 5 years, it will be 17%. Only 4% of Japanese companies see themselves as Digital Leaders. 61% of Japanese companies are currently piloting Connected Industrial Workforce measures, but only 11% have already implemented solutions. IT Security and cost concerns are the most important challenges in adopting the Connected Industrial Workforce. Legal issues will not pose a challenge in adopting Connected Industrial Workforce measures.

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