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Smart Factories: How can manufacturers realize the potential of digital industrial revolution INFOGRAPHIC

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A revolution in manufacturing is firmly underway. Infineon, a German semiconductor manufacturer, is investing
$105 million in the next five years in order to turn its Singapore plant into a smart factory. It took robots and
3D Printing to make Adidas bring back manufacturing to Germany. A leading fragrance maker in Switzerland
ramped up capacity by a third in the past three years, all through addition of robots.

To assess how manufacturers can drive most value from smart factories, we surveyed 1000 senior executives
of large companies across key sectors and countries.

Here are the key findings from the research:

The prize:

• Smart factories could add $500 billion to $1.5 trillion in value added to the global economy in
five years
• Manufacturers predict overall efficiency to grow annually over the next five years at 7 times the
rate of growth since 1990
• We estimate that smart factories can nearly double operating profit and margin for an average
automotive OEM manufacturer

The challenge:

• 76% of manufacturers either have a smart factory initiative that is on going or are working on
formulating it. And more than half of manufacturers (56%) have aligned $100 million or more
towards smart factories.
• However, only 14% of companies are satisfied with their level of smart factory success. Only 6%
of manufacturers are ‘Digital Masters’: at an advanced stage in digitizing production processes
and with a strong foundation of vision, governance and employee skills.
• Digital Masters outpace all other categories in realizing the benefits of smart factories

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Smart Factories: How can manufacturers realize the potential of digital industrial revolution INFOGRAPHIC

  1. 1. Manufacturers are pouring in money to set up smart factories 56% of the survey respondents have invested more than US $100 Million in last five years Distribution of manufacturers based on their smart factory investments in the last five years Smart factories to add from $500 billion to $1,500 billion in the next 5 years annually* *in eight major economies We estimate that smart factories can more than double operating profit and margin Manufacturers predict quality indicators to improve annually at 12 times the rate of growth since 1990 thanks to smart factories Industrial Manufacturing Automotive Aerospace & Defense Energy & Utilities Pharma, Life Science, BioTech Consumer Goods Average realized overall productivity gains from smart factories so far What is a smart factory? A factory that makes intelligent use of cutting edge digital technologies and smart features to gain considerable advantage in terms of productivity, efficiency, quality and flexibility. The Size of the Smart Factory Prize is Too Large to Ignore Manufacturers across segments are already harnessing the potential of smart factories 12x 2x $500 bn $1,500 billion A research by Capgemini's Digital Transformation Institute Digital masters are reaping the rewards of their digital maturity How can manufacturers become digital masters? Digital Maturity Matrix However, only 6% of manufacturers are truly advanced in their digital transformation Digital Intensity dimension: - measures the level of digitization of crucial processes, and the level of use of digital technologies. Transformation Management Intensity dimension: - measures management aspects such as smart factory vision, governance, and the digital skills of manufacturers’ workforce. All the surveyed countries and industries, on average, are quite far from becoming digital masters Proportion of categories based on digital maturity across industries Realized Gains - Beginners Vs. Digital Masters Contact us: dti.in@capgemini.com The information contained in this document is proprietary. © 2017 Capgemini. All rights reserved. Smart Factories: How to realize the potential of the digital industrial revolution Manufacturers across countries are enthusiastic in embracing smart factories North America Western Europe India and China US 54% France 44% Germany 46% India 28% China 25% UK 43% Sweden 39% Italy 33% Audi’s €1 bn smart factory in San José Chiapa, Mexico Faurecia’s $64 million smart factory in Columbus, Indiana Adidas’ high-tech Speedfactory in Ansbach, Germany Siemens’ smart plant in Amberg, Germany GE’s “brilliant Factory” in Pune, India ABB’s smart plant in Beijing, China Penetration level: 50 - 60% 40 - 50% 30 - 40% 20 - 30% Percentages indicate the share of companies in the respective country that has a smart factory initiative ongoing 17% 18% 16% 17% 18% 17% 29% 27% 27% 26% 24% 21% ProductivityDirect labor Cost Raw Material, Logistics & Tranportation Overall Equipment Effectiveness (OEE) Quality & ScrapSelling, General & Admin Costs Beginners Digital Masters Fashionistas Digital Masters Beginners Conservatives Establish a roadmap and rally support of key leaders Measure and monitor business value of digital initiative and kill unprofitable ones Bridge the digital talent gap by partnering with ecosystem players Craft a holistic vision; establish a foundation of strong leadership and governance Invest in digital initiatives aligned with the vision Launch proofs-of-concept and demonstrate early wins Ensure agility is factored in your governance models Prioritize and execute on your digital initiatives Scale your initiatives to the organizational level Maintain focus on your roadmap Sustain the momentum by keeping your people engaged Strive for a digital culture and mindset as you advance your initiatives Source: Capgemini Digital Transformation Institute analysis 20% 19% 17%18% 17% 18% Capgemini Smart Factory Framework 84% 85% 80% 81% 65% 86% 13% 11% 15% 16% 20% 11% 1% 1% 1% 1% 1% 4% 5% 3% 14% 4% Aerospace and Defense Automotive and Transportation Consumer goods Energy & Utilities Industrial manufacturing Biotech & Pharma Beginners Conservatives Fashionistas Digital Masters 5% 4% 5% 5% 6% 11% 6% 7% 6% 7% 6% 4% 5% 6% 7% 5% 28% 16% 18% 18% 56% 20% 1% 1% Less than $50M Between $50 - $100M Between $100 - $250M Between $250 - $500M More than $500M Both Greenfield & Brownfield Brownfield Greenfield Yet to be decided Fashionistas 1% Beginners 78% Conservatives 15% Digital Masters 6% Low High LowHigh Transformation Management Intensity DigitalIntensity Manufacturing Digital Transformation Complex System Simulation: Product, Process, Flow Industrial Cybersecurity: Product, Process Smart System Collaboration Usage feed-back Digital Twin Remote monitoring Autonomous Operations Operations Technology Product Quality Preventive & Predictive maintenance Mobility & Remote Augmented / Virtual reality Health Safety Environment Operations Management PLM Digital Asset Management Industrial Control System Manufacturing Intelligence Digital Operator Digital Mock Up From Scan… to Print Product and Asset Management 3D Continuity 3D Platform IoT Platform Smart Factory

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