Connie Palucka, Managing Director of Regional Initiatives with Catalyst Connection marks out guideposts for the future state of Industry 4.0

1. Preparing for the Future
What It Will Take to Compete in 2021
Connie Palucka
Managing Director
Regional Initiatives
May 20, 2016
©2016 Catalyst Connection

2. Industry 4.0 …
The Evolution of Smart Factories
May 24, 2016 SLIDE 2

3. Industry 4.0 Examples
• Germany’s Energy Sector ꟷ smart grids allow shift from
consumption-oriented generation to generation-optimized
consumption
– RESULT ꟷ fluctuating renewable energy power generation &
consumption is optimally managed
• Michelin ꟷ Connectivity & smart devices enabled them to
completely shift business to providing mobility & safety of
tires as a service rather than focus on selling tires
– RESULT ꟷ Sensors & intelligence embedded in tires monitor
performance; a network of support ensures problems are addressed
SLIDE 3

4. Trends to Watch … They Could
Impact Your Company’s Future
• Additive
Manufacturing
• Collaborative Robotics
• Internet of Things
• Distributed
Manufacturing
SLIDE 4

5. Manufacturing Trends
Additive Manufacturing (AM)
• TODAY: Currently used for prototypes, tooling,
fixtures & jigs (non-critical parts) in aerospace, medical
device, automotive & consumer sectors
– Boeing uses AM to produce over 200 PN for 10 types of aircraft
– GE invested $39MM in CATA; std process in each business unit
– Alcoa investing $60MM to develop advanced AM materials &
processes
• WHAT TO EXPECT LONG-TERM:
– Expect lines between additive & conventional manufacturing to blur
– As materials portfolio expands and standards are introduced, AM
will be approved for critical as well as non-critical parts
SLIDE 5

6. Manufacturing Trends
Additive Manufacturing
• NEXT FIVE YEARS:
– Expect expanded range of materials, improved reproducibility,
introduction of quality and machining standards
– Important next stage is 3D printing of integrated electronic
components, such as circuit boards
– 3D printing-as-a-service model as well as a leasing model
• WHAT SHOULD YOU DO TO PREPARE
– Utilize 3D printing for prototyping to spur innovation & reduce time
to market
– Start small. Really look at your application. Understand the
characteristics that help determine which ones could benefit from
AM. Contract 3D prints on several machines to narrow process /
equip selection.
– Purchase something cheap 1st to learn basics .. how the technology
works … how support materials work. Then select a 3d printer.
SLIDE 6

7. Manufacturing Trends
Collaborative Robotics “Cobots”
• TODAY: Initially less intricate tasks like lifting or welding … now
robots do more complex jobs like working on engines
– Starting to see collaborative robots to complement rather than replace workers
– Automotive sector has invested heavily in collaborative robotics
• WHAT TO EXPECT LONG-TERM: Smarter, more mobile, more
adaptable, easier to program
– Cobot applications: machine tending; handling heavy payloads currently
requiring lift devices; mechanical assembly; palletizing / packaging / handling
– Major changes on factory floor & global competitive landscape
• China planning robot revolution by automating work done by millions of
low-paid workers.
– Accelerated time-to-market, improved
production accuracy, reduced rework
– Expect more autonomous vehicles on the
road & in the warehouse
SLIDE 7

8. Manufacturing Trends
Collaborative Robotics
• NEXT FIVE YEARS:
– Industry expected to grow 10x by 2020 to reach $1B
– Robots and humans working side by side will become common
• WHAT SHOULD YOU DO TO PREPARE
– Identify potential applications
– Describe in sequence how the task is currently being performed;
take particular note of metrics such as :
• Changeover Throughput Environment
– What could be improved on the cell
• Production cost; Quality; Ergonomics
• Other key metrics you are working to improve in your plant
SLIDE 8

9. Manufacturing Trends
Internet of Things
• TODAY: Apps making mobile devices multifunctional so
they can operate equipment, act as scanner, etc.
– GE’s wind turbines - 20,000 sensors produce 400 data points/sec; ongoing
analysis allows GE & customers to optimize turbine performance &
proactively make decisions
• WHAT TO EXPECT LONG-TERM:
– Production will become more networked until everything is interlinked with
everything else; machines, sensors, computers & humans are linked
enabling new levels of info monitoring, collection, processing & analysis
SLIDE 9

10. Manufacturing Trends
Internet of Things
• NEXT FIVE YEARS:
– IoT is like any new, emerging
technology
• Ex: Cloud computing - The
Open Group set key
considerations in 2019 for
how to build & measure ROI
for cloud initiatives
• This gave businesses a set of
stds & benchmarks to define
success and measure results
of investing in “the cloud”
• 2016, cloud solutions are the
norm
– Expect IoT to develop the
same way; GE already working
on transforming all of their
products into data centers
$170
$206
$225
Consumer IoT
Enterprise Cloud
Computing
Industrial Internet
Annual Revenue by 2020
shown in $Billion
SLIDE 10
Industrial Internet Gold Rush
By 2020, GE expects the industrial
Internet market to be far more lucrative
than consumer IoT

11. Manufacturing Trends
Internet of Things
• WHAT SHOULD YOU DO TO PREPARE
– Determine what data is most valuable to collect; Gauge efficacy of
analytical structures that will be used to assess data
– Data security - big concern within Industry 4.0 to guarantee safe
production
• Establish appropriate IT security mechanisms for the production
environment as part of a new enterprise security plan
– If you’re developing smart products, start small & work on projects
that are “quick wins” - will generate value quickly without significant
investment
• Start small with a hand-built prototype, make a dozen for a few
strategic customers - Prove value in small ways
SLIDE 11

12. Manufacturing Trends
Distributed Manufacturing
• TODAY: This week, UPS announced creation a fully
distributed mfg platform, connecting 60 UPS stores, each
with mid-level 3D printers, onto an advanced production
platform built & run by parts mfger, Fast Radius
• WHAT TO EXPECT LONG-TERM:
– The UPS story is first instance of “Uberization of mfg”, i.e. seamless
connection of demand with distributed production capacity
– Look for production partners around the world on this platform to
expand rapidly, mirroring UPS’ extensive hub and spoke distribution
network - Implications for global manufacturing are potentially as
disruptive as when Amazon launched its Cloud Hosting business
– Currently unknown whether distributed manufacturing will become
mainstream or remain a niche activity
SLIDE 12

13. Manufacturing Trends
Distributed Manufacturing
• NEXT FIVE YEARS: Currently it’s too early to predict
• WHAT SHOULD YOU DO TO PREPARE
– Stay abreast of what’s going on in your industry and supply chains
SLIDE 13

14. SLIDE 14

15. Connie Palucka
Catalyst Connection
(W) 412-918-4259 (C) 412-721-8309
cpalucka@catalystconnection.org
Thank You!