Industry 3.0 vs. 4.

0 - Vision of
the new manufacturing world
June 2017
Alex West,

Principal Analyst – Smart Manufacturing

IHS Markit - Manufacturing Technologies

Alex.west@ihsmarkit.com

© 2016 IHS Markit. All Rights Reserved.

The 4th Industrial Revolution
1760 1870 1969 201?

1011
0101
0001
11

1st revolution 2nd revolution 3rd revolution – 4th revolution –

Water Steam and Electricity Automation and IT Cyberphysical systems
Mechanization
• Hand to machine • Mass production • Increased automation of • Mass customisation
production production
• Division of labour • Democratization of
• Factories introduced • People empowered to manufacturing
• Automotive industry “higher level jobs” – i.e.
• Textile industry an an early adopter programming
early adopter
• Automotive industry use
© 2016 IHS Markit. All Rights Reserved. of robotics *Icons made by Freepik from www.flaticon.com
What’s slowing us down? What are the reasons your company is not using the
Cloud and has no plans to do so?
Solution looking for a problem
What companies are saying: No clear RoI

“We will never allow third parties to host
our data”
“This is just marketing language for
technologies we’re already using”
“We’d like to, but don’t have the ability to
collect the data or people to make sense
of it”
Existing technologies sufficient
Can't collect the data
Real time response needed
Cybersecurity (theft of data)
Cybersecurity (impacting
production)
Cost is prohibitive

Lack of skilled personnel

Lack of leadership support

0 20 40 60 80 100 120
Sample size: 433
Sample frame: 188 © 2016 IHS
© 2016 IHS Markit. All Rights Reserved.
Technology (R)evolution

From data to information

• Sensors (smarter and more connected)

• Connectivity – networking the factory floor from the sensor level to the cloud
• Big Data – an explosion in the amount of data collected
• User interfaces simplifying technology use (and increasing worker mobility)
• Smarter more dextrous robots able to work “hand-in-hand” with employees
• Additive manufacturing – new product designs and geometries

© 2016 IHS Markit. All Rights Reserved.

Innovation and trends with embedded sensors in automation and IPC
Sensor embedded in more equipment for predictive maintenance. Enabling new business models
• ABB’s smart sensor, • Smart bearings with embedded sensors

> Makes vibration sensing affordable for lighter > Introduced or in development e.g. from SKF,
industrial assets FAG, NTN…

> Target low voltage motors (low cost) > Speed, vibration, temperature, load, angle…

> 150€ (estimated 50€ in volume) > Enable to change business model: selling
service and eventually uptime rather than just
> Cloud based analytics mechanical hardware

> Secure closer relationship with customer

Wireless vibration sensor
module for 50€ (photo FAG
IHS, Hannover Fair) VarioSense
Bearing with
speed, load,
temp and
vibration
sensing
© 2016 IHS Markit. All Rights Reserved.
Change in the automation hierarchy - traditional

ERP

MES

SCADA
systems
Control systems –
PLCs, DCS and IPC
Sensors, actuators,
hardware

© 2016 IHS Markit. All Rights Reserved.

Change in the automation hierarchy – potential change

ERP
MES
SCADA
systems
Control systems –
PLCs, DCS and IPC

Sensors, actuators,
hardware

© 2016 IHS Markit. All Rights Reserved.

 New vendors are key to IIoT
OT IT OT and/or IT

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© 2016 IHS Markit. All Rights Reserved.

How business is changed? What type of company do you prefer to lead the
Internet of Things Evolution project for implementing your IIoT solution?
Other
• IT – OT convergence remains a challenge (please Existing
main
specify)
No automation
• Internal preference for team leading IoT preference
1%
supplier
projects is evenly split between 20% 15%

engineering and IT teams

• C-Suite leads only 10% of respondents
projects
• Centrality of automation products Existing
main IT
influences decision making process supplier
Systems 27%
integrator
23%

Existing
Software
main OEM
solution
supplier
developer
Sample size: 133 5%
9%
Sample frame: 133 © 2016 IHS
© 2016 IHS Markit. All Rights Reserved.
What can we do with this?
• Asset related analytics provide low
hanging fruit
• IIoT vendors are entering the market
with differing strategies
Asset Health
• Almost half of companies see
Improved throughput and
productivity
OR Reduced downtime / production
failure as the main benefits.
© 2016 IHS Markit. All Rights Reserved.
Which of the following applications do you believe will
benefit most from your organizations use of the Cloud
for IoT related applications:
Asset tracking
Condition monitoring
Predictive maintenance
Maintenance planning
Demand monitoring
Design, Prototyping and simulation
Energy management
Plant / factory control
Plant / factory visualization
Remote servicing / training
Resource planning
Other (please specify)
Sample size: 508 0 50 100
Sample frame: 199 1 2 3 © 2016 IHS
 Benefits across the lifecycle
Design Operations Maintenance Supply Chain
• Harley-Davidson • Petroflow Energy • CNH Industrial • Sandvik Coromant
Reduced model New Corp. average maintenance Monitors existence of
Product Introduction Site power consumption time reduced by 50% any bottlenecks in the
(NPI) from more than a reduced by 43% overall supply chain
• Fanuc
year to 1.5 weeks
• Marathon Petroleum Saved US$2M from • Shanghai CHILO
• Maserati Company reduced downtime Press Company
reduced number of Alarm rate reduced by Inventory error rate
• Nova Chemicals
prototypes, and time to approx. 90% reduced from 50% to
reactive emergency
market resulting in 4% within 6 months.
•Husky Injection work reduced by 47%
30% less development Inventory control
Moulding and time spent on
time. converted US$95k loss
productivity and cycle proactive, preventative
to a US$158k profit
time gained from 3% to maintenance has
12% increased by 61%

© 2016 IHS Markit. All Rights Reserved.

 IoT Servitisation - the new business model
“Industrial companies are in the information business whether they want to be or not.” – Jeff
Immelt GE

Shift of business from selling hardware to selling service

• New services models introducing new revenue streams and closer ties with
customers
• Shift from CapEx to OpEx spend
• Challenges on revenue sharing across a partner ecosystem

© 2016 IHS Markit. All Rights Reserved.

Summary

• It’s coming (but not tomorrow)

• Technology will evolve – applications and business models will be revolutionised
• Partnership between IT and OT will be necessary (internally and externally)
• “People” are the most significant inhibitor to growth

Alex West,
Principal Analyst – Smart Manufacturing
IHS Markit - Manufacturing Technologies
Alex.west@ihsmarkit.com

© 2016 IHS Markit. All Rights Reserved.