MWC19 Theme Report: Industry 4.0

Definition

Industry 4.0 is the digital transformation of industrial markets, with smart manufacturing currently at the forefront. While originally referring just too manufacturing industries, today Industry 4.0 as a term is used to represent the so-called fourth industrial revolution in:

• Discrete and process manufacturing,
• the chemical industry,
• Energy (Energy 4.0),
• Transportation,
• Utilities,
• Oil and gas,
• Mining and metals
… and so on.

Image courtesy of Christoph Roser at AllAboutLean.com

There is some debate about whether there actually is a ‘fourth industrial revolution’ under way – the argument against being that industry has always used advanced technology to create more automated and carefully-monitored systems. Certainly this is a reasonable argument when looked at purely through the lens of Operations Technology (OT), the monitoring and management systems used in factories today. These are designed to gain the most productivity and reliability from a factory’s assets. While services like NB-IoT can be used to improve the instrumentation on machines and help with tasks such as predictive maintenance, such activities can also be performed using other wireless or even wireline interfaces.

However, this argument focuses purely on the adoption of technology, while industry 4.0 advocates will point to much more fundamental changes brought about by the combination of new technologies with new business models and processes. Ultimately this leads to businesses reshaping how they create value, generate revenue and relate to their customers.

This diagram shows how, in principle, full Industry 4.0 transformation works to change every aspect of a company’s business (credit: www.i-scoop.eu).

One very straightforward example would be Siemens wind turbines. Thanks to advanced instrumentation and predictive analytics, Siemens has been able to shift its business from selling wind turbines and components to selling ‘energy as a service’, where they retain responsibility for the ongoing performance of the wind turbines and their SLAs are based around the uptime of the machines. This provides them with a much more predictable income stream and aligns their incentives with those of their clients.

Alongside Industry 4.0, we are seeing a parallel evolution in the supply chain and logistics (Logistics 4.0).

We are also seeing more interest in the value of data created through Industry 4.0, its management and exchange. A supply chain is driven by sharing data at the right time with the right counterparts, so there is a natural move towards creating methods to manage and share data.

However, data sharing has the potential to go much further. Smart cities such as Amsterdam have also used open data to enable citizens to create smart apps and services that would otherwise be well-nigh impossible to achieve. Siemens, in the example above, is now able to collect and analyse data from many more wind turbines than any one client company alone, and create better predictive models as a result. There are very early moves to develop commercial data-sharing or brokering techniques to help companies create revenues from the data they generate and, at the same time, gain access to external data in a properly curated fashion.

Relevance of the telecoms industry to Industry 4.0

At a basic level, telecoms providers can be providers of connectivity to support new ways of instrumenting, analysing and using data. The suite of services such as LTE, LTEA-A, NB-IoT and so on can support a wide range of use cases, and the development of capabilities such as edge computing and network slicing are attracting interest. However, despite many trials adoption of telecoms services have not been as rapid as many in the business would like. This is for several reasons;

Technically: Caution about security and reliability (especially wireless) remains strong. A ‘five-nines’ approach is not robust enough in a situation where companies can lose thousands of dollars a minute in cases of failure. Moreover, manufacturing plant can have a lifecycle of 30-50 years; retrofitting new technology is possible, but not straightforward.

Corporately: Large-scale adoption of industry 4.0 methods & technology isn’t an overlay, but (to be cost effective) should go along with a change in operations, new business models, skills base and mind set. That takes a lot longer than technology trials. Most companies don’t feel they have the skills in place yet to make a major change.

– There is a realisation that Industry 4.0 cannot be delivered by tech teams in-house because of the diversity of technologies involved. This is unsettling for companies that depend on uptime for profitability and who are used to in-house maintenance teams on call 24/7. How to manage that, and balance skills in-house and elsewhere, has not been settled. In theory this may open up opportunities for operators, but in practice the opportunities to deliver maintenance and IT services will depend on how deeply embedded the operator gets into service delivery. For operators who are focussing on delivering security and reliability of connection, maintenance will fall into standard SLAs. However, there is a potential gap in the market for players who can move quickly enough and with authority to compete against, or collaborate with, systems integrators and enterprise IT vendors.

– One of the promises of Industry 4.0 is greater flexibility and adaptability to circumstance, but that has knock-on effects throughout the supply and delivery chain as well. It’s not enough for one part of the chain to adapt far beyond the rest, if money isn’t to be wasted.

– Unsurprisingly, there is also unease over what this would mean for employment within companies embracing the full suite of automation, and battles to be had with unions and potentially government.

– Industrial IoT trials have so far focussed mainly on improving uptime, performance improvement and predictive/preventive maintenance. These are able to offer significant financial payback (e.g. reducing energy costs by 10%) but are not transformative in themselves. Meanwhile the pieces which could be transformative, such as Robotic Process Automation, data and analytics, are more visible for the white-collar and customer facing roles but less obviously “Industry 4.0” than enterprise transformation.

Industry 4.0 Conference Sessions

Digital Transformation: Reinventing your customer relationships
Monday 11.00 – 12.10
Digital transformation opens up the opportunity for companies of all kinds to engage with their customers in new ways. Brands can build on their familiarity to create new services and revenue streams direct to the consumer; to engage them in not just conversational commerce but crowdsourced design; to develop a loyalty that goes beyond the transactional to the personal, and to rethink what exactly the company should be offering their customers, how and when.
To do this successfully also requires a change in the way the company itself operates, partners, thinks about value and about itself. We hear from leaders making those changes, both in their customers’ experience and in their own.

Unlocking the benefits of 5G for the Enterprise Market
Monday 13.30 – 14.30
Globally we see many trials where large industrial companies are already experimenting with aspects of 5G and pre-5G services, such as network slicing and ultra-low latency. However, there are ongoing arguments about how much business value can be created for the enterprise by 5G compared to existing technologies.
During this session the audience will hear business leaders discuss the economic value of 5G for all the stakeholders involved.

Capitalising on Operators’ Assets for the Industry 4.0 Value Chain
Tuesday 13.00 – 14.00
For years now operators have had a rich set of capabilities that can add value to enterprises of all kinds, beyond connectivity and communications: Security, identity management, location, rich pools of data… the list goes on and is only growing as new capabilities are introduced to the network. These offer huge opportunities to companies of all sizes, both digital natives and those going through their own digital transformations.
As more ‘network operators’ transition to become ‘digital service providers’, this discussion examines how you can really gain value from the assets you already have and shares best practices from the leading edge.

Industry 4.0: Blockchains, Supply Chains & Logistics
Tuesday 14.15 – 15.15
Alongside increased levels of automation and autonomous decision-making within a company, the supply and delivery chain is also going through a parallel evolution. From source through processors, handlers and all the way to the end consumer, the way that goods are being ordered, distributed and monitored is going through an astonishing transition with ever-increasing levels of automation.
The challenge is to make sure that the right data is getting securely & reliably to participants at each step in the supply chain. This session examines the state of logistics and supply chain today, asking whether the flow of data is as capably managed as the flow of goods, and does distributed ledger technology offer a credible solution to the questions of data coordination and security?

Cashing in on industrial data: Data exchanges, brokering and analytics
Tuesday 15.30 – 16.30
Having information for your own use is good, but being able to derive value from sharing data beyond the company, as well as the as-yet unexplored opportunities for data monetization, is even better. The outcomes of data sharing in the healthcare sector offer an impressive early example of how revolutionary this can be and there are exciting initiatives under way to help industries generally to follow suit. There are huge hurdles to overcome in governance, security, and commercial models but these are being addressed quickly. In this discussion we hear from the global pioneers who are changing the conversation about the value of industrial data.

‘’Industry 4.0’’ Event Theme Networking Reception Sponsored by Citi
Tuesday 16.30 – 18.30

Debate: Can Industry 4.0 be as Secure & Reliable as Industry 3.0?
Wednesday 13.30 – 14.30
Industry 3.0 was built on operations technology with an absolute focus on maximising reliability, productivity and uptime. Five-nines reliability just isn’t enough. Moreover, to a company that could lose lives as well as money from a failure or security breach, why would you risk trusting decisions to AI or open yourself up to hacking? Despite the appreciable benefits of Industry 4.0 automation, intelligence and efficiency, perceived risks are slowing adoption dramatically.
Are those perceived risks real, and can they sensibly be addressed by the developments taking place in the development of Industry 4.0 technologies? Does Industry 4.0 require a change in the way industry thinks about its KPIs? Or is the full Industry 4.0 ideal doomed? Our panel of experts will argue this out, then it’s up to you to ask questions and make your decision.

Beyond Trials: Embedding Industry 4.0 in Corporate Culture & Operations
Wednesday 14.45 – 15.45
There have been a huge number of (successful) tests and trials of technologies such as AI, IoT and 5G in large organisations but relatively few companies so far have managed to translate those lessons into the wider business and capitalised on the gains possible. It’s not too surprising: Implementing a technology trial is much simpler and less risky than altering a company’s mindset and activities, and the price of failure is that much less.
This session shares the experiences and lessons learnt from companies that are making this transition, to look at how different approaches to becoming an intelligently connected company can help produce significant results.

Linking IoT, 5G and Analytics in Smarter Enterprise
Wednesday 16.00 – 17.00
While heavy industry and manufacturing gain a great deal of attention from ‘Industry 4.0’ conversations, the principles of creating data and converting it to actionable intelligence have a plethora of applications to every business. Improving the productivity, creativity and enthusiasm of your workforce; taking a fresh view of the business’ costs; making data easier to action; and simplifying repetitive processes all have the potential to make material changes to the bottom line without radical and disruptive change. Join us in this case-study driven session to examine how intelligent connectivity can apply beyond heavy industry.

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