THE (R)EVOLUTION OF THE MACHINE MAKING THE FACTORY OF THE FUTURE
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1 MAY 2016 THE (R)EVOLUTION OF THE MACHINE MAKING THE FACTORY OF THE FUTURE Alex West, Principal Analyst, Manufacturing Technology +44 (0)
2 World machinery market World machinery market $1.5tn Rest of the world $270.2bn $123.1bn $476.2bn $122.5bn $521.2bn 18.0% 8.1% 31.5% 8.1% 34.4%
3 Machinery production growth profiles Total Machinery Production Percentage Growth Rates % Growth of machinery production measured in US $ CAGR US 0.5% -1.8% 1.4% -0.7% 1.6% 3.7% 3.4% 3.6% 1.6% Germany 4.1% 1.6% -19.2% -0.9% 1.3% 2.5% 2.4% 2.4% -1.7% China 7.5% 6.4% 0.2% -0.3% 1.4% 2.8% 3.0% 3.1% 2.0% Japan -13.1% 1.2% -5.5% -1.1% 1.4% 2.1% 2.8% 1.7% 1.4% Source: IHS; Industry Publications Mar-16 50% 25% 0% -25% -50% Percentage growth rates of machinery production in US $ US Germany China Japan 3
4 Productivity stagnation Output per worker in developed regions has stagnated Output per worker growth in 2014 Limited evolution in machinery China wages have soared 0% or less 0% to 2.5% 2.5% to 5% 5% to 7.5% 7.5% or more No Data Source: IHS A market with new normals providing opportunities and threats technology will be at the center as manufacturing changes 2015 IHS
5 Internet of Things Evolution Internet of Everything (IoE): represents the open access to data from one or more monitoring and control systems by third-party applications to provide unique, additional value to stakeholders. Connect Devices Collect Data Access Data Complex Analytics Unique Value Connectivity Intelligence Sensors Storage Cloud Standards Open APIs Big Data Realize the true potential of a connected society. Where we are today. Next stage security is key challenge! Ideal goal many years away 5
6 Changes in technology smart manufacturing / Industrie 4.0 Digitization Remote diagnostics and monitoring Predictive maintenance Demand driven manufacturing Energy efficiency Mass customization Mobility 6
7 Steps from reactive to predictive maintenance Prescriptive maintenance Impending failures are predicted based on data analytics, system operation can be adjusted to allow for prolonged product lifetime Predictive maintenance Impending failures are predicted based on data analytics, allowing for pro-active response minimizing downtime Condition monitoring Suitable measures depending on the condition of the system based on diagnostic data and remote monitoring Preventative maintenance Repair and maintenance work is scheduled based on pre-defined intervals Reactive maintenance Response to failure or impaired performance of product 7
8 Relocation of manufacturing Machinery Output production per worker by growth region in ( vs. 2015) From globalization to localization as supply chains are shortened Americas 0% or less Rest of Asia 0% to 2.5% 2.5% to 5% Japan China Increase dependency on local service support 5% to 7.5% 7.5% or more EMEA Standards are needed No Data Notes: underlying pie chart Y2015 ;foreground pie chart Y 2003 Source: IHS Source: IHS 2016 IHS 2015 IHS
9 German companies looking to re-shore A chunk of high tech manufacturing is gradually reshoring back into Germany Wage rates in China rising rapidly Re-shorers are those that outsourced purely due to costs Proximity to the domestic market Better quality control, oversight and logistics 20% OF COMPANIES PRESENT IN CHINA PLANNING TO PULL OUT Source: The Association of German Engineers 9
10 Changes will impact almost every area of business Technology Shift from hardware to software Suppliers Partnerships are crucial Location Localisation of manufacturing Skillsets IT and OT collaboration and recruitment challenge Business models New revenue streams Uptime as a service Automation Evolution of automation architecture 10
11 The winners and losers are to be decided Mobile phone market share 2007 vs Nokia, <2% <Motorola, 2% When the wind of change Nokia, 40% blows, some people build walls and others build windmills - Chinese proverb Motorola, 12%
12 The manufacturing landscape is changing, not just with the introduction of new technologies, but new business models, locations, partnerships and skillsets. Successful companies will be those that are able to incorporate software and digital services alongside existing offerings. Thank you any questions?
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