The digital transformation is well underway, radically changing value chains and offering a potential sales volume in the billions. In German industry alone, digital products and services will reportedly generate 30 billion euros. This is according to a recent study of 235 companies conducted by PwC, Strategy& and the German Engineering Association (VDMA). The study found that companies that have digitized their range of products and services already have a clear competitive advantage. According to the study, almost 70 per cent of all companies with highly digitized products have enjoyed growth of between six and ten per cent over the last three years. Examples can be found everywhere. In mechanical and plant engineering, for example, sensors are being developed that enable machines to autonomously report when they need servicing – before a breakdown occurs. A key competitive advantage.
Integrated industry is a CEO topic
The journey to Industry 4.0 requires significant investment, explains Volkmar Koch, partner at Strategy&. "To manage this process effectively, the topic needs to be high on the top management agenda."
In actual fact, four out of five German industrial companies plan to digitize their complete value chain by 2020. An annual investment sum of 40 billion euros is set to be invested in appropriate solutions – but this is not purely a German phenomenon. In the USA too, for example, companies are stepping up the pressure when it comes to networking machines and factories , albeit under the banner of "cyber physical systems" rather than Industry 4.0, a term coined in Germany. And yet the topic often seems too far removed from where it urgently needs to be embedded – in the consciousness of the upper echelons of companies. This is something that has been proven by various studies.
An "unknown trend" on a wide scale?
For the information and telecommunications sector, integrated industry is the hot topic of the year: it has jumped from tenth to fourth place in this year’s survey conducted by industry association BITKOM. This is in stark contrast to the results of a survey carried out by IT service provider CSC of 900 decision-makers in German, Austrian and Swiss industry, according to which 40 per cent of decision-makers in Germany had not heard of Industry 4.0, with the figure rising to more than 50 per cent in Austria and 60 per cent of those surveyed in Switzerland. Around a quarter were familiar with the term but did not know exactly what it means, while only a quarter knew which changes the fourth industrial revolution involves. There was frequently a lack of any strategy within individual companies.
Opportunities occur at the interfaces
Companies not wanting to miss out are being forced to adapt their processes – from procurement and manufacturing to marketing and sales. On the one hand, it is vital to continue developing production along Smart Factory lines. "Increasing integration, the exchange of information it facilitates and the analysis of data enable quality defects to be detected and remedied earlier within companies and also between partners, which means that the reject rate in incoming goods inspections by customers can be reduced," says Volkmar Koch.
The future of the industry depends not just on technological innovation, however, but also – and to a critical extent – on the development of suitable new kinds of business models . To this end, a new form of cross-industry collaboration between the individual industrial disciplines is required. Mechanical engineering, logistics, automation, IT: these are the interfaces where new opportunities occur. For those who are not afraid to rethink their business beyond the boundaries of disciplines, the digital revolution opens up tremendous opportunities.
Under the overall theme of Integrated Industry – Discover Solutions , HANNOVER MESSE is bringing together industry experts and visionaries. Join the discussion, at events such as the Industrial Automation.