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Executive Summaries

Tuesday, January 22, 2019

Industry 4.0—A Regional Update

Over the last several years, the information technology (IT) world has dramatically changed due to several strong influences including social, mobile, big data/analytics, and the cloud (SMAC). Some would add the IoT to this list. The next big thing seems to be digitalization, which leverages solutions addressing the SMAC and IoT trends to help companies fundamentally transform their businesses. According to a recent survey, top-performing businesses are currently spending 34% of their IT budget on digital transformation, with 44% planned in 2019.

The Industrie 4.0 initiative started in 2006 as one point in a 10-point high-tech German strategic plan and has consistently promoted the Internet of Things and services since then. Their effort recognized the importance of social platforms, mobile, analytics, cloud, and the Internet of Things (IoT) to the future of manufacturing and global commerce. Countries around the world have responded to this vision, building their own programs to advance their societies.

This paper offers an overview of the responses in five major global economies in which CIMdata delivers its annual PLM Market & Industry Forum: The United States, Germany, India, China, and Japan. Each country is pursuing the Industry 4.0 vision with a strategy unique to their situation.

CIMdata believes that Industry 4.0 and the digitalization trend sweeping business are really two sides of the same coin. Further, manufacturing companies pursuing these strategies need to have strong PLM practices and enabling technologies to profitably serve markets of one. As witnessed in our global PLM market research, this wave can provide a huge opportunity for the PLM Economy.

The PLM Economy needs to leverage these initiatives in the United States, the other countries discussed here, and just about any country, particularly those identified in the figure below. The Industry 4.0 vision itself is smart and connected, and the driving force behind that vision is profitably delivering smart connected products tailored to markets of one. Creating those smart connected products requires skills in developing mechanical, electrical/electronic, and software elements and weaving those elements into market-ready integrated offerings. Based on CIMdata’s industrial consulting, many companies are still struggling with bringing those disciplines and their intellectual assets together into a cohesive, configuration managed whole. They need PLM software and services providers to help them make this transition.

Figure 1

Figure 1—A Sampling of Country-Based Manufacturing Initiatives

The bigger issue for countries with mature manufacturing bases, like the US, Japan, and Germany, is that they have to maximize the value of their existing physical plant, often by making it smarter and connected, on the way to the Industry 4.0 vision. Companies will need clear, consistent maturity assessments that can capture the status quo and point the way forward. Migration strategies must deliver benefits from an early stage to encourage continued investment. This means bite-sized action steps positioned in a strategic framework.

The same trends driving IT and society—Social, Mobile, Analytics, Cloud, and the Internet of Things—are key enablers for both PLM and Industry 4.0. Product companies need PLM processes and enabling solutions that can provide the necessary end-to-end connectivity spanning the lifecycle. This digital thread will help animate digital twins of products, production, and operation that will enhance understanding and provide new opportunities to advance product quality and features. CIMdata sees platforms and digitalization as core to the Industry 4.0 vision, but current enterprise software and PLM-enabling solutions do not yet support the cyber-physical systems part of the vision.

There are regional variations in Industry 4.0 definitions, and in governmental and industry responses. It really depends on their starting point. Those ahead (the US, Germany, and Japan) want to stay there, others want to lead. Their strategies must address strengths and weaknesses of their countries, and where they want to go. There is plenty of opportunity for the PLM Economy. Over the last few years digital manufacturing revenues have grown strongly, driven by Industry 4.0 investments.

Industry 4.0—A Regional Update is an 18-page whitepaper.

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