IBM's Point-of-View of Industry 4.0, and how IBM can enable manufacturing industry in the Cognitive Era

1. Industry 4.0 Digital Reinvention
in Manufacturing Industry
MK Koh, Asia Pacific Electronics Industry
Ethan Chee, Client Manager for Electronics Industry, Singapore January 2016

2. Our Points of View on Industry 4.0
The Structure Approach and Component Building Blocks
Points of Discussion
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2
Digital Reinvention Use Cases
2
3
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3. Several initiatives around the global are aiming to bring Manufacturing Digital Reinvention, creating what is been called
the 4th industrial revolution
How Germany is dealing with the fusion of the online world and the world of industrial production.
"Those who are the leaders in the digital domain will take the lead in industrial production."
Leading the USA industrial sector transformation into a networked, information-driven environment
Providing an open Smart Manufacturing Platform to support real-time, high value applications.
Transform China from a manufacturing giant into a world manufacturing power.
Priorities include improving manufacturing innovation, integrating IT and OT and promoting
Global Manufacturing Initiatives
Bringing innovation to the manufacturing process in Korea, expanding the use of smart factories
Developing core technologies related to the Internet of Things, 3-D printing and big data
Innovation in Manufacturing 3.0
Priorities include improving manufacturing innovation, integrating IT and OT and promoting
service-oriented manufacturing.
France industrial plan to enable the industrial sector for the next industrial revolution.
Assist companies in their transformations towards a world where digital is closing the gap between
industry and services.
UK strategic initiative that aims to revitalize the manufacturing industry.
Consists of technology and innovation centers that work as gateways to access the best
manufacturing talent and facilities in the country.
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4. The 4th Industrial Revolution
First
Industrial
Revolution
based on the introduction of mechanical
production equipment driven by water
and steam power
Third
Industrial
Revolution
based on the use of electronics and IT to
further automate production
Second
Industrial
Revolution
based on mass production achieved by
division of labor concept and the use of
electrical energy
Fourth
Industrial
Revolution
based on the use of cyber-physical
systems
From Industry 1.0 to Industry 4.0
Degree of
complexity
Fourth
First mechanical loom,1784
1800 1900 2000
First conveyor belt, Cincinnati
slaughterhouse, 1870
First programmable logic
controller(PLC) Modicon
084,1969
TODAY First
Second
Third
http://www.bmbf.de/en/19955.phpIndustry 4.0 web link : 4

5. Trends towards Industry 4.0 : The objectives and the path
Horizontal
integration through
Value
Networks
The journey towards Industry 4.0The Primary Goal of Industry 4.0
Key Features
Primary Goals
• Peer to peer eco-system
• Meet individual and highly customized
demand
• Profitable Lot Size 1
• Software defined products
Based On
End-to-end
engineering
through entire
Value Chain
Vertical integration
and
networked
manufacturing
systems
• Cyber-Physical systems
• Internet of Things
• Smart Factories
• Smart supply chains
• Smart products
Key Features
• Real time sense and response
• Predictive and prescriptive analytics
• Dynamic business processes
• Optimized decision making
Watch the video: https://www.youtube.com/watch?v=GKhSTjraHlU

6. Whatever the estimation we consider, the potential economic impact is huge… and 70% is in B2B
Factories
• Operations optimization, predictive maintenance,
inventory optimization, health and safety
1,210 - 3,700
160 - 930Worksites
• Operations optimization, equipment maintenance,
health and safety, IoT-enabled R&D
“The economic impact of IoT applications could be
from $3.9 trillion to $11.1 trillion per year in 2025” Home Vehicles Cities Outside
The Industry 4.0 Economic Impact with IoT
Source: McKinsey Global Institute: The Internet of Things: Mapping the
Value Beyond the Hype
from $3.9 trillion to $11.1 trillion per year in 2025”
“Business-to-Business applications will generate
nearly 70% of potential value enabled by IoT
and the 4th Industrial Revolution”.
9 Settings
gave us a cross-sector view of a
total potential impact of $3.9 trillion-11.1
trillion per year in 2025
Home
Chore automation
and security
$200B-350B
Vehicles
Autonomous
vehicles and
condition-based
maintenance
$210B-740B
Cities
Public health and
transportation
$930B-1.7T
Outside
Logistics and
navigation
$560B-850B
Human
Health and fitness
$170B-1.6T
Worksites
Operations
optimization health
and safety
$160B-930B
Retail
environments
Automated
checkout
$410B-1.2T
Factories
Operations and
equipment
optimization
$1.2T-3.7T
Offices
Security and
energy
$70B-150B

7. Autonomous
Systems
Internet of
Services
Internet of
Things
Ability to connect and manage
devices
Near real-time data collection
Insights of what is happening
New business models
Internet of Things
New delivery channels and business models
Internet of Services
Smart and networked products
Ability to communicate thru the Internet
Self diagnose / self awareness
Autonomous Systems
The emerging technologies that path the way for Industry 4.0
Technologies enable Industry 4.0 Digital Reinvention
Industry 4.0Industry 4.0
Services
Analytics &
Cognitive
Flexible
Manufacturing
ThingsNew business models
Flexible machines
3D printing
Machine to machine
Mixed human / robotics
New standards and protocols
Vertical and horizontal integration
Flexible Manufacturing
New delivery channels and business models
Integrations across value chains
The API economy
Embedded in equipments, products and
services
Predict what may happen
Prescribe actions for best outcomes
Self learning
Communicate in natural language
Analytics & Cognitive
Sources: Acatech: Recommendations for implementing the strategic initiative Industrie 4.0, April 2013;Gartner: Industrie 4.0- The Ten Things the CIO Needs to Know; Deutsche Bank Research: “Upgrading of Germany’s industrial capabilities on the horizon “, April 2014
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8. Industry 4.0 Digital-Reinvention in manufacturing is set to redefine every participant in the manufacturing
value chain, from R&D, supply chain, and factory operations to marketing, sales, and service
DIGITAL DATA
The growth in data volumes, computational power and the
emergence of analytics and business-intelligence capabilities
CONNECTIVITY
Interconnecting the entire value chain via mobile or fixed-
line high-bandwidth telecom networks synchronizes supply
chains and shortens both production lead times and
innovation cycles.
Technologies enable Industry 4.0 Digital Reinvention
Mckinsey and Company “Digital manufacturing: The revolution will be virtualized” August 2015 and Roland Berger: “THE DIGITAL TRANSFORMATION OF INDUSTRY” February 2015
AUTOMATION
New forms of human-machine interaction such as touch
interfaces and augmented-reality systems
DIGITAL CUSTOMER ACCESS
The (mobile) internet gives new intermediaries direct access
to customers to whom they can offer full transparency and
new kinds of services with the rise in improvements in
transferring digital instructions to the physical world
Four Disruptions/Levers Drive the
Digitization of the Manufacturing Sector
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9. The four levers of digitization are supported by new enablers and propositions. New players from other industries can
leverage innovative business models to acquire a substantial level of value added.
Emerging Initiatives and opportunities ….
C2M : Customer to Manufacturing
C2B : Consumer to Business
F2C : Factory to Consumer
O2O : Online to Offline
Drivers of digitization
Technologies enable Industry 4.0 Digital Reinvention
Source: Roland Berger: “THE DIGITAL TRANSFORMATION OF INDUSTRY” February 2015
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10. Cloud-based, as a Service
Dynamic / Self Configured Processes
Closed Loop
Cognitive Value Chain /
Human Collaboration
Cloud-based, as a Service
Pre-Defined / Automated Processes
Closed Loop
Human Supervision
On- Premise, Owned
Provide insights
Open Loop
Human Required for Action
IBM Vision & Strategy to realize full potential of Industry 4.0 Digital
Reinvention
CPS-1
CPS-2
CPS-n
Watson
CPS-1
CPS-2
CPS-n
▲Specialized Model 1 ▲Specialized Model 2
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11. The IBM Industry 4.0 Digital Manufacturing
Connecting machines, technology and processes to enable autonomous control and operational insights
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Industry Cloud
Integrated MESConnected Equipment
Transparent Supply Chain

12. The IBM Industry 4.0 Smart Factory – Overall Approach
INSTRUMENTED
Ability to measure, sense and monitor the
condition of almost everything.
INTERCONNECTED
People, systems and objects can communicate and interact with
each other in entirely new ways.
INTELLIGENT
Respond to changes quickly and accurately, and get better results by predicting
and optimizing for future events.
Smart Manufacturing
Comprehensive set of capabilities to enable smarter decisions faster
Physical Meets Digital
Linking physical world assets, resources and infrastructure with the digital world of
event processing, business analytics and optimization.
Information Model Standard-Based Standardized Metrics Event Management
Prediction Visibility Collaboration Analytics & Optimization
Smart Manufacturing Enablement
One open channel to all data required to operate assets in real time

13. Scope: Industry 4.0 is an emerging and on-going roadmap with different target
scope at different phase
Phase I
INTRA-FACTORY &
INTRA-ENTERPRISE
Phase II
E2E CONNECTIVITY
ACROSS THE VALUE CHAIN
Phase III
SOFTWARE DEFINED
MANUFACTURING
Interconnection of
machinery and systems
across the factory and
across the enterprise,
enabling major
Interconnection across
the entire supply chain
leads to further gains in
efficiency, productivity
and flexibility
New business opportunities
enabled by globally
interconnected cloud of
enterprises
Enables profitable lot size 1
P2P Value Network Creation
B2B Value Chain
Integration
enabling major
productivity gains and
increased
flexibility/agility
M2M / M2B
and flexibility
B2B
Enables profitable lot size 1
Amazon of manufacturing
P2P
M2B
Intra –
factory /
enterprise

14. Enterprise Network (Business Floor)
Asset
Management
Business
Process
Product
Quality
Management IoT Cloud Data Partners
Security
Analytics
Portal
Web Apps
I4.0 Platform
Architecture and Building Blocks: Industry 4.0 is an emerging and on-going
roadmap with different target scope at different phase
Business component (e.g. design, demand,
supply and etc.) need to be developed as
interoperable services in a horizontal
integration platform to support a E2E/P2P
value network
Horizontal Integration
Realtime Network (Shop Floor)
Production
Process
Control Sensors Data Machine Events Mobile

20. Common Use Cases: Production Optimization (3 of 3)
CPS Asset Health
INSIGHTS
Sub-assembly / component lifetime wear indicators
Leading failure indicators
Engine alerts
Overload / over speed alerts
Permit to work
Use of safety equipment
Unsafe condition of equipment
Fatigue
Alertness
Fall / Injury
Production real-time status
Equipment utilization
Best time to perform maintenance
CPS Worker
CPS Production
Optimization
Orders
Customer
Order quantity, price, due date
Production routing
Best time to perform maintenance
Worker productivity
Worker equipped with wearables
Production data
Production status
Inventory (WIP, FG..)
Equipment status
Workstation status…
Real-time
Data Exchange
Real-time
Data Exchange
Real-time
Data Exchange

21. The Next Wave of I4.0 Digital Reinvented Manufacturing Use Cases
Connected Sales & Connected OperationsConnected ProductsConnected Sales &
Marketing
Connected Products
Customer Insights and Opportunities
Flexible Billing and Pricing Models
New Value Added Services
Connected Product Usage Analysis
Connected Product Quality Analysis
Connected Software Management
Asset and Materials Tracking
Connected Operations Intelligence
Unified Key Performance Indicators
Real-Time Asset Health Monitoring
Operation Management Improvement
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22. The Next Wave of I4.0 Digital Reinvented Manufacturing Use Cases
Connected CustomersConnected Services Connected InformationConnected CustomersConnected Services
& Support
Connected Information
& Operation Technology
Monitoring and Diagnostics
Remote Services
Automated Service Execution
Condition-based Predictive Maintenance
Connected Service Parts Planning
Warranty Cost Management
Usage and Performance Dashboard
Customer Self-Service
Product Personalization
Flexible Product and Asset Connectivity
Identify and Security Management
Scalable IoT Operation Management
Seemless IoT Data Integration
Automated Analytics and Actions
Rapid IoT Application Development
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23. To help choose the right data set, technology etc., manufacturing leaders can use a “digital compass”. Cross-functional
discussions that will help companies find the levers that are best suited to solve their particular problems.
The ‘digital compass’ helps companies find tools to match their needs.
“Digital Compass” – Guideline for Industry 4.0 Digital Reinvention
The compass consists of eight
basic value drivers and 26
practical Industry 4.0 levers.
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24. The Steps Ahead?
1. 2. 3.
Explore unique industry
requirements. Collaborate with
Industry and Technology player to
identify your business priorities and
challenges.
Identify opportunities for
innovation and growth.
Determine where best to deliver
business process and technology
improvements and innovation.
Develop a road map and
partnership model.
Leverage productivity and innovation
enhancements to accelerate
measurable business outcomes
that support your strategy.
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25. Made with IBM
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ContactsContactsContactsContacts
Email • kohmk@sg.ibm.com
LinkedIn • https://sg.linkedin.com/pub/meng-kuang-koh/5/16b/473
Email • cheekte@sg.ibm.com
LinkedIn • https://sg.linkedin.com/in/ethanchee