Internet of Things and Smart Manufacturing

Next Paradigm for the Manufacturing Sector

Karthik Sundaram
Jithendranath Rabindranath
July 10, 2014

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Presenter’s Profile
Functional Expertise

Strategic Market Research expertise in the domain of Industrial Automation and Process
Control.

Technical expertise in the field of Industrial Automation. Particular expertise in:
Engineering, Design and Commissioning and of Safety Systems (Invensys Triconex)
Industry Expertise

More than three years of intensive research expertise in the markets of distributed
control systems (DCS), programmable logic controllers(PLC), human machine interface
(HMI), supervisory control and data acquisition (SCADA) and product lifecycle
management (PLM).
Karthik Sundaram
Specialized focus on future manufacturing process frameworks, with specific focus in the
Industry Analyst
across the concepts of Industry 4.0/Smart Manufacturing.
Frost & Sullivan
India
Functional Expertise

Functional expertise in logistics and supply chain management industry, including
projects mainly focused on:
oWarehouse Management System : Receiving and put-away, Replenishment and
picking, Packing and loading
oProject Management : Monitoring the work and cost, motivating the team, reporting
progress back to the organization, working with the team to solve project problems
and achieving the team goals.
Industry Expertise
Jithendranath
Experience base covering broad range of sectors, leveraging long-standing working
Rabindranath relationships with leading industry participants’ Senior Executives in
Research Analyst oEffective Transportation
Frost & Sullivan oSupply Chain Management
India
Agenda

Coverage Dimensions

Industry 4.0/Smart Manufacturing: The Vision
and its Implications

Industry 4.0/Smart Manufacturing -
Functional Attributes

Challenges for IoT in Manufacturing

Industry Convergence Matrix: IT and
Manufacturing

IoT and Smart Manufacturing

Enabling Technology Platforms

Technology Convergence & Applicability

Funding Initiatives & Economic Scenario

Key Global Initiatives & Practices

Futuristic Preview

Investment Opportunities

Strategic Insights

Industry 4.0 and the End-user Equation
Industry 4.0/Smart Manufacturing: The Vision and its
Implications
The term “Industrial” in this context, refers to all
segments within the industrial world associated with
Internet of
discrete/process industries. It’s scope is inclusive of Industrial Cyber Things
enterprise applications in board rooms to Security
manufacturing production units in the shop floor. Cloud Platforms
Big Data
Industrial Revolution 1.0 – 3.0 Analytics Technology
• Mechanised Processes
• Mass Production
• Production Automation
Industrial Revolution 4.0 - Pursuits Industry Convergence

• Product Innovation Collaboration

Industry 4.0
• Increased Collaboration
• Operational Process Enhancement Flexible Production
• Cyber-Physical Production Models
Mass
Customization
Strategic Trends Processes

Convergence of applications will form crux of

new advancements Sustainable Internet of
Manufacturing Services
Energy efficiency and sustainability to gain
greater business focus
Lifecycle
Greater presence of mobility and web-based Assessment
information systems
 Industry 4.0/Smart Manufacturing - Functional Attributes

 Improved asset
Services as utilisation
New Profit  Energy
Centres optimisation

Industry Industry 4.0/

Convergence Smart ERP
Manufacturing
Integrated
$ Enterprise PLM
Ecosystem
 Improved cost benefits
 Reduced total cost of
ownership MES

Collaborative
IT
Industrial  Fosters Innovation
Cyber  Reduced time-to-market
Security  Improved productivity
 Minimal capital expenditure
Enabling enterprise integration  Efficient training mechanisms
Enhanced production safety
 Challenges for IoT in Manufacturing

Industry Fast-changing Competitive

convergence alters consumer trends pressures driving Risk of Cyber
competitive impacts enterprise Ineffective Attacks
landscape stability innovation

Multiple challenges are set to impact

enterprises during the course of
their evolution. But the biggest
challenge that can derail progress is
“Industrial Cyber Security”

Increasing Growing
 Maximised production @minimal Burgeoning
commodity Energy
Competition
energy - A catch 22 situation costs Demand
 Convergence of industries
 Rise of disruptive technologies
Global Uncertain Volatility in
 Weak manufacturing output
Economic Geopolitical Government
 Lower profit margins Woes Landscape Policies
 Regulatory Pressures

6
 Industry Convergence Matrix: IT and Manufacturing
Industrial IT Market: Manufacturing Sector, 2014
Professional Core Industry Manufacturing Enterprise

EMI Ethernet Devices

Cloud IT Infrastructure VR Predictive
Maintenance
VR Simulation Systems Digital
Manufacturing
Asset Management Apps
Wireless
Communication

Industrial 3D Operator Training

Mobile Internet Assistance
Maintenance
Customer
Focus 3D Printing

Social Media Apps

Remote Home Control Warranty

Apps Management Apps
Cyber Security
Apps

Consumer Commercial IT

Information & Communication

Industry Focus Manufacturing
Technologies (ICT)
Note: Top five markets are in brown text boxes. Source: Frost & Sullivan
IoT and Smart Manufacturing

The Internet of Things (IoT) is a
scenario in which the information is
gathered from sensory equipment and
connected devices that are uniquely
identifiable and emit massive amounts
of data.

An increasing trend towards the realization
Increase in popularity with the
of plant wide optimization, information development of readily available
aggregation and analytics, network sensors, real time analytics and
infrastructure and multi disciplined control robots.
and intelligent assets are driving the
adoption of the this technology in various
market sectors.

Benefits Sensors

Enterprise-wide traceability Megatrends Influence

Converged supply chain automation
Internet
New Business models and
of Computers
Innovating to Zero are the two mega

Efficient resource utility Things trends that are expected to achieved

Process optimization through enabling IoT with smart

Data-driven sensor awareness Video manufacturing.

Enhanced data-driven decision analytics

Cloud Datacenter

Analytics Engine Intelligence

User
Enabling Technology Platforms

Electronics Sensors
• Smart Sensors
• RFID
• SCADA
• Touch & haptics
• Wireless Sensors & Networks
• Gesture recognition
• MEMS/Nanosensors
• Advanced displays
• Energy Harvesting
• Wireless charging
•Near field communication (NFC)

Applicability

Manufacturing/Production Internet
Video
Inspection • WPAN’s
• CCTV
Security • Wi-Fi
• Stereo Cameras
Service Support • 3G
• 3D Cameras
Business Operations • LTE

Software
Communication • Information and discovery services
• Cloud Platform (IDS)
• Big Data • Contiki
• Data Centres • Mantis
• Augmented Reality • GPS
Technology Convergence & Applicability
Others ICT Sensors Electronics Applications

Augmented RFID
Reality SCADA
GPS

Wi-Fi
NFC
SCADA
Big Data RFID
RFID
WPAN’s Cloud
Smart NFC
Sensors
RFID
RFID
3G MEMS

GPS Smart
Sensors
3G

MEMS
Cloud
Augmented
Reality
GPS 3G
Wi-fi Big Data
Cloud

GPS
 Funding Initiatives & Economic Scenario

The UK Government has announced a funding
of $61 Million for companies working on

In the USA, corporate and venture
developing the IoT platform in order to enable it
capital funding are driving initiatives.
in different application sectors.

Puppets Lab, US, received about $45.5
million from venture capital funding for
development of IT automation software.

The EU Commission under
its horizon 2020 initiative has
granted funds for various
projects.

US - GDP –

Advanced Manufacturing
Manufacturing – 2013
Control Systems, Ireland Europe - GDP –
20%; Growing trend
received $39 million from Manufacturing – 2013
venture capital funds. 16% ; Declining trend

Though Asia is the

manufacturing base for several
products, smart manufacturing
has not garnered significant
interest.
Key Global Initiatives & Practices

High-Tech Smart Factories for Higher Productivity and Efficiency

•A key market player in Germany has built a futuristic plant with high-tech
facilities.
• It has smart machines that are coordinated with the company’s control devices.
•This has enabled the company to significantly reduce the lead time and material
wastage thereby improving the overall process efficiency.

Adoption of Smarter Solutions to Boost Growth

•A key market player in the USA, has enabled the Industrial internet in its plant
and it is expected to play a critical role in the company’s growth over the next few
years.

Collaborative Model Leading to Realization of Factories of the Future

•One of the major players in the USA market has collaborated with a university for
the creation of an appropriate, smart IT infrastructure.
•They are showing manufacturing companies a realistic route to the intelligent
factory of the future.
 Futuristic Preview
A company has an R&D center in North America, testing operations
in North America and Europe, and sourcing of materials for the
finalized design happens in APAC and ROW. Finally, the item goes
into manufacturing at a site in China.

Customer

Headquarters Testing
Manufacturing

R&D Facility

Through sensors located across the

supply chain, information is
transmitted to the appropriate Sourcing
systems and personnel from each
segment, each region, and each Customer
business unit.

A typical Internet of things environment fits into a company’s exhaustive supply chain and transmits
information through a robust network infrastructure to enterprise solutions, which makes use of the data that
is obtained.
 Investment Opportunities
Countries across the globe consider the
manufacturing sector to be one of the
key sectors to increase the economy of
the country.
With IoT , the manufacturing
companies are expected to achieve
a number of benefits in terms of
optimizing their production
process by reduced lead time,
increased efficiency and reduction
in time taken for the product to
reach the market.
IoT is considered to be one of the
key enablers for realization of
smart manufacturing/factories of
the future concepts leading to
improved productivity and
efficiency.
In the USA and Europe there has been an
increased interest in achieving the
Industrie 4.0 and smart factories in the
near future. IoT is seen one of the
technology for enabling the same.
Other than the manufacturing sector,
IoT is expected to have an impact in
various other market sectors such as
retail, healthcare and infrastructure
What is it for thereby increasing the business
the opportunities.
investment
community?
IoT in Smart Manufacturing will
provide a gateway for
commercial ICT vendors to enter
the manufacturing space.
With the advent of IoT in Smart Manufacturing,
existing industrial suppliers are set to witness
increased competition from commercial IT
vendors in the future.
Strategic Insights
Commercialization •Active funding for R&D activities and commercialization, in addition to
Strategy demonstrating increasing the capabilities.
•Improving the product features will further increase the wide scale adoption by
users for their various needs.

•Increased awareness of the concept in order to demonstrate the capabilities and

Marketing Strategy
advantages of this novel technology platform to realize futuristic efficient
factories.

•Increasing the capabilities in order to cater to various manufacturing industries

Target Markets and targeted specific application sub- segments.
•Asia
Asia is the manufacturing hub, initiatives to gain the attention of the stakeholder
ecosystem in this region.

•Expanding the strength of service providers and stakeholders in the market will
Ecosystem Diversification help users to adopt the IoT concept without having to invest a lot of money in the
initial installation.

•It is beneficial if the incumbent join with one of the key players and enter the
Co-opetiton Model – market. Through this collaboration, the incumbent can have successful sales and
Collaborate with Major can also avoid the need of a creating a positive brand image considering it has
Tier Players & Compete never commercialized its products earlier. Additionally, it can also avoid the
growing pains to establish itself in the market, especially when it’s competitors
are considered as giants globally.
Industry 4.0 and the End-user Equation
What the End-user wants: The Missing Link in I4.0 Discussion
Industrial vendors have embraced the idea of Industrie 4.0 within their product framework, repositioning their
existing solutions in line with this industrial paradigm. However, in the discussion on I4.0 and the Smart Factory
initiative, there is a need to understand end-user perception. We, at F&S, firmly believe that the end-user factor
will decide the future of the I4.0 vision.

Industrie 4.0: Key Stakeholders Macro Challenges

Global Uncertain Volatility in
Vendor Proposition Economic Geopolitical Government
Woes Landscape Policies

State Policy
Increasing Growing
commodity Energy
costs Demand
End-user Acceptance

Fast-changing Competitive
Market

Burgeoning consumer trends pressures driving

Competition impacts enterprise Ineffective
stability innovation
Challenges
Functional

Industry
convergence Risk of Cyber
alters competitive Attacks
landscape
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For Additional Information

Karthik Sundaram
Jithendranath Rabindranath
Industry Analyst, Frost & Sullivan
Research Analyst
Industrial Automation & Process
Technical Insights, Frost & Sullivan
Control (Europe)
+91-44-6681-4134
+91-44-6681-4035
jithendranathr@frost.com
karthiks@frost.com

Kasthuri Jagadeesan
Program Manager
Technical Insights, Frost & Sullivan Thank You
+44-(0)-1865-398-625
kasthuri.jagadeesan@frost.com