KPMG: Manufacturers Must Start Taking Bolder Steps to Secure Value Through i4.0

Few manufacturers have achieved the scale and integration required to drive enterprise value from i4.0, according to a report released by KPMG International.

The report finds that, while there are many manufacturers working towards creating the ‘factory of the future’ or digital enterprise, few have worked out how to apply those capabilities across all of the corners of their operations. Most are still experimenting with discrete pilots or trialing point solutions.

“We believe that the time for small-scale i4.0 experimentation is coming to a close,” notes Doug Gates, Global Sector Chair, Industrial Manufacturing and Global Head of Aerospace and Defense. “Indeed, to win in tomorrow’s competitive environment, we believe that manufacturers will need to start being bolder in their vision, strategies and actions.”

The report, Beyond the hype: Separating ambition from reality in i4.0 is based on a series of global benchmarking exercises conducted earlier this year by KPMG’s Industrial Manufacturing professionals and provides deep insight into the current state of the i4.0 environment.

Low-to-medium level of maturity

The benchmarking exercises found that many organizations demonstrated only a low-to-medium level of maturity in key areas such as demand-driven supply chain, machine-to-machine (M2M) communication, and digital twinning. However, they showed somewhat better maturity in cloud, robotics, Big Data, cybersecurity and Internet of Things (IoT) technologies.

“Gaining experience with i4.0 technologies is certainly important. But we believe that the real value of i4.0 comes, not from the component technologies or capabilities, but rather through the integration of automation, data, analytics, manufacturing and products in a way that delivers unique competitive advantages and unlocks new business and operating models,” added Doug Gates. “And this cannot be accomplished without achieving larger scale, greater integration across functions and a willingness to disrupt the status quo.”

Rather than focusing on pure investment numbers and reported investment returns, this research focuses on identifying how the leaders of today’s i4.0 revolution are driving value from their investments and preparing their organizations to take advantage of emerging opportunities in the future.

The report identifies areas where manufacturers could be taking a more integrated and strategic approach to i4.0 adoption. And, in each area, it offers practical advice for driving adoption and creating value.

The report identifies key focus areas that are creating challenges for manufacturing executives as they work to transform their organizations for the i4.0 environment; issues such as developing the strategy, scaling up the programs, managing the impacts, integrating with products and improving the value network.

“Our discussions with leading manufacturers reinforced our view that success in i4.0 is not about how much you invest; the winners will not be those with the deepest pockets. Rather they will be those that are able to take bold action and clear steps towards developing and executing an enterprise-wide i4.0 strategy and roadmap aligned with their long-term business objectives and operating model,” added Doug Gates.

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