INDUSTRY 4.0 | The fourth industrial revolution…

The first significant driver for the advance of industrial internet solutions
lies in the opportunity to integrate and better manage horizontal and
vertical value chains.

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…characterised by the increasing
digitization and interconnection of products, value chains and business
models — has arrived in the industrial sector.

The first significant driver for the advance of industrial internet solutions lies in the opportunity to integrate and better manage horizontal and vertical value chains. Companies surveyed expect more than 18% higher productivity over the next five years. While today only one fifth of the industrial companies have digitized their key processes along the value chain; in five years’ time, 85% of companies will have implemented
Industry 4.0 solutions in all important business divisions.

The digitization and interconnection of products and services (internet of things/services) is a second important driver. It will contribute strongly to ensuring competitiveness and promises additional revenues of 2% to 3% per year on average. When applied to the German industrial landscape as a whole, additional revenues reach up to €30 billion per year. For the European industry sector, additional revenues amount to €110 billion annually.

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A third major driver are the newly emerging, often disruptive, digital business models that offer significant additional value to customers through tailor-made solutions. These new business models are characterised by a considerable increase of horizontal cooperation across the value chains, as well as the integrated use and analysis of data. They are therefore capable of better fulfilling customer requirements. The various opportunities, the large extent of change and the elevated need for investments make the industrial internet one of the most important topics for corporate management. However, the numerous challenges that the transition entails are also not to be underestimated. Besides the partly still unclear business cases for the industrial internet at company level, industry standards have to be defined and agreed upon and questions need to be answered, for example, in the area of data protection. The respondents also consider the required qualification of employees at increasingly digitized companies to be a major obstacle. Policy makers and industrial associations can provide significant support with these issues.

Come and listen to experts how INDUSTRY 4.0 will shape the landscape of CONSUMER PACKAGED GOODS in the next few years.





Source: © 2014 PwC | INDUSTRY 4.0

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