Shaping the Digital Transformation
A global perspective
Thomas Hahn, Siemens AG | September 1st, 2016
Unrestricted © Siemens AG 2016

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Digitalization
changes everything

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Page 2September 1st, 2016

Thomas Hahn

The world is becoming digital – User behavior is radically changing based on
new business models and digital enhanced products

Newspaper,
books

Online media

CinemaVideo
on demand

Telephone booth

Smart phone

Writing letters

Social media

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Thomas Hahn

This takes place also in industrial environments –Considering installed base, lifetime and processes

Manual machine
configuration

Virtualcommissioning

Large
power plants

Virtualpower plants

X-rayphotography

Digital imagine
and analysis

Fixedmaintenanceintervals

Predictive
maintenance

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Thomas Hahn

Massive pervasion of technologies driven by exponential growth ofcomputational power
Communication and Connectivity

Modeling and Simulation

Autonomy and Intelligence

Semantic Technologies and Big Datatarget = rt
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1

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Thomas Hahn

Digitalization impacts business models,value creation processes and products

Business models
modelsBusiness
Smart services
services
Smart

03
Innovative digitalbusiness models

01

Value creation
creationValueprocesses
processes

Digitalization andintegration of verticaland horizontal
value chains

Industrie 4.002
Digitalization of productand service offerings

Smart factory,
factory, smart
smart plant
plant
Smart

Digitally enhanced
products
Smart productsInternet of things and services
Source: ZVEI following PwC
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Thomas Hahn

What is happening in the B2B environment,
and how is this helping to create new business opportunities?

Degree ofmaturityof digitalbusinessmodels

Media

Trade
Mobility

We are seeing
increasing
digitalizationof industries

HealthManufacturing
EnergyDegree of implementation

Source: Accenture – assessment based on the 3 dimensions (business models, value creation processes and products)
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Many initiatives making progress
to innovate manufacturing
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Many initiatives making progress to innovate manufacturing
ExamplesFuture of Manufacturing• Projects for the Futureof Manufacturing

Manufacturing
Renaissance•

ExamplesStrongrobotics
experiences•

Smart
Manufacturing
Leadership
Coalition“Robotrevolution
imitative”

Reform ofindustrial policy•

Focus on IT
integration inindustrial
processes•“Made in China
2025”

High-tech strategy•

Projects for the Future"Industrie 4.0" and"Smart Services World“…
Prognosis of future market size (examples)• IDC (May 2014): revenue forecast IoT $1.9 trillion in 2013 to $7.1 trillion in 2020
• Gartner (Nov 2015): connected things IoT 6.4 billion in 2016, 20.8 billion in 2020
• IDC (CEO Summit 2015): machine generated data 1.5 ZB in 2013 to 18 ZB in 2020
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Thomas Hahn

Increasing complexity leads to new value systems …
… and productivity, speed and flexibility remain the biggest challenges

Product volume

1980 Customized

E.g. smartphonemass production

1955

2000

Mass production

Quality

Globalization

Productivity
Regionalization
Manual1913 production"People can have theModel T in any color −so long as it's black."

e.g. vehicle
configurator

Complexity

Personalization

Speed

1850

E.g. 3D printing

Henry Ford (1913)

Product variety

Flexibility

Based on: The Global Manufacturing Revolution; sources: Ford, beetleworld.net, bmw.de, dw.de.
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Thomas Hahn

The digital transformation needs a broad-based foundation
Plattform Industrie 4.0 in Germany

Industrie 4.0…
… is a project of and for society as a whole …
… which requires close cooperation among theprivate sector, academia, politics, trade unions
and associations …
… and needs to be translated into practice andbe implemented right now.

The Platform Industrie 4.0 provides support for the coordinated and organized transition
to the digital economy in Germany.
Source: Platform Industrie 4.0
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Plattform Industrie 4.0
Organization and working groups
Chair
Ministers Gabriel, Wanka
Representatives from business, trade union, academia
Political integration
Technical and practicalcompetences, decision-making

Political direction, societal actors,
multipliers

Steering Committee(business)••

Led by businesses, with the participation ofBMWi, BMBF
Chairs of working groups and other guests/
ambassadors

Development of industrial strategy, technicalcoordination, decision-making andimplementation

Strategy Committee(Politics, industry associations,trade union, academia)••••

Working Groups
•
•
•
•
•

•

Reference Architectures, Norms andStandardisation
Research and Innovation
Security of Interconnected Systems
Legal Framework
Employment, Apprenticeships and Life-Long
Learning

Working bodies with technical and practicalcompetences; departments involved: BMWi,
BMBF, BMI, BMJV, BMAS••

Chair: Secretary of State Machnig, Secretaryof State Schütte
Representatives of the Steering Committee
Representatives of the Federal Chancellery,
BMI
Representatives of the Federal States
Working Group
Representatives of the industry associations(VDMA, ZVEI, BITCOM, BDI, VDA, BDEW)
Representatives of the trade union (IGMetall)Representatives of the academia (FhG)

Agenda-Setting, political steering, multipliers

Academic Advisory Board

Market-linked activities

Industrial consortia
and initiatives
Market implementation:
Testing, Use Cases

International
standardisation
Standardisation bodies (DKEand others), consortia

Reference architectures, standards and norms
Chair: Dr. Peter Adolphs, Pepperl + Fuchs
Research and innovation
Chair: Johannes Diemer, Hewlett Packard Enterprise
Security of networked systems
Chair: Michael Jochem, Robert Bosch GmbH

Legal Framework
Chair: Dr. Hans-Jürgen Schlinkert, ThyssenKrupp
Work, education and training
Chair: Dr. Constanze Kurz, IG Metall

Project office as service provider
Coordination of the network, organisation, project management, internal and external communication

Source: Platform Industrie 4.0
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Plattform Industrie 4.0
Overall guiding principles

Customerbenefits first

Build on own
core competencies
and strengths‒ Industrie 4.0 will be successful only if there is a market for Industrie 4.0 solutions.
‒ We need to create solutions that generate customer benefits.

‒ We have profound knowledge of the physical world, e.g. machines, automation,mechatronics.
‒ We have a deep understanding of the core value creation processes inmanufacturing industries.
‒ Digitalization offers the opportunity to bolster these strengths.

Use-case based
approach‒ Heterogeneity of manufacturing industries does not allow a one-size-fits-all approach.
‒ Elaboration of sets of problems and solution approaches.
‒ Not every elaborated problem may be of interest to a specific customer.
‒ A specific solution approach can address several problems.

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Plattform Industrie 4.0
Reference architectures, standards and norms

Further development of the RAMI 4.0-Model(Reference Architecture Model Industrie 4.0)
• Development and Publication of the structure of theadministration shell• Design of an “Industrie 4.0-grammar”

Standardisation and international cooperation• Initiating and support of DIN SPEC 91345 Part 1• Development and coordination of the requirements for
network communication• Initiating a test-bed “RAMI 4.0-Fabrik” as an EUfunded project (Consortium outside the Platform)• Foundation of a “Semantic Alliance” with w3c, IIC andother actors
Source: Platform Industrie 4.0
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Plattform Industrie 4.0
Research and Innovation

•

•

•

Development and documentationof various scenarios regarding thefuture development of Industrie 4.0
Criteria for the qualification of
test-labs, recommendations fordevelopment of test-beds and CoE’s
Development of migration
guidelines for the support of SME’s

R&D-Roadmap and innovation
strategies•

identify research and innovation
requirements from the industry
perspective and set priorities

Scenarios mapped onvalue-add networks that integrate Life Cycle / Supply Chain Mgt.
External World
MarketingCustomer

Sales

IPE

SP2

Product
Development

Product Line
Planning

KRW

Product Line
MaintenanceDiscontinuation
Management

SAL
External World

Industrie 4.0 scenarios

Factory &Prod. Planning

Productionengineering

Recycling

Maintenance andDisposal Planning

AGP

DDA

TWP
VBS

Production

WFF
Erection

AUP

Factory
Operation

After-Sales
Services

Disposal
MaintenanceFactory 2
ServiceproviderMachineproviderOperation

Manufacturing Company

Supplier
Product type related

Production system related

External World
Order related

Service related

Source: Platform Industrie 4.0 Graphic based on: GMA 7.12. (vdi Fachausschuss “Industrie 4.0”)
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Plattform Industrie 4.0
Research and Innovation - Scenarios
AGP – Order-Controlled Production: describes dynamic composition of necessary production resources for an order
WFF – Adaptable Factory: focuses on a production resource with respect to an adaptable design and addresses theconsequences for supplier and system integrator
SAL – Self Organizing and Adaptive Logistics: considers entire inter- and intra-logistics
VBS – Value Based Services: describes the design of service value networks if product- and/or process information isprovided based on an IT-platform
TWP – Transparency and Adaptability of Delivered Products: focuses on a product and describes design of transparency
and adaptability of delivered products based on an IT-platform
AUP – Operator Support in the Production: describes future support of operator in the production based on newtechnologies
SP2 – Smart Product Development for Smart Production: describes collaborative product engineering, starting with productrequirements and designing seamless engineering workflows to deliver necessary information to production and service
IPE – Innovative Product Development: describes new methods and processes in product development with focus on earlyphases
DDA – Seamless and Dynamic Engineering of Plants: addresses increasing dynamic in plant engineering and importanceof validation of engineering decisions
KRW – Circular Economy: considers (delivered) products up to recirculation of its physical parts in an overall material cycle
Source: Platform Industrie 4.0
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Plattform Industrie 4.0
Security of Interconnected Systems

IT-Security for SMEs•

introduction of “Industrie 4.0 security” aspects to SMEs•

help facilitating the necessary confidence between value chain partners

IT-Security within education and training•

define the new knowledge and experience required of employees inrelation to Industrie 4.0 security issues

Source: Platform Industrie 4.0
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Plattform Industrie 4.0
Legal Framework

Highlighting the fields where legislative action is needed•

Analysis of how the present regulation, which essentially addresses humancontrolled behaviour, needs to be adapted to cover machine-controlledcommunication

Focus on the following fields of law•

Civil Law and Civil Procedure Law•

IT- and Data Protection Law•

Product Liability Law•

IP-Law•

Labour Law

Source: Platform Industrie 4.0
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Plattform Industrie 4.0
Work, education and training

Work, education and training for Industrie 4.0•

In networked information and production spaces, humanmachine interfaces and cooperation must be designed to serve
the interests of the people involved and the innovative capacityof enterprises•

The organisational frameworks for coalescing value networks
must be designed to facilitate working and learning within theprocesses.

•

Training and qualification programmes in hybrid fields must be
designed to accommodate operational skills development,
process-oriented learning and new forms of learning.

Major competencies areaffected by “Industrie 4.0”

Status today

Future target

Source: Siemens

Source: Platform Industrie 4.0
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A change that harbors economic risks

Where do the challenges lie for enterprises?
64%

Need for capital investments

57%

Scarcity of skilled workers

50%

Lack of standards
Security concerns
Unclear economic benefit

46%
38%

Source: Platform Industrie 4.0, Bitkom Research October 2015; multiple answers possible.
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Where Industrie 4.0 can be tested for practical use

As an aid for getting started, the platform offers
for small and medium-sized enterprises …

Test

Interconnect

Design… an overview of extensive advisory and coordination
possibilities.
Source: Platform Industrie 4.0
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Labs Network Industrie 4.0 –Where Industrie 4.0 can be tested for practical use

Plattform Industrie 4.0

recommendations

Standardization(DIN, DKE, IEC, … OPC, OMG)

Experiecnes

experiences

Recommendations

Information

Application

Technology roadmap

Labs Network Industrie 4.0

Testlabs (inter-)national
Centers for certification
Testing of innovation

Enterprises
Source: Labs Network Industrie 4.0
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End-to-end digitalization and integration of engineering along
the value chain – Virtual and real world converge
Holistic approach: Integration und digitalization of the value-add chain enabled by vertical software
Vertical Integration
Integrated and networked
production systems

Productionengineering

Production
execution

Services

Production
planning

End-to-end
Engineering
End-to-end digitalengineering across theentire value chain

Product
designHorizontal
Integration
Horizontal integration
through value networks

Lifecycle & Data-driven Services
Manufacturing Execution Systems
Automation Engineering
Simulation
CAx
Collaboration backbone

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Examples

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Use cases –Where Industrie 4.0 is already being practiced today in Germany>200

examples of Industrie 4.0
applications and products …

… from large and small enterprises in a wide
range of different industry sectors.
Number of employeesof the enterprises

More than 15,000
employees

5,000 – 15,000
employees

Source: Platform Industrie 4.0, www.plattform-i40.de/I40/Landkarte

28%

28%

employees

15%29%

1 – 250

250 – 5,000
employees

Multiple choices possible

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Siemens AG, Berlin Gas Turbine Factory –3D printing of gas turbine components‒ The laser sintering process can be used to produce small batches
at a lower cost and much more quickly than using the costly castingprocess.
‒ This process is used to make prototypes in order to integrate thetesting of certain gas turbine components into the productdevelopment process. Now even aggressive component designs
can be quickly evaluated and sent back to the design cycle. The
result is greater efficiency increases.

"The innovative selective laser sintering process shortens
production times compared to conventional production processes,
so much so that function-critical components can already betested during the product development stage."
Sebastian Piegert, Siemens AG.
Source: Platform Industrie 4.0, Siemens AG, Berlin Gas Turbine Factory.
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Optimization of wind parks (Project ALICE)
ResultQ

1target = rt

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1% increase ofannual energy
with optimized
control policy

Q

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Wind power

Wind turbines

Autonomous learning– Market drivers– Customer needs– Aerodynamics– Meteorology– ~12,000 installed globally– Mechanical engineering– Sensor properties– Controller design– Neural Networks– Robust policy generation
despite very noisy data

Domainknow-howContext
know-howAnalytics
know-how

Smart
Data

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Health check for CERN's Large Hadron Collider
Result

Early warnings
to increase
operating hours

Automation infrastructure

Automation components

Rule and pattern mining– Market leader in industry
automation– Strong presence in all
business areas– Complex: Hundreds of
SCADA systems and
SIMATIC control systems– >1 terabyte of operational
data generated per day– Detect fault patterns

Domainknow-howContext
know-howAnalytics
know-how

Smart
Data

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Thomas Hahn

Questions & Answers
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