Study of US Manufacturing Digitalization Exposes Significant Data Gap

Ian Wright posted 2017-06-08
Simulation of an automated production line. (Image courtesy of Bridgeland Copyright.)
As part of the emerging fourth industrial revolution—a.k.a. Industry 4.0—manufacturers are going digital. This shift is poised to transform every aspect of manufacturing, from metrology and quality assurance to machine tools, robotics and even cutting tools.

But is Industry 4.0 realistic?

For clarity on this issue, we can turn to a study of more than 200 US manufacturing executives conducted by Longitude Research on behalf of Siemens. The study identifies two distinct categories of US manufacturers on the path to digitalization: “efficiency experts” and “revenue reinventors.”


Efficiency Experts and Revenue Reinventors

According to the study, the efficiency experts group consists of companies that are typically over 50 years old with annual revenues under $5 billion USD. They are investing primarily in connected sensors, virtual training and artificial intelligence (AI).

As per their moniker, efficiency experts are pursuing these technologies to improve their uptime and productivity. However, they also identify themselves as being behind their industry peers in terms of data and financial performance.

(Image courtesy of Siemens.)
In contrast, the study describes revenue reinventors as companies that are under 50 years old with annual revenues over $5 billion. In terms of technology, their focus is primarily on cloud computing and data analytics.

Revenue reinventors identify themselves as both financially and digitally ahead of their peers, with their pursuit of digitalization being motivated by a drive to open up new markets. Hence, revenue reinventors are adopting new technologies not only to improve efficiency, but also to create new products and services.

 

The Data Gap

“It’s probably not surprising to see mid-sized companies delay in embracing new technologies, but even Fortune 500 companies sometimes hesitate based on various barriers,” said Raj Batra, president of Siemens Digital Factory Division U.S., in the report.

The study identified the top five digital technologies implemented by manufacturers, based on the percentage of respondents who reported adopting them:

  1. Cloud Computing (85 percent)
  2. Connected Sensors in Plant Operations (65 percent)
  3. Connected Sensors in Products (59 percent)
  4. 3D Printing (39 percent)
  5. Advanced Data Analytics Tools (34 percent)

Interestingly, despite the prevalence of sensors being used in plant operations, only 20 percent of respondents stated that they analyze more than 60 percent of the production data they collect, indicating a significant gap between what information is available and what’s actually being put to use.

Moreover, 38 percent of respondents admitted that the delay between production data being generated and its being analyzed is three or more days.

(Image courtesy of Siemens.)
This could explain why revenue reinventors appear more successful than efficiency experts, despite the latter’s extensive investment in sensor technology. By investing more heavily in data analytics, the revenue reinventors appear to be getting more bang for their buck from the connectivity of their production lines.

To read the full report or compare your own digital path to the benchmark, visit the Siemens website.