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Unlocking the value of i4.0

Unlocking the value of i4.0

Through smarter products, processes and profit.

Stéphane Souchet

Global Head of Industrial Manufacturing

KPMG in France


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For today’s manufacturers, Industry 4.0 (i4.0) is not just about driving operational efficiency and performance. It’s also about delivering better value to the customer. When smart products are tied together with smart processes, unprecedented value can be created for customers, manufacturers and their suppliers.

However, few manufacturers seem prepared to fully integrate the opportunities presented by i4.0 into their product lifecycle. In fact, there seems to be a significant disconnect between those implementing i4.0 within operations and those designing and developing smarter products.

Making the smart moves

We believe that the ability to connect both dimensions — smart products and improved processes — is the key to unlocking the real underlying value of i4.0.

There is no value in putting sensors into your plant machines or your products if your design teams can’t translate the data into insights and real product improvements; or if plant operations cannot use machine data to increase plant utilization and improve changeover speeds.

To properly leverage i4.0, manufacturers need to ─

  • start thinking about how their smart products integrate into their smart operations
  • carefully consider their current capabilities and operating model, their IT assets and their competitive environment
  • be prudent about what they can achieve and by when
  • synchronize their product lifecycles and product data with their long-term strategy to achieve measurable advances.

Look at what the leaders are doing

In our recent report, Beyond the hype: Separating ambition from reality in i4.0, a team of KPMG’s Manufacturing professionals conducted research and interviews to determine the current state of i4.0 initiatives in the manufacturing sector.

Our report suggests that a handful of market leaders are now starting to bridge the gap between their smart products and their smart processes. And, in doing so, they are uncovering new opportunities to drive customer value and improve performance.

They use product data to improve end-to-end value. The leaders leverage customer data and field data from their products to improve the way their products are designed, developed and manufactured. They focus on improving and prioritizing the reliability and relevance of their customer data sources. And they formalize data ownership frameworks and security.

They improve integration between customers and products. The leaders are looking to use their smarter products to drive stronger relationships with customers. They see i4.0 as a basic requirement for improved customer communication. Where it makes sense, they are connecting their customers to their suppliers and product development function through the cloud.

They move from products to services. That’s because they understand the significance of data and analytics and see the potential to leverage product and customer data to create services that drive additional revenue. The most advanced leaders are moving into predictive solutions, using their analytics capabilities and deep product knowledge to provide additional insights to customers.

The bottom line

Manufacturers need to fully integrate their product lifecycle into their i4.0 strategy to unlock value. In particular, they need to understand how customer data creates value across the enterprise; improve the flow of customer data across the extended enterprise; understand the potential for disintermediation as a result of smarter products; and find ways to improve coordination with customers.

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