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Market Views
Discrete Manufacturing
Market Views

## Highlights

- Almost all products are becoming smarter
- Connectivity is growing at an exponential rate
- 3D printing will transform the market
- Energy costs continuing to rise
- Market revenues will reach $27.78 billion in 2017
- 70% of manufacturers offer connected products
- 40% will provide Product-as-a-Service platforms by 2018
- By 2020, most things at home can be monitored online

## Digital Journey

CUSTOMER EXPERIENCE
  Almost all products will soon be a mix of hardware, software and connectivity. While embedded software, enhanced user interfaces and product control components allow users to control product functions in a way that personalizes their experience, ensuring products remain user-friendly will be critical.
BUSINESS REINVENTION
  Discrete manufacturers will need to focus not only on enhancing design and customization, but also on offering value-added services that enhance the overall product experience. They are exploring how they can leverage their increasing volumes of data to open up these new revenue streams.
OPERATIONAL EXCELLENCE
  Companies must be able to react quickly to trends. New product launches must be timely to ensure opportunities aren’t missed when products can very quickly gain and lose favor. Manufacturers need high levels of flexibility that can cope with huge variations in demand over short periods of time.
TRUST AND COMPLIANCE
  As product digitalization becomes the norm, the increasing volumes of data produced and shared must be secured from threats across cyberspace. Protection against unauthorized access to products, data centers and networks is now critical. The risks are high.

#### Davide Criscione

Global Head of Discrete Manufacturing & Aerospace

> Increasing volumes of data are helping manufacturers to understand the behaviors, needs and desires of their B2B customers and consumers better. The wealth of intelligence available will help them tailor their products to meet the individual needs of specific market segments.

Technologies in the Digital Journey
Technology | x | y | x (phone) | y (phone) | Impact | Range | Section | Keys | Description
--- | --- | --- | --- | --- | --- | --- | --- | --- | ---
Beacons | 94 | 10 | 89 | 40 | Mainstream | 2016 | Low | experience | Once beacons have detected the presence of a known customer, digital devices offer them relevant promotions and services. A consumer who has designed a tailored product at home might be presented with more options for that product when they arrive in store, for example, in an experience that glides seamlessly across all channels of interaction.
Advanced data visualization | 75 | 40 | 80 | 30 | Early Adoption | 2018 | Medium | experience,excellence | Manufacturers are leveraging immersive 3D visualization technologies based on real- time data to reduce machine set-up times. Operators optimize machine settings in this virtual world before switching production. Technologies such as these that also enable virtual testing and concurrent engineering also decrease time-to-market.
Augmented reality | 79 | 33 | 65 | 65 | Adolescent | 2017 | Medium | experience,excellence | Smart glasses use augmented reality to provide step-by-step instructions on how a machine needs to be set up or details on maintenance requirements. This information may be displayed in a worker’s line of sight through augmented reality glasses. Embedded cameras relay pictures back to base to record activities or tap into the insight of a specialist engineer – who could be located remotely, anywhere around the globe.
Cloud Service Integration | 68 | 43 | 70 | 50 | Adolescent | 2018 | Medium | excellence | Vital systems are also managed within the cloud and delivered ‘as a service’ wherever and whenever they’re needed. Systems that monitor and control processes no longer need to be located within the plant; sales and marketing systems no longer need to be located in store. Remote or temporary plants or shops can be deployed quickly, delivering the consistent engineer or customer experience that enhances productivity and drives engagement. As the need for cloud-based functions grows, Cloud Service Integration connects processes seamlessly. Leading manufacturers have moved to the integrated manufacturing, enabling the information transparency and collaboration between MES / MOM, ERP and PLM systems. This vertical view along the value chain becomes increasingly critical as product lifecycles shorten and the continuous evolution within product releases accelerates. The shift to integrated manufacturing was not a quick technical fix. The first steps required a simplification and harmonization of the IT landscape. Later steps include Cloud Service Integration.
Digital rights management | 66 | 22 | 44 | 47 | Early Adoption | 2017 | High | business,trust | As the number of products created on 3D printers grows, manufacturers must turn their focus from producing physical products to delivering value-added services to their customers. Once the cost of 3D printers drops and consumers begin printing products at home, digital rights management will help manufacturers retain intellectual property (IP).
3D printing | 47 | 5 | 65 | 12 | Adolescent | 2018 | Transformational | experience,business,excellence,trust | By using 3D printing to produce prototypes and individual components, manufacturers have cut transportation costs, stock volumes and, most importantly, downtime. When an engineer is assigned to a maintenance job, any parts he may need are first created virtually in a cloud-based system before being printed on-site – which is particularly useful when they’re working at a remote location many miles from the parts store. 3D printing will also change the supply chain dramatically by dematerializing concrete products. Products – initially simple products without mechanically stressed parts and later more complex and highly customized products – are going to be printed firstly by specialized printing service companies and, later, at home. The end customer will pay for a data package as they do for music or movies. Sales channels will also be affected.
Digital signage | 90 | 10 | 80 | 34 | Mainstream | 2016 | Medium | experience | In store digital signage – from wall mounted screens to tablets and even the consumer’s own smartphone or smart watch – allows the manufacturer to show a greater variety of stock in a limited space while, at the same time, providing a more engaging and personalized customer experience.
Distributed analytics | 72 | 40 | 75 | 40 | Adolescent | 2018 | Medium | experience,excellence,trust | A few years from now virtually every action on or by a product will leave a digital trace. Manufacturers manage those billions of pieces of information coming from embedded sensors securely in an internally-managed private cloud. Distributed analytics gives them deep intelligence on consumer desires and behaviors by combining insight from this data with insight from operational, stock, price and customer data.
Edge computing | 44 | 27 | 45 | 40 | Adolescent | 2018 | High | experience,excellence | With vast amounts of data to be processed and intelligence required in real time, manufacturers have adopted edge computing to process – for example index or analyze – the data in its diverse formats close to the point of capture.
High performance computing | 81 | 11 | 45 | 40 | Early Adoption | 2016 | High | business,excellence,trust | With the volumes, variety and velocity of data accelerating, high performance computing is needed for handling the complex analysis of the volumes of data transmitted from consumer devices. It will give companies a better understand of how products are being used and reveal potential issues before they arise.
Hybrid cloud | 86 | 14 | 60 | 60 | Early Adoption | 2016 | Medium | experience | To enhance customer value, manufacturers are increasingly complementing their own services with third-party services. For example, moped manufacturers are offering a service that enhances a view of a customer’s journey and driving performance with details of the weather along the way. A hybrid cloud combines the manufacturer’s insight with the third-party weather service.
Innovation value webs | 83 | 25 | 80 | 36 | Early Adoption | 2017 | Medium | business | Open innovation ensures discrete manufacturers optimize value from their wider partner ecosystem. Suppliers are encouraged to provide more complex outcomes and share the investment cost of new technologies. Innovation value webs encourage collaboration and knowledge sharing while facilitating data aggregation and sharing.
Internet of Things | 62 | 6 | 50 | 15 | Early Adoption | 2017 | Transformational | experience,business,excellence,trust | On the shop floor, the smart factory is helping manufactures respond to an increasingly complex and fast- paced production environment. Fully autonomous production chains reconfigure automatically for each individual product according to its individual design parameters. By promoting Internet of Things (IoT), Industry 4.0 helps companies to efficiently respond to the increasing demand for customized products. Furthermore, senior management gets the real time insight it needs to make informed business decisions. After communicating changing production to the shop floor, for example, flexible reconfiguration procedures, amongst others, ensure production can respond to customer needs in next to no time. Both plant assets and discrete products continually report their status back to the central control system using IoT technologies. Precise measurements of components, oil pressures, vibrations and more not only provide engineers with an early indication that parts are becoming worn. Technicians can access the remote discrete product securely – no matter where they are and where the product is located – to perform remote maintenance and optimize its performance. Experts no longer need to be onsite – they can share their knowledge and expertise from any corner of the globe.
Machine learning | 37 | 40 | 55 | 40 | Emerging | 2019+ | High | excellence | To help improve both products and manufacturing processes, machine learning is learning about how products perform and are used during their entire life cycle. It takes advantage of the additional knowledge that can be gained from novel situations to enhance their performance.
Self-adaptive security | 50 | 38 | 48 | 58 | Emerging | 2018 | High | trust | Self-adaptive security techniques, including trusted probes are being deployed to look for evidence of specific suspicious behaviors and help companies anticipate threats. Behind the scenes streaming analytics and HPC analyze millions of events in real time. Meanwhile distributed analytics in combination with HPC supports vital forensic analysis after an incident is detected. They help organizations quickly identify where the attack started, who is behind it and how it was carried out.
Prescriptive analytics | 64 | 36 | 65 | 45 | Adolescent | 2018 | Medium | excellence | Advanced data analytics are making use of that data to increase plant uptime by predicting – and even prescribing – maintenance requirements. Manufacturers are turning to prescriptive analytics to predict actual equipment failures and then suggest a number of possible actions and their likely outcomes. They’re also deploying prescriptive analytics to predict when and how their washing machines, TVs and more will fail and recommend the actions the consumer needs to take to prevent that failure.
Streaming analytics | 70 | 15 | 65 | 30 | Early Adoption | 2017 | High | experience,excellence,trust | New sources of intelligence are paving the way for manufacturers to develop new types of relationships with and exciting new services for their end customers. A service linking real-time data streaming from a bicycle helmet with customer data automatically calls the emergency services with the cyclist’s details if they do not move for 30 seconds, for example. Streaming analytics processes that data in real time.
Wearable computing | 93 | 20 | 84 | 65 | Early Adoption | 2016 | Low | experience | Two-way communications between machines, workers through tablets, smartphones and even wearables has increased agility on the shop floor.

Radar View

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