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Digital Business in Manufacturing –
Trends and Technologies
Owen Chen
Research Director
CIO research team
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Agenda
Digital trends in manufacturing industry
Digital Ecosystem
From Selling Product to Selling Service
Customized Product
Emerging technologies in manufacturing industry
AI
Digital Twin
IoT Platform
AR/VR
…
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Determine the Right Kind of Ecosystem to Pursue
Business Ecosystems
Commercial
InterestInnovation
Device
Platform
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Shift From Producing Products to Producing Ecosystems
Source: Haier
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From Selling Product to Selling Service
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Case Study: SKF's Shift From Component Producer to Knowledge
Engineering Partner
Source: SKF
4
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While You've Been Thinking About Customization …
Profitability — NPD Study
Customers are willing to pay up to 25%
more for customized products
25%
Branding
Increase in Facebook traffic for
customized product
870%
Reinvent
Change business model to reinvent
From $50m to $57b
100x
Trends
Mine customization data to create new
mass production product successes
$10b
Customer Retention
Customized product companies see
much higher customer retention rates
65%+
Fewer Returns
Reduce returns with customers
investing in personalized products
Source: Custom Nation
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Pioneer: Dell's Configurable Product Line
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© 2018 Gartner, Inc.
Base: All answering, excludes DK, n varies by segment
Showing the 10 most common answers per segment, coded open-text responses
Which technology area do you think is most important to helping your business differentiate and win?/is most crucial to achieving your organization’s mission?
ID: 346746
BI/Analytics is Ranked as the Most Important Differentiating Technology
Most Important Technology That Will Differentiate Business/Are Most Crucial to Achieving Organization's Mission
Rank
China
(n = 56)
Top Performers
(n = 165)
Typical Performers
(n = 2,476)
Trailing Performers
(n = 193)
1 BI/analytics 36% BI/analytics 28% BI/analytics 26% BI/analytics 20%
2 Artificial intelligence 14% Digitalization/digital marketing 17% Digitalization/digital marketing 14% Digitalization/digital marketing 12%
3 Digitalization/digital marketing 9% Cloud services/solutions 15% Cloud services/solutions 9% Enterprise resource planning 9%
4 Internet of Things 7% Mobility/mobile applications 7% Mobility/mobile applications 6% Cloud services/solutions 8%
5 Financial apps 7% Artificial intelligence 7% Internet of Things 6%
Customer relationship
management
6%
6 Cloud services/solutions 5% Internet of Things 6%
Customer relationship
management
5% Internet of Things 6%
7 Mobility/mobile applications 5% Integration/interoperability 4% Artificial intelligence 5% Mobility/mobile applications 5%
8
Customer relationship
management
4%
Application programming
interface
4% Infrastructure/data center 5% Infrastructure/data center 4%
9 Infrastructure/data center 4% Infrastructure/data center 3% Enterprise resource planning 5% Legacy modernization 3%
10 Enterprise architecture 4% Security and risk 3% Automation 4% Integration/interoperability 3%
Percentage of Respondents
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D
is
ru
p
to
rs
Relentlessly Rebalance Your Technology Portfolio
28%
24%
16%
16%
12%
10%
7%
5%
5%
5%
3%
3%
3%
40%
3%
5%
5%
5%
8%
8%
Bi/analytics
Cloud services/solution
Cyber/information security
Articifical intelligence/ machine learning
Internet of things
Digitalization/digital marketing
Enterprise resource planning
Infrastructure & datacenter
System/ process automation
Mobility and mobility application
Network, voice and data communications
E-commerce/ website/ client facing
Software licensing/maintenance/support
Hosting services/ servers
Storage services
Manufacturing execution systems
Legacy systems
Business operational systems
Base: All answering, excludes DK, n varies by segment
Showing the 10 most common answers per segment. coded open-text responses
• What are the technology areas where organization will be spending the highest amount of new or additional funding in 2018?
• What are the technology areas where your organization will be reducing funding by the highest amount in 2018 compared to 2017?
ID: 346766
Percentage of China respondents
increasing investment
Percentage of China respondents
decreasing investment
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13%
15%
25%
25%
31%
39%
54%
41%
49%
72%
Autonomous Vehicles
3D Printing
Blockchain/
Distributed Ledger
Digital Twin
Virtual Reality (VR)/
Augmented Reality (AR)
Smart Robots
Artificial Intelligence (AI)
Conversational Interfaces
Internet of Things (IoT)
Digital Security
Disruptive Technologies Approaching a Tipping Point
Percentage of respondents that have deployed a technology or are in short-term planning for deployment
What are your organization's plans in terms of the following digital technologies and trends? n = 3,138, Top performer segment, excludes DK, n = 183
Have already invested and deployed/ in short-term planning All other responses
China TOP
13%
22%
23%
25%
30%
31%
40%
45%
51%
91%
Autonomous Vehicles
3D Printing
Blockchain/
Distributed Ledger
Digital Twin
Virtual Reality (VR)/
Augmented Reality (AR)
Smart Robots
Artificial Intelligence (AI)
Conversational Interfaces
Internet of Things (IoT)
Digital Security
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Augmented Data Discovery
and Analysis
Augmented Data Science
and Machine Learning
Citizen data scientist explores
autogenerated models
End user or application-augmented
Autogenerated models and insights
NLP/NLQ exploration
NLG narration
Specialist data scientist builds and
customizes models
Embedded
Assisted model building and
customization, tuning, life cycle
management
Collaboration Is Key;
Convergence Will Increase Over Time
Intelligent Apps and Analytics: Augmented Analytics
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Opportunity
Move from manual to automated inspection
of burger bun production to ensure and improve quality
Data and Analytics
Photo-analyze over 1,000 buns per minute for color,
shape and seed distribution
Continually adjust ovens and process automatically
Result
Eliminate thousands of pounds of wasted product
per year
Speed production; save energy
Reduce manual labor costs
Intelligent Apps: Intelligent Operational Applications
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Intelligent Things: Autonomous Vehicles in Specialized Environments
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Computed Risk of
Stress Fracture
Computed Tire Wear
Image source: Gartner
Computed Blade Pitting
Digital Twins Blend the Real World and Digital World
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Mobile
Partners
IT Apps
Endpoints
IoT Solution
IoT Platform
Cloud
OT Apps
(ERP, CRM, …) (MES, BMS, …)
Customers
Communications
APIs/Integration/MOM
Business
Outcomes
Holistic
Things
Agents
Gateways
Orchestration
Data
Analytics
APIs/Integration/MOM
Aggregated Device
Management
Digital Technology Platforms: IoT Platforms Are Necessary for Solution Success
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Healthcare
Therapies
Simulated Experiences
Molecular Modeling
Virtual and Augmented Reality: Enabling Digital Business Moments and Models
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Thank you!
