Industry 4.0 market study: demand for connected software solutions

Industry 4.0 market study: demand for connected software solutions September 2015 Software Innovations

2 Market Survey Industry 4.0 2015 Introduction Turning data into new knowledge A key raw material for Industry 4.0 In Industry 4.0, one raw material plays a pivotal role. But unlike steel, plastic, or other physical components, this material is invisible and intangible. It is the invisible streams of data in connected industry. With the right tools, companies can use this material to great advantage, since it offers them a way of continuously improving their own processes. Moreover, these data are the foundation for new business models, making them the true revolution in connected industry. At present, the focus of interest relating to Industry 4.0 is often on the hardware. This includes smartphones, tablets, fast computers, large memories, sensors, RFID technology, and wireless connections. All these things make it possible to connect machines within factories and across national boundaries. At many of its more than 250 plants worldwide, Bosch is doing precisely that, and improving its competitiveness. And the company is allowing its customers to benefit from many of the things that have proved valuable internally. But the potential of Industry 4.0 is much bigger. More than anything else, data are revolutionizing industrial production. And they are doing so here and now. Innovations based on collecting, evaluating, and using data are the driving force behind many new business models: The ability to filter out important information and turn it into new knowledge is a key qualification for the future. That means we need experts

3 who are equally at home in the analysis of huge volumes of data, manufacturing and the product itself. Increasingly, this is putting sensors, software, and data security on the agenda of established manufacturing companies. This combination is the only way we can hope to turn our factories digital raw material into useful new information. Electrical engineering, mechanical engineering, and software are no longer separate worlds. For this market study, we asked some 181 production managers at manufacturing companies in Germany, Austria and Switzerland how they use Industry 4.0 software solutions. One participant s response immediately struck a chord: namely that the success of Industry 4.0 projects depends on IT experts and engineers speaking a common language. Only by working together can we find the perfect solution. Dr.-Ing. Werner Struth Member of the board of management, Robert Bosch GmbH We should all strive to improve on the status quo: none of us should ever be satisfied with what they have achieved, but should always endeavor to get better. Robert Bosch

4 Market Survey Industry 4.0 2015 Overview Introduction Background to the study Survey: scope and methodology Use and awareness of connected software solutions Level of information and key sources of information about Industry 4.0 Industry 4.0 software solutions: currently in use and planned Demand and requirements for Industry 4.0 software solutions Which KPIs do respondents expect Industry 4.0 software solutions will improve? Functionalities of Industry 4.0 software solutions Relevance of data to be analyzed using Industry 4.0 software solutions Barriers to Industry 4.0 software solutions Data security as a barrier Other barriers Other key aspects of implementing Industry 4.0 software solutions Conclusion Management summary: key points from the study Overview: questions of the survey 2 5 8 8 9 11 13 15 16 17 18 19 21 23 25 28

5 Background to the study The goal of this study was to determine the demand for Industry 4.0 (or I4.0 for short) software solutions among users in manufacturing companies, both at the time of the survey and over the subsequent 12 months, and to determine how this demand can be met. The survey and study were carried out by Bosch Software Innovations, the part of the Bosch Group that specializes in software-based solutions for the connected world. The study focused on one particular area of the market, exclusively surveying users of I4.0 software solutions who work at manufacturing companies in the DACH region (Germany, Austria, and Switzerland). Around one third of the respondents are production managers at Bosch plants. Two thirds of the study participants work at other manufacturing companies. The respondents from the target group work in various areas including production planning, coordination and implementation, industrialization/manufacturing of special-purpose machinery, and other production-related disciplines (IT/technology, engineering/product development, etc.) see the pie chart on the right in figure 1. These charts also break down the respondents by industry and annual sales. The participants and their companies represent a good mix of different industries, sizes, and functions.

6 Market Survey Industry 4.0 2015 Industry n/a Other 6% 13% Info/com. 6% 7% Process 17% 27% 24% Automotive Electrical/ electronic Mechanical/ plant eng. Annual sales in n/a < 100m 14% 18% > 5bn 18% 19% 20% 11% 100-500m 1-5bn 0.5-1bn Function in the company n/a 12% Product development/ engineering 25% Other 24% 24% 15% Production IT Figure 1

7 Since there are a range of definitions of software solutions for I4.0 in the business world, participants were provided with a clear definition before they took the survey (figure 2). All the study results refer exclusively to this definition of connected software solutions for I4.0. We understand I4.0 to be connected software solutions in the manufacturing and logistics environment that make existing data from various systems/ sources (machines, sensors, databases, MES, SAP) available in an integrated user interface (data integration). With help from user-friendly visualization tools and automated evaluation methods (e.g. comparison of actual-target, drift, outliers, data mining), users can actively glean new insights from that data. They can do so based on automized notifications (e.g. e-mail, SMS) in cases of deviations and via the user interface as well. Our connected software solutions offer our customers the basis for making the right decisions based on fast and reliable information. In this way, they can sustainably increase their competitiveness through continuous improvement in the areas of productivity (cutting costs, increasing production output) and flexibility (in relation to market and internal changes). Figure 2

8 Market Survey Industry 4.0 2015 Survey: scope and methodology In January 2015, nine interviews were conducted with plantand division-level I4.0 coordinators and project managers at Bosch with the support of a market research institute. The results of these interviews were then used as the basis for producing an online questionnaire. This questionnaire was further refined in February 2015 in two pre tests involving representatives of the target group carried out prior to the start of the survey in the Bosch plants. The anonymous online survey at the Bosch manufacturing plants took place from February 26 to March 18, 2015. The follow-up survey of participants from other manufacturing companies (not Bosch) took place between June 2 and July 3, 2015. The population for this study consists of 181 participants. Average time taken to complete the questionnaire was 16 minutes, revealing a high degree of commitment from the participants. Use and awareness of connected software solutions Industry 4.0 is going to change work completely. People don t want change. That s going to be the biggest challenge. a production manager cited

9 Level of information and key sources of information about Industry 4.0 The proportion of well-informed participants in the target group was 58 percent. These respondents consider themselves to be well or very well-informed about I4.0 (figure 3). The percentage of well-informed participants was higher within the Bosch Group (65 percent) than among participants from other manufacturing companies (55 percent). This result reflects the very high response rate in the Bosch target group and underscores the major emphasis that Bosch puts on issues related to the future of manufacturing, both as a leading user and a leading supplier. Similarly, this is illustrated by the over 100 pilot projects Bosch is currently running to investigate the benefits of I4.0 solutions. Figure 3

10 Market Survey Industry 4.0 2015 The top three I4.0 information sources (figure 4) currently used by the study participants are trade magazines, trade fairs, and market/analyst studies. Respondents classed as particularly well-informed ranked I4.0 communities among their three most important sources of information instead of trade fairs. The better informed the user, the more effort they apparently invest in searching for and finding information in I4.0 communities. This goes beyond the mere acquisition of knowledge about I4.0 they also help shape this information by actively participating in discussions as needed. Download full market study now: www.bosch-si.com/study

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