ARC Advisory Group

Are You Ready for Industry 4.0?

Blog Post created by ARC Advisory Group on Feb 8, 2018

With Donald Trump, Justin Trudeau, Emmanuel Macron, Angela Merkel and Narendra Modi in attendance, along with the chief executives of hundreds of companies, including ABB, IBM, SAP, Schneider Electric and Siemens, and of course not forgetting celebrities like Elton John, Cate Blanchett and Shah Rukh Khan, it was no surprise to see the World Economic Forum’s annual meeting, which took place in wintry Davos under the theme of Creating a Shared Future in a Fractured World, getting plenty of news coverage and TV airtime last week. Somewhat less heralded but perhaps more relevant for those down in the industrial trenches and keeping tabs on Industry 4.0 was the Readiness for the Future of Production Report, released by the WEF just a week before the gathering of the global elite in Switzerland. 

 

This World Economic Forum study, which is available online, assesses the relative strengths of no less than 100 countries around the world in terms of how ready they are to capitalize on the future production opportunities afforded by (what the WEF calls) the Fourth Industrial Revolution. The assessment methodology is described in quite some detail in the 266-page document, but essentially, countries are ranked on two components: Structure of Production – which reflects the complexity (higher is good) and scale (higher is good) of a country’s current production base; and Drivers of Production – performance across six key enablers that position a country to capitalize on emerging technologies and opportunities in the Industry 4.0 future.

 

So what about the results? Based on the Structure of Production and Drivers of Production scores the WEF ranks each of the 100 countries into one of four groups: Leading (25); High Potential (7); Legacy (10); and Nascent (58). It should not be too surprising that the Leading countries are the more economically developed nations of the world, located primarily in Europe and North America, with the US coming out tops. Or that the Nascent countries are those mainly at the other end of the development spectrum, hailing predominantly from Central/Latin America, Asia and Africa.

wef%20diagram2.jpg

The four archetypes that categorize different countries' readiness for Industry 4.0. 

 

The High Potential category captures those countries that score well on Drivers of Production but poorly on Structure of Production, signifying a limited industrial base but with the key enablers in place and providing the opportunity to move ahead in an Industry 4.0 future. High Potential countries include Australia, New Zealand, Norway, and the UAE. Conversely, Legacy countries are strong on Structure of Production but weak on Drivers of Production, which means they risk falling behind in an evolving Industry 4.0 world. Those countries include India, Russian Federation, Mexico, and Thailand.

 

A key conclusion from the WEF’s study into the future of production is the fact that all countries – even Leaders – have some way to travel on a transformation journey that is only just beginning, and no country is yet close to harnessing the full potential of the Fourth Industrial Revolution.    

 

Getting Smart in Singapore

Interestingly, one of only six non European, non North American countries that made into the WEF’s Leading category is Singapore, which recently launched something called the Singapore Smart Readiness Index. Developed as a diagnostic tool by the Singapore Economic Development Board (EDB) in conjunction with inspection and certification company TÜV SÜD, the Index aims to help local companies understand the concepts behind Industry 4.0, assess their current as-is states, and architect transformation strategies and implementation roadmaps in order to attain sustained business value from Industry 4.0.

 

In its development, the Singapore Smart Readiness Index incorporated Plattform Industrie 4.0’s Reference Architectural Model for Industry 4.0, or RAMI 4.0, as the theoretical framework, but also added a real-world element through validation by industry experts from companies including Emerson Automation Solutions, Honeywell Process Solutions, Rockwell Automation and Siemens, followed by pilot testing at local industrial companies, encompassing both discrete and process manufacturing and larger (MNC) and smaller (SME) organizations.

 

While there is not space here to go into all the intricacies of the Index (interested readers can find the complete workings in the downloadable document from the EDB), I’ll mention that it is based around three Building Blocks (Process, Technology, Organization), which each map to designated Pillars (total eight), which in turn map to Dimensions (total 16). It is at this Dimension level where companies can assign themselves into one of six bands (0 to 5). So for example, the six bands for the Technology Building Block/ Connectivity Pillar/Shop Floor Connectivity Dimension graduate from (0) Not Connected to (1) Connected to (2) Interoperable to (3) Interoperable and Secure to (4) Real-Time and finally to (5) Scalable.

 

sg%20ready%20diagram.jpgThe three-layer framework of the Singapore Smart Readiness Index

 

With the veritable fire hose of information on Industry 4.0 from technology suppliers over the last few years, coupled with government urgings to transform manufacturing operations in that direction, I do sense companies here in Singapore struggling to absorb what can be often conflicting, complicated messages and yet wanting to move ahead with appropriate actions. The Singapore Smart Readiness Index is a timely tool which can help clear the fog and encourage a structured rather than haphazard approach towards getting on the right road to Industry 4.0 and making it to the end.   

 

“Reprinted with permission, original blog was posted here”. You may also visit here for more such insights on the digital transformation of industry.

 

 About ARC Advisory Group (www.arcweb.com): Founded in 1986, ARC Advisory Group is a Boston based leading technology research and advisory firm for industry and infrastructure.

For further information or to provide feedback on this article, please contact lkanickaraj@arcweb.comsgandhi@arcweb.com

 

 

 About the Author:

Bob Gill

General Manager, Southeast Asia

Bob Gill is responsible for managing ARC's business operations and market research activities in Southeast Asia.

Bob joined ARC Advisory Group in 2014 after a decade-long career in industrial technology media, most recently as Editor-in-Chief at Singapore's Contineo Media, where he had editorial management responsibility for Control Engineering Asia, Asia Food Journal, PharmaAsia, Logistics Insight Asia, and Payload Asia, while also concurrently being Editor of Control Engineering Asia.

Outcomes