For example, one rail freight operator implemented IoT telematics solutions to develop an in-vehicle monitoring system, spanning more than 1,500 vehicles scattered across 30 locations. Most have focused on retooling their own operations, introducing advanced analytics into products. 6 Embarking on the digital industrial transformation journeyĭeloitte has collaborated with several high-tech and industrial companies to help drive their digital industrial transformation agendas. This realization may be the reason why, in recent Deloitte global surveys, 94 percent of executives in industrial companies see digital transformation as a top strategic priority 5-but only 14 percent are highly confident that their organizations are ready to fully harness the changes associated with IIoT/Industry 4.0. This demands a major shift in mindset as well as processes, and the challenge gets more complex when companies try to balance their legacy businesses with emerging offerings and newer business models. For example, customer service in traditional business models begins once a customer reaches out with an issue for resolution in digital industrial models, services teams may remotely track usage and performance, predicting when there might be an issue and proactively reaching out to the customer to resolve it, reducing downtime (see figure 2). Specifically, to create value throughout the customer life cycle, an organization must reorient its business model from linear to always-on. Standing up a digital industrial operation involves fundamental shifts across all aspects of business.
We refer to this as digital industrial transformation.Īs with most fundamental shifts, this change is easier to execute in theory than in practice. To capitalize on this shift to Industry 4.0 and effectively create and monetize IIoT solutions, enterprises must embed new digital technologies and capabilities in their legacy assets. What is digital industrial transformation? From inventory planning to predictive maintenance, the IIoT can dramatically enhance operational and capital efficiencies across entire ecosystems. The Industry 4.0 shift has given rise to numerous IoT-based applications in the industrial space (see figure 1).
Consumers are proving to be willing to pay for data-driven insights, and increasingly, so are businesses. For example, a smart thermostat costs dramatically more than a traditional thermostat-and demands far more setup-but offers real data-generated benefits to consumers, including reducing power consumption, improving comfort, and learning to anticipate owners’ preferences.
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4 This paradigm shift is transferring value from the physical to the software and from the process or function to the data. As previous Deloitte publications have laid out, Industry 4.0 is transforming how organizations run by bringing real-time data and intelligence to operations. Industry 4.0 and the Industrial Internet of Thingsįirst, let’s talk about Industry 4.0, and the Industrial Internet of Things (IIoT) specifically, to set the stage for digital industrial transformation. The term Industry 4.0 encompasses a promise of a new industrial revolution, one that marries advanced manufacturing techniques with the Internet of Things to create manufacturing systems that are not only interconnected but communicate, analyze, and use information to drive further intelligent action back in the physical world. Through an effective digital industrial transformation, you can reinvent your business to win in Industry 4.0.
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Over the coming months, in a series of articles, we will be walking through frameworks and approaches that can help you overcome these challenges. In a recent survey of 2,000 global C-suite leaders, the top three challenges for shifting strategy to meet the demands of Industry 4.0 were lack of vision, too many technology choices, and organizational or geographical silos.
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Many leaders are aware of the need to adapt to the new paradigm of Industry 4.0 but unsure how to make it happen quickly. This inflection point represents a real opportunity. Subscribe to receive more content from Deloitte InsightsĪs Internet of Things technology becomes ubiquitous, legacy B2B enterprises should rethink their products and services to thrive in an Industry 4.0 environment or risk being left behind by more nimble, digital-native competitors. Explore the Digital industrial transformation collectionĮxplore the Internet of Things collection
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