Manufacturers must turn ambition into action to drive industry 4.0 value, says KPMG

Manufacturers turn ambition action drive industry 4.0

While most manufacturers are investing in industry 4.0 capabilities, few have achieved the scale and integration needed to drive enterprise value, according to KPMG’s Beyond the hype: Separating ambition from reality in industry 4.0 report.

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The report finds that, while many manufacturers are working towards creating the ‘factory of the future’ or digital enterprise, few have worked out how to apply those capabilities across all of the corners of their operations. Most are still experimenting with discrete pilots or trialling solutions.

“UK manufacturers have shown more enthusiasm than preparedness for industry 4.0, and our latest report, Beyond the hype: Separating ambition from reality in industry 4.0, reflects that this is a global trend,” notes Stephen Cooper, Head of Industrial Manufacturing at KPMG UK. “In February, we released our Rethink Manufacturing report, which showed that the majority (56%) of UK manufacturers agree that industry 4.0 represents an unprecedented opportunity to revitalise manufacturing across the country. However, they are far less sure about how it will affect their business and whether they have a coherent strategy and the right talent and skills to capitalise on it.”

The report included a number of benchmarking exercises which found that many organisations demonstrated only a low-to-medium level of maturity in key areas such as demand-driven supply chain, machine-to-machine (M2M) communication, and digital twinning. However, they showed somewhat better maturity in cloud, robotics, Big Data, cybersecurity and Internet of Things (IoT) technologies.

Alec McCullie, Associate Director and UK lead for Industry 4.0 at KPMG, added: “Gaining experience with industry 4.0 technologies is certainly important. But the real value of industry 4.0 comes, not from the component technologies or capabilities, but rather through smarter processes that integrate automation, data, analytics, manufacturing and products in a way that delivers unique competitive advantages and unlocks new business and operating models. And this cannot be accomplished without achieving larger scale, greater integration across functions and a willingness to disrupt the status quo.”

Rather than focusing on pure investment numbers and reported investment returns, this research focuses on identifying how the leaders of today’s industry 4.0 revolution are driving value from their investments and preparing their organisations to take advantage of emerging opportunities in the future. The report also identifies areas where manufacturers could be taking a more integrated and strategic approach to industry 4.0 adoption. And, in each area, it offers practical advice for driving adoption and creating value.

“There are a number of key focus areas that are creating challenges for manufacturing executives across the value chain,” continued Alec. “Particularly as they work to transform their organisations for the industry 4.0 environment. This includes issues such as developing a robust, goals-focused strategy, scaling up the programs, managing the impacts across functional areas, integrating with products and improving the value network.

“Success in industry 4.0 is not about how much you invest; the winners will not be those with the deepest pockets. To win in tomorrow’s competitive and rapidly changing environment, manufacturers need to start being bolder in their vision, strategies and actions if they are to succeed.” Alec concluded.

 

-Ends-

 

Notes to editors

Beyond the hype: Separating ambition from reality in i4.0 is based on a series of global benchmarking exercises conducted earlier this year by KPMG’s industrial manufacturing professionals and provides deep insight into the current state of the industry 4.0 environment.  

For media enquiries, please contact:

Jo Chileshe, KPMG Corporate Communications
T: +44 (0)121 232 3343
M: +44 (0)7919 211 803
E: jo.chileshe@kpmg.co.uk

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KPMG Press Office: +44 (0)207 694 8773

About KPMG

KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 13,500 partners and staff.  The UK firm recorded a revenue of £2.07 billion in the year ended 30 September 2016. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 152 countries and has 189,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity.  Each KPMG firm is a legally distinct and separate entity and describes itself as such. 

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