HomeEnterpriseSiemens and SAP join Industry 4.0 initiative to move enterprises out of digital ‘pilot trap’

Siemens and SAP join Industry 4.0 initiative to move enterprises out of digital ‘pilot trap’

A new industrial consortium including SAP and Siemens has convened to help industrial organisations go beyond the ‘pilot trap’ with their Industry 4.0 deployments.

The Singapore Economic Development Board (EDB) and German testing and certification company TÜV Süd have recruited SAP and Siemens, alongside management consultancy McKinsey & Company, to devise a new computational tool to help industry move forward with digital transformation.

The tool will recommend focus areas and digital initiatives, based on companies’ individual ‘readiness’ scores and financial performance. This ‘prioritisation matrix’ will launch at Hannover Messe 2019 at the start of April.

EDB and TÜV Süd initially launched a ‘smart industry readiness index’ to help industrial companies identify prep work for digital transformation back in 2017. The index has since been applied in Singapore, via the EDB, an agency under Singapore’s Ministry of Trade and Industry, responsible for strategies that enhance business and innovation.

More than 2,000 business executives from 500 companies have attended public workshops and conferences hosted by the Singapore government on the index. Singapore has funded 
300 index assessments to help small, medium, and large companies in all industries kick start digital transformation, it said. It is also offering an accreditation programme to train and qualify assessors.

Chng Kai Fong, managing director of EDB, commented: “While interest in Industry 4.0 has caught on, many companies are now experiencing a ‘pilot trap’ where transformation activities may be underway but have yet to scale beyond proofs of concept to yield meaningful bottom-line benefits.

“The collaboration will enable us to establish a neutral, open and qualified Industry 4.0 ecosystem which will facilitate the transformation of companies’ processes, technologies and organisation globally and at scale.”

The initial matrix is also being offered by TÜV Süd variously in Indonesia, Thailand, India, US, Europe and Japan, as well.

Axel Stepken, chairman of the board at TÜV SÜD, said: “This engagement synergises with the implementation and operation phase of our manufacturing clients to scale Industry 4.0 solutions. We believe this ecosystem has the potential to become best practice with an impact on a global scale.”

The new collaboration with McKinsey, SAP, and Siemens brings additional skills to the table to round out the offer, the group said in a statement. In order, these include: strategic insight around process redesign, tech road-mapping and organisational development; business software to bring new process agility and business innovation; and an industry-specific digital portfolio for the discrete and process industries.

Christoph Schmitz, global leader for manufacturing and supply chain at McKinsey & Company, commented: “Most manufacturing companies consider digital manufacturing a priority and see themselves ahead of the game. A clear majority have also embarked on their Industry 4.0 journey by piloting digital solutions.

“However, for most companies, advancing beyond the pilot stage to broader rollout within the organisation is still a big challenge, and this platform has been designed with this challenge in mind. Through this powerful collaboration, we are excited to provide a holistic Industry 4.0 ecosystem that will help our clients win the digital manufacturing race.”

Deepak Krishnamurthy, executive vice president and chief strategy officer at SAP, said: “This collaboration aims to create an intelligent, networked, data-driven model to help manufacturers realise their Industry 4.0 vision.”

Klaus Helmrich, member of the board at Siemens, said: “Regardless of company size, digital transformation reshapes every business aspect and also brings along exciting developments, new opportunities and new business models. To achieve this, collaboration is the catalyst of success.”

The readiness index is described by the EDB as a “world-first Industry 4.0 tool”. It sets out a four-step approach for enterprises: to learn about the concepts, evaluate their facilities, design a roadmap, and execute on the strategy.

The index will serve as a means to benchmark industries, and enable governments to design sector-specific policy interventions to accelerate the transformation of industrial sectors, it said.

It also comprises three layers, with three core building blocks, around process, technology and organisation in the top layer, eight pillars of focus in the middle, and 16 “dimensions of assessment” in the bottom.

It provides an assessment matrix for each of these 16 dimensions. The matrix doubles as a step-by-step improvement guide, as each dimension provides intermediate steps needed for companies to progress, said the EDB.

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