,Key Trends in Industry 4.0 to Watch,Justinas Liuima, Lead Industry Analyst Justinas Lainskas, Senior Industry AnalystSeptember, 2018,2,This PowerPoint presentation includes proprietary informationfrom Euromonitor International and cannot be used or stored with the intent of republishing, reprinting, repurposing or redistributingin any form without explicit consent from Euromonitor International.,OVERVIEW,Internet of ThingsSupply chain effectivenessHi-tech goods industry recoveryCybersecurityMachine-to-Machine trafficSupply chain, production process trackingInterconnected devices growthAugmented reality,4,IoT will be key technology in Industry 4.0,INTRODUCTION TO IOT IN MANUFACTURING SECTOR,Factory,Suppliers,Logistics,Computer/ server,Smart products,Virtual production,Digital factoryCustom products,5,IoT will be key technology in Industry 4.0 (cont.),INTRODUCTION TO IOT IN MANUFACTURING SECTOR,IoT is set to be a pivotaltechnology in the Industry4.0 revolution,Industry 4.0 will lead torising usage of advancedproduction machinery,sensors and communicationwith manufacturers andsuppliers,Industry 4.0 will requirethat billions of devices inthe supply and productionchain will be interconnected,IoT,Autonom ous Robots,3DPrinting,Augment ed Reality,Simulati on,Big Data Analytics,Cybersecurity,6,Three pillars of IoT,INTRODUCTION TO IOT IN MANUFACTURING SECTOR,IoT helps to connect physicalsystems and devices witheach other and create large,interconnected network,Currently consumer side ofIoT is the main target, butmanufacturing operationsprovide significant future growth opportunities,The primary target is moreeffective production methods,that will require connectivity services,Infrastructure is anothermajor business IoT segment.Manufacturers can track theirenergy, transportation andother networks, minimizing operational costs,IoT,Consumer IoTConsumer electronicsDomestic appliancesSmart home,Infrastructure IoTEnergyTransportation systemsLogistics systems,Business IoTIndustrial robotsCustomer serviceProcess management,Pillars relevant to manufacturing industries,OVERVIEW,Internet of ThingsSupply chain effectivenessHi-tech goods industry recoveryCybersecurityMachine-to-Machine trafficSupply chain, production process trackingInterconnected devices growthAugmented reality,8,Effect on supply chain,SUPPLY CHAIN EFFECTIVENESS,Hi-tech goods turnover in the USA,B2B costs,Value-added,Domestic c,argins,DomesticProduction,multiplication,Increases turnover,Increases value-added Drives B2B spending,Hi-tech goods industrys B2B costs group in the USA, 2017,9,30-40%lower machinery maintenance costs,Global industrys globalcost savings could totalUSD140 billion per year,Total savings in global hi-tech goods industry couldtotal USD12 billion per year,Benefits to manufacturing sector,SUPPLY CHAIN EFFECTIVENESS,0,Hi-tech Goods Agriculture Transport EquipmentUtilities and RecyclingFood, Beverages and TobaccoMetal Products Retail and Wholesale Forestry, Wood and Paper Chemical ProductsMachinery Construction and Real Estate Information and CommunicationsBusiness Services Rubber and PlasticEnergy,Largest spenders on machinery, 2017,50100150USD Billion,OVERVIEW,Internet of ThingsSupply chain effectivenessHi-tech goods industry recoveryCybersecurityMachine-to-Machine trafficSupply chain, production process trackingInterconnected devices growthAugmented reality,11,Business products become a haven,OPPORTUNITIES FOR HI-TECH GOODS INDUSTRY,Developed countries seek new growth prospects:Western Europe: 0% CAGR North America: 1% CAGR Asia Pacific: 4% CAGR*over 2012-2017,Consumer electronics market cools,Consumer electronics demand shifts east,100200,SmartphonesWearable ElectronicsPeripherals Desktops Home VideoImaging Devices Portable Computers-1000,Retail value RSP growth 2012-2017, USD billion,Invest in components making,Transforms to solutions companies,Seek M&As,3.0%,0.5%,0.8%,-1.8%,-2.5%-1.5%-3.7%,Retail value RSP, CAGR 2012-2017,12,OPPORTUNITIES FOR HI-TECH GOODS INDUSTRY,CAGR 3.2% in 2012-2017 to reachUSD6.1 trillion,CAGR 4.8% in 2018-2030 to reachUSD11.2 trillion,6,0004,0002,0000,8,000,10,000,12,000,2012201420162018202020222024202620282030,USD billion,Industry 4.0 to kick start hi-tech goods industryHi-tech goods Production Value,13,Whats behind the growth?,OPPORTUNITIES FOR HI-TECH GOODS INDUSTRY,Electronic componentswill account for 29% ofhi-tech goods growth in 2017-2030.Batteries to post thelargest growth rate,thanks to autonomousvehicles and demand for mobile power.Consumer-orientedindustries continuegrowing, yet undergo transition.,OVERVIEW,Internet of ThingsSupply chain effectivenessHi-tech goods industry recoveryCybersecurityMachine-to-Machine trafficSupply chain, production process trackingInterconnected devices growthAugmented reality,15,In 2017, global computerservices revenue stood at USD2.7 trillion,Spending on computersoftware will grow asmanufacturingcompanies will facegrowing cybersecurity issues,Computer servicesindustry is forecast toexpand by 122% over2018-2030 to totalUSD5.9 trillion,Cybersecurity will be the future challenge for manufacturers,M2M traffic is expected to surge at 70%CAGR over 2016-2021, driving demand for cyber insurance services,CYBER CHALLENGES FOR COMPANIES,0,20,40,60,80,100,120,0,150,Cyber insurance revenue, USD billion,50100Number of companies in the US,2,013:10 companies,USD 40 billion,201,6:50 companies,USD 84 billion,2020:,USD 113billion,16,CYBER CHALLENGES FOR COMPANIES,Operational systems protectionThreat to production processTheft of data,Logistics system protectionMisinformation about processesBusiness contamination affecting multiple clients,Data protectionTheft of dataTheft of business know- how,Consumers protectionPersonal data lossDistortion of consumer data,Cybersecurity threatsThreats to be contained to ensure smooth IoT usage in business operations:,OVERVIEW,Internet of ThingsSupply chain effectivenessHi-tech goods industry recoveryCybersecurityMachine-to-Machine trafficSupply chain, production process trackingInterconnected devices growthAugmented reality,18,Surging data traffic key component,INDUSTRY 4.0 AND THE M2M TRAFFIC,1000,200,300,400,500,600,700,800,900,2017,2018,2019,2020,2021,M2M traffic, petabytes,Machine-to-machine traffic across regions, 2017-2021,Western Europe Asia Pacific Latin America,North America Eastern Europe Middle East and Africa,Consumer Traffic,Corporate Traffic,2-3bn devices are connected to IoT today100-150bn devices expected to beconnected to IoT by 203020-30%+ CAGR expected over 2017-2030,Source: Euromonitor International from Cisco,Mobile Telephony,Household,Vehicles,Industrial,19,INDUSTRY 4.0 AND THE M2M TRAFFIC,5GInternet,Broadband Connection,Smart Vehicles and Transport,Online Media,Control of Smart Devices,Internet of Things (IoT),Telecom companies converge with industrial enterprisesIndustry 4.0 encompasses all:5G internet to driveIndustry 4.0 revolution,Telecom companies well positioned for Industry 4.0,Content grows inrelevance, benefitsboth telecom andindustrial companies,IT-telecomconvergence to driveindustrial automation,OVERVIEW,Internet of ThingsSupply chain effectivenessHi-tech goods industry recoveryCybersecurityMachine-to-Machine trafficSupply chain, production process trackingInterconnected devices growthAugmented reality,21,SUPPLY CHAIN, PRODUCTION PROCESS TRACKING,Customer,Manuf acturer,Retailer,Logistics,Suppli er,Transportation network overhaul to benefit customersTop Logistics Services Buyers GloballyMore transparency in pricing, delivery trackingReal time facility and transport trackingTime savings,22,Digital production to help reduce errors,SUPPLY CHAIN, PRODUCTION PROCESS TRACKING,Around USD1.5 billion worth of foodproducts are wasted in manufacturing process in the UK alone,On global scale, food and beverage waste losses would equate to USD64 billion,The most common causes of food wasteare machinery breakages and errors in the manufacturing process,Digital production,Ingredients,0,2,000,4,000,6,000,8,000,Food, Beverages and TobaccoMetal Products Hi-tech Goods Transport Equipment Chemical ProductsMachinery Textile and Leather Products Non-metalic Mineral Products Forestry, Wood and Paper Rubber and PlasticPharmaceuticals and MedicalHousehold Goods,Top 10 Global Manufacturing Industries, USD Billion, 2017,23,Benefits for manufacturers,SUPPLY CHAIN, PRODUCTION PROCESS TRACKING,Cost ReductionLower labour costsMore flexible supply chainsDigitization helps to track inefficiencies,FlexibilityAbility to produce on demand = less stock in warehouseCustomisation and diversified product mix,Higher PrecisionLess errors in production processLower aftersalescost,OVERVIEW,Internet of ThingsSupply chain effectivenessHi-tech goods industry recoveryCybersecurityMachine-to-Machine trafficSupply chain, production process trackingInterconnected devices growthAugmented reality,25,Prerequisites for IoT adoption in industries,INTERCONNECTED DEVICES,Industryssophistication,Highervalue-added,Supply chain,Financial strength,Profitability,Presence of large companies,Investments in innovations,Industrys spending on digitization efforts (machinery, computers, IT systems, etc.),26,Leading economic sectors,INTERCONNECTED DEVICES,0.00.10.20.30.40.50.6,Primary Materials,Construction and Real EstatePersonal and Recreational ServicesGovernment, Health and EducationHotels and Restaurants,Retail and Wholesale,Business Services,Finance and InsuranceTransport and CommunicationsManufacturing,Energy, Utilities and Recycling,Best Positioned Sectors to Use IoT,Energy, utilities and recyclingBenefit from strong financial backup from countries governments, and relatively universal activities throughout the world simplifying the sectors transition to IoT,Services-related sectorsStrong financial standing and high value- added created within the sectors drive competition in the technology department.Digitalization effort is a key factor driving the transition to IoT,ManufacturingManufacturers and governments seek to boost sectors productivity,27,INTERCONNECTED DEVICES,Data Collection,Energy companies can increase efficiency by using IoT:Equipment monitoring Data analytics can forecast peakdemand/supplyLower reaction times,Infrastructure control,Infrastructure effectiveness to increase:Communication between different equipmentSmart meters, sensors Creation of smart grid,Energy and Utilities: using IoT to handle renewable energyBy 2030 power generation from renewable sources in EU is expected to reach 30%.Smart systems will have to be implemented to handle this.,28,Autonomous cars future growth area,INTERCONNECTED DEVICES,Businesses operating in closed environments (agriculture, mining),Road freight transport and taxi companies bring autonomous cars on the road,Private consumers adopt new technology,USD216 billion globallyautomotive industrysspending on hi-tech goods in 2017,Key growth sectors: SensorsEnvironment recognition, hazard detection,Signal EquipmentAntennas, data transfer,Movement Control UnitsSteering, driving, torque controlsComfort EquipmentInfotainment systems,Time,2018,2025,Autonomous cars evolution,30 million of autonomous cars of various levels on the road20302035,OVERVIEW,Internet of ThingsSupply chain effectivenessHi-tech goods industry recoveryCybersecurityMachine-to-Machine trafficSupply chain, production process trackingInterconnected devices growthAugmented reality,30,Virtual reality,Industry 4.0 expands reality to improve processes,AUGMENTED REALITY CHANGES MANUFACTURING PROCESSES,Augmented reality,Mixed reality,Industry 4.0 offers several virtualization layers,Fully digital visualization,Digital-reality visualization,Digital-reality-experience visualization,31,Reinvesting manufacturing process,AUGMENTED REALITY CHANGES MANUFACTURING PROCESSES,Higher efficiencySafer environmentLower costsNew products launchStronger quality controlDeeper employee training,Thank You,