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How Has Industry 4.0 Progressed in 2018?

Posted by Charing Kam on Nov 23, 2018 10:31:00 AM
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Back in the beginning of 2018, we spoke about the cloud forecast for manufacturers in the realm of Industry 4.0; key trends predicted included the increase in public cloud, hybrid cloud usage, and the focus on cloud security and cloud ERP.

According to Forrester, ‘the total global public cloud market will be $178B in 2018, up from $146B in 2017, and will continue to grow at a 22% compound annual growth rate’. SaaS revenue, in particular, is expected to jump from $58.6 billion to $71.2 billion, per Gartner.

So, with 2018 almost over, how has Industry 4.0 progressed? Are manufacturers using Industry 4.0? What partnerships or new technologies have been announced, and what should we look forward to in 2019?

Southeast Asia Is Aiming For Industry 4.0 Dominance

Within the last year, countries within Asia, and Southeast Asia in particular, have all announced Industry 4.0 initiatives, in an attempt to take a slice of the emerging industrialisation pie.

From Malaysia announcing their Industry4WRD initiative back in October, to Indonesia and their 'Making Indonesia 4.0' in April, it has become clear that countries in the region now know the importance of digitalisation and Industry 4.0 technologies. Of course, Singapore has their own Smart Industry Readiness Index, released last year in collaboration with TÜV SÜD, which has led to the announcement of 300 funded assessments, and the launch of the Index Partners Network.  

In another exhibit of faith in the region, last month, the inaugural Industrial Transformation Asia Pacific (ITAP) was held here in Singapore, in collaboration with the leading trade fair Deutsche Messe. More than 200 exhibitors (including us!) were showcasing their wares and speaking at different conferences held during the 3-day event, aiming to contribute their solutions to manufacturers’ digitalisation journeys.

Large Corporations and Small Start-Ups Are Changing the Industrial Landscape

Industry 4.0 Progress 2018 (1)

Industry 4.0 has often been discussed as a solution for large multinational corporations to manage their shop floors more efficiently and help their teams to sell faster. This doesn’t mean, though, that only large manufacturers can benefit from Industry 4.0 solutions.

While companies such as Merck and BMW are using Internet of Things (IoT), Big Data and Additive Manufacturing to solve inefficiencies, smaller manufacturers such as start-up Voodoo Manufacturing have also used Industry 4.0 proactively to help in quicker expansion and growth plans.

2019 Continues On The Upward Trend of Digitalisation

As we’ve seen, investments in the realm of Industry 4.0 continues to be one of the key roadblocks when it comes to digital transformation. A Deloitte presentation in October showcases that Industry 4.0 investments tend to revolve around small operational upgrades, with supply chain teams uninvolved in the process.

Industry 4.0 Progress 2018 (2)

Revenue growth is limited to the savings from the operational upgrades executed, as well as in departments where upgrades can seem easier to implement, from ERP software analytics to productivity tools for Excel, or other sales management tools that can be relatively straightforward to manage. R&D-driven investment is low, and that means that new business models such as Equipment-as-a-Service are less popular.

In terms of country-specific digitalisation, we can also see which industries each country is focusing on.  As per a study by PwC, European companies are focusing in digital factory investments, but mostly within their home markets, while Indonesia’s Industry 4.0 initiative clearly states its focus on the textiles, garment, automotive, electronics, and chemicals industries. This affects the types of digitisation within each country and region, as specific technologies are built to meet those industries’ needs.  

From the solution-provider point of view, though, costs are expected to decrease over the next few years as companies lean on servitisation to make a profit. Ability for customisation and exemplary customer service will help companies to stand out in a crowded market. Skilled labour, then, in the realm of Industry 4.0 technologies, will become crucial; employees will take on larger roles in real-time decision-making as predictive maintenance becomes more common. According to a World Manufacturing Forum report, he skill gap, especially in advanced manufacturing, will grow by at least 9% by 2020. 

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Charing Kam

Written by Charing Kam

Charing is responsible for In Mind Cloud's Inbound Marketing initiatives. A content marketing enthusiast, she works to find out how consumers make decisions and aims to help them along the way.

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