21.04.2016 Nearly half of all industrial companies are implementing Industry 4.0
- Bitkom study conducted on behalf of the Hannover Messe
- Only four per cent of companies are currently willing to invest in Industry 4.0
- Many companies are planning new hires to support the implementation of Industry 4.0
Industry 4.0 has spread to German factories, where 3D printers are churning out models, robots are controlling production and products are communicating with machines. However, German companies are still hesitant to invest in innovative digital technologies for networked production. This reluctance was one of the key findings of a representative survey commissioned by Bitkom in preparation for this year’s Hannover Messe. 559 industrial companies with 100+ employees each participated in the survey. The results revealed that 46 per cent, or nearly half of German manufacturing companies have implemented Industry 4.0 applications, and that an additional 19 per cent have concrete plans to implement them. This means that 65 per cent, or nearly two-thirds of German industrial companies are already engaging with Industry 4.0. Around one-fourth of survey participants (23 per cent) do not have concrete plans to implement Industry 4.0 yet, but can imagine that they would implement these sorts of applications in the future. Only 12 per cent of survey takers said that they are not or will not be interested in Industry 4.0. Incidentally, ‘Industry 4.0’ is an umbrella term that refers to the fourth Industrial Revolution, which involves merging traditional production practices with the Internet. This revolution entails digital technologies such as sensors, big data analyses and 3D printing converting traditional factories into intelligent ones where machines, products, customers and suppliers are networked with one another as well as with outside parties. This networking optimises processes, lowers costs and gives rise to new, innovative business models – for example, ones based on platforms or big data analyses. “The fourth Industrial Revolution has arrived on the factory floor,” says Frank Riemensperger, member of the Bitkom Executive Committee. Nevertheless, entrepreneurs are still rather hesitant to invest in this revolution, as the Bitkom study revealed. 57 per cent of the companies that have implemented or intend to implement Industry 4.0 have allocated resources to this end. However, on average, this budget allocation only amounts to four per cent of total revenues. “Companies cannot expect to lead the digital marketplace on a meagre budget. Those who wish to remain successful in the future need to invest in digitization now,” says Riemensperger.
According to the Bitkom survey, most companies implement or plan to implement Industry 4.0 with two main goals in mind: optimising their processes and improving the capacity utilisation in their factories. 69 per cent of companies who have implemented Industry 4.0 and 57 per cent of companies who plan on doing so named these aims among their three most important goals. 50 per cent decided to engage with Industry 4.0 in the hope of being able to address individual customer demands more quickly. 44 per cent primarily wished to reduce their production costs by implementing Industry 4.0, while 19 per cent mainly hoped that this shift would reduce their personnel costs. 17 per cent of those who have implemented or plan to implement Industry 4.0 named improved maintenance window scheduling as a high priority. Only 15 per cent are mainly engaging with Industry 4.0 in order to develop new business models or modify existing ones. Finally, a mere 13 per cent are engaging with Industry 4.0 with the main goal of addressing new customer groups. “Industry 4.0 rewards companies with benefits that traditionally ensure commercial success, including increased efficiency and productivity. This shift also allows companies to improve existing capacities and create new ones in equal measure,” says Riemensperger. “Industry 4.0 is particularly beneficial for ‘as a service’ business models, whereby companies calculate usage based on units of consumption instead of selling products. When companies set up these new business models, they need to call traditional practices into question, or even implement radical changes.”
While nearly all of those engaging with Industry 4.0 (97 per cent) are taking a strategic approach to implementing this shift, these approaches widely vary: 59 per cent have created a strategy for their entire company, while 38 per cent only target individual divisions. “It is a good idea to start out by making changes in parts of the company. However, the company will not reach its full potential until all of its divisions have been thoroughly digitised. The company will not benefit if the production is highly digitally networked, but the supply chains and customer loyalty projects cannot keep up with these new, agile developments. Companies need to implement an integrative approach for the medium-term, and create a single, cohesive digital strategy that applies to suppliers, partners and customers,” says Riemensperger. Companies also benefit when employees are able to work across departments and incorporate external expertise. 91 per cent of survey takers engaging with Industry 4.0 indicated that they are largely developing their Industry 4.0 strategies internally, under the direction of employees such as the head of production. 39 per cent drew upon the expertise of external consultants such as ones from management consultancies or industry and trade chambers, 28 per cent developed their strategies in cooperation with small, medium-sized or large companies from the digital sector, 11 per cent cooperated with competitors and eight per cent worked together with scientific institutions. A mere six per cent incorporated start-ups into the strategic process. “When it comes to developing new, data-driven business models, companies need to draw upon the experience of their own employees as well as people who think outside of the box and bring new, creative ideas to the table, such as their customers and service partners as well as start-ups.”
The greatest hurdle to implementing Industry 4.0 is the financial investment that this entails. 75 per cent of all German industrial companies said that high investment costs hindered their company in implementing Industry 4.0. Around half of the companies identified data protection requirements (55 per cent) and security requirements (51 per cent) as significant impediments, while 53 per cent cited a lack of specialists. Additional impediments include: the complexity of the undertaking (named by 50 per cent), lack of legal framework (named by 40 per cent), feared susceptibility of systems to fault or failure (named by 38 per cent) and lack of standards (named by 36 per cent).
Industry 4.0 also affects work in networked factories. 11 per cent of companies that have implemented Industry 4.0 or plan to do so hired new employees to supplement this implementation last year, while 15 per cent plan to do so this year. The most sought-after types of IT employees are data analysts: 36 per cent of companies that hired or plan to hire employees for Industry 4.0 cited their interest in taking on these kinds of specialists. 21 per cent of companies are seeking IT security experts, making this the second most highly-sought-after group. Companies also hired or plan to hire software developers or programmers (17 per cent), IT service managers (15 per cent), system architects (13 per cent), and quality managers/testers (ten per cent). Moreover, just over half of all companies (51 per cent) that have already implemented or plan to implement Industry 4.0 will provide further training for their employees. 43 per cent did so last year. Generally speaking, implementing Industry 4.0. does not involve layoffs: only six per cent of companies who have implemented or plan to implement Industry 4.0 laid off employees last year as part of the implementation, and only seven per cent plan on doing so this year. “Industry 4.0 does not take people off factory floors. However, it does call for new skill sets. Employees need to practise handling new digital technologies, and, generally speaking, companies also need to hire new employees who are experts in industrial IT,” says Riemensperger. According to the study, qualified specialists with interdisciplinary knowledge on networked working methods are in high demand. Industry 4.0 also opens up new opportunities for less-qualified personnel through IT-based assistance systems. According to the survey, three-quarters of companies (75 per cent) agree with the following statement: Industry 4.0 is a necessary prerequisite for maintaining competitiveness on the German industrial market as well as for securing jobs.
Bitkom will present additional recent survey results on the topics of Industry 4.0 and IT security/economic regulations at a press conference at the Hannover Messe on 25 April at 11:30 am. Bitkom Executive Committee member Winfried Holz will speak on this occasion. To register, please contact: firstname.lastname@example.org
Bitkom will also be represented by 15 exhibitors, including – for the first time ever – start-ups, in the Bitkom Innovation Area in Hall 7, Booth D28. 45 experts will present lectures and lead podium discussions at the accompanying Bitkom Innovation Forum. Additional information on Bitkom’s activities at the Hannover Messe is available here: https://www.bitkom.org/Presse/Presseinformation/Bitkom-auf-der-Hannover-Messe.html
Note on the survey methodology: This information was gathered from a representative survey that Bitkom Research conducted on behalf of Bitkom. 559 heads of production, board members and CEOs of industrial companies with 100+ employees apiece participated in the survey.