Many Manufacturers Not Prepared to Harness Benefits of Digital Technologies Despite Plans to Invest Heavily in AI & Related T...
April 19 2016 - 3:59AM
Business Wire
Automotive and industrial equipment companies
could spend up to €220 billion in R&D over next five years
to create a connected industrial workforce
Despite plans to invest in machines and artificial intelligence
as part of their strategy to boost productivity, many automotive
and industrial equipment companies are failing to implement the
measures needed to harness these capabilities, according to a new
report from Accenture (NYSE:ACN).
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The report, “Machine dreams: Making the Most of the Connected
Industrial Workforce,” is based on interviews with more than 500
business executives in Asia, Europe and the United States involved
in setting their company’s strategy for the connected industrial
workforce. According to the report, manufacturing and production
are undergoing rapid change as machines and artificial intelligence
are becoming closely integrated with personnel, creating the
connected industrial workforce. By combining mobile, safety and
tracking technologies with analytics, companies are enhancing the
activities of an industrial worker.
The report concludes that the creation of a connected industrial
workforce is already part of the business strategy of the majority
of automotive and industrial equipment producers, cited by 94
percent of respondents. Respondents estimate that their companies
could spend up to one-quarter of their R&D expenditure over the
next five years on connected industrial workforce technologies.
This could reach €181 billion for automotive companies and €39
billion for industrial equipment companies.
But while the manufacturing companies surveyed believe that the
impact of the connected industrial workforce will be significant,
the research reveals that the companies making these investments
could fail to maximize the competitive advantage that the
investments can bring. For instance, fewer than one-quarter (22
percent) of respondents said their companies have implemented
measures designed to realize the potential of a connected
industrial workforce, with 85 percent of respondents describing
their companies as digital followers or laggards, rather than
leaders.
One of the issues that could adversely impact the implementation
of a connected industrial workforce is the related technology. Data
vulnerability is seen as a medium or high risk for 76 percent of
respondents, while system complexity and related vulnerability is
seen as medium or high risk by 72 percent of respondents. In
addition, more than two thirds (70 percent) of respondents
consider a shortage of skilled human workers to be a high or medium
risk. This could also impact their ability to deliver on their
connected industrial workforce strategy.
“Those leading manufacturers investing in digital technologies
to harness competitive advantage are spending almost twice as much
as laggards on the connected industrial workforce – and will
continue to raise the bar over the next five years,” said Eric
Schaeffer, senior managing director and head of Accenture’s
Industrial practice. “We also see laggards lacking the confidence
to implement the technologies that underpin a successful connected
industrial workforce and this may threaten their
competitiveness.”
The vast majority of respondents – 85 percent – said they expect
the focus of technology in manufacturing to evolve from human to
human-machine-centric, where collaborative machines, humans
augmenting machines and autonomous machines are combined to create
a more effective workforce. A number of the organizations surveyed
have a clear focus for investments relating to workforce
effectiveness. Autonomous guided vehicles – mobile robots that move
materials around a facility or warehouse – already account for half
of spending by these companies in this area and will continue to
account for much of it in the future. The same organizations plan
to boost their investments in both collaborative robots (“cobots”)
and augmented reality devices, including smart glasses and helmets,
over the next five years.
In their efforts to tackle the security concerns, a number of
respondents are also investing heavily in upgrading their existing
IT infrastructures to help ensure a securely connected workforce.
Among the respondents who believe they are leading the creation of
the connected industrial worker, 89 percent have started to hire
new talent to close the skills gap.
Automotive could lead the way
Accenture estimates that by 2020 the connected industrial
workforce could help an automotive manufacturer with annual
revenues of €50 billion unlock as much as €500 million in
additional profitability – including €50 million in increased
R&D profitability, €415 million in increased profitability from
manufacturing and supply, and €30 million in increased
after-sales profits.
Among the respondents who are seeking to use technology to help
them improve productivity, the automotive manufacturers and
suppliers have the highest interest in collaborative robots,
automated guided vehicles and augmented reality devices.
“As cobots take on more and more specialized tasks, leading
manufacturers that are investing in digital to harness competitive
advantage are moving rapidly toward human-machine-centric
manufacturing,” added Schaeffer.
The report also identified some differences by country in terms
of their R&D investments in connected workforce technologies.
US respondents expect to make the highest percentage of R&D
investment in the connected industrial workforce, at 40 percent of
total R&D spend. The next highest percentage is for respondents
in China, estimating 23 percent of R&D to be spent in this
area, falling to 17 percent of total R&D spend for respondents
in Japan. The respondents in Germany and France estimate 20 percent
and 19 percent respectively.
About the research
Accenture interviewed 512 business professionals at companies in
China, France, Germany, Japan and the United States. All
respondents were involved in setting their company’s strategy for
the Connected Industrial Workforce; the sample included factory
directors, engineering and R&D heads, operations and HR
managers, and C-suite executives. More than half were from the
industrial equipment industry, with the rest split between
automotive and construction equipment. The interviews were
conducted in December 2015.
About Accenture
Accenture is a leading global professional services company,
providing a broad range of services and solutions in strategy,
consulting, digital, technology and operations. Combining unmatched
experience and specialized skills across more than 40 industries
and all business functions – underpinned by the world’s largest
delivery network – Accenture works at the intersection of business
and technology to help clients improve their performance and create
sustainable value for their stakeholders. With approximately
373,000 people serving clients in more than 120 countries,
Accenture drives innovation to improve the way the world works and
lives. Visit us at www.accenture.com.
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AccentureAnthony Hatter, + 44 7810 756
138anthony.hatter@accenture.com
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