SIMON JACOBSONResearch VP

Gartner Research

Digital Transformation of Manufacturing

SIMON LAWSONManufacturing Solutions

GE Digital

CONFIDENTIAL AND PROPRIETARYThis presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other intended recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates. © 2017 Gartner, Inc. and/or its affiliates. All rights reserved.

Digital Transformation in Manufacturing Operations

Simon Jacobson

@simonfkj

4 © 2017 Gartner, Inc. and/or its affiliates. All rights reserved.

62% of organizations expect over half of their revenues to be driven by

digital business in the next two years

Source: Gartner Digital Business Impacts and the Supply Chain Study, 2017n=318

© 2013 Gartner, Inc. and/or its affiliates. All rights reserved.

Can You Change the Wheels on a

Moving Bus?

6 © 2017 Gartner, Inc. and/or its affiliates. All rights reserved.

CostQuality

Capability

TimeTransparency

Reliability

Value for the Customer

How We View Manufacturing Has Changed

© 2013 Gartner, Inc. and/or its affiliates. All rights reserved.

Innovation

Trigger

Peak of Inflated

Expectations

Trough of

Disillusionment

Slope of

Enlightenment

Plateau of

Productivity

Ex

pe

cta

tio

ns

Time

Positive Hype

Negative Hype

Innovation

Trigger

Peak of Inflated

Expectations

Ex

pe

cta

tio

ns

Positive Hype

Trough of

Disillusionment

Slope of

Enlightenment

Negative Hype

Plateau of

Productivity

Time

Digital Pressures The Manufacturing Improvement Portfolio Balancing Innovation with Core Competency

What future trends should my

company be preparing for?

Where should my company be

focused today?

What my company

should have completed?

© 2013 Gartner, Inc. and/or its affiliates. All rights reserved.

Digital Pressures The Manufacturing Improvement Portfolio Balancing Innovation with Core Competency

Source: Hype Cycle for Manufacturing Strategy, 2017

© 2013 Gartner, Inc. and/or its affiliates. All rights reserved.

10 © 2017 Gartner, Inc. and/or its affiliates. All rights reserved.

Mat

urity

Lev

el

Inside-Out Outside-In

Connected Plants and Factories Connected Value Networks

Avoid Outpacing YourselfDevelop a Balanced Roadmap

Standalone Manufacturing

Reacting

“We are a servant that must fill all

orders at any cost”

Site Excellence

Anticipating

“We must drive increased OEE”

Integrated Manufacturing

Network

Integrating

“How are we driving economies of scale to

flexibly support the business?”

Outcome-drivenManufacturing

Collaborating

“Are we impacting the customer-driven outcomes of the supply chain?”

Solution-driven Manufacturing

Orchestrating

“Are we involved in creating new

demand?”

Source: Gartner, 2016

11 © 2017 Gartner, Inc. and/or its affiliates. All rights reserved.

Mat

urity

Lev

el

Inside-Out Outside-In

Connected Plants and Factories Connected Value Networks

Digital Happens At All Stages

Standalone Manufacturing

Reacting Site Excellence

AnticipatingIntegrated

ManufacturingNetwork

Integrating Outcome-drivenManufacturing

CollaboratingSolution-driven Manufacturing

Orchestrating

The Trap

The Opportunity

Operating Efficiencies through Smart and/or Connected Factories

Orchestrated Capabilities and Ecosystems

Source: Gartner, 2016

12 © 2017 Gartner, Inc. and/or its affiliates. All rights reserved.

Maturity Is Not When We Start Thinking Big Things, It's When We Start Understanding Small Things.

CONFIDENTIAL AND PROPRIETARYThis presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other intended recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates. © 2017 Gartner, Inc. and/or its affiliates. All rights reserved.

Digital Transformation in Manufacturing Operations

Simon Jacobson

@simonfkj

• The devil is in the detail

• Just collect data – right?

The analytics trap

Analytics is not an outcome

• What does this mean?

Data for the sake of data?

• Time series data – temperature

• Location data

• Events – Rain, sunshine

• Outcome

• No need to pack a heavy coat

Data in context

Time >>>

Me

asu

rem

en

t

Time series data

1 2 3

• Collects time-series data: Pressures, temperatures, test values, etc…

• Identifies production events: Part, lot, batch, downtimes, product changes, etc…

• Provides operational context: Product, grade, crew, order, customer, etc…

4

Characterizes by

summarizing

Average,

Total,

Max, etc.

Average,

Total,

Max, etc.

Average,

Total,

Max, etc.

Average,

Total,

Max, etc.

Operational context

Manufacturing data in context

Production events

MES

ERP

MES

Historian

Automation

Plant / Sensors

Manufacturing Execution Systems

Data in context

Projects with measurable outcomesand provide contextualized data

X-as-a-Service

Future State of a Transformed Discrete Manufacturer

Services

People, Parts, Tools, and Material Tracking

Site Analysis

Risk Identification

Energy (Air, Water, and Electricity) Usage

Safety and Sustainability

Component Manufacturing Finishing AssemblySourcing

Digital Twin Output

Operational Routing Activities; Data Collection (Quality)

Fleet Management

Dealer/Distributor

Inventory and Material Management and Supply Chain Management

Simulate

Production

Workforce Optimization;

Standard Operating Procedures and Work Instructions

Simulate

Usage

Usage Monitoring

Fleet Service and

Management

Forging, Casting,

Stamping, Drilling,

Milling Machines, 3D

Printing to the Assets

System-wide Machine Service Maintenance, Coordination, and Performance

Component Manufacturing Finishing AssemblySourcing

Welders, Torches,

Torque Tools and

Robots

Spray Guns, CNC

Machines, and

Robots

Lift Devices and

Torque Devices

BuildingDesign

Business

Environment

Operations

Assets

The Path to Transformation for a Discrete Manufacturer

TIME

Manage operations by automating

workflows, optimizing staffing, and

predicting maintenance

• Develop predictive machine maintenance

capabilities

• Identify production bottlenecks early

• Design new equipment models for reliability

• Reduce waste and minimize material

consumption

• Reduce paper on plant floor

• Reduce cost of energy/utilities

• Reduce water and wastewater

Tie in the enterprise and sense

demand, respond in real time, and

simulate and optimize production

• Enable build-to-sequence environment

• Leverage real-time production reports

• Bring real-time usage into the design cycle

• Reduce cost to serve

• Use analytics to drive decisions around

simulation and optimization

• Achieve 100% on-time delivery

• Improve and accelerate prototype cycle

• Reduce raw material variability

• Improve product conformance

• Reduce human error

Establish visibility in people, process,

machine efficiency, and cost

• Develop real-time visibility into asset performance on

any device

• Improve machine operator productivity

• Ensure operator is qualified for a given operation

• Parse, aggregate, and report on asset downtime codes

• Reduce process inefficiency

• Improve traceability within the plant

• Layout manufacturing process accurately

• Decrease rework time and volume

• Decrease cost of inventory and reduce material costs

• Track true cost by unit produced

Visualize

Optimize

Innovate

Two decades of

experience delivering

value with the worlds most

respected manufacturers

http://www.geautomation.com/global-mes-installations2

GE manufacturing software

GE AviationGE Aviation

https://youtu.be/sSooHMMVpfU

GE Aviation

https://youtu.be/sSooHMMVpfU

Run video

Cheltenham, UK

GE Aviation, Cheltenham

• 10 point improvement in on-time-delivery

• Better quality

• Visibility to actual costs

• ERP, MES, HRM & Quality systems in concert

“This is a business project. This is not an IT project.”

GE Digital solutions for productivity

Digital Productivity Opportunities

Application Areas

Processesá On time in full

á Throughput

â Rework

â Lead Time

Personnelá Productivity

á Compliance

â HSE incidents

â Turnover

Materialsá Yield

á Quality

â Waste

â Cost

Equipmentá Reliability

á Availability

â Operational Cost

â Operational Risk

Procter & Gamble

https://youtu.be/FVR1JGzrnCc

P&G

https://youtu.be/FVR1JGzrnCc

Procter & Gamble

Run video

Digital tools critical

• Digital tools critical to delivering manufacturing of the future

• The work doesn't happen at the desk, the work happens at the piece of

equipment

• Integration of disparate systems

• 45mins saved per shift per line

• Transformational forces shaping responses

The new paradigm

Close to consumer market Smaller

Multi product Made to order

The time is right

Synchronised upswing for global economy

“The past decade has

been marked by a series

of false economic dawns

This time really does feel

different”

Sundsvall, SwedenAkzoNobel

https://youtu.be/nQq8gDbVvv0

Sundsvall, Sweden

AkzoNobel https://youtu.be/nQq8gDbVvv0

Run video

AkzoNobel

Enabled to serve our customers in a better way

• Recovered 20% capacity in Sundsvall

• Deferred CAPEX on a new line

• Learning point

• Transformed business models

Summary

• Organizations expect revenues to be driven by digital business

• Develop a balanced roadmap

• Take advantage of economic upswing

• Projects that provide contextualized data

• Act now

See us in the Tech Hall – Manufacturing Solutions

Take The Next Step

Thank You

SIMON JACOBSONResearch VP

Gartner Research

Digital Transformation of Manufacturing

SIMON LAWSONManufacturing Solutions

GE Digital

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Safe Harbor Statements

This document contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking

statements may be identified by words such as "expects", "anticipates", "intends", "plans", "believes", "seeks", "estimates", "will" or words of similar

meaning and include, but are not limited to, statements about the expected future business and financial performance of GE. Forward-looking

statements are based on management's current expectations and assumptions, which are inherently subject to uncertainties, risks and changes in

circumstances that are difficult to predict. Actual outcomes and results may differ materially from these expectations and assumptions due to

changes in global political, economic, business, competitive, market, regulatory and other factors. We undertake no obligation to publicly update or

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The information presented is intended to be an outline of general product direction and it should not be relied on in making a purchasing

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promise or legal obligation to deliver any material, code, or functionality. The development, release, and timing of any features or functionality

described for our products remains at our sole discretion.