A revolution in manufacturing is firmly underway. Infineon, a German semiconductor manufacturer, is investing $105 million in the next five years in order to turn its Singapore plant into a smart factory. It took robots and 3D Printing to make Adidas bring back manufacturing to Germany. A leading fragrance maker in Switzerland ramped up capacity by a third in the past three years, all through addition of robots. To assess how manufacturers can drive most value from smart factories, we surveyed 1000 senior executives of large companies across key sectors and countries. Here are the key findings from the research: The prize: • Smart factories could add $500 billion to $1.5 trillion in value added to the global economy in five years • Manufacturers predict overall efficiency to grow annually over the next five years at 7 times the rate of growth since 1990 • We estimate that smart factories can nearly double operating profit and margin for an average automotive OEM manufacturer The challenge: • 76% of manufacturers either have a smart factory initiative that is on going or are working on formulating it. And more than half of manufacturers (56%) have aligned $100 million or more towards smart factories. • However, only 14% of companies are satisfied with their level of smart factory success. Only 6% of manufacturers are ‘Digital Masters’: at an advanced stage in digitizing production processes and with a strong foundation of vision, governance and employee skills. • Digital Masters outpace all other categories in realizing the benefits of smart factories

1. Manufacturers are pouring in money
to set up smart factories
56% of the survey respondents have
invested more than US $100 Million in last five years
Distribution of manufacturers based on their smart factory investments in the last five years
Smart factories to add
from $500 billion
to $1,500 billion
in the next 5 years
annually*
*in eight major economies
We estimate that
smart factories can
more than double
operating
profit and
margin
Manufacturers predict
quality indicators to
improve annually at 12
times the rate of
growth since 1990
thanks to smart factories
Industrial
Manufacturing
Automotive Aerospace
& Defense
Energy
& Utilities
Pharma,
Life Science,
BioTech
Consumer
Goods
Average realized overall productivity gains from smart factories so far
What is a smart factory?
A factory that makes intelligent use of cutting edge digital technologies and smart features to gain
considerable advantage in terms of productivity, efficiency, quality and flexibility.
The Size of the Smart Factory Prize is Too Large to Ignore
Manufacturers across segments are already
harnessing the potential of smart factories
12x 2x
$500 bn $1,500 billion
A research by Capgemini's Digital Transformation Institute
Digital masters are reaping the rewards of their digital maturity
How can manufacturers become digital masters?
Digital Maturity Matrix
However, only 6% of manufacturers are truly
advanced in their digital transformation
Digital Intensity dimension: - measures the level of digitization of crucial
processes, and the level of use of digital technologies.
Transformation Management Intensity dimension: - measures management
aspects such as smart factory vision, governance, and the digital skills of
manufacturers’ workforce.
All the surveyed countries and industries, on
average, are quite far from becoming digital masters
Proportion of categories based on digital maturity across industries
Realized Gains - Beginners Vs. Digital Masters
Contact us: dti.in@capgemini.com
The information contained in this document is proprietary. © 2017 Capgemini. All rights reserved.
Smart Factories: How to realize the
potential of the digital industrial revolution
Manufacturers across countries are enthusiastic in
embracing smart factories
North America Western Europe India and China
US
54% France
44%
Germany
46% India
28%
China
25%
UK
43% Sweden
39%
Italy
33%
Audi’s €1 bn
smart factory
in San José
Chiapa,
Mexico
Faurecia’s $64
million smart
factory in
Columbus,
Indiana
Adidas’
high-tech
Speedfactory in
Ansbach,
Germany
Siemens’
smart plant in
Amberg,
Germany
GE’s “brilliant
Factory” in Pune,
India
ABB’s smart
plant in Beijing,
China
Penetration level: 50 - 60% 40 - 50% 30 - 40% 20 - 30%
Percentages indicate the share of companies in the respective country that has a smart factory initiative ongoing
17%
18%
16%
17%
18%
17%
29%
27% 27%
26%
24%
21%
ProductivityDirect labor
Cost
Raw Material,
Logistics &
Tranportation
Overall
Equipment
Effectiveness
(OEE)
Quality & ScrapSelling,
General &
Admin Costs
Beginners Digital Masters
Fashionistas Digital Masters
Beginners Conservatives
Establish a roadmap and rally support
of key leaders
Measure and monitor business value
of digital initiative and kill unprofitable
ones
Bridge the digital talent gap by
partnering with ecosystem players
Craft a holistic vision; establish a
foundation of strong leadership and
governance
Invest in digital initiatives aligned with
the vision
Launch proofs-of-concept and
demonstrate early wins
Ensure agility is factored in your
governance models
Prioritize and execute on your digital
initiatives
Scale your initiatives to the
organizational level
Maintain focus on your roadmap
Sustain the momentum by keeping
your people engaged
Strive for a digital culture and mindset
as you advance your initiatives
Source: Capgemini Digital Transformation Institute analysis
20%
19%
17%18% 17%
18%
Capgemini Smart Factory Framework
84% 85%
80% 81%
65%
86%
13% 11% 15% 16%
20%
11%
1% 1% 1%
1%
1% 4% 5% 3%
14%
4%
Aerospace
and
Defense
Automotive
and
Transportation
Consumer
goods
Energy &
Utilities
Industrial
manufacturing
Biotech &
Pharma
Beginners Conservatives Fashionistas Digital Masters
5% 4% 5% 5% 6%
11%
6%
7% 6% 7%
6%
4%
5% 6%
7%
5%
28%
16%
18% 18%
56%
20%
1%
1%
Less than
$50M
Between
$50 - $100M
Between
$100 - $250M
Between
$250 - $500M
More than
$500M
Both Greenfield & Brownfield Brownfield Greenfield Yet to be decided
Fashionistas 1%
Beginners 78% Conservatives 15%
Digital Masters 6%
Low High
LowHigh
Transformation Management Intensity
DigitalIntensity
Manufacturing Digital Transformation
Complex System Simulation: Product, Process, Flow
Industrial Cybersecurity: Product, Process
Smart System
Collaboration
Usage feed-back
Digital Twin
Remote
monitoring
Autonomous
Operations
Operations
Technology
Product Quality
Preventive &
Predictive
maintenance
Mobility &
Remote
Augmented /
Virtual reality
Health Safety
Environment
Operations Management
PLM
Digital Asset
Management
Industrial
Control System
Manufacturing
Intelligence
Digital
Operator
Digital
Mock Up
From Scan…
to Print
Product and Asset Management
3D Continuity
3D Platform
IoT Platform
Smart Factory