Study Germany: Industry 4.0 offers $1.4 trillion global annual added value in 2030

Editor: Barbara Schulz

A global study by Oliver Wyman on "digital industry" found that Industry 4.0 offers enormous potential, and not only within production. Most of the value of digital industry will be realised outside of the production area.

Potential for digital industry in 2030 (additional annual margin)
Potential for digital industry in 2030 (additional annual margin)
(Photo: Wyman)

Production will of course be enhanced, the study said, but more importantly, digital industry will give rise to a second generation of “lean” over the next 10-15 years and impact processes like planning, pricing, maintenance, R&D and product launch.

Oliver Wyman predicts that the global annual margin impact of Industry 4.0 across discrete manufacturing in 2030 could be an estimated $1.4 trillion. The automotive sector could see the highest absolute value impact, while aerospace and rail-rolling stock manufacturers could see the largest relative change. Contrary to common belief, “digital industry” is not about technology, Oliver Wyman said. Technology will be an enabler, but the true value of the next industrial revolution is that it will lead to better decisions, more efficient processes, and new business models. Digital industry will dramatically transform the way industrial companies operate, with results over the next 10-15 years comparable to the introduction of mass production at the beginning of the twentieth century and to lean and re-engineering toward its end.

Next generation of production technology

The next generation of production technology is just starting to be rolled out, however, the study projects that the hardware and software will matter less than the “application layer” - the business models, processes, analytics, and decision-making that this technology will enable.

This cumulative value will be unlocked by the wide range of levers that is becoming available. Demand forecasting and intelligent pricing is the largest lever. Not surprisingly, more flexible production and mass customisation will also deliver on margin impact. Small or individual lot sizes will be handled just like regular series production, based on 3D models, simulation, flexible systems, and fully integrated end-to-end data flows.

Digital industry will also enable machinery and engineering firms to evolve their business models around internal processes, aftersales and optimisation software.