Post on 01-Jun-2018
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Transform to the power of digital
Digital Transformation in ManufacturingSeminar
27 August 2014
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Transform the power of digital
AGENDA
About Capgemini Consulting
Digital Transformation
Digital Transformation in manufacturing
Manufacturing case examples
Breakout discussions and present back
Summary and conclusions
Copyright 2014 Capgemini Consulting. All rights reserved.
3
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Capgemini Consulting is the management advisory part of the Capgemini Group
Canada
United States
Mexico
Brazil
Argentina
All over Europe
Morocco
Australia
Peoples Republicof China
India
Chile
Guatemala
Singapore
Philippines
Taiwan
Vietnam
UnitedArab Emirates
Malaysia
Outsourcing ConsultingTechnology
One of the worlds foremost providers of Consulting, Technology
and Outsourcing services
We enable our clients to transform and perform through
technologies
Group Workforce: 130,000
Revenue: 10,092 million
Global footprint
Strong performance, stock +50% since Jan 2012
Part of Capgemini Group: global leader inconsulting, technology, outsourcing
Global consulting firm with strong local presence
- Largest consultancy of European origins
- Some 4,000 mgmt consultants worldwide
Full service consultancy
- Capabilities across sectors
- Global competency and operating model
ConsumerProducts,
Retail&Distribution
Manufacturing&
Automotive
Telecom,
Media&
Entertainment
FinancialServices
PublicSector
Energy,
Utilities&
Chemicals
Etc...
CAPABILITYUNITS
Business Model Transformation
Customer Experience
Operational Excellence
SECTORS
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Digital Transformation is at the heart of Capgemini Consultings value proposition
Since 4 years, Capgemini Consulting and the MIT Sloan School run
a joint research program to identify how digital leaders manage
or have managed successful digital journeys
Driven by the work of its Digital Transformation Research Institute
and consultancy team, Capgemini Consulting was ranked in the top 5best consultancies in the world for thought leadership in the second
half of 2013; a rise of 10 places from the second half of 2012.
Capgemini Consultings first significant Digital Transformation study -
Digital Transformation: A road-map for billion-dollar organizations -
conducted in collaboration with the MIT Center for Digital Business
in 2011, as part of a three year industry research program, was
ranked in the top 5 thought leadership publications of the last
decade by Source.
Source: Source, a leading market analyst firm for the consulting industry
Top rated thought leadershipLeader in Digital Strategy & Transformation
Leader in digital transformation research,joint research programme with the MIT
Capgemini Consulting
in a segment of one
digital specialist
Partnershipswith technology companies
Top rated capabilities within digital strategy
http://www.capgemini-consulting.com/digital-transformation-review-4http://www.capgemini-consulting.com/ebook/digital-transformation-review-2/index.htmlhttp://www.capgemini-consulting.com/ebook/Digital-Transformation-Review-3/index.htmlhttp://ebooks.capgemini-consulting.com/CC-MIT-SMR-Research-Embracing-Digital-Technology/http://www.capgemini-consulting.com/ebook/Transform-Power-Digital/publication-interactive/index-global.htmlhttp://www.capgemini-consulting.com/ebook/digital-transformation-review-1/index.htmlhttp://www.capgemini-consulting.com/ebook/The-Digital-Advantage/index.htmlhttp://www.capgemini-consulting.com/ebook/Wiring-Enterprise/publication-interactive/index-global.htmlhttp://www.capgemini-consulting.com/transform-to-the-power-of-digitalhttp://www.capgemini-consulting.com/ebook/How-Digital-are-You/index.html8/9/2019 Digital Transformation Cap Gemini
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Do you know the legend of Sissa? ... and Moores law?
The real effect of doubling phenomenon is not noticed before you reached the second half
of the chessboard
7
We are at the second half of the chessboard (Prof. Andy McAfee, MIT)
The data capacity doubles
every 18 months. We have
now gone through 32
doublings!
http://localhost/var/www/apps/conversion/tmp/scratch_6//upload.wikimedia.org/wikipedia/commons/0/00/Transistor_Count_and_Moore's_Law_-_2011.svghttp://localhost/var/www/apps/conversion/tmp/scratch_6//upload.wikimedia.org/wikipedia/commons/0/00/Transistor_Count_and_Moore's_Law_-_2011.svghttp://localhost/var/www/apps/conversion/tmp/scratch_6//upload.wikimedia.org/wikipedia/commons/0/00/Transistor_Count_and_Moore's_Law_-_2011.svghttp://localhost/var/www/apps/conversion/tmp/scratch_6//upload.wikimedia.org/wikipedia/commons/0/00/Transistor_Count_and_Moore's_Law_-_2011.svghttp://localhost/var/www/apps/conversion/tmp/scratch_6//upload.wikimedia.org/wikipedia/commons/0/00/Transistor_Count_and_Moore's_Law_-_2011.svg8/9/2019 Digital Transformation Cap Gemini
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... Will lead to
the Singularity
Accelerating processing powerwe are approaching the Singularity
Copyright 2014 Capgemini Consulting. All rights reserved.
8
A study of different AI expert predictions found a wide range of
Singularity dates, with a median value of 2040
Accelerating pace of change ...1
Exponential growth in computing power ...
... By powers of 10
.... Now progressing more each hour than
it did in its entire first 90 years
2
3
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The world is in the middle of the Digital Revolution
Copyright 2014 Capgemini Consulting. All rights reserved.
9
Steam Power led toindustrialization
Electrificationled toinnovationsuch as assembly line
Digitization leads to the re-modeling of products,
capabilities, and businessmodels
1stIndustrial Revolution
2ndIndustrial Revolution
3rdIndustrial Revolution
Machines replacing
muscle power
Machines replacing
brain power
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Bandwidth, devices, content in place for mobile internet usage
Digital technologies are part of peoples lives
10
Usage increasing No of users increasing
13
23
6,5
20
2011 2016
Consume
Communicate
Forecasted minutes per day spent on mobile device:
time spent doubling, shift towards consumption
1,2
4,5
2012 2018
Number of smartphone users
expected to reach 4.5 billion by 2018.
CAGR 25%
Smartphone users spend
128 min/day of which 22
min on talking and SMS
167 min / day desktop, 274 min on TV, 26 min /day newspapers
Consumerization of
technology
Bandwidth
3G / HSPA / LTE
Devices
Smartphone
penetration
Content &
services
The web, applications
and mobile sites
Usage
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Technology is changing the business landscape and leaders views
2,4
3,7
4,8
5,65,9
Managers in the United States and in Great Britain ranks the business
value of technology and telecom investments. The scale is 1 to 7,
where 7 is extremely important
1970s
1980s
1990s
2000s
2010
Max 7
% of
TechnologyCompanies 2
1956 20111982
3.3% 3.3% 27%
100% 80%
33.3%
No major change in
the composition of
the DJIA between
1956-1982 High proportion of
traditional
companies in both
1956 and 1982
Significant change in DJIA
composition as several
traditional companies lost
dominance
% of tech companies
increased tremendously
Source: Capgemini Consulting-MIT Analysis; Historical Down Jones Industrial Average Composition1 DJIA stands for Dow Jones Industrial Average2 TME , IT, and Semiconductor companies
More and more leaders agree that technology
is crucial for businesses% of Companies Surviving in the DJIA 1956-2011
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A few industries have already felt the power of the digital wave
0
50
100
150
200
250
300
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
FUJIFILM
KODAK
Napster
(P2P)
iPod launched
IPRED law
Spotify launched
... Music
... Photo... In Media
Share prices
REVENUE FROM RECORDED MUSIC (bn)
... Telecom
BLOCKBUSTER
NETFLIX
Blockbuster declined offers to
acquire Netflix in 2000 for 50
MUSD...
2004-2005 Motorola
reaches its peak with
a 22% market share
2006 Q4 Sony
Ericssonreaches itspeak with a 9%
market share
12
A ll thi t t d b i d l lik l t hift t d d t t ti d
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50 Bn devices
500 Bn devices/sensors
People
Things and people
Things and things
Approx. 23 Bn devices
Business model:
Data
Eye balls
Business model:
Data
Computations
Priority
Time20202014
Connections
2050
Digitization of society & business
Why Google et al are investing billions in networks and smart services
As all things get connected, business models likely to shift towards data, computations and
priority
Copyright 2014 Capgemini Consulting. All rights reserved.
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Digitization continues ... and data will only grow in importance
Combination of central and decentralized compute and data storage
For us Digital Transformation is about utilizing new technologies to radically change
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For us, Digital Transformation is about utilizing new technologies to radically change,
improve and future-proof an organization and its business
DIGITAL MATURITY MATTERS
THEDIGITALWAVEAFFECTALLTYPESOFINDUSTRIESANDCOMPANIES- NOTJUST
HIGH-TECHPLAYERSALSOMORETRADITIONALINDUSTRIES
COMPANIESTHATSUCCESSFULLYMANAGETHETRANSFORMATIONARETHEFUTURE
LEADERS
IN
THE
MARKET
COMPANIESTHATWANTTORIDEON- ANDNOTBEWASHEDAWAYBY- THEDIGITAL
WAVEHAVE TO ACT NOW
14
To truly understand the new challenges and opportunities in a digital world we entered
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To truly understand the new challenges and opportunities in a digital world, we entered
into a research partnership with the MIT some 4 years ago
Capgemini Consultings partnership with the MIT
Copyright 2014 Capgemini Consulting. All rights reserved.
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MIT CDB studies the challenges of leading global organisations in
their digital transformations and the importance of the new
digital economy, founded in 1999
Prof. Eric Brynjolfsson
Director of MIT CDB
Digital productivity
Prof. Andy McAfee
Principal investigator Enterprise 2.0/Management
implications of Digital
Prof. George Westerman
Project lead
Technology & Organisation
Capgemini Consulting and MIT are partners in thestudy of digital transformation
The objective is to understand how the digital winners
are managing(or have managed) their digital
transformation, starting from brick and mortarand
moving to a digital company, and to identify some
guidingprinciples and best practices.
Capgemini Consultings 'Digital Transformation: A Road-Map for Billion-Dollar Organizations' developed
with the MIT was just ranked in the top 5 publications of thought leadership of the last decade
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Question 1
Copyright 2014 Capgemini Consulting. All rights reserved.
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Digital Transformation is on top of CXOs agendas
Copyright 2014 Capgemini Consulting. All rights reserved.
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We want P&G to be the most digitally-enabled company in the world
Bob McDonald, P&G, CEO
Digitalisation will become part of our DNAJoe Gross, Allianz Group, Head of market
management
Europe is facing a digital transformation.
Data is the new oil for the digital age. So we
are planning to shake up how public
authorities share data.
Neelie Kroes, VP European CommissionDigital has been a catalyst for
everything in the company
Angela Ahrendts, Burberry, CEOBoeing believes the future of the aviation
industry lies in "the digital airline. Materials,componentry, construction methods,
manufacturing methods, the whole digital
revolution We are embedding all that
thinking into the product.
We have defined digital maturity along two different dimensions: Digital Intensity and
http://www.google.com/url?url=http://europa.eu/about-eu/basic-information/symbols/flag/index_en.htm&rct=j&frm=1&q=&esrc=s&sa=U&ei=Wlf8U9v2G8Xf4QSxlIH4Cw&ved=0CBYQ9QEwAA&usg=AFQjCNHBsmBuiY8E_jPUVT5umpXiOvvEBQ8/9/2019 Digital Transformation Cap Gemini
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We have defined digital maturity along two different dimensions: Digital Intensity and
Transformation Management Intensity
Digital Intensity is investment intechnology-enabled initiatives to change how
the company operatesits customer
engagements, internal operations, and even
business models.
Transformation Management
Intensity consists in creating the leadershipcapabilities necessary to drive digital
transformation in the organization.
Location-based marketing
Digital Design
Connected Products
Mobile sales
Customer Service in Social Media
SMAC
Digital Vision
Cross-silos coordination and governance
New skillsCultural change
Transformation Management Intensity
DigitalIntensity
l l d f h
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Digital leaders outperform their peers
Strong overarching digital vision
Good governance
Many digital initiativesgenerating business value inmeasurable ways
Strong digital culture
Overarching digital vision exists,but may be underdeveloped
Few advanced digital capabilitiesin place
Strong governance cross silos
Taking active steps to builddigital skills and culture
Management skeptical of thebusiness value of advanceddigital technologies
May be carrying out someexperiments
Immature digital culture
Many advanced digital features(e.g. social, mobile) ...
... but in silos
No overarching vision
Underdeveloped coordination
Digital culture may exist in silos
Digitalintensity
Transformation management intensity
Fashionistas
Beginners
Digirati
Conservatives65%
6%
14%
15%
Whatis theorganization doing
with Digital
Technologies?
--- hard stuff ---
Howis the organizationmanaging this
transformation?
--- soft stuff ---
Source: Capgemini Consulting & MIT
FashionistasBeginners DigiratiConservatives
Revenue
Profitability
Market valuation
-4%
6%
-10%
9%
-24%
-11%
9%
26%
-7%
-12%
7%
12%
Digital leaders outperform their peers
Four levels of digital maturity based on a
combination of hard and soft factors
Most companies now recognize that digital is critical ... But the pace is too slow
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Most companies now recognize that digital is critical ... But the pace is too slow
(unless youre the CEO)
5%
13%
33%
18%
27%That time has passedit is already
a matter of survival
This Year
Within the next
2 years
3 years or more
Its never going to become
important across the entireorganisation
78%
47%
57%64%
67%
38%
32%25%
22%
15% 11% 11%
StaffManagersC-Levelexecutives
CEO
Fast or Very Fast
About Right
Slow or Very Slow
10%
20
The pace of implementation of digital
transformation in the organization
When will it become critical to implement DT
across the organization?
A l k f f i th bi t b i t Di it l T f ti
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A lack of sense of urgency is the biggest barrier to Digital Transformation
The vast majority of employees
support the digital vision when
senior leaders share it
... But few CXOs actually do
share their digital vision ...
Agree
20%
Strongly Agree
73%
Other 7%
Did not share their
vision: 64%
Shared their
Digital Vision:
36%
...or a clear /
aligned road map
>40%
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Question 2
Copyright 2014 Capgemini Consulting. All rights reserved.
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Most digital initiatives focus on improving the customer experience
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Most digital initiatives focus on improving the customer experience
Copyright 2014 Capgemini Consulting. All rights reserved.
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Customer Experience Operational Improvements Business model change
Improve
internalcomms
Enhance the
productivity
of workers
Automate
operational
processes
1,880
1,260
1,090Transition physical
products / services to
digital ones
Develop new
business models
Launch new
businesses
Expand our reach to
new customers and
markets
Ensure x-
channel
consistency
Enhance our
existing
products
services
Launch new
products and
services
Improve the
customer
experience
Most digital initiatives focus on CX
Our digital initiatives are
helping us to: ...
The customer is the first priority Top-line focused programmes
Easier to get funding
... Or lipstick on the pig?
In our experience companies have not followed optimal path to increase digital maturity
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Common A combination of hard and soft factors required
Priorities and initiatives to address both Digital
Intensity and Transformation Mgmt dimensions
What signifies the Digital Leaders we have
studied, do they exhibit common characteristics?
In our experience, companies have not followed optimal path to increase digital maturity
How to become a Digital Leader? What steps?Fashionistas
Beginners
Digirati
Conservatives
Commonly chosen path in the Digital Journey
Start with customer facing / tangible activities Early and costly failures due to silo structures, lacking strategy and no
transformation agenda
How to find the management courage to increase investments after initial failures
Holistic perspective required
Optimal
Transformation Management Intensity
DigitalIntensity
Question 3
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Question 3
Copyright 2014 Capgemini Consulting. All rights reserved.
25
Companies are digitally transforming across three key dimensions
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Companies are digitally transforming across three key dimensions
Digital Leaders have a common DNA 1(3)
Digirati distinguish themselves by excelling in one or more areas of digital intensity
Digirati are far better than other types of firms at changing their business models
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Digital Leaders have a common DNA 2(3)
Digirati are far better than other types of firms at changing their business models
Digirati are able to link their implementation
capabilities and leadership capabilities to
fundamentally transform how the company
operates. Companies in other quadrants are
less able to do so.
The business model changes include:
Adding value to products and services
Reaching new customers
Linking operational and customer-facing
processes in new ways
Launching new businesses
Customizing products and services
Operating as a more unified enterprise
27
Though every companys journey is unique, certain combinations of
b l
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Digital Leaders put focus on Analytics and Data Integrationfundamental to
radically improve both customer experience and operational excellence
investments appear to be complementary
28
Analytics- Target marketing more
effectively- Personalize marketing
communications- Optimize pricing
- Better qualify sales prospects
ProcessDigitization
- Automating processes
- Monitoring operations inreal-time
- Adaptability to externalchanges
InternalCollaboration
- Active knowledge sharing
- Use of internal socialnetworks and video conf.
- Working anywhere, anytime,any device
Social Media- Monitor reputation- Promote & sell products &
services
- Provide customer service- Build customer /ecosystem
communities
CustomerExperience
- Cross-channels consistency
- Personalize the customerexperience
- Offer self-service
Mobile Channel- Promote products & services- Sell products and services
- Provide customer service
Data Integration- Customer Data
- Other data (finance, supply-chain, operations)
Engage customers Internal operations
Investments in digitaltechnologiesthe SMAC stack
- Social
- Mobile
- Analytics
- Cloud
Data integration
- Usually with cloud as achange agent
- Fundamental to get leverageon other capabilities
Analytics capabilities tooperationalize the data
Digital leaders realize that data is a critical asset to harness
Digirati invest 100% in transformation management
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g % g
Vision
IT
Business
GovernanceEngagement
Four key transformation management practices enable companies to align their digital efforts under a
common vision and coordination structure, and engage the company in making that vision a reality
Digital Leaders have crafted a compelling digital vision that
incorporates the companys strategic assets
Digital leaders get Business & IT to work together
even if it means substituting people and processesas well as the technology
Effective investment rules and
coordination mechanisms improveefficiency and ensure digital efforts
are moving in the right direction
When employeesare engaged in a
shared vision they help to make it areality, offer less resistance to
change and often identify new
opportunities
Digital Transformation needs to be shaped, driven and sustained from the top of the organizationFocus on the How more than the What
Digital Leaders have a common DNA 3(3)
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Transform the power of digital
AGENDA
About Capgemini Consulting
Digital Transformation
Digital Transformation in manufacturing
Manufacturing case examples
Breakout discussions and present back
Summary and conclusions
Copyright 2014 Capgemini Consulting. All rights reserved.
30
In our research we concluded that the typical manufacturing company remains a digital
beginner in the context of Digital Transformation
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beginner in the context of Digital Transformation
Digital maturity by industry
Copyright 2014 Capgemini Consulting. All rights reserved.
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Some industries are more mature than others... ... but there are digital leaders in every industry
38%
35%
33%
31%
30%
26%
24%
20%
12%
7%
High Tech
Bank & Finans
Frskring
Resor & service
Telekom
Detaljhandel
Konsumentvaror
Energi
Tillverkning
Lkemedel
Share of Digirati per industry
Banking
Insurance
Travel & hospitality
Telecom
Retail
FMCG
Utilities
Manufacturing
Pharmaceuticals
High Tech
Banking
FMCG
Insurance
Manufacturing
Pharmaceuticals
Retail
High Tech
Telecom
Travel & hospitality
Utilities
Strong in social and mobile
Need to focus on cross-
channel consistency, worker
enablement and analytics
See less opportunity / threat
in digital transformation
Need a transformative digital
vision and the leadership
drive
Fast to launch digital
initiatives
Need to integrate and
align initiatives across silos
Strong digital
governance
capabilities, but
cautious to investing
Regulatory worries and
a risk-averse culture
Digitalin
tensity
Transformation management intensity
Only 12% of the manufacturing companies can be associated to the Digirati
Digital manufacturing leaders are outperforming their peers, especially on the How
dimension
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dimension
Copyright 2014 Capgemini Consulting. All rights reserved.
32
Consistent with other industries, compared to their
industry peers, digital leaders stand out on the HOW
... The horizontal axis in our digital maturity matrix
Generally, Manufacturing is behind other industries inbusiness model and customer experience
- Move from product to service, but taking time
- In a B2B context, Dealer structures inhibiting
end-user / customer relationships
How are the digital manufacturing leaders different?
For manufacturing companies DT is blue skies ... but still have a limited view of what
they should do and how to do it
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they should do and how to do it
Copyright 2014 Capgemini Consulting. All rights reserved.
33
... But no aligned plan in placePositive about DT opportunities ...
83%of the manufacturing Digiratihave a comprehensive
visionand a
roadmaptowards
digital
We fear that most manufacturers are not yet realizing the potentially disruptive shift about to come
12%
21%
74%
14%
12%
12%
74%
67%
14%
Digital transformation is a
competitive opportunity for our
company
Our competitive position will suffer
if we do not e ngage in digital
transformation
Digital transformation is a threat to
our company's status in the industry
Disagree Neutral Agree
43%
55%
51%
23%
17%
26%
34%
28%
23%
There is a high-level roadmap for
digital transformation
Senior executives and middle
managers share a common vision of
digital transformation
Senior executives have a digital
transformation vision that involves
radical changes
Disagree Neutral Agree
Question 4
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Copyright 2014 Capgemini Consulting. All rights reserved.
34
Many manufacturing companies need to scale up capabilities on both the customer side
and the operations side and above all become more data driven
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and the operations side and above all, become more data driven
Copyright 2014 Capgemini Consulting. All rights reserved.
35
83% of the Digital Leaders in manufacturing monitortheir operations in real-time, and 100%have
automatedtheir core processes
67% of the digital leaders use analytics totarget markets and customers
Digital Leaders are much more data driven than their peers
19%
42%
51%
30%
20%
23%
51%
38%
26%
Our core processes are automated
We monitor our operations in real
time
Our operational processes can adapt
quickly to external changes
Disagree Neutral Agree
53%
60%
70%
18%
17%
15%
29%
23%
15%
We use analytics to target
marketing more effectively
We use digital tec hnologies to
enable self-service
We improve our knowledge ofmarkets and customers through
devices embedded in products
Disagree Neutral Agree
Internal operationsCustomer engagement
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Manufacturing leaders focus on cloud enabled common platforms for their operations
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Copyright 2014 Capgemini Consulting. All rights reserved.
37
75%have a common platformfor differentbusiness units
67%state they have anintegrated view ofproduct
& serviceperformance
67%believe to have anintegrated view on
customer data
100%state they have an integratedview on supply chain status
Top-performers(Digirati)
Manufacturingaverage
48%
43%
38%
56%
We are only at the beginning of the
digitization of the manufacturing industry The digital leaders are taking steps to
enable a shift in business model from
physical hardware to digital software
Over time, the vehicle and manufacturing industry to move into more advanced servicesrequiring more capable infrastructures and platforms
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q g p p
Copyright 2014 Capgemini Consulting. All rights reserved.
38
Fleet mgmt andpredictive asset
maintenance
Capability examples:
Connected machines
data collection
Over the air PAM
Remote diagnostics can
ensure proper
functioning, minimum
down time and lower
fuel consumption
Dynamic machine &vehicle customization
Capability examples:
More capable platforms
with the ability to push
updates and new
services simultaneously
across entire fleets
Security, e.g.
authentication services
Enable collaboration
across ecosystem
Autonomousmachines & V2Vcommunications
Capability examples:
Infrastructure with
elastic networking,
supporting vehicle to
vehicle and close to the
edge compute &
communication
Advanced security e.g.
signature services, to
manage end to end
SLAs
Compliance to
regulations / policies
Standardization and
interoperability
Maturity &complexity
Time
Now
2 yrs -
5 yrs - Vehicle and manufacturing players will need to develop their
software offering and operation
Increasing need for a common platform
Move from data collection to remote management (updates &
upgrades) of the software
Risks, examples
- There may be a push for separation of hardware and
software, which is likely detrimental for current business
- Risk that current leaders get disrupted by new entrants with
less vested interest
Opportunities, examples
- New revenue possibilities primarily on the software side
- Need to leverage e.g. installed base
- Need to build an ecosystem
Microsoft model or Apple model
- Open or closed
- Software-led or hardware-led
Vehicle and manufacturing leaders to develop
capabilities required for future digitization
Digital Leaders are years ahead of their peers
Question 5
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Copyright 2014 Capgemini Consulting. All rights reserved.
39
Strong overarching digitalvision
Good governance
Many digital initiativesgenerating business value inmeasurable ways
Strong digital culture
Overarching digital visionexists, but may beunderdeveloped
Few advanced digitalcapabilities in place
Strong governance cross silos
Taking active steps to builddigital skills and culture
Management skeptical of thebusiness value of advanceddigital technologies
May be carrying out someexperiments
Immature digital culture
Many advanced digital features(e.g. social, mobile) ...
... but in silos
No overarching vision
Underdeveloped coordination
Digital culture may exist in silos
Digitalinte
nsity
Transformation management intensity
Fashionista
Beginner
Digirati
Conservative
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Transform the power of digital
AGENDA
About Capgemini Consulting
Digital Transformation
Digital Transformation in manufacturing
Manufacturing case examples
Breakout discussions and present back
Summary and conclusions
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(Modular, Flexible, Boundless)
What do we see manufacturers focusing on?
Lets look at some cases
A trailer manufacturer delivers networked and integrated transport solutions
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Smart Products | Use Case
Solution
Telematic tools deployed in the trucks
track maintenance-status, weight-
load, cargo-temperature and the
location
Two-way communication between the
truck and both customer and
manufacturer as a continuous datalink
Background
Real-time sharing of operational data
to customer and manufacturer is not
sufficiently provided
Operated trucks, especially with the
refrigeration unit, are not centrally
integrated from the customers point
of view
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Benefits
Better integration of connected
support services such as efficient
truck maintenance based on pro-
active servicing
Enhanced item demand forecasting
to further improve supply chain
efficiency Improved product development
based on detailed insights on truck
performance and actual usage
patterns
A smart two-way communicationwith the refrigeration unit canprotectagainst damagewhen transporting
temperature-controlled freight
A leading building automation company designed a digital service management platformto enable the delivery of innovative remote service offerings
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Smart Services | Use Case
Benefits
Business structure and IT perfectly
respond to business needs
Deliver innovative service offerings
through highly automated and
efficient processes
Solution
Definition of function, role and
process requirements for operating
the remote service portfolio
Design of a target IT architecture for
digital service management
Implementation of an advanced digital
service management platform
Background
Intention to offer innovative remote
services
Renew and expand the IT platform to
offer / extend value added services
Create a better customer experience
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Service digitization increases theefficiencyof service delivery andensures the delivery of high-quality
servicesat low costs
Easy-to use tools are available through cloud-based platforms, from solutions for ideageneration and crowdsourcing up to complex engineering activities
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Extended Innovation | Use Case
Benefits
Enables Extended Innovation in
variable intensity, as needed
Integrates a multitude of possible
channels
No heavy up-front investments
required
Solution
Cloud-based, enterprise-grade
innovation and collaboration
platforms are now easily available
They provide functions such as
SharePoint integration, CAD
capabilities, social media analytics,
content sharing Examples: Local Motors, AutoDesk
360, SpigitEngage, IdeaScale
Background
When benefits are difficult to
quantify, decision-makers are
reluctant to invest into new
platforms or tools
But integrating the surrounding
network of customers, suppliers or
partners into the idea generationand product development process
requires structured tools
Copyright 2014 Capgemini Consulting. All rights reserved.
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If collective intelligence is such apowerful wayfor organizations toget things done [...] why dont more
businesses use it? The answer, we think, is
they dont know how.Founders of the MIT Center for Collective Intelligence
A collaboration platform enabled a world-class aircraft and rocket engine manufacturer toengineering collaboration across the extended-enterprise
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Background
Need to globally collaborate all along
product life cycle with more
suppliers and partners
Real time collaboration of internal
and external users around digital
mock up must be improved
Communication must be facilitated Partners and suppliers dont have a
direct access to product
configuration
Copyright 2014 Capgemini Consulting. All rights reserved.
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Agile Collaboration Network | Use Case
Benefits
Global transparency about demand
and resource availability through
consolidation across all levels of the
network
Validation of plans by checking sales
plans against network planning
quantities Reservation of agreed quantities to
ensure delivery reliability
Triggering the investment process at
an early stage
Solution
Implementation of collaborative
solutions based on TeamCenter
Unified Architecture (TCUA) to share
configurations and digital mock up
with external partners and suppliers
Definition of product data model
Reengineering of modificationprocesses in order to find the right
balance about the rhythm of
evolution into digital mock up and
PLM corresponding configurations
ThroughAgile CollaborationNetworks, manufacturing companies cantruly leverage the opportunities arisingfromthe globalized marketplace for
know-how.
Situational adaption of product lines enables just-in-time production, minimized batchsizes and optimal capacity utilization
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Decentralized Production Control | Use Case
Benefits
Plug & Produce capability of
production modules allows for
dynamic integration in production
cycle
Under-utilization and resulting
excess capacity may be transferred
to business partners
Solution
Formulation of systematic production
processes to be run on modularized
production lines
Automated reconfiguration of
production modules in response to
market demand
Production lines are connected in across-company network
Background
Hitherto, production planning and
control processes are rigid,
centralized and decoupled even from
the intra-company ERP system
The layout of production facilities is
equally obtained through rigid,
hierarchically structured planningprocesses
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Self-adjustingelements and productionstations enable dynamic transformationof production lines in regard to order,
function and amount of used modules
DevelopmentServices
(Product/
ProductionSystem)
ProductionServices
AssemblyServices
PurchasingServices
MaintenanceServices
Erection &Installation
Services
DeliveryServices
ProductionSystems
Productdefinition
QualityMgmt.
Services
Chip manufacturer Intel designed and implemented a data-driven chip testing processresulting in significant operational cost savings
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Data-driven Operational Excellence | Case Study
Added value
The model results were leveraged to
significantly cut down the number
of conducted tests
This led to cost savings of
USD 3 million within the first year
By rolling out this solution to all
production lines, annual savings ofUSD 30 million are expected
Solution
Intel initially launched several pilot
projects to discover the potential
arising from data
By this, a business analytics solution
was designed that optimizes test
procedures of a specific production
line Previously, all produced chips were
run through an extensive series of
tests
Background
Highly automated production
facilities generate about 5 TB of data
every hour
In the past, the potential arising from
this data was not leveraged to drive
its core competency of high volume,
precision manufacturing
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Techniques ofbig data analysisapplied on core value processescanlead to annual savingsof several
millionUSD
Question 6
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The future manufacturing business model will focus on customized, smart products,supplemented by highly targeted services, delivered in open ecosystems
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The Future Manufacturing Business Model
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The Future Manufacturing Business Model will be based on customized, connectedproducts, data-driven services and increasingly service-based operating models
The virtual product model will be a major output or resource
Value creation organized through open ecosystems: We will see a specialization even of big players in very specific fields , in which
they will provide leading, modularized products & services
Those will be used in plug & play style for the interconnected value propositions
In the future, manufacturers should therefore focus their business model on:
The best possible integration into the relevant ecosystems Providing specific services with high value-add
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Transform the power of digital
AGENDA
About Capgemini Consulting
Digital Transformation
Digital Transformation in manufacturing
Manufacturing case examples
Breakout discussions and present back
Summary and conclusions
Copyright 2014 Capgemini Consulting. All rights reserved.
50
Breakout: instructions
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Purpose
To have a joint discussion and understanding of the importance of DT to Volvo and its implications
2 perspectives: external and internal
What
Split into 4 breakout groups (3 groups locally, 1 virtual/phone)
2 groups to discuss external perspectives of DT and relevance for Volvo Group
2 groups to discuss internal perspectives of DT and relevance for Volvo Group Each group has an assigned leader, who will also present back to the large group on behalf of the
breakout group
Time
30 min parallel discussions within each breakout group
4 x 5 min present back from each breakout group
2 x 5 min joint reflections and discussion (per perspective)
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Digital flipchartGroup 1
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Ambitions
(strategy)
External change
(CuEx)
To what extent is DT important to Volvo Group?
It is important (considering the digital
transformation all around the world)
What is Volvos current digital maturity
Incosistant, case by case, not clearly imbedded.
What are the key objectives?
Defining the unified brand
experience/Platform.
Define the ownership of the data. (Product,
Customer, Market)
Combine this data with customer needs for
sustainable business models.
Time to market/ Agile development
Platforms for involving customer collaboration
in product development and also inoperations/services.
What should Volvo do within the next 3 yrs in terms of:
Customers
Offering new solution .
Develop the knowledge about total offfer.
Markets
Getting insights for new markets.
Extending the established digital platforms tonew markets/use existing information for new
Competition
Collaborating with information
Benchmarking
Products & services
Digital services, solutions.
Channels
Digital flipchartGroup 2
Ambitions E t l h
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Ambitions
(strategy)
External change
(CuEx)
The presentation only manufacturing, not the whole
company (development, AM etc).
E.g. AM has a suggestion, but is getting a noeven though
there is a business case. Because product cost goes up.
Society goes towards a DT so Volvo cannot stand outside.
Will new competitors show up quickly?EX: An AM company
that only sells services for automation.
Other competitors are not too good either, so not critical to
work on this -> low prio.
Digital maturityhistorically quite high at Volvo, but today
we are not unified e.g teamplace, we are not really using the
potential. Why?no training. Technical mature but not sogood to capitalize on it. Ex: CareTrack no service connected to
this.
Key objectives? well there are no decisions, but what we
consider? Cost saving goal 2%, quite contra-productive. There
are different IT cost that should be steered differently, e.g.
admin systems, product IT, services etc.
Key objectives: to standardize and harmonize all applications.
All legacy systems. With fewer applications, fewer sources ->
easier to get info. Negotiate globally regarding applications. Ex: VCEyou buy
an own system if you cannot find exactly what you wantwe
need a stronger corporate. New org can give this?
To make customer value, capitalize
Take the services and soft products to the market, to sell in.
Must give customer value. Something that the customer will
save money on.
Our customers are not in the frontline of DT. To sell in
digitilization to these customers is a challenge. Cool features
are not the thing.
We must have a better dialogue with the customer to get
there needs.
Requires also training, ex: how to drive to save fuel, to create
effectivness in the customers processes.
Should we broaden our views for customers and services? ->goal 50% to be soft productsnot reached.
New ideas, the ideas that are today are quite futuristic.
Ex: fleet management, we do not earn much, more a
competitive thing.
We must look on the maturity and need for different
markets, NA or Africa does not have the same.
VCE: AM, engine is sold to the wrong market, cannot be
supported locally.
Breakout group 3 and 4
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Ambitions
(strategy)
Internal
change
(OpEx)
To what extent is DT important to Volvo Group?
What is Volvos current digital maturity
What are the key objectives?
What should Volvo do within the next 3 yrs in terms of:
Organization
Governance
Skills
Technology
Digital flipchartGroup 3 & 4
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Ambitions
(strategy)
Internal change
(OpEx)
Yes to a certain extent.
Great opportunity for developing services for
our sales operations.
Within manufacturing we are quite mature.
Key objectives:
Grow business from digital driven service
solutions
Stepwise improvement of our operations by
implementation of improved techinal
solutions (Lync etc)
Big data management for improvement
Technology:
Reduce the number of systems
Fit the systems to the service oriented
company
Skills:
Improve knowledge from data to learn about
our customers business/industry
Governance
Improve measurement cross organization (big
data)
Adherence to our process
Organization
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Transform the power of digital
AGENDA
About Capgemini Consulting
Digital Transformation
Digital Transformation in manufacturing
Manufacturing case examples
Breakout discussions and present back
Summary and conclusions
Copyright 2014 Capgemini Consulting. All rights reserved.
57
The 7 myths of Digital Transformation
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MYTH REALITY
DIGITALISFORMEDIA, TECHNOLOGYANDB2CCOMPANIES
DIGITALTRANSFORMATIONISABOTTOM-UPPHENOMENON
ONLYTHECUSTOMEREXPERIENCEMATTERSINDIGITAL
TRANSFORMATION
THEREISNORECIPEFORDIGITALTRANSFORMATION
DIGITALTRANSFORMATIONCANHAPPENDESPITEIT
I HAVEPLENTYOFTIME
IMSAFE, MYDIGITALTRANSFORMATIONISCOMPLETE
THEREAREDIGITALLEADERSOUTPERFORMINGTHEIRPEERSIN
EVERYINDUSTRY
DIGITALTRANSFORMATIONMUSTBELEDTOP-DOWN
DIGITALLEADERSCREATEPROFOUNDCHANGESINBUSINESS
MODELSANDOPERATIONSASWELL
DIGITALLEADERSEXHIBITCOMMONCHARACTERISTICS
ALLDIGITALLEADERSHAVEBUILTSOLIDIT-BUSINESS
RELATIONSHIPSANDTECHNOLOGYCAPABILITIES
DIGITALTRANSFORMATIONTAKESTIMEANDSOMEOFYOUR
COMPETITORSAREALREADYLEADINGTHERACE
TECHNOLOGIESNEVERSTOPCHANGINGANDNEWBUSINESS
MODELSARRIVEEVERYDAY
1
2
3
4
5
6
7
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Concluding discussion
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How was the seminar overall?
Good
Room for improvement
Did we meet your expectations?
YES
To some extent
NO
Discussion & qualitative feedback (no poll)
Benefits? What was good / interesting?
Concerns? What should we have done
differently?
Copyright 2014 Capgemini Consulting. All rights reserved.
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Feedback
Concluding discussion
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How was the seminar overall?
Good
Room for improvement
Did we meet your expectations?
YES
To some extent
NO
Discussion & qualitative feedback (no poll)
Benefits? What was good / interesting?
Concerns? What should we have done
differently?
Copyright 2014 Capgemini Consulting. All rights reserved.
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Feedback
Thank you very much for the opportunity to be here, and the interesting discussions!
Want to learn more about Digital Transformation?
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Go to capgemini-consulting.com ...
... for our main research & publications
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Ulf JanssonManufacturing & Automotive
+46 703 78 14 76
ulf.jansson@capgemini.com
Karl BjurstrmDigital Strategy & Transformation
+46 706 80 46 23
karl.bjurstrom@capgemini.com