PWC: Five “digital” years until ROI

Almost all industrial companies in Germany are investing in the expansion of digital factories. A lack of digital culture and the shortage of skilled workers are the biggest hurdles on the way to “Batch size 1”.

The digital factory is high on the management agenda of industry: Ninety-one percent of manufacturing companies in Germany are investing in digital production. Six percent consider themselves as already completely digitalized. However, the vast majority (85 percent) have only networked partial areas or use digital technologies for isolated applications. Only nine percent plan no expansion to a digital factory.

However, certain obstacles have to be cleared on the way to a smart factory. Employees at approx. half of the respondents have not yet realized the potential of digital transformation, and there can be no talk of a genuine digital culture in those companies.

Consequently, it is necessary to integrate and involve employees in this process, because they play a pivotal role in a digital factory. However, interaction between man and machine has to be redefined.

For example, more than half of the companies surveyed estimate that their workforce will remain unchanged or even grow. By 2022, the proportion of employees without professional skills will drop from 21 to 17 percent and those with college degrees will increase from 19 to 24 percent. In contrast, employees with specialized vocational training comprise a constant 59 percent of the workforce.

The lack of skilled workers is a great concern. Eighty-one percent of companies find it difficult to meet their needs for qualified personnel. Substantial investments in the education and training of the workforce are to compensate for this shortcoming.

No digital factory without data
Predictive maintenance is paramount in digital concepts. Twenty-eight percent of respondents already plan maintenance looking ahead to the future. This share will amount to two-thirds in five years. Almost just many (30 percent) use data analysis to optimize their processes and product quality (2022: 65 percent). With the digital technologies, companies rely mainly on networked sensor technology, 3-D printing, virtual/augmented reality, humanoid robots and artificial intelligence.

Almost half of the companies surveyed believes that their investment will only pay for itself in five years. Following the initial euphoria of a few years ago, realism has returned in this respect. However, the vast majority is fundamentally optimistic about Industry 4.0; 90 percent see more advantages in it than threats to their business.

About the Study
Two hundred executives of industrial companies in Germany were interviewed for the study by PWC in February of this year. In addition to a “blueprint” for the digital factory, it contains a number of specific application examples, e.g., from Bosch, Fujitsu, Magna Steyr and Continental.

PWC: “Digital Factories 2020—Shaping the future of manufacturing”

Further information

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