Battle for data sovereignty

The current discussion about Industry 4.0 falls short because it focuses on the technology used on the shop floor. The decisive value levers do not lie in the technology, but in the intelligent interpretation of the data generated along the value chain.

This shows that those who can establish strategic control points along the data collection and analysis process will benefit the most from the next industrial revolution.

The manufacturing industry is experiencing an immense surge in innovation: advancing digitalization in the industry, summarized under the buzzword Industry 4.0, is leading to increased efficiency in the production process and more growth.

Those who master the new rules of the digitalization game can make better decisions, integrate processes more closely and develop lucrative business models.

"Up to USD 1.4 trillion in additional annual margins can be leveraged worldwide in 2030 thanks to the digital industry"

says Thomas Kautzsch, Partner at Oliver Wyman and Head of the global Automotive and Manufacturing Industries consulting practice.

The projected added value will come from cost reductions on the one hand and profitable growth on the other.

The study "Digital Industry - The True Value of Industry 4.0" sheds light on the key levers and areas of conflict in the coming years:

"The most exciting question will be who will capture the additional value potential. The Industry 4.0 phenomenon is potentially changing the power structure between the companies involved in value creation to a great extent"

says Kautzsch.

According to the study, established manufacturing companies are in a good starting position, but need to act quickly and strategically. The winners will be those market players who are able to make data-driven decisions.

"The scramble for data sovereignty has already begun, but the battle is by no means over"

says Tobias Sitte, co-author of the study and also a partner at Oliver Wyman.

This means that companies in the mechanical and plant engineering sector, for example, are primarily faced with strategic questions rather than technological ones. The technical drivers behind the rapid transformation have largely been identified:

Networked machines are finding their way into production facilities, along with increasingly comprehensive 3D printing processes, simulation software and the ability to collect and analyze large amounts of data in practically real time (big data).

Lack of creativity

Managers are increasingly expected to use data-based and transparent decision-making processes. So far, very few managers seem to consider themselves well equipped.

In the study, all decision-makers from the machine and plant manufacturers surveyed stated without exception that they lacked "creativity to think beyond existing operating and business models": There was a lack of "creativity to think beyond existing operating and business models".