Playing it smart: Germany, US jump on the digital factory

By PLANT Staff   

Business Operations Industry Operations Production Manufacturing IIoT Industry 4.0 manufacturing productivity

Most companies see it as key to reducing costs and increasing productivity.

Germany and the US are adopting smart factory technologies. PHOTO: THINKSTOCK

Canadian manufacturers who aren’t giving a lot of thought to Industry 4.0 take note: companies from two of the world’s leading industrial nations – likely some of your competitors – have a jump on the adoption of new smart, digital technologies.

The Boston Consulting Group studied the status of 4.0 adoption at 627 companies from the US and Germany (revenues of more than $50 million). Most respondents to the March 2016 survey (75% from Germany, 66% from the US) see it as increasing productivity and cost reduction, and many of them (48% in Germany and 43% in the US) associate it with revenue growth.

The study found German companies were off to a faster start: 19% of them have implemented a full concept (such as a smart factory) or first measures toward a concept (such as the introduction of autonomous robots). That compares to 16% of US companies.

German companies are better prepped to adopt Industry 4.0: 47% have developed their first full concepts, and only 18% are not prepared to introduce the digital technologies. The US lags at 29% for first concepts with 41% unprepared.


German manufacturers are also ahead on applying, or planning to apply advanced technologies. About 60% have applied (or intend to within the next one or two years) digital factory logistics or predictive maintenance. That compares with approximately 40% of US manufacturers. The Germans lead in robotics adoption (292 industrial robots per 10,000 workers as of 2014) compared to 164 per 10,000 US workers. Canada weighs in at 118 per 10,000 workers (as of 2013).

Although there are no comparable numbers for Canada, PLANT’s Manufacturers’ Outlook 2017 shows companies (mostly SMEs, well below the $50 million level) continue to lag in the adoption of advanced and smart technologies. For example, 76% are not applying Industrial Internet of Things (IIoT) technology, 38% say it’s not applicable and 34% aren’t familiar with its capabilities. Thirty-two per cent aren’t using advanced technologies such as CAD/CAE/CAM, data acquisition, computerized manufacturing or robotics technologies; and only 30% use automated data collection, analysis and review; while 28% don’t measure shop floor data.

American manufacturers’ more enthusiastic adoption of Industry 4.0 technologies threatens to further widen the productivity gap with Canadian companies.

A study by the Business Development Bank shows the gap is already considerable. The federal Crown corporation found SMEs generate 73% as much output as their US peers. That’s down from 90% in the 1980s.

BDC warns lagging productivity erodes corporate profits and discourages capital investment.


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