the emergence of digital manufacturing

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The Emergence of Digital Manufacturing The Emergence of Digital Manufacturing Enabling the Dawn of the Digital Factory Enabling the Dawn of the Digital Factory Karthik Sundaram, Senior Analyst Industrial Automation & Process Control 4 April 2013 © 2012 Frost & Sullivan. All rights reserved. This document contains highly confidential information and is the sole property of Frost & Sullivan. No part of it may be circulated, quoted, copied or otherwise reproduced without the written approval of Frost & Sullivan.

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Page 1: The emergence of digital manufacturing

The Emergence of Digital Manufacturing The Emergence of Digital Manufacturing

Enabling the Dawn of the Digital FactoryEnabling the Dawn of the Digital Factory

Karthik Sundaram,

Senior Analyst

Industrial Automation & Process Control

4 April 2013

© 2012 Frost & Sullivan. All rights reserved. This document contains highly confidential information and is the sole property ofFrost & Sullivan. No part of it may be circulated, quoted, copied or otherwise reproduced without the written approval of Frost & Sullivan.

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Today’s Presenter

5+ years of comprehensive experience in industrial automation and process

control, both in terms of research and consulting and engineering experience.

Particular expertise in carrying out growth consulting exercises, analysing new

market opportunities and understanding the changing landscape of industrial

technology.

An avid reader of books centred on Indian history and oriental philosophy,

who also likes to occasionally indulge in the the craft of writing and live in the

world of words.

Karthik Sundaram, Senior Research Analyst

Frost & Sullivan, India

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Contents

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Digital Manufacturing – An Overview

A major DM vendor

“In an era of crowded markets with high competition, streamlining and executing new manufacturing processes forms the basis of sustenance and profitability. This makes digital manufacturing an inevitable investment for the discrete manufacturing industry.”

Digital Manufacturing- Bridging the Divide

Note: cPDM stands for Collaborative product data management. Source: Frost & Sullivan Analysis.

• Compress time-to-market

• Promote new product innovation

• Decrease operational expenditure

• Establish lean and flexible manufacturing

• Facilitate integration between multiple enterprise disciplines

Advantages of Digital Manufacturing Applications

Digital Manufacturing

Digital manufacturing (DM) is an enterprise initiative that aims to define and validate

manufacturing process models founded on a collaborative platform involving business

intelligence from multiple enterprise disciplines.

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Geographic Scope

Timeframe Timeframe

Short term:

Medium term:

Long term:

2012–2013

2014–2015

2016

Base year: 2011

Historic Period: 2008–2010

Source: wwww.oanda.com; Frost and Sullivan analysis.

Digital Manufacturing Market: Geographic Scope, Global, 2011North America:

This includes the United States of America, Canada, and

Others (Mexico, Caribbean Islands, etc.).

Europe:

This includes all major countries in western, central, and

eastern Europe.

Asia-Pacific:

This includes Japan, South Korea, China, India and

Others(Singapore, Indonesia, Malaysia, Vietnam, etc.)

Rest of the World:

This includes Latin America, Russia and the

Commonwealth of Independent States, Others (Africa and

the Middle East.)

Exchange Rates: 1 USD = 0.7720 Euro (Average of 2011)

Geographic Scope:

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End-user Scope

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Market Drivers and Restraints

Denotes long-term impact Denotes current impact Source: Frost & Sullivan analysis.

Need for improved manufacturing efficiency

and reduced time-to-market is expected to

spur growth.

The rapid growth of PLM is expected to

boost investments in digital manufacturing.

Emphasis on product quality compliance,

decreased warranty costs, and improved brand

perception is poised to improve adoption.

An uncertain global economic environment

is likely to impede investments and impact

market growth.

Lower demand for digital manufacturing in small

and medium enterprises (SMEs) is poised to limit

market expansion.

Dependence on external enterprise partners for

project executions affects net profitability.

Key Takeaway: The need for cross-discipline collaboration and increased manufacturing efficiency will drive growth over the forecast period.

Key Takeaway: The need for cross-discipline collaboration and increased manufacturing efficiency will drive growth over the forecast period.

Lack of customised solutions for process industries is expected

to limit adoption.

Emphasis on advanced operator training and evaluation is likely to

aid adoption.

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Split Across Geographies

North America,

29.7%

Europe,33.6%

Asia-Pacific,23.9%

Rest of the World, 12.8%

Digital Manufacturing Market: Percent Revenue Share by Region, Global, 2016

Digital Manufacturing: Geo-economic Factors Digital Manufacturing: Geo-economic Factors

Sovereign debt crisis

Poor export demand

High capital cost

Geographic Prospects

From a macro-economic perspective, this market is primarily driven by developed economies. Emerging economies of Asia, such as China and India, are also expected to witness a greater adoption of digital manufacturing over the forecast period.

Uncertainty in global markets

Decline in manufacturing output of emerging markets

End-user reluctance to invest in DM

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End-user Analysis

“Others” include pharmaceuticals, cosmetics, medical devices, and so on. Note: All figures are rounded. The base year is 2011. Source: Frost & Sullivan analysis.

Key Takeaway: Discrete industries are positioned to exhibit greater demand for digital manufacturing applications.

Key Takeaway: Discrete industries are positioned to exhibit greater demand for digital manufacturing applications.

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Competitive Structure

Digital Manufacturing Market: Competitive Structure Global, 2011

Number of Companies in the Market More than 10 with revenue greater than $1 M

Competitive FactorsCustomisation, integration with major PLM, enterprise

resource platforms (ERP), and brand image

Key End-user GroupsAutomotive & Transportation, Aerospace & Defence,

Machinery & Industrial, and Hi-tech and Electronics

Major Market Participants Siemens AG, Dassault Systemes, and PTC

Market Share of Top 3 Competitors Greater than 50%

Distribution Structure Direct sales, system integrators, and value-added resellers

Notable Acquisitions and MergersDassault Systemes acquired Intercim, a manufacturing

execution systems provider, in 2011

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The Last Word

Source: Frost & Sullivan Analysis.

22Developed economies are likely to dominate growth over the forecast period, with North America likely to experience high growth.

Developed economies are likely to dominate growth over the forecast period, with North America likely to experience high growth.

33The top three major PLM vendors, leveraging on their strong PLM portfolio, are poised to expand their footprint through strategic mergers and acquisitions as well as innovative product strategies.

The top three major PLM vendors, leveraging on their strong PLM portfolio, are poised to expand their footprint through strategic mergers and acquisitions as well as innovative product strategies.

11The need for accelerating lead times and increasing profitability will boost growth for the global digital manufacturing market.

The need for accelerating lead times and increasing profitability will boost growth for the global digital manufacturing market.

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Next Steps

Develop Your Visionary and Innovative SkillsGrowth Partnership Service Share your growth thought leadership and ideas or

join our GIL Global Community

Join our GIL Community NewsletterKeep abreast of innovative growth opportunities

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Please inform us by “Rating” this presentation.

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For Additional Information

Karthik Sundaram

Senior Research Analyst,

Industrial Automation & Process Control -Europe

+91 44 6681 [email protected]

Muthukumar Viswanathan

Practice Director,

Industrial Automation & Process Control -Europe

+44 20 7915 7804

[email protected]

Sivakumar Narayanswamy

Program Manager,

Industrial Automation & Process Control -Europe+91 44 6681 [email protected]

Julia Nikishkina

Corporate Communications Executive,

Industrial Automation & Process Control –Europe

+7 499 918 61 [email protected]