How much is the market for projects related to Industry 4.0 worth in Italy? What are the most widespread applications within the companies? And which professionals – managers and others – are mostly involved in the decision-making processes? The Osservatorio Industry 4.0 of the School of Management, Politecnico di Milano, has tried to answer these and other questions, which are increasingly recurring, through a study whose results show not only a significant growth of the market, but also the need to include more people and enhance skills.
by Fabrizio Dalle Nogare
The debate on the need to maintain, if not strengthen, the incentives for companies that are committed to investing in process digitization is hotter than ever in Italy. All the more so given the frequent changes of government, and therefore of direction, that have affected the country in recent years.
Understanding how well the various Industry 4.0 and Enterprise 4.0 Plans have worked, however, is not enough to frame the issue of digitalization in the Italian manufacturing industry. The Osservatorio Industry 4.0 of the School of Management, Politecnico di Milano, has therefore investigated more thoroughly, trying to bring out the figures (referring to 2018) that measure the breadth and vitality of the market but also, and above all, the trends that feature the present and the future of companies that look towards “4.0”. The results, encouraging in some ways, should also make us think.
A market worth 3.2 billion euro
Made of IT solutions, enabling technological components working on traditional production assets and related services, the market of Industry 4.0 projects reached a value of 3.2 billion euro in 2018, an increase of 35% over the previous year. It is clear that the investments made in 2017 (and invoiced in 2018) were driven by the Industry 4.0 Plan. Estimates for 2019, based on the results of the first quarter, point to a slowdown in growth, which is supposed to be around +20-25%.
Technologies related to Industrial IoT (components for connecting machinery to the network) account for 60% of the market (1.9 billion euro; +40%), followed by Industrial Analytics with a share of 17% (530 million euro; +30%) and Cloud Manufacturing (270 million euro; +35%). Among the OT (Operational Technologies), Advanced Automation conquers the largest market share with 160 million and a growth of 10%, followed by Additive Manufacturing with 70 million euro.
Tangible benefits in terms of flexibility and cost reduction
On the basis of the survey held by the Osservatorio Industry 4.0, of 192 companies (153 large companies and 39 SMEs), 80% believe that Industry 4.0 is a revolution that will bring radical changes with great potential yet to be expressed, only 20% consider it only an evolution of what was already started in previous years. However, as soon as one in three companies has evaluated their digital readiness, 54% are interested in doing so in the future, while 14% have not and do not intend to do so.
The Italian scenario is also very dynamic from the point of view of 4.0 applications. Almost 800 are those surveyed, on average more than four initiatives per company, distributed in the three areas of business processes: Smart Factory (production, logistics, maintenance, quality, safety and compliance), Smart Lifecycle (product development, life cycle management and supplier management) and Smart Supply Chain (planning of physical and financial flows).
Once consolidated, 4.0 projects bring tangible benefits, especially in terms of flexibility and cost reduction. The main benefits indicated by companies with projects in operation for more than a year are improved production flexibility (47%), increased plant efficiency (38%), reduced design time (34%) and the opportunity to develop innovative products (33%).
The most perceived barriers to the development of 4.0 applications are, on the other hand, difficulties in the use of technology and in the adoption of standards (59%), organizational as well as competence management issues (41%), change management difficulties (20%) and dissatisfaction with the offer (17%).
The people’s revolution?
The involvement of people in the development of digitization solutions is another of the aspects investigated. And here the notes become more painful. Workers, who are also the end users of the technologies, were only actively involved in all phases of the projects in 7.8% of the companies and in slightly more than one in four cases (26.6%) they were not even informed of the presence of a 4.0 strategy. HR are, if possible, even less involved and have participated in these initiatives in only 6.8% of companies. In many cases, the promoters of the 4.0 initiatives are top managers (43.8% of the sample) or production or plant managers (35.4%). The R&D function is mainly involved in the stage of project development.
“The data show that few companies are facing the 4.0 revolution with a systemic approach that looks at technological solutions and the organizational model at the same time, and there are still a minority that adequately assess the impact of technological choices”, commented Raffaella Cagliano, Professor of People Management and Organization at the Politecnico di Milano. “This could represent a potential barrier on the way to the 4.0 path of Italian companies, which can limit the full and rapid achievement of benefits not only for business performance, but also for the enrichment of operators”.
A more aware industrial fabric about the extent of the gap to be filled
Already 57% of companies have taken action to identify “4.0” skills shortages and start necessary interventions to fill them. About three out of ten consider them adequate and as many are working to improve them. The decision to evaluate skills involves a strong participation of entrepreneurs and top managers (74%) and managers of 4.0 projects, especially in the stages of promotion, definition of objectives and evaluation methods (44%). HR managers remain in the background and only gain importance in the implementation stage, a further proof of the difficulty of playing a more strategic role in the 4.0 transformation process. “Overall – said Sergio Terzi, Director of the Osservatorio Industry 4.0 -, the industrial fabric seems more aware of the extent of the gap to be filled, determined to activate the available resources to train the most relevant skills, but to a large extent still in the phase of defining a clear strategy on the skills of Industry 4.0”.