DIGITIZATION AND INDUSTRIAL INNOVATION

Howard HeppelmannPTC

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PTC IS A GLOBAL SOFTWARE TECHNOLOGY COMPANY

NEW HQ: BOSTON SEAPORT REVENUE BY VERTICAL

FAST FACTS

GEOGRAPHIC COVERAGE

Life Sciences5%

Industrial Products

31%

Federal, Aerospac& Defense

16%

Electronics& High Tech

18%

Automotive14%

Retail & Consumer

7%

Other9%

BRANDS

Americas42%

Europe37% Asia Pacific

21%

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CONVERGENCE OF PHYSICAL AND DIGITAL

Smart Product

Smart, Connected Product

AutomationSystem

Connected System

SmartFactory

Supply ChainSystem

Manufacturing Execution

System

Distribution System

System Of SystemsProduct

CAD/3DP/PLM ALM SLM IOT AR/VR I4.0

4CONFIDENTIAL – NOT FOR DISTRIBUTION - COPYRIGHT 2017 © MICHAEL E. PORTER AND JIM HEPPELMANN

WAVES OF IT-DRIVEN COMPETITION

1800s 1960s 1990s 2010s

Mechanical Products & Manual Processes

Value Chain Automation

Value Chain Dispersion and Integration

Smart, Connected Products (IoT)

IT automates processes and

information collection of

activities in the value chain

The internet enables coordination and integration acrossthe value-chain,

across geography, and with customers

and business partners

IT is embedded in products themselves,expanding the way

products create value and shifting the nature of competition

Products are mechanical/ electrical and information processing is performed manually

Digital information is delivered to people in 3D and in context,

changing how humans interact with smart products and

environments

Augmented Reality (AR)

November 2014 October 2015 November 2017

2015s

5

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TECHNOLOGY - FROM A PLACE TO A PACE

How we live How we work How we get around How we buy

How we innovate How we produce How we operate How we serviceThe definition of “Value ChainHow we generate and consume information

Everything Is Changing - At an Exponential Rate

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OPERATIONS TECHNOLOGY - FROM A PLACE TO A PACEIndividually impactful, collectively & synergistically disruptive

IOT (IT / OT Connectivity)

Digital Technology Platforms

Machine Learning / AI

Additive Manufacturing

Augmented Reality

Robotics

Digital Twin

Everything is Changing … at an exponential rate

Agile Methodologies

How we design for manufacturability

How we train the workforce

How we capture, analyze & use data

How we ensure quality

How we automate

How we continuously improve

How we deliver work instructions…

1

2

3

4

5

.

.

.

Current

L3 Production Execution(MES / MOM)

L2 Process Monitoring(HMI-SCADA)

L1Process Sensing,

Manipulating(PLC)

L4/L5

Business Systems(ERP, SCM, PLM)

Governance & planning

ISA-95

SUPPLIERS ENVIRONMENTALLOGISTICS IOT GATEWAY

%

• Disparate equipment & data

• Unique structures of data

• Production sensitive networks

• Rigid systems - costly to evolve

• Rip and Replace Innovation

Current

L3 Production Execution(MES / MOM)

L2 Process Monitoring(HMI-SCADA)

L1Process Sensing,

Manipulating(PLC)

L4/L5

Business Systems(ERP, SCM, PLM)

Governance & planning

ISA-95

Break-Thru Solutions

PLANT & CORP.MANAGEMENT MAINTENANCE QUALITY OPERATORS

• Connected

• Real-time

• Role-based

• Predictive / Prescriptive

• Mobile & augmented

• Wrap and extend Innovation

Industrial Innovation Platform

Innovation Platform

Source

SUPPLIERS ENVIRONMENTALLOGISTICS IOT GATEWAY

%

1 – DIGITAL TECHNOLGOY PLATFORMS (INDUSRTRIAL INNOVATION PLATFORM)

Contextualize

Synthesize

Orchestrate

Engage

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FLOWSERVE VIDEO

1 – DIGITAL TECHNOLOGY PLATFORM

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1 - ANSYS SIMULATION

SOURCE CONTEXTUALIZE SYNTHESIZE ORCHESTRATE ENGAGE

1 - DIGITAL TECHNOLOGY PLATFORM IN ACTION

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2 - MACHINE LEARNING/AI TO REDUCE UNPLANNED DOWNTIME

Predicting alarms 24 hours in advance, with a 91% accuracy

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3 - IOT MEETS ADDITIVE MANUFACTURING AT e.GO MOBILE AG

:24

2:04

15

ProductDevelopment

Manufacturing Operations Logistics Marketing

& Sales Service HumanResources

N = 107. Average of 2.3 functional areas chosen per respondent.

18%17% 17% 14% 19% 13%

Collaborative Design Review

Digital Design Review

Maintenance Work Instructions

Operator & Assembly Work

Instructions

Virtual Product Companions

Augmented Brand Experience

Augmented Operator Manual

Head-upDisplay

Service Manual Instructions

Service Inspection & Verification

Job Specific Training

Safety & Security Training

Retail Space Optimization

Augmented Interface

RemoteExpertise

ExpertCoaching

4 - AUGMENTED REALITY – INDUSTRIAL APPLICATIONS

DATA GROWTH*(ZETTABYTES)

* IDC's Digital Universe study, 2014

20134.4

20158.5

201716.4

202044.0

4 - THE DELUGE OF DATA

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4 - SEPARATE PHYSICAL DIGITAL EXPERIENCE

Separated Physical & Digital Worlds

Mentally understanding GPS images and then transposing them onto the road ahead is demanding and prone to

errors.

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4 - CONVERGED PHYSICAL DIGITAL EXPERIENCE FOR HUMANS

Converged Worlds

AR speeds humans ability to absorb and act on digital information by putting it in

context of the physical world.

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4 - WHY EVERY ORGANIZATION NEEDS AN AUGMENTED REALITY STRATEGY

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4 - MACHINE LEARNING MEETS AR TO REDUCE DOWNTIME AND IMPROVE WORKFORCE EFFICIENCY

“Large German automotive manufacturer reduces downtime loss by over 40K euros per minute, upon implementing predictive maintenance and augmented reality”.

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LOGISTICS

DHL is using AR to track pick lists and guide workers through the warehouse

to the location of each product to be packed.

Value Metrics• Reduced errors

• More engaged workers• Productivity improved by 25%

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Enabling Timely Data Driven DecisionsAgile in the Factory: Time to value with short innovation sprints

5 - AGILE METHODOLOGIES

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Digital ManufacturingA Journey of Transformation

Continuously assess how today’s technology forces unlock innovation to optimize agility, cost, quality and workforce safety and efficiency

DigitalThread

PredictiveAnalytics

UNDERSTAND

ADVANCE

OUTPERFORMPerformance

BenchmarkingSynchronized Operations

AgileInnovation

AR EnabledOperations

TODAY

Unified Connectivity

Operational Intelligence

Real-Time Issue Identification

Supply ChainVisibility

Prescriptive Analytics

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CLOSING THOUGHTS

What if….? …we had unified real-time visibility to factory operations?

…we knew the health status of every asset enabling our operations and how much time we had to fix it?

…we could predict quality issues before they appeared?

…we could deliver information to our workforce in a way that makes them more flexible, more productive, yields dramatic quality improvements while reducing training costs?

…we had the capability to efficiently create and deploy digitally enabled processes linking humans, production machinery, robots and business systems?

…we could deliver a continuous stream of operational innovation with minimal risk to production in cycles measured in weeks?

…

PHYSICALWORLD

DIGITALWORLD

DIGITIZATION AND INDUSTRIAL INNOVATION

Howard HeppelmannPTC