Siemens Financial Services (SFS) has published a research paper, Digitalization Productivity Bonus: Machine Building - What value does digitalization offer machine building manufacturers?, which investigates the value of digitalization for machine builders in China, France, Germany, India, the Nordics, Poland, Russia, Spain, Turkey, the UK and the USA. The potential value of digitalization is estimated to be between $103.2bn and $160.5bn for the global machinery and equipment industry.
New-generation digitalized technology (also known as Industry 4.0) is enabling manufacturers to improve performance through increased manufacturing productivity, improved planning and forecasting, enhanced competitive capabilities and greater financial sustainability.
Although the exact building blocks of productivity differ between industries and countries, increasing that productivity - to either manufacture the same number of products for less or more products for the same - has a clear and calculable positive effect on costs and margins. This positive effect has been labelled the Digitalization Productivity Bonus.
The research paper draws on a statistical model, developed by SFS, which estimates the Digitalization Productivity Bonus to demonstrate reliable financial gains from digitalization and automation.
In the machine building sector, digitalization and sensor technology enable remote control, monitoring and in-line adjustment, which enable processes to be refined and maintenance scheduled predictively to maximise uptime.
Financial support for Industry 4.0
To overcome the obstacle of investing in Industry 4.0 technology, specialist financiers have developed a set of financing tools – referred to as Finance 4.0 - that enable the transition to new-generation digital technology in a way that is affordable, sustainable and designed to alleviate the manufacturer’s cash flow and working capital pressures.
The research paper explores these specialist financing methods, including pay-to-access/use equipment and technology finance, technology upgrade and update, software finance, pay for outcomes, transition finance and working capital solutions.
Brian Foster, Head of Industry Finance at Siemens Financial Services in the UK, comments: “The ability to increase manufacturing productivity is a universal starting point for measurable value from digitalization and for industrial machine builders to make the business case for investing in the technology upgrade to Industry 4.0. Intelligent financing arrangements are needed to enable manufacturers to make this transition in a sustainable way. Only specialist financiers have the understanding of Industry 4.0 technology, and how it is implemented, to enable investment while alleviating manufacturers’ cash flow and working capital pressures.”
Follow the link for more information and to download a PDF copy of the research paper.