Digital transformation to 'Industry 4.0'

Deloitte in Switzerland has analysed the challenges and opportunities that industrial enterprises are currently facing. How can they master the digital transformation to "Industry 4.0" and benefit from exponentially growing technologies?

Throughout the world, the traditional manufacturing industry is undergoing a digital transformation. The arrival of information and communication technology enables new approaches to development, production and logistics. Deloitte has analysed this transformation process in Switzerland in the newly release "Industry 4.0" report.

Ralf Schlaepfer, Managing Partner Manufacturing Industry at Deloitte in Switzerland, explains: "The interconnection to create an internet of things, services, data and people will shape industrial production in the future. The fourth industrial revolution – "Industry 4.0" – has four key characteristics:

1. The vertical networking of smart production systems (such as smart factories).
2. Horizontal integration across global value chain networks that enable business partners and customers to be integrated.
3. Through-engineering across the entire value chain.
4. Acceleration from exponentially growing technologies."

Technologies speed up transformation

The acceleration brought about by technologies is a major challenge for Swiss enterprises. New technologies like 3D printing, autonomous drones, artificial intelligence, intelligent robots and sensors are growing exponentially – in line with Moore's Law, which states that computer performance doubles roughly every two years. Swiss enterprises need to adapt to this speed, otherwise they face being forced out by nimbler competitors.

Swiss companies at the start

The Deloitte study shows that Swiss industrial enterprises are not very advanced in their digital transformation. But a majority of those surveyed (84%) see opportunities to boost their competitiveness and that of the Swiss manufacturing industry as a whole via this transformation process. For example, the responses regarding the use of 3D printing show that, although the huge potential of such key technologies is recognised (64% of respondents), it is hardly used to its full extent despite planned investments (68% do not use 3D printing at all yet).

Investments are also required: In IT infrastructures – only one third (32%) of companies surveyed describe their current structure as suitable). And on cyber security – 84% of enterprises fear increased cyber risks from the digital transformation to "Industry 4.0". What's more, only 4% of respondents have adequate staff to successfully master the digital transformation.

New era of customer orientation

Opportunities arising from "Industry 4.0" include integrating customer preferences in development and production processes, facilitated by exchanging data with machines, for instance. "Machine data are easier to analyse," says Markus Koch, Consulting Partner at Deloitte. "This helps to improve the quality of production and avoid errors in the process, making it possible to offer customers individualised solutions flexibly.”

“What is needed is a reorientation from a 'push into the market' of better products for the customers to a 'pull' approach and an individualised understanding of customer needs. To ensure that Swiss industrial enterprises arrive successfully in Industry 4.0, they need to evolve into learning organisations that take advantage of these radical changes," states Ralf Schlaepfer.

Deloitte study on the Swiss industry

The Deloitte study discusses the key challenges and opportunities for Swiss industrial enterprises to master the digital transformation of the Swiss manufacturing industry. To this end, over 50 industrial enterprises mainly in the Swiss mechanical and electrical engineering and metalworking industries as well as the chemicals and construction sectors were analysed on this topic between March and August 2014 on the base of a survey and personal interviews.

You will find the full results of the Deloitte study here.

About Deloitte in Switzerland

Deloitte is a leading accounting and consulting company in Switzerland and provides industry-specific services in the areas of audit, tax, consulting and corporate finance. With approximately 1,300 employees at six locations in Basel, Berne, Geneva, Lausanne, Lugano and Zurich (headquarters), Deloitte serves companies and institutions of all legal forms and sizes in all industry sectors. Deloitte AG is a subsidiary of Deloitte LLP, the UK member firm of Deloitte Touche Tohmatsu Limited (DTTL). DTTL member firms comprise of approximately 210,000 employees in more than 150 countries around the world.

Note to editors

In this press release references to Deloitte are references to Deloitte AG, a subsidiary of Deloitte LLP, which is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent entities. Please see www.deloitte.com/ch/about for a detailed description of the legal structure of DTTL and its member firms. Deloitte LLP and its subsidiaries are leading business advisers, providing audit, tax, consulting and corporate finance services through more than 12,600 exceptional people across the UK and Switzerland. Known as an employer of choice for innovative human resources programmes, it is dedicated to helping its clients and people excel. Deloitte AG is recognised by the Federal Audit Oversight Authority and the Swiss Financial Market Supervisory Authority. The information contained in this press release is correct at the time of going to press.