Professional Documents
Culture Documents
www.abiresearch.com
The focus of this whitepaper is an Industry 4.0 Matrix Index that ABI Research and Nokia have created to
highlight the progress made by seven vertical markets (chemicals, fabricated metals, petroleum, mining,
electronics & appliances, heavy machinery, and ports/logistics firms) with regard to aligning their investments
in IT infrastructure and deploying use cases underpinned by digital technologies at their facilities. The IT
infrastructure needs to support the ambitions of the OT teams and, alternatively, to justify the investments
supporting the use cases operating that use the infrastructure. Projects will fail if the two perspectives are
misaligned.
The Industry 4.0 Matrix Index is based on the results of an online survey of 500 individuals that was
undertaken in 1Q 2023. Respondents were working in one of the vertical markets and located in either
the United States, Japan, France, Germany, or the United Kingdom. In addition, the sample was a mix of
IT and OT leaders, and senior managers whose companies operate out of a single location or dozens of
sites and employ hundreds or thousands of employees. All respondents were involved in either devising the
overall strategy, the program design, or on-site implementation of digital transformation projects at their
company’s factories/plants/industrial sites/facilities.
In addition to informing the Matrix Index, the survey looked to understand respondents’ operational
concerns, the background to their investments, and barriers to adoption; all of which are discussed in
this whitepaper.
EXECUTIVE SUMMARY
I&M firms are under scrutiny from regulators like never before, both from an operational compliance and
an Environmental, Social, and Governance (ESG) perspective. In addition, firms are attempting to navigate
complex and sometimes volatile operating environments. For these reasons, digital transformation is no
longer the preserve of technology teams, it is part of I&M firms’ corporate strategies.
But it is not a smooth path to adoption. I&M firms report that a lack of internal expertise or alignment
between IT and OT perspectives is holding back or preventing progress. The nine segments of the Industry
4.0 Matrix Index show where plans can go awry. Upgrades to IT infrastructure should be synchronized with
the use cases being deployed. Additional use cases will place an extra load on the IT infrastructure, risking
poor performance. Alternatively, spare IT capacity wastes scarce budgets.
The survey findings show that I&M firms are rolling out 4G networks and 5G networks. Often they
have already made investments in Wi-Fi across their facilities. Firms have also been scaling cloud
applications and supporting remote workers with mobile devices.
Manufacturers of electronics and appliances lead the way with investments in private 5G and edge
compute able to support firms’ data strategies.
Investments in campus networks and private 4G enable producers of fabricated metals to control
their equipment and operations. These investments will enable the firms to meet their customers’
needs and their sustainability goals.
Alignment between IT and OT teams at petroleum producers will help the firms monitor their
emissions and use drones to maintain safety levels.
Chemical producers are using data to adhere to regulations, support customers, and optimize their
workforce.
Operators of ports and logistics firms are behind other verticals with regard to deploying use cases,
such as Automated Guided Vehicles (AGVs) and Autonomous Mobile Robots (AMRs), and need to take
advantage of their IT infrastructure.
Production issues trigger mining firms to consider investments in digital transformation. Investing in
digitizing their equipment should be a priority. Investments of this nature would underpin efforts to
monitor emissions.
Manufacturers of heavy machinery must invest in digitizing their production machinery and software
applications to better align their IT and OT environments.
Improving the company’s agility, such as handling supply shocks, political risks, local economic
conditions, etc.
The spider diagram in Chart 1 shows that all of the topics are a focus of attention with the mean score for
the 500 respondents above 7 for each topic.
7.4
7.3 7.25
7.2
7.1
7.06
The priority for respondents is to optimize their workforce operations and ensure safety levels followed
by supporting their sustainability goals and improving the performance of their equipment. Looking at the
results through different sample groupings reveals alignment between respondents from those with IT or
OT responsibilities, with both groups prioritizing workforce optimization and safety. Digging deeper into
those responses indicates that when IT teams prioritize workforce optimization, improving quality levels and
improving knowledge retention are critical topics. For OT professionals the key focus is on improving
knowledge retention, as well as collaboration and communication between teams. Both groups want to
increase the knowledge of the workforce, but perhaps with different objectives in mind.
Those in senior management were most concerned about their organizations achieving sustainability
goals, scoring 7.6. This finding indicates that ESG performance is resonating in the boardrooms of I&M
firms. Reducing emissions and energy consumption are the key concerns. Individuals with responsibility for
leading digital transformation projects at their organizations were prioritizing improving asset performance
with increasing equipment life span a key concern.
From a vertical market perspective, those working for manufacturers of electronics & appliances,
chemicals producers, and ports & logistics were prioritizing workforce operations and workforce safety.
The costs involved with replacing parts on an oil well or specialized equipment for producing heavy
machinery explains why producers and manufacturers of heavy machinery were focusing on asset performance.
Producers of fabricated metals are prioritizing meeting their sustainability goals. This provides evidence
that ESG concerns are resonating across industrial value chains, with buyers scrutinizing the environmental
footprint of their raw materials. Finally, given the volatile nature of commodity prices, Mining firms were
focusing on their ability to handle the external environment.
Sustainability priorities vary across vertical markets, with reducing water usage a priority for ports &
logistics firms; regulations driving the thinking for manufacturers of electronics & appliances and chemicals
firms; reducing energy consumption is key in the heavy machinery and fabricated metals sectors; and, not
surprisingly, reducing emissions is the key concern for miners and petroleum firms.
Digital transformation projects stem from delivering our ESG goals 286
Digital transformation projects originate as a result of an issue(s) on the production line 271
In our sample, digital transformation is part of both corporate and IT strategies. It is less about external
considerations highlighted above, such as labor shortages or compliance considerations.
For individual vertical markets, customer requirements are a key influence for producers of chemicals and
fabricated metals, as well as ports & logistics firms. In contrast, for mining firms, digital transformation often
is the result of an issue(s) on the production line. ESG goals and resolving a safety issue are triggers for digital
transformation projects for manufacturers of electronics & appliances, while for petroleum firms, it is safety
and production issues.
Survey respondents were asked to indicate their current thinking and progress made with regard to
investments in their IT infrastructure (Wi-Fi, private wireless, campus networks, devices, edge compute,
and cloud) on a 10-point continuum. At one extreme, a respondent has no plans for investing in the
technology for the foreseeable future (0) and at the other extreme, the respondent is exploring/
evaluating the next iterations of the technology (10). The survey responses indicate that I&M firms are
committing budgets to each area of IT infrastructure in the next 12 months and several technologies have
already been implemented at all applicable facilities.
The chart below shows the median scores for each IT investment area.
0 1 2 3 4 5 6 7 8 9 10
SCORE
Edge Compute: Data Centre Mobile devices: Smartphones,
Campus wireless IIoT data net-
works (LoRa, Wireless Hart, Tablets, Ruggedized devices
Campus wireless workers com- SigFox, etc.)
munication legacy networks
(DECT, Tetra, PAMR, etc…)
0 No plans for the foreseeable future 6 Devising implementation program of the technology
1 Possibly consider in the next five years 7 Initial roll out at a limited number of factories/plants/ facilities
2 Possibly consider in the next 2 years 8 Scaling technology across our factories/plants/facilities
3 Considering adoption in the next 12 months 9 Technology has been implemented at all applicable factories/plants/facilities
5 Evaluating suppliers
In terms of private wireless, respondents from the petroleum industry were further ahead than other
verticals and scaling private 4G networks across their facilities (median score of 8). Manufacturers of
electronics & appliances, as well as those producing fabricated metals, are furthest ahead with respect to
private 5G networks with a median score of 6 (devising implementation program of the technology).
Fabricated metals producers were also the most advanced with regard to campus wireless legacy networks
(DECT, TETRA, PAMR, etc.) and many are scaling technology across their factories (median score of 8).
Many respondents are only considering proofs of concept for edge compute; however, manufacturers of
electronics & appliances are slightly further ahead and evaluating suppliers (median score of 5).
Given that many respondents have yet to connect their equipment to the Internet, it is not surprising
that respondents are only conducting proofs of concept for edge compute. The investments in software
applications ties in with the need to optimize the workforce by improving knowledge retention and
quality levels.
Optimizing Their Operations: Having connected assets to the Internet, OT teams look to install
management tools, such as Supervisory Control and Data Acquisition (SCADA) systems and software
for Robotic Process Automation (RPA). Other investments to optimize production include robots and/or
Collaborative Robots (cobots), as well as deploying AGVs, AMRs, and drones for inspections.
Investments in mobile assets especially need to be supported by asset tracking solutions. Companies
can also monitor and manage operations with supply chain and/or quality management tools having
eliminated paper-based data collection.
Using Analytics: The focus increasingly is to run operations based on data. For example, collecting
video-based images to inform Machine Learning (ML) for quality analytics or developing analytics to
identify solutions to resolve issues. The data collected should not reside in individual applications, but
be shared with applicable tools via a digital thread. The data can also feed digital twins of equipment
and production lines of facilities. All of these investments can support the move toward fully
autonomous operations.
Optimize Work Delivery: I&M firms are supporting day-to-day work delivery with investments in
remote working, 1-to-1 communication systems, and Augmented Reality (AR)/Virtual Reality (VR)/Mixed
Reality (MR) applications for collaboration, supporting assembly functions, and training. Finally, I&M can
improve employee welfare with investments in exoskeletons.
Table 3 summarizes survey respondents’ deployment plans for each using the investment lifecycle
introduced in the previous section. Again, the position of the use case on the continuum is based on the
median score from the 500 survey respondents.
Not Under
Topic/ Scaling Out and Under
Consideration
Deployment Exploring Future Implementing (5, 6, 7) Consideration
in the Next 2 years
Plans Possibilities (8, 9, 10) (3, 4, 5)
(0, 1, 2)
Industrial robots/cobots
Using Analytics Data analytics for identifying Creating a digital thread A digital twin to
the root cause of issues manage assets
Fully autonomous operations
Data analytics to identify A digital twin to
solutions to issues manage operations/
production lines
Video-based quality
inspection A digital twin to
manage a facility
Optimizing Work Cloud applications for re- AR/Extended Reality (XR)/VR for
Delivery mote working training
All use cases are at least under consideration in the next 2 years. Typically, respondents are implementing
use cases that support their concerns for optimizing their workforce and operations. Respondents are only
beginning to test and evaluate digital twins.
Chemicals: Tying in with the concerns around workforce safety and optimization, chemical producers
are further ahead than others with drone deployments for inspections (median score of 9).
Fabricated Metals: Producers are more advanced in deploying technologies to control their machines
(SCADA systems and the like), PLM software, and quality inspection tools, perhaps reflecting the need to
refine their products and processes to meet sustainability goals. The sector is further ahead on private
4G investments, which means that the network can readily support AR for day-to-day tasks and 1-to-1
communications. However, the sector lags behind others with respect to condition-based monitoring
and ML quality analytics; potential use cases that a private 4G network can support.
Mining: Firms are behind other verticals with regard to digitizing equipment. Investing in this area could
improve their ability to handle external shocks.
Electronics and Appliances: Well placed to meet their workforce optimization and safety goals.
Manufacturers are furthest ahead with respect to digitizing their equipment. Coupled with their
investment in edge compute and private 5G, these manufacturers can optimize their operations with AR
tools and create digital threads, which should allay respondents’ regulatory concerns.
Petroleum: Given the safety concerns, scale, and complexity of their facilities, petroleum producers
are the most advanced in their deployments of drones for inspections and creating digital twins of their
facilities.
Ports/Logistics: Given the mobile nature of assets at a port or logistics firm, it is not a surprise that
this vertical lags behind others in digitizing assets. However, improving workforce operations is a priority
and it is surprising that respondents in this vertical are behind on deploying AGVs.
The chart below confirms that manufacturers of Electronics & Appliances are the most advanced in their
deployment of use cases and IT investments. In addition, it confirms that manufacturers of Heavy Machinery
trail other vertical markets.
100.0
70.0
Ports/ Logistics, 67.3, 60.9
60.0
Manufacturer of Heavy All Respondents, 68.8,
50.0 Machinery, 57.8, 55.9 66.0
40.0
Mining, 61.6, 59.5
30.0
Chemicals, 67.0, 65.6
20.0
10.0
0.0
0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 90.0 100.0
Use Case Deployment (OT)
You may now benchmark yourselves using the self-assessment tool co-created by Nokia and ABI Research:
The Assessment Tool.
In addition to developing the Index, ABI Research and Nokia have summarized respondents’ positioning in
nine different segments.
100
Good
IT Leading IT/OT Operational
Technology the Way Synchronized Momentum
Maturity
(IT)
100
Use Case Deployment
(OT)
Those in the bottom left corner are only just beginning to invest in their IT infrastructure and to deploy
use cases in their facilities, while those in the top right corner are well on the way to achieving self-learning
operations that run with little human involvement. In both scenarios, the IT and OT investments align. But
as companies scale, IT and OT environments need to maintain that alignment; otherwise, the IT or OT
environments get ahead of one another and move too far to the left or to the right. The sweet spot is in
the middle with the investments maintaining alignment with the IT infrastructure supporting the increasing
numbers of use cases.
Mapping the survey findings to the segments, overall, the 500 respondents have good operational
momentum and are on the cusp of a pathway to the industrial metaverse. Vertical markets with good
operational momentum include ports & logistics operators and producers of petroleum and chemicals. The
manufacturers of electronics & appliances, as well as those producing fabricated metals, are on the pathway
to the industrial metaverse, while the manufacturers of heavy machinery and mining firms have their IT and
OT environments synchronized.
People: Staff fearful of being replaced by technologies and losing their jobs 36 46
Internal: We struggle to articulate the business case and communicate across teams 34 44
People: We often don’t know enough about the technology/topic to commercially deploy 38 26
People: We do not have time/resources to think about innovation and are
24 29
worried about the risk it poses to our operation
Commerical: we need to amortize existing infrastructure before investing in new solutions 17 27
Internal: Our assets (machines, robots, etc..) are too old and cannot be digitalized 16 22
Technical: We are lacking the reliable and easy to use technology to connect
all assets and extract data 17 12
Number of Responses
N=500
Which of the following do you consider to be barriers to investing in and delivering digital transformation
projects at your company?
Interestingly, IT respondents rank the lack of alignment a key reason, while OT counterparts consider a lack
of expertise a key reason.
Senior managers agree with the IT respondents, while transformation leads with the OT respondents. From
a vertical market perspective, mining firms, manufacturers of fabricated metals, heavy machinery, ports &
logistics, and electronics & appliances lack expertise internally, while the lack of alignment is prevalent among
petroleum and chemical producers.
www.abiresearch.com
ABI Research is a global technology intelligence firm delivering actionable research and strategic guidance to technology leaders,
innovators, and decision makers around the world. Our research focuses on the transformative technologies that are dramatically
reshaping industries, economies, and workforces today. ABI Research’s global team of analysts publish groundbreaking studies often years
ahead of other technology advisory firms, empowering our clients to stay ahead of their markets and their competitors.
© 2023 ABI Research. Used by permission. ABI Research is an independent producer of market analysis and insight and this ABI Research
product is the result of objective research by ABI Research staff at the time of data collection. The opinions of ABI Research or its analysts
on any subject are continually revised based on the most current data available. The information contained herein has been obtained
from sources believed to be reliable. ABI Research disclaims all warranties, express or implied, with respect to this research, including any
warranties of merchantability or fitness for a particular purpose.
www.abiresearch.com