Exponential manufacturing A collection of perspectives exploring the frontiers of manufacturing and technology EXPONENTIAL MANUFACTURING: A COLLECTION OF PERSPECTIVES EXPLORING THE FRONTIERS OF MANUFACTURING AND TECHNOLOGY Start exploring with an augmented reality journey Get a new perspective on the collection of perspectives by downloading the free Aurasma app from your preferred app store. Once you have downloaded the app, launch your AR journey by holding your tablet or phone over the report cover. CONTENTS Foreword | 3 Exponentials watch list | 4 Science and technology innovations on the horizon The future of manufacturing | 22 Making things in a changing world High-performing manufacturers | 56 Where they play and how they win Industry 4.0 and manufacturing ecosystems | 80 Exploring the world of connected enterprises The rise of the digital supply network | 104 Industry 4.0 enables the digital transformation of supply chains Advanced Technologies Initiative | 124 Manufacturing & Innovation 3D opportunity for business capabilities | 138 Additive manufacturing transforms the organization Blockchain: Trust economy | 158 Taking control of digital identity Cyber risk in advanced manufacturing | 170 Machine intelligence | 184 Technology mimics human cognition to create value Help wanted | 196 American manufacturing competitiveness and the looming skills gap Foreword Thank you for attending the 2017 Exponential Manufacturing Summit, an ongoing collaboration with Singularity University and Deloitte that brings together the world’s brightest executives, entrepreneurs, and investors for three intensive days. Our hope is that, by attending, you’ll learn from and interact with business leaders seeking answers for how they can own their disruption, while working to find insight to a number of complex questions. Manufacturing as we know it is changing. Today, many manufacturers find themselves on the cusp of a fundamental transformation driven by the continued convergence of the digital and physical worlds. The pace of this convergence continues to accelerate—exponentially—and is ushering in the next indus- trial revolution. Many refer to it as Industry 4.0. As a result, manufacturers are increasingly facing disruption and opportunities that are impacting both their core and emerging businesses. Business leaders are also increasingly seeking answers for how they can own their disruption, and are working to find insight to a number of complex questions. Singularity University and Deloitte have been at the forefront of exploring the convergence, disruption, and opportunity facing manufacturers. Through events like the Exponential Manufacturing Summit and programs like the Innovation Partnership Program, our organizations are working with manufacturers, technology companies, and other organizations to examine how manufacturers can best capitalize on the convergence of machines, technology, and data. The business of making things continues to transform and evolve. In the following pages, we provide insight and highlight perspectives across a number of topics impacting manufacturers, including: • Cyber risks impacting manufacturers • Science and technology innovations on the horizon, including robotic process automa- • Advanced technologies creating competitive tion and block chain advantages • Americans’ views and perceptions of careers • Human cognition and machine mimicking in manufacturing and the impact on finding skilled talent Singularity University and Deloitte are excited to unite the manufacturing leaders at the forefront of the next industrial revolution at the 2017 Exponential Manufacturing Summit, and present the insights provided in these articles to further inform and augment the conversations and perspectives shared throughout the conference. Sincerely, Rob Nail Andrew Vaz CEO and associate founder Global Chief Innovation Officer Singularity University Deloitte Touche Tohmatsu Limited 3 Exponentials watch list Science and technology innovations on the horizon FROM TECH TRENDS 2017: THE KINETIC ENTERPRISE THOUGH BUSINESS APPLICATIONS FOR NANOTECHNOLOGIES, ENERGY SYSTEMS, biotechnology, and quantum technologies may seem light-years away, in reality they are approaching rapidly. In the next three to five years, expect to see business use cases emerge and pioneering deployments accelerate around these once-futuristic technologies. With this in mind, increasing numbers of CIOs, CTOs, and business strategists are already taking exploratory steps with these and other exponential technologies. They are sensing and scanning disruptive forces and putting in place deliberate, disciplined innovation responses. These leaders understand that waiting for exponentials to manifest as mature technology trends before taking action may be waiting too long. NLIKE other trends examined in this report In each force, we seek to identify precursor uses or that demonstrate clear business impact in breadcrumbs of adoption for early application to Uthe next 18 to 24 months, the exponentials business uses. Some if not all of these exponentials we are discussing appear a bit smaller on the may disrupt industries in 24 months or more, but horizon. These are emerging technology forces that there can be competitive opportunities for early will likely manifest in a horizon 3 to 5 timeframe— adoption. At a minimum, executives can begin between 24 and 60 months. But when they manifest, contemplating how their organizations can embrace the speed with which they impact markets will likely exponentials to drive innovation. grow exponentially. Don’t let yourself be lulled into inaction. The time For businesses, exponentials represent unprec- to prepare is now. edented opportunities as well as existential threats. As such, an analysis of exponential forces is a time-honored part of our annual discussion of Focus: Nano-engineered emerging technologies. In our Tech Trends 2014 materials report, for example, we collaborated with faculty at Singularity University, a leading research institu- The word nano is often used to describe something tion, to explore artificial intelligence, robotics, unusually small. For example, Tata Motors cybersecurity, and additive manufacturing. At that developed a compact automobile primarily for the 2 time, these emerging technologies were outpacing Indian market it calls the Nano. But beyond its Moore’s law—that is, their performance relative to diminutive descriptive usage in product marketing, cost (and size) was more than doubling every 12 to nano has a much more precise definition. Using one 18 months.1 Just a few years later, we see these same meter as a measuring stick, a nanometer is defined technologies are disrupting industries, business as one billionth of a meter (that’s 1/1,000,000,000). models, and strategies. If this is hard to imagine, try using a single carbon atom as a measuring stick. A single nanometer is In this year’s report, we test specific aspects of about the size of three carbon atoms placed side by four exponential forces that are being propelled side. In comparison, a single human hair is 80,000 by significant investment and research across the to 100,000 nanometers wide.3 public and private sectors: nano-engineered materi- als, energy storage, synthetic biology, and quantum Nano-manufacturing—the process of making things optimization. For each, we provide a high-level at nano-scale—represents an important emerging introduction—a snapshot of what it is, where it capability. To create things smaller than 10 comes from, and where it’s going. nanometers, we typically turn to advanced chemis- 5 Tech Trends 2017 The kinetic enterprise MY TAKE ROB NAIL, CEO AND that is hopeful and full of historic possibility. By ASSOCIATE FOUNDER leveraging exponentials, we could have a future SINGULARITY UNIVERSITY in which cancer no longer afflicts our families. Everyone—even the most pessimistic—can We live in tumultuous times. As we have seen agree that this is a desirable goal. This is the lens during the past year, political landscapes are through which we should all view exponentials. By shifting beneath our feet. News, signals, and harnessing the power of quantum optimization, random information come at us in torrents. At nano-engineered materials, or synthetic biology the same time, exponential technologies such to eliminate scarcity and uplift humans, we can as synthetic biology, advanced energy storage, tackle problems that have traditionally seemed nanotechnology, and quantum computing, so daunting that we’ve never imagined a world among others, are poised to disrupt every part without them. Exponentials are an opportunity of our lives, every business model and market, driver, not something to fear. every society. Eventually, they may even redefine what it means to be human. As use cases for exponentials emerge and technologies mature over the next three to five years, it will not be enough for the technology, EXPONENTIAL TECHNOLOGIES “ science, academia, and business sectors to focus MAY EVEN REDEFINE WHAT IT MEANS solely on their own goals. Collectively, we must TO BE HUMAN. also help build understanding throughout society ” of what these technologies are and where they can take us. What are we to make of all this? Change is happening all around us at a pace that will The future is already here. The world around is only accelerate. Particularly in the realm of changing every day, and will continue to do so. exponentials, when you see seemingly radical Unless we equip ourselves with a new vision innovations