INDUSTRY 4.0/IIOT INVEST SMARTLY WITH FINANCE 4.0
Smart finance provides an avenue to investment in the present, enabling manufacturers to realise long-term transformation goals in the future
Neli Ivanova, sales manager, Industrial Equipment at Siemens Financial Services in the UK, explains the benefits of smart finance
hrough increased connectivity, 5G is likely to accelerate smart factory initiatives and given its transformational promise, the mobile technology is viewed as a crucial tool for post-pandemic recovery1
T .
. It boasts a transmission rate of up to 20GB per second and consumes only one- thousandth of the amount of energy per bit transferred compared to LTE3
5G is ten to twenty times faster than its predecessors 4G and LTE (Long-Term Evolution)2
. For
manufacturers, 5G technology is likely to alter the future of factories leading to the development of completely new and flexible factory concepts.
The pandemic has highlighted the increased need for manufacturers to swiftly change production processes in response to shifting demand alongside labour shortages. With 5G manufacturers will be able to dynamically adapt their production areas to current circumstances at any time, without having to make major changes to their infrastructure. It particularly supports the remote deployment of autonomous vehicles4
, seen as increasingly important in the current climate of reduced person-to- person contact. A report on the benefits of 5G in industrial operations found that 75% of industrial companies in the UK plan to invest in 5G in the first 2 years of its availability5
.
Of course, 5G is only part of the smart factory evolution and manufacturers are reliant on a consistent rollout of infrastructure throughout the UK. The agility, cost-efficiency and productivity benefits that stem from transforming into a fully digitalised factory floor can be critical in
helping manufacturing businesses withstand times of change and to better adapt to a fluctuating demand in either direction. Alongside 5G, manufacturers require advanced automation, artificial intelligence and machine learning.
Understanding the cost of not
transforming to Industry 4.0 is the topic of the most recent research from Siemens Financial Services (SFS)6
, which estimates the
size of the investment challenge and looks at the potential organisational and financial gains - from migrating to smart factory technology - that late adopters will miss out on. Seizing digital transformation can constitute the difference between falling behind, or surviving and thriving. Challenges to implementing digital transformation tend to pivot around the issue of finance – particularly during this time of economic turbulence. These barriers, however, can be overcome using smart
finance techniques - known as “Finance 4.0” - which cover the full range of requirements, from the acquisition of a single digitalised piece of equipment, to financing a whole new factory. Smart financing techniques help manufacturers to address the need to invest, to harness sustainable third-party capital to reduce the burden on corporate lines of credit, as well as to deploy cash flow management techniques that help maximise available working capital. All of these are playing a crucial role in helping manufacturers deal with the current period of volatile markets and economics. Smart finance solutions tend to be offered by specialist financiers, where the funder understands the technology, the markets, the applications and the operating pressures and where financing is an integrated part of the discussions with technology vendors. Using this knowledge, they create and align financing structures which are focused on achieving recognisable and clearly identified desired business outcomes for the manufacturer, through access to the right technology, services and advisory. The biggest advantage of such an approach is the ability to flex and adapt rapidly to market challenges. More broadly, these financing techniques align payments to the expected rate of return-on-investment delivered through new technologies and equipment. Increased production capacity, agility and productivity, while improving price competitiveness are just some of the examples of the benefits of smart factory transformation. While manufacturers eagerly await the arrival of 5G, measures should be taken to keep factory processes optimised to ensure a business is competitive, especially during these challenging times.
Sources: 1
ITP, Orange celebrates industrial 5G use cases at
Europe’s 2nd largest port, 26 Oct 2020
https://www.itp.net/news/94326-orange-celebrates-
industrial-5g-use-cases-at-europes-2nd-largest-port 2
The Manufacturer, UK Govt pledges £40m for
manufacturing 5G trials, 18 June 2019
https://www.themanufacturer.com/articles/uk-govt-
pledges-40m-for-manufacturing-5g-trials/ 3
Siemens, A 5G network for every factory, 15 Nov 2019
https://new.siemens.com/global/en/company/stories/ind ustry/industrial-5g-the-wireless-network-of-the-
future.html 4
Siemens, Industrial 5G. For the industry of tomorrow.
https://new.siemens.com/global/en/products/automatio
n/industrial-communication/
5g.html 5
CapGemini, 5G in industrial operations: How telcos and
industrial companies stand to benefit, 2019 6
Siemens Financial Services, Industry 4.0: Rising to the challenge, 2020
Siemens Financial Services
new.siemens.com
MARCH 2021 | PROCESS & CONTROL 25
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