McKinsey opens Digital Capability Centres in Germany and Singapore

11 April 2017 4 min. read
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Industry 4.0 and its array of technologies are rapidly being developed, with the potential to create considerable disruption within the wider manufacturing space. To provide insights into the potential of the various technologies involved in the wider integration of vertical and horizontal supply chains, McKinsey & Company has launched two new Digital Capability Centers, one in Germany and one in Singapore.

Manufacturing is in the process of becoming even more automated, with new technologies under the wider Industry 4.0 rubric, set to integrate the horizontal and vertical value chains of production. The wider integration is achieved through the integration of, among others, the Industrial Internet of Things, whereby intelligent machine and humans are integrated within the wider production process. Industry 4.0 has been estimated as seeing a potential $4.5 trillion in investment by 2020.

The technology is not without barriers however; and while there is a potential boost to productivity and reductions in costs, concerns around cyber-attacks on linked networks; no ubiquitous communications standards; and normative concerns related to the effects of further automation on working people, remain.

McKinsey Digital Capability Centers

In a bid to support companies across the globe explore the potential benefits of the technology within their wider value chains, McKinsey & Company in association with various companies across the globe, have launched a number of Digital Capability Centers (DCC). The DCCs offer clients, and potential clients, with a simulation of an Industry 4.0 integrated factory, including its various technologies.

The first DCC is located in Aachen, Germany. The new centre is a joint project between McKinsey & Company and Institut für Textiltechnik of RWTH Aachen University, which are working together with PTC and technology providers, through the DCC, to support clients and potential clients to explore a simulation of an Industry 4.0 manufacturing factory.

McKinsey opens Digital Capability Centres in Germany and Singapore

Regarding the new centre, Christoph Schmitz, Senior Partner at McKinsey, says, "Many companies are already thinking about Industrie 4.0, but get stuck when it comes to implementation. The DCC helps companies realize the concrete value-add of digitized production. Industrie 4.0 represents both a major challenge and an opportunity for the economy. McKinsey founded the global DCC network in response to the question of what Industrie 4.0 means for companies in practice and how digital transformation can be realized successfully.”

The consulting firm has also announced the launch of a DCC in Singapore; which is being developed in partnership with A*Star's Advanced Remanufacturing and Technology Centre, at a cost of $15 million. The new facility, which is staffed by ten full-time employees, includes a simulation of a gearbox manufacturer leveraging Industry 4.0 technology, with S$2 billion in revenue and 8000 employees. In addition, the new facilities offers themes related to Industry 4.0, focused on IIoT technology in the predication and prevention of breakdowns, and their respective downtime – which can reduce downtime by up to 50% according to the consulting firm.

Remarking on the new centre to The Business Times, Oliver Tonby, Managing Partner of McKinsey's South-east Asia, says, "Singapore, in our view, is also uniquely positioned to become the home of smart manufacturing pilots. The DCC is also designed to be especially relevant to regionally important sectors including discrete manufacturing, semiconductors, oil and gas, electric power, and mining. We see DCC Singapore playing an integral role in the ecosystem, drawing on ARTC's state-of-the-art facilities and research and development capabilities across A*Star, ranging from manufacturing, data analytics, virtual process modelling, and digital solutions for complex manufacturing processes."

David Low, ARTC's CEO, says, "These sessions will leverage DCC's learning modules across themes such as predictive maintenance, digitised performance management, procurement and supply chain. The DCC will utilise part of ARTC's Model Factory testbed that will be launched in the later part of the year."

Related news: McKinsey & Company opens Experience Studios in Toronto.