Agenda
Industrial Evolution
4th Industrial Revolution
Building Blocks of Industry 4.0
Potential Industrial Products Implications
Potential Consumer Products Implications
Impact of Industry 4.0
Digital and data
What is this?
What is this?
What is this?
Industrial Evolution
4. Industrial revolution
Based on cyber-physical-
systems
3. Industrial revolution
Through the use of electronics
and IT further progression in
autonomous production
2. Industrial revolution
Introducing mass production
Level of complexity
lines powered by electric
energy
1. Industrial revolution
Introducing mechanical
production machines powered
by water and steam
Industry 1.0 Industry 2.0 Industry 3.0 Industry 4.0
End of the Beginning of the Beginning of the Today
18th century. 20th century 70th
Source: DFKI/Bauer IAO
Phases of earlier 3 Industrial
Revolutions
1. 1760 to 1840 - Ushered in Mechanical production; railways and steam
engine
2. 1870 to 1940 - Mass production; electricity and assembly line
3. 1960 to 2010 - Computers; semi conductors, main frame computing,
personal devices, internet
Industry 4.0
A collective term for technologies and concepts of value chain organization.
Based on the technological concepts of cyber-physical systems, the Internet of
Things and the Internet of Services, it facilitates the vision of the Smart
Factory.
Builds on the Digital revolution
Smaller & powerful sensors
Ubiquitous internet
Artificial Intelligence (AI)
Machine Learning
Labor & Energy Cost
Today’s Factory
Tomorrow’s Factory
Industry 4.0
Six Design Principles
Interoperability: the ability of cyber-physical systems (i.e. work piece carriers,
assembly stations and products), humans and Smart Factories to connect and
communicate with each other via the Internet of Things and the Internet of
Services
Virtualization: a virtual copy of the Smart Factory which is created by linking
sensor data (from monitoring physical processes) with virtual plant models and
simulation models
Decentralization: the ability of cyber-physical systems within Smart Factories to
make decisions on their own
Real-Time Capability: the capability to collect and analyze data and provide the
insights immediately
Service Orientation: offering of services (of cyber-physical systems, humans
and Smart Factories) via the Internet of Services
Modularity: flexible adaptation of Smart Factories for changing requirements of
individual modules
Building blocks of Industry 4.0
Examples of Product evolution:
Connected and smart products
Harvard Business Review
Impact
Economy
Growth
Ageing
Productivity
Employment
Labor subsititution
The nature of Work
Impact
Business
Customer expectations
Data enhanced products
Collaborative innovation
New operating models
Combining digital, physical and biological worlds
Impact
National & Global
Governments
Countries, regions & cities
International security
Society
Inequality
Community
The Individual
Identity, morality & ethics
Top 10 Skills to be relevant in
Industry 4.0
Digitization, Digitalization,
and Digital Transformation
Digitization: changing day-to-day acts or
processes from being analog to being digital
Transcribing analog information to digital
information
Analog picture to digital picture
Playing music with PlayScore
Example of Digitization
Digitalization
Digitalization: how digitization changes many
facets of life, including the business models and
how they gain revenue
The acquisition of digital skills become
prerequisite for individuals and industry
Online classes erase our need for physical
classes, AC, parking space, security, etc.
Example of Digitalization
Digital Transformation
Digital transformation: Customer-driven business
transformation that requires organizational
change and technology
People who live abroad who want to vote but
they cannot vote
Executives who are on a business trip and yet
still have to manage the day-to-day errands at
their offices
i-Voting
Voters cast their ballots from any internet-
connected computer anywhere in the world.
Voters log onto the system using an ID-card or
Mobile-ID, and casts a ballot.
Allow voters to log on and vote as many times as
they want during the pre-voting period.
Since each vote cancels the last, a voter always
has the option of changing his or her vote later.
Digitization, Digitalization,
and Digital Transformation
We digitize information, we digitalize processes
and roles that make up the operations of a
business, and we digitally transform the business
and its strategy.
Catering to Digital Consumer
Shoppers, Consumers, Customers
(Mall shopper, Coffee consumer, Starbucks
customer)
Multichannel, Omnichannel
Showroom-ing, Webroom-ing
Online shoppers
Multichannel
What is important?
The design and the deployment of different
channels in marketing the offerings
What are the objectives?
Acquisition, retention, development of customers
What do we sell?
Products, services, expertise, activities
Omnichannel
What is the most important?
Synergy across numerous available
communication channels and touchpoints
What is the objective?
Creating a nourishing shoppers, consumers, and
customers journey
What do we sell?
Customer experience, offerings, brand
Online v. Physical Stores
Online is good for acquisition
Offline stores are good for sales increase
Online is good for planned purchase
Offline stores are good for hedonic consumption
https://www.youtube.com/watch?v=pLNf4rtKX4
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What do you think?
What are some new ideas that you can come up
with?
Digital Trace Data
Commodification of Data
Big Data
Different Types of Data
Media Planning
Commodification of Data
Data are generated on a diverse number of
websites: from social media to news.
Numerous websites pay for their own existence by
selling advertising, and they use our data to match
our profiles with the most relevant advertisements.
Third party actors; they bundle data from multiple
sources and sell them to other firms: sometimes in
raw form, and sometimes as analytical insights.
Big Data
Digital trace data: the data that are generated —
and collected — as a by-product of our online
activities.
Big Data: very large volumes of data collected
about online activities.
However, big data is just the tip of the iceberg:
information collected about the weather patterns
by satellites, interaction data from so-called
“Internet of Things”, devices connected to one
another
Implications:
Data v. Sample
Can make predictions
Large volumes of data allow for automated
pattern recognition, the testing of hypotheses at a
rate of knots
When it comes to online activities, the more
gritty “digital trace data” is the most relevant for
social — and economic — activities.
Individuals typically unintentionally leave digital
traces as they browse, shop, and transact online.
Cookie Request
Storing small amounts of data on
our computers
These small files are linked to a
particular website
The files can be accessed both
from the user’s computer and
from the website owner’s server
The files fine-tune the user’s
online experience by
remembering preferences or
providing targeted advertising
Data with content v. Metadata
Data with content Metadata
Personal Data about data
Substantial The quality of the
photographs you share
Things we share on social
media The time you tweet
Birthdays The IP and the location you
log in to social media
Demographic information
1. Service Data
We give these data to service providers
These data are also given in the offline world
Name
Address
Bank account
Cell phone numbers
There are legal issues when it comes to using
these data
2. Derived Data
Data inferred from other data
These data are not personal but rather in groups
Show correlations among their demographics,
psychographics, and behaviors
“People who live near MRT or train stations are
the heaviest Gojek users”
“Sophisticated professionals go to Starbucks
before 8 AM”
This data require a minimum of 2 persons
Anna and Susan wear shades
Anna and Susan likes wearing neutral colors
Anna and Susan has blonde hair
“People wearing shades like
neutral color and have blonde hair”
3. Disclosed Data
Data that we control according
to our intention or purpose
The data are located in our
own media
While the data are publicly
available, we can decide what
to share, and for how long
Third parties wanting to use it
can easily do so as well.
4. Entrusted Data
Similar to service data, but
you submit these online in
borrowed media
We cannot control what firms
subsequently do with our
trace data.
Facebook has built some of
the world’s most reliable
facial recognition software
Likes pearl earrings
How Entrusted Data Benefits Third
Party
Carlos Neri
5. Incidental Data
Generated as results of entrusted data
The comments, tag, or likes you give on
someone else’s entrusted data
Machine learning algorithms
Business insights
Mostly qualitative data on how the public
perceive or judge various contents
6. Behavioral Data
Data is obtained when we are
interacting with our mobile
device
Where do we text from
How long we are looking at
our cell phone
With whom we talk, how
often, and at what time
Left or Not?
Implications for Third Party
Consumer segment
Consumer behavior – first time users or lurkers
Algorithms to filter data
Discrimination and profiling – computers will be
able to find your psychographic or demographic
simply by analyzing your pictures
For Businesses
Might buy data more than they need
Structuring data is more crucial than obtaining
data
Consumers request data protection by design
Encryption, anonymization, etc.
Informed consent
People on average spend 7.6 seconds per year in
reading informed consent
Data and Privacy
Classwork
Present an analysis of
Service data
Derived data
Disclosed data
Entrusted data
Incidental data
Behavioral data
of a public figure or someone you know
