Siemens predicts big returns on digital investment for plastics processors
Siemens Financial Services has estimated plastic manufacturers embracing digital processing could increase revenues by $60 billion (£440 million).
Siemens, which sells automation software to manufacturers, has written a report, ‘Digitalisation Productivity Bonus: Plastics’, which supposes that without specialised financing, manufacturers face a challenge to make the technology investment required for digital transformation.
Siemens Financial Services (SFS) has released a new research paper, launched at SPS IPC Drives 2017, which investigates the value of digitalisation for the plastics products industry in China, France, Germany, India, the Nordics, Poland, Russia, Spain, Turkey, the UK and the US. It suggest the potential value of digitalisation would be $39.3bn - 61.2bn for the plastic products industry globally.
The paper draws on a statistical model, developed by SFS, which estimates the Digitalisation Productivity Bonus to demonstrate reliable financial gain from digitalisation and automation.
In the plastics sector, for example, Industry 4.0 technology is being leveraged to create individualised customised component parts as virtually a mass production process, along with shortened development, set-up and start-up times.
To overcome the obstacle of investing in Industry 4.0 technology, specialist financiers have developed a set of financing tools – ‘Finance 4.0’ - that enable the transition to new-generation digital technology in a way that is affordable, sustainable and is designed to alleviate the manufacturer’s cash flow and working capital pressures.
The paper explores these specialist financing methods, including pay-to-access/use equipment and technology finance, technology upgrade and update, software finance, pay for outcomes, transition finance and working capital solutions.
Brian Foster, Head of Industry Finance at UK Siemens Financial Services, said: “The ability to increase manufacturing productivity is a universal starting point for measurable value from digitalization and for plastics manufacturers to make the business case for investing in the technology upgrade to Industry 4.0. Intelligent financing arrangements are needed to enable manufacturers to make this transition in a sustainable way. Only specialist financiers have the understanding of Industry 4.0 technology, and how it is implemented, to enable investment while alleviating manufacturers’ cash flow and working capital pressures.”