Australia’s submarine contract means huge opportunities for Industry 4.0

The upcoming submarine contract could be a real game-changer for the future of Australia’s manufacturing industry, as John Allen reports.

Probably the single most important topic right now for the future of manufacturing in Australia is the decision about to be made on which submarines the Federal Government will choose.

Many industry leaders believe that the Federal Government’s decision has the potential to accelerate Australian industry’s ability to participate in the fourth industrial revolution (Industry 4.0), which provides benefits far in excess of a single defence project, and for years to come.

According to Jeff Connolly, Chairman and CEO of Siemens Australia and NZ, Australia has a one-time unique opportunity to ignite its economic growth engines by leveraging the investment in submarines for the benefit of the whole of industry.

“A flagship project of this size, with the right partner, will help the process of retooling the nation. With the wrong partner then Australia won’t be able to leverage its investment in the same way.”

In December last year Siemens made an in-kind grant of $2.7m of software with the SA Government and Simulation Australia for the same purpose – to support South Australia’s transition to the new economy through digitalisation skills.

“Whilst this underlines that we are in the country for the country, what is critically important is that by using the right tools Australian industry becomes more globally competitive,” Connolly told PACE.

But it’s not all altruistic by Siemens – as Connolly pointed out – Siemens has a “vested interest in Australia’s success”.’

It’s about longevity and few companies understand this as well as the German technology behemoth, which has had continuous operations in Australia for the last 144 years and in Germany since 1847.

“It works like this. We need Australian industry to be successful for the long-term because, put simply, we sell to Australian industry. The more successful, then the more demand for our technology to support the competitiveness of those industries and businesses.”

Connolly is very upbeat about the country’s future, saying he has an obligation to be positive.

“Just recently, I jointly unveiled new high temperature superconductor technology with the Assistant Minister for Innovation, Wyatt Roy.”

The unveiling took place at Queensland University of Technology with the Defence Science and Technology Group who are partners in the project where Siemens has contributed a $2m HTS prototype motor along with 15 years of intellectual property to take the research to the next step of commercialisation.

Connolly is also soon to head to Hannover Messe (Fair), the world’s largest industry showcase, jointly leading a business delegation with the German Chamber.

“Australian stakeholders need to understand what the benchmark looks like and they need to understand the rules of the game if they want to be part of a globalised future.”

Connolly describes Hannover Messe as a real eye opener for anyone; stimulating new business possibilities.

“But what I find most, is how impressed people are when they get money-can’t-buy access to German industrial sites and factories.”

“I mean the Siemens Amberg automation factory is Angela Merkel’s showcase of Industry 4.0 in action. Even President Obama will be at Hannover Messe this year.”

But Connolly’s main contention at the moment is the opportunity presented by the Australian government’s proposed spend on submarines and he wants everyone to know that this decision has far greater implications than just to those involved in the defence industry.

“If Australia was to leverage the future submarines investment for the whole of industry, then the economic benefits could be vast with rapid transfer and adoption of key skills and tools into local industry.”

“With the right skills and tools, Australia can combine its renowned ingenuity to kick-start the ideas boom of the 21st century.”

Connolly’s comments come from experience where Siemens software is already the chosen tool of trade across $700bn of US defence projects including Virginia’s digital shipyards, which supply the US Navy with aircraft carriers and submarines.

Recent visiting global President and CEO of Siemens PLM (Product Lifecycle Management) Software, Chuck Grindstaff, who was in Australia in early April, flagged a multi-million dollar software in-kind grant should Germany be selected to build Australia’s next fleet of submarines.

At an event held in Tonsley in late March, Adelaide’s innovation hub, Grindstaff highlighted how the establishment of a digital shipyard in Adelaide could help the state transform into a hub for high-tech manufacturing, innovative ideas and increased employment.

Submarine flow-on

The reason the submarine decision has the potential to affect industry so much is because the German submarine offer by thyssenKrupp Marine Systems Australia includes digitalisation – bringing the digital shipyard approach.

The intellectual property, skills, tools, knowledge will come with the offer. An estimated 2000 local suppliers will rapidly adopt these and therefore will be able to also participate in industry 4.0.

“It fits the innovation agenda of the country and is probably the biggest potential to ignite our industrial economic growth engines by reinvigorating manufacturing and shipbuilding.”

According to Connolly who has been a leading voice for a transition to Industry 4.0 in Australia, the narrative is both simple and powerful.

“The world is rapidly changing through digitalisation. Countries like Germany are investing heavily to prepare its industry.

“Even Australia is targeting innovation through its $1bn ideas boom agenda. But there are also prerequisites if you want to be part of it, including understanding the rules and following them, and retooling with the latest skills and technologies.”

But as Connolly points out, the problem is one of scale and Australia will struggle to get there without partnering.

“We can see what’s going on in the world around us.  It’s rapidly becoming digitalised and this is transforming businesses, jobs and economies.

“We are entering a fourth industrial revolution driven by technology advancements which allow flexibility, customisation and new ways of doing business.”

“The Germans call this concept Industry 4.0, and it’s largely about digitalisation of their industrial base to increase efficiencies and productivity so that they remain competitive globally.”

“Almost every nation sees this and many are investing heavily to prepare, with Germany investing about $40bn per year.”

He said Siemens is in a unique position to have a line of sight to the next generation of technology, skills and tools needed for Australian industry to be part of this exciting future.

“I have no doubt that with the right tools and national framework, Australian industry is a team which is good enough to take the field – whether it be building the future submarines locally and from day one as per the German offer, or supplying the highest quality engineering services to the rest of the world,” said Connolly.

“The concept of Industry 4.0, developed in Germany, is critically linked to the major Australian defence projects such as the future submarines.”

Connolly says that Industry 4.0-related projects such as ‘digital shipyards’ offer the opportunity for Australia to fast track the advanced manufacturing future that Australia has defined as part of the National Science and Innovation Agenda.

“Siemens is the most advanced and most experienced provider of digital shipyard technology with PLM software being the backbone of seven major shipyards around the world including thyssennkrupp Marine Systems, which began their digital journey 15 years ago.”

Connolly highlighted a significant event, which happened in early March, where two of most advanced industrial nations, US and Germany, announced that they would work together to set the global course for digitalisation standards.

And as part of Siemens commitment and obligations to supporting Australia’s journey to Industry 4.0, Connolly next week will lead a special Taskforce’ to meet with US and German counterparts at Hannover. This task stems from his participation in Australia-Germany Advisory Group led by Finance Minister Mathias Cormann, which is designed to improve bilateral relations.

“In a roundtable discussion at Hannover Messe we will connect Australia with the German Platform Industrie 4.0 group and the US Industrial Internet Consortium,” he said.

So it is clear – Industry 4.0 is a game changer for Australian industry.

The question is will Australian industry be part of this new global game?