Digital transformation in the industry

The pandemic is providing a digitalization boost across all industries. Nevertheless, only 62 percent of all German industrial companies with a company size of 100 employees or more use special applications for Industry 4.0 - according to a Bitkom study from 2021. Why are some companies still hesitating? This is what we need to find out! That's why we talk to Tina Johnscher - head of the ZD.B Digital Production & Engineering topic platform - and Dr. Maximilian Bock - project manager of the aforementioned topic platform - about opportunities and challenges. Likewise, we shed light on the topic of funding opportunities to support you in the best possible way.

Tina, why do some companies still refuse to jump on the digitization bandwagon?

Tina Johnscher: I wouldn't say across the board that companies refuse. The topic is simply insanely complex and thus represents a major challenge. In addition, the order books at most companies have been pretty full in recent years. Thus, they have not seen a need for action.

If many companies are not aware of the need for action, please explain why digitization is important for a manufacturing SME?

Tina Johnscher: Companies can overcome many challenges with digitization . I can only mention a few examples here, as I would otherwise go beyond the scope of our interview. For example, digital processes can be used to increase CO2 reduction because processes can be better monitored and optimized through data collection and analysis. Likewise, companies can more easily comply with the Supply Chain Act or avoid product liability issues through digitalization.

Max, let's assume we convince Bavarian SMEs to start their digital transformation. What should be the first step?

Dr. Maximilian Bock: In the first step, it is important to create a basic understanding in the company at all levels, so that every employee is informed: what can be implemented with digitalization in the environment of production or engineering ? There are now many databases that collect use cases for this purpose. We also present such best practices, for example, at our Bayern Innovativ events . After all, successful practical examples best illustrate which problems can be solved with which digital processes. In the second step, a company must clarify which data it collects and which IT systems it already uses for this purpose or would like to use in the future. After these two steps, you already get a good overview of what is possible under which conditions. Finally, I always recommend analyzing the following question: What are the most pressing problems in my production? For example, do certain machines break down more frequently? Digitization is not an end in itself, but a means of solving problems and identifying potential!

That sounds like a challenge where you can quickly lose track of things, right?

Dr. Maximilian Bock: Absolutely! Here it is particularly important not to lose sight of the corporate strategy. Ideally, the company management is involved in the in-house analysis from the very beginning and convinced to start the digital transformation of the company. In my opinion, it is recommended to integrate the digitization strategy into the overarching corporate strategy and to define clear responsibilities. This way, a company can set up a pilot project in a structured way, which usually delivers added value quickly.

Tina, what tips can you add based on your experience?

Tina Johnscher: Also from a technical point of view, it's really important to keep an overview right from the start. After all, you don't want to launch just one pilot. The goal, after all, is to present your company fully digitized. So it's important that your own systems and machines can communicate with each other. And it's important that the software systems you buy, which may be needed for different applications, can exchange data and communicate with each other. So that in the end you can establish a kind of control center from which you can monitor the entire company.

What challenges do companies most often have to face as part of a digitization process?

Tina Johnscher: We have already mentioned that it is enormously important to inform all employees about the digitization project right from the start and to integrate them into the process. After all, they usually know best what the day-to-day problems are. In addition, it is of great importance to illustrate the added value of the new system, because longstanding employees in particular often approach change with skepticism. It is therefore a challenge to develop existing employees into specialists and, if necessary, to hire new specialists at the same time, which also changes previous team structures. When it comes to structure, it is just as often the case that companies have outsourced their IT structure and appropriate decisions have to be made here for the future. Partly it lacks additionally financial possibilities.

As a topic platform, you yourselves support companies in the digital transformation. What sources of information are there besides you?

Dr. Maximilian Bock: We are in close exchange with federal initiatives, such as the Platform Industry 4.0, which is funded by the Federal Ministry of Economics. But we also exchange a lot with regional initiatives. There are SME centers here, for example. We usually publish the information we collect in bundled form on our own website: https://www.bayern-innovativ.de/digital-production-engineering . In addition, my colleague has just mentioned the challenge of funding. One reason why we as a theme platform are also active in the area of funding advice.

Financial resources are important. But aren't the right network partners at least as important?

Dr. Maximilian Bock: I think some companies can manage the digital transformation alone, without partners on hand. This applies in particular to isolated industrial companies that have their own IT/software department. For many companies, however, the topic of IT has tended to play a subordinate role in the past, as a result of which hardly any knowledge is available. In these cases, challenges naturally arise and cooperation with a partner is recommended. However, when looking for a partner, one must already be able to describe in detail which company goals are to be targeted, which creates another challenge. Therefore, we offer for this as theme platform appropriate exchange opportunities or partner searches.

At the end of the year, I would like to know from you of course: What do we have to be prepared for in 2022 in the field of digital production & engineering?

Dr. Maximilian Bock: A big topic will be data ecosystems. In the broadest sense, it is about exchanging data across company boundaries. The goal is even to create standards at the EU level in the sense of a European IT infrastructure and to agree on certain values. An absolutely exciting matter! As a topic platform, we would naturally like to take the application perspective here again and look at what the added value is for an average medium-sized production company. That might sound counterintuitive at first, because people think a lot about data protection and cybersecurity . But we believe that in many application areas, such as CO2 reduction, tracking across the value chain, product liability, etc., it is essential to share data with other companies.

Tina Johnscher: A second significant topic will be environmental sustainability. In other words, the question: what ecological sustainability goals can a company achieve through digitization? In this topic area, too, we as theme platform will keep our eyes open for exciting application examples and present them to our network in a timely manner as inspiration and/or Support.

The interview was conducted by Christoph Raithel, Team Leader Event at Bayern Innovativ GmbH.