Reading time: approx. 15 minutesA Mechanical RevolutionHow digital technologies are the driving force behind the transformation of companies.
Dr. Robin P. G. Tech can track the transformation taking place in the mechanical engineering sector directly on the Internet. Four years ago, he founded the startup company Delphai which provides a search platform that uses big data and machine learning to automatically generate insights into global high-tech innovation trends and to identify the companies that are involved or affected.
The digital tool is now being used by corporations and Small and Mid-Sized Enterprises around the world to gain a better understanding of innovation, capitalize on business opportunities and make more sustainable decisions. Last month, Delphai, together with the German Engineering Association (VDMA), published a study on the use of artificial intelligence (AI) in the German mechanical engineering sector. VDMA has 3,300 members, making it the largest network organization in the European mechanical and plant engineering sector. The clear result that emerged was that an increasing number of companies in the mechanical and plant engineering sector are relying on artificial intelligence (AI) to enrich their products with data-based added value. This makes IT expertise an increasingly relevant factor in terms of competition and success for Germany’s most important sector – as well as its strongest driving force for change.
And as Tech explains, “The number of job vacancies in mechanical engineering companies that are calling for software employees has skyrocketed in recent years.” Delphai systematically captures, analyzes and visualizes job postings in the mechanical engineering industry and according to Tech, the advertisements are not aimed at system administrators or people who can set up printers. The positions advertised are for highly qualified roles: data analysts, experts in user experience, machine learning and artificial intelligence. The industry is significantly expanding its IT capacities and therefore its IT expertise, Tech notes.
“No wonder,” says Stefan Weiss, partner and head of industry manufacturing at the Managment and IT-Consulting firm MHP, “the industry is undergoing a complete transformation.”
Mechanics, hydraulics and drives can no longer be represented in a purely analog way. The same is true for product development, customer service and maintenance. Digital data alone is no longer enough – the data must also be valid, up-to-date, available, comprehensive and able to be enriched. After all, digitalization is entering its next phase. The IT islands, such as a closed or proprietary digital machine control system, an inventory management system isolated from the rest of the IT landscape or a separate customer database are things of the past.
Standardized interfaces have ensured that machines, control programs and management programs now communicate directly with one another. The Internet of things identifies each component part individually, ensuring it can be tracked and monitored. Digitally networked sensor technology monitors individual machines, production processes, assembly systems and handling solutions, i.e. entire production lines, and thus forms the basis for so-called "smart factories". Stefan Weiss also talks about the concept or vision of the "dark factory," i.e., a factory floor in which lighting is no longer needed because there are no longer any operational employees working there. Production would then no longer be controlled from the factory floor, from the "store floor", but from the "top floor", from the operational or top management level. But this also means that the job profiles and qualifications required for this will change. Ultimately, these concepts will make companies more competitive and thus secure jobs in Germany.
But it is not just the internal processes that are being digitally integrated. As part of this new digital ecosystem, the machines and plants at the customer’s site and their performance are also constantly monitored and optimized and share their data with the company’s systems.If there are small deviations such as in smooth running, oil temperature or the ignition, the programs compare this data with past data and, in a way, gain knowledge from experience. If the program finds that small irregularities in the ignition, for example, have always resulted in a fault, it automatically makes a decision and initiates an action such as ordering a new spark plug.
As an example, Zeppelin CAT, the world’s largest marketer of construction machinery, carries out real-time monitoring of the wheel loaders, bucket excavators and bulldozers that it has sold or leased and continuously analyzes over a dozen different parameters for each machine. By analyzing all past machine data and using it to train an artificial intelligence system, it is now possible to determine whether a machine will fail three days before it actually happens.“Equipped with this knowledge, you can prevent faults and failures from occurring in the first place,” says Zeppelin-CAT CEO Peter Gerstmann. This predictive maintenance, he says, is now part of the product standard.
But data is not only used in companies’ own digital ecosystems and their products. After all, it is not just all digitally controlled functions and digital management systems that are growing together. The entire supply chain of a product – from the development of raw materials, the assembly of components, right through to disposal – can be imagined in the future as a cross-company, digitally integrated process.This leads to the emergence of smart ecosystems, in which company boundaries slowly start to disappear at process level.
With this digitally networked economy in mind, in 2018, Siemens launched MindSphere, a cloud-based, open operating system for the Internet of things. This platform as a service (PaaS) facilitates the development, operation and provision of applications (apps) and digital services. It functions as an integration platform and allows systems, machines, plants and products to be connected. MindSphere can be used to analyze data and to model processes. Siemens has therefore created an Amazon-like platform for industry. “The business-to-consumer concept is important in the business-to-business sector,” says Robin Tech.
Car manufacturer Volkswagen is pursuing a similar concept, for example, with its Automotive Cloud, developed together with Microsoft, and the Industrial Cloud, which it developed in cooperation with Amazon Web Services (AWS). “This brings our two major domains to the cloud – first the networked vehicle and digital services, and now its production and logistics,” explains Gerd Walker, Head of Group Production. He goes on to explain that the idea behind the new Volkswagen Industrial Cloud is to connect the Volkswagen Group’s global production network with its 122 production facilities in the future.“The Volkswagen Industrial Cloud brings together data from all machines, plants and systems from all factories,” says Walker. This makes the processes even easier to analyze, and therefore more productive. In the future, we also intend to integrate the global supply chain with over 30,000 locations and 1,500 partner companies into the Volkswagen Industrial Cloud.
IT companies such as Microsoft are no longer a simple supplier for mechanical engineering companies,” says Robin Tech. “They are strategic cooperation partners who are involved in making decisions about future competitiveness.”Here, too, he was able to use Delphai to conclude that more and more mechanical engineering companies are entering into cooperations with IT companies and investing in tech startups: “The number of cooperations is increasing exponentially,” says Tech.
His study, published together with the VDMA, also showed that startup companies are playing an increasingly important role as cooperation partners. A total of 825 startups in 46 countries were identified as providing AI solutions for the mechanical and plant engineering sector. 42 per cent of these are from Europe, putting the continent ahead of both North America (33 per cent) and Asia (24 per cent) in terms of the number of startups. This makes it clear that IT expertise has now also become one of the most important factors for choosing location.
Those who don’t just want to cooperate with a startup are therefore setting up their own: For example, the Zeppelin Group, based in Friedrichshafen on the shores of Lake Constance and in Munich, launched the Z-Lap in hip and trendy East Berlin in 2016: as an innovation laboratory, incubator and software developer. One of the startup’s first products was Insite 3.0, a web-based solution for monitoring and controlling the flow of people on construction sites. And true to the motto “If you don’t cannibalize yourself, someone else will,” Z-Lab developed klickrent.de as a manufacturer-independent, and now very successful, online construction machinery rental company.
The “Flex Factory” joint venture, which Porsche AG has set up together with MHP and Munich Re, shows that IT expertise is key. It aims to support companies on their way to becoming smart factories. The platform does not provide its own production facilities, rather it acts as a consultant and business enabler by providing the knowledge needed to establish flexible production. The idea is for customers from the manufacturing industry to be able to use this “digital production as a service” concept to implement innovations and item variants faster and more efficiently than in the traditional production process and with less capital expenditure – particularly for the production of small series.
Brand new business models are emerging in the current climate of transformation: In the fall of last year, the TRUMPF Group announced that it was developing a new range of services for laser cutting machines together with the Munich Re Group (Munich Re). “Our pay-per-part model is intended to enable customers to use TRUMPF fully automated laser processing machines in the future without having to buy or lease them,” said Mathias Kammüller, Group Managing Director and Chief Digital Officer of TRUMPF.nstead, customers pay a previously agreed price for each cut sheet metal part. “This allows them to make their production process significantly more flexible and react more dynamically to changes in the market environment,” said Kammüller. In this model, Munich Re acts as a business enabler, financing the machine and thus bearing the investment risk. The IoT service provider relayr, a subsidiary of Munich Re, provides the necessary data analyses for the financing model.
“With this partnership, we will move forward into new business models more clearly than ever before,” says Mathias Kammüller. “It will be a first step in enabling our customers to build production capacity without major upfront investment as an alternative to the traditional purchasing of machinery.” These kinds of partnerships are a forward-looking response to the challenges of an increasingly dynamic market environment.
This response is also necessary, says Stefan Weiss: “New digitialized business models such as equipment-as-a-service or pay-per-part offer machine and industrial component manufacturers opportunities for new revenue channels If you wait too long, the technology companies and tech firms will come and take this new digital machine market for themselves.”
The digital integration of the development, procurement, production and sales chains is becoming increasingly established in conventional mechanical engineering. In addition to the traditional engineering disciplines, the quality of data, the quality of its analysis and the quality of digitally generated and controlled automatic processes across company boundaries are becoming additional success factors and making new and previously unknown business models possible.
But it is not just the internal processes that are being digitally integrated. As part of this new digital ecosystem, the machines and plants at the customer’s site and their performance are also constantly monitored and optimized and share their data with the company’s systems.
IT companies such as Microsoft are no longer a simple supplier for mechanical engineering companies,” says Robin Tech. “They are strategic cooperation partners who are involved in making decisions about future competitiveness.”