otoico t o · 2016. 9. 13. · Board at Atreus, has more than 20 years of experience in general management, change management/restructuring, sales and marketing. The growth opportunities

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The mechanical engineering and plant construction industry is faced with

new challenges, and will have to rethink its approach if it is to continue growing

as it has in the past.

Industry needs a new approach

Digital transformation

»The industrial sector is at the beginning of a transformation.

The rapidly increasing digitalization of work processes is influenc-

ing business models and the efficiency of companies. The makers

of industrial components, plant and machinery are starting to

redesign their organizations to meet the demands of the future.«

The Global Interim Management Group

0001000011001010001000100010010100001000010000001000111100101001000101010000010010010000110010100010001000100101000010000100000010001111001010010001010100000100100100001100101000101010000010001 DIGITAL TRANSFORMATION 0110001000100010010100001000010010001000100010010100001000010011100101001000101010000010010010000110010100010001000100101000010000100000010001

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Sascha Hackstein is a Director at Atreus – the leading German provider of interim management. He has more than 20 years of international industry experience in the general management of manufacturing companies and technical trading enterprises.

Dr. Christian Frank, Partner and member of the Executive Board at Atreus, has more than 20 years of experience in general management, change management/restructuring, sales and marketing.

The growth opportunities that digitali-zation brings with it are enormous. The companies that rigorously drive the devel-opment of their digital technologies and competencies forward, and that set up the right prerequisites within their organ-izations early on, can improve their per-formance inestimably. But to do so, they have to rethink the way they do things. They have to actively structure and man-age the transformation.According to figures provided by the Ger-man Engineering Federation VDMA, the machines used by German companies are 18.7 years old on average. While half of the surveyed companies have carried out an Industry 4.0 project in the last twelve months – usually process optimizations and automation, system networking and the implementation of new technologies – many of them still shy away from digital-ization. They are wary of the investment because many of them are not in a posi-tion to judge the potential of the various

Industry 4.0 technologies or what the right combination of technological read-iness and commercial potential is. 77% of the VDMA members surveyed said that this insecurity about the benefits of Industry 4.0 was an impediment to their digitalization.Of course, industrial companies in the digital economy will continue to make products, but an ever-growing share of the value generated will come from the product-related services. The Internet of Things will drive the number of networked products from five billion to 21 billion in the next five years, but the companies must not fail to protect the interface to the cus-tomer. Digital competitors can easily push their way into existing customer relation-ships. New service providers and the us-ers themselves are now also asking, for instance, for diagnostic services, and all that on platforms for which the battle has long begun. New services are emerging. In future it will no longer be the product

Competitiveness in mechanical and plant engineering

or individual machine alone that will be decisive for success, it will be its linking to services or complex service-intensive machine systems.Digitalization will be the key factor when positioning a company on volatile, fast-moving markets in a way that will enable it to flourish in the future. The experts in Atreus‘ Mechanical and Plant Engineering Solution Group help enter-prises meet these demands quickly and successfully, with analyses and strategy, implementation and international project management.

Dr. Christian FrankAtreus Partner Head of the Mechanical and Plant Engineering Solution Group

Sascha HacksteinAtreus Director

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EDITORIAL

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Constant interchange of experience and agile project realization with manageable pilot projects ensure a transformation that can be controlled and validated at all times. For example, the solution lies not only in networking production, but also in developing a comprehensive organization-al orientation of the processes and sella-ble service products. But a digital strategy is only useful if the foundation is strong. Operational excellence in all divisions of the company – professionalism in interac-tions with customers, developing prod-ucts, delivering best quality – has to be the mantra here. If you don‘t master the fundamentals, you cannot simply buy yourself the advantages in a digital trans-formation. For instance, digitalization adds an optimization dimension to the lean management methods in the form of net-works and services. Companies have to recognize the core challenge, make deci-sions on how their Smart Factory should look and from that basis derive a strategy and task allocation at management level.•

Digitalization is the enabler. With it, com-plex tasks can be mastered better, infor-mation is made available in real time and assistance systems will help us make de-cisions using that information. But two things have to be taken into considera-tion: first we have to learn what is possi-ble with new technologies and what value contribution they can make in a company, and secondly we have to structure the im-plementation and transformation.In order to realize these changes to a company‘s business model and opera-tional handling, professional transforma-tion management is required that covers in particular the following issues:

What skills will the company have to have in the future? Which disciplines have to be installed and further developed? What are the digital strategy and roadmap for the future? Which processes and systems are affected? What is the ideal procedural and structural organization? How can we master growing complexity? How high will the investments have to be? What is the working model in the new world?

Digitalization makes it possible

AN INSIGHT Success factors in adynamic environment

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Agility. Development, production and

innovative services are becoming ever more closely interlinked.

2

Include the customer. Close cooperation with the custom-

er from the design and develop-ment phase onwards. Products are becoming ever more individually customized, in order to be able to create tailored benefits for the customers and their customers.

3

New methods. Pace is gained and customer

benefits are anticipated using new methods (Scrum), modes of working and agile project management.

4

Rapid prototyping. Prototypes are produced quickly

and inexpensively using 3D printers.


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How digital transformations succeed in mechanical engineering and plant construction

Various speeds are becoming apparent in the implementation of Industry 4.0. What has to be done now?

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1 Flexible process modules have to replace production lines and

cycles.Production lines and cycles are still pre-dominant in German production facilities, but they limit the production volumes and the number of different product variants. This means they cannot satisfy the grow-ing desire for individualized products in small batches. Instead, companies have to focus on flexibly connectible, scalable process modules – although the equip-ment can vary and have different cycles depending on the production task.

2 Industry 4.0 means a new optimization dimension in the

form of networks and services is added to the methods of lean management.Companies have to recognize the core challenge, make decisions on how the Smart Factory is to look, and derive a

4 Data are the basis for better decisions and the fuel of new

business models.It is particularly important in manufactur-ing that all relevant parameters be availa-ble in real time, in order to ensure an un-broken flow of information and make the processes of all functions, fields and seg-ments automatic. To achieve this, compa-nies have to determine the organization and concept of their IT landscape, inte-grate services such as Cloud or IT service models and formulate standardized de-mands on processes – each keeping the additional precondition of „data security“ in mind. Companies that have not solved these problems will soon become victims of digital transformation.

strategy and task allocation at manage-ment level. But as difficult as the challeng-es of Industry 4.0 are, not everybody has to master everything. Indeed, the compa-nies should only determine, set up and further develop the skills they specifically require.

3 Industry 4.0 needs an intelligent combination of existing and

new competencies.When integrating modern technology into the company‘s operating processes, you need the hardware expertise of the sys-tem providers and technology companies and outstanding software and algorithm expertise – with regard to methods for the analysis, design and management of complex systems, structures and pro-cesses. And many of the components re-quired for Industry 4.0 are already availa-ble. The deficit currently lies generally in he lack of smart connectedness.

FOCUS: DIGITAL TRANSFORMATION


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5 Don‘t only digitalize manufacturing.

The often neglected aspect of mainte-nance and how to reorganize it plays an important role in this context. Many man-ufacturers focus purely on the manufac-turing process, optimize the supply chain and reorganize the material flow in pro-duction. But at the same time, many deci-sion-makers still consider maintenance to be more of a cost factor and underesti-mate the positive effect it can have on the company‘s success. No wonder expen-sive mistakes occur here over the years: decentralized warehouses, opaque spare parts inventories, ambiguous labelling of articles and a fragmented IT landscape in many companies lead to a critically low supply reliability level, to overfilled ware-houses, unclear procurement costs, an unknown number of suppliers, duplicate parts and allocations to the wrong cost centers. All these inefficiencies cost mon-ey on a daily basis and put the industry under even more cost pressure. Compa-nies that investigate these things are making important adjustments in the right place.

6 Challenges for procurement and the supply chain.

“When people talk about the digital revo-lution, their thoughts nearly always re-volve around questions of production. But

that is a big mistake,“ says BME Manag-ing Director Dr. Christoph Feldmann. The new thing about Industry 4.0, he says, is the digital interconnection between sev-eral companies. This is a challenge “pri-marily for the Procurement units and the supply chain.“ Procurement has to do its bit if the networking of several factories is to become a reality sometime in the dis-tance future. What is needed are compre-hensive solutions for production, engi-neering and procurement and the strategic integration of the protagonists involved throughout the entire supply chain. In these new partner networks, services will be crucial that the technical distribution instance can take over as an adaptable part of the supply chain.

7 Away from the silo mentality.

The borders between industries, technol-ogies and companies are blurring. New networks are forming and the number of corporate alliances across industries is on the rise. Customers and business part-ners will in future be active parts of the company and value-adding processes. The relationship between production and top-quality services will become closer, and what were once purely industrial products will become hybrid commodi-ties. But for that to take place, networked thinking is required, and that is something

that to a certain degree has to be learned. Companies have to become more flexible and open-minded if they are to make use of the benefits that Industry 4.0 promises.

8 Management and staff competencies have to change.

Industry 4.0 is first and foremost a man-agement issue: change not only has to be structured, it also has to be responsibly executed. This has grave consequences for company structures and processes. In future, industrial companies will need ex-perts with a profound understanding of processes, production, logistics and IT, who can plan and implement produc-tion-relevant processes within a da-ta-based and data-driven network. This will mean that staff on the production floor will be faced with entirely new chal-lenges – especially the qualified experts and middle management. In many cases, companies do not yet dispose over these skills; they first either have to be devel-oped internally and/or acquired from out-side the company – sometimes in the form of an interim manager. •

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The manufacturers of industrial products, the engineers, plant manufacturers and technical distributors all know that one focus of their business activities will be in the field of services in the future. None-theless, many companies find it difficult to optimize their existing services into “smart services”, or even to develop new services. And that although the business model for the service doesn’t have to re-invent the wheel: it is much more about recognizing changes in the market, draw-ing the right conclusions for one’s own business model and continuously optimiz-ing existing models.Here, the companies are in varying phas-es of their path to becoming true service professionals. What makes a service pro-fessional? It simply means being exactly the opposite of disorganized or reactive providers. The service professional is pro-active and integrates all the relevant pro-cesses, generating value and added value for its customers. It organizes its service business professionally as a separate business and makes it a key component of its future positioning in the competitive

environment. The “smart products from smart factories” have extensive sensor systems and provide manufacturers and other links in the supply chain with large volumes of data on the internet. “On this basis, data-based service offerings are the actual engine of the service of the future, as neither the use of sensors nor the interconnectedness of the ma-chines alone represent an additional value over solutions offered to date,” writes Manager Magazin. Using these data as the foundation for new and smart services is the logical con-tinuation of the Industry 4.0 concept, and it is increasingly at the center of the relat-ed activities. Already today, the data are often used to improve services and ex-ploit the potential in productivity and qual-ity. For example, the assessment and utilization of machine operation data is widespread when optimizing repair and maintenance procedures.So data-based services are already well established, but the most important inno-vation of smart services lies in compre-hensively interconnecting all the various

different involved parties: the prepared data will in future be organized through integrated service platforms that refine unstructured data sets into structured ones and enable precise statements to be made on the current or expected custom-er needs. Based on this information, physically rendered services, electronic services and products will be joined to-gether to form customer-specific solu-tions – and possibly even offered to the customer before they even recognize that they need them. •

Product and service can no longer be considered separately. Combining them into data-based solutions is the future basis of value creation.

Service isn’t part of the business: service is the business

SERVICE AS A BUSINESS MODEL

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»The importance of services for the growth and competitive-

ness of companies is undeniable – regardless of whether we

are talking about person-related, knowledge-intensive or

product-supporting services.«

Today’s model: Proactive sale of product-related services

Service portfolio defined in relation to the products

The volume of services provided rises in line with the product business

The added value of the services is made known to the customer and paid for

Service expertise is in Sales and Marketing

Established individual services are standardized and configured as service products

Measures for improving the service quality are implemented

Data management is one of the company’s core processes

Tomorrow’s model: The service professional – data-based services

The service business has its own department or profit center

Sales, profit margin and market shares are determined by the success of the service

The service business grows irrespective of the product business

Analysis and interpretation of data are among the core competencies

The innovation process for developing proprietary services is established

Investments in IT enable automation of handling

High level of integration is the foundation of the customer loyalty

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Digital transformationA digital transformation is a major chal-lenge that affects every part of an organ-ization, and often a company does not dispose over all the skills and resources it requires to implement it. The experts from Atreus all have numerous success-ful digitalizations behind them, in which they have secured the ability of their cli-ent companies to flourish going forward.Atreus Managers help realize the digital transformation – quickly, reliably and sus-tainably.

What Atreus doesAtreus uses its exceptional industry, stra-tegic and implementation expertise to help its clients master their challenges. Turnaround and restructuring,

for instance in poorly performing subsidiaries

Managing profitable growth Optimizing the supply chain Optimizing production

(flow manufacturing, degree of auto-mation, reducing throughput times)

Setting up and relocating production venues

Expanding the scope of business and entering new fields of business

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Atreus GmbHLandshuter Allee 8 80637 MunichGermanyPhone: +49 89 452249 - [email protected]

atreus.de

The right step into the futureAtreus reliably masters the strategic and operational challenges from the “old world“ and accom-panies engineering and plant construction enterprises into the “new world“. In doing so, we offer extensive experience from business analysis, reorganization and IT projects, as well as the right experts who successfully drive digitalization and start-up forwards.

This is what Atreus stands for:

1

Initiating, designing, managing and implementing the process of trans-forming into a digital enterprise, as navigator, captain and change agent. We present the details of all required activities on a comprehensive roadmap.

2

Assuming responsibility for the execution of individual work streams on the way to becoming a digital enterprise. With results assured by experienced Atreus experts.

3

Faster realization and greater reliability by integrating individual specialists into the process.


The Global Interim Management Group

Atreus is part of Globalise – The global interim management group

Globalise provides clients across the globe with a source of proven talent to meet specific management and organizational needs – even at very short notice. We help companies turn challenging situations into successful outcomes. Globalise is a close-knit group of leading interim management firms, and we have the reach to sup-port clients in solving their company’s most important issues locally or around the world.

Globalise delivers the combined strength of its partners. 25,000+ managers Euro 100 m annual turnover 500 annual client successes

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otoico t o · 2016. 9. 13. · Board at Atreus, has more than 20 years of experience in general management, change management/restructuring, sales and marketing. The growth opportunities