07. October 2021
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Digital transformation in German industry: significant progress in the last four years

Digital transformation is no longer a future scenario. It has now reached industrial companies in all sectors - especially in the last four years. This is shown by several cases - for example, from the automotive industry and also from medium-sized mechanical engineering companies. What has changed since 2017, which drivers led to this, and what benefits does digital transformation already bring?

Digital transformation in German industry

Digital transformation: an overview of the benefits

The benefits that digital transformation offers industrial companies are well known - and the list is long. It starts with greater customer orientation. After all, in intelligent, flexibly designed factories, individual customer wishes can be implemented much better. After-sales service can also be significantly improved with digital solutions. Remote maintenance of products is just one example.

In the area of production processes, digital technologies are increasingly becoming a tool for optimizing and automating workflows. This increases efficiency. At the same time, processing times and thus delivery times are reduced. Furthermore, product quality can be improved. Connected components - which are the basis of the digital factory - enable significantly optimized maintenance of systems and machines. The keyword here is "predictive maintenance" - data-based, anticipatory and needs-based maintenance.

Furthermore, the digital transformation has advantages in collaboration. This does not only apply internally. Rather, far-reaching interconnection of all players along the value chain is feasible. Particularly in the case of complex, international supply chains, collaboration can be significantly improved as a result. The companies involved can react more quickly to disruptions.

The connectivity of products and plants is generating more and more data. This can be used not only to improve service. It makes it possible, for example, to develop value-added apps for customers. Currently, especially the digital transformation of business models can be observed. This opens most of the time access to new market segments for companies and new potentials.

Digital transformation: examples show that the industry is picking up speed

Digital transformation in the automotive industry

If we take a look at the years from 2017 to today, we can see that key German industries such as the automotive industry have recognized the opportunities and also the necessity of digital transformation. This is demonstrated by the Catena-X initiative, which was launched in 2020. The alliance is made up of automotive manufacturers, suppliers, software companies and scientific institutions to provide an environment for the collaborative use of end-to-end data chains along the automotive value chain. Remarkably, even competitors are cooperating within the framework of Catena-X.

It has long been clear to the automotive industry that the digital transformation has problems, especially when it comes to integrate various types of systems and data formats. This is set to change with Catena-X. Together, the members are developing standards, technologies and a ecosystem for end-to-end data exchange along the entire automotive value chain. It should also be possible to integrate small and medium-sized enterprises in a simple way. Among other things, Catena-X could enable real-time tracking of components and load carriers, making supply chains much more transparent and stable.

Cloud issues to be solved by GAIA-X

Digital transformation is accompanied by a dramatic increase in demand for computing capacity, storage space, connectivity and innovative software solutions. This demand can only be met with the use of the cloud. The problem is sometimes that all leading cloud providers do not come from the EU. Rather, there is a dependency on leading providers from overseas. For this reason, European representatives from business, science and government have joined forces in 2019 to realize a counter-design with GAIA-X: a trustworthy, secure as well as powerful and competitive cloud for Europe. Among other things, the new ecosystem is intended to support the digital transformation of business models of European companies so that they become more competitive globally. As a matter of fact, Catena-X plans to leverage GAIA-X. This shows: In recent years, the industry has developed the will to shape its digital transformation independently of U.S. cloud services.

Mechanical engineers are shaping digitization

There are also positive examples of digital transformation in mechanical engineering. Much of this revolves around the collection and analysis of machine data and digital services. The knitting machine manufacturer Mayer & Cie. can be exemplary. It has created a platform that enables customers to read out the data from their machines from any location. This gives them a real-time overview of important indicators such as speeds, downtimes or even efficiency. Remote support with the use of mixed reality glasses is also feasible thanks to the networking of the machines.

Another example of the advancing digital transformation in mechanical engineering comes from DMG MORI. With "PAYZR", the leading machine tool manufacturer has even developed an entirely new, digital subscription business model. Both its machines and the associated software can be "subscribed" under this approach. The special feature is that, in addition to a monthly basic fee, a usage-based fee is charged per spindle hour. The price includes a "all-round carefree package". It includes all relevant factors such as packaging, transport, commissioning, training, service, wear parts, spare parts, maintenance and insurance. This innovative billing method is only possible because the machines are networked. Because in this way they can provide the billing-relevant information. The management of the subscribed machines is also digital. The manufacturer provides a digital marketplace for this purpose (DMG MORI STORE).

What do the projects from Mayer & Cie. and DMG MORI have in common? Both require the Industrial Internet of Things (IIoT) as the basis for networking their products. Likewise, both companies are members of ADAMOS - a strategic alliance of leading machine and plant manufacturers.

Don't procrastinate, take action together

A look at recent developments shows that German industry is clearly gaining momentum in terms of digital transformation. The sooner companies get on board, the greater their successes will be in the future. Fortunately, as the examples from this article show, this path has not to be taken alone. Rather, there are industry-related collaborations and initiatives that support the digital transformation. And it is precisely this "coopetition" that is likely to make a significant contribution to further transformation progress in the coming years.


ADAMOS — driver of digital transformation 

While the automotive sector has been cooperating within the framework of Catena-X since 2020, the mechanical engineering sector established an open joint venture with ADAMOS back in 2017. Today, more than 30 companies are part of the alliance. With bundled know-how, they pursue the goal of establishing a joint ecosystem for the digital transformation of the industry. This includes the production and use of connectivity and the provision of digital solutions. 

The digital solutions from Mayer & Cie. and DMG MORI are just two examples of approaches, from the ADAMOS alliance. Many other machine builders are also using the alliance to drive their digital transformation and provide added value to their customers.

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