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Despite lots of potential, digital implementation in German companies is very slow. Many companies simply do not know how to modify their well-established processes while competitors offering innovative ideas are mushrooming and changing the rules of the game.
To both stand up to digital change and master it successfully, companies do not only need visions, but also a high degree of willingness to transform and speed, too. There is a problem in that particularly small and medium-sized businesses (KMU) are not aware of their potential – this is what Fraunhofer Institute for Material Flow and Logistics IML found out.
To boot, medium-sized businesses often work with paper-based and manual processes when it comes to order handling. This, according to concerns voiced by the IML, not only leads to many errors and nontransparent processes, but companies acting that way also jeopardize their connectivity to customers and suppliers.
Let us take a look at the digital pioneers to see how things can be done differently. The study commissioned says that many companies have already mapped out digital strategies, created corresponding jobs and optimized business processes thanks to internal networking, automation and the abolishment of conventional silo mentality.
Experts are convinced of the following: To be able to stay competitive in the long run, these approaches at digitalization are no longer sufficient today. Networking above and beyond one’s own business limits is becoming increasingly important. In the wake of global competition, increasing customer demands and high speed of innovation, businesses must permanently reinvent themselves and keep modifying their business model.
Many technologies such as, say, the bar code, have existed for years and thanks to Industry 4.0 are experiencing a new upswing. Combined with cloud technologies and software platforms they can help to virtualize entire supply chains. That way, companies can consistently track their merchandise and optimize their processes with the help of large quantities of data.
This makes sense especially if businesses have outsourced numerous processes and at the same time need to keep an eye on a number of interfaces such as Würth Industrie Service. Said company is specialized in C parts management as well as automated procurement and logistics solutions for both assembly material and fasteners as well as production material and operating resources.
When manufacturing an excavator, 4,000 different items are needed. Rainer Bürkert, Executive Vice President of the Würth Group and managing director of Würth Industrie Service, explains: “One single missing part can bring the entire production process to a standstill.” To prevent this from happening, more than 21 interfaces in this concrete case – from the engineer to the sleeve supplied – need to be checked. Bürkert says: “The problem is the exchange of information.” Every item has its history that must be communicated from the first to the last step.
To also avoid friction loss in digitalized value added chains and to be able to act efficiently, people today need to interact with machines and machines need to interact with other machines. Taking the example of Würth Industrie Service, these are intelligent bins and supply systems that trigger orders independently and safeguard replenishment of the material needed for the production process or operating supplies directly at the place of consumption. RFID-based Kanban systems allow for early identification of fluctuations in demand in the production process as well as automatic reordering of C parts without scanning and manual recording directly at the place of storage. The vending machine concept ORSY®mat safeguards in-house and fully automated supply of operating supplies and with it transparent, 24/7 availability of products.
Manufacturing industry businesses using these and other system solutions not only save time, but can also considerably reduce procurement and therefore process costs. Digital technologies support human labor and free up human potential for other, more complex activities.
Digitize, but how?
The associated changes in the intralogistics processes are the focus of the interview with "The Business Debate" and Rainer Bürkert, Executive Vice President of Würth Group and General Manager of Würth Industrie Service.
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