Why and how should an industrial SME “go digital” in the CEE region?

An impressive start: consider the issue of industrial digitalization as it was with the electricity in the beginning of the past century. Today this is common to everyone and we only recognize it – when we don’t have it. It should be the same for the manufacturing industry in the near future, all the stuff with IIoT, AI or advanced data analytics have to do their job in the background. These are a kind of infrastructure elements designed, coordinated and operated by experts.

A couple of days ago I had the opportunity to give a presentation at the Factory Experience conference – a regional event organized quarterly by PHP Media’s Gyártás Trend Magazine – dedicated to manufacturing SME-s with the main topic “Going Digital in Manufacturing”.

Hence, I would say this is not our job as an industrial engineer or logistics expert to deal with model building or training a Machine Learning algorithm. We have to rather provide domain-specific knowledge on our system we operate, essential for e.g. a successful data analytics project: set up goals, define what and how to measure, what kind of data can be collected at all, what is our intuition on the most relevant features or correlations based on our experience.

Nice words, however, to be honest, after moderating the panel discussion during the afternoon it was clear, even big players in manufacturing are ON THE BEGINNING of their journey of industrial digitalization. At least they have already started, but they are still on the way reaching the next level (to reach “level 4.0”, e.g. ,VW). And they fail a couple of times, no doubts (McKinsey, “pilot purgatory”).

So what about the SME-s in the CEE region? They find it slightly out of the scope, costing a lot, too complex and first of all, with no solid ROI for such a small scale. In some cases even the need for digitalization is just emerged in the recent years: this is rather an external factor and not initiated in-house.

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My personal impression during the conversations was totally in line with the outcome of a MS study published recently focusing on the CEE region: 31% of the SME-s do not address Digital Transformation however, they already know they should evaluate this. The ratio changes when picking the bigger companies: only 17% answered the same as the SME-s, but in contrast, 36% have a dedicated local digitalization team available (sadly 19% for the SME-s).

The new generation: “Do you have a free wifi at the shop floor?” This is the very first question of the students entering the production area, reported by a CEO of an innovative SME, running training programs for secondary school children. These “future colleagues” will bring the digitalized solutions into the manufacturing industry — literally in their hands.

But until then, as a common understanding of the audience, in our region the key driver of “Going Digital” could be the manufacturing efficiency. This is currently around 50%(!) in the CEE region, compared to e.g. the Netherlands, Germany or UK, given by a presenter. Deal with value added activities and do not waste your time on practices could be easily turned into an automated (digitally supported) process, could be the motto for starting the industrial digitalization right away.

Sources of data: Think something very simple, similar when you wrote your first macro in Excel to save time for a coffee in the future. This was probably a minimal set of data to be gathered from different sources. And then, the magic happened when the macro repeated every day the same task, e.g. in form of a custom report with complicated analysis, and could be sent to your boss. You might have multiple sources of production data at you company: excels for process or quality data, a MES for production, ERP, but even some handwritten info provided by the shift-leaders. So, the big challenge in this case is always putting the required data together. Set up an “all-you-can-eat” database for collecting everything in one place? Not necessarily.

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As agreed in the panel discussion, external help is mandatory for setting up a viable digitalization roadmap: what is the current state (maturity level), what level the company wants to reach, what are the main areas to be selected for digitalization, and how to start. This will lead the company through the process in a systematic way. The first benefits will come soon.

So, let’s start collecting manufacturing data.

Store it and — don’t forget — start to use it.

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