With almost 8,000 employees in 29 plants around the world, Miba produces sintered components, engine and industrial bearings, friction materials, power electronics components, coatings and special machinery on a daily basis. "With all the isolated measures we had already taken in the direction of Industry 4.0 and digitalization, we also realized that we needed to take a holistic view of the issues in order to be successful in the long term," says Dietmar Hocheneder, Head of Supply Chain Management at Miba Sinter Austria, describing the situation at the time. "The starting signal was given with the development of the 'Smart Factory' concept for the comprehensive digitalization of internal logistics processes."

The IT map

A detailed big picture of the production landscape was to visualize the connection between ERP, MES, machine level and the other affected systems. "This phase of the project provided important insights into what the right systems are for our purposes and how we can connect and use them most effectively in terms of digital production. For example, we were confirmed that we need individual solutions for the respective areas of application, with a clear separation
between internal (MES) and external processes (master data management: SAP). The close connection between the two systems goes without saying," continues Hocheneder.

The step into real-time operation

"The results from this test phase convinced us and so we took the plunge into live operation," says Hocheneder. "Before that, however, we were faced with the challenge of deciding which measures we wanted to implement first. So we defined and prioritized work packages and chose a representative unit at our site in Vorchdorf, within which we could map the packages with a manageable quantity structure."

The people in charge at Miba were aware of one thing in this context
Miba was aware of one thing right from the start: the comprehensive integration of the leading software systems was needed to achieve the digitalization goals. Dietmar Hocheneder: "Industry 4.0-compatible production planning and control can only work if the information supplied in the systems is up to date and, above all, correct. However, this real-time transparency can only be achieved if all activities that take place in production are communicated to the systems without delay and the information is processed immediately and in a targeted manner." One of the work packages was therefore dedicated to direct communication between the MES and the machine control system. Supplemented by organizational measures, many added values can already be derived from this. Today, these range from the automatic formation of transport units to the elimination of manual counting - previously a major potential source of error!

Milestone Data Matrix code

The central task, however, was the close integration of the overarching processes between ERP and MES. One example: in the past, long production processes resulted in a high WIP (work-in-progress) in Miba production, as goods movements and stock levels were not recorded between the many operations. This meant that planners did not have a complete overview of the production process. One measure was therefore to shorten the order structure and add several storage levels. Today, all stocks and goods movements are recorded in the MES with the help of transport and forklift control and transferred to SAP in real time via an interface. In combination with cronetwork detailed planning, which was also introduced, Miba now has a completely new level of data quality in the planning and execution of production processes.

Dietmar Hocheneder, Head of Supply Chain Management at Miba Sinter Austria: "We have now created the basis for gradually taking the next steps into the future of digital manufacturing!"

© Miba

At Miba, the complex sintering technology represents a particular challenge on the way to completely transparent production. After the first work step, the parts produced consist only of compacted, pressed powder. In order to be able to record each individual sintered part, a solution had to be found that ensures the application and reading of a data matrix code (DMC) on the green part (sintered blank) even under the most difficult conditions. Hocheneder explains: "Once we had created the technical requirements, we sent a series of components into a permanent loop for testing purposes, where the DMCs had to be read under a wide variety of lighting conditions. Thanks to constant optimization measures, we have been able to achieve a readability rate of more than 99% to date." So we know that the technology works. However, widespread use is not planned for the time being, as this is heavily dependent on the expected profitability in the respective areas.

Looking into the crystal ball

For those responsible at Miba around Dietmar Hocheneder, a concrete picture of future production is already emerging. "As a logistics specialist, I envisage that the MES will process information for production employees even more intensively in future on the basis of the data collected!" In future, a system should be able to recognize at an early stage that follow-up materials are required and automatically initiate the necessary procurement steps . The vision behind this is that as many processes as possible between systems, transport devices and storage systems will run electronically and the logistics specialist will mainly take on the task of process monitoring.

Working in reaction mode - the interview on the topic

Stefan Ehrlich from SQL Project

© SQL

IT managers in German SMEs often have 'stomach pains' when they think about topics such as the strategic further development of IT or sustainability in integration and process optimization - according to one of the results of a digitalization study by SQL Projekt. Stefan Ehrlich, CEO of the Dresden-based IT service provider, explains why.

Mr Ehrlich, what is the current state of digitalization in German industry?

Ehrlich: Digitalization in companies is coming to a standstill. The background to this is that the IT sector is overloaded due to high complexity and insufficient resources and is therefore primarily working in reaction mode. Companies are facing challenges such as the continuous renewal of the IT landscape, mastering the complexity of the growing IT landscape and the hot topic of cybersecurity.

What does this mean for the status quo in terms of digitalization?

Ehrlich: Although many of our customers have an integration solution, they view the networking of IT systems exclusively in technical terms because it often has to be done very quickly. However, if the relationship to the business processes is not sufficiently taken into account, the savings targets set cannot be achieved or the results fall short of expectations.

Where do you see the levers that companies can turn in the direction of digitalization?

Ehrlich: Large companies still have a lot of potential in the area of end-to-end integration between the top floor, store floor, suppliers and customers. There are also still opportunities in the area of utilizing available data within the company. Often, the focus here is only on measured values from the machines - the valuable and information-rich data from the MES, ERP, CRM and CAD systems, on the other hand, is neglected.

And what about small and medium-sized companies?

Honestly: Smaller companies are often stuck with keeping their IT landscape running at the level of "telephone, network, hardware and standard software" or "operating system, databases, Office and ERP". Almost 100% of IT resources flow into these areas. In addition, companies distance themselves from their own digitalization potential with the statement "Only the big players can do that!". However, there are also positive examples that show that smaller SMEs can digitize and automate just as well. For them, however, this is always based on the will of the management.

What exactly is the problem with SMEs when it comes to successful digitalization?

Ehrlich: On the one hand, the causes are an underestimation of their own possibilities for digitalization. On the other hand, there is often a lack of understanding of how to build up comprehensive digitalization knowledge - both organizationally and technically.

And what do you recommend to SMEs?

Ehrlich: My recommendation is to outsource the standard IT with network, hardware and standard software including operating system, databases and Office applications to a competent partner. Once this brake has been released, the existing in-house IT specialists can be used to create value for successful digitalization and automation. Here, companies should focus on taking small steps as part of a larger automation roadmap.

The 'Digitalization Index for SMEs 2018'

Whether it's cloud computing, Industry 4.0 solutions, big data or machine learning, many SMEs in industry have been working with and using digital technologies for a long time. This is the result of the 'Digitalization Index for SMEs 2018' from techconsult. According to the authors of the study commissioned by Deutsche Telekom, digitalization is even part of the business strategy in almost half of the companies.

The 'Digitalization Monitor 2018' by management and technology consultancy BearingPoint also confirms that companies are making good progress in many areas of digitalization. According to the survey, strategies and visions are now clearly defined compared to the previous year and corresponding implementation responsibilities have been defined. However, the BearingPoint study warns that the gap between companies is widening. For example, although 42% of the companies surveyed have already selected one of the two highest maturity levels, one in five companies are still at the very beginning of developing their digital strategy. Traditional companies that are more than 21 years old in particular are still finding it difficult to align their visions with the requirements of digital transformation.

According to the 'Digitalization Index for SMEs 2018', companies that are transforming are active in four areas: they are improving relationships with their customers, increasing their productivity with digital solutions, putting their business model to the test and developing it further with digital technologies. SMEs are aware that the digital field of action of IT, information security and data protection is the fundamental basis without which all further digitalization efforts are doomed to failure. 39% of medium-sized industrial companies are already generating digital added value today - for the authors of the 'Digitalization Index for SMEs 2018', this means that the benefits of digitalization measures exceed the costs incurred. The main beneficiaries are those manufacturing companies that have implemented digitalization early and consistently. In order to accelerate the digital transformation , almost half of industrial companies are investing in the digital skills of their employees.