Dr. Schlick, you have been recording the level of activity of German companies in terms of Industry 4.0 since 2014. What is the current situation?

Dr. Jochen Schlick: This year, the 'Industry 4.0 Index' on the topic of the smart factory has risen again: More and more companies are addressing the topic of Industry 4.0, but while the number of individual projects implemented is growing significantly from year to year - every second company is now implementing the Smart Factory in individual operational projects - the number of companies implementing I4.0 comprehensively on an operational level is only increasing to a small extent.

Why is that?

Dr. Jochen Schlick: Unfortunately, the Smart Factory is often exclusively located in the
operations. They are often not in a position to question what and how much is produced, nor how the products are delivered to the customer or how their wishes are taken into account. Yet the smart factory is the tool of choice for manufacturing customized products with maximum efficiency and massively accelerating order processing. The implementation of a smart factory requires all the 'principalities' of a company to pull together.

Does the development in the sectors differ?

Dr. Jochen Schlick: The electrical industry in particular is strong in I4.0 implementation - both in terms of individual operational projects and overall operational implementation. The automotive industry, on the other hand, seems to have gone into reverse gear, which is certainly also due to the economic situation. It is interesting to note that the mechanical and plant engineering sector is experimenting heavily in the area of smart business and many manufacturers are gaining initial market experience with customer portals or intelligent service offerings, for example. The electrical industry has also been offering intelligent and networkable devices for some time now.

What reasons do you see for the differences between the sectors?

Dr. Jochen Schlick: The success of these efforts depends heavily on the available capacities and skills. Regardless of whether they are geared towards the products or the company's own factory: The use of smart solutions is an innovation project, and half-hearted implementation of such projects rarely leads to success. A lack of human and financial resources hinders digitalization in the company. The fact that IT resources were often viewed purely as a cost factor in the past and therefore usually have a lot of catching up to do is often diametrically opposed to the transformation to a 'competitive IT factor'.

According to the study, the majority of the specialists and managers surveyed only see the smart factory as a means of reducing costs?

Dr. Jochen Schlick: This is also related to the often rigid localization of the Smart Factory topic in the operations area, where there is practically only the cost screw. In order to approach the topic, individual projects are often initiated. However, these are often a patchwork of isolated solutions. However, a clear smart factory vision and a systematic implementation strategy are the prerequisites for rapid success.

Most companies are treading water when it comes to smart business, offering fewer digital products, services or even complete business models than in the previous year. Why is that?

Dr. Jochen Schlick: Obviously, some of the new developments have not yet been able to fulfill their promises and have had to be withdrawn or revised. But perhaps this is also a typical manifestation of the hype cycle and the German industry is on the verge of a breakthrough with smart business.

What do you think companies should pay attention to?

Dr. Jochen Schlick: While digitalization primarily brings with it a culture of horizontal networking, German industry seems to be more attached to silo thinking. It focuses on the vertical and optimizes within the established system boundaries of company divisions. As a result, many companies are wasting the potential of cross-company digitalization initiatives. What is needed here is openness at the top management level. The focus on transparency, efficiency and costs is too short-sighted.