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Digitization as a Vaccine for Mechanical Engineering

Innovations in Mechanical Engineering lie in Digitization

A vaccine is always needed when a contagious disease spreads. Mechanical engineering does not have to fear COVID-19, but possible consequences in the form of economic crises and recessions.

Digitization and innovation as a vaccine for mechanical engineering

In order to be armed against economic crises and recessions, this branch of industry must position itself so strongly that even longer hard times can be survived. Innovation and digitization are the key words, as is Industry 4.0 and cloud-on-demand engineering. These steps make it possible to immunize against crises of all kinds. This brings advantages for machine builders from Germany, all of Europe and worldwide.

Digitization and Profound Innovations are the Key to a Secure Future for Mechanical Engineering

The digitization of mechanical engineering offers European companies enormous advantages in terms of productivity and performance. The cloudification of this sector is particularly noteworthy here. Computing processes in the high-performance range are significantly facilitated by this. This is important because this process is highly customizable and cost-saving. The digitization of the mechanical engineering industry has made steady progress. Furthermore, essential functions of their value chain are increasingly digitized. Thereby, the industry's product portfolio is expanded with digital functions. As a result, innovative data-based services can be introduced.

Advantages of Digitization in Mechanical Engineering through Innovations

The benefits of smart industry are enormous. These can be clearly presented:

  • higher productivity
  • improved resource efficiency
  • lower energy consumption
  • less downtime
  • less frequent maintenance intervals of the machines
  • less frequent defects
  • shorter time to market
  • significant performance improvements in the area of productivity

What Digitization of Mechanical Engineering Entails

The innovation of digitization is part of the umbrella term Industry 4.0. This future-oriented system increases the need for companies to integrate and process data from various external sources. In this way, new cooperation models are emerging through which revenue potential can be exploited much more efficiently. The focus is on the value chain and the entire time span of the product life cycle. Only close cooperation, strategic alliances and cross-functional integration between different companies will enable more efficient utilization. In addition, new jobs and companies will be created, because complementary technologies as well as services are a necessary standard for realization.

Cloud-on-Demand Engineering as a Revolution in Mechanical Engineering

The key points of digitization in mechanical engineering are summarized below:

Cloud-based Mechanical Engineering Services

If ordinary CAD (Computer Aided Design) software and / or CAE (Computer Aided Engineering) software is run on local machines, they will become cloud-on-demand engineering applications, which will bring a revolutionary change for engineering companies.

Data Transfer

Data is what holds all the components together, connecting virtually every single element.

Importance of data for industry
Collection, processing and analysis of data is a valuable tool for mechanical engineering

Industry 4.0 and its technological domains are almost entirely data-driven. The paradigm shift ranges from focusing on physical assets to optimizing processing, analyzing it, and sharing data. These valuable facts are collected across the entire value chain and product lifecycle. The great advantage of this data is that it offers new market opportunities. The accumulating and indeed huge amounts of data are created by employees, customers, processes, companies, products and machines. Moreover, this data can be easily generated, collected, processed and shared with third parties.

Ultra-High-Speed Broadband Connectivity

Developing and extending high-speed, reliable Internet connectivity is critical to delivering next-generation digital machine building support services. Industry 4.0 and digitization in machine building can only work if these huge volumes of data can be transferred globally in real time.

Network of Data Centers and those for High-Performance Computing

The generation of large volumes of data requires secure data management and it must be possible to process the data volumes at extremely high speeds. Equally essential is secure data storage, which requires special programs and hardware. All in all, digitization in mechanical engineering means that extensive IT resources must be available, with cloud-based HPC playing the decisive role.

Critics of Digitization Predict Sales Losses in Mechanical Engineering

Advocates Predict Golden Era for Machine Engeneering

New technologies such as digital platforms and others for the industrie 4.0 are also opening up previously unknown opportunities for mechanical engineering. Since those increase the efficiency of existing systems many times over, machine designers see their business threatened. Digitization and networking are already changing the production of goods and equipment of all kinds and will do much more in the future. Intelligent machinery and robots will communicate autonomously with each other. They will be able to control and monitor production processes independently. In such machine shops, people will almost no longer be needed. Proponents claim that this marks the beginning of a golden era for mechanical engineering. After all, the cost factor of human labor can be replaced.

Established Business Models at Risk

However, digitization also has a downside for machine builders. Many industry executives believe the onset of disruption is imminent. They fear that their established business model will fail. The packaging industry clearly illustrates the problem for machine builders: Particularly in fast moving consumer goods (FMCG), there are a large number of packages that are almost identical except for the print - yogurt pots, for example. The business of the packaging industry is to equip dairies with machines so that they can fill their products directly. For a dairy's business model, such a machine is absolutely essential - even though it only produces the shell of the actual product. Since yogurt pots are very similar or technically identical, the packaging industry equips the various dairies with similar systems.

Usage problems cause effort and costs. A packaging machine that is not utilized 100 percent of the time creates costs for each dairy.

Worldwide digitization and networking
Digitization and networking are already changing the production of goods and equipment

However, it is impossible for a single company to always push the production capacity of its own packaging line to its limits. The quantity produced depends on many other factors: For example, the price of milk, the amount of raw materials supplied, the capacity of the machines and sales. Every dairy is therefore faced with the problem of having to operate a plant that is absolutely necessary for its own production without being able to use it optimally. Or the quantity of yogurt produced is too large to be filled by the packaging line. This then turns out to be a bottleneck that throttles the output of the entire plant and thus indirectly generates costs. Ultimately, the sales potential that would otherwise be possible cannot be exploited.

Digital Platforms Trade Capacities

This dilemma can be solved with digital tools. After all, an intelligent networked packaging system knows its capacity utilization. A dairy company can also make this information available to other partners. For example, operators of digital platforms that offer information about unused capacities and market them. On such portals, a dairy can see which other company in the immediate vicinity has a similar packaging plant and what its capacity utilization is. If there is a threat of over- or under-utilization of its own packaging line, a dairy company can either use the available capacity of another company nearby or make its own resources available to another company. Digital trading platforms and the networking of machines thus make it possible to make optimum use of existing capacities. For the packaging industry, this means that dairies will be able to achieve the same output with fewer machines in the future. As a result, machine manufacturers will receive fewer orders for new machines because the models already supplied are simply too good.

Digitization in Mechanical Engineering versus AirBnB - a Comparison

In AirBnB, money is made because temporarily or permanently vacant living space is rented out to people on a short-term basis. The future looks similar in digitized mechanical engineering. If, for example, a bottling plant has a regular daily capacity utilization of 50%, the remaining capacities can be ceded to other companies.
This is always cheaper for the temporary users than purchasing a new filling line or replacing the existing one with a larger one.

Digital platforms trade in capacities
Trading in capacities serves to optimize the utilization of packaging systems in the dairy industry

The provider of such capacities has an advantage here, because he earns from the temporary loan. And this is done without major financial outlay, because the fixed costs for the machine that is available anyway hardly change. The brokerage platform for free production capacities also earns through its service. Machine builders who are aware of this fact will find ways to go with digitization here instead of fearing empty order books. However, they need to re-examine aspects of their offering and adapt their services to these new customer needs. Whether they decide to offer fee-based after-sales products or new support solutions, for example, new challenges also create new opportunities.

Conclusion: Digitization in Mechanical Engineering as a Challenge and an Opportunity

Industry 4.0, digitization and other innovations will lead to unprecedented technical possibilities that have not been thought through to the present day. New business areas will emerge that will revolutionize the entire industry and related sectors overall. In fact, digital tools can enormously increase the efficiency of new and existing plants.
As a result, digitization will ensure the sustainability that every individual will increasingly be forced to achieve in the future. However, it is important to consider where this path leads so that there is no threat of a drop in sales. After all, if the same or even higher performance can be achieved with fewer systems, this means that machine builders now need to take a close look at the buying behavior of their customers in order to secure order levels here. Agriculture, for example, shows how this behavior could change. There, machine parks are kept ready so that every connected farmer can borrow the high-tech harvesting vehicle he needs. In this way, the productivity of individual farms has been dramatically increased without them being crushed by the high cost of purchasing machinery. If machine builders decide to establish similar technology parks and rent out their own machines rather than sell them, digitization can indeed be a beneficial vaccine for the machine building industry. For this, it is necessary for machine builders to look at their existing business models and take new paths within the framework of digitization in order to remain present on the market.