“Creative destruction of the extant” – Big data requires radical rethink

Johann Soder, board member, COO and visionary at SEW Eurodrive, made it very clear: “We have to destroy the extant in a creative manner.” He believes that digitalization requires a radical rethink. Using SEW as an example, Soder showed how production will look in the future. According to his example, it will be modular, flexible and agile. It will interact with people and enable intelligent cooperation between humans and technology. In the future, orders will find their own way to production, which is the ultimate meaning of the “smart factory 4.0.” There will still be people in production, although they will be more qualified than they are currently. However, we will work differently, train differently and develop different working and employment models. The SEW COO feels that a holistic approach is required here, with speed being the decisive competitive advantage.

So what will the value chains of the future look like? Soder believes that production will consist of flexible and modular applications which are changeable and adaptable and also integrate logistics processes – the key word here being agility. Collected data forms the basis for improving processes. Automation technology connects the real world with the digital world, as demonstrated by the assistance systems which will be used to support people in the future. For this to work, standardized interfaces are a necessity. Soder stresses that companies must always ensure the correct infrastructure is in place: “Young people want to swipe, not enter numbers on a computer.” The digital factory, which is organized in a modular manner, enables an ideal status to be planned. Data is then collected and evaluated in real processes and improved with the ideal state as a target. This, he continues, is how management will be organized in the future, with factories being planned and “tested” virtually before they are built.

Purpose-oriented data analysis

Of course, big data also means that this data is not only collected, but also analyzed in a targeted manner. Dr. Markus Schoisswohl from SYN2TEC explained that producers must ask themselves which processes can be improved and what data is required to do this. What do individual factors mean and what information do they provide? Data must be evaluated in such a manner that measures can be derived from them. One method which can help here is measuring separate processes and collecting as much data as possible – even unstructured data. This would enable errors, the cause of which would otherwise remain undetermined, to be discovered and corrected.

The subsequent panel discussion showed that despite the enthusiasm for data and digitalization, old ways of thinking and worries still prevail among customers when it comes to providing production data for overreaching analyses and processes – for example using a cloud. The objective here is to create the necessary trust in the security systems and strengthen cooperation between software developers and users.

Upswing has still not reached all areas

At the beginning of the conference, Sebastian Popp, Deputy Managing Director of the trade association, provided clarity on the current economic situation.

The main issue is the heterogeneity of the sector – in 2018, both incoming orders and turnover recorded negative values. This is mainly due to the cement plant engineering sector, which remains in a market characterized by overcapacities. If cement plant engineering were removed from the calculations, the incoming orders of German building material plant manufacturers in 2018 would have been 17 % higher than the previous year, with turnover 16 % higher.

Asia continues to display the strongest economic growth. South America also recorded growth due to the recovery of the raw materials markets, resulting in the international mining market also developing more positively.

For cement production, the largest growth is expected in Asia, with China managing the issue of overcapacities better. For the past two years, the Chinese government has applied measures with the goal of throttling back production. Over the next five years, the country’s production will fall to below 50 % of global production, while utilization of production capacities will simultaneously increase from 82 to 95 %. In this regard, we are on the right path.

The recovery for plant manufacturers is forecast to continue throughout 2019, even if risks, such as international trade policies, remain incalculable. The construction and mining customer industries continue to find themselves on a growth course, an aspect which also benefits the suppliers.

No change in sight in US trade policies

On the eve of the event, a different, yet still burning issue, was on the agenda: the trade policies and increasing protectionism from the United States. A core realization emerged from the discussions – even with the presidential election campaign looming, the approach will not change significantly. Those placing their future hopes in the hands of the Democrats, believing they will remove the tariffs again, are unfortunately mistaken.

Donald Trump began his first term as President on an anti-migration, anti-free trade and anti-Washington platform. Before him, trade policies were never a particular issue in election campaigns, a factor which set him apart from the other 17 candidates in his party. Republicans have traditionally supported free trade, however this has completely changed under Trump.

US trade policy will probably remain protectionist, and the upcoming election campaign will not bring about a significant change in its stance. Dr. Laura von Daniels from the German Institute for International and Security Affairs in Berlin explained the current approach of the Trump administration and was unable to assuage the participants’ fears that the US plans to introduce tariffs on vehicle imports in the summer. According to her, the approach of the US government in this regard is currently a well-kept secret.

In order to face the US from a position of strength, the EU must present a uniform approach and cannot get wrapped up in internal disagreements. Both parties have a joint interest in forming a counterbalance to China, in itself reason enough to ensure negotiations are completed successfully.

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