Interview 19 February 2020
Interview with Arno Kühn: “The Digital Transformation Needs a Strategy”

What are the first steps that need to be taken toward digitization? Where does the potential for optimization lie? What do the corporate processes look like at the moment? We discussed the opportunities and risks, challenges and visions for the future with Dr. Arno Kühn, director of the Product and Production Management department at the Fraunhofer Institute for Mechatronic Systems Design IEM in Paderborn, Germany.

Legacy processes and structures, demographic changes and the digital transformation are challenges related to Industry 4.0. In particular, what are the future challenges facing medium-sized control cabinet manufacturers?

The challenges are multi-layered. A crucial one is customer-specific production – the key concept is “lot size 1.” Customers want their control cabinet produced as quickly as possible. For the production department, that requires a high degree of flexibility in the face of ever-shortening throughput times. And more intense foreign competition, in Eastern Europe for example, isn’t making things any easier. Many companies are becoming more and more tempted by the notion of shifting larger portions of their control cabinet production there. Last but not least, the growing skills shortage is a challenge: Keeping pace with large companies and hiring competent people is even harder for small and medium-sized control cabinet manufacturers.

» The digital transformation presents control cabinet manufacturers with many opportunities, but also many challenges. «

Dr. Arno Kühn

But it doesn’t sound like these challenges have just appeared out of nowhere ...

No, in the control cabinet manufacturing industry – as in many other industrial sectors – none of this is new. However, the necessity of significantly efficiency increases has become clear. Most companies have long maintained their competitiveness by improving their value creation processes. At this time, we still have a great deal of very competitive control cabinet manufacturers in Germany. But that doesn’t mean that the industry can rest on its laurels. The digital transformation presents control cabinet manufacturers with many opportunities, but also many challenges. Addressing these is unavoidable.

One crucial competitive factor concerns digital engineering. Why do many control cabinet manufacturers still rely on paper-based assembly plans when the control cabinet production process is digital anyway?

Digitization offers enormous efficiency potential for the entire value creation process: I have access to digital information about the control cabinet that I can use to make downstream processes more efficient. When I consider the race to exploit potential efficiency, I see both digitization of the processes and the associated automation as tremendous competitive edges. Therefore, investing in their own digitization potential is a fundamental next step for companies. Nonetheless, many companies hesitate and fall back on conventional tools. That often has to do with the fact that a typical control cabinet manufacturer is a medium-sized company, caught up in everyday concerns, which seldom leave much time for strategizing.

In your opinion, why is not enough emphasis placed on process work?

It’s like any strategic question companies face: How much time should I invest for strategic considerations, which yield no direct economic benefit, after all? However, scrutinizing and optimizing my processes is essential in order to remain competitive in the future. The competition, which is more automated, cost-effective and powerful, is great. Another central element of digitization is the question of what I really want to digitize in order to make processes efficient and transparent. However, it’s also clear that employees often lack the qualifications necessary to conceive and design leaner processes.

» Digitization offers enormous efficiency potential for the entire value creation process. «

Dr. Arno Kühn

Who in a company do you see as the driver of a digital transformation?

It’s crucial that the senior management are one hundred percent committed to the issue. The path to digitization is not free. It’s an investment in the future, which involves more than just buying a tool or machine. It’s an investment in staffing and in cooperation with third parties. However, I also think that everyone in the control cabinet manufacturing ecosystem has an interest in making processes as efficient as possible. Control cabinet manufacturers can strengthen their role – from the machine and equipment manufacturer, to the component supplier, all the way to the engineer and tool supplier.

How can production be networked and the data that can be extracted from it be exploited in order to optimize, not just one production step, but an entire value creation chain?

If I want maximize the automation of production, I need to provide this information early on. I can do that by collecting all the data centrally in a digital model as early as possible so it can be used further in all downstream automated production processes. That’s what we mean when we speak of a three-dimensional layout. The information basis I produce consistently at this point is the key to the digital factory. Ultimately, this is nothing other than the creation of a digital twin of the control cabinet that can be used later for the entire production process, and also for further operation.

Design and production are two different segments of the value creation chain – but the end goal is the same. How can the two “languages” be better linked to each other?

In this connection, I like to mention the concept of “production-oriented design”: Subsequent production should already be considered during the control cabinet design phase. That only works if skilled people from production can route their knowledge and experience back to the design phase. Production workers are often very experienced and have spent years reading circuit diagrams, and optimizing the control cabinets as well. This feedback must flow back to the project design phase efficiently. That’s one way experienced workers could be involved directly in the design phase.

This type of interdisciplinary cooperation sounds very efficient in theory. What does the reality look like?

It has been the case in the past, and remains so today, that the design data is partially provided by the customer, reworked a little around the edges and then passed to production. Where automation and efficiency of production need to be increased, the control cabinet plan must be thought through in detail. Continuous coordination between the different departments is essential for this. Sooner or later, much more than the actual production know-how will be built up and entrenched in the design phase. In contrast, production will focus more and more on the handling of machines and production systems.

» It’s crucial that the senior management are one hundred percent committed to the issue. «

Dr. Arno Kühn

How long will the transformation of control cabinet manufacturing process take? Where are we at now?

We speak of a digital transformation process, and most companies are taking their first steps in this right now. However, many control cabinet manufacturers already have experienced with similar transformation processes, such as introducing cable assemblers or drilling machines, which many control cabinet manufacturers carried out over ten years ago. The process that took place there is no different from what now needs to be gradually built up in other areas. Today there are already companies exploiting their digital potential to a great degree, but there are also those that still handle production as they did 15 years ago – it will be difficult for the latter.

To what degree could the digital transformation influence production methods too – the key concepts being “continuous production versus batch production” and “modular control cabinets with a project- or task-oriented structure versus a function-oriented structure?”

The main question here is: “What kind of control cabinet manufacturer are we talking about?” What is its order situation? Does it produce in small quantities or large series? How can component suppliers adapt? Due to the higher degree of automation, the tendency here is towards continuous production. The function-oriented modular construction of control cabinets contains enormous potential for efficiency. Large quantities of pre-assembled modules can be installed and produced accordingly. The central challenge here again is that pre-assembled, modular construction has to start in the early design phase. Since modularization can also impact the design, it should be performed in close coordination between mechanical/systems engineering and control cabinet construction.

What does this development mean for the current skills shortage?

The need for expertise shifts to the upstream processes. The demands on project planning and design are increasing, since a significant portion of the tasks must be handled there. Much more forethought and planning are necessary for projects than before – so more jobs will be created in these areas. The employees in these areas are highly qualified and not so easy to recruit. On the other hand, unskilled production employees can be supported with digital assistant systems so that they can be deployed more flexibly.

» The significance of lifelong learning is increasing enormously. «

Dr. Arno Kühn

Is the level of training in Germany sufficient for the digital transformation?

We have enough training institutions in any case – there’s no shortage of options in Germany. The question is just whether the qualification process is headed in the right direction. Educational institutions must also ask themselves what effects digitization will have on the content of their curricula and what qualifications employees will need in the future. Interdisciplinary cooperation between various areas is essential for training and qualifying skilled employees. Furthermore, the significance of a “lifelong learning” approach is increasing enormously, so employees can keep learning while on the job.

And finally, a question that focuses more on the practical than the theoretical: What’s your opinion of the variety of engineering tools available on the market?

I consider the myriad of tools a good thing for the moment, especially since it’s definitely not as large as in other domains. The nice thing about the industry is that there’s no single solution that is the sole focus, such as Google is for search engines. Variety is an extremely important factor and value. Competition among tool vendors leads to continuous improvement of tools. Many innovations we speak of now in control cabinet manufacturing would never even have been possible without this variety.

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