Smarter Production: Hints on How to Go About It

19.07.2021 by Ümit Günes

Man with a tablet in his hand in a production hall.

In-house digitization is seen as a key value driver for industrial enterprises, but all the value-adding processes must first be connected. The Smarter Production trendbook is full of practical hints on how to go about it.

On the outskirts of Hangzhou, China, is the site of what might be seen as the factory of the future. Hangzhou is the home of the Alibaba Group, and at its Xunxi Digital Factory Alibaba aims to align its production processes even more closely to customer needs. Alibaba, a multinational technology company that has long ceased to be just an online trader, wants to help shape the future and achieve a 75 percent time saving at its smart factory. Sewing machines can be operated by smartphone and water consumption is optimized by means of artificial intelligence (AI). Production is to be faster, more sustainable and, of course, more more profitable.

Changing customer expectations pose challenges for manufacturing companies. How are they to accelerate value creation-critical processes? How are they to prevent waste and increase quality at the same time? And how can companies manufacture the most cost-effectively? Answers to these questions are to be found in the new Smarter Production trendbook with its focus on in-house digitization as a success factor for manufacturing enterprises.

Step-By-Step Transformation to Smart Production

Companies cannot change into manufacturing service providers overnight. They can only change step by step. And an indispensable requirement for the digital transformation to smart production is a strategy. The authors recommend a twofold approach: “First develop the ‘big picture’ for the next five to seven years, then embark on initial process optimizations, and thereby lay the foundations for data-driven business models.”

A target vision for connected value creation could, for example, be as follows:

  • Be inspired by successful projects and networking with experts
  • Develop a roadmap
  • Secure broad-based support, including that of the Management
  • Embark on a transformation process with a focus on people
  • Create a high level of acceptance among employees

Evaluate Data, Increase Customer Satisfaction

In-house value creation can be optimized with the aid of data. “Industrial enterprises must definitely be able to develop data-driven business models,” says Enno Borchers, Industry Partner Automotive & Manufacturing, in an interview for the Smarter Production trendbook. Companies must adopt a customer-centric approach and consider what the customer will want in the future and how they must orient themselves in order to offer customers the greatest possible benefit. “That will clearly include anticipating digital needs,” Borchers says.

Manufacturing enterprises can collect data from all value-creating processes in order to create end-to-end transparency:

  • Link operational technology (OT) and IT
  • Boost visibility by means of apps and dashboards
  • Improve transparency means of tracking and tracing in production
  • Enhance-how by means of further training for employees and networking with companies
  • Make data-driven decisions with the aid of a digital twin

Industry Makes Frequent Use of Data Analyses, Study Shows

The SME Digitization Index 2020/21 benchmark study by techconsult and Deutsche Telekom shows that industrial companies have made great strides in the use of data analyses. Seventy-eight percent said they were already using data analytics to monitor and optimize processes or to develop new products. In addition, one SME in five links analyses by means of artificial intelligence (AI) and can thereby improve inventory management or better assess the development of customer and market segments.

In recent months it has also become clear that industrial companies with a very high degree of digitization have been able to cope well with the Covid-19 crisis because their business model or business processes were already comprehensively digitized. That was confirmed by 81 percent of respondents. And they are well prepared for the future. According to the study, digital leaders will continue to increase their sales, earnings, product and service quality after the Covid pandemic. So industrial SMEs will be taking digital transformation further forward and basing their business models even more firmly on digital services.

The Smarter Production trendbook – download it here – contains detailed practical hints, the latest trends in digitization in industrial production, and best practice examples in three areas of activity.


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Ümit Günes
Ümit Günes

Marketing Manager IoT

Having been with Telekom since 2008, Ümit possesses a comprehensive understanding of various facets of the Internet of Things. He has a keen interest in the digital transformation of the business world. On this blog, he shares insights into the latest developments and trends in the IoT sector that provide genuine value to customers.