Digital transformation: Taking advantage of the opportunities of digitization and automation in production

Industry 4.0 and IoT are buzzwords for the transition from analog centralized procedures to fully connected digital and decentralized production processes. Intelligent mechatronic systems offer an enormous added value and are the building blocks for profitable, future-oriented business models. Key levers for the realization of efficiency potential in manufacturing include:

  • Conception of digital models for production technology
  • Development and evaluation of automation solutions at low cost with low investment requirements
  • Determination of the plan-based Overall Equipment Effectiveness (O.E.E.)
  • Reduction of engineering times and commissioning costs

With the experience of numerous automation and digitization projects, the ConMoto consultants do not only ensure that the O.E.E. planned values are achieved in production due to productivity increases through measures such as machine learning and predictive maintenance. We do also develop functional application solutions for plant automation. This enables companies to plan their productivity precisely.

Our implementation expertise and methodological know-how transfer your digitalization strategy into more productive manufacturing processes – quickly and effectively. We develop tools for value stream analysis such as the ConMoto DigitizationScoreTest. Disruptive technologies help us implement new automation strategies. With the same goal, we combine commercial and technical processes on IoT platforms.

With and for our clients, we build functional meta-models as digital twins for products, productions and processes. The digital twin revolutionizes processes throughout the entire value chain. As a virtual image of the product, production or performance, the digital twin enables a smooth connection of the individual process steps. This consistently increases efficiency, minimizes the error rate, shortens development cycles and offers the possibilities of a complete real-time simulation with a corresponding cloud architecture or even with AI – which is why virtual commissioning also enables further time potential. In addition, these advantages also enable the realization of new business models. And finally, the customer relationship is completely redefined.

The four-legged ConMotos on the road of success

Annabell Wede won two A-jumps with ConMoto Crazy Cato and was second in L-Jump.
Annabell Wede won two A-jumps with ConMoto Crazy Cato and was second in L-Jump.

The show jumping sport is slowly getting back on track. The ConMoto-sponsored horses and riders are performing excellently: ConMoto Qufocolo Crazy Stud, ConMoto Crazy Chara and ConMoto Crazy Cato started at two tournaments. They reaped a total of seven golden loops for victories and three silver loops for second places.

Franz Bormann won three showjumping competitions on Qufocolo: a Class S point-based track, a two-phase Class M track and a point-based Class M track. He also finished second on the stallion in another S-jump. Ferike Bormann and Chara mastered the course victoriously in S-jumping. In their third Class M competition, the pair finished second. After a nearly two-year injury break, the old hand Cato also started again. Ridden by young Annabell Wede, he won two Class A jumps and finished second in an L-jumping. Three starts, three placings – Cato still has the right touch and was obviously having fun.

Process optimization and IT integration – The success formula for the digitization of maintenance

Depending on the industry, maintenance does affect up to 70 percent of direct and indirect production costs. Therefore, an efficient maintenance organisation is a decisive cost lever. It also contributes to the sustainable success of any plant-intensive production. The performance of maintenance is mainly determined by two factors: on one hand, the efficiency of the maintenance processes and its methodology. On the other hand, their integration into the IT infrastructure. Both ensure the reduction of losses and waste to minimum. 

Process optimization facilitatehuman/human as well as human/machine cooperation at the highest effective and resource-friendly level. Without functional best-practice processes, even the most contemporary IT systems cannot provide any significant added value for maintenance. Then again, even the best processes can only achieve limited efficiency gains without integrated IT systems. Consequently, process optimization and IT integration must go hand in hand with the digitization of maintenance. Only their combination sustainably exploits the full optimization potentials. ConMoto’s project figures speak for themselves: 

  • Increase in overall plant efficiency (O.E.E.) by 5 to 20 percent depending on the industry, 
  • Reduction of the maintenance cost rate by 7 to 28 percent, 
  • Reduction of spare parts stocks by 15 to 55 percent.

Effective integration of process optimization and IT integration in maintenance creates competitive advantages 

The added value generated by IT systems becomes more significant with each newly developed technology. A maintenance system that exchanges data directly with a process control system saves and shortens communication paths. Algorithms for precision maintenance predicting future failures from condition data and plant histories can operate more accurately and faster than any engineer. Augmented or virtual reality technologies such as data glasses and digital twins allow maintenance personnel to access information quicker and more extensively than ever before. Meanwhile, the effective integration of processes and IT has become a decisive competitive advantage in maintenance – no matter on which stage of the digitization process your company currently is. 

Creating competitive advantages by the effective integration of process optimization and IT in maintenance
Creating competitive advantages by the effective integration of process optimization and IT in maintenance

The core of digital maintenance is a computerized maintenance management system (CMMS). 70 to 80 percent of the companies with a maintenance volume of more than one million euros per year already use a CMMS. Stillmost of them are not actively put to their intended use. The active use of CMMS systems facilitates the administration of databases with relevant information on the systematic management of maintenance processes. They enable the planning of maintenance activities, record and then evaluate them. Thus, the total costs can be broken down in detail, which contributes decisively to the further development and planning of maintenance. The selection of suitable software as well as the corresponding integration of the best practice maintenance processes and methodology are important success factors. 

In a further step of digitalization, many companies are currently engaged in mobile maintenancethe support of maintenance processes by employee-operated mobile devices. Regardless of their location, maintenance personnel may enter and request CMMS data in real time. The initial issue to be dealt with is always choosing the right software – in the field of mobile maintenance as well as in all other steps of digitalization such as predictive maintenance, augmented reality, digital twin, IoT and artificial intelligence. In the meantime, there are many companies on the market that offer maintenance software and the necessary hardware such as, for example, tablets and AR glasses. Ultimately, it is important to align the overall system of processes and IT systems with the specific requirements of your maintenance organization. 

Selection of software and hardware according to best practice criteria 

ConMoto has implemented maintenance systems and methodology at more than 250 production sites, continued the development of existing IT systems or supported our clients in selecting and implementing new IT solutions. We advise you neutrally and manufacturer-independent regarding the right software and hardware respectively – within the scope of a structured and qualified decision-making processThe selection procedure is based on best practice aspects, which includes all functionalities important for maintenance. In the final step, the customer and ConMoto consultants carry out an individual prioritization in order reflect the specific requirements of the company perfectly. The result is a ranking of the different vendors accompanied by the ideal choice of the most suitable IT solutions and interaction. 

Profit from the benefits of our pioneering role in process optimization and digitization of maintenance. 

ConMoto named Top Employer in the small and medium-sized company sector for the third year in a row

ConMoto Award Top Employer 2020
ConMoto receives the Top Employer 2020 Award

For the third time after 2018 and 2019, has awarded ConMoto as “Top Employer in Small and Medium-Sized Companies”. The seal of approval aims to draw attention to the advantages of medium-sized employers. It serves as an orientation for employees in finding interesting employers.

This special award is not based on surveys. Those often have low participation rates and are therefore not particularly insightful. Instead, the users’ access and reading behavior on is evaluated based on more than 60,000 job ads within a year.

The evaluation criteria are:

  • The number of users that a company achieves on average per job ad and company profile,
  • The percentage of users who actually read the content, i.e. stay on the page for a corresponding period of time, and
  • The proportion of readers who engage in an application-related action, for example by clicking on “Apply Now” or on the company’s website link.

Based on these three categories, a popularity index is created for each employer. ConMoto is once again one of the best rated companies this year. We are very proud of the award “Top Employer in Small and Medium-Sized Companies 2020”.

Two ConMoto horses win at the equestrian tournament in Harsum

Ferike Bormann on ConMoto Crazy Chara wins the M-class showjumping
Ferike Bormann on ConMoto Crazy Chara wins the M-class showjumping

Just like the economy, equestrian sport is getting back on track. After tournaments were not possible for a long time, a showjumping competition took place in Harsum on the Pentecost weekend. There, two horses bearing ConMoto in their name were very successful. Franz Bormann won the S-class showjumping on ConMoto Qufocolo Crazy Stud by points. It was the 101st victory of his career in an S-class competition. He also received a golden bow on the stallion for 1st place in a class M jumping competition.

His daughter Ferike Bormann won an M-class showjumping competition in Harsum on the Hanoverian mare ConMoto Crazy Chara by points. Even though the tournament was still held without an audience, it is a positive signal that show jumping is back on track as well. The sporting performances in Harsum were excellent. ConMoto congratulates Ferike and Franz Bormann – we are delighted to see them and their horses succeed with our support.

19 successful cost reduction projects within the last seven months

ConMoto ensures the competitiveness of clients in different industries

Especially when the economic situation is difficult, potential analyses are a proven method and the basis for reducing costs and increasing productivity. The comprehensive ConMoto potential analysis is based on standard modules that are individually adapted to our clients’ requirements. Each analysis includes the main elements of finance and performance as well as the corporate functions production, logistics/supply chain and order management. Other key issues and cross-sectional topics such as product development, purchasing, digitization of production or infrastructure are added depending on the respective assignment.

At a glance: Average results of 19 ConMoto potential analyses
At a glance: Average results of 19 ConMoto potential analyses

Over the past seven months, ConMoto has carried out 19 such analysis projects in a wide range of industries: twelve in the automotive sector and six others, for example, in medical technology or plant engineering. The potential analysis is useful for companies of different sizes. At the recently assessed plants, the number of employees ranged from 176 to 2,466 and annual turnover between 28 and 593 million euros. The estimated savings potentials amounted to an average of 17.1 percent of the production costs – this figure alone shows convincingly what is feasible with a structured approach.

Productivity up, costs down

Cost savings are offset by increases in productivity. The analyses revealed productivity potentials of 34.6 percent in manufacturing and 39.5 percent in logistics on average. In the indirect areas, the average of possible cost reductions was 24.8 percent. The performance values identified feasible increases of the overall equipment effectiveness at an average of 25.6 percent. Lead times could be reduced by an average of 38.3 percent.

The actual potential analysis takes between one and two weeks, depending on the size of your company and the scope of the specific tasks. It concludes with the definition of measures (initial target concepts, a tactical implementation plan) and a blue-sky workshop. Currently, we are supporting our clients in implementation projects regarding the realization of these potentials. The ConMoto consultants work with a transparent hardness level system to check the cost impact and tools for close progress monitoring.

Evolving from the crisis: An action plan for quick and sustainable performance

Moderne Produktion

How does your company emerge from crisis mode to productive normal mode quickly? Medicine has developed the concept of rapid recovery. The idea is: during and after a crisis, action must be taken as quickly as possible so that the patient can fully recover. Ambulances equipped as stroke units for the immediate rescue of affected patients, for example, are working based on this principle.

If your company is to return to full performance in production and the market after the crisis, thinking and acting in three different time horizons is expedient:

1. Implement immediate measures to secure subsistence

Use working capital management to optimize capital lockup and do not leave it at a mere reduction. Together with you, the ConMoto experts will consistently identify existing liquidity reserves within your company. A sustainable optimization of the capital lockup will also show you whether you have achieved real process improvements. Our short assessment includes the extent of receivables and requirements for logistics performance. We also run process simulations based on the EFQM model – including an evaluation and benchmarking. The value stream mapping covers representative material flows as well.

In addition, ConMoto uses the Failure Mode and Effect Analysis (FMEA) to identify and avoid risks. Particular attention is now to be paid to hygiene regulations as well as stricter health and safety protection at work: during and after the Corona crisis, different rules apply to production.

2. Secure your supply chain for production and logistics

ConMoto creates a comprehensive risk profile of your supply chain. The resulting risk management is controlled by strategic purchasing whilst being closely connected with production and development. We screen key suppliers and others that have a high priority for your supply chain. The assessment includes environmental and health risks, financial risks as well as strategic and performance risks. All analyses aim at shaping your processes to facilitate production at a competitive cost after a short ramp-up time.

Safe, efficient processes are paramount in ramp-up management. ConMoto relies on the adapted 5S method: Safe, Spotless, Swift, Sensitive, Stable.

3. Implement structural improvements and optimize your products

In order to enhance the long-term competitive position of your company, you need answers to the key strategic questions. ConMoto supports you in the development and implementation of your production strategy by shaping your manufacturing & logistics footprint. The correct vertical integration, the adequate dimensioning of your plants and an effective value creation network are important elements of economic success. In addition, we also address your product strategy: make your product development crisis-proof and benefit from future opportunities. We optimize your product costs with you.

The “new” normal

Roboter in der Fertigung mit Glasabtrennung

At noon today, the Coronavirus Monitor reports 15,000 confirmed people in Germany who are currently suffering from Covid-19. Altogether, 175,000 infected people have been registered since the first incidents in Stockdorf. Nearly 8,000 people died in Germany who were suffering from Covid-19 at the time.

Next Monday, all shops will be re-opened. The gastronomy is allowed to run the beer gardens again in Bavaria. A week later, the restaurants follow. All of us, at least the overwhelming majority, accept the rules and have become accustomed to covering our mouths and noses.

Starting on April 2nd and including today’s post, we have built a diary of 20 articles, which we will summarize for you again.

Also on April 2nd, the economic institutes predicted a decline in the gross domestic product of five to eight percent and estimated the cost at 750 billion euros. It was feared that between 1 and 1.8 million people would be unemployed and an additional six million short-time workers. At this point, ConMoto had already predicted a 12 to 15 percent decline in manufacturing and related services – with a peak in May and June, followed by a recovery period of five months.

Illustration from our post on April 2nd, 2020: GDP and Industry Production in Germany 2020
GDP and Industry Production in Germany 2020

As early as April 3rd, we announced that the Corona crisis will be with us for a long time to come and that we must learn to live with it. At that time, we were already calling for an integrated view of medical, ethical, social and economic issues. We also pointed out very early, that the hospitality and gastronomy sector will be affected above average, including the risk of a third of the businesses becoming insolvent. Unfortunately, the actual development took an even worse turn than initially expected.

Only very late, on May 12th, a joint study by the Ifo Institute and the Helmholtz Centre for Infection Research was completed, which looks at both epidemiological and economic variables as well as the impacts. The conclusions of the study in brief excerpts:

  • “At best, a slight, gradual relaxation of shutdown measures is likely to reduce economic costs without jeopardizing medical objectives.”
  • ”Furthermore, we cannot perceive a conflict between economic and health costs in terms of a strong easing – the costs would be higher in both dimensions.”
  • “Too much easing is therefore not preferable. This kind of policy would allow for more economic output in the short term, but according to our simulation analyses, it would prolong the phase of slight constraints to such an extent that the total costs are going to increase in 2020 and 2021.”

Politicians certainly acted correctly and consistently in the first phase. Exiting the lockdown was understandably much more difficult for policymakers than the decision to initialize the lockdown.

At last, now we may restart! Are we going to restart?

Of course, we restart! But what about the pace – and the costs? Which lessons will we have drawn from the biggest economic crisis of the last almost 100 years?

In recent days, we have learned a great deal about an economic sector and its precarious conditions that affects us all: slaughterhouses and meat processing. Most plants are certainly safe from a hygienic perspective, whereas regarding the spread of epidemics, especially the housing conditions of the predominantly Eastern European workers are not acceptable! The schnitzel from the discounter now incurs follow-up costs that are not included in any price. Occupational health and safety are fundamental things that are non-negotiable! It makes no sense to introduce minimum wages if they are being reduced to an effective four euros per hour by work contracts and gagging leases for inhumane housing.

When the heavy blows are over – also thanks to very effective state aids such as tax deferrals – strategic issues are on the agenda:

What needs to be changed in which way to make us more resilient to such events? How does a production in Europe look that will ensure our prosperity? What are the growth areas? How do we maintain the competitiveness of our products? How are organizations changing? From an economic perspective, we must significantly reduce the cost of infrastructure in order to avoid tax increases

We wish you the best of success with your activities and would be pleased to accompany you on your journey.

Accelerated consolidation in the automotive industry

Nicht abgeholte Neuwagen auf einem Werksparkplatz

The Corona crisis is accelerating the upheaval in the automotive industry because the sales gap creates additional pressure. As a result, consolidation will proceed faster than has been apparent up to now. This applies especially to small and medium-sized suppliers, which have long had far too little return on investment. The declines in sales have left them partly in the red. This has two very different effects: OEMs organize acquisitions by strong partners for strategically important products. And investors specialized in difficult cases are going bargain hunting. Of course, Chinese companies play a major role in this.

A current example also shows how active Chinese companies are: Daimler Truck AG and the Volvo Group are setting up a joint venture to develop hydrogen drives for commercial vehicles. The two partners each hold 50 percent of the new company, and Volvo buys in with 600 million euros. Volvo and the Chinese electric car manufacturer Geely have the same owner. These two companies are now planning a merger. Geely, on the other hand, holds 9.7 percent of Daimler shares through its investment company “Tenaciou3”. At the same time, Daimler and Geely have been setting up a joint venture for Smart for about a year now. As from 2022, the Smart will be produced as an electric car in China. Unlike BMW and VW, Daimler does not have a domestic anchor shareholder in Germany.

Changes always lead to market adjustments

A dramatic upheaval is also emerging in the car trade. Trading portals that take the problems, in other words: the cars, out of the yards of brick-and-mortar retailers, will gain as much significant market share as direct marketing. The car dealers are virtually caught in the vice: customers are postponing major investments and at the same time, there is a threat of competition from new players in the seller market. Smaller retailers are under pressure from online car portals and large retailers that give significant discounts.

Upheavals have always led to market shakeouts. Now it is important to prepare your own company for the future – whether you are working in automotive production or automotive sales. The end-to-end processes from order intake to delivery to the customer must be well aligned. High speed paired with flexibility and efficiency is crucial. The products must be competitive in design, function and price. Innovation becomes a decisive competitive advantage. Competitive prices require optimal costs. No matter how good a production system is, it still cannot compensate for the disadvantages that have already been “built in” by design.

Put everything to the test. Times are not going to be easy.

The shutdown is over!

Shopping mit Maske wieder erlaubt

Politicians have cleared the field for the economy – conditionally, of course. The final decisions are to be made regionally. Wise and quick decisions and actions are important now to minimize material damage.

Since Monday, ConMoto has been sensing that our clients are preparing for the ramp-up. The focal topics are:

  • Re-engineering of the processes of the indirect areas. These areas need to be resized considering the expected competitive situation. To reduce the risk of infection, shift operation and/or remote work must be organized.
  • Clocking of production. The new distancing regulations are changing the production systems. One-way traffic must be set up as free of crossings as possible.
  • The operation of the factory canteen and staff catering must be organized.
  • Shift start and change must be handled contact-free or at least low-contact.
  • Delivery and shipping must be compliant whilst remaining both economical and reliable.

In addition to these organisational priorities, costs and prices must be thoroughly examined.

Overall, the entire ramp-up must be coordinated with suppliers and customers. Communication with all involved parties is particularly important for this coordination. The companies that were already “under special observation” of their customers before the shutdown will now have to solve old problems very quickly. Otherwise, the redesign of the supply chains can result in a fast supplier change – especially in the automotive industry. This will, of course, also generate new opportunities.

Take your chance to enter new markets. This requires quick reactions to requests. According to ConMoto’s observations, many companies often fail in this because there is not enough qualified capacity for the required calculation. The same applies to the short-term necessity of new supply sources and suppliers, e.g. when suppliers from abroad are not yet able to resume production.