In an international comparison, Chinese and US companies are the frontrunners when it comes to using digital technologies in the Industry 4.0 environment. The United Kingdom can keep up with some distance, also due to the early decision to set the course for Brexit.
On the other hand, progress in digitization is stagnating in the DACH region. These are the central findings of the Industry 4.0 Barometer 2021, which the management and IT consultancy MHP created in cooperation with the business administration experts at the Ludwig Maximilian University (LMU) in Munich. 776 experts from industrial companies in Germany, Austria and Switzerland, China, the UK and the USA took part in the survey, which was conducted for the fourth time last year. The barometer shows the status quo of Industry 4.0 activities at the companies surveyed and insights into market-specific features in the regions examined.
Tom Huber, Associated Partner and Head of Operations Performance & Strategy at MHP: “In addition to the four topic clusters that we survey every year: technology, IT integration, strategy and goals as well as drivers and obstacles to digitization, we also have the focus topics of digital leadership and supply chain – Resilience analyzed in more detail. In an international comparison, different directions of development can be observed.”
Digital leadership: DACH is stagnating, China is setting a high pace
Companies in German-speaking countries are performing worse overall than in 2020: the survey values for the technology categories surveyed are at the same level as in previous years or even lower. In an international comparison, too, companies from Germany, Austria and Switzerland are increasingly being left behind. Chinese companies, for example, show a 20 percent higher use of digital twins, twice the supply chain transparency and twice the automation and remote control rate of plants. US companies also score top marks – more than half have an advanced technological infrastructure that enables artificial intelligence. However, not everyone in the USA can keep up with the rapid pace. SMEs and established companies in particular are in danger of falling behind. The situation in Great Britain is similar: just half of the companies with fewer than 100 employees have implemented additive manufacturing processes. At 75 percent, sensor-equipped systems and autonomous robots are not used.
Figure 1: Chinese companies most often use digital twins. (Source: MHP)
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Transnational: High costs and lack of know-how
Prof. Dr. Johann Kranz, Professor of Digital Services and Sustainability at the LMU Munich: “Companies are under enormous pressure to digitize around the world, since customer requirements for products and services are changing massively and continuously as a result of digitization. In the hesitant companies, the economic potential of this change is not used enough and thus appears too low in comparison to the investment costs. However, the current challenges such as the corona pandemic or the supply chain problem show that companies that have done their homework in terms of digitalization are much better at maneuvering through these crises.” With the exception of China, there is also the fact that qualified employees with digitalization skills miss. “There is often simply a lack of employees with the know-how to implement Industry 4.0 successfully and quickly,” adds Prof. Kranz. In addition to the lack of skilled workers, there are internal coordination difficulties and bureaucracy, especially in German-speaking countries, which slow down the progress of digitization projects.
“The DACH companies must quickly catch up in digitization in order to remain competitive. Internationally, a CIO in management, customer focus and collaboration prove to be a universal guarantee of success,” states Tom Huber.
Image 2: Every second company in the DACH region complains about a lack of qualified personnel. This is why, among other things, progress in digitization is stagnating. (Source: MHP)
Automotive industry in the DACH region pioneer
The only exceptions are companies from the automotive industry, which clearly stand out from other industries: 64 percent of those surveyed from automotive companies stated that they had implemented powerful communication architectures such as 5G. That is 13 percentage points more than in the reference industries. According to the company, one reason for this is the strong pressure to digitize, which is more pronounced among manufacturers and suppliers than in other sectors. Within the DACH region, the automotive industry could be the driving force to significantly accelerate digitization here as well.
However, this can only be achieved if the skills and competencies of the employees are continuously developed and the CIO is integrated into the management. Equipped with the right skills, a CIO can not only initiate a company-wide coordinated and economical digital transformation. It can also provide more resilience, as recent experiences with the corona pandemic and supply chain problems have shown.
Figure 3: More than 60 percent of automotive companies have a powerful communication architecture between their plants. (Source: MHP)
The full report is available for download here.