Connected machines

Digitalization in mechanical and plant engineering - challenges and opportunities

Digitalization is changing the entire value chain. Thanks to the Internet of Things (IoT), companies know the location and condition of their machinery and equipment at all times. Predictive maintenance allows faults to be detected and eliminated in advance. By networking all machines, systems and computers, valuable information is collected and changes can be responded to in real time.

Image: Connected Machines

This ideal connected world has many names: Industry 4.0, digitalization, digital transformation, Industrial Internet of Things (IIoT), smart connected products or smart industry. Back in 2015, Roland Berger and BDI recognized in the study “Digital transformation in industry” that the mechanical and plant engineering sector has the potential to create revenue of 89 billion euros through digitalization. This is an incredible sum when you consider that, according to Statista, mechanical and plant engineering in Germany generated sales of around 204 billion euros in 2020. For companies, this also means immense growth opportunities.

On the manufacturer side, the digitalization of mechanical engineering is already well advanced. However, one of the biggest challenges remains the connectivity and uninterrupted operation of the plants.

How far along is the process of digitalizing machinery and production plants?

The representative survey “Trendstudie Digitalisierung 2020“ conducted by Bitkom Research on behalf of the IT service provider Tata Consultancy Services (TCS) showed that the machinery and plant engineering industry is anything but “narrow-minded” and “old-fashioned”. In fact, 93% of machinery and plant manufacturers are open to digital technologies and new innovations. This makes them the leading players among Germany’s key industries.

Nevertheless, while 47% of companies use robotics, so far only 22% use IoT and only 14% use artificial intelligence.

Connected systems – like a big “brain”

But the most important thing for mechanical and plant engineering is networking and automation. Networked systems – through e.g. IoT, Knowledge Graph, ERP software, IoT platforms, etc. – communicate with each other and function like a big “brain” that can see and recognize everything. Thanks to automation and artificial intelligence, these brains are able to detect potential bottlenecks, malfunctions or failures of machines and systems in good time and eliminate them automatically.

Of course, this level of networking cannot be realized overnight, but must be approached step by step due to the technical complexity involved.

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Challenges in mechanical and plant engineering

Industrial companies are facing many challenges these days: Cyber crime, industrial espionage, delivery bottlenecks or interrupted supply chains, the production of increasingly complex products in shorter cycles; individual customer requests, legal requirements, documentation and much more.

However, before companies can benefit from digitalization and master these challenges, the foundations must be laid.

From stand-alone solutions to comprehensive end-to-end connectivity

Many IT tools in industry are stand-alone solutions and not intended to communicate with other systems. It is especially important when deploying IoT that IT and OT – the operating technologies used to monitor machines and devices – are networked together. Many old devices are over 30 years old and don’t even have a CPU. In addition, sensors should be integrated, for example, in places where there is no continuous power supply. For this reason, finding and selecting the right edge devices and the IoT gateway as well as handling device management is equally challenging.

For comprehensive end-to-end connectivity to succeed, all machines, devices, applications and sensors need suitable interfaces. Only then will all components be able to communicate with each other and evaluate data.

In addition, business partners, suppliers and customers also play an enormous role. All participants must be technologically integrated in the digital infrastructure so that communication is not interrupted.


So why all this?

If you ask yourself the core question of why you should digitalize machinery and production plants in the first place, you will always come across two statements:

  •  Increased efficiency &
  •  Cost savings

Ultimately, it’s about optimizing the productivity, capacity utilization and availability of machines and systems. How can the machines work more efficiently so that they save costs?

But that’s just the beginning: Smart, networked products offer the company more flexibility, allow new business areas and services to be opened up, and offer many new opportunities for plant manufacturers, dealers and machine users.

One thing is clear: tomorrow's products will be smart and connected. The only question is whether your organization will be part of it.

- Markus Kohlbacher, OEM expert, t-matix

What are the benefits for machine and plant manufacturers?

The machinery and plant engineering industry benefits from this by being able to offer digital services for their customers, e.g. monitoring, remote maintenance, remote management and over-the-air software updates of machines, devices and plants. In this way, the plant engineering company benefits just as much as the manufacturing company.

Servitization & After Sales

Above all, companies are increasingly becoming long-term partners to their customers. Instead of selling machines and equipment as a one-off, they now offer after-sales services. Many of these services are offered “on demand” and customers now only have to pay for what they actually need. As a result, the customer remains financially flexible, while the plant manufacturer or dealer, for example, can expand its business model.  

The benefits of digitalization for mechanical and plant engineering:

  • Real-time data-based analysis
  • New business models and products through servitization
  • Fewer malfunctions and expensive machine failures thanks to predictive maintenance
  • More control and overview (through integration of ERP and business analytics)
  • Cost savings
  • Higher product quality
  • Shorter time-to-market
  • Cost-effective on-demand services for customers
  • Better customer retention thanks to customized solutions

In short, companies work more efficiently and, thanks to digitalization, can expand their own portfolios and offer many new digital products and services that were not possible before.

What does the future hold?

Everything is currently in motion. For companies, this means that there are constantly new opportunities to optimize their business and tap into new business areas. This also means, however, that you can’t just sit back and wait.

Megatrend digitalization & IoT

Those who understand how to use these new technologies for their company can develop products faster, better and more cost-effectively. The IoT sector in particular is still in its infancy and offers endless opportunities to implement or combine new technologies.

One thing is clear: tomorrow’s products will be smart and connected. The only question is whether your organization will be part of it.

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