Companies that fail to digitalize will have a tough time

Where are we right now with 5G and artificial intelligence – and what comes next? In this interview, Heinz-Jürgen Prokop, Chief Executive Officer Machine Tools at TRUMPF, explains how sheet metal fabricators can prepare themselves for the connected future.

marketSTEEL: Some sheet metal fabricators are still working with machines they bought ten or more years ago. Isn’t digital manufacturing a bit out of reach of typical sheet metal customers?

Prokop: It might appear like that at first glance, but in many cases the time being wasted on the shop floor is not due to inefficient machines. You would be amazed to see the number of machines at some sheet metal fabricators that are working below capacity because of bottlenecks. That’s why anyone who is serious about improving productivity should look beyond the machines at the processes upstream and downstream from the actual cutting, punching, bending and welding. Digitalization offers us a raft of new opportunities that can help boost capacity utilization on the production line by up to 50 percent in some cases. Sheet metal fabricators don’t need a fully connected smart factory to start making the most of that potential.

marketSTEEL: So, what do they need?

Prokop: They can start with small steps. For example, they could use our Track&Trace indoor positioning system to make their production line more organized by keeping constant track of every job, or they could use our TruTops Fab software to boost transparency on the shop floor and improve capacity utilization. Equally, they could use an app to order spare parts quickly and conveniently instead of looking up each order number by hand in a catalog. But what really matters isn’t the specific solutions they choose, but rather their ability to understand that opportunities upstream and downstream from the machining process are often being wasted. It’s not easy to document these upstream and downstream processes because, unlike machines, they can’t be seen with the naked eye and are extremely hard to monitor without digitalization.

marketSTEEL: So where do things like 5G and artificial intelligence come into the equation?

Prokop: Companies that have organized their production based on smart factory principles are already enjoying a competitive advantage. Yet our industry will experience even tougher competition and cost pressure in the future as batch sizes and delivery times continue to fall. Consequently, the aspects of production that can only be captured through digitalization are going to become increasingly significant. That’s why it’s so important for sheet metal fabricators to make their manufacturing processes more transparent and start getting to grips with digitalization if they haven’t already done so. We’re happy to advise our customers based on the knowledge we’ve gained from our own sheet metal processing facilities, where we introduced smart connectivity several years ago. But we also want to ensure we can still guarantee innovative solutions five years from now – and that’s why we’re already working so hard on 5G and artificial intelligence.

marketSTEEL: So, this isn’t just about hedging your bets for the future?

Prokop: No, the die has already been cast! The German federal government raised billions this summer with its auction of national 5G licenses to telecom companies. Soon we’ll see licenses for industry coming under the hammer, too. Using 5G to transmit data is clearly a better choice, because the new network standard increases mobile broadband capacity, which is exactly what we need to connect up more and more machines. So there’s little doubt that 5G will be part of our daily lives a few years from now. It’s a similar story with artificial intelligence. At TRUMPF, we’re already using AI successfully in a wide range of development projects, for example to safeguard the quality of machine performance or improve their processes. In short, it’s not a question of whether we want to play the game – it’s about making sure we win it.

marketSTEEL: What obstacles do you see ahead?

Prokop: I’m increasingly worried about the attitude toward new technologies in Germany. While we’re busy discussing the lack of investment in broadband expansion, the city of Shanghai alone is investing several billion euros in artificial intelligence! Instead of talking about the opportunities digitalization will offer in the future, we’re arguing about the threat of job losses. As a technology leader, we should be at the forefront of digital connectivity developments – otherwise we risk falling behind international competitors.

marketSTEEL: But aren’t job losses a genuine downside of the digital revolution?

Prokop: I would say it’s the other way around. Those who fail to digitalize are really going to suffer over the long term. If we want to maintain wage levels in Germany, our only choice is to achieve efficiency gains through connectivity. To help customers successfully meet that goal in the sheet metal industry, our machines are already set up for connectivity and ready to form part of a networked future.

marketSTEEL: So where will we be five or ten years from now?

Prokop: Several thousand customers have already had a glimpse of the future at our Smart Factory in Chicago. Most of the solutions on show there are already available, while others are in the process of being prepared for market launch. Once again, the key lies in the aspects of manufacturing that can only be captured through digitalization. The level of connectivity at the Chicago factory means that the majority of steps upstream and downstream from cutting, bending or welding are automated. It’s a bit like the situation with bank transfers, where hardly anyone would actually take the slip of paper to a bank any more. In ten years, we will look back on many aspects of today’s sheet metal fabrication as overcomplicated and old-fashioned.

About TRUMPF

The high-technology company TRUMPF offers production solutions in the machine tool and laser sectors. It is driving digital connectivity in manufacturing industry through consulting, platform and software offers. TRUMPF is the world technological and market leader for machine tools used in flexible sheet metal processing, and also for industrial lasers.

In 2018/19 the company – which has about 14,500 employees – achieved sales of 3.8 billion euros. With over 70 subsidiaries, the TRUMPF Group is represented in nearly all the countries of Europe, North and South America, and Asia. It has production facilities in Germany, France, Great Britain, Italy, Austria, Switzerland, Poland, the Czech Republic, the USA, Mexico, China and Japan.

For more information about TRUMPF: www.trumpf.com

Photo: Trumpf