Inside TRUMPF’s digital transformation process
A Q&A with Ulrich Faisst, digital transformation officer, TRUMPF
A growing number of companies in several industries are adopting smart manufacturing strategies to improve operation efficiency and gain more value from business. One of the companies that has embraced digital transformation is TRUMPF, a German machine tool manufacturer and Industry 4.0 specialist. Enterprise IoT Insights discussed the firm’s digital transformation strategy with Ulrich Faisst, Digital Transformation Officer at TRUMPF.
Q: Digital transformation is a bit of a buzzword; how has the company approached that process?
A: The digital ambition for TRUMPF was specified for a timescale of five years. Within this time, TRUMPF wants to become a ‘digital leader’ in its markets. This ambition is divided into three main areas: Orientation towards the customer, towards the company and its processes, as well as towards the employees.
Alongside the direct customer focus, the focus of internal digital transformation is on processes which represent a direct interface with and added value for customers. Thus, the focus is on the processes of market development and of marketing (lead-to-order), as well as the fields of service and aftersales. Increased efficiency, provision of new services and the effective digitization of the value creation process are also at the core of the ambition. The development of digital skills is the main challenge as far as our employees are concerned. We want to open up new development opportunities and promote the employer brand by means of the rigorous formulation of new qualifications.
Q: Specific to manufacturing operations, how has connectivity and IoT changed the way you run your business?
A: As part of the definition phase of the digital ambition, more than 70 ideas for optimization using digitization of internal processes were adopted. These consider possible areas for internal digital transformation.
In subsequent stages, TRUMPF is concentrating initially on those processes which interface directly with the customer:
(1) Lead-to-order processes: all market development processes
(2) Order-to-cash processes: all order fulfillment processes
(3) Lifecycle processes: all customer care processes
These processes were prioritized with a clear focus on our customers. Digital transformation should not be an end in itself; it should enable TRUMPF to be differentiated from the competition. The optimization of these processes should offer the customer added value, thereby elevating TRUMPF above the competition. Those processes and projects which contribute most to the digital ambition and KPIs for the digital ambition are being cultivated as a priority.
Q: Separate from the technology, were there any implications to your workforce related to digital transformation?
A: The digital transformation of TRUMPF is an undertaking which has to be supported consistently by all employees and management; this is the only way it can succeed.
This fact is also relevant to the Digital Ambition, the objective of Digital Transformation. Alongside the dimensions ‘for our company’ and ‘for our customers’, the focus is clearly on the meaning of the Digital Transformation ‘for our employees’.
Digital transformation is indispensable to the continued success of TRUMPF. If will result in considerable changes to all our work. We have to meet these changes openly and positively in order to be able to conquer them together.
Only if every individual takes personal responsibility will the Digital Transformation move forward, and will make a significant contribution to success for TRUMPF and for each individual. Our interest and our readiness to learn will prepare us to meet the new requirements of a changed working world.
Q: What guidance would you offer your colleagues looking to transform their manufacturing operations?
A: Currently, requirements on manufacturing enterprises are changing fundamentally – in particular, quantities are reducing continually. These are the main challenges:
- Falling batch sizes (e.g. 5 rather than 500 identical parts) due to increasingly individualized customer requirements.
- Short reaction times (dispatch parts at the press of a button).
- Real-time transparency (information regarding the production status of the part ordered).
- Purchasing independent of location (global ordering via online portals).
- High part quality at low cost (costs are more easily comparable).
- The increasing speed of technical innovation (new production processes, disruptive technologies and enablers) and new business models (platforms for ordering CNC parts, or similar) and increased competition as a result.
- Continually improving methods of generating knowledge from data.
- Availability of machines and resources (particularly qualified professionals).
- Media discontinuities result in a slow and opaque overall process.
- Mastering complexity by means of manual coordination has become more difficult.
- Insufficient connection of existing systems results in inefficiency
In order to be able to economically manage many small orders, as opposed to a few large orders, processes must become faster and more secure. TRUMPF machines today are so fast that there is little optimization potential remaining in terms of part processing time. Upstream and downstream processes, from the ordering process, via material procurement, and up to invoicing and dispatch are decisive for overall productivity. The time required for these indirect processes must be reduced in order to be able to implement a reduction in the lead time and lower unit costs. It is precisely here that the opportunity of networked production is found.