The manufacturing industry is a crucial branch of the Swiss economy. Yet it is also a high-pressure environment where efficiency is indispensable. In this article, you will find out how the digital transformation, also known as Industry 4.0, is helping change the face of manufacturing.
Text: Andreas Heer, Image: Keystone,
Switzerland’s manufacturing industry is known for its premium quality. It is also highly diverse, ranging from precision mechanical components, watches and all manner of machines, to pharmaceutical and cosmetic products. It is an important branch of the economy. In 2018, the manufacturing industry contributed almost 19% of Switzerland’s gross value added, coming second only to the service sector, according to the Federal Statistical Office.
With such a broad-ranging sector, it comes as no surprise that there are numerous challenges to overcome, too: Switzerland’s high production costs compared to internationally, the strength of the Swiss franc and global competition mean that the local industries must work with great efficiency and stand out through innovative developments. This helps Swiss manufacturing to stay ahead of the competition. However, a shortage of skilled workers in technical professions, including engineers, makes it all the harder to find the right experts for the work.
Digitalisation and the automation of production processes are playing a central role in overcoming these challenges. Technologies such as the cloud, the Internet of Things (IoT) and 5G form the digital basis of this Industry 4.0. Through the digital transformation, companies are turning to digitalised processes and data-driven production. These approaches also mean that existing business models can be enhanced with additional services, helping them stand out from the competition. Some examples of innovation include predictive maintenance, “on-demand” production, and rental models that come with services, to name but a few.
The digital transformation is not just about cost savings in the actual production process. “If they are to increase efficiency, companies must also involve peripheral processes, such as suppliers and logistics between different locations,” says Julian Dömer, Head of IoT at Swisscom. Only then would the desired effects really come into play, allowing production to become not only faster but also more flexible.
Without digitalisation, efficiency gains will have only a limited impact. This is because the interdependencies between people, machines and infrastructure are too complex an equation to be solved by mental arithmetic. “You can only achieve transparency here when you digitally map the processes and procedures,” says Dömer. “This will also unveil that last bit of potential for improving efficiency.”
“For us, quality control and logistics are the most important drivers,” says Dömer. That’s because automated testing can speed up the production process. This kind of automation is implemented using various measures. For example, a network of IoT sensors can provide information about production conditions such as temperature and humidity; or workpieces could be photographed by a camera while an AI application analyses the images and detects production errors. This does not necessarily speed up production itself, but can considerably accelerate the processes after production, which reduces idle times and downtimes.
If production is faster, this has an impact on the entire production chain, from the supply chain to the individual production steps and logistics. The required raw materials must be made available in sufficient quantities and measures must be in place so that the finished products can then be stored or delivered.
In its study “Global Lighthouse Network”, the World Economic Forum (WEF) regularly examines what sets apart successful production companies, otherwise known as lighthouses. Data plays a decisive role here. The lighthouses have consistently digitalised their entire chains, enabling them to make data-based decisions and communicate more quickly. For example, if demand increases, digitalised production companies can more rapidly order source materials, ramp up production and deliver the finished goods. This enables a significant increase in output, one of the KPIs for measuring performance improvement. A short time to market is, in turn, a welcome recipe for success and for thriving in the face of competition.
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