27.09.2018 Ι Advancing digitization will greatly change the German mechanical and plant engineering industry – both as a user and as a provider of digital products. “In order to retain its strong role in innovation and customer access, mechanical engineering must position itself strategically in platform economics and cooperate more closely,” emphasized Wolfgang Lemb, Executive Board Member of IG Metall at the Mechanical Engineering Conference in Berlin.
The challenges for the German key industry mechanical and plant engineering are enormous: demographic change, for example, has an impact on the companies in the industry, the potential for apprentices is falling, the average age of the workforce is increasing and many skilled workers will retire in the coming years. The current uncertainties of world trade are putting pressure on mechanical and plant engineering: The European single market is being weakened mainly by Brexit, the US government under the presidency of Donald Trump is pursuing protectionist strategies, emerging economies such as China have caught up and are also serious competitors become technology-intensive products. After all, climate change will be a challenge for the mechanical engineering industry, which, with over one million employees, is the industry’s largest industry sector, the backbone of German industry and the global supplier of technological industry solutions.
Mechanical and plant engineering – today the world market leader in many areas and, thanks to a high export ratio, the figurehead of the German economy – is currently both a driver and a driver. It drives innovation and is under strong international competitive pressure, above all from China and the USA.
Can the industry win the race?
And it is exactly in this complex overall situation, precisely in this complicated situation, that digitization is now a new, major challenge. Along with it comes the question: Can the mechanical and plant engineering in Germany win the race for innovation even in an increasingly digitized, networked product and work world? And what are the challenges for the employees?
The fact is that digitization and Industry 4.0 are playing an increasingly important role in machine and plant engineering as part of digital networking – both as a user and as a provider of digital products. Digital business models and new competitors in the field of digital platforms are increasingly posing challenges for companies in the industry. More and more products, applications and processes are now supported by electronic components. This makes them more complex and networking increases.
Digitalization will change work a lot
Fact is also: Progressive digitization and comprehensive networking will lead to a change in employment in all operational areas and functions. This has consequences: “Mechanical engineering must not miss the connection to the digital transformation of the industry: Internet giants and IT companies are already in the starting blocks to push their platforms between customers and mechanical engineering,” said Wolfgang Lemb , managing director of IG Metall responsible for mechanical engineering at the engineering conference of IG Metall in Berlin. The industry must maintain its role as a global supplier of technological industry solutions, even in times of digital transformation.
How this can be achieved has now been analyzed in detail by a study commissioned by IG Metall from the IMU Institute. The study “Digital Transformation in Mechanical and Plant Engineering” provides comprehensive information on the status and strategies of digitization as well as their effects on the employees of the German mechanical engineering industry.
Claim sovereignty over customer relationships
It becomes clear that the challenges facing digital and mechanical engineering are enormous. They can be mastered – but more effort and intensive cooperation are needed. “It’s no longer just about providing the most innovative hardware solutions, but in times of platform economics and networked production, it’s important for mechanical engineering to assert its own sovereignty over customer relationships,” says Wolfgang Lemb. The example of the market with mobile phones shows how quickly it can happen that Internet companies and no longer hardware producers dictate the conditions of value creation. “This should not happen in machinery and plant engineering so far.Together with a strong representation of interests, the transformation process in the companies must be designed.”
Time for consistent action is now: At present, as the scientists show in their study, the German engineering industry is even fewer users, but more suppliers of digital products. On the user side, ie in the company’s own internal processes, a rather creeping implementation has been observed in recent years. Many small and medium-sized enterprises are currently only at the beginning of the digital transformation. However, digitization is now being pushed forward strategically by the larger companies that are often considered pioneers in digital transformation.
Set up strategically in the platform economy
The scientists conclude that the international competition for innovation leadership in digital solutions and platforms is crucial – but has not yet been decided. “The goal for mechanical engineering companies must therefore be to continue to control the direct customer interface and not to lose to providers outside the industry such as the well-known Internet giants or IT groups,” emphasizes Wolfgang Lemb. For this to succeed, the mechanical engineering industry urgently needs to strategically position itself in the platform economy.
From the point of view of the IG Metall and its works councils, a goal-oriented and investment-oriented industrial policy is necessary as the framework for a secure future for mechanical and plant engineering – because with the digital transformation, the study also reveals structural changes between different groups of employees as well as to qualitative changes in working conditions. “Under the premise of ‘growth through digital offers’, the balance sheet will be neutral to positive over the next few years.” In the medium to long term, machine and plant construction is more likely to lead to job losses due to rationalization effects Production as the indirect areas such as sales, administration or office could meet, “said Wolfgang Lemb.
Strong advocacy needed to shape change
For employees at all levels of qualification, solutions must therefore be found to deal with the structural change in the companies. This requires strong representation of interests and a high degree of unionisation in the companies, which help to shape digitization in the interests of the employees, demand forward-looking qualification and keep healthy working conditions in mind.
“A strong works council is an essential prerequisite for shaping digitization in the interests of the employees in the company,” said the trade unionist. But you need the necessary resources and know-how. This is not a matter of course, especially in the small works council committees of many medium-sized mechanical engineering companies. “For this reason, IG Metall is calling for the Federal Government to improve the possibilities for action of works councils in order to be able to negotiate with the employer at eye level via digitization in the workplace.”