An interview with Steinbeis Entrepreneur Professor Dr.-Ing. Herbert Emmerich
Reconciling production and organizational demands – while still maintaining a strategic view of the future, despite day-to-day priorities – sounds like an oversimplification of what is a highly complex challenge for SMEs. For over 20 years, Professor Dr.-Ing. Herbert Emmerich has been investing a great deal of personal passion in this area. Emmerich lectures at Pforzheim University for the mechanical engineering, production technology, and production management degree program. He puts his expertise to practical use at his Steinbeis Transfer Center for Production and Organization. The success of his work is also reflected in his twice winning the Steinbeis Foundation Transfer Award – the Löhn Award, in 2010 and 2019. Emmerich talked to TRANSFER magazine about the current challenges faced by SMEs and his approaches to solving those challenges.
Long-term competitiveness and profitability
Hello Professor Emmerich. You’ve been a member of the Steinbeis Network for more than two decades, working in the fields of production and organization. How have technological developments changed everyday business during this time, especially for SMEs?
Technological developments have brought about sweeping changes in everyday life for companies over the past 20 years, in a number of ways. In industrial production, they’ve led to significant improvements in performance and productivity, such as in machining technology, laser technology, and the use of new and optimized materials. In addition to those classic areas, however, there have also been advancements in innovative, highly efficient processes, from the pilot phase to serial production, and those processes are now standard procedure. Examples of this include additive manufacturing, metal foam production, or end-to-end process chains that allow product data to be automatically converted into process data; that’s a reference to CAD/CAM. A decisive element of this success was the ongoing development of CAX technology and its targeted application. But just like ERP systems, developments in IT and software solutions have also been extremely rapid. Their introduction has been instrumental in mastering and significantly accelerating business processes, which have become increasingly complex.
The global situation at the moment – with climate change, armed conflict, supply chain problems, and energy shortages – poses new challenges for industrial production. What solutions can SMEs use to deal with these challenges in the short term?
Drastic changes in energy prices caused by the armed conflict in Ukraine, along with supply chain problems, have literally caught lots of companies unawares. Of course we need to do more to develop and use resource-efficient technology and processes, and exploit every opportunity to make savings. But depending on the field of business and the size of the company, there’s only a limited extent to which you can come up with tangible measures that offer a high level of utility, and do it quickly. So it’s important to scrutinize every process and procedure involved in day-to-day operations, as part of a longer-term strategy, and to check processes for efficiency. To do that, you need data transparency in areas like productivity, delivery times, costs, and quality, but also when it comes to the measures it takes to achieve targets. You need to quickly identify and activate the levers that impact the competitiveness of the business. That’s the only way to establish a basis for further, medium-term steps with a bearing on technological and organizational factors.
Of course this is not just about technology – to remain successful, organizational procedures also need to be continuously moved forward within the company. What kind of organizational problems do companies face at the moment?
Lots of SMEs are well poised in technological terms, but they’ve failed to adapt the organization to sales growth. The weak points in production processes and immediate areas of value creation are often still the smaller, albeit easily identified problems. Often, what’s more worrying are the inadequate, interrupted, and inconsistent data structures, or the quality of master data. This results in a lack of transparency in overall workflows and unnecessary frictional losses within the everyday frontline business, in all affected departments. The areas where that immediately jumps out at you are production control, long lead times, high inventories, backlogs, delays, material shortfalls on processed orders, and “rampant” costs due to poor efficiency. Although many companies could have the fundamentals in place, starting with an ERP system, they often lack transparent management tools with early warning systems, and unfortunately they sometimes also a lack the will to question things and deviate from the well-trodden path.
What solutions does your Steinbeis Enterprise offer for dealing with this?
One area we still place strong emphasis on is our range of services for planning and developing individually matched, innovative automation solutions for use in manufacturing and assembly. This is because a firm can’t differentiate itself from competitors by purchasing “standard technology.” It’s extremely advantageous for efficient manufacturing if products are designed to be compatible with production and assembly. This is an area we have a great deal of experience in, and this is incorporated into planning.
But we also offer services for securing and improving the short-term profitability of companies. Measures always dovetail with a clearly defined, longer-term strategy. In detailed terms this is mainly about topics like optimization and workflow resilience, introducing leadership and visualization tools, and lean management methods. That said, our offering and projects also include new plans for entire production units, and even factory planning and material flow planning.
One important and particularly interesting service we offer SMEs is advice on submitting applications for funding projects and scientific support during implementation. We’ve succeeded in doing a lot to the benefit of our customers in this area in recent years. They often lack capacities, or have no real overview of the important individual funding opportunities and supported topics.
If you look back at the large number of successful projects you’ve worked on, which ones were particularly challenging for SMEs, and for you, and what difficulties do you currently face?
The challenges we face were and still are the challenges faced by our customers. In the past, there was more emphasis on mastering technical processes within the comparatively unyielding relationship between the customer and the supplier. The globalization of recent years has triggered a general uncoupling of economic thinking and business management. The shift abroad that goes with that – in development and production – requires huge financial and organizational outlays, and coping with this means companies have to achieve a certain critical size, also in personnel terms.
We’re observing a sometimes dramatic reduction in project times and the implementation schedules expected by customers. This requires rapid and extremely accurate processes in product and process development, based on the latest technologies. And that’s only referring to the topics of transformation and digitalization.
One of the big challenges in this regard is getting people to feel enthusiastic and willing to work for fast-moving SMEs, especially young people. It’s quite common to find that there are not enough skilled workers, and this is becoming a major stumbling block for the ongoing development of companies. So you can’t overestimate the value of offering your own training schemes and putting on courses for staff.
I also wouldn’t want to conceal the fact that SMEs are suffering particularly badly from the increasing amount of bureaucracy. It’s important for small and medium-sized enterprises that they can count on business conditions and sensible SME support, especially in areas offering future potential, and this is important for them to be able to develop innovation capabilities and competitiveness.
Contact
Prof. Dr.-Ing. Herbert Emmerich (interviewee)
Steinbeis Entrepreneur
Steinbeis Transfer Center Production and Organization (Pforzheim)
223074-33