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“DIGITAL SOLUTIONS ONLY MAKE SENSE IF THEY BENEFIT THE CUSTOMER OR COMPANIES”

An interview with Prof. Dr. Peter Philippi-Beck, Prof. Dr. Andreas Pufall, and Prof. Dr.-Ing. Heiner Smets, experts in the Steinbeis Competence Team at Technologieumsetzung – Unternehmensoptimierung K|T|U

Three Steinbeis Enterprises – one concept: providing companies with end-to-end solutions. This approach is particularly important to companies in times of all-encompassing digital transformation, as technologies and sectors of industry converge. But what does it entail in practice? To find out, TRANSFER spoke with Prof. Dr. Peter Philippi-Beck, Prof. Dr. Andreas Pufall, and Prof. Dr.-Ing. Heiner Smets, who pooled their expertise in 2016 to help companies spot technological trends and introduce new business models, products for the future, and manufacturing processes.

Hello Professor Philippi-Beck. In 2016, you joined forces with Professor Pufall and Professor Smets and founded the Steinbeis Competence Team for Technologieumsetzung – Unternehmensoptimierung K|T|U. What was your idea behind this?

Our idea at the time was to offer interdisciplinary services, so not just work up business or technological solutions for customers, but also comprehensive solutions. That’s still our approach today, and it’s an important one. We started out with a focus on production topics, but we’ve increasingly noticed that we need to include other competences in the knowledge network; the changes happening in industry are spreading out into other areas and shifting dynamically. Given these changes, a network like this also has to be set up to be dynamic. You only have to look at a topic like 3D printing – it’s not just about producing parts, which would probably not be possible (not with these levels of flexibility) with other processes. It’s more about looking at the overall value chain and, based on this, coming up with the smartest solution. This entails new competences in order processing, 3D-compatible engineering design, and embedding processes into existing development, production, and logistical structures. But you still have to maintain a focus on the competitiveness of companies and retain their business models using modern technology.

Turning to you, Professor Smets: You’re closely involved in the topic of business optimization. How do you make a distinction with this compared to corporate development? And what makes business optimization successful?

We deal with optimization on an operational level. So it’s about improving products and production by using new technology in such a way that it enhances the competitiveness of the company. That’s linked with an understanding of success factors and introducing efficient control mechanisms to this area. “Corporate development” goes further: It includes aspects like organizational development, organizational change, and management. Obviously, that also means you have to understand business models, and this forms a link to the business strategy, one part of which is business optimization.

Professor Pufall: Product development is one option offered by business development and it’s hugely important if a company wants to succeed, especially at SMEs. Which factors currently influence product development and which factors do you think will influence it in the future?

Today’s products are increasingly smart, networked, and sustainable. That poses three central challenges for SMEs when it comes to product development. First, it will be increasingly important to develop services as a product or as an associated part of a physical product. Lots of these product functions will be made possible by or provided through software. Typical examples of this are smartphone apps that can be sold to go with the actual products, or smart add-on services such as predictive maintenance and related web services. This raises complexity, and software development becomes an even more important aspect of product development. Larger firms are increasingly reacting to this with model-based and virtual product development, or agile and evolutionary procedural models. Despite this, SMEs often struggle to adapt the approaches they take in product development because they lack the specialist departments. They often work according to sequential procedural models, clearly defined development phases, and fixed requirement lists issued by marketing or sales departments. This is an inefficient way to do things if you need to develop software-driven products iteratively based on a new business model.

The second point is that modern product development is based on a holistic perspective and takes all factors into account across all phases of the product life cycle. The aim is to get all stakeholders to interact with one another and avoid a silo mentality. So successful startups dovetail customers and other industry players with the right expertise extremely closely into the development process in order to boost their potential to innovate. That said, established firms also increasingly involve production engineers, logistics experts, certification agencies, and external stakeholders such as customer service technicians or customers in systems design in order to optimize the product benefits for everyone involved. Products shouldn’t just be optimized in terms of functional performance, concentrating on specific disciplines while developing the details – they should also be improved for all of the product life cycle phases that follow product development. Products should be designed to be sustainable and suitable for production, maintenance, logistics, and recycling. Especially when it comes to sustainable product design, it’s important to understand all potential negative impacts of a product design, throughout the entire life cycle – as soon as possible, thinking about all disciplines. But SMEs often fail to understand the importance or the benefits of taking such a view, and they lack the expertise to conduct quantitative assessments.

And thirdly, modern product development and modern supply chain management will no longer take place among companies based on linear chains; they will increasingly be part of value creation networks. This will turn product development into a task that takes place across several different companies, on an increasingly interdisciplinary level, and specialists will be expected to work with others across different areas of expertise. This will place increasing emphasis on investments in intercompany project management, engineering based on end-to-end digital technology, and communication between all parties from different cultural backgrounds and time zones.

One factor of central importance is which parts of value creation the company takes on itself and which partners to work with.

One thing that is apparent overall is that for companies to prepare their product development for the future, they will have to regularly re-think and redevelop their procedures, processes, IT solutions, and organizational setups. This is where our team at C|T|B comes in by proactively helping SMEs design and optimize their development processes and lay the right emphasis according to the specific circumstances.

Successful companies create value by offering appealing products, efficient processes, and new business models, but it’s a bumpy journey getting there. Where do you see the biggest challenges for SMEs, and what does the Steinbeis Competence Team do to help companies with these challenges?

Andreas Pufall:

The biggest challenge for SMEs is addressing the opportunities presented by digital transformation to keep their processes and products competitive. But digital solutions only make sense if they benefit the customer or companies, and that’s precisely where the big challenge lies. For example there are still lots of firms with production processes dictated by a whole host of paper documents, with high stock volumes and bad synchronization between different departments. Under such circumstances, it would probably be counterproductive to network all of the different parts of production without thinking everything through or without looking into the benefits, even if there can be no denying that this would deliver benefit in the medium term.

Peter Philippi-Beck:

It’s more about working up relevant approaches toward innovation, and these require interdisciplinary expertise and methodical and systematic approaches.

It’s no longer a secret that many digital transformation projects at small and medium-sized companies were only successfully implemented because the right networks were in place. In a world of networks, companies are rarely in a position to adequately fulfill the needs of their customers by themselves. Our goal is to support companies with this complex process so they can successfully develop their business in keeping with defined objectives, based on the right technology.