German Manufacturing Industry Research Articles

Diffusion of AI value-driven services in the German manufacturing industries—an empirical examination of value-driven service references classified by the business Model Canvas

Diffusion of AI value-driven services in the German manufacturing industries—an empirical examination of value-driven service references classified by the business Model Canvas

Energy Tax Exemptions and Industrial Production

Abstract This paper investigates the impact of a large electricity tax exemption on production levels, employment and input choices in the German manufacturing industry. For two policy designs, we show that exempted plants increase their electricity use. This effect is larger under a notched exemption policy, where passing an eligibility threshold yields infra-marginal benefits, compared to a policy without such benefits. We detect no significant impact of the exemptions on production levels, export shares and employment. Using counterfactual simulations, we document that notched policies substantially distort firms’ production input choices when financial stakes are high and compliance costs are low.

Evaluating the Ranking of Performance Variables in Flexible Manufacturing System through the Best-Worst Method

Flexible Manufacturing Systems (FMSs) provide a competitive edge in the ever-evolving manufacturing landscape, offering the agility to swiftly adapt to changing customer demands and product lifecycles. Nevertheless, the complex and interconnected nature of FMSs presents a distinct challenge: the evaluation and prioritization of performance variables. This study clarifies a conspicuous research gap by introducing a pioneering approach to evaluating and ranking FMS performance variables. The Best-Worst Method (BWM), a multicriteria decision-making (MCDM) approach, is employed to tackle this challenge. Notably, the BWM excels at resolving intricate issues with limited pairwise comparisons, making it an innovative tool in this context. To implement the BWM, a comprehensive survey of FMS experts from the German manufacturing industry was conducted. The survey, which contained 34 key performance variables identified through an exhaustive literature review and bibliometric analysis, invited experts to assess the variables by comparing the best and worst in terms of their significance to overall FMS performance. The outcomes of the BWM analysis not only offer insights into the factors affecting FMS performance but, more importantly, convey a nuanced ranking of these factors. The findings reveal a distinct hierarchy: the “Quality (Q)” factor emerges as the most critical, followed by “Productivity (P)” and “Flexibility (F)”. In terms of contributions, this study pioneers a novel and comprehensive approach to evaluating and ranking FMS performance variables. It bridges an evident research gap and contributes to the existing literature by offering practical insights that can guide manufacturing companies in identifying and prioritizing the most crucial performance variables for enhancing their FMS competitiveness. Our research acknowledges the potential introduction of biases through expert opinion, delineating the need for further exploration and comparative analyses in diverse industrial contexts. The outcomes of this study bear the potential for cross-industry applicability, laying the groundwork for future investigations in the domain of performance evaluation in manufacturing systems.

Hyperautomation as a vital optimization tool in organizations: cognitive approach with the use of Euler circles

Purpose Hyperautomation is a technological concept whose popularity has been growing continuously since the German manufacturing industry “initiated” the Fourth Industrial Revolution (Industry 4.0), whereas, on the basis of theory, hyperautomation is a term still new and little recognized. This applies equally to scientific studies (articles, conference reports) and empirical studies (quantitative, qualitative). Therefore, this article attempts to fill definition gap that exists in the literature on management and quality sciences on the term hyperautomation.Design/methodology/approach The authors use literature review approach to identify the gaps in the existing literature on hyperautomation. They present a nominal definition of hyperautomation, discuss related issues and provide a comparative perspective between hyperautomation and automation.Findings The article’s findings include a precise definition of hyperautomation and the problems it raises. The authors point out that the term “hyperautomation” is still relatively new and underutilized in the management and quality sciences literature. It also compares hyperautomation to automation from several angles and emphasizes how it affects businesses, industries and other economic sectors.Practical implications Authors emphasize that in order to deploy hyperautomation successfully, enterprises must take a distributed and integrated approach.Originality/value This article addresses a gap in the management and quality sciences literature about the definition of hyperautomation. Authors give a thorough explanation of hyperautomation, along with relevant problems, useful implications and a comparison between hyperautomation versus automation.

Reasons for Germany's Economic Success in Recent Years

In this paper, I mainly talk about the changes of the German economy in recent years, and I will write about the changes of the German economy from four different perspectives, I think these four aspects will have a greater impact on the German economy. The first is the German manufacturing industry, we all know that the German manufacturing industry is a major source of the German economy, but due to some changes in recent years, will it have an impact on the German manufacturing industry? The next question is whether inflation in Germany will have a small impact on the national economy. In addition, I want to talk about the employment problem of Germany. As a developed country, will the epidemic, war and other factors affect the employment rate of Germany? Finally, I will talk about Germany's fiscal policy, and I will describe some of the policy improvements and changes made by the German government.

Small- and Medium-Sized Companies Tackling the Digital Transformation of Supply Chain Processes: Insights From a Multiple Case Study in the German Manufacturing Industry

Current research lacks in-depth insights into the digital transformation management of supply chain (SC) processes in small- and medium-sized enterprises (SMEs) from an intrafirm level perspective. Therefore, the aim of this article is to investigate how SMEs strategically and organizationally manage the digital transformation of SC processes to ascertain the reasons for the low penetration of digitally transformed SC processes. To address the challenges arising from digital transformation, we conduct a multiple case study with 15 highly knowledgeable stakeholders from seven companies within the German manufacturing industry using semistructured interviews. Our findings are varied and indicate that explicitly formulated digital SC strategies are absent in SMEs, but companies use three different approaches to digitally transform their SC processes. Accordingly, the article reveals how these approaches are organizationally implemented and explains the barriers impeding further digital SC process transformation in SMEs, such as insufficient attention by upper management, uncoordinated initiatives due to uncertainty, and inadequate operational capabilities. In addition, the article confirms the link between the creation of transparency and organizational structure. Consequently, this article is one of the first to enhance the knowledge of digital process transformation by examining the existing core transformation principles of SMEs, developing a bottom-up implementation model, holistically analyzing barriers, and necessary prerequisites to the digital transformation of SC processes, providing in-depth managerial implications, and laying the foundation for further research endeavors.

Who is Replaced by Robots? Robotization and the Risk of Unemployment for Different Types of Workers

We study the effects of robotization on unemployment risk for different types of workers. We examine the extent to which robotization increases inequality at the skill level and at the occupational level using two theoretical frameworks: skill-biased technological change and task-biased technological change. Empirically, we combine worker-level data with information on actual investments in industrial robots. Zooming in on the German manufacturing industry, our multivariate results show that robotization affects different types of workers differently. We do not observe an increase in unemployment risk for low- and medium-skilled, but we find a considerably lower unemployment risk among high-skilled workers. Moreover, the unemployment risk is significantly higher in occupations with highly substitutable tasks, but only in industries that invest largely in robots.

An integrated conceptual framework for analysing heterogeneous configurations of absorptive capacity in manufacturing firms with the DUI innovation mode

Scholars of different disciplines widely agree that firms follow heterogeneous innovation patterns, meaning that different types of knowledge are relevant for their innovation activities. Given this fact, it is reasonable to assume that firms are also characterised by heterogeneous absorptive capacity patterns that fit their innovation behaviour. However, existing research, which mainly focuses on absorptive capacity in terms of formalised R&D and technology-based innovation, neglects both: other modes of knowledge absorption and the potential heterogeneity of firms' absorptive capacity in the context of different innovation patterns. The main objective of this paper is to develop a conceptual framework that enables the analysis of the heterogeneity in manufacturing firms' absorptive capacity configurations, particularly for innovation patterns based on the Doing, Using and Interacting (DUI) mode of innovation. To reach this goal, we introduce and integrate different constitutive elements on the individual and organisational level and process dimensions of absorptive capacity taken from previous literature. We illustrate and apply the proposed framework using the example of three case studies with companies from the German manufacturing industry, each of which follows a distinct DUI-based innovation pattern. Our empirical findings provide support for the heterogeneity assumption and allow the differences in the configurations of absorptive capacity to be linked to the firm's dominant innovation pattern. Thus, by showing its potential to capture the heterogeneity of absorptive capacity in an empirical analysis, our framework can serve as a comprehensive basis for a more differentiated understanding of absorptive capacity and its improved measurement.

Augmenting Industrial Control Rooms with Multimodal Collaborative Interaction Techniques

The German manufacturing industry has been carrying out new developments towards the next industrial revolution, focusing on smart manufacturing environments. Our work emphasizes human-centered control rooms in the context of production plants. Increased automation does not have to come with less human control. Therefore, we report on multimodal collaborative interaction techniques to augment industrial control rooms. In particular, we include mobile workers who use the control room while being in the production hall using tablets or specifically mixed reality glasses. Collaborative annotation dashboards support discussions and a shared understanding among analysts. Manufacturing-related data can be integrated into business analytics environments so that holistic analyses can be performed. Multimodal interaction techniques can support effective interaction with the control room based on the users’ preferences. Immersive experience through mixed reality-based three-dimensional visualizations and interaction possibilities support users in obtaining a clear understanding of the underlying data.

The wage effects of offshoring to the East and West: evidence from the German labor market

This paper analyzes the labor market effects of offshoring in a high-wage home country and how these effects crucially depend on (1) Job complexity and (2) The characteristics of the destination country. It thereby links several sources: rich administrative data on individuals and plants in the German manufacturing industries, information on a job's task bundle, and the evolution of imported inputs from low- or high-wage destinations, which are represented by Eastern and Western Europe, respectively. Offshoring to these origins has opposing effects on German wages with respect to the relative task complexity of jobs: While offshoring to the West puts pressure on the wages of complex jobs and increases the wages of simple jobs, offshoring to the East entails the opposite effect. The overall effect adds up to a 4.2 percent increase in wages for jobs with high complexity, while low-complexity jobs see a 3.9 percent decrease in wages.

Ten Years of Industrie 4.0

A decade after its introduction, Industrie 4.0 has been established globally as the dominant paradigm for the digital transformation of the manufacturing industry. Amalgamating research-based results and practical experience from the German industry, this contribution reviews the progress made in implementing Industrie 4.0 and identifies future fields of action from a technological and application-oriented perspective. Putting the human in the center, Industrie 4.0 is the basis for data-based value creation, innovative business models, and agile forms of organization. Today, in the German manufacturing industry, the Internet of Things and cyber–physical production systems are a reality in newly built factories, and the connectivity of machinery has been significantly increased in existing factories. Now, the trends of industrial AI, edge computing up to the edge cloud, 5G in the factory, team robotics, autonomous intralogistics systems, and trustworthy data infrastructures must be leveraged to strengthen resilience, sovereignty, semantic interoperability, and sustainability. This enables the creation of digital innovation ecosystems that ensure long-term adaptability in a volatile economic and geopolitical environment. In sum, this review represents a comprehensive assessment of the status quo and identifies what is needed in the future to reap the rewards of the groundwork done in the first ten years of Industrie 4.0.

Robustness of production systems: Evidence from the German manufacturing industry

Robustness of production systems is a popular research topic that comes in many facets. However, apart from a few case studies, not much is known about what robustness actually means in practice. Therefore, this study analyzes how practitioners deal with robustness. The data is based on a fairly representative survey of the German manufacturing industry. Amongst others, it is shown what practitioners understand by robustness, how they assess it, and which measures they consider as suitable to improve it. The results not only allow practitioners to compare their own status with industry’s best practices, but also suggest further researcher areas.

Markups and Concentration in the Context of Digitization: Evidence from German Manufacturing Industries

Abstract Recent empirical studies suggest that there is a rising trend of market power across sectors in advanced economies. We contribute to this line of research by providing industry-specific evidence for German manufacturing industries, based on representative high-quality firm-level data from official statistics that cover firms from all size classes with more than 20 employees (2005–2013). We compare firm-specific markups and industry concentration as market power indicators that reflect a market structure and a performance perspective, respectively. Our results do not suggest an overall average increase in market power in German manufacturing, but increasing markups and an increasing concentration in many industries. We demonstrate the complementarity of the indicators, as predicted by industrial organization theory. We also evaluate the competitive impact of digitization and find no clear evidence that digital transformation and market power go hand in hand.

The biological transformation of industrial manufacturing – Technologies, status and scenarios for a sustainable future of the German manufacturing industry

The German manufacturing industry is forced to evolve its processes, techniques, and organizations due to increasing global competition and progressive sustainability requirements. In this context, the soaring possibilities of bio- and information technology have recently let few authors develop the vision of a biological transformation of manufacturing, a concept that to date has been barely concrete to politicians, scientists, and managers. In this paper, we present results of the first systematic assessment of the biological transformation of the German manufacturing industry. We chose a combination of the Delphi method and scenario planning in order to assess key technologies, determine the status quo of Germany and provide a forecast of potential developments. Thereupon, we identify ten fields of action for setting the course for a sustainable industrial value creation. We conclude with a summary and recommendations for decision makers in politics, industries and research.

Lessons learned from Industry 4.0 implementation in the German manufacturing industry

PurposeIndustry 4.0 is assumed to yield extensive industry-spanning opportunities. However, exploiting these opportunities requires a targeted implementation of Industry 4.0. The purpose of this paper is to generate a deeper understanding of relevant implementation action. Existing recommendations are mostly general, highly aggregated and difficult to grasp. Yet, specific and concrete actions that need to be taken to accelerate the realization of Industry 4.0 are essential.Design/methodology/approachThe article uses 13 semi-structured in-depth expert interviews as the source of empirical data. The interviews were conducted with managers from Industry 4.0-experienced German manufacturing companies. All interviews are analyzed using qualitative content analysis.FindingsThe study reveals relevant and targeted aspects for Industry 4.0 implementation: the development of Industry 4.0-specific know-how, securing financial resources, integrating employees into the implementation process and establishing an open-minded and flexible corporate culture. Further aspects include comprehensive planning processes, cooperation with external partners, proper handling of data interfaces, interdisciplinary communication, an adaptable organizational structure and data security.Research limitations/implicationsThe paper is limited to German manufacturing enterprises and should be transferred to other industries and countries.Practical implicationsThe study supports managers to effectively implement Industry 4.0 within their organizations and consequently benefit from Industry 4.0 and derives recommendations for future research.Originality/valueThe paper is among the first to give specific and concrete examples for lessons learned from Industry 4.0 implementation, directly obtained from industrial application.

Knowledge, Skills, Craft? The Skilled Worker in West German Industry and the Resilience of Vocational Training, 1970–2000

Abstract The spread of computer technology in West German industry during the 1980s and 1990s dramatically changed the demand for skilled and unskilled work in manufacturing. As a result the knowledge used in production was redefined and reformers pushed for radical reform in vocational and general education. In these decades a corporate agreement across trade unions, associations of employers and state bureaucracy brought about a series of adaptive reforms of existing apprenticeships and the creation of new apprenticeships in new branches. This survival of the dual system is analysed as part of the strategies of modernizing West German manufacturing industries. Both employers and trade unions defended the central role of skilled workers in the new system of flexible quality production that developed during this period of rapid technological change. Data from the Socio-Economic Panel and from other sources enable analysis of the social effects of this economically successful strategy. They show the large-scale use of skilled workers in industrial production and their opportunities for upward mobility and additional qualifications. At the same time unskilled workers, and unskilled migrant workers in particular, experienced greater risks of unemployment and increased job uncertainty.

Opportunities and directions for digital economy development in Russia and blocking factors of its development

The paper shows the importance of the 4th Industrial Revolution and its product — the digital economy — in the development of mankind, its dual impact on the welfare and labor market of a specific people, the country, as well as the world community as a whole. The author examines the consequences of introduction of artificial intelligence, cyberphysical systems in production processes. Also, the paper analyzes the German program “Industry 4.0” shifting a German manufacturing industry on a digital basis through the use of digital technologies and setting up smart factories. The author summarizes the digital programs of the USA, Great Britain, Japan. The possibilities and problems of development and blocking of digital economy in Russia are shown. The author describes such basic components of the digital economy as blockchain, cyberphysical systems, digitalization, big data, artificial intelligence. He considers adverse consequences of the digital economy, factors blocking its development, as well as possible ways of their neutralization and elimination.

Benchmarking Holistic Optimization Potentials in the manufacturing Industry – A Concept to Derive Specific Sustainability Recommendations for Companies

A decoupling of resource use and productivity increase is essential for a transition to sustainable production. However, most companies are not able to assess to what extent they can improve their production sites. In order to facilitate sustainable manufacturing within companies, the holistic vision of an Ultra-Efficiency Factory was defined by the five fields of action material, energy, emissions, human/staff and organization. As of yet, missing guidelines for comparing the sustainability performance of companies impede the identification of critical aspects and potential improvements. Even sustainability reports of companies are rarely comparable due to different scopes and references of published KPIs. This paper thus presents the development of a sector-specific benchmark using the Ultra-Efficiency framework. The selected indicators are partially recommended by GRI and other reporting standards. In order to cover all five fields of action, the indicator set is extended with further relevant KPIs. The developed benchmarking framework is supposed to enable a comparison of companies within the industry sectors food processing, automotive, mechanical engineering and electronics. As a result, critical fields of action as well as recommendations for improvement are identified. The development of the described benchmark is comprised of the initial formulation of the concept, its validation in four companies, the identification of specific recommendations and its adaption according to the company feedbacks (e.g. applicability, suitability, data availability). The validated concept will be spread widely via different media and thus may serve as the new standard for future holistic optimization in the German manufacturing industry.

The Biological Transformation of Industrial Manufacturing-Future Fields of Action in Bioinspired and Bio-based Production Technologies and Organization

A more efficient use of natural resources is a main task for modern societies. It would both relieve our ecosystem and counteract societal challenges such as emerging resource conflicts. In order to keep up our wealth and well-being, new forms of value creation are needed. They will arise with the biological transformation of value creation, an approach that was systematically analyzed for the German manufacturing industry within the BIOTRAIN project for the first time. Based on a Delphi approach, 123 high-ranking experts were interviewed and workshops with more than 200 participants were conducted. In this paper, we outline potential fields of action for research and development. Thereby, we distinguish between three major domains: [1] optimization solutions, based on bioinspired algorithms (e.g. evolutionary algorithms, swarm intelligence), which mainly affect product flows and production organization, [2] the shift of exhausting, fossil to additive, bio-based manufacturing technologies as well as [3] the development of biointelligent manufacturing cells, which will lead to a completely new form of value creation. The results presented here are the base for a comprehensive transformation program planned by the German government.

Industry 4.0 in Germany - The Obstacles Regarding Smart Production in the Manufacturing Industry

The digital transformation in the manufacturing industry is referred to as Industry 4.0. The concept includes real-time data transfer and networking along the entire value chain and, with this, vertical and horizontal integration as well as end-to-end engineering through cyber-physical systems, sensors, actuators and human-machine interfaces. Seven years after its inception however, Industry 4.0 technologies have thus far been predominantly limited to certain test applications and pilot projects. In light of this, the present study aims to provide a detailed insight into the concept of Industry 4.0 and highlight the main obstacles that hinder its implementation. The study also seeks to answer the question of whether the concept of Industry 4.0 will ever be implemented to its full capacity in the German manufacturing industry. The research design of the present study is divided into a theoretical and empirical investigation. The theoretical part is based on extensive literature research and aims to provide the reader with an introduction to the technical characteristics and requirements of Industry 4.0, and in particular to highlight as many aspects as possible that hampers the implementation in Germany. The following empirical part is based on the analysis of expert interviews. For the investigation n=13 experts were selected based on their reputation and experience in the field of Industry 4.0 technologies. In order to supplement the theoretical results with practical experience, the experts were chosen from industrial associations as well as, in particular, from those occupying leading positions in the manufacturing industry and IT-consulting. The empirical part therefore will focus to identify the main inhibitory factors to implementing Industry 4.0, that are referred to as 'obstacles' in the course of this thesis. The findings of the present study indicate that, principally, two major obstacles hinder the implementation of Industry 4.0. The first major obstacle relates to the high complexity of the concept, a result of the interacting consequences of a lack of standards and interoperability, of security and legal aspects, as well as the lack of employees suitably qualified in the field of informatics. The other major obstacle concerns psychological reservations, which arise from a reluctance to open up company boundaries for the associated real-time data transfer along the entire value chain. The findings further indicate however, that despite these major obstacles, the German manufacturing industry still has a reasonable chance of succeeding with Industry 4.0 implementation over the long term.