Linked into the new decade
What can Europe as a business location offer?
Interview with Mathias Stach and Thomas Jaißle
Mathias Stach, Co-Founder and Speaker of the Management of ASCon Systems
Thomas Jaißle, Partner at Drees & Sommer
Change management and business transformation have accompanied Mathias Stach, who holds a degree in business administration, throughout his whole professional life. As early as the mid-1990s, he advised major customers (including Allianz, Daimler and BMW) for IBM Deutschland GmbH on how to simplify and optimize IT processes. Before Mathias Stach co-founded ASCon Systems GmbH in 2017, he held management positions at Audi in Ingolstadt and Mexico and as CIO at Volkswagen Argentina.
At Drees & Sommer, Thomas Jaißle is a bedrock. He joined the company in 1985, directly after studying civil engineering. On the contrary: The partner and managing director is responsible for the business segment Mobility Industries and argues against rigid ways of thinking. He is an expert for complex large-scale projects and multi-project management. His reference projects include the Porsche Museum in Stuttgart and the Terminal 3 of Fraport.
D&S: Mr. Stach, how will the corona virus affect digital business models and especially Industry 4.0? Will the pandemic lead to a rethinking of companies and to them focusing more on transformation?
Stach: We at ASCon are convinced that Corona will have serious social repercussions and that in many areas it will no longer be possible to return to the previously valid models. This is the first global pandemic we are experiencing and we expect that we are only at the beginning. It would be naive to believe that if Covid-19 is over, that‘s it for the next 20 years. What we are currently seeing in schools and universities, for example, is changes, digitalisation on prescription. It was difficult for many companies and public institutions to get something sensible on its feet during the crisis, but there has also been a surge in the use of technological solutions in many areas. If we now look at the world of our customers, especially in the manufacturing industry, we can already see massive considerations on how they can focus more on the topic of digitalization and, above all, on automation and autonomous systems. To believe that if Covid-19 is survived, that‘s it for the next 20 years, would be naive
D&S: Corona thus acts as an accelerator of change for society and industry. Mr Jaißle, can this also be applied to the construction and real estate industry?
Jaißle: There are definitely parallels. The past few weeks have had a kind of burning glass effect that has mercilessly exposed our deficits in digitization compared to other regions of the world. For example, we deal with data much less naturally than people in Asia, who are more open-minded and not immediately afraid to disclose anything. During Corona, we have seen how well digitization works – in operations and in collaborations. In videoconferencing, we all deal with each other in a very focused and disciplined manner. We learned this quickly because we had to learn it. I think this development is great because it further stimulates what we at Drees & Sommer have long been aiming to bring to the market in the construction and real estate industry. Keyword BIM, or Building Information Modeling. We in Germany are already lagging behind in a European comparison, because other nations are moving forward more vigorously. In some countries, construction companies are not even allowed to apply for public contracts if they cannot provide proof of digital expertise. The latest feedback from our customers now shows a greater openness. Even the often very encrusted construction industry has understood that we will not win a flower pot if we stay too much on the analogue side. Even the often very encrusted construction industry has understood that we will not win a flower pot if we stay too much on the analogue side.
D&S: Is there any chance of catching up with Asia and the USA in terms of digitisation issues? And in which areas do we have the greatest opportunities?
Stach: Wherever high technology is involved; it becomes difficult because we have lost a lot of ground. In everything that has to do with platforms or AI, the Americans and the Asians are years ahead of us. Is that the end of the line? Not necessarily. There are some hot spots where a lot of things happen. In Tübingen, for example, an AI cluster is developing. That’s good news. We have considerable future opportunities, especially in manufacturing within the framework of Industry 4.0. In mechanical engineering, plant engineering, aircraft construction or automotive engineering, the European and especially the German industry is the absolute benchmark.
D&S: Only in terms of technology or also in terms of implementation and procedures?
Stach: Both and. German industry is the benchmark in the areas of standardization and consistency across the entire supplier and production chain. Of course there is fierce competition and other countries have dramatically lower personnel costs, especially the Asian ones. But as soon as the degree of automation increases and you have to understand a lot about complex production processes, e.g. in automotive, tool or mechanical engineering, nobody can hold a candle to us in Germany. If our industry combines its expertise with intelligent production methods for automated and autonomous work, then we are competitive. But only then.
D&S: Mr. Jaißle, the Handelsblatt recently drew a comparison of the production costs of different industries in Germany and China, which revealed Asia is three quarters cheaper than us. Can automation compensate for this?
Jaißle: Industrial construction is an essential pillar of our economy. We have many world market leaders there. We have to see this further than our niche. For me, focusing on quality means decisively increasing the level of digitalization. This can only be achieved with a deep understanding of processes and new technologies.
Stach: Tesla is a good example in this respect. What hasn’t been written about Tesla in the past few years? There was talk about Breakthrough and Leading Edge. Technologically speaking, that’s true; when it comes to electric vehicle architecture, German automakers are years behind. But you have to be able to build the cars. Tesla has reached its limits in mass production. And how did they react? They brought in manufacturing specialists from Germany to get the ball rolling. It’s just there’s a big difference between producing a small series of 20,000 to 30,000 vehicles per year in manual production or a large series of 500,000 vehicles. That did not work. Germany has mastered this kind of thing. So we have to bring know-how on board where we have lost touch and otherwise we have to concentrate on our strengths. Our companies should not try to do everything themselves, but rather enter into smart cooperation’s. The times of monolithic suppliers who still try to get the vendor lock-in and take everything into their own product world are over.
D&S: Keyword smart cooperation’s: You are currently in the process of bringing together the core competencies of ASCon and Drees & Sommer and merging them with the client’s worlds by creating a so-called integral planning process. What is the idea behind this?
Stach: The world of ASCon is that of digital twins, virtualization, contextualization and data flow modeling. We really know our way around there. Drees & Sommer’s planning knowledge within the company makes us the perfect partner. Together, we want to get to the point where production, plant or building planning no longer involves intensive expenditure of time, costs and other resources as before. In these planning processes, we are confronted with similar problems again and again, regardless of the industry in which we are working. We store these recurring elements as reusable building blocks in libraries and use them in a virtual planning process. This has huge advantages because it not only saves time and money, but also increases agility and responsiveness – in planning, in the construction phase and in operation. The offer of assisted planning, as we call it, with all its product features, which are able to consider and map all the interrelationships of the production plant, the building and the environment, has not existed up to now. This is a truly disruptive approach.
D&S: What exactly is meant by assisted planning?
Stach: We are thus saying goodbye to the highly manual planning philosophy that has been common up to now. It is a first step towards autonomous planning and production.
Jaißle: It’s about thinking from the world of digital data. On the one hand, with the data that a production plant collects at each production step, on the other hand with the data of the physical shell, i.e. the building around the plant – and then to use both intelligently. At BIM we have a digitalized building design process. But building operation with its sensor technology is not yet included. Our approach enables an integrated factory planning as I imagine it, away from silo thinking, which suffers from a lack of coordinated planning. In this case, the ball is in the court of those who develop the product. Then come the production and plant planners, who consider how the production process should be. And only when this whole process has been going on for two years is the construction planning side added at some point. Assisted planning is capable of changing the entire process on the infrastructure side massively for the better. We don’t have to reinvent the wheel every time; we don’t need this conceptual skirmish. If I have all the people around the table immediately, I can get straight into the planning depth, pick up speed earlier and achieve a higher quality of discussion and level of detail.
Stach: Our product is unique because of its triad. At the end we have a product twin, a process twin and a building or plant twin. And this is linked to the context of the surrounding influencing factors.
D&S: Is there already a pilot project or an example of best practice?
Stach: We have implemented our first projects in the automotive industry. And before we started product planning, we determined the market requirements in discussions with our reference customers: The market is there – and it is gigantic, not only in Germany and Europe, but globally.
Jaißle: What we are doing is not an end in itself. It is a product that has standard modules but adapts to the respective application.
D&S: Are you afraid of encountering widespread resistance to change? In many companies “business as usual” has priority. Risk affinity is not widespread. This slows down the goal of bringing innovation quickly to market.
Stach: A lot is currently Playing into our Hands. The European industry is registering how fast and at what high quality level the Asian competition is moving. That doesn’t just mean China, but also South Korea or Taiwan, for example. If our industry does not move towards data-driven business models, it will lose touch. It has taken time, but this has now arrived. The logistics and automotive industries in particular are coming under pressure. However, the problem affects all industries. Not a single one is spared. There is no alternative to continuing as in the past.
Jaißle: The challenge will be to take the employees with us. The realization that something has to change has reached many companies. But this will not automatically lead to a dissolution of silo thinking and a greater emphasis on the platform concept. That is human, people are afraid for their jobs.
Stach: Absolutely right. But it is crucial: Increasing automation of planning and production processes does not mean that we no longer need people. That is not the message. The only thing that is changing is the role of employees, who will no longer have repetitive and dull jobs in factories, for example, some of which are associated with health effects. It gives us courage to see that more and more decision-makers in companies are determined to go down this path even against resistance. We will not be able to missionize all, but if we succeed in demonstrating the benefits within flagship projects with globally operating companies, small and medium-sized businesses will jump on the bandwagon. We want to address them with all the potential benefits and efficiency gains.
D&S: When we at Drees & Sommer thought about intelligent production, we always had smarter buildings in mind. You want to change the focus.
Jaißle: Yes, it’s a natural reflex of the construction industry to think of the building first and neglect the production plant in it. But only those who think both together achieve the optimum of positive effects: a leaner production process on less space with less energy consumption and better working environments. It is possible that in the course of this collaboration with ASCon, we at Drees & Sommer are sawing off the branch on which we have been sitting for decades. But we are gaining an entire forest.
Interview conducted by:
Götz Schönfeld, Senior Manager Business Transformation and Network Management
Kim Heselschwerdt, Consultant Business Transformation and Network Management
Drees & Sommer