Annual Report 2020

A digital

The year 2020 helped to drive forward digitalization at MAHLE and this extends far beyond the shop floor. Markus Bentele, Vice President Information Technology & Overall Responsibility Digitalization at MAHLE and Alexander Kutsch, Vice President Corporate MAHLE Production System & Factory Digitalization, explain where the focus lies now and how employees at MAHLE already embraced the transformation some time ago.

“Change starts with ourselves”

Mr. Bentele, as one of the decade’s top ten CIOs in Germany, Austria, and Switzerland, what is your vision for a digital MAHLE Group?

Markus Bentele:
A “digital MAHLE” combines the strength of a global group with the ability to adapt quickly. As a digital MAHLE Group, we are, on the one hand, not a start-up, but still a strong, global company that operates with maximum efficiency and excellent products in stable supply chains. On the other hand, we’re also a place where with innovative spirit, a willingness to take risks, and top know-how new ideas for the powertrain of tomorrow are generated in line with our Vision: “MAHLE We shape future mobility.” This requires digital, modular processes, data consistency and excellence, and the trickiest thing: a culture of transformation that’s always open.
The possibilities of artificial intelligence or big data extend far beyond the shop floor. Where else can these technologies help us?

I see it this way: In principle, modern technologies can be used to create real value for the employee and for the company in any task. Data analysis is already helping us to optimize purchasing volumes. We have a quality system that tracks down the sources of defects more quickly with the support of AI. Automated, data-driven processes relieve our colleagues in the Finance function of routine tasks. That’s why it’s not enough just to have a few digital experts on board. Everyone, at all levels of the business, must engage openly and actively with the new possibilities and they need to do it now. These technologies are not just helpful, they connect and optimize the efficiency of and collaboration between technology, employees, and processes at MAHLE. The future is already here.
What are the priorities of MAHLE’s digitalization drive?

We’ve set clear priorities. First, we’re investing in technologies and know-how to accelerate our CO2 reduction and environmental protection efforts. What we’re talking about here is IIoT-driven energy management systems and scrap reduction platforms. A second focus is on digital process automation in our plants, but also importantly in our indirect service areas. This encompasses everything from the swarm-based, AI-supported supply of materials on the assembly line through to automated export certificates.
What is the current situation at MAHLE, and what are the next steps?

For several years now, we have been using pilot applications to build up the understanding and expertise needed to initiate corresponding efficiency gains through to global rollouts, which are now leading to further initiatives and being implemented in phases. This is done in close cooperation with all relevant departments. Digitalization can never be carried out in isolation, highlighting the importance of our motto One MAHLE—One Team. So, working in different teams, we take on dozens of use cases with positive business cases every year. Small experiments can fail, but not big rollouts—after all, we’re talking about major investments. That’s why we’ve incorporated all of this into a step-by-step approach. With each quick little step, we learn what works—or what doesn’t—and can thus respond in the right way for MAHLE. We don’t just talk about agility, we’re also increasingly learning how to be agile and putting this into practice.
Digitalization scares initially a lot of people. How are you getting the entire MAHLE team on board?

We’re well aware that many of the innovations we’re driving forward also have the potential to cause conflict. It’s something we take seriously. After all, it’s the employees who make the company’s success possible. There are many different aspects to “getting people on board.” For one person, it’s anxiety about losing their job, for the next, it’s fear of a new tool, and the third person doesn’t understand what added value the digital possibilities can bring to their everyday work. These are just a few examples. We’re therefore taking a broad approach with a clear communication strategy, a new program for advanced training, and, for example, by firmly embedding digitalization in management development. But we also see the personal motivation of the employees as a key source of leverage. Change always starts with ourselves. But that’s exactly where our strength lies—with a clear message: Let’s tackle the digital future together! Let’s build the digital MAHLE that will shape at least 100 more years.
We don’t want isolated pockets of digitalization with a few lighthouse projects but rather a transformation along the entire value chain.
Alexander Kutsch,
Vice President Corporate MAHLE Production System & Factory Digitalization

Team challenge

How is the digital transformation progressing at MAHLE specifically? One thing is clear: The focus of the transformation is on added value for the customer, the company, and its employees. In exciting projects, teams at MAHLE demonstrate that they are already shaping developments.

If you imagine the digitalization process as a long expedition, then we are about to embark on the critical stages. There are three reasons to continue. First, it is too late to turn back. Second, we are now on a steep ascent. Third, no one is traveling alone. Customers, suppliers, companies, and their employees—everyone is on this journey together. The aim of this expedition is to create a highly efficient and highly flexible company—a “digital” company. MAHLE shows how this works as a global supplier group.

“When we talk about this expedition, we’re referring to a complex task,” explains Alexander Kutsch, Vice President Corporate MAHLE Production System & Factory Digitalization. His objective is to transform MAHLE’s about 160 production locations in such a way that the end result is an overarching, unified system. “We don’t want isolated pockets of digitalization with a few lighthouse projects but rather a transformation along the entire value chain.”

This is not being done at MAHLE simply for the sake of it. “We have our customers and their own specific requirements clearly and firmly in mind,” says Alexander Kutsch. More specifically, “If digital solutions can improve the quality, reliability, or sustainability of our products, we will use them.”

However, the digitalization process will only succeed if the employees also recognize how they stand to benefit from the innovations. “To achieve this, we need to breathe life into the major future technologies like artificial intelligence or the Industrial Internet of Things (IIoT),” says Alexander Kutsch. All the projects aim to design the human-machine interfaces in such a way that employees are relieved of routine work and thus discover new creative freedom. It’s not about replacing people but rather empowering them.

The following projects highlight areas where Markus Bentele and Alexander Kutsch believe this digital transformation has been particularly successful within the company.

Already in motion

Automated invoices

Clearing goods through customs is one of the most time-consuming and monotonous tasks performed by our locations in Mexico. It involves processing numerous invoices for customs agencies. Since 2019, these entries have been taken on by a “bot”—an automated program that carries out standard tasks independently, saving time so that the employees can focus on more meaningful tasks. This is one example of around 50 projects that the Digital Automation Office’s international team has initiated in the MAHLE Group. Whether in our plants, in the Purchasing or Finance functions, or within our IT structures, the goal is always to save time and resources, analyze business activities, and identify new opportunities.

Intelligent guided vehicles

Vehicles that not only drive autonomously in the production halls with the help of AI but also communicate with one another are no longer simply a sci-fi fantasy. The result is an intelligent swarm in our material warehouses. The “coordination” between the machines increases flexibility and productivity in logistics and delivery processes—and saves costs. These vehicles have already been successfully introduced at the Neustadt and Schorndorf locations in Germany. As lighthouse projects, they will drive rollouts in additional plants and warehouses throughout the MAHLE world.

AI hackathons

MAHLE’s digital experts predict that many jobs in the Group will soon be supported by systems incorporating artificial intelligence (AI). These tools are still unfamiliar territory for many employees, which leads to questions: How do these systems benefit us? And, how safe are they? At regular hackathons, real-world challenges are solved using AI by means of rapid prototyping within a defined time. This is how employees are learning how AI solutions can help to create real value from data. By preventing breakdowns, aiding decision-making, or inspiring new business models—to name just a few examples.

Energy management system

If you want to save energy, you need to know how much you are consuming and where efficiencies can be made. The MAHLE plant in Montblanc/Spain uses a system based on the Industrial Internet of Things (IIoT) to analyze this information: Machines communicate their energy and production data to software that then analyzes, compares, and evaluates it. This produces a detailed analysis of the current efficiency status of an entire production line. The team members save time because they don’t need to collect the data themselves. Instead, they can focus their efforts on running simulations to identify where further increases in energy efficiency can be made. Furthermore, they can use it to measure the effectiveness of planned energy measures. This not only saves money, but also conserves resources. Digital technology is thus becoming a key tool in helping MAHLE to achieve its climate target and become carbon-neutral by 2040.

Predictive maintenance

When it comes to machinery, serious defects do not appear out of nowhere. In numerous cases, their presence is signaled by anomalies. These can be measured—and a MAHLE team at the location in Hwasung/South Korea is using this information to detect damage before it occurs. The employees use sensors to continuously measure machine vibrations. The data feeds into software that sounds the alarm as soon as irregularities appear. At MAHLE’s plants in Hwasung and Ulsan, 40 machines have been connected to the system since mid-2019. Since then, several sudden machine breakdowns have been prevented.

Preventing waste using machine learning

For many years, MAHLE has been working to produce aluminum tubes as efficiently as possible and with minimal impact on resources at its location in Durban/South Africa. Once a certain point was reached, however, it was almost impossible to make further optimizations—until the teams on site discovered machine learning (ML). Their approach begins with the collection of data by networked machinery. This data helps the interdisciplinary team to spot anomalies in the production process, which can then be gradually eliminated. This has resulted in 30 percent less waste, increased productivity, fewer breakdowns, higher quality, and a closer look at the production processes.

Additive manufacturing

Can you imagine a machine that produces pistons one day and heat exchangers for inductive charging systems the next? It’s possible thanks to additive manufacturing. For this new method of piston production, the development team uses a technology called laser powder bed fusion, which layers metal in powder form and uses a laser to melt it into a solid component. The laser is controlled by a system that has previously been fed with a digital model of the component. This means that it is also possible to manufacture small quantities of components that have been individually designed for customers. The production process itself is automated, the system reports when a physical component has been created from the data and high-tech powder.

Digital sprints

So-called PPI sprints involve around ten team members from all areas of the business meeting in one plant to work with participants from the plant on the optimization of production processes. During the COVID-19 pandemic, the teams have been carrying out digital sprints. The live videos from the production facility not only convey the feeling of being at the heart of the action, but also allow the ideas developed together to be implemented directly on the equipment and the result to be evaluated immediately.