Digitalization and Automation are the Bridges to Sustainability
Despite the risks and uncertainties of war, the energy crisis and disrupted supply chains, the automation industry can look back on two good years.
Christian Wolf, Managing Director of Turck, and Bernd Wieseler, Product Manager for the RFID segment at Turck, discuss the boom in automation technology, the path to sustainability and the challenges that the digital transformation poses for large companies and SMEs in an interview with Anja Van Bocxlaer, Editor-in-Chief and Owner of the Think WIOT Group.
Christian Wolf is managing director of the Hans Turck GmbH & Co. KG and Turck Holding GmbH.
Bernd Wieseler is Director Product Management RFID Systems at Hans Turck GmbH & Co. KG.
1. Mr. Wolf, what challenges did Turck have to overcome in the past three years of crisis?
Wolf: The past three years have definitely been challenging years in terms of the scarcity of resources, the shortage of skilled workers and the uncertain overall situation – caused by Corona and the war. Three years with ups and downs. As an example: in my 25 plus years at Turck and in the industry, I have never experienced such a price and procurement war for components as in 2021 and 2022. Brokers determined many prices for components and raw materials, which we had to process in close cooperation with our customers.
2. How has the crisis affected business development?
Wolf: In business terms, we have experienced exactly the opposite of a crisis in these years, namely a boom in automation technology. In 2020, sales fell slightly compared to the previous year. In 2021, we recorded growth of 26 percent in automation technology.
In 2022, we still had a very good 16 percent in growth. A curious circumstance. The period of the pandemic is actually the most successful period in our company's history to date. The question of how we can counteract the shortage of employees, the shortage of materials and the lack of manufacturing capacity, especially during the pandemic, arose at the same time as the massive increase in incoming orders.
3. What do you see as the reasons for the increased demand for automation solutions?
Wolf: There are several reasons. Generally speak- ing, automation technology offers solutions to many of the problems we face today. Specifically, the four major social and economic challenges of this era are: de- globalization with intensive global trade interdependencies, decarbonization and thus the pursuit of CO2 neutrality and energy efficiency, and the transformation toward electromobility. The automation and digitization of all processes is the basic prerequisite for each of these tasks. And with all these changes, we must also successfully address demographic transformation.
4. Can you give an example of how digitization and automation relate to the issue of sustainability?
Wolf: Let's take the exam- ple of mechanical engineering. Today, due to increased energy prices on the one hand and EU sustainability requirements on the other, a mechanical engineering company is asking itself how it can make production more energy efficient.
The answer is: through digitization and automation. The evaluation of sensor data from machines is essential to set up process speeds as well as the maintenance and downtimes of machines in such a way that the energy balance is optimal. The use of energy can also be optimized through the use of automation technology. Reducing energy consump- tion and operating costs are processes that can ultimately only be solved in a data-based manner through digitization. In this respect, efforts to produce and manage sustainably are significant accelerators for digital transformation in industry.
5. How has the increase in energy prices affected production at Turck?
Wolf: Not as strongly as in other industries, but the increased costs are also noticeable for us. Turck is not a company with high energy consumption. We only use gas to a small extent, not for machines and plants, but to heat our premises. Our machines and plants are operated electrically.
We have therefore launched initiatives and investments to significantly increase the share of photovoltaics in our energy supply in the near future. In doing so, we want to become much more self-sufficient in terms of energy. I generally welcome the fact that an ecological rethinking of energy issues is taking place in industry in order to become less dependent on gas supplies in the future.
6. Do you see a way to build resilience against the impact of geopolitical crises?
Wolf: If you assume that economic development will remain volatile, you have to position yourself more broadly on the capacity side in order to respond quickly to customer requirements in the event of a sharp rise in demand. After all, high availability will continue to be a decisive criterion for the economic success of companies in the future.
Ultimately, this means acting countercyclically. In other words, it will continue to be the case that the economic climate will cool down after three to four years. To nevertheless be able to plan for the longer term, we at Turck are now working on a structured five-year plan. As a company, we have to turn the uncertainties caused by geopolitical tensions back into entrepreneurship and stay on the investment path even in difficult times