Digital Twin

Evaluating sustainability with the green digital twin

On January 5, 2023, the Corporate Sustainability Reporting Directive (CSRD) came into effect – but what exactly does that mean? The European Parliament adopted this regulation as a significant step within the European Green Deal framework of 2019. The ambitious goal: a carbon-neutral EU by 2050 – and thus the first carbon-neutral continent in the world.

CSRD and ESRS: challenges in reporting

The classification is based on environmental, social, and governance (ESG) criteria according to the EU taxonomy. Each of these three areas encompasses different guidelines and regulations. The CSRD specifically addresses environmental aspects and obliges companies across industries to act more sustainably. The European Sustainability Reporting Standards (ESRS) further specify how these obligations should be reported.

The challenge lies in recording and calculating the required environmental data, such as pollutant emissions, in accordance with ESRS KPIs. The question is: How can this data be collected efficiently and accurately?

Efficient data collection for sustainability

Environmental databases can support sustainability reporting, for example, the database for process-oriented basic data for environmental management instruments (ProBas) provided by the German Environment Agency (Umweltbundesamt, UBA).

The digital twin plays a crucial role as a useful helper. As a digital replica of products, machines, or components, it offers a comprehensive solution to the challenges of data collection in the context of the CSRD. By fully digitalizing the product passport, relevant data can be compiled throughout the entire product lifecycle. This enables both efficient data collection and transparent data sharing along the entire value chain.

From individual parts to the overall picture

The digital twin allows to consolidate information from environmental databases, ERP, MES, and material data management systems. Based on this data, the environmental impact of each component can be assessed with the Life Cycle Assessment (LCA) method. Taking a bicycle as an example, this includes the handlebar, fork, frame, saddle, pedals, and the two wheels with tires. The LCA metrics can be recorded for single components and the entire product. These individual parameters can be used to determine the carbon footprint across the entire value chain of the bike.

This data also forms the basis for the bike’s digital product passport. By fully digitalizing the product passport, the calculated environmental data can be easily shared, for example, with retailers or consumers.

Green digital twin for the aerospace industry

In the industrial sector, the aerospace industry is particularly affected by the CSRD. As part of the PredictECO research project, CONTACT Software is working with partners from science and industry on a green digital product twin that meets the new requirements. This includes the obligation to provide evidence in the form of a digital Lifecycle Data Sheet (LDS), which documents the materials and processes used down to the smallest detail. The goal is to create a comprehensive digital twin that contains all the necessary manufacturing information for sustainable production according to the requirements from the LDS and can provide them in a standardized digital form.

Outlook

The digital twin already proves to be a field-tested solution to meet the CSRD requirements of the CSRD. Collecting environmental data throughout the entire product lifecycle not only enables efficient reporting but also contributes to creating sustainable value chains. Take advantage of the opportunities the green digital twin offers to elevate sustainability in your company to a new level.

For more information on the green digital twin, read this article on the CONTACT Research Blog.

Achieving digital service excellence in three steps

The benefits of a strong service offering

Service is an anchor of stability in the machinery and plant engineering sector during times of global crises. After-sales revenues are less susceptible to external developments and economic fluctuations compared to new plant business. Additionally, their higher profit margins stabilize companies’ cash flows and mitigate risks. Moreover, an attractive service offering provides a clear competitive advantage in global markets.

According to McKinsey, customers can expect a longer product lifespan from manufacturers with corresponding maintenance contracts since no one knows the equipment better than the manufacturers themselves. Regular after-sales touchpoints deepen customer relationships and offer recurring sales opportunities, making it easier for machinery and plant manufacturers to understand their customers’ problems and resolve them with the appropriate service offerings.

The 2020 Customer Service Benchmark by the German Mechanical Engineering Industry Association (VDMA) shows that many companies in the machinery and plant engineering sector have recognized these opportunities and are expanding their services. While at the time of the last major VDMA study on this topic four years ago, only about 61% of companies offered maintenance contracts and generated around 20% of their revenue from services, an increase in these values can be expected in the next survey.

This places us in the midst of a market development that will accelerate in the coming years. Technological progress also contributes to this: the Industrial Internet of Things (IIoT) allows service business to be optimized on a customer-specific basis using data from the product’s operation.

In the future, it will become more important but also easier for machinery and plant manufacturers to increase the maturity level of their service. The following maturity model helps you assess where your company stands on the road to service excellence.

A Maturity Model for Service

Companies with low service maturity handle customer inquiries exclusively reactively. Such processes take a long time because they are still partly processed with paper forms, and searching for the required information is a tedious routine activity that does not generate value. If inquiries via email or phone are not digitally collected, this complicates the structured and prompt processing of service cases. In the worst scenario, inquiries get lost in email inboxes or remain unprocessed during an employee’s vacation because no one has insight into the current status of communication.

Digital Service Management

Digitalizing service processes is the first step to increasing internal efficiency. Companies can use a CMS (Customer Service Management) tool to manage delivered products. Services are planned and documented digitally, resulting in a service logbook for each customer and asset. Incoming customer inquiries via email or telephone are automatically converted into tickets internally and then systematically processed.

Only once service processes can be handled efficiently is it worth building up the after-sales volume. Therefore, the digitalization of internal processes is the basis for the transition from reactive to proactive service business. For example, by offering standardized service contracts with regular maintenance for sold equipment.

Connectivity & Automation

The next step for machinery and plant manufacturers is to develop their products into smart products that transmit selected operating data. In the past, there were concerns about the feasibility of this approach because providing this data depends on the customer giving his consent. However, more and more plant operators are now willing to do so. McKinsey has validated this trend in a survey and identified two significant factors:

B2C customer experiences lead to increased expectations for service experiences
Positive experiences with IoT-based remote services during COVID-19

Plant operators are generally motivated to share information with the manufacturer when the added value is tangible, for example, in the form of cheaper maintenance contracts and the promise of higher availability. Manufacturers can achieve this by using operating data to introduce usage-based maintenance strategies instead of following calendar-based maintenance cycles. This results in fewer services per plant and reduces overall costs. Furthermore, software can detect suspicious patterns in operating data early on and automatically initiate preventive measures based on rules.

Customer Integration

Companies with high service maturity integrate their customers into their business processes via a customer portal. Such a portal is the centerpiece of a modern service experience and strengthens customer loyalty. It enables customers to view their purchased products along with their operating data and the service logbook for each asset. An overview of past and planned services provides planning security and streamlines scheduling between the manufacturer and operator. A ticket system allows customers to submit new requests, track their processing status, and respond to corresponding inquiries directly in the system without the need for a service employee to answer phone calls and manually convert them into tickets. Additional services such as spare parts orders or trainings can also be requested through the customer portal, which streamlines and accelerates the sales process.

Conclusion

A strong service business has positive effects on cash flow, minimizes entrepreneurial risks, and simultaneously strengthens customer experience. How this is best achieved depends on the current situation in customer service, the company’s products, and the offering of the competitors and is unique for each company. Blueprints such as the maturity model described here provide guidance and enable a quick assessment of how excellent service can be realized step by step with the technologies available on the market.

CONTACT Elements for IoT helps your team effortlessly manage the increasing number of customer inquiries while enhancing the efficiency of your service department.

MES and MOM – A clarification of terms

Digitalization in manufacturing

Production is one of the most heavily optimized industrial sectors, and for good reason. Avoidable scrap or machine downtimes not only consume time and nerves but, above all, a significant amount of money. To prevent this, companies organize use digital systems to organize and execute their manufacturing processes. For this purpose, they often rely on Manufacturing Execution Systems (MES). Recently, another term has gained increased attention: Manufacturing Operations Management, abbreviated as MOM.

This blog post explains how MES and MOM are related and what to consider when choosing an MES.

What is MES?

MES is software that helps manufacturing companies organize their production. Initially, sales planning is carried out and corresponding production orders are created in the Enterprise Resource Planning (ERP) system. Subsequently, the production department uses the MES to execute these orders.

In the MES, it is determined who will execute which production order and which resources and tools they will use. During production, employees manually enter operational data into the system and therefore supplement the automatically collected data from machine controls and sensors. To ensure product quality, the MES enables planning and documentation of quality inspections.

The MES thus creates transparency within the production department. Finally, employees report completed orders back to the ERP system, triggering logistical and commercial follow-up processes.

What is MOM?

Manufacturing Operations Management (MOM) is a holistic concept with the goal of optimizing the overall value chain process. Companies achieve this by digitally managing their manufacturing processes and transparently providing manufacturing-related information across multiple departments. Production processes are considered an integral part of cross-departmental business processes. To ensure seamless communication from the manufacturing to the management level, information exchange between different IT system domains is essential. This includes, for example:

Product Lifecycle Management (PLM) for product development and planning work steps in production,
Enterprise Resource Planning (ERP) for sales planning and commercial order processing,
Manufacturing Execution Systems (MES) for executing production orders,
Quality Management Software (QMS) to ensure product quality,
Industrial Internet of Things (IIoT) platform to consolidate data from machine controls and sensors and monitor manufacturing processes in real-time.

The interaction of IT systems makes collaborating between different departments and teams more efficient, positively impacting the entire value chain process. Production operates at lower manufacturing costs and can ensure shorter delivery times and high product quality. By integrating production processes into the overall value chain process through the holistic MOM approach, companies can adapt quickly and flexibly to changing market situations.

How do MES and MOM differ?

MES is an important component of the MOM approach. As shopfloor software, it primarily focuses on executing tasks and processes within production. MOM, on the other hand, describes the overarching concept that integrates production processes into the business processes of the overall value chain. The approach aims to optimize the value chain by coordinating information across various departments. The concept includes not only the execution level (MES functions) but also adjacent functions from areas such as ERP, PLM, QMS, and IIoT.

What to consider when choosing an MES?

The challenge in selecting MES software is ensuring that it fits the company’s manufacturing structure and corresponding needs. For example, process manufacturing often requires recipe management, while discrete manufacturing involves working with bills of materials.

Furthermore, it is crucial to focus on the seamless integration of the system into the current IT infrastructure, encompassing elements such as PLM, ERP, QMS, and IIoT platforms. Following the MOM approach, maintaining cross-departmental information consistency significantly improves overall efficiency.

Companies should consider the following aspects:

Expandability
Depending on the project scope, initially rolling out some basic MES functions minimizes project risks. Subsequently, it is possible to gradually add further functional areas until all relevant processes are integrated. For this approach, a modular software that grows step by step with the company’s needs is recommended.
Scalability
In addition to the functional expansion of an MES to cover more areas, it is relevant whether the solution can scale to all manufacturing locations. This requires support for the relevant languages and the ability to centrally consolidate and analyze local information. Ultimately, the MES provider must also be able to conduct implementation projects on a global scale.
Customizability
Production processes are as individual as the manufactured products. The better the MES supports the company’s processes and information needs, the greater the benefit.
Future-proofness
The economic resilience of the MES provider and their affinity to integrating new technologies, such as IIoT and artificial intelligence (AI), are crucial factors for the system’s long-term development.
User Experience (UX)
If the software is intuitive and well-designed, it avoids acceptance issues and the need for extensive training measures. The most feature-rich system might be worthless if end users do not use it correctly.

If you are looking for an MES for discrete manufacturing and want to follow the MOM approach, CONTACT Elements for IoT could be the right solution for you. This holistic manufacturing management system combines traditional MES functions with advanced maintenance management, energy monitoring, and seamless IT integration. The result: cost savings through reduced scrap and downtime and the integration of manufacturing into the overall value chain process. Learn more about CONTACT’s IoT offering.