Digital

How machine learning is revolutionizing Factory 4.0

Artificial intelligence is taking performance and efficiency in industrial manufacturing to a new level. With digital ventures such as FactoryPal or InspectifAI, Körber is raising the bar here.

Selection Day is a good occasion to unlock the secret of success of company building at Körber. At this event, five teams pitch their projects, which they have previously vetted for coherence and feasibility in a week of intensive boot camp work. The atmosphere is that of a typical start-up, a fresh, high-strung cheerfulness, with all the teams speaking without notes and often improvising during their twelve-minute slots. At the end of the day, only one project makes it to the next project phase – Selection Day in fact.

However, this event is less about a whimsical think tank and all the more about market size, untapped potential and customer base. With LOI, FTEs and EBITDA. The message is obvious: beyond all start-up romanticism, the key is whether an idea will have real market impact.

Revenues from the artificial intelligence (AI) software market worldwide from 2018 to 2025

"Industrial manufacturing is taking a giant leap by moving from hardware-driven control to software-driven control and eventually to one where artificial intelligence takes over large parts of the organizational processes," says Dr Christian Schlögel, Chief Digital Officer (CDO) at Körber. This is a complex undertaking making data-centered and holistic approaches more and more indispensable. "Digital software-as-a-service solutions along the value chain determine the future of the industry," says Christian Schlögel: "Smart algorithms, data science and machine learning provide huge potential.“

Körber established its Business Area Digital back in 2017 – initially to expedite the digital transformation of the technology group and to promote digital innovations within the established Körber Business Areas. The focus then shifted more in the direction of company building two years later. Its stated goal: to initiate specific projects to boost efficiency in industrial manufacturing and then launch them as independent start-ups into the market. Each year Körber aims to set up two to three such spin-offs. With around 250 employees, Körber Digital is already the largest company builder in Germany – and plans to grow to 500 employees by the end of 2022. 

A potential sales volume of 50 million euros is mandatory 

"Problems are our gold," says Daniel Szabo, who has been heading the Körber Business Area Digital since 2019 and is an entrepreneur through and through: With YOU MAWO, the 35-year-old co-founded what is now the world market leader for customized 3D printed eyewear, and with Additive Scale he founded a technology company that focuses on so-called "mass customization". In his role as CEO of Körber Business Area Digital, Szabo transfers this founding spirit onto his staff. His teams pay close attention to what is lacking in production and develop customized digital solutions.

Based on the Digital Innovation Process (DIP), an in-house three-stage model is used: phase one is for identifying current challenges and drafting distinct scenarios for the future of the markets in question. Phase two focuses on project potential and initial customers, before moving on to the company set-up in phase three. Projects selected by Körber for implementation and spin-off must have a potential sales volume of at least 50 million euros. 

In three cases, the roll-out has already been successfully completed or is in full swing. In 2020, FactoryPal was launched, whose SaaS solutions optimize the performance of plants with the help of AI algorithms . It started in the tissue industry, where the intelligent software delivers up to 30 percentage point increases in overall equipment effectiveness, OEE in short. An important feature of FactoryPal is that it runs not only on Körber systems, but also on those of its competitors.

"We never develop our solutions exclusively for plants of one manufacturer, but always industry- and machine-agnostic," says Daniel Szabo. This makes them easily adaptable for many customers and other manufacturing industries. For example, FactoryPal has recently also been used in Körber's Business Area Pharma to reduce the formation of bubbles in adhesives.       

In the fall of 2021, Körber Business Area Digital launched its second corporate venture, InspectifAI. The Karlsruhe-based company improves the optical inspection of pharmaceutical products, which is required by law. Up to now, these have been analyzed using static algorithms. In five to ten percent of the cases, the program is not certain whether the inspected products are flawless. And thus have to be checked manually by experts on site. InspectifAI's self-learning algorithms are now reducing the inspection rate to around 0.5 percent – an outstanding improvement that cuts both time and costs.  

Creating measurable added value

A third venture is in the process of roll-out. It offers AI-based solutions designed to use gamification software to boost the satisfaction of warehouse employees – in other words, by using playful assets such as rankings, high scores or progress bars. Particularly in warehouse management, where employee turnover is high in many places, the software has already led to a measurable rise in motivation among the workers in several pilot customer projects. The official launch is planned for spring 2022.

"Creating measurable added value is more in focus than ever in manufacturing," says Daniel Szabo, who intends to bring two more start-ups to market over the course of 2022 in the segments of sustainability and aftersales, thus doubling his workforce over the course of the year. 

With its company building approach, Körber's Business Area Digital is becoming a highly attractive employer in the fiercely competitive software and IT market. "We combine the best of both worlds," says Daniel Szabo. "The security of a worldwide operating company with tradition, network and stability, as well as the flexible conditions and agile methods of a start-up. We attach great importance to this. With any new venture, we assemble a new winning team of the best minds."

www.koerber-digital.com

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