Industry 4.0

Four Mittelstand firms that get the digital economy

Seeing the future. Source: Bausch + Ströbel

Germany is famous for its Mittelstand, the small and medium-sized firms that are usually family-owned and closely held — and often hidden champions in global markets. But the Mittelstand as a whole is also at risk of sleeping through the fourth industrial revolution, in which new manufacturing techniques meet the Internet of Things. Development bank KfW estimates that only one in five Mittelstand firms is on the cutting edge. But that’s still a lot of firms. Here are four prime examples of German businesses on the cutting edge of the latest technological trends:

Duravit: At-home urinalysis

One of the world’s premier makers of sinks and toilets is located in a picturesque valley in the Black Forest. Called Duravit, the firm doesn’t just churn out any old porcelain for our effluvia; it works with celebrity designers such as Philippe Starck for that je-ne-sais-quoi for your salle de bain. Its next big thing, to be launched early next year, is a toilet bowl that automatically takes urine samples just as a doctor would.

The toilets — admittedly dear at €7,000 ($8,100) — are operated by an app. The initial target market is fitness-conscious people, says boss Frank Richter. When the customer urinates, the toilet tests the fluid for all sorts of health markers, from protein levels to signs of dehydration. Within three minutes, it sends the data via Bluetooth to the app. This being a German product, the data is of course protected — only the designated device can receive and store it.

Just like the doctor, but with no wait. Source: Duravit

Miele: Rentable washing machines

Founded in 1899 and known for its washing machines, dryers and other “white goods,” Miele has never exactly been sexy. But the firm has picked up on a Next Big Thing: the sharing economy. People already use Airbnb to share their apartments and DriveNow to share cars. “Especially young people are moving away from buying stuff and toward renting it,” says Gerrit Heinemann, an expert at the University of Applied Sciences Niederrhein. So why not washing machines?

To try the idea out, Miele has a pilot project called Blue Horizon that lets people rent, rather than buy, washing machines. They can pay a flat rate or per load; experts estimate an average cost of about €20 per month. That not only makes the costs predictable and manageable to users, it could also reduce the hassle of owning. That’s because Miele, as the owner, will service the machines. Miele can only offer this service because it thinks that the combination of software and connectivity will allow it to monitor its machines all the time, seeing if one is about to break down before it even happens.

Miele is not alone in spotting the trend, of course. German retail giant Otto and electronics chain Media Markt are apparently considering renting out TV sets. And that’s just the start of the sharing to come.

Sharing is caring. Source: Miele

Hhpberlin: Faking fires

Hhpberlin is a Mittelstand firm that simulates fires and engineers ways to prevent or contain them. Among its clients are famous venues such as Angela Merkel’s chancellery and the stadium of FC Bayern Munich. But simulating fire is a fiendishly difficult business, requiring vast computing power. So in 2015 Hhpberlin hopped on the cloud computing train. Instead of owning and operating its own servers, it rents computing power in a remote data center in Amsterdam, which it accesses through high-speed fiber-optic lines. It’s sort of like sticking a fire hose into a cloud and tapping it for water whenever you want.

“Now we can calculate different fire scenarios in parallel, have infinite storage and can take on a lot more orders,” raves Stefan Truthän, Hhpberlin’s director. About 45 percent of Mittelstand firms already use cloud computing, according to consultancy Crisp Research, and another 35 percent have plans to do so.

Where there's smoke... Source: hhpberlin

Bausch + Ströbel: Manufacturing VR

Bausch + Ströbel is a world leader in making huge machines for hospitals and, like many Mittelstand firms, is based in a small town in the southwestern region of Swabia. Its monster appliances clean, fill, inspect and label syringes, vials, ampoules and all those other little bottles doctors use. Even though it makes only about 400 such machines a year, its revenues are around €200 million. In making these machines, the firm used to have carpenters build huge models out of wood. Customers then had to visit and look at the structures to see if they would fit into their hospital or lab. Not exactly convenient or user-friendly. Whole warehouses were cluttered with old wooden models.

Soon, however, Bausch + Ströbel will invite potential customers to put on goggles and experience their future machines in 3D and virtual reality. How does the air flow around the machine? How will staff operate and fix them? What does it sound like? It’s not only a better customer experience but streamlines the manufacturing process. Right now, the time from receiving an order to the first use of a machine is about 12 months; using virtual reality will bring that down to seven or eight months, even for custom-designed machines.

Seeing is believing. Source: Bausch + Ströbel
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