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German manufacturers are now focussing on their supply chains in China. Supplier development programmes, which are common in Germany, are becoming more prominent in the Chinese market. Companies react to increasing production costs, greater competitive pressure and price cuts, which are demanded from the Chinese government. German industry sees tremendous scope for improvement at their suppliers: Productivity in Chinese factories can be increased by more than a third, whilst scrap and lead times can be halved – which will allow to achieve high cost savings. This is the outcome of a market analysis by Staufen, a consultancy company.

The general euphoria about Industry 4.0 promises companies the solution to their complexity problems virtually at the touch of a button. The initially extolled German Industry 4.0 index shows however that, besides networking technology, efficient development and production processes are especially necessary in order to really enhance the indisputable potential of the intelligent factory. For this study, 140 industrial firms in Germany were surveyed by Staufen Management Consultancy

Only 27 percent  of industrial companies in Germany have actively looked at possible Smart-Factory projects, as revealed by the Staufen consultancy’s “German Industry 4.0 Index”. A majority of these companies apparently does not yet feel ready for the transition to a networked factory. It is true that some homework needs to have been completed before a successful transition can be started. Being lean and efficient is imperative to set off into the world of Industry 4.0. Lean Management and digitalisation go hand in hand. Making a successful transition into a smart factory is the topic of discussion with leading representatives from manufacturing industries together with scientific experts at the Staufen AG “BestPractice Day 2015” in Darmstadt from 8 to 10 June 2015.

71 percent of German companies are convinced that the role of managers in the age of Industry 4.0 is more important than ever. Companies see the primary quality of the ideal “Manager 4.0” as that of an outstanding communicator with both subordinates and superiors. The problem: According to the recently compiled first ever “German Industry 4.0 Index”, current managers have a lot of catching up to do in this respect.

Eight out of ten companies in Germany feel abandoned by the political establishment with regard to the future-oriented topic of Industry 4.0. As the first ever compilation of the “German Industry 4.0 Index” also shows, one in ten companies even rate the attitude of politicians towards new key technologies as “counter-productive”. For this study, 140 industrial firms were surveyed for the Staufen management consultancy.

German industry is very confident when it comes to Industry 4.0. As shown by the newly compiled “German Industry 4.0 Index”, domestic companies have put Germany in pole position internationally on the road to developing the “Smart Factory”. Only Japan and the USA are developing at a similar rate, according to German firms. China, in their opinion, is already hot on the heels of several industrial nations. For the “German Industry 4.0 Index”, 140 industrial firms were surveyed for management consultancy Staufen.

The “Year of Innovation 2015” proclaimed by Germany and China is in danger of failing. 62 per cent of German business representatives still lack confidence to undertake future development work with Chinese partners. By way of comparison: Not even one in ten cite such a lack of confidence with respect to partners from the European Union. That was revealed by a study conducted by management consultancy firm Staufen and Chinaforum Bayern e.V. For the “China Poll”, 150 companies in Germany were interviewed.

For the next round of negotiations with their suppliers, German automotive companies have already set the course with their recently announced cost-cutting programmes amounting to billions of euros. The problem: In recent years, many suppliers have already fully exploited the potential for productivity increase in the operational sector. In order to remain competitive in the future, suppliers can no longer avoid a more productive organisation of all processes along the value creation chain.

While World Cup euphoria is likely to drown international criticism of Brazil in the weeks to come, industrial companies in the country itself are not given any respite. Subsidiaries of Western parent companies also feel the pressure: the domestic economy, isolated by politics, is limping, investments in machine parks are delayed, personnel costs are going through the roof. As a consequence, companies’ productivity is on a sharp decline.