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Industrial subcontractors have undergone a phenomenally swift transformation in recent years – from suppliers of products and parts to development partners for integrated solutions. It’s a paradigm shift that has been spurred on and powered by digitization, Industry 4.0, process automation, the rise of niche business models and product individualization.

To survive in today’s competitive markets, you have to supply integrated solutions while keeping costs down and delivering on consistently high standards of quality and sustainability. And to achieve that, you need the support of ICT and partners – you need to be connected and collaborative.

The growing interconnectedness and digital integration of production processes is drawing subcontractors ever deeper into the value chains of their customers. The result is an industrial landscape in which product and production data, expertise and other resources extend beyond company boundaries.

A good example of this cross-company integration and connectivity is the "e-WORLD" system developed by German steel provider Salzgitter Mannesmann Stahlhandel GmbH. The e-WORLD system digitizes complex supplier-customer business processes in the form of an "e-CONNECT" data exchange interface and an "e-SHOP" online ordering platform. The system gives customers direct access to the company’s inventory data and enables them to order products as and when required.

Meanwhile, German plastics specialist Pöppelmann leverages virtual product development and optimization tools such as 3D simulation and CATIA V5 to streamline the process of creating series production molds. As part of the process, CAD data is exchanged in real-time between customers and Pöppelmann engineers via an FTP server. This gives the engineers the detailed information they need in order to design special-purpose parts for optimal fitting in their intended installation locations. Pöppelmann uses simulation technologies such as FEM (finite element method) and Moldflow to ensure that correct functionality and maximum efficiency of production are built into its parts and tools right at the engineering design phase.

Supply chain management, simultaneous engineering, optimized throughput times and minimal error rates – these things are possible only when industrial suppliers and their customers redefine their roles and connect and collaborate with one another as partners.

Needless to say, this move towards smart supply chains puts more responsibility on subcontractors. But that’s also a major opportunity – a chance to create exciting new business models in the quest for smaller batch sizes, individualized products and smart services.