VW and CATL, two pace-setting e-mobility companies, are among the winners of the INDUSTRIE 4.0 AWARD. In 2024, the ROI-EFESO team gained further insights into the success stories of both companies at town hall meetings at the award-winning plants in Dalian (VW FAW Engine) and Ningde (CATL) in China.

Mr. Wang, you are closely networked with Chinese market leaders from the key industries for the global development of e-mobility. What do these companies do particularly well when it comes to digitalization and automation? For example, what characterizes the "digital practice" at VW FAW Engine’s plant as a forward-looking Industry 4.0 solution?

LW: This factory shows exemplary, how a strategy can be broken down into real action. During the last years, VW realized with his “speed program” a very high maturity in operations. In Dailan and many other locations, the factory teams developed a deep knowledge of the value stream run as well as of the ideal shopfloor management procedures and conditions. Furthermore, they combined this experience at an early stage with the software management run, addressing a problem-solving acting in their manufacturing lines and in the associated operational functions.

This provided good starting conditions for the Industry 4.0 journey. For example, in the cost dimension: The deep understanding of the business process enables them to manage and control the investments for the digital solution development which is been done by external suppliers. Additionally, they build up a very strong digital analysis team – and thus opens opportunities to integrate AI at an early stage. Based on this team capability, they developed their own R-language. Furthermore, they achieved the prediction and autonomy level in individual areas of production, regarding to the stages of the Industry 4.0 pyramid.

Let's stay on this aspect. How do they use AI for prediction?

LW: In the area of the machine spindles of engine manufacturing, for example. They developed an own predictive maintenance solution, which is tracking the process. So, every deviation is displayed in time and the plant operator can prevent the breakdown of the machine as well as the breakdown for the spindle itself.

It’s a best practice in big data usage: The manufacturing team collected a lot of process data and handled this to the data analysis team. Together they identified the pattern and parameters, that influence the breakdown for the spindle. And at the end, they come up with a model to predict when they should do the preventive maintenance for the components to avoid the breakdown for the machine.

The teams in the factory learn how to define and improve the process and ultimately how to organize cross-functional collaboration.

At this point, even very progressive companies are repeatedly faced with the challenge of combining the perspectives of IT / data management with those of manufacturing. How did the team in Dalian solve this challenge?

LW: In general, it’s a key challenge here to decide about the prior levers for change – is it the organization culture? Or the leadership culture? Or has the communication culture to be changed in a way that it fits to the measures and methods in the production resp. business processes? In this regard, VW FAW Engine has two advantages: One is the high operation management maturity in the speed program. So, they learn how to define and improve the process and then they learn how to do the cross-functional collaboration.

The second advantage is their leadership culture with highly communicative, motivating decision-makers in the plant management who are open to digital transformation. There's no kind of restriction, e.g., by bureaucratic policy. You can sense that as soon as a good process flow is in place, the team is encouraged to develop the right digital solution for it. And this is then done with great motivation.

What makes this Industry 4.0 success story so special, in brief?

LW: VW FAW Engine realizes a strong bottom up-approach with strong leadership support and a mature operations framework. Within this framework, they are creating digital solutions flexible and keen to experiment. By doing so, they start from capability and from knowledge.

As mentioned, they understand the process and know what kind of data is needed, what kind of a model they need to build based on the data. And based on the model, what kind of a solution they want to achieve. This approach really makes the difference. So, one main lesson for industrial digitalization could be here: embrace the digital, but don't embrace digital simply for the digital.

Learn more: VW FAW Engine winning project›

"Speed" also characterizes the other INDUSTRIE 4.0 AWARD 2023 winner, whose production you visited at the award-winning factory in Nindge.

Thirteen years after it was founded, CATL* is now the world's leading manufacturer of lithium-ion batteries. How does CATL's Industry 4.0 journey differ from that of VW FAW Engine?

LW: This is hardly comparable, because it’s a unique business case – in the process industry, in the e-mobility market and in many other aspects. Just imagine that since CATL started in 2011, the complete process and engineering for the battery production has already been changed or upgraded 13 times. That means significant changes every half year, especially in terms of material usage, R&D-, manufacturing, logistic process and staffing. So, compared to an established OEM like VW, they don't focus on the details and perfection for the process in their Industry 4.0 journey – they focus on technology. This is the first characteristic and difference.

The second one is the is the differently oriented strategy. When implementing digital solutions, the question of ROI is of course always asked and usually you need to consider the payback in two years. But at CATL, a lot of decisions are made on the strategic alignment and secondarily on the return-on-investment calculation. This applies to investment decisions in IT technologies as well as to the expansion of personnel capacities.

Especially, as it is a particular challenge to find specialists with digitalization expertise for manufacturing processes that are changing so quickly or have to be created from scratch. How is this reflected in the team constellation at the plant in Nindge?

LW: The number of their team members in operations and IT is much higher than for the setup or the configuration of manufacturing processes as in other companies in the market. So, to hire as many digitization talents as possible, was also a strategic level decision.

Combined with the best technologies, this generates enormous creative power and impact. For example, in the usage of AI: Based on the massive volumes of data that have been collected in manufacturing since day one, CATL is much more successful in developing and using a AI, that monitors and analyzes millions of product or process pictures and learns to “understand” failures or quality characteristics for the products.

To handle an extreme transformation speed, the focus is on technology instead of perfect processes.

If there are so many high talented people on site, how did they make sure that there's a perfect flow of information within this team?

Especially in regard to the dynamic market conditions, the very short development circles and the fast evolving manufacturing technologies?

LW: There are two interesting characteristics of CATL’s corporate culture that make it easier to deal with these challenges. Firstly, when CATL wants to develop or use a digital solution, they always go to the Gartner pyramid’s sector on the up and right side as first choice. So, they go for the best one and this is a kind of a first guarantee.

Secondly, we should not forget the startup culture roots – it’s still a quite young company, despite the enormous expansion. Now, as it is a big global group, it's still a mentality of startup culture in it. Most of the companies who do this transformation lose this kind of power. They change to bureaucratic organizations and to bureaucratic processes. But if you do this step, you didn't change the culture and you stay on this transformation speed, it's a great advantage.

How will both companies continue their Industry 4.0 journey?

LW: Certainly, VW FAW Engine will expand their success with their bottom-up approach and with their excellent process understanding and control. An important aim here might be to keep up the pace by adapting new technologies to support the process.

CATL is already addressing the highest level in the Industry 4.0 pyramid, the autonomous process management. As mentioned, the AI development and usage will be a central success factor for the nearer future. But from the process point of view, things will change: The transformation cycles will extend from half-years to longer periods. So, when the process becomes stable, they should study how to maintain the process from a WCOM™** point of view. This will be of great importance for scaling the successes achieved so far in the interaction of the operations areas.

*Contemporary Amperex Technology Co., Limited / **World Class Operations Management

Learn more about the CATL winning project›

Learn more

INDUSTRIE 4.0 AWARD: All winner projects›

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