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The Digital Transformation of the Mid-Market: Opportunities Offered by Manufacturing-X

Reading Time: 4 Minutes 21.02.2024 Currents & Trends

Wie der industrielle Mittelstand von Manufacturing-X profitiert

Manufacturing-X aims at developing a digitally networked industry to exchange data beyond company borders and thereby achieve sustainability, more resilience, digital business models, and a new European data economy. But what added value does this initiative offer?

In times when data are becoming ever more important, the European industry is on the cusp of a meaningful transformation. The name of the groundbreaking initiative: Manufacturing-X. It focuses on data exchange across company borders. The project, which is also driven by proALPHA, aims at creating a fully networked, sustainable, and resilient industry.

Michael Finkler, managing director and co-founder of proALPHA, is sure: "We're not only faced with the challenge to integrate new technologies, but also with the task to design a completely new data economy in Europe." The European Union (EU), which has recently agreed on the "EU Data Act", plays a central role here as it lays the foundation for the new data economy. 

A platform for efficient and secure data exchange

Manufacturing-X is essential here. The initiative aims at creating a single market that allows for free data flow within the EU, but it also goes way beyond traditional data use. It opens up new possibilities for cross-industry data exchange and cooperation. Overall, Manufacturing-X aims at creating federal data spaces, which offer a platform for efficient, secure and high-quality data exchange. 

"It's all about creating an infrastructure that allows you to share and refine data without losing control of your own data," explains Finkler. This development is particularly essential to the mid-market. Even though mostly larger manufacturing companies are involved in Manufacturing-X at this point, mid-market companies should also keep track of the developments and adjust their internal processes accordingly. 

Critical to the future of the European economy

The ability to contribute to this new form of data exchange will be crucial to a company's competitiveness. Therefore, Manufacturing-X is supported by a wide range of players. This includes governments, large associations like VDMA and Bitkom, leading companies, and research institutions. This broad support shows that the initiative is critical to the future of the European economy.

The digital transformation through Manufacturing-X goes way beyond the sole automation of production processes. It comprises the redesign of business models and addresses the challenges arising from the dependence on large, global hyperscalers. "Manufacturing-X offers a platform for innovative, data-driven business models, and enhances data sovereignty in Europe," emphasizes Finkler.

Sovereign data infrastructure within Europe

An integral part of Manufacturing-X is the connection to other X initiatives such as Gaia-X and Catena-X. These initiatives share the goal to establish a sovereign data infrastructure in Europe and provide a basis for cross-industry data exchange.

As a reminder, Gaia-X is the European platform for data exchange, started by Germany and France in 2019 and founded in Brussels in February 2021. Catena-X is an association specifically founded for the automotive industry in May 2021, which has gained 160 members since then. The organization thereby created an ecosystem that allows for secure, autonomous, and fast data exchange within an industry-specific value network.

"Manufacturing-X is more than a technological innovation. It's the pioneer for a new era of the European data economy."

Michael Finkler, co-founder of proALPHA



Therefore, the X initiatives also enhance the resilience of supply chains. Here's an example: The chip shortage of the past years is primarily attributed to the pandemic. In retrospective, however, the actual cause is a combination of wrong decisions, missing transparency, and natural disasters. A federal data space that provides access to the production information of the entire supply chain could have prevented this.

What can be done already today

Manufacturing-X offers the unique opportunity to transform the mid-market industry in the long term, and thus presents an important step toward a European data economy. Companies of all sizes should use this initiative to actively contribute to the digital transformation. It offers real added value and confidence for the future. 

What can mid-market manufacturers do already today? Prepare themselves, including their IT systems and data, for Manufacturing-X. The following questions have to be answered in this process:

  • What is the level of digitalization throughout the company, including the employees?
  • Is state-of-the-art technology being used? Are the ERP system and other business applications up-to-date? Does master data management work properly? Have the data been cleaned and could they be integrated into data spaces like Manufacturing-X?
  • What production data are collected? What is being measured and read out? What other information is required and how can it be obtained?
  • Are there already approaches and tools for carbon tracking? What possibilities are there to determine Scope 2 and Scope 3 emissions? 

Mid-market companies should spring into action now and join initiatives like Manufacturing-X. It's well worth it. The sooner the better. 

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