The Impact of Connectivity, Platforms, and Digitalisation

Royal Metaalunie chairman Mark Helder on the opportunity for the Dutch manufacturing industry: Supply chain automation as a prerequisite for growth

In recent years, the frontrunners in the manufacturing industry have accelerated digitisation, putting them even further ahead of the pack. The challenge now is how to integrate the middle group of manufacturing companies in terms of digitisation and automation. "There lies a tremendous opportunity. Sharing enables Growth. At the same time, there is a great risk here. If we don't take this step, we will lose earning capacity and become less attractive as an industrial country," says Mark Helder, the new chairman of the Royal Metaalunie.

Mark Helder took over the chairman position earlier this year from his predecessor, Fried Kaanen. He gladly adopts the metaphor of a leading group and a pack, which was introduced by his predecessor. This reality was recently confirmed in a report by ABN AMRO on the machining industry. With the help of private equity, clusters of industrial machining companies have emerged with the means to invest in digitisation and automation.

Network Economy

"In particular, some companies in the Brainport region have advanced far ahead. Due to the current disruptions in the supply chain, the leading group has increased their investments in new technology and digitisation. You can see that the pack is being pulled apart," Mark Helder extends the metaphor to the situation in mid-2023. This greater distance concerns him. The biggest group of manufacturing companies still need to catch up with digitisation and automation. And by automation, he mainly means automation in the supply chains, between companies. This is primarily necessary because productivity in the Netherlands has been stagnant for years. "If not declining," he adds. Secondly, we are moving toward a different way of working, with much more collaboration in networks. "We are entering an economy where collaboration leads to real value creation," he says. Unlike, for example, Germany, the Dutch manufacturing industry has traditionally been open to this. Machine builders ask their suppliers to think along about the best solution for the functionalities they are seeking. "When you build such a close network with your suppliers, you create a better product by aligning things with each other."

How does the SME pack connect?

"At the same time, there is also a challenge here," says Mark Helder. Operating in chains requires automatic data exchange, automation of the chains, no longer limited to within a single company. "Sharing enables Growth," he says. When you share data between companies, it contributes to the growth of the entire manufacturing industry. However, the chairman of the Royal MetaalUnie knows that the majority of SME manufacturing companies are not ready for this yet. The union's constituency, consisting of 15,000 mainly small and medium-sized businesses, is currently overwhelmed by market pressure to deliver, scarcity of skilled workers, increased costs, and the energy crisis. "And now they have to undergo a process of digitisation?" This digitisation requires a different business setup, different competencies from employees, and financial resources. Banks are not particularly eager to finance software.

Competitive position at stake

Nevertheless, this is crucial. Mark Helder, who has led multiple companies in both the manufacturing and automation sectors, believes that if the Netherlands as a manufacturing country does not embrace digitisation, it will lose its competitive position. The lack of productivity growth is due to the lag in digitisation and supply chain automation. If this continues, it will put the earning capacity of the Dutch manufacturing industry under pressure. "We will even lose entire industry sectors, which will disappear from the Netherlands. Then we become less attractive as a region and a country," he warns. Because in a network economy, development and manufacturing must be close to each other. "This fosters knowledge building and innovation. If manufacturing is lost to other countries, innovation will follow suit... Then we will fall behind technologically. The Netherlands is already an expensive country, so we must truly be at the forefront of technology to maintain our position."

Responsibility of OEMs

It is not too late yet, but steps must be taken quickly. The most important thing, according to the Metal Union chairman, is a clear industrial policy that supports SME manufacturing companies in digitisation. He knows that in the fragmented Dutch political landscape, this has long been a dirty word. However, that is gradually changing. "But countries around us are already moving forward." In addition, he believes that OEMs like ASML should also take responsibility. "Sharing enables Growth." Finally, he calls on banks to be more lenient in financing investments in software. He understands the skeptical attitude of banks because in the event of bankruptcy, software has no value unlike machines. However, SMEs need resources to invest in further chain digitisation.

Support from MetaalUnie

The Royal Metaalunie also takes initiatives itself, for example, by collaborating with partners on smart industry projects. Their own Industry 4.0 program is called Teqnow, which supports members with knowledge about digitisation, automation, 3D printing, and other relevant new technologies. Since the start of Teqnow, around 2000 companies have participated in its activities. The focus is primarily on creating awareness because ultimately, it is the entrepreneurs themselves who must set their sights on the horizon and digitize their companies. Mark Helder believes that companies should first set their goals, start with digitisation, and only then purchase a cobot, software or other investment. Otherwise, there is a risk of investing in the wrong type of automation. If the solution is not suitable for the process, the investment will be a failure. "You won't win the Paris-Dakar Rally with a Formula 1 car, no matter how technologically advanced it is."

Platform Revolution

A controversial point when discussing digitisation is whether to choose the closed software of machine builders or the more open system of, for example, CAD/CAM developers. Or will we eventually have a kind of Google that unlocks both machines and design software? "That would make it easier for SMEs to get started." Connectivity becomes a key term, says Helder. Can a platform like Tech2B play a role in this? Mark Helder believes so, but at the same time, he is concerned about the rise of platforms like Tech2B. "We might end up with a dominant Uber-like platform in the sector that companies become dependent on." Especially if such a platform is in foreign hands, he would not see it as a positive development. Sjors Hooijen, co-founder and CEO of Tech2B, says that the Dutch platform has recently added two important values to its three core values. These core values of Tech2B are scalability, security, and user-friendliness. "We have now added sustainability and sovereignty of data use."

National platform

The latter is especially important. Dependency will always arise, he believes. But it is important that the value of the data generated by the platform flows back to the users. And according to him, this is better guaranteed with a national platform like Tech2B than with a platform owned by international entities. "We are identifiable, and we represent the national industry of the Netherlands. Sharing enables Growth, and this can also be applied to Tech2B. By growing, we can protect Dutch entrepreneurs against platforms from other continents that might divert the value of data elsewhere." For Mark Helder, this is currently reassuring. He sees a significant role for platforms as supply chain digitisation progresses. "Then such a platform truly has great potential. But it is of national importance that such a platform ensures certainty and has good intentions behind it."

Mark Helder - Royal Metaalunie chairman

Sjors Hooijen - CEO Tech2B