Heraeus innovation expert Markus Kriegl on digitization

Hello Markus, thank you for taking the time today to talk a bit about digitalization at Heraeus. The digital unit of the Heraeus Digital Hub helps the various Heraeus business units in the portfolio company with digitization. Where do your projects come from?

Yes, in essence it is quite simple: We consider together with the business units: Where do we have problems that we want to overcome, where do we have opportunities for improvement - either internally or also in our customer markets. And then we think about how digital solutions can help in a targeted way and develop a ready-made solution from A-Z together with the business units.

As a digital hub, you are the central hub for everything that has to do with digitization in the Group. What are the advantages of such a function in a portfolio company?

Yes, so of course we want to have digital capabilities in the business units in the portfolio company. However, as the Heraeus Digital Hub, we combine a number of functions that can be used by all business units.

That includes central hosting of joint technologies, knowledge management and recognizing early technologies in the market. We also consider in which business unit these early solutions make sense and how we can then develop a technology, so that we can use it productively.

What did the Heraeus Digital Hub implement last year? Would you like to share a few examples?

I'd be happy to. Last year, we essentially carried out projects with all eleven business units of the Heraeus group - around 30 in total.

To give you a few examples: We did projects in the area of visual inspection with the help of machine learning. This includes teaching machines how to see like human beings and thus raising quality rates to a completely different level. We have done projects on data science - where we really use the data from the supply chain and from production, to draw new insights. And we've also done projects focusing on customers. Here we think about: How do we actually have to optimize and design customer processes and our customer perception so that we can achieve an optimal customer experience. That's what we call digital customer experience.

From the projects to the trends. What is your assessment - which digital trends will play a major role in 2021?

Yes, so I think there are three main trends that everyone should have on their radar.

The first is machine learning, the second is omnichannel management and the third is cybersecurity.

Why machine learning? Wherever we find data, wherever we recognize patterns or have repeatable processes, Machine Learning can be a lever to develop new solutions.

Omnichannel management, too, is quite clear: today's and tomorrow's customers expect a similar experience in the B2B sector as they do as private customers. That's why this trend is so important.

And on the topic of cybersecurity: the more we are networked on the Internet, the more data travels on the global network and is stored in the cloud, and the more applications we have, the more relevant the topic of cybersecurity becomes for us as companies, but also for us as private individuals.

The Corona pandemic has driven digitization in many areas. What would you say has been the most significant change in the production environment?

So, I think in the traditional production environment it was very quickly recognized. As a globally active company, there are often situations when you have to carry out maintenance in a production facility or when you need an expert to take a look at a machine to determine a fault. In the past, before Corona, that involved flights and business trips. During the Corona pandemic, we placed a lot of emphasis on remote assistance and augmented reality and found that a lot of things work very well.

I think it's relatively clear for the future that we will live in a hybrid world. Physical travel and augmented reality will come together much more strongly and create a new working world.

In the last 20 years, digitization initiatives have grown exponentially. What is your assessment, will this speed continue?

Yes, the speed will remain. First, the technological trend is equally strong or getting stronger. Even if we think about us as end customers: We drive electric cars, we drive autonomous vehicles, we use other digital technologies in our daily lives. That's the first point.

The second point is that over the next few decades, the global middle class will grow by a further two billion people. In other words, these are all people who can and want to use digital solutions.

And the third point is that digital technology can also make a significant contribution to the sustainable development of society and the environment.

Keyword sustainability. To what extent exactly can digitization support sustainability and sustainable innovations?

Yes, there is a whole range. But to give you an example that we might also know from everyday life.

If you imagine a production plant, it has a lot of equipment that consumes electricity. Today, it is usually the case that the plants are controlled individually – depending on when an individual plant or machine needs electricity, it is switched on and off.

Currently, it is less common for an algorithm to be used across the board to determine whether the energy consumption is optimal in terms of sustainability, but also in terms of resource efficiency. And these are already topics that will come up in the future - where we are already carrying out the first projects internally. You can see very clearly that technology can and will also be a major component of sustainable management.

As a family business, Heraeus has a long history. How would you say you and your team bridge the gap between tradition and modernity?

I believe that it is actually a strength. As a family-owned company with a long tradition, Heraeus has learned to recognize core technologies and core trends early on and also to invest in them sustainably and to remain invested.

And it's the same with digital technologies: There are technologies that generate a payback very quickly. But there are always technologies that you have to get to grips with, that you have to test. Sustainable investment is a fundamental competitive advantage over publicly traded companies, which are subject to much shorter-term pressure to succeed.

Many thanks Markus for your time