#DIGINNObest: Advanced technologies and solutions are the recipe for manufacturers’ competitiveness. HODA and SARGASAS cases

For years, entrepreneurs and industrialists have been talking about the concerning and ever-widening gap between rising wages and labour productivity. According to the Bank of Lithuania, wages in the country increased by 19 %, and productivity by as little as 2.9 % in 2012-2016 alone. But industries are encouraged to invest in progressive solutions and technologies that improve operational efficiency not just due to the above circumstance.

“After reviewing the range of our manufactured parts, we realized that there was a number of products the price of which went down over the last ten to fifteen years, leave alone going up. This happened primarily due to growing competition. After all, manufacturers nowadays often compete not on the national or regional, but on the global level. Thus, to prevent losses and to make profit, we had to invest in solutions that increase productivity,” says Raimundas Gražys, CEO of Hoda, manufacturer of plastic components.

Reducing manual labour

Located in Molėtai district, Hoda is the largest manufacturer of plastic products in the Baltics. The company moulds parts for the automotive, furniture industry, and home appliance manufacturers.

To increase its productivity, last December the company completed a project to expand its manufacturing facilities, and acquired 17 new plastic injection moulding machines and 27 industrial robots.

Raimundas Gražys refers to the latter as additional, automatic working hands. At the factory, the robots operate the injection molding machines and pack the manufactured parts.

“I would not dare to say that our factory has already entered the so-called Industry 4.0 development phase, where big data, artificial intelligence, and robotics are used in production. The production process has not been fully automated yet. For example, even though the packaging machine is Swiss, it also makes errors, so the packages undergo careful human inspection. But the amount of manual labour gradually reduces at Hoda,” says the CEO.

The investment of the factory in the premises expansion and equipment upgrades reached 3.8 million EUR. A project part amounting to one million EUR was funded by the European Union.

According to Raimundas Gražys, the upgrade benefits are obvious: Hoda’s labour productivity jumped by a third. He says that with full production load, the investment could pay off in five years.

“However, we estimate that the investment will fully return in ten years. Such a timeline is perfectly normal, the acquired machines are reliable, made by European manufacturers, and they will certainly last long,” says the factory CEO.

UAB Hoda production site 

Doubled productivity

Inga Šileikytė, the Head of Sargasas, another engineering industry company, which produces high precision metal mechanics, gives a slightly different view. The company, predominantly manufacturing parts for the laser and optics industry, is completing a production digitization project to install smart sensors on the machines for real-time measurements.

The company’s investment in these technologies developed by a Lithuanian company Prodivi amounts to about 150,000 EUR.

“According to our calculations, the investment has already paid off. The turnover increased significantly, and we do much more with the same capabilities. With the implementation of digital solutions, the company’s productivity doubled: the amount of products manufactured during the same time unit has increased, and the useful working time has grown up,” – comments Inga Šileikytė.

Sargasas mainly produces parts for Lithuanian laser and optical companies, and exports about one fifth of its produce. Production orders are small, and precision parts are predominantly manufactured individually, so there is no need to robotise production.

However, getting accurate data at all times is critical in such high precision manufacturing.

“Until now, we could not even accurately estimate the cost of our products as we did not know the duration of some production cycles. We realized the need to get real-time information on what was happening with our machines every moment. By installing smart sensors, we can monitor the production process, react promptly in case of faults, monitor productivity and efficiency indicators, assess loads, capacities, and evenly distribute works and schedule orders,” she says.

UAB Sargasas product 

Artificial intelligence will be used

Sargasas is among the top and most advanced companies in Europe engaged in such activities. However, the company does not intend to stop looking for ways to apply digital solutions to drive operational efficiency. The company’s further plans are to improve manufacturing processes through the use of artificial intelligence.

“The factory-installed digital solutions now provide a wealth of data that we can monitor in real time. However, the next step includes software that would both track data, and suggest how to use available capabilities, plan equipment and human work most efficiently. Based on information too vast for a man to process, artificial intelligence will be able to help in organising the company’s operations,” says Inga Šileikytė.

Hoda also intends to keep improving its productivity with the help of advanced technologies. Solar modules have already been delivered to the factory and, according to the CEO, a solar power plant will be installed there in the upcoming 2-3 months. The next development stage is a modern raw material warehouse with a central system for raw material feeding.

According to Raimundas Gražys, such a system would allow feeding raw materials to plastic injection molding machines directly from the warehouse instead of keeping them near the machines in the manufacturing premises. This would allow for a more efficient use of the occupied space, speeding up the production process, and reducing manual labor.

However, machines should not take labour away from humans. The Sargasas team, which is rapidly implementing smart technologies, has even grown considerably in recent years, from 54 to 78 employees.

According to the company Head, the number of orders and new machines is growing, so the number of employees is not reducing. On the contrary, the company faces a shortage of staff, predominantly operators. To this end, they cooperate with Jeruzale Labour Market Training Centre, which trains workers with required skills.

According to the Hoda CEO, the company does not currently face a major challenge due to a lack of specialists. The company employs population of Molėtai district and the surrounding towns, while higher qualified engineers commute from Vilnius.

However, the Company CEO admits that in general, Lithuanian plastic industry suffers greatly from gaps in the education system. There are many plastics manufacturing companies, but no educational establishment trains plastic molding operators because such a training program does not exist at all.

“Of course, when production is robotized, low-skilled workers are less needed. But the need for specialists capable of servicing and maintaining the machines remains, and it will only grow,” says Raimundas Gražys.

A way to stay competitive in the world

Operations of the country’s engineering industries like Sargasas or Hoda grow rapidly. Darius Lasionis, the Head of Lithuanian Engineering Industries Association LINPRA that unites these companies, estimates that production in the sector has grown by 64% over the last decade, while the engineering industry generates about 6% of gross domestic product a year, and it is still growing.

However, the Association Director emphasizes that ensuring the subsequent sectoral development and global competitiveness require targeted efforts by the private and public sectors aimed at developing an investment-friendly environment in the engineering industry, which is still often overlooked.

“Rapid employment of advanced solutions and technologies is also important for Lithuanian business. Only then it will be able to remain competitive in a global environment, which is the key to driving the industrial revolution forward. Digital technologies are already dramatically changing the way we design, produce and sell various goods and services. They will also shape the future markets and business models,” comments D. Lasionis.

Business people agree with this view. According to Inga Šileikytė, increasing the operational efficiency is the only way for business to stay competitive.

“The opportunities to make our products extremely cheap are highly limited. We will not forge our parts any nicer than our competitors do. Thus, efficiency is the only area where we can stand out, and gain advantage. Therefore, hopefully, the highest possible number of national companies will implement advanced solutions, technologies and digitization,” says the Head of Sargasas.

Lithuanian Engineering Industry at Hannover Messe exhibition

LINPRA together with 10 companies, members of association, will take part and represent the Lithuanian engineering industries sector in one of the largest world’s trade fairs Hannover Messe on April 1–5. Find us at Hall 4, Stand 51 F.

LINPRA also initiates an introductory event focused on doing business in Lithuania. German companies that are already operating in one of the prominent Baltic markets – Lithuania – will share their unique experience. The event will occur on April 2 and will be followed by a networking session.

Find out more about the Lithuanian companies in this list: Hannover_Messe_LINPRA_companies.

For more information regarding the event and LINPRA stand at the exhibition contact rokas.bekeris@linpra.lt.

 

International engineering matchmaking event in Lithuania, March 21

Kaunas, Park Inn Hotel, K. Donelaičio str. 27 | March 21, 2019 
International B2B matchmaking event  

Lithuania has deep manufacturing and engineering industry traditions – it is capable to deliver quality products with an attractive quality-to-price ratio.

An international engineering B2B event, co-organized by the Engineering Industries Association of Lithuania LINPRA and Enterprise Lithuania, will take place on 21 March 2019 in Kaunas. It will host TOP Lithuanian companies from metal, plastics, electrical, machinery equipment, robotics and other sectors. The matchmaking session is open and kindly invites international guests, interested in finding new suppliers from the Baltic States.

Companies participating in the matchmaking event will be able to book a series of 20-minute meetings with the companies of their interest, in search for opportunities of mutually beneficial cooperation. The event enables a company to meet with up to twelve other companies in just one-day’s session – which is an easy and cost-effective way to find reliable business partners in the Baltics.

Field of interest and main sectors:

  • Metal, plastics and rubber processing
  • Electrical and machinery equipment
  • Automatization, robotics and lasers

The day before the B2B event all guests are also welcome to the international conference “Making Industry 4.0 Real”. Save the date for a two-day business professional event in Lithuania: digital transformation conference on March 20 and B2B matchmaking event on March 21 in Kaunas, Lithuania.

More information HERE.

Registration for the B2B event required. Register HERE.

ORGALIME GENERAL ASSEMBLY HELD IN VILNIUS: EUROPE REQUIRES AN AMBITIOUS INDUSTRY STRATEGY

In order to enable the European technology industry to make a full contribution to the evolution of the Old Continent’s economy and society, in the European Union and its Member States, targeted investment in industrial digitization and innovation must be strongly promoted. Such a position was heard at the General Assembly of members of one of the largest and most influential European industry organizations, the engineering industry association ORGALIME. Orgalime’s General Assembly is the time for the European technology industry to meet, exchange and discuss. This year’s summer edition took place in Vilnius, Lithuania, hosted by LINPRA – Orgalime’s member association.

Delegates from more than 40 organisations of engineering industry gathered to plan the organization’s activities and to participate in a conference, addressing the challenges of the fourth industrial revolution, changes and trends in the industry and society.

The event on 12-13 June brought together CEOs from across Orgalime’s members to explore the latest industry trends and burning policy issues at European level, while charting the future for the association in the year ahead.

The meeting began in closed-door sessions where members reviewed the past year’s achievements and discussed a roadmap for the future.

The public event that followed saw representatives from select companies share their experiences and discuss how transformation in the technology industries is driving positive change in Europe’s economy and society.

Contributions from Gintaras Vilda, Lithuania’s Vice Minister of Economy, and Lasionis on behalf of LINPRA gave participants an insight into Lithuania’s status as an emerging powerhouse in industrial engineering and its enormous growth potential.  To cite just one impressive figure: the national industry output jumped by a massive 18 % in the last year alone.

A diverse programme of keynotes and panel debates gave participants the chance to hear directly from some of the country’s most successful technology industry entrepreneurs – with case studies ranging from innovative digitised production models to low-carbon building systems.

Participants of the conference, representatives of engineering industry associations and companies shared their experience on the implementation of technological solutions, which could improve the efficiency of industrial and manufacturing enterprises in several ways. The production volumes of Lithuanian companies operating in this sector have increased by one third, 34 % over the past decade. However, in order to ensure further development of the sector and global competitiveness, it is necessary to focus both private and public sector efforts on creating an investment-friendly environment in the area which has so far been under-emphasized.

The ORGALIME Association, founded in 1954, unites engineering industry organizations. The industries represented by ORGALIME employ nearly 11 million people in the EU and in 2017 accounted for some €2000 billion of output. Association members create about 28 percent of European goods, accounting for about one-third of European Union production exports.

Read more about the General Assembly on ORGALIME page.

LITHUANIAN ENGINEERING INDUSTRY ASSOCIATION LINPRA HAS ADOPTED NEW MANAGEMENT

Tomas Jaskelevičius, the chairman of the Board of UAB “Progresyvūs verslo sprendimai” (Progressive Business Solutions), was elected as the president of the association LINPRA for the two-year term of office of the Lithuanian engineering industry. According to the newly adopted LINPRA head, the association would not only contribute to the improvement of the business environment and the promotion of exports, but would also help the engineering companies to create higher value-added products and establish themselves among European leaders.

“In recent years, we are witnessing a breakthrough in the Lithuanian engineering industry and growing investment in technological efficiency. However, international competition is also growing, and the output of many companies in this sector is yet to reach a higher added value. Therefore, together with the renewed Association’s leadership, we will strive to promote the competitiveness of the domestic engineering industry and help our companies to reach better positions in the European industrial supply chain. Both, the changing competitive environment and the fourth industrial revolution, mean new challenges for our companies, and LINPRA is ready to help them,” says T. Jaskelevičius.

According to him, although the Lithuanian engineering industry is increasingly recognized as an intelligent and reliable partner in the world, but to their customers they do not yet sell the final product that could be used immediately. Therefore, special attention is needed to change this situation. In addition, the Association’s priorities will continue to be the promotion of business-science partnerships and improvement of the working conditions, improvement of the quality of training of qualified specialists and improvement of education.

The newly elected Presidium and Vice Presidents were elected in the general assembly of LINPRA members, which took place in Vilnius on May 12. For the next two years, Kęstutis Jasiūnas, General Manager of Ekspla, and Arnoldas Šileika, General Director of the Western Shipyard, were re-elected as vice presidents. Also to act as a vice president, LINPRA members have entrusted Gintautas Kvietkauskas, the director of UAB Arginta Group, and the previous president of LINPRA.

“Several recent breakthroughs have taken place – the general Lithuanian engineering industry has grown and the association’s activities have expanded, influence has increased, and leadership has grown. If the engineering industry had been left behind in the margins of public attention, today we can firmly say that we are becoming more and more alert, our needs are taken into account, our aspirations are appreciated and recognized. I believe that the new Presidium of the Association and its executives will continue to successfully use the existing work results that have been reached so far, use all available means and continue their activities in the right direction, maintain and strengthen the influence of the engineering industry sector,” said G. Kvietkauskas, who has been chairing the association for the last four years.

LINPRA members have also appointed the Director of the Association. These responsibilities have been entrusted to Darius Lasionis, manager of the Baltic Automotive Components Cluster (BACC) and Plastics Cluster. D. Lasionis took over the position of director of the association from Gintaras Vilda, the present vice minister of economy of Lithuania.

The Lithuanian Engineering Industry Association LINPRA unites over 90 members. An independent self-governing organization represents the interests of its members, working in metal, machinery and equipment, plastics, electrotechnology and electronics sectors on national and international scale.

The turnover of the sector represented by the association in 2017 reached 3.8 billion euro. More than 70 % of Lithuanian manufacturing industry output is exported.

LINPRA – publicly acknowledged at Digital Skills and Jobs Coalition

LINPRA has been publicly acknowledged for the contribution as a Pledger at Digital Skills and Jobs Coalition and has a pledge in the Digital Skills for Labour Force category.

The Digital Skills and Jobs Coalition brings together Member States, companies, social partners, non-profit organisations and education providers who take action to tackle the lack of digital skills in Europe. Member States can support cooperation among different actors in their country by bringing them together in national Digital Skills and Jobs Coalitions.

Specifically, we contribute to the development of vocational competences – including digital ones – for at least 100 trainees and at least 50 VET trainers in the metalworking sector, with the development of a new set of occupational standards, a new VET programme and educational material that matches the skills requirements of the manufacturing industry. In addition, we commit to actively work in the field of vocational guidance and reach at least 6,000 young people and vocational teachers with a mobile STEAM laboratory (InfoMobil), aimed at increasing the attractiveness of the engineering professions and the awareness of the need for digital skills in the manufacturing industry. In order to strengthen vocational training for engineering professionals we aim to establish a sector ‘Professional competence center’, gathering the vocational training centers that provide training programmes relevant to the sector.

Page of Lithuanian coalition.

List of all National coalitions.

 

Digital Innovation Hubs

The European Commission launched on 19 April 2016 the first industry-related initiative of the Digital Single Market package. Building on and complementing the various national initiatives for digitising industry, the Commission acts to trigger further investments in the digitisation of industry and support the creation of better framework conditions for the digital industrial revolution. One of the more important pillars of the Digitise European Industry effort is the activity to develop a network of Digital Innovation Hubs (DIH). A first draft version of the Digtial Innovation Hubs catalogue is online. Lithuanian Digital Innovation Hubs are also in the European DIH network. More information – on European Commission page HERE

Lithuania – in the list of initiatives for the digitisation of industry across Europe

European Commission observes and provides an overview of National Initiatives for digitising industry. The full list and the map that reflects the status of national policy initiatives in the Member States is provided on European Commission page.

Fifteen national initiatives for digitising industry have been launched across Europe in recent years. With value chains increasingly distributed across Europe, the further digitisation of industry brings challenges that can only be addressed through a coordinated EU-wide effort. Read more about the digitising European Industry Policy HERE.

 

The author of “The Fourth Industrial Revolution” Klaus Schwab visited Lithuania

German engineer and economist Klaus Martin Schwab, the founder of the World Economic Forum in Davos, who holds doctorates in economics and engineering, is one of the most prominent researchers and developers of the concept of the fourth industrial revolution. Initiated by The Engineering Industries Association LINPRA and with the help of partners, professor’s book The Fourth Industrial Revolution has been just released in Lithuanian language and introduced during the Annual Economic Forum 2017 in Vilnius, 12 October.

As the main guest and speaker of the event, Klaus Shwab shared his ideas comparing the concepts of Industry 4.0 and The Fourth Industrial Revolution, explaining that revolution is much more overwhelming and refers to more aspects, not only digitalisation of the industry. One of the most important aspects is Education4.0 – traditional education mixed with lifelong learning and development of digital skills, maybe even coding, since young age.

During the visit Professor K. Shwab was awarded with the honorary doctorate of Kaunas University of Technology and delivered a public lecture on Friday, 13 October.  

First meeting of the ‘Industry 4.0’ Commission

The first official meeting of the National Industrial Competitiveness Commission ‘Industry 4.0’ (‘Pramonė 4.0’) takes place on August 29, 2017, aiming to:

  • Introduce activities, performed due to the digitalisation of industry and the implementation of ‘Pramonė 4.0’ initiative;
  • Discuss further possibilities of the initiative;
  • Determine the main directions of the National Digitalisation Platform ‘Pramonė 4.0’ activities;
  • Set up the tasks for the Coordinating group of the National Industrial Competitiveness Commission.

Structure of the National Industrial Competitiveness Commission ‘Industry 4.0’ (‘Pramonė 4.0’) is confirmed by the Prime Minister Saulius Skvernelis on June 13, 2017, and consists of the following:

  • Mindaugas Sinkevičius – Minister of Economy (chairman of the Commission);
  • Robertas Dargis – President of the Lithuanian Confederation of Industrialists (deputy chairman of the Commission);
  • Gintautas Kvietkauskas – President of Engineering Industries Association of Lithuania LINPRA;
  • Eglė Radišauskienė – Deputy Minister for Social Security and Labour;
  • Lukas Savickas – Adviser to the Prime Minister for Economic Affairs and Strategic Change Management;
  • Rimantas Vaitkus – member of Lithuanian Robotics Association, General manager of joint stock company ‘Vilniaus baldai’;
  • Gintaras Valušis – Director of State Scientific Research Institute, Center For Physical Sciences And Technology (FTMC);
  • Paulius Vertelka – Executive director of association ‘Infobalt’;
  • Giedrius Viliūnas – Deputy Minister of Education and Science;
  • Mantas Vilys – Director of Public Institution Lithuanian Innovation Center.