April 21, 2021

Bottom up and Deep Digitization of Operations

Augmented reveals the stories behind the new era of industrial operations, where technology will restore the agility of frontline workers. 

In episode 15 of the podcast, the topic is: Bottom up and Deep Digitization of Operations. Our guest is Dr. Damir Hrnjadovic, Managing Director, DMG MORI Digital GmbH

In this conversation, we talk about How DMG MORI was able to digitize their operations in a matter of weeks, using Tulip software. Lean, nocode startups are transforming experiences for factory owners because its shopfloor solutions are so easy to implement. We discuss whether nocode actually means process engineers can become independent from the IT department. Damir confirms that DMG MORI power users are able to do that even though not every shopfloor operator will create a Tulip application. We discuss upskilling in the German Mittelstand of small-and medium size businesses and how Damir feels like a time traveler when he encounters paper based processes on the shop floor.

After listening to this episode, check out DMG MORI as well as Dr. Damir Hrnjadovic's social profile.

  • DMG MORI (@dmgmorieu): https://us.dmgmori.com/
  • Dr. Damir Hrnjadovic (@DamirHrnjadovic): https://www.linkedin.com/in/dr-damir-hrnjadovic-3ba0485b/

My takeaway is that it's striking to hear about how Damir at times feels like a time traveler when encountering paper based operations at the shop floor, at other times, he can experience bottom up, deep digitalization in a matter of weeks. How can those to co-exist? Clearly shopfloor change is uneven at the moment, depending on whether you heard the right digital gospel and what the attitude of the IT department is to introducing changes that democratize IT.

Thanks for listening. If you liked the show, subscribe at Augmentedpodcast.co or in your preferred podcast player, and rate us with five stars. If you liked this episode, you might also like episode 3 How to Train Augmented workers or episode 10 A Brief History of Manufacturing Software. Augmented--the industry 4.0 podcast.


Deep digitization

Trond Arne Undheim, Host: [00:00:00] We'll use a tiny little bit of this, but it's more important right now just to make sure that we agree on questions and stuff. But anyway, tell me a little bit about yourself to mirror and your exposure to all of the world of software and Manufacturing. You seem to have been there both from an academic side and and in, in an industrial context that at

[00:00:18] Damir Hrnjadovic, DMG MORI: [00:00:18] work.

[00:00:18]So my background is I'm an engineer Economic as I studied chemical engineering. And then wrote my doctorate and let's say very theoretically, but in optimizing production processes, logistic processes, process standardization. And after that I founded my own startup, which was the complete other fields of e-learning.

[00:00:43]But there, I started to work really as an entrepreneur with this, let's say lean startup background, two things, fast, fail fast, but cheap. See what works not. And then if you see it as a failure to go to the next direction and started then to work at teams, you as. To the project manager. So build together up with the Tulip team United States, this partnership with DMD Memorial on one hand, but also on the other hand, went to customers went through our production to see where could be optimization, potentials, which we could realize where to lip.

[00:01:17] And then again, to them for me is that let's say best example for this. Lean approach. Yeah. Try out things fast, build an MVP, see what works. What's not working. Then fail, try the next thing. And so

[00:01:31] Trond Arne Undheim, Host: [00:01:31] tell me how you got exposed to Tulip. Cause that might be an interesting story.

[00:01:35]Damir Hrnjadovic, DMG MORI: [00:01:35] What means exposed?

[00:01:36]Trond Arne Undheim, Host: [00:01:36] Tell me how you got how you found Tulip.

[00:01:38]Damir Hrnjadovic, DMG MORI: [00:01:38] We, as Demaurie found Tulip while our CEO, Mr. tRNAs was visiting the MIT in Boston and then met, I think Natan, this was in late 2018 and then beginning of 2019 we started to do first MVP at the spindle at assembly frontline. To see, okay. Is it really easy like this?

[00:01:58] And it was a pretty interesting, amazing pretty amazing experience for us because we've managed to digitize the whole process. Only the couple of weeks and get before it looks like, yeah, the most companies at the moment when they try to digitize something, they go to the it department.

[00:02:15] It's your department tells you, okay, come back in six, six months because we have a lot of other things to do. And this is also pretty amazing. This was pretty amazing for us. It's still an amazing experience, but also for our customers to see, okay, we get it back in our hands. So yeah, we can push the digitization on the shop floor on our own.

[00:02:33] We know the processes. We don't have to wait four weeks a month to do the next step. And then to see that it's maybe what's from step. So this is how everything started. I

[00:02:44] Trond Arne Undheim, Host: [00:02:44] I'm. I'm curious about that and it's great to hear that story. I've heard that story several times about Tulip and, I was at MIT, I probably at the time when they were introduced and there are several stories about Tulip that goes that way, where companies are just very surprised.

[00:03:02] Why do you think. You hadn't found anything like that before and you know what and I guess more importantly, now that you have this sort of approach on board Is it affecting other parts of your process as well? Have you involved other sort of leaned no code startups in, in your process or is because many manufacturers that I speak to, they historically have a, a very complex set of softwares themselves, and then they have a myriad of vendors.

[00:03:29] So the infrastructure is fairly

[00:03:31] Damir Hrnjadovic, DMG MORI: [00:03:31] complex. So let's maybe start, let's maybe start with the second part of the question. So of course we also have a lot of different software and use different. Let's say we have at the moment right now, two different ERP systems, because one old ERP system we used for last 20 years developed ourself or improved ourself, or to get her with some consultants.

[00:03:55] And now the other hand we are introducing at the moment, the new SAP for our. So let's say this is also a once one special thing to have two year piece systems in place is pretty painful. Let's say if we want you to grade other software, but of course we have let's say qualities and software for quality issues dashboards and all the different stuff.

[00:04:15] And this is, let's say this is also the huge benefit from Tulip on the other hand, because if I want to solve the. Different problems I have on my shop floor or for us our shop floors, because we have a couple of plants, but then you need different solutions because yeah. Problems are different from prevalent proponent, from problem to problem, you need different solutions and this is what makes it, what it makes.

[00:04:41] Pretty complex. On one hand, you have to find the right solution. Then you will find out that the solution is not perfect. So you need to adjust it or to adapt it to your problem. This takes time. You need it guys on one hand. And on the other hand, if you want to connect these different solutions from 20 different it suppliers, then you will have a problem.

[00:05:00] So it will be really hard. And this is also then a benefit from Tulip because you can go with Tulip too. Yeah. It doesn't matter. W we have a problem with Tulip. You can create your own solution based on one platform. So we don't need to connect these different pieces. And it's one platform based on which you can build applications and you can connect them easily because of their nature, because they're built on top of one platform.

[00:05:22]This is a huge benefit. The second, so let's come back to the first part of the question. How does it, or does it impact other parts? I would say I'm not sure, but I think Tulip was our first no code platform. We started to use, we know other no-code platforms like Mendix and so on.

[00:05:40] I'm pretty sure that we also maybe tested them, but there have been well known in the company, but I think Tulip was the first one with his focus on shop floor processes on production processes. And it's this in with the mix of, let's say the founder team would not on, and this correspondence on the date, this was w what catched us and that's why we tested it.


[00:06:03] Trond Arne Undheim, Host: [00:06:03] Is it re was it re, is it really the case that you are able to, because the promise of no code is really no code, meaning your engineers or your operators don't have to know a lot of previous coding knowledge in your experience when you started to implementing Boer, you still using the it department, or is it really possible for engineers?

[00:06:26]On the shop floor who don't have a software background to tinker with these apps at this stage.

[00:06:31] Damir Hrnjadovic, DMG MORI: [00:06:31] Yeah. So it is really possible. There's this also in our experience, really some shop floor operators who are assembling the spindles. They are improving the spindle app. Week by week.

[00:06:45] And this is also for me, this is, let's say this is the key to a successful implementation of Tulip because we had, let's say a really bad experiences with customers who told us, okay. I like Tulip. But please implement this application for me. So they had a really great idea for the application, but what we realized is, okay, what's the difference then between us creating this application and Tulip and coding this into Tulip, because if you are not using Tulip yourself to adapt the applications, to change them and so on.

[00:07:15] There's no difference. Then you are not dependent from a T guys and you are dependent from us. So this is a really important thing too, to have success, to find really fast power users from the shelf floor which understand the processes because they work every day there because they have the acceptance from their colleagues, which also working in the let's say spin line assembly.

[00:07:35]And these are really the guys who built the application and improve them. I would say comfortably more. To be able to say, go focus more on this. Of course not every shop floor operator will build application and there are some guys or Yeah, some colleagues, which like it more, which we, some of them have more ideas and so on.

[00:07:58] And some of them have, let's say have a better are more talented than others to build more or easier, or more complex applications. But I'm pretty sure that every operator who is able to use a smartphone or to use a PowerPoint, to create a presentation is able to create with Tulip application.

[00:08:15] For his problem.

[00:08:16]Trond Arne Undheim, Host: [00:08:16] How prevalent is this kind of approach in the German. Medium-sized small and medium sized businesses where I guess what's called the German middle stone, because I know that at least politically, upskilling is a big priority. You have some exposure to the German metal stone.

[00:08:34] Tell me a little bit about the challenges that. That group of companies specifically are facing when it comes to digitalization?

[00:08:40]Damir Hrnjadovic, DMG MORI: [00:08:40] My experiences, so let's say if we're looking at him, look into, in the media in the last couple of years, it's everywhere industry 4.0 digital transformation AI and all this stuff, but.

[00:08:53] When I typically go to the shop floor, it's I would say feeling like a time traveler, because it's, it looks like we're still working with the same same media XO paper, like 20 years ago. And the most critical thing for me is that we're starting to do the first steps. It's as fast as possible with Tulip to have small let's say small success stories, but it happens very often that the vision is really great, which is what these companies have.

[00:09:21] And they want to do to let's say 100 steps. Yeah. As a first step at one time, and this is the thing where I've to have to tell them, okay, yeah, we're going to do this together, but let's talk with the first small steps. Okay. So they realized that they missed this. Let's say process of digitization in the last 10 years.

[00:09:39] And then they try to catch up in it's in a couple of days, and this will not work because either. You will fail because something will not work out or will, you will lose let's say your employees on the, on this way because they they cannot understand why this needs to be so fast. And I think this is really critical and this is where Tulip helps to make digitization understandable for the operators, which may be today.

[00:10:07] Do not have a lot to do with digitization. Yeah. And to make it for them. Yeah. I don't know the English word, but to give power in their hands and to agent to empower them this, I think this is going to be the right word. This is really critical because yeah, we have maybe a couple of it colleagues working at the company, but if we producing, if a manufacturer, we have a lot of shop floor operators, right?

[00:10:36] Yeah. Yeah, we better should use their knowledge to digitize us. Because otherwise we will have the same problem, like introducing the ERP system.

[00:10:44] Trond Arne Undheim, Host: [00:10:44] Yeah. It just strikes me to me that this challenge of even though the systems are you, some systems are becoming easier. It's very easy. Whether you are a smaller, large company to already be embedded in a software system that kind of locks you into the old process.

[00:11:00]So what are your thoughts on how other companies can get out of that dynamic? DMG Mori is of course not a small company in that sense, but if you think about those, your suppliers again, w what is the first step? It, is it the same way that you could implement a no code system possible for any pardon?

[00:11:20]Any supplier to to take that path, or do you see use cases where you first have to I don't know, get rid of your old systems or even just this old attitude that the it department runs the process? I guess I'm just curious as to. You're explaining that it went pretty smoothly with DMG.

[00:11:38]Would you say that was because you were just you had buy-in from the top that we're going to try this, or was it really just that the solution almost solves itself because it builds in a very different approach.

[00:11:49]Damir Hrnjadovic, DMG MORI: [00:11:49] I think two things are critical on one hand, as I said to you, you have to have one, let's say supporter or believer from the C-level from management.

[00:11:58] Somehow let's say so I want to push this. And also the willingness to invest at some point, because of course, because it's the return of invest. Chances. And the other hand, you need these power users on the shop floor. We're willing to push this real to, to bring this to life. And as I said, I think I would completely agree that you have to, let's say free aligned and.

[00:12:23] Yeah, free yourself from dependent from the it, this could also, it happens a couple of times that also the, it, colleagues need to understand that they have also benefits. From Tulip. If it's used in a company it's not a system which makes them not needed anymore, it's assess  system, which helps them so that they can focus on real important things in the company.

[00:12:46] I teach security and all the staff, or maybe also the ERP system. So we did at the beginning, a couple of mistakes where we let's say create the momentum in companies for between management and shop operators. But before it got the it guys. And then they let's say block this somehow. So this is what we are focusing.

[00:13:06] We need to create momentum in in the, all the different for all the different stakeholder groups and show them the benefits from Tulip for them, this is really important. And then some of the groups like the management is of course not so involved anymore where we're creating application, the a T guys also, we need there maybe.

[00:13:25] When we create interfaces between Tulip and the ERP system, but our main focus group are the shop floor operators to push the button off digitization.

[00:13:37] Trond Arne Undheim, Host: [00:13:37] That's interesting what you said there, because. It's not surprising, right? If you are the it department, you're used to a certain way of being in control all that infrastructure that you own.

[00:13:48] This is a very different paradigm. I w what are some of their reactions even in the best case, do they feel also empowered by this or is that more of a, an adoption process? Because the paradigm, is different. They, they are not, controlling the process anymore.

[00:14:02]Damir Hrnjadovic, DMG MORI: [00:14:02] It's it depends. It's from customer to customer. We have let's say the worst thing is where we have maybe I T guys, which feel. How do I say like someone is taking them because they hard-coded, everything, Hotwired everything and their job is pretty safe because no one knows how the systems are working besides what I was referring to.

[00:14:22] Yeah. Beside, beside them, I would say is if you, as a company have some of these colleagues, it's also for you as a company, pretty dangerous because at some point, No one is going to live forever. So at least at some point also these colleagues will exit the company. And then this will be the prepare for you as a company, because if not a T guy comes inside, he needs to understand what was hard-coded there.

[00:14:47] And so this is, let's say that this would be, this is the, let's say bad experience. Yeah. I would say this maybe in 5%. 5% of the cases, the other things are. Okay. We have it guys, which see the potentials and see yeah. See the huge potential of Tulip and help the shop floor operators to connect to the systems and to push digitization as fast as possible because they understand that this is really critical for most companies of most manufacturers today to digitize themselves because It's an important to, to keep up.

[00:15:20] And as I said, most of the companies in Germany, I would say for regards to digitize themselves in the last 20, 20 years, and this is good, more and more it's just becoming more and more. So everyone needs to. Take, or let's say two to play as a team and a team guys have their day part. They are, I don't know how to say they are like the goalkeepers and they need to know where to play the next pass.

[00:15:48]So someone let's say pass to, to open up a connection to a database, and then there's the defender. The defender is the shop floor operator. He creates applications using. The state puppets and so on. So everyone needs to work as a team. I think this is really important. Are you a soccer fandom here? A bit of it.

[00:16:06] Yeah, me too. Me too. Yeah, I can. I can always also for the colleagues United States, would say the it guys maybe to quite a bit, and he plays the pause to, to, to the wide receiver and then the wide receiver builds the application uses the past yet to score at the end to score with the Tulip app.

[00:16:23]By collecting maybe data from the shelf to find out what the process is not working well. And then I don't know, then the is optimizing the process. Yeah.

[00:16:32] Trond Arne Undheim, Host: [00:16:32] Damir. I wanted to touch on a personal note, just for a few seconds. You told me you were born in Bosnia, former Republic of Yugoslavia and came to Germany as a refugee.

[00:16:40] You're a bit of an unlikely it, executive yourself. You have come from a lot of challenges. You're a lean startup in and of yourself.

[00:16:48] Damir Hrnjadovic, DMG MORI: [00:16:48] Yeah, right? Yeah. That's right. Yeah. Yeah this is the story of my life. For me, I don't know, for me, it's completely normal.

[00:16:55] They had came to Germany when I was about seven years old went directly to school. I think. Maybe two weeks after we arrived here without speaking a word of German. And for me as a kid, it was then, okay, because as a kid, you don't realize so many things, but I think it was like the same lean approach.

[00:17:15] Yeah. Just do it to try it out. Things will work out. Some of them not okay if not, and go to tons of rides and go again, the next bowl. And then again, turn to the left. So it's kind of part of my. Life story.

[00:17:29] Trond Arne Undheim, Host: [00:17:29] The reason I think it's fascinating. And obviously, congratulations on having succeeded with that.

[00:17:34] But the reason I brought it up was, I think that the way that you explain things. Reflects your personal story as well. I just wanted you to think about when you're selling a lean startup approach inside of DMG Mori, or to your suppliers. Do you feel like you are drawing a lot on your personal experiences?

[00:17:51]Maybe not directly, maybe you don't tell them this story, in a sense, upskilling isn't it isn't just about learning skills. It is about this. Improvisational attitude. Tell me a little bit more about how that translates into the workplace. More, more generally.

[00:18:05]Damir Hrnjadovic, DMG MORI: [00:18:05] Yeah, I think you need to be so I'm not sure if I understand the question, but I think you need to be also this ups scaling thing and everything around it. I need, you need to be open for changes. Also for changes by learning new skills, by trying things out. And if you are shuffle operator, I'm pretty sure you never you never have experiences with coding and bam, you still, you are something like a developer, like an app developer, but by using Tulip and you need to be open for that.

[00:18:38]I think this is also somehow one of them. Part of the journey. But it's I would say it's great to learn new things, to give you new perspectives. Otherwise I would say that, 50 years ago, it was completely usual that people have been working for, let's say 15 or 30 years for the same company and never left the company and things are changing today.

[00:19:00] And I think you can highly motivate operators to give them new challenges. Because if you assembly as a young person for next 30 years, the same spindles, then you will get bored probably. And then you, maybe you will change the company. That's what we don't want to have. We want people to stay at the DMG Mori that they grow together with us.

[00:19:21] And if we give them new opportunities to challenge themselves, I think this is a, yeah, this could be a great way.

[00:19:28]Trond Arne Undheim, Host: [00:19:28] Tell me a little bit more about your business and how it's affected by digitalization. So you sell machine tools. They previously weren't connected to too much at all, apart from their own selves, like there was a some sort of it system embedded in them after a while, but now they're all connected to when did this all happen?

[00:19:48]But these tools started to get, sensors and started to go online and communicate with other systems in the organization.

[00:19:55]Damir Hrnjadovic, DMG MORI: [00:19:55] So I would say so it's tired. I would tell her it was Natan in 2013. It was, let's say the initial. And this was when we when we launched our sales system, which is, let's say like the.

[00:20:09]Operation system on the machine with different application, similar to an iPhone, we have the different applications. I would say this was the starting really the starting point in the new age. Then of course, with all the sensors, you have insight to show to the operate. Okay. What's going on into, in the machine and the thing about connections and connecting you.

[00:20:29] The systems yeah. To embed it in the system landscape. I think this is the process we will, which we started a couple of years ago, a couple of weeks, a couple of years ago. But I think now is really the time where companies are realizing what the benefits are from connectivity, from conducting different systems, from collecting data and so on.

[00:20:49] I think we are right now at the, is not now it's the time and this is what I see also after the COVID. All stuff around cupboard. What happened is also what it speeds up this connectivity and digitization thing. And I think that's I would say a couple of years ago, the idea was okay, we need to digitize these machines and all companies understand it's enough.

[00:21:13]I can improve the process on one machine and then maybe a machine depart five minutes faster than before. But again, if I lose that in the assembly six minutes, because I'm still using paper. Okay. So did not save any time at all. So that's what. Where companies are realizing they need to digitize all the processes or let's say, improve the processes by digitizing them.

[00:21:35] And this is also important thing for me, which I'll tell the customers we're not digitizing because of digitization, but digitizing to improve processes for continuous process improvement. And this is what brings us to return of investment. And this is our main goal. We're not investing in digitalization because it's cooler to have a tablet PCs out there instead of paper it's because.

[00:21:57] They help us to do the processes better, faster with less scrap Parsons.

[00:22:02]Trond Arne Undheim, Host: [00:22:02] Last question for you. The mirror is if you look to the future, so you just brought me back to 2013. That's not that far back actually. We're talking eight years. Fast forward eight years into the future. How fast is this moving and how different will the factories look?

[00:22:19]If you forecast uh, eight years into the future.

[00:22:21] Damir Hrnjadovic, DMG MORI: [00:22:21] Hopefully we'll hopefully look different than they look today. Yeah. Hopefully we don't lose again, seven or eight years. I think it will I think it will change from technology side. What we use, hopefully we'll use less paper.

[00:22:36]We will, I think the most important thing is that we will use other tools to support our operators. To do the work they need to do to make lives easier for that. Because if I look today, of course, we're using different systems. We have the ERP system, the quality management system, then the machine monitoring they need to use today, six, seven, eight different tools because they're not connected because they're from eight different.

[00:23:01] Yeah, it suppliers and there's no connection between them. And my idea would be the same. Like we have it today on our iPhone. We have one system and we have two different applications on there. And if I want to see the latest soccer scores, I open my soccer app and see, let's say my life ticket.

[00:23:17] What's going on there. If I want to track how many kilometers I ran yesterday. Then I open up my, I don't like my tricking application. Okay. So I have, let's say one user interface, which I'm used to use, which I know pretty well. And I have old information at one place from different systems, which I need.

[00:23:38] And so this would be the vision and the vision is, I think important we will digitization is not yeah, not needing less operators on the shop floor. It is the idea is we need to improve their productivity by giving them the right information and the right tools so they can do the work.

[00:24:02] Trond Arne Undheim, Host: [00:24:02] And what's your advice to mute you operators on the shop floor in terms of learning industry 4.0 approaches? How is, how should they go about it? Is it just tinkering, like getting exposed to no-code applications and start tinkering? Or is there some more structured approach that you would recommend.

[00:24:18]Damir Hrnjadovic, DMG MORI: [00:24:18] No code is a, it's a good approach because it's or let's, it let's compare it to digitization, let's say. And by introducing a new ERP system, everyone is done talking about the new ERP system, but the shop floor operator, they don't see anything and they have to wait four, five, six years, and then boom, there's a new system.

[00:24:34]Please use it. And it is a huge benefit of no code is hands on. Approach at an operators can create it on their own that they can. Yeah, they can create a digitization on their own. I would say even it's somehow it's like a democratization of digitalization, what we're doing with no code.

[00:24:53] And this is it for me. Beautiful. Because it's not. For operators that only talking about digitization and have to accept the tools that we, as I T team introducing, it's more by giving them the opportunity to create this kind of two to cool, create a digitization with all the other team members and colleagues around them.

[00:25:15] This is why I liked the no-code approach. And also for me, I have a it background. I have not it background. I have an engineering background. So I would love to know how to coat, but I do not know how to do this, but Tulip.co gives me the opportunity to bring also my ideas to life.

[00:25:33] And this is is really also nice. Nice for me.

[00:25:36] Trond Arne Undheim, Host: [00:25:36] Fascinating. Damir, I thank you so much for your observations. It's been a great pleasure.

[00:25:42] Damir Hrnjadovic, DMG MORI: [00:25:42] Thank you. Thanks.



Damir Hrnjadovic Profile Photo

Damir Hrnjadovic

Managing Director, DMG MORI Digital GmbH

Damir is a passionate entrepreneur and Managing Director of DMG MORI Digital, as the digital unit of the world's leading machine tool manufacturer DMG MORI. At DMG MORI Damir has been leading and implementing more than 50 digitalization projects at international industry companies over the past years. His focus areas are the conceptualization and execution of go-to-market strategies for new business models as well as building digital sales channels for SaaS/subscription-based products in the industry.

Prior to starting at DMG MORI Damir, Damir founded the EdTech platform studygood as a digital e-learning marketplace for universities and students. He participated in numerous start-up competitions and in 2018 won the Founders Hack initiated by the Bertelsmann Foundation in cooperation with Miele & Cie. KG. Damir holds the Dr. rer. pol. from University of Paderborn and has several years of experience in research on topics of operations research, logistics management as well as complexity management.