Date: Wednesday, August 14, 2019

Digitalization – myth versus reality for small & medium-sized companies in Hungary

There is no chance to open a document or visit a conference without coming across the digitalization agenda for industry. There is a clear technology push and hype around industry4.0 trend yet the honest interpretation among the manufacturing SMEs is lagging behind. Almost all businesses benefitting from industry4.0 are typically large (automotive) manufacturers or serial producers -not small companies.

So, how to tackle this in Central-Eastern European region, West Hungary where cheap labour is the main competitive advantage? The most urgent task for manufacturers is to understand their current level of maturity followed by a common roadmap definition. A survey conducted by Hungarian Pannon Business Network (PBN) revealed a shocking reality:  Only 8% of manufacturers claimed to understand what digitalization means in production, only 7% were satisfied with their ERP system and around 3% claimed to have expertise  in data analytics.

At the same time, almost all manufacturers were ready to invest in new technologies. This contradiction obviously outlines the danger of the digitalization trend that is materialized in machinery investment rather than in know-how for various applications.

How to transform digitalisation roadmap to competitive edge?

There is an urgent need for discussion with manufacturers in Hungary: Customized training, experimentation with new technologies and individual mentoring are needed. This is exactly what has been taking place at PBN for a year now with selected companies, to assist the shift towards the digital era. Companies visit am-LAB digital innovation hub individually where the goal is to identify relevant solutions for each company.

Engineering and economic experts are mentoring them for two days, from digital twinning to collaborative robotics and each elements is analysed in detail. Level of satisfaction is well reflected by a scoring, but more importantly on the agreed next steps. Demand for data analytics is phrased explicitly, to help understand potential first, analyse data and finally outline concrete steps to move forward. This may sound trivial, but it is not. The process of production smartification is the first step towards intelligent digitalization.

European initiatives and projects are also supporting the digitalization of SMEs. PBN is a member of L4MS consortium, which is an acceleration program for European Manufacturing SMEs and Mid-Caps to automate their intra-factory logistics. SMEs from PBN’s network have the chance to apply for L4MS open call and develop their logistic processes. Challenge was written above, to reach a higher level of digitalization is a complex process, where smart logistic is one of the last needs from company side. The possibility is given to innovative companies and it is an interesting experiment in the Hungarian market.


Balázs Barta
Managing Director
Pannon Business Network Association

Interested applying to L4MS Open Call this year? If you are a manufacturing SME or slightly bigger, automation provider or mobile robot manufacturer, you can apply as a consortium to L4MS and get up to 250,000€ to develop intra-factory logistics with the support of our L4MS technical & business experts. We offer teams an IoT Platform OPIL and 3D tool to test and develop optimal solution before implementation ("test before invest"). If you don't have a partner, register here and L4MS experts can help you find a suitable team to submit an application to L4MS Open Call before 30th November.

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