April 30 - May 4, 2018. Düsseldorf, Germany – CEIBS MBA students had the opportunity to see excellence in manufacturing and Industry 4.0 in action during their overseas elective to Düsseldorf, Germany this week. The five-day programme, attended by almost 40 MBA students, included lectures on industrial excellence and digital transformation, as well as company visits to pioneering industry disruptors.  These included Mercedes-Benz, Bayer and Deloitte’s Digital Factory. Read on to find out what Pablo Che Leon, a 2019 MBA candidate, made of the experience:-

“Three years ago, I visited Düsseldorf for the first time. I went to represent my former employer, Ericsson, as part of a course on Consultative Sourcing.  What I remember most clearly from that trip is the food – the curry wurst and the pork knuckle.  And the beer.  Now, having just completed the overseas elective on Excellence in Manufacturing, when I think of Düsseldorf, ‘learning’ is one of the first words that spring to mind.

Before the elective began, as I flew over Dubai, I mulled over the similarities between Germany and China. Both have a growing elderly population, which is a challenge as more jobs will need to be created and pension funds will need to grow to support young workers entering the labour force.  Clearly, automation will need to play a major role to cover unwanted jobs, increase productivity and drive economic growth.  I flew to Germany hoping to find out how a harmonious balance can be achieved between human labour and automation.

As an international student in China. I’ve already been exposed to automation and digitalisation in retail.  I’ve seen everything from one-stop solve-all apps, to superlatively convenient online delivery platforms. However, I was still very surprised by the advances that Germany has made in digitalising their manufacturing processes. As part of the week, we learnt about how product innovation and manufacturing automation is conceptualised, planned and executed, first through a video conference call with Henkel and then via a company visit to Deloitte’s Digital Factory. I was particularly impressed by ABB’s collaboration robot. Seeing it in action, working side by side with a human worker, made me realise how close we are to living in a society where heavy lifting in the workplace is a thing of the past.

For me, one of the highlights of the overseas elective was the visit to Mercedes-Benz. I found it remarkable how they produce vehicles in the middle of Düsseldorf without causing any air contamination. To see manufacturing no longer contributing to environmental pollution gave me high hopes for China’s own development.  While taking in the assembly line for the company’s fleet of vans, I was heartened to hear that the jobs of about 6,500 employees had been maintained over recent years, despite the increased use of automation.  These developments have also enabled Mercedes-Benz to offer more customisation and flexibility in the assembly process.  This would have been unimaginable just a few short years ago.  

Another highlight was geeking out at seeing KUKA’s robots in action. Recently acquired by China’s MIDEA group, KUKA develops a range of robots designed to optimise production lines in what I can only describe as synchronised mechanical harmony. 

Towards the end of the week, I still had questions about the future. I understood that Industry 4.0 is a global, not a country-specific trend (unlike previous industrial revolutions). I understood that Germany, in collaboration with their workforce, had made progress in shifting its industry towards automation.  And that China was gaining more advanced capabilities in manufacturing through the acquisition of European and American companies. But something still did not fit.  How were people in this environment going to be able to work together and understand each other? Culture beats strategy.  Always. How could German culture successfully interact with Chinese culture?

It wasn't until Thursday evening, during our final dinner with faculty from our host school, the Otto Beisheim Graduate School of Business, and CEIBS MBA alumni in Germany, that I was able to raise my concerns with the school’s Chair of Organisational Behaviour, Professor Miriam Müthel. Previously she had given us a lecture on Digital Transformation from an HR Perspective. As I approached her with these questions, her answer was simple, yet compelling: trust. Both countries will have to work on building trust for the long term. From the German side, that meant not taking relationships for granted and actively working to nurture them using the power of rituals, like Confucianism, to remind their counterparts why they are important.  From the Chinese side, it meant working beyond pragmatism to mutually benefit both sides until the German counterpart is seen as part of the inner circle.

As I flew over conflict-impacted areas of Iraq, back to Shanghai, I thought about what this week had meant for me. A single week will definitely not make me an expert on Industry 4.0, nor am I yet able to recommend where to go to get the best sauerkraut in Düsseldorf. However, this week allowed me to take a closer look at what the future will look like, and how Europe and China are working together to achieve it. Yes, we might be talking about robots, increasing productivity, GDP per capita growth and the future of the workplace, but the success of these technological innovations will be conditioned ultimately on the level of trust and collaboration among all parties involved.

At the end of the day it will come down to leadership.  It will be about managing people, not robots; equipping workers with new skills, not writing algorithms. As we left the airspace above the conflict-torn region, I felt like humanity had been presented with the chance to build an even brighter future. Hopefully, one that benefits all of us, and not only the machines.

Pablo Che Leon MBA 2019