According to a recent report by VTT Technical Research Centre of Finland, Finnish manufacturing industry SMEs that have invested in digitalisation over the long term are also more successful when measured with economic indicators. In particular, companies located in North Karelia showed an exceptional pioneering attitude in the implementation of digital methods and system expertise.
Between December and March, VTT examined the digitalisation level and resilience, or a capacity for change, of SMEs in Finnish manufacturing industry. The study was implemented as part of additional funding granted by the Ministry of Economic Affairs and Employment, the aim of which is to further the digitalisation of manufacturing industry and the competitiveness of companies in the operating environment after the corona pandemic.
“One of our most interesting findings was the fact that SMEs that have invested systematically in the implementation of digital methods over the years are also most successful in terms of their financial success. The factors that appear have the highest correlation with a company’s financial success are the digitalisation of the product and manufacturing process and the digital competence of production personnel,” says Jyrki Poikkimäki, VTT’s Development Manager, who was responsible for the implementation of the study.
The manufacturing industry companies involved in the study represent the best in Finland’s SME and MidCap companies. The companies were selected by VTT’s network of representatives on the basis of detailed criteria (e.g., growth and internationalisation).
Two thirds (70%) of the companies analysed using the DigiSiirto matrix (n = 40) placed at the two bottom levels of the matrix (general or advanced level). At these levels, most of the companies’ operations are manual, but there may be CNC controlled machines, automatic operation modes and robot cells in production. More than one fifth (22%) of the companies placed at an integrated level, which is already more advanced. “Such companies can, for example, combine data from different sources and optimise operations using analysed data.
More than 8% of the companies ranked as being at the most advanced levels in the matrix (a forerunner or a future prospect) were at the top of the study. In these cases, companies direct their production in real time, even over the network using mobile technology and take advantage of software robotics.
“Based on our digital transfer analysis, it can be said that Finnish SMEs have good control of basic systems, but the actual digital leap is still largely undone,” says Poikkimäki.
The top third takes the industry forward
All eight plastic and metal industry SMEs representing the manufacturing industry in North Karelia and involved in the VTT analysis placed in the most advanced top third as measured by the DigiSiirto matrix.
“From the perspective of North Karelia, region has an exceptionally large number of companies that utilise digitalisation in highly advanced system expertise. Consequently, it can be said that the Finnish industry is successful precisely because of this type of companies,” says Poikkimäki, by way of emphasising his point of view.
According to Poikkimäki, no single factor can explain this. One explanation may be related to the fact that these organisations have their own strong expertise which they have been able to use to transfer their systems to the digital age.
In the digital transfer analysis, one of the best performing companies is CNC-Machining Oy from Joensuu, which specialises in the production of sub-assemblies and components for the machine and metal industry.
“It has taken a great deal of development work to bring up the digitalisation of our company to its current level. Our goal has always been to make our automated manufacturing as complete and flexible as possible, which requires smooth digital data transfer from work supervision to production workstations. We continuously develop our information-flow methods, says Petri Holopainen, CEO of CNC-Machining.
The global furtherance of Finnish industrial expertise has also been recorded in the mission of the company, and there has been a strong emphasis on planning our future growth so that it will take place outside Finland’s borders. Holopainen also considers it important that there are other companies operating in the neighbourhood that have invested in the development of digital competence.
Holopainen hopes that the traditional image associated with the metal industry will be updated for young people and future employees.
“I think that the black and sooty image of a shipyard with sparks flying all around is obsolete. In our company, work is done in a modern work environment together with automated machines. Each of our employees is required to have strong digital skills and an ability to cope with computers, Holopainen says.
VTT’s research combines two of the four key sectors, the growth and internationalisation of which in the Joensuu region is especially focused on: ICT and digital economy as well as the plastic and metal industry. Internationally operating companies have a strong network of subcontractors and contract manufacturers in the region.
“At Business Joensuu, we are very proud of the expertise and success in research that the companies in the region have demonstrated. It is great to see how long-term development work is now reflected in concrete results in the competitiveness of companies. These companies have good opportunities to get new customers and to participate increasingly in global supply networks, which opens new doors to growth and success, says Business Specialist Veikko Tahvanainen at Business Joensuu, visibly pleased.
The study, by VTT and its regional network of representatives, was carried out between December 2020 and March 2021, with more than 80 manufacturing industry SMEs and MidCap companies from different parts of Finland participated in it. A DigiSiirto matrix, which measures the degree of digitalisation, was created for a total of 40 companies.
The digital transfer analysis is related to the implementation of the Industrial Competitiveness Programme. The programme was funded by the European Union Regional Development Fund and the Regional Council of North Karelia.
Veikko Tahvanainen, Business Specialist, Business Joensuu, firstname.lastname@example.org, +358 50 408 8696
Jyrki Poikkimäki, Development Manager, VTT, email@example.com, +358 40 5660 292.
Petri Holopainen, CEO, Joensuun CNC-Machining Oy, firstname.lastname@example.org, +358 10 315 1800