German manufacturers in metal processing, the electrical, and mechanical engineering industries are world-leading (“Made in Germany”). Nevertheless, they are affected by complex factors including volatile raw material prices, rising energy costs and exchange rate risks. Industrial production is made possible by semi- or fully-automatic production processes and is usually connected with high fixed costs. Germany’s positive industrial production market environment has been facilitated by cheap oil price, historical low interest rates and a weak euro.

Despite economic challenges in emerging economies, medium-sized manufactures are being pressured to follow their major customers in international expansion („Follow Your Customer-Strategy”), especially to China, India and South America. High cyclicality in the capital goods industry presents challenges to producers in terms of corporate planning.

The biggest current challenge is the digital shift, which will also provide opportunities for industrial companies to grow. The fourth industrial revolution is characterized by increasing digitalization and networking of products, supply chains and business models (Internet of Things). The market for industrial products is driven by technological innovation. Improved management of horizontal and vertical supply chains, thanks to the digitalization of key processes, can often increase productivity over 20%.

Digitalization of product and service offerings is critical for a sustained business success, increasing profitable growth and company value.