C-PARTS, LOGISTICS & KANBAN: How Screwerk made availability its business model through industrial digitisation
Thanks to Screwerk’s clever “predictive production” approach customers don’t have to worry about sourcing screws for plastics anymore.
In the world of C‐parts, products are usually manufactured in very high quantities but limited to a small variety of in‐demand items. However the same can't be said if you need smaller quantities or atypical sizes of an item. Despite this existing demand for more variation and low quantities, manufacturers and distributors are often not in a position to adjust their processes accordingly. A great example of this bottleneck is found with screws.
Founded in 2013, Screwerk developed its innovative “predictive production” to solve this problem and with an initial assortment of screws for plastics the company can pretty much provide a suitable dimension for every need.
Guided by its founder’s IT background, Screwerk applies a digital approach to provide technical solutions in an industrial environment. The company created a comprehensive digital system that integrates an extensive inventory with a standardised “assortment production” for screws. While most producers are just starting to gather data to optimise machine maintenance, Screwerk is already combining production and distribution data in its very own innovative business model. The “predictive production” is an example of what can really be achieved by consistent digitisation", says Alexander Hoffmann, one of the company’s founders (pictured top with fellow founder Heiko Schlabach, left).
Screwerk’s self‐developed software named “Graph” is the heart of the system. It allows the order fulfillment department to organise an inventory of over 300 million individual items in 10,000 different variations. The “Graph” also controls the work preparation of production through algorithms using data such as order history, inventory levels, and production capabilities of the individual machines. Data gathered every day is statistically evaluated for future demand and production slots are organised in an optimal order. As a result, the decision to produce a certain item is made even before the customer’s order comes in. Using computerised processes Screwerk secures the uninterrupted availability of the existing assortment while at the same time expanding it with production‐optimised small batch additions.
Screwerk: Industrial digitisation of cold forming processes
Now with in‐house production, the company, which originally started as an E‐commerce business, has evolved into a pioneer in the industrial digitisation of cold forming processes. At Screwerk’s Lüdenscheid facility in Germany, the company has built a production hall where existing machines are digitised through open source‐based retrofits that secure continuous open standards. These standards allow information to flow freely without interfaces throughout the organisation and enable processes to be modelled with flexibility. The existing machinery can be fitted with sensors and actuators connected to the mainframe and can be controlled digitally. “A digital transformation in which existing machinery has to be replaced with new ones is not affordable for any company,” explains Hoffmann, “therefore a highly adaptable retrofit approach is necessary to connect the vast variety of production resources in a cost‐efficient way.” Today, Screwerk’s strategic decision to strictly stick with open‐source software and hardware solutions has resulted in one of its decisive competitive advantages. The approach provides a showcase of what can be achieved with technologies that are available to everybody. The necessary information, software solutions and hardware are available in abundance on the internet. Storage space and processing power are not a constraint anymore. And all of this at prices that only a few years ago were unimaginable. It’s in this environment that the company can re‐think solutions for industrial production in a digital way and transform a traditional industry.
More than 2,500 new customers per year find what they are looking for through Screwerk’s availability of screws for plastic and the firm is one of Germany’s fastest growing companies. Since the business model is not only based on the screw as a product, but rather on its availability in an extreme niche, it offers a valuable proposition to all market participants. End customers benefit from the extended availability in small quantities while distributors and C‐part managers benefit from reduced search costs and drop shipments to their customers; and manufacturers can now provide quantities below their minimum lot sizes if requested by their customers. With its successful model already in place, Screwerk is currently expanding its offer by including metric machine screws and
every day is building up the assortment. And all in line with the company’s vision to provide the ultimate availability for screws.