Düsseldorf, September 19, 2018

Platform Economy pushes digitalization in the metal industry

SMS group uses the potentials of platform economy to consolidate its position as the leading partner in the world of metals. The emergence of digital platforms in the metal industry opens up new competitive advantages for companies, e.g. lower transaction costs, increase of revenue due to new services as well as strong customer loyalty. The spin-off SMS digital built up an open industry platform to facilitate the access to digital transformation for companies. In the integrated mySMS group industry app store, relevant apps for optimizing the business can be hosted and used. 

Digital platforms

In the consumer context, digital platforms are already well established. The platform is a modern marketplace in the internet connecting providers with potential customers. The key feature of the platform is therefore the network structure, that enables the participants to exchange information. In the private sector, we nearly use this kind of digital platforms every day: fast and convenient shopping at amazon – not longer only for books.  Staying in touch with family and friends via Facebook. Or purchasing smartphone apps via the Apple and Google app stores. These are only some examples.
Today, Apple, Google, Microsoft, Amazon and Facebook rank among the most valuable companies in the world. They all follow a platform strategy and they have good reasons for that decision. But Europe still lags behind: only three percent of the most valuable platforms are from Europe. In contrast, 64 percent are from the USA. The only relevant platform in all of Europe is provided by SAP. Time to catch up.

Developing platform strategies in the industry

The platform economy also offers competitive advantages for industrial companies. Digital platforms provide a new regulatory framework for the digital economy, so to say. They directly contribute to a consequent realization of Industrie 4.0 as well as to a continuous progress of digital transformation.
Digital platforms take on a key role in the IIoT (Industrial Internet of Things), because they are a crucial part in optimizing industrial processes. The added value lies within reduced transaction costs, new business and service models as well as specific network effects.

Digital platforms reduce transaction costs

Using a platform allows industrial companies to make contact with existing and new customers more quickly. The digital platform then becomes the main point of contact between customer and the company. The exchange of data and information takes place via standardized technical interfaces. This facilitates the communication and makes it much more efficient. It is important to implement that aspect promptly and at an early stage to acclimate the customers to the new platform and to make them use it in their everyday work.

Platform services generate additional revenue

Thanks to a digital platform, industrial companies can offer their customers new services. Services like predictive maintenance only work in combination with a platform. Only if machine data is centrally collected and analyzed, predictive maintenance can be successful.
In that case the digital platform is the basis: the apps for intelligent evaluation of all machine data run on it. The customer then accesses the industrial platform and his encrypted data in the cloud via an individual login. The customer area is isolated to ensure that only eligible customers have access. The billing of the platform usage is made with the pay-per-use model depending on the number of users or transactions.

Platform for customer loyalty

Thanks to the hosting of apps on the digital platform, companies can establish long-term relationships with customers. Because data analytics become significantly faster and easier with the use of a platform. This fact results in an improved user experience and a real benefit for the customers. The proportions of value added will increasingly shift to digital services. These services run on digital platforms. The more members there are on the platform the more attractive it becomes. The benefit increases exponentially with the number of members.

Industrial platform for the metal industry 

Platform economy basically means unifying many providers and offering a diverse range of services on a joint platform. Within a highly specialized industry like the metal industry it is therefore not advisable to build a digital marketplace on one unique mega platform. In that case the requirements and the complexity are too high. It is wise to rely on a firm industry platform where the most important apps are running. The integration of further special platforms can be realized later on.

SMS digital e.g. implemented an open industrial platform, mySMS group, which offers the metal industry a specialized industry app store. Here, companies can find apps for intelligent alarm management, spare part service or order services. Furthermore, University4Industry, a specialized platform with learning content, is integrated in the mySMS group platform. Thanks to this integration, members of the mySMS group platform benefit from a seamless access to learning content on Industrie 4.0. They do not have to register on several platforms to profit from the content.
In future, SMS digital plans to develop and provide their own apps as well as to integrate further partners in the industrial app store. Moreover, the mySMS group will be available for other industrial companies as platform as a service (PaaS) to build their own industrial platform.

Would you like to know how your company can directly benefit from a digital platform?

If you have any questions, please do not hesitate to contact Marc Pudelski at mp(at)