The Mittelstand is identified as the backbone of the German economy as it composes 99% of SME (small and medium-sized enterprise). The German Mittelstand comprises not only the majority of SMEs but also supplies more than 75% of all jobs in Germany.

Innovation, in the age of digitalisation, is a requirement to survive. Similarly, Germany relies massively on exports and innovative developments, which allows it to challenge the competition globally. German Mittelstand companies are globally appreciated for their innovation, especially concerning the goods, method, and service innovation. For this reason, the Classic and the Upper Mittelstand contributes 68% of Germany’s export, indicating its dominance in international business.

When discussing innovation in Mittelstand and its future, it cannot be denied that it has been a world-leading machinery exporter for some time. It is unlikely that the German export movement will decrease anytime soon if the Eurozone and the global economy continue to grow, solely because of its high exposure to world trade.

Logistics 4.0 and Mittelstand

Technological change has transformed the way industries function, and every sector of businesses has been hit by digitization. Since the initiative of the fourth industrial revolution or Industry 4.0 by the German government, which promotes computerization of manufacturing, it has transformed the method of business practises and most of the companies are adopting this now.  Meanwhile, along with it comes Logistics 4.0 (also known as “Digital Logistics”) as well, to match with the trend and complexity of logistics. Logistics 4.0 makes use of smart technology derived containers, pallets, warehouse management system, vehicles, and driverless transport systems. It assures in building a fully networked supply chain that offers supply chain managers, shippers, freight forwarders, and others, the necessary transparency and clarity to route transport and performs other logistics tasks in an optimal process. It takes care of the product from the warehouse to the end-user– consumers.

The Mittelstand success is driven at the operational level through family-like business values with a strong focus on the customer. Logistics 4.0 concerns various aspects of end-to-end logistics with a focus on delivering seamless solutions for customers. It also focuses on driving value of high-valued products in the context of Industry 4.0 through Digital Technology, Mobile Devices, (IoT) Internet of Things, Big Data, Smart Sensors, emerging technologies as well as advanced data enabled by AI (Artificial Intelligence) and building Smart Factories, Smart SCM (Supply Chain Management), Smart Data-driven Product Policy-driven.

Four Elements of Logistics 4.0

1. Clarity

One of the essential factors of technology-driven logistics is the development of transparency and visibility from digitization beyond the complete supply chain system.

2. Smart Benefits

The smart version of traditional logistics components has transformed the way shipment circulates from suppliers to end users.

3. Industry 4.0 Incorporation

The most vital factor of Logistics 4.0 is its ability to collaborate integration with Industry 4.0 systems and procedures.

4. IoT Adoption

With the advancement of technology, many IoT development companies have come up with digital devices that can be stationed and installed on factory floors of warehouses like smart containers and utilities by connecting them to the cloud.

The demand for high-customised products and services is continuously rising globally. Thus, inbound and outbound logistics are adjusting to this dynamic environment. Due to its increasing complexity, it cannot be managed with conventional planning and non-digital systems.