This article was written based on the presentation by Tarun Chopra, Head of Manufacturing Services, Danfoss Group IT, at the MES and Industry 4.0 Summit 2023 in Porto, Portugal.

Danfoss is a 90-year-old manufacturing leader in three segments: Power Solutions, Climate Control, and Power Electronics and Drives. Organic growth, mergers and acquisitions have contributed to our growth. We now have 97 plants in more than 100 countries and are still growing, nearly doubling in size in the past decade alone. As we enjoyed such success, it became increasingly clear that more growth and profitability will require a transformation of our digital landscape across a common backbone.  We’ve started that transformation and can share some insights already.

Giving manufacturing its due

Our first challenge in implementing an integration of such a large scope was to get as much attention for manufacturing as ERP, R&D, PLM, CRM and other better-funded functions. When we looked at what it would take to build the kind of digital backbone, we would need to integrate all such functions and it was clear that although manufacturing was the key enabler of such end-to-end integration, it was significantly underfunded.

Smart Implementation   

Given the scope of our mission, it was also clear that Smart Manufacturing would have an essential role.  To us, smart manufacturing is a concept that blends MES/MOM, SCADA, PLCs and OT Edge operations.  

We began our journey towards digitizing our manufacturing processes in 2019 setting out our value proposition for implementation across our three segments. In 2020 we got buy-in from all three of our segments and by 2021 we had consolidated use cases across all segments. Within a year we had gotten approvals on the four workstreams that would become the roadmap for each sector and initiated a pilot for each.

The workstreams involved evaluating business impacts, setting priorities, and making organizational, management other changes as needed. These focused on four areas: standardizing MES/MOM platforms, connectivity, OT Security and Edge OT.

First things first

MES/MOM standardization is a top priority for us. We need a standard backbone that would support all our 97 factories. Each one has a unique manufacturing process, but the core MES functionality would be adapted for each one.

Focusing on connectivity is also a high priority.  We must harmonize many different IT landscapes.  We need our PLCs and SCADA systems to connect agnostically to the MES layer.  We need to transition our acquisitions out of their legacy MES/MOM systems.

OT security is a third focus area. This is increasingly essential for all OT implementations and because smart manufacturing uses the cloud, OT Edge application development is our fourth focus.

Follow the money

With so much to do, what do you do first? We started on things that would have the greatest business impact. We build business cases around each and expect ROI within two years. We have roadmaps in place for all but one segment and are seeing ROI already. Here are some of the business benefits:

  • Generation of timely, high-quality data, which can be analyzed for business and production optimization.
  • Use of no touch processes, which reduces labor costs and improves accuracy
  • Improved productivity of salaried workers, which also optimizes labor costs while improving outcomes.
  • Enablement of end-to-end process automation, which can reduce costs while adding production value.


Four years in, to some, it may seem like progress is slow. We are laying down a foundation that’ll last us for decades. Here are a few pointers for anyone looking to embark on a similar journey.

  •  Go for top down’ bottom-up buy-in.  Communicating our business proposition to management clearly was critical in getting attention for manufacturing, and we also talked with the operators and supervisors to explain how it would make their jobs easier.
  • Find your sweet spot. While you need to think big to pull off a project of this scale, once you get on that track, it is easy to get too ambitious. Find the balance between what you’d like to change and what is practical.
  • Correct course as needed.  Acknowledge that you are on a journey, possibly one that you have never taken before. Reevaluate every step in relation to your business goals.
  • Know your strengths and weaknesses. Recognize that you may have to pause, reiterate and restart to take maximum advantage of your talents.

And where you are not strong, be sure that you have a partner network that can fill the gaps, including, of course, Critical Manufacturing.

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