Success story: Industry 4.0 or how Bulgaria is responding to the global chip and human capital shortage

The global chip shortage is a hot topic of discussion and a pressing issue affecting many industries around the world. The shortage of people - too. Ivan Chernov, Global Production Manager at Melexis Bulgaria, who has been with the company for more than 15 years, shares how Melexis Bulgaria copes with the challenges as a manufacturer and employer, what are the positives and challenges of Industry 4.0 and what are the most sought after skills in people in a highly digital and automated world.

Today, the shortage of chips is a huge problem for many industries, and expectations for Bulgaria for their production are high. How does our market manage to meet the challenge?

The global shortage of chips is definitely a challenge, but also an opportunity for companies like Melexis to work actively on solutions to improve the supply chain. After the drop in demand caused by the pandemic in 2021, we now see a significant increase in chip demand. There has been a huge investment in the industry around the world to meet the shortage, but production and delivery times remain relatively long due to the complexity of the chip (plate) manufacturing process.

At Melexis we strive to analyze and manage the situation in the best possible way. Thanks to our financial stability, we maintained a high level of availability during the period of low chip demand last year. This was a lesson from the beginning of the last automotive crisis in 2008 and allowed us to make a realistic commitment to our customers in this regard.

Another important part of our response to the crisis is the expansion of Melexis' research and production facilities in Bulgaria, as well as our warehouse space. Hence the increase in the company's teams - we are actively hiring operators, technicians, engineers. By the end of 2022, we expect to hire 160 specialists in various fields.

I believe we made the right choices during the COVID period as we continued to serve our customers in the best possible way, resulting in a 34% increase in sales for the first 9 months of the year. A fact that we are all proud of is that every car that goes to market today has an average of 13 Melexis chips.

Lack of staff is also a global problem. Do you observe this trend in Bulgaria and how do you manage to cope?

The problem is indeed not only local but global. That is why at Melexis we pay great attention to recruitment programs as well as various initiatives for close cooperation with technical universities and professional high schools in the country.

Over the years, we have developed several programs aimed at students and recent graduates whose focus is to build on the knowledge they have gained at university and further develop them as microelectronics professionals.

A fresh example would be our new technical academy, which we developed over the summer and which so far is aimed at colleagues within the company. It gives operators without technical training or experience the opportunity to prepare for a junior technician position. The program features two months of focused training and practice in topics such as mechanical, electrical, pneumatic, instrumentation and technical drafting, and our first class of 8 will be graduating by the end of the year.

All these efforts help us to meet the challenges of recruiting people. Something we're proud of is that 85% of our leaders and 75% of our experts have grown internally. Our key to success is finding the right people - something we call "Melexis DNA". These are the people where we see during as soon as the interview process starts that they share the same values, that they are committed and motivated, that they are living for engineering.

Industry 4.0 seems to be becoming a must for manufacturers like you. How is it transforming the day-to-day at Melexis?

The Fourth Industrial Revolution (Industry 4.0), has brought an incredible boom of new technologies that give endless possibilities and provide freedom to reorganize our industries in a whole new way.

I think it's particularly important to be bold - not in the sense of adopting technology at all costs, but exploring the options to find answers to our questions. This is individual for each company. Sitting in one place and doing nothing is the only wrong approach. The environment is very dynamic and it is important for organizations to adapt to it.

At Melexis we have been working for several years in the context of Smart Factories, Digitalization and Artificial Intelligence. This year, for example, we have successfully connected some of our production machines directly to our ERP system. In this way, we made manual data transfer at the end of the batch fully automated, which saves colleagues time, increases productivity and improves the quality of the data itself. The latter is a very important factor when it comes to digitalization, because having a lot of data is good, but it is no less important to be able to rely on it.

Other projects are also underway. Until recently, when an operator had to prepare a machine by switching it from one product to another, a reconfiguration process had to be conducted. During this process there are several operations and settings that have to be entered. This was all a manual and time-consuming process. Today, we are proud to have implemented a technological solution where machines automatically receive their settings from a central server in seconds by simply scanning the barcode of the product.

Over the next ten years, we will continue the trend of digitalization, the introduction of collaborative robots and autonomous vehicles into production. We will also increasingly talk about total connectivity of all processes, and smart systems will support our decision-making in the factory management.

What skill do employees at Melexis have to possess?

We live in a highly dynamic world and the qualities and skills required are constantly changing. For me the three most important qualities are Motivation, Adaptability and Creativity. I believe that the combination of these can help us to get through any challenge on the path of progress.

In terms of skills, we must not forget that each new technology comes with its initial stage of adaptation. We need to think about how new technologies would affect the work process and whether they will not require new competencies from employees. The need for new skills may necessitate advance preparation programs so that employees develop in the right direction. I believe that in the future the focus will increasingly fall on soft skills, the ability to handle data and troubleshoot problems at the expense of monotonous and repetitive tasks, topics that we are increasingly actively preparing and including in our internal team development programs.