From machine to CO₂ report: how Manufacturing-X works for SMEs

Hello dear friends of IoT. Today we are diving into a project by the company SITEC, a medium-sized mechanical engineering company. Together with its project partner Smart Systems Hub, a compelling use case was realized. You will hear in a moment what exactly they do. The focus is on how SITEC, with the help of various partners, masters the entry into implementing Manufacturing-X and its architectures.
We will look at a specific use case around CO₂reporting, a topic that is particularly important for their customers. It is about data driven services and we will also address questions from the community. In addition, we will examine how an experiment environment and the existing infrastructure of Smart Systems Hub are used to implement such projects.
We will discuss hurdles, best practices for interfaces, required competencies, the effort involved, and how to deal with standardization and connectors. We may also uncover further exciting use cases that can be realized on this basis. This is a hands on episode for decision makers in mechanical engineering.
Joining us today are Jens Viertel, Head of Digital Products, known to some from episode 156, and Michael Kaiser, CEO of Smart Systems Hub. As always, you can find all information about the episode and about implementing your own projects at iotusecase.com and in the show notes.
With that, let’s go to the podcast studio.

A warm welcome to you, Jens, and hello Michael.

Michael

Hello Madeleine!

Jens

Hello, good morning!

Jens, let me start with you. Where are you at the moment?

Jens

I am working from home and I am currently preparing various events. There is a lot to do again, especially in the area of marketing.

Very nice. You are based in Chemnitz, right?

Jens

Exactly, SITEC is based in Chemnitz. I am in Auerbach in the Ore Mountains, in a small place that probably very few people know.

I am very happy that you are joining us today. By the way, congratulations! You won the innovation award this year, right? I think it was the Saxon State Prize. Is it still okay to congratulate you?

Jens

Yes, thank you very much. Exactly, it was the Saxon Innovation Award in the category of innovative business models. We won with our connACT SERVICES and were very happy about it. The path was quite demanding, but it shows that our direction is future proof.

I think we’ll learn more about that today – how you approach things and what you’ve learned along the way. Michael, a warm welcome to you as well! I was trying to remember when we actually met. I think it was at the end of 2022, or maybe even early 2022. It’s been a while, crazy.

Michael

I think it was even back in 2021. We worked together on a great project at the time, and some of my colleagues have already been guests on your podcast. So I’m really happy to be back with you today.

Wonderful. You’re the CEO of Smart Systems Hub and your LinkedIn profile mentions topics like Manufacturing-X, robotics, and co-innovation. How long have you been active in this field? Tell us a bit about your background – what fascinates you personally about digitalization and the world of IoT?

Michael

I’ve been CEO of Smart Systems Hub since 2018. But I’ve been involved in the topic of collaborative innovation for more than 20 years, in various roles and across different regions, including Asia. I find it more exciting than ever today, because this kind of collaboration is essential to develop viable solutions quickly in an increasingly complex world. And I’m proud that Smart Systems Hub is a place where exactly that happens.

Can you put into context what this project with SITEC means for you as a company? Is it a typical project for you, or something special?

Michael

In principle, every project is special for us, because it always depends on the people involved and how they work together. Of course, we have a standard program with our co-innovation formats, where we connect technology providers – often software companies from our large partner network – with industrial partners who have specific challenges. This cooperative approach enables us to move quickly and efficiently together. That’s also how we supported the project with SITEC – methodically, technically, and in close collaboration. This kind of teamwork often creates a strong dynamic and a real sense of shared purpose. We love that.

Cool. You run a co-innovation format where you support companies as an interdisciplinary project team. They can set up their own projects and implement digital products. Then you have your own testbed for Manufacturing-X – a technical infrastructure that you provide. And you also help with the practical implementation of solutions. Those are your three main focus areas, as I understand it. Is that correct?

Michael

Exactly. That’s the full scope of what we do. We help companies get started, guide them through the first steps, and then accompany them all the way to productive implementation. We don’t just want to stop at the proof of concept. We support that entire journey – and it’s always an exciting one. Jens knows what I mean.

Jens, just a quick bit of context for anyone who doesn’t know SITEC yet — we featured you in an earlier episode together with in.hub, which I’ll link in the show notes. It’s definitely worth a listen.
You’ve been on the market for quite some time, based in Chemnitz, and active in mechanical and plant engineering, especially in the field of laser processing. Who are your customers, and what does your business model look like? Do you build the machines yourselves, do you also operate them, or how does it work at SITEC?

Jens

SITEC has been around since 1991 in Chemnitz. We originated from a research collective back then, and you can still see that influence today – it’s part of our DNA.
In addition to special-purpose machinery, as you mentioned, we also see ourselves as a technology developer. Our customers don’t just come to us because they need a machine, but because they want a complete solution that enables them to manufacture their products. We accompany them from the very first request to the final solution, often in the form of a system that stands in their own facility. That’s our classic and traditional business model.
Beyond that, we also produce in series. At our site, we operate a large machine park where we manufacture directly for our customers. This puts us in the comfortable position of truly understanding their challenges – because we face the same ones ourselves.
So, we don’t just build our own machines to manufacture our customers’ products, but we also have our customers’ machines in-house, which we use to produce their components directly. It’s an interesting combination. And it’s important to note: we’re not a corporation, but a typical medium-sized company with around 270 employees. This structure gives us a very dynamic way of working.

So, you have your own production, which means you know the typical connectivity challenges your customers face. And in addition, you handle the machine-building side, where you likely also take care of service when a system is operating at the customer’s site.

Jens

Exactly – the classic after-sales business. From standard service work to complex service projects, that entire area is fully established with us.

Cool. And what exactly does your joint project focus on? Is it more about production, or is digital service at the center? Can you explain that a bit?

Jens

That’s exactly what it’s about – we’ve taken what we’ve always done and where our core competence lies, and developed it further. This resulted in connACT SERVICES, for which we received the Saxon Innovation Award. connACT SERVICES is a data-driven service ecosystem that we want to offer to our customers – and in fact, to the entire manufacturing SME sector across Germany and Europe.

How is “connACT” written? Just briefly, for everyone who wants to look it up.

Jens

The name actually says it all: “conn” as in “connectivity,” meaning connection, and “ACT” with A, C, and T – as in “to act.” So it stands for “connect and act,” which captures the essence perfectly. We digitalize our customers but don’t just leave them with a piece of software. We support them through the entire integration process and go beyond that – for example, by optimizing processes and machines based on their data. In short, everything a customer needs to operate production efficiently. Especially in volatile markets and with diverse challenges, this approach resonates strongly because it offers a complete end-to-end service promise.

And how did it come about that you said, “Hey Smart Systems Hub, let’s tackle this together”? Many companies try to handle such projects internally. Why was it important for you to bring in the Smart Systems Hub?

Jens

We deliberately develop our digital services in close collaboration with partners who bring in specific expertise that we don’t intend to build up internally – simply because it wouldn’t make sense. We work with partners on equal footing, for example with manufacturers of edge devices that we integrate into our systems, or with partners who develop complex software services that we then build upon.
And that’s exactly where the Smart Systems Hub comes into play. Our partners develop platform services or apps that we make available to our customers. But these services only make sense if the production data is transmitted reliably and securely to them.
That’s precisely the challenge we tackled together with the Smart Systems Hub in the context of the Thin[gk]athonproject. Typically, a company has its production on one side and a platform layer on top. The path in between – the “road” the data travels on – usually has to be built by the company itself.
And here lies the big advantage of our collaboration. The Smart Systems Hub not only provides the necessary infrastructure but also the know-how to select the right connectors and technically enable the data transfer. This connectivity comes with a certain architectural complexity, but thanks to the Hub’s expertise, we were able to implement everything within just two days. That was really impressive.

[11:11] Challenges, potentials and status quo – This is what the use case looks like in practice

Such applications are, of course, never an end in themselves. They usually involve investments, especially on the customer side.
Do you have a concrete example, a use case where you’re already working with a customer who’s willing to pay for it? Can you outline the problem and give us an example?

Jens

Yes, that’s actually quite diverse. In this specific case, it was about determining the CO₂ footprint of individual machines or entire production lines. On one side, you have the customer with their machine on the shop floor, directly in production. That machine can first be digitalized, meaning data is collected and made available – that’s the foundation.
On the other side, there’s a service provider offering an easily accessible service to calculate this CO₂ footprint while considering all relevant parameters. And that’s exactly where the added value lies. Our customers need a verifiable CO₂ footprint for their production in order to meet ESG reporting requirements.
We bring the production-side expertise – the digitalization of the machines. Our partner provides the analytical service. And the Smart Systems Hub delivers the infrastructure to securely and reliably transfer the production data to that service.
A particularly important aspect here is trustworthiness – especially today, data sovereignty is essential. Our customers want to know exactly who has access to which data.

So you started with a very concrete use case where there was a clear customer demand – a real starting point. From there, it was about the technical implementation. You’ve mentioned infrastructure and connectors already. Can you explain that part of the project again?
I’m especially interested in the “why”: What were the real challenges in practice? Was it mainly about capturing data from the machines – so connectivity – or was it more about integrating the data into the target system? What were the sticking points where you said, “We need partners here”?

Michael

Before we go into the technical details, I’d like to highlight a general challenge. We’re talking about the context of Manufacturing-X – and you’ve had great episodes about that already. Technologically, there’s a lot happening right now. In 2025, there are numerous X projects underway.
But one thing hasn’t changed: getting started is still extremely complex. That’s exactly where what Jens mentioned comes in – using existing infrastructure to make that first step feasible. If a company had to build all of that on its own, the effort would be enormous.
We’re already very good at automatically generating data. When you look at the sheer volume – we’re talking about exabytes, that’s 10 to the power of 18, meaning billions of gigabytes per day – it’s impressive. But, as you know, Madeleine, the issue of data silos still hasn’t been solved at the same pace that we generate data. That’s where Manufacturing-X steps in.
And it’s not just about SITEC, but also about their customers – entire supply chains, sometimes complete supplier networks. This creates a completely new form of collaboration, one that requires new structures.
That’s why we developed a format that Jens mentioned earlier – the so-called Thin[gk]athon. In this innovation sprint, we bring together exactly these supply networks and test how collaboration works, based on the Manufacturing-X infrastructure and the underlying technologies.
We ran this together in June 2025 at the Global Thin[gk]athon. For the first time, we conducted it physically at multiple locations simultaneously – in Hamburg, Chemnitz, and Leipzig – and even had participants joining from India.

So, essentially, it’s a kind of structured workshop format that you’ve developed?

Michael

It’s a further developed format based on the Hackathon concept but much more comprehensive. It runs for an entire week and goes far beyond pure software topics. We also integrate the full setup, including hardware and real connectivity. And we work directly on real industrial use cases.
One of the highlights is our Manufacturing-X Experimentation Field, which offers two key advantages. First, it allows for a quick and easy start. With automated onboarding and a user-friendly interface, even participants with little technical background can get started right away. The data is validated during input, and with just a few clicks, the infrastructure is ready to use.
Second, we have a physical, mobile pop-up testbed that allows industrial use cases to be experienced hands-on. That’s incredibly valuable because this topic can often seem abstract. Here, people can actually experience it – with real edge devices, digital twins, infrastructure, and everything that goes with it.

Very interesting – also to understand what your setup looks like and what you actually offer. If I understood correctly, with this testbed you’re providing a technical infrastructure where real scenarios can be tested in a practical environment. So companies don’t need to start with their own systems and large investments right away – they can first experiment and see how everything works.

Michael

Exactly. You can test how your own components interact. But we also provide industrial components that may be missing—for example, a PLCnext from Phoenix Contact, an edge device, or a robotics system. This way, you can test how everything behaves, even in a simulated setup, just as your customer or supplier would have it later.
That creates transparency and understanding, and it significantly accelerates development. But, and this is important to emphasize, the infrastructure alone will move you forward, but not fast enough. You also need someone who supports you on the technical side, moderates the collaboration methodically, and structures the process. It’s the combination of technology and guided methodology that really gives projects a boost.

Very cool. If I wanted to implement something similar – you have several hubs across Germany, right? And you offer different ways to experience it. So, if someone is listening now and is interested, how does that work? Can they just visit you, or how does the collaboration start?

Michael

Basically, there are two easy ways to get started. You can contact us directly – I’ll share our contact details later – and use the virtual part of the testbed. There’s a data space that’s initially virtual, so it’s very easy to get started with that.
If you want to experience it physically, with the mobile pop-up testbed, there are regular opportunities. We are on tour with the testbed, visiting cities such as Hamburg and Bielefeld.
Or you can join one of our events – you’ll find all the details on our website. The next big opportunity is in November at hub:disrupt, which offers great networking possibilities, lots of exchange with other players, and plenty of best-practice insights. So, a warm invitation to everyone interested!

That’s November 5 this year. And if you’re listening to this episode after the event, no problem – just get in touch. I’ll put the link in the show notes.
What you’ve built there is really impressive, both in terms of the people involved and what participants can take away. I can highly recommend checking it out.
Coming back to Manufacturing-X – for everyone who isn’t fully familiar with it yet, even though many will be: Manufacturing-X is a program funded by the German Federal Ministry for Economic Affairs and Climate Action and part of the national digitalization strategy.
The goal is to create an interoperable and sovereign data ecosystem for industry – a system in which data can be shared securely across the entire value chain. It’s all about enabling safe, controlled data exchange.
Now I’d like to know: Who exactly is part of these supply networks you mentioned, Jens? Who did you want to involve specifically?

Jens

Everyone knows PayPal. The idea there is simple: I want to buy a product or service from someone I don’t personally know. I still need to pay them,
but I need a trusted intermediary to make sure the transaction is secure.
The situation is similar with Manufacturing-X. There are service providers that offer services that are very valuable to manufacturing companies—for example, through evaluations based on production data, such as CO₂ footprint or energy efficiency. These services offer real added value.
But today, customers no longer want to get everything from a single provider. Just like in our private lives, we use specialized services from different suppliers. In the industrial world, it’s the same. In the past, one vendor often provided a massive software suite, but companies used only a small fraction of it.
Together with our partners, we take a different approach. We offer modular, individually combinable services. Customers can pick exactly what they need. And if there are additional specialized services available – for example from another partner – those can be integrated via Manufacturing-X.
This way, customers can use multiple specialized services without having to invest in a huge all-in-one system.

Michael

What’s special here is that we no longer want to simply send data somewhere, such as into a central cloud. Instead, we create a structure in which someone can access data in a targeted manner. Instead, we’re creating a structure where authorized access to data is possible – not as a custom-built, one-off solution that every company has to develop on its own, but within a secure, standardized data space where it’s clearly defined who can access what, how, and where the data resides.
The challenge is that there won’t just be one such space. In the automotive sector, for instance, dedicated data spaces are already being built, while other industries are developing their own. And these spaces must be interoperable.
Our supply chains are already international – spanning countries like France and Japan. So when a company like SITEC operates in France or Japan, it must also be able to work there in an  identity-based  and trustworthy manner.
And that’s exactly what we’re working on: how to connect these different data spaces. Once we achieve that, it will unlock enormous potential – enabling standardized and automated data access across global supply chains. The potential is huge.

Absolutely. Jens, from your practical perspective, can you explain what these concepts mean for you in concrete terms? Maybe let’s take your CO₂footprint use case for ESG reporting as an example. What does this mean for you in practice, and what challenges do you face when you implement this technically for a customer?

Jens

First of all, it is important to understand what a “data space” actually is. A data space is  not  simply a new data silo in which all data is stored centrally. Rather, it is a space in which various actors operate, one of whom provides data and another processes it –  without the data necessarily being stored centrally anywhere.
Between these actors there are technological components that enable secure, controlled, and interoperable data exchange. For all listeners, please do not think of a classic cloud where large amounts of data are simply deposited.
Concretely in the CO₂ footprint use case, we selected a machine from our production that already generates a very large amount of data. This machine is our primary development machine but it is also used in series production. Our goal was to capture the CO₂ footprint of this system.
Since we do  not  have the competence to develop such a CO₂ service ourselves, we brought in a specialized partner. Using the data space structure and with the help of connectors, we transferred our production data to this partner. Based on that, they calculated the CO₂ footprint.
All of this also works in perspective in the context of the  digital product passport , which means we directly close the loop to regulatory requirements. At the same time, we gain a concrete benefit, namely the CO₂ footprint per part or per product coming from the machine.

So you take the data from the OT level, meaning from the machine’s automation, and pass it on to the IT level. And that is exactly where the connectors come into play. Would you say that this is a classic IT/OT integration component—and what exactly is the connector for you?

Jens

Yes, for us the connector sits exactly at this interface. As a machine builder, we can handle everything that happens at the production level. We use gateways that capture the machine data and prepare it for transfer upward.
The crucial question then is  which transmission technology  we use to send the data to a higher level system. In our case, we used MQTT.
What matters most, however, is that the connection is trustworthy.

Okay, so you essentially stop at the gateway level and then pass the data on, for example to the customer or a partner, and from there it is processed further in the respective system. The recipient will probably need their own integration into ERP, MES, or other systems in order to evaluate a CO₂footprint in a meaningful way. Is that a fair understanding? In other words, you hand over the data, and everything else then happens on the partner or customer side?

Jens

Exactly, that is one possible solution. Our focus is on the machine first. But the more additional and corresponding information from other systems flows automatically into this service, the more valid the result becomes.
In our example, we initially used the machine’s energy data. In addition, we knew how many parts were produced in a given period. From that, our partner was able to calculate the CO₂ footprint per piece, which was exactly the service we used.

Michael

And this is exactly where the big advantage of a standardized infrastructure lies. What you definitely do not want is for SITEC to have to integrate each customer’s ERP system individually. That would not be scalable as the number of customers grows.
That is why we work with so-called  EDC connectors (Eclipse Data Connectors), which are standardized and usually open source. This gives companies the flexibility they need. Currently very widespread, for example, is the Tractus-X EDC, which has proven itself in such scenarios.
How the data is transferred in detail, whether via MQTT or other mechanisms, can be defined individually. What matters is that the connector ensures a standardized data exchange on both the sending and receiving sides.
This also includes processes such as authentication, authorization, and identity management—in other words, everything related to secure access and trustworthiness.
We currently offer this at Smart Systems Hub within a test environment. Companies can directly use the functions there, get certified, or acquire the knowledge needed to set up such environments themselves, either on the edge or through our central system.
The great thing is that all the components we are talking about are ready to use. And that massively reduces development effort.

So, you work with partners who know exactly how to handle this – the concrete implementation of the EDC connector. There’s probably a reference architecture or something similar that you rely on. And then you bring in specific partners to handle the implementation. Is that correct?

Michael

Exactly. At the moment, we provide this connector along with documentation, including detailed instructions for IT service providers. There is also an SDK (Software Development Kit) in the works that explains exactly how the connector operates and how it can be implemented.
Although the EDC connector is highly functional, it is also quite complex in practice. It is not something you can simply install on a system in a few minutes. That is why we offer it as a ready-to-use component—or we enable companies to use it independently in a targeted manner.

I see. That is extremely helpful for many companies, especially since they often deal with very heterogeneous interface landscapes.
As you said, no one wants to start from scratch and connect everything individually. Instead, you can work with a standardized connector that can flexibly handle different machine types and customer systems.
That significantly reduces the effort because you can build on an existing reference architecture.

Michael

Exactly. And the real leverage, the big effect, comes when you manage to digitally represent a machine – in our case, SITEC’s machine – as a digital twin. Dafür gibt es mit der Asset Administration Shell (AAS), also der Verwaltungsschale, der genau beschreibt, wie Maschinen strukturiert digital dargestellt werden.
By following this standard, machine data can be described, structured, and made available in a consistent way.

Very cool. I’ll include one or two relevant episodes in the show notes where specific use cases were presented. If you’re interested in the details, make sure to check them out.
And a quick question to everyone in the community: How do you handle this in your own operations today? How do you connect your machines? Which standards do you use? Share it in the comments or message us on LinkedIn or Instagram. I’d love to include your examples in one of the next episodes.

[28:29] Transferability, scaling and next steps – Here’s how you can use this use case

Are there any concrete recommendations from your project – things to watch out for when setting up connectivity, or pitfalls to avoid because they end up being expensive or time-consuming?

Michael

Don’t try to do everything on your own. Look for others who are already on the journey and learn from existing solutions and formats.
Actively seek exchange and combine expertise instead of building everything internally from scratch. Especially in mechanical and plant engineering, we see many companies trying to develop deep software expertise on their own. That takes a lot of time and energy.
My advice: take your first steps pragmatically. Use existing infrastructures and bring in partners. And don’t focus only on technology – look at the business case. Ask yourself: where exactly is the pain point in your company? What will actually make a difference, financially or operationally?
It doesn’t always have to be the biggest cost factor. Sometimes it’s simply about avoiding frustration.
Also, don’t limit your view to technology alone – include business development. A common mistake is to approach everything too much from the IT side without considering the practical benefits for operations and users.

Yes, absolutely. I think employee satisfaction and change management are really key topics. The acceptance of digitalization projects often depends on soft factors that are easily underestimated.
We all know it from everyday life – privately, everything works smoothly on the smartphone, everything is intuitive and simple. But in industry, you suddenly face rigid processes. Especially for new employees or younger generations, that can be frustrating.
Jens, from your perspective – do you have any additional best practices based on your own experience?

Jens

What helps enormously is to adopt the perspective of the other side. As a machine builder, we’ve developed many solutions together with our customers – including in the field of edge computing. Early on, we asked them, “Would you be interested in working with us on this solution?”
The “price” the customer pays is just a little bit of time. But through this exchange, we get valuable feedback – concrete ideas, real problems from everyday practice – and can develop in a much more targeted way.
That’s a real advantage. Once you internalize that, you realize you need to open up. Unfortunately, this mindset hasn’t yet reached every part of the German midmarket. But those who don’t open up risk falling behind – especially in digitalization.
Just because someone can program PLCs or operate robots doesn’t mean they’ve mastered digitalization. That’s not criticism, it’s simply reality. So my advice: seek out partners who can support you with know-how and experience. That’s absolutely crucial.

Very nice. Jens, maybe one last question to wrap things up. What is the current outcome for your customer – for the actual user? The project is still ongoing, but can you briefly summarize what you’ve achieved so far in terms of CO₂reporting? Can the customer already see the data? Is the use case solved?

Jens

In the end, it’s all about providing tangible solutions for our customers. Our product, connACT SERVICES, is already a functioning ecosystem with digital services, industrial offerings, and much more. It’s live, operational, and already in use.
At the same time, we’re continuously expanding the portfolio with new solutions that deliver real added value for our customers. The CO₂ footprint was one of the next logical steps – especially regarding ESG reporting and regulatory requirements.
In June, together with the Smart Systems Hub, we developed the first prototype. We’re now in the next phase of development, and I expect that we’ll roll out the final implementation later this year, making it available as part of our product offering for customers.

Wonderful. Michael, one last question for you: if you look into the crystal ball – say, the next three to five years – what can we expect from Manufacturing-X? How will it evolve, both in your project and in the broader context?

Michael

Collaboration between companies will increasingly revolve around combined service offerings – that’s something we’re already seeing.
We’re building the infrastructure for exactly that.
And next year, we’ll again host a Global Thin[gk]athon. This year, we had 70 participants from 40 companies. Next time, we want to take it even further and deliver a real boost for concrete use cases.
At the event on November 5 in Dresden, we will be speaking with, among others, Angelina Marko from the SCALE-MX initiative, which focuses on practical knowledge transfer. Our mobile testbed will also be there – with plenty of things to see, touch, and try out.

To everyone listening: feel free to join the event – you’ll find the link in the show notes. And even if you’re listening to this episode afterward, it’s worth checking out our other podcast episodes.
Thank you both very much. It was great to dive deep into the practical side – from CO₂reporting to connectors and concrete implementation. A fantastic project, and I’m really looking forward to seeing how it continues to evolve.
I’ll give the final word to you.

Michael

Thank you, Madeleine, for the great moderation, and of course to Jens – it was a fantastic exchange. I’m really glad that we’re moving forward together on this journey.

Jens

Many thanks from my side as well. It was a great discussion, and it’s exciting to look ahead together. There’s definitely a lot of interesting things coming our way.

Take care, and enjoy the rest of your week. Bye!

Jens

You too, bye!

Michael

Bye!