L4D: How has your business changed since the beginning of the full-scale invasion? 

Oleg Shcherbatenko: At the beginning of the war, we focused on those areas where it was necessary, first of all, to help the state, the first thing we did was a large digital system for military administrations, and this system helped the country to keep records, orders, financing in a single system, we did a similar project with Ukrzaliznytsia.

The number of customers has decreased, but still we did not stop the work of our R&D center, we understand that our main advantages are in digitalization, creation of digital twins, and this is needed not only during COVID-19, it is also needed during the war.

The number of customers has decreased, but still we did not stop the work of our R&D center, we understand that our main advantages are in digitalization, creation of digital twins, and this is needed not only during COVID-19, it is also needed during the war. Really now a lot of people have left, a lot of people have been relocated and the need for manufacturing technology to be focused on innovative production management technologies, this pushed us to focus on continuing to invest in Smart Factory, Digital Twin, everything related to artificial intelligence. We are promoting this both in Ukraine and in foreign markets, we started to work more in foreign markets, of course.

We had such an example, on the eve of the war, about a week before the war started, we signed a large contract with a company from Dubai, Dubai Cable Company, which helps us now to implement all these areas in real projects abroad.

During the war, we participated in Wire 2022 Dusseldorf Germany, CableEnvire, we took part in two exhibitions in Cairo.

L4D: Is your strategy now aimed at retaining staff, entering new markets, relocation or other options?

Oleg Shcherbatenko: All these issues are key, the war requires the company to focus on teams and staff, we needed to support employees who went abroad, we have many people who work abroad on foreign and domestic projects.

We do not look at the events after the war as a survival policy, because it would mean closing all areas. We focus all teams on creating new products during the war. The main focus of the company is to create new opportunities, new values for customers, new products.

L4D: So, the war has given you new challenges, not stopped you?

Oleg Shcherbatenko: The company has been on the market for a long time, we have survived many crises: 2008-2009, 2014-2015, COVID-19, all these crises, both global and regional, increase the demand for digitalization solutions. The crisis leads to increased competition, and it is possible to work in a competitive environment when you are more efficient than your competitors, digitalization is an opportunity to work more efficiently, first of all. Secondly, even if you buy modern equipment, it will never immediately give an advantage, this equipment must be effectively managed, and this is also digital technology. During all crises, we received more focused customer needs, and we always looked for solutions for customers so that they could work more efficiently, could develop during COVID-19, and even now, during the war.

There were no military administrations until February 24, they were created on March 6, and we provided a digital solution to work remotely, to use digital signatures. These are new challenges, and we are responding to them.

L4D: Have your relations with foreign partners changed?

Oleg Shcherbatenko: We had a big focus on Ukraine because we are a product company. But we cooperate with clients in 15 countries and after February 24 we made this vector of work a priority, important for development. We are expanding the number of contacts, the number of partners. We have a separate team that works in this direction, we focus on understanding the needs and requirements of each foreign partner to us and to our decisions, how to make us move faster. We have something to offer, we were focused before the war on Industry 4.0 and 5.0, Artificial Intelligence, Smart Factory, Digital Twin, Industrial Internet of Things (IIoT), all these areas we did not curtail, we see the demand for them.

As for Industry 5.0, we are interested in partners who are looking for not only efficient production, but also responsible production, everything related to the Green Deal, waste reduction, energy efficiency. We see that these solutions are needed not only in Europe, but also in the MENA zone, we are looking for partners who work in Industry 4.0 and 5.0, and this gives us results.

As for Industry 5.0, we are interested in partners who are looking for not only efficient production, but also responsible production, everything related to the Green Deal, waste reduction, energy efficiency.

L4D: In what areas of activity do you optimize business and reduce costs (are there areas where you have increased investments)?

Oleg Shcherbatenko: We carry out optimization in the company, we look to who from the company can work in foreign markets, we recruit new staff somewhere, we invest in staff and in new solutions, we conduct training in the company, the company’s training center is operating. We are still developing the company so that it does not lose the speed it had before the war.

There are also problems in the world, there is an impact of the war in Ukraine and on the world, still the problem is that the solutions that the company will produce will be more effective. We make sure that these areas are a priority.

L4D: What is your product policy now – do you have plans to release new products or solutions?

Oleg Shcherbatenko: We have many products related to Predictive Maintenance, Smart Factory, IoT, but we are still looking for new directions. One of these products is Anomaly, a product that is based on artificial intelligence and helps the equipment maintenance company, its configuration can be done not by programmer, but by user, and this also corresponds to the global trends that artificial intelligence is closer to production, so that the business analyst can independently configure models for equipment maintenance. We invested in this product before the war, but now we have increased investments in it to make it available in all countries.

We continue the directions that we have been and create new products.

Our goal is to be able to get the result in a few days after the implementation of the product, we directly receive information from the equipment, for this we have IoT devices to collect data, we have artificial intelligence to process this data and provide service offers for people.

Each of our products meets the needs of the client. We see that many companies have both modern and less modern equipment, and we need to reduce the dependence of the system on human input, we fill all systems with data from the Internet of Things, we have an Internet of Things designer that can be quickly implemented. Our goal is to be able to get the result in a few days after the implementation of the product, we directly receive information from the equipment, for this we have IoT devices to collect data, we have artificial intelligence to process this data and provide service offers for people. We make sure that the time from the delivery of the product to the first results is days, not months, as before. This is the main goal of the product, it will reduce costs and this product will help to get results quickly.

We have been dealing with such products since 2012, first we switched to RCM2, and then we switched to Predictive Maintenance, so we have a lot of experience in this area.

KOEEBOX is a new solution, we can come to a new production facility, install this device, and it will provide information about the equipment in 15 minutes, information about the status of the equipment, downtime, etc.

We also have an Energy AI product, and we predict the energy demand of your production or office. We are working in the direction of Predictive quality analytics, we monitor the process that is in production, and we can predict what will reduce the quality of products if some situation occurs, and we can give commands to adjust the process to obtain better quality. These products are based on different models of artificial intelligence, and these products are the topics that we are developing now.

Now we are promoting the KOEEBOX product in this direction, which we started making before February 24, but now we see a great demand for it abroad. We plan to promote it to foreign markets, we are working on it.

KOEEBOX is a new solution, we can come to a new production facility, install this device, and it will provide information about the equipment in 15 minutes, information about the status of the equipment, downtime, etc. And for this we do not need to involve a programmer or telecommunications specialists to connect to the network. This device immediately works in the cloud, the first results can be obtained in 15 minutes. We are promoting this idea of how to bring a company closer to Smart Factory in 15 minutes. We have already supplied this product to the Emirates, to Egypt, where these solutions are already working, and we are ready to offer it to European customers. 

L4D: Has the level of cooperation in your community changed? (Has consolidation among Ukrainian companies in your sector increased, in which areas, or vice versa – competition has increased)

Oleg Shcherbatenko: I think that there have been no significant changes. In Ukraine, the IT industry is very developed, according to various estimates, more than 200,000 specialists work in the IT industry, most companies work on outsource, there are product companies, we are a large product company, in our environment the competition has not increased, and the challenges relate to the problems of replacing Russian IT products in Ukraine. We have a separate product for Ukraine MASTER, to replace 1C, now there is a process of substitution in this area. There are not so many Ukrainian products to replace 1C, because companies have just started to do this, and it is impossible to create a replacement so quickly.

We have been creating MASTER product since 2015, we already have more than 25,000 users of our MASTER product. Here we see competition for Western companies from SAP, Microsoft, but it is difficult for foreign companies to work in this area, as it is necessary to constantly monitor changes in legislation.

L4D: What are your forecasts for the development of the situation on your markets in Ukraine? In your opinion, is there a prospect for foreign partners in Ukraine – in what way?

Oleg Shcherbatenko: To restore Ukraine, it is necessary to have foreign partners who will create new production facilities or localize in Ukraine. It is important to find companies that can participate in the restoration of Ukrainian production.

Previously, in one of our areas, we competed with foreign brands, SAP, Oracle, Microsoft, IFS in Ukraine, and our main competitor was the Russian product 1C. Now the demand has narrowed, and it will be even more difficult for these international companies to promote their solutions in Ukraine. It will be difficult to enter Ukraine with new products because the number of users has decreased. Now there is a very big interest in Ukraine in the world, and we hope to establish cooperation with these companies abroad. We see that Ukraine is strong not only in IT, but also in the armed forces, but IT has always been our advantage. Our competitive advantage is that we are able to adapt to new market needs, changes in the world, we do not stand still, we are always moving forward.

Our company has been on the market for over 30 years and our focus has always been on industrial solutions for production. We are a big company, we have experience and specialists for digital transformation of production. This is also our advantage. Most companies abroad have already implemented ERP, but we now have projects in China, Europe, MENA, and we see that there are not many solutions with deep expertise in manufacturing. We have a lot of knowledge-intensive solutions. We do not provide simple solutions, we have invested a lot in artificial intelligence, optimization methods, different approaches to developing solutions without human intervention, this is our focus. Production is difficult to implement these approaches, we want to show that we have extensive experience in this, we are ready to share this experience. We create competence centres for these solutions, help companies implement these solutions. The history of our company shows that we have invested a lot over these 30 years in high-tech solutions and worked for the future. Our own R&D centre for Industry 4.0 is still working, it is a centre for technology development, we have always invested in our solutions, we have always invested in creating mockups that we presented at exhibitions around the world.

I think that this gives us a credit of trust, we have worked a lot with large state-owned companies, Ukrposhta (60,000 employees), Ukrzaliznytsia (400,000 employees), UkrOboronProm (group of companies), ANTONOV, Yuzhmash, Yuzhnoye State Design Office, as well as with companies known in the world, Interpipe, which is one of the world leaders in the production of pipes and railway wheels, Ferrexpo, Nibulon, this experience shows that we have worked with big business and gives confidence in our solutions. Big business does not work with startups, big business chooses stable solutions that you can be sure of, we have extensive experience in such projects.

We are working to improve production efficiency within the framework of Industry 4.0, these areas – from the sensor to decision-making, everything works in the system, using artificial intelligence. Our slogan is “solutions without human intervention”, we have been promoting this for over 15 years, our solutions from sensor to control, we focus on effective management, full cycle.

We promote solutions that are needed for production, equipment maintenance, these areas are more specific and our experience in implementing production management solutions using artificial intelligence is useful. There is demand and less competition than in the field of ERP. There is a demand for them in the world, we promote them.

L4D: What are your main proposals for cooperation for foreign partners?

Oleg Shcherbatenko: We have a big advantage here, we promote our solutions both in Ukraine and in the world. We have created connectors with SAP, Oracle, IFS. We can integrate our solutions into these systems, and take on the solution of focused tasks for production, production management, production quality, production reliability, everything that fits into the concept of EEI. We have such experience, increasing this indicator by 10-20% in foreign companies. For those companies that are focused on OEE, our solutions will be useful.

Our case with Interpipe can be viewed here. In this project, they increased OEE by 15%, achieved a very high rate of just-in-time order fulfilment, 95%. They track logistics with an accuracy of 1 hour. They work in 82 countries, 80% of their exports. Of course, all these indicators were valid before the war, now there are some difficulties.

We launched the Industry 4.0 Trans4mation Forum in Kyiv, the first in Eastern Europe. We planned the Trans4mation Forum 2022 for April 1, all speakers were found, but unfortunately the war destroyed these plans.

Previously, there was such a direction of development of the world industry – everything was produced in China, but now Industry 4.0 has changed approaches to the location of production. Now the factor of cheap labour is losing its weight, modern production works in a new way, world giants return production to their countries and create highly automated and robotic systems using artificial intelligence.

When we come to production, we see the following: companies buy new equipment, machines, but still it works with an efficiency of about 60%. In any case, there are some events that cause downtime, for example, untimely delivery of materials, improper planning for the order. Now, as you know, almost all production facilities work to order, so you need to track each order, but if there are thousands of them, they need to be properly planned so that there is no downtime. We had an experience, with 60% of downtime, we reduced the number of downtime by 15-20%, we are working on detecting hidden factory. For example, there is a company with an OEE of 55%, this is the average in the industry, the company builds another factory nearby, which will have an OEE of 45%, so the company will be able to fulfill all orders, but the efficiency will be very low instead of building another factory, we come and increase the efficiency of production management (OEE) by 15-20%, bring the OEE to 80%, and this gives amazing results for the business.

We launched the Industry 4.0 Trans4mation Forum in Kyiv, the first in Eastern Europe. We planned the Trans4mation Forum 2022 for April 1, all speakers were found, but unfortunately the war destroyed these plans.

Summing up, I would like to say that we are a product company that has its own R&D centre for Industry 4.0 and Industry 5.0, we are looking for partners with whom these solutions can be adapted and implemented in foreign companies, these are IoT products, Predictive Maintenance, Smart Factory. Our products allow companies to become Smart very quickly.