⏱ 9 Min. Read

The Schreiner Group, based in Oberschleissheim near Munich, is a global technology leader in functional labels and high-tech tags. With 1,200 employees and over 200 million euros in revenue, this family-owned business demonstrates how a classic medium-sized company can transform its entire production using IoT sensors, digital twins, and AI-supported quality control. A success story that proves: digitization in the Mittelstand works when driven consistently by management.

Key Points in Brief

Initial Situation: Global Market Leader with Analog Shop Floor

The Schreiner Group is a prime example of a German ‘Hidden Champion’: founded in 1951, active in over 50 countries, specializing in functional labels for the pharmaceutical, automotive, and electronics industries. What few people know: these ultra-thin labels are high-tech products. RFID labels for drug traceability, tamper-evident seals for auto parts, conductive labels for electronic assemblies.

However, while the products were technologically advanced, the production methods were stuck in the past. Roland Schreiner, the third-generation managing partner, described the situation in 2022 as follows: “We were producing high-tech products, but our production control was run using Excel spreadsheets and paper forms. That didn’t align.”

The challenge was clear: increasing customer demands for traceability, ever-smaller batch sizes, and a growing shortage of skilled workers in the Munich region forced the company to act. The reject rate for certain product lines was 4.2 percent, and the Overall Equipment Effectiveness (OEE) was 68 percent. These were not acceptable values for a quality leader.

The Decision: Not an IT Project, but a Corporate Project

What sets the Schreiner Group apart from many failed digitalization projects: The transformation was not delegated to the IT department. Roland Schreiner took personal charge and installed a cross-functional team from production, IT, quality assurance, and sales.

„Digitalization in medium-sized businesses is not an IT project. It is a question of corporate culture and the willingness to fundamentally rethink processes.“

Roland Lässig, Senior Partner, Boston Consulting Group

„The biggest mistake medium-sized companies make is treating digitalization as an IT project,“ says Dr. Stefan Günther, who accompanied the project as an external consultant. „At Schreiner, it was clear from day one: This is a business transformation project, not a technology project.“

The investment decision was made in the third quarter of 2022: 4.5 million Euro over three years. For a company with around 200 million Euro in revenue, this is a substantial investment that Roland Schreiner defended to the advisory board with a clear business case: Amortization within 30 months through reduced scrap and efficiency gains.

Phase 1: The Pilot Line as Proof of Concept

Instead of choosing a big-bang approach, the Schreiner Group started with a single production line for pharma labels at the Oberschleissheim site. The reason was strategic: Pharma customers demand seamless documentation, and the added value of digitalization was visible here the fastest.

In six months, the pilot line was equipped with 47 IoT sensors. Temperature, humidity, web tension, printing speed, adhesive application — everything was captured in real-time and fed into a digital twin of the production line. The data infrastructure was based on an edge computing architecture with local preprocessing and cloud integration for analytics.

The result after six months of pilot operation exceeded expectations: The scrap rate on the pilot line fell from 4.2 to 2.1 percent. The OEE (Overall Equipment Effectiveness) rose from 68 to 79 percent. And an unexpected side effect: The machine operators began actively using the real-time dashboards and contributing their own optimization suggestions.

Phase 2: AI-Supported Quality Control Changes the Game

The real breakthrough came with the second phase starting mid-2023. Based on the collected sensor data, the team trained a machine learning model for predictive quality control. Instead of detecting faulty labels only at the end of the production line, the system now predicts quality deviations before they occur.

„The system recognizes patterns that the human eye cannot see,“ explains the production manager. „Minimal fluctuations in web tension that would lead to printing errors three hours later. Previously, we only noticed this during the final inspection and discarded the entire batch.“

In parallel, the company introduced a MES (Manufacturing Execution System) that digitalized all manufacturing orders. The paper forms disappeared. Every production step is documented, and every deviation is reported in real-time. For pharma customers who demand FDA-compliant traceability, this is a decisive competitive advantage.

The Counterpoint: Not Everything Goes According to Plan

While the numbers sound convincing, the transformation also had its downsides, which Roland Schreiner openly addresses. The biggest resistance did not come from the machine operators, but from middle management. Shift supervisors and foremen, who had built up expertise over decades, felt devalued by the data-driven decision-making process.

„We underestimated how strongly middle management saw their role threatened by digitalization,“ Schreiner admits. „The machine operators were quickly enthusiastic because the dashboards helped them. But the foremen wondered: Do they still need me if an algorithm makes the decisions?“

The solution was an intensive change management program that redefined the role of the foremen: Instead of being operational decision-makers, they became „process coaches“ who train the system and evaluate the AI suggestions. A cultural change that took half a year longer than planned.

Costs also spiraled out of control at times. The originally planned 4.5 million Euros was not enough. The IT integration with existing ERP systems turned out to be much more complex than anticipated. In the end, the Schreiner Group invested nearly 6 million Euros. Roland Schreiner comments pragmatically: „Yes, we exceeded the budget. But the ROI is still correct because the results are better than planned.“

Phase 3: Rollout to Four Locations

After the successful pilot, the Schreiner Group rolled out the system to all four production sites between January and September 2024. The biggest advantage of the pilot phase: The team had not only tested the technology but also built an internal competence team that could carry out the rollout independently.

Eighteen months after the start of the pilot line, all locations were networked. Today, over 320 sensors collect production data in real-time. The digital twin no longer represents individual lines but the entire production chain across all locations. The management can compare the productivity of all plants in real-time on a dashboard.

Measurable Results After 24 Months

The figures after two years of full operation speak for themselves:

Particularly noteworthy: Employee turnover in production decreased by 18 percent in the same period. The Schreiner Group attributes this to improved working conditions. Monotonous control tasks were eliminated, making the work more demanding and varied.

Lessons Learned: What other SMEs can take away from this

1. CEO sponsorship is non-negotiable. Without Roland Schreiner’s personal involvement, the project would have failed when the budget was exceeded. An IT manager could not have pushed this decision through.

2. Start small, prove quickly. The pilot line delivered hard numbers within six months. This made the business case for the rollout unassailable. Anyone starting with a three-year plan without interim results will lose the organization.

3. Middle management is key. Shop floor workers and top management at Schreiner were quickly convinced. The resistance came from the middle. Change management must focus precisely there.

4. Plan for budget cushions. ERP integration cost 40 percent more than planned. This is not a problem specific to Schreiner. According to a Gartner study, 65 percent of all IoT projects in SMEs exceed their initial budget.

5. Data before algorithms. Before the AI model could work meaningfully, six months of sensor data had to be collected. Anyone wanting to start with AI without having a clean database will fail.

Outlook: From digital producer to platform provider

The Schreiner Group has already initiated the next phase: The know-how built up internally is to be offered as a consulting service for other SMEs. “We now know what mistakes can be made and how to avoid them,” says Roland Schreiner. “This knowledge is worth its weight in gold for other companies of our size.”

A model reminiscent of the logic of digital due diligence: Those who do not know the digital maturity of their company risk strategic mistakes. The difference: Schreiner has proven that transformation in SMEs is not only possible but also profitable.

Frequently Asked Questions

Further articles on digitization in medium-sized businesses:

• Digital Due Diligence: Why M&A deals fail due to IT
• CIO Agenda 2026: Between cost pressure and innovation mandate

Further Reading

• → CIO Agenda 2026 (Digital Chiefs)
• → FinOps: Getting Cloud Costs Under Control (cloudmagazin)
• → AI in the Job Market 2026 (MyBusinessFuture)

More from the MBF Media Network

• → FinOps: Getting Cloud Costs Under Control (cloudmagazin)
• → AI in the Job Market 2026 (MyBusinessFuture)

Title image source: Pexels / ThisIsEngineering