Industrial News Updates
Measurement yes, mediocrity no
How is success achieved? According to the sensor manufacturer ifm: with a lot of unconventionality, more than one ear on the customers - and a shot of chaos.
ifm who? If you are not involved in automation you will hardly know the Essen medium-sized group with the three letters - but you still benefit from its products every day. Example shopping mall: Photoelectric sensors from ifm ensure that the car park barrier does not damage the roof of your car. Its safety light barriers guarantee that nobody gets stuck in the automatic entrance or lift doors. And its pressure sensors make the lift ride safe. Above all, however, the shops would be totally dead without ifm: Modern mass production is not conceivable today without sensors, controllers and systems for industrial automation. ifm develops and supplies them. More than 9,000 products are included in the portfolio:
Position and process sensors, sensors for motion control and safety technology, for industrial image processing and communication and for identification systems and the control of mobile machines.
Sounds abstract. But it isn't. See shopping mall. Or windmills: ifm vibration measuring equipment ensures that they do not have to be turned out of the wind when a storm is raging, that they do not shake or even tip over. Or in agriculture: 3D cameras from ifm do not only help combine harvester drivers to find the optimum track and thus to save a lot of time thanks to the rop edge detection - they even ensure an absolutely pure milk quality:
The camera system identifies which cow goes to the milking parlour, shows the milking robot the exact position of its udder teats and scans the shape of its backside. For: If the cow is healthy, its backside is round. If it isn't, it is still milked but the milk is automatically rejected and the farmer is informed at once.
From the automotive industry to agriculture
High-tech, hidden in the cowshed. That fits very well with a real hidden champion. ifm is among the world's top 5 sensor manufacturers. Even the Chairman and Managing Director Michael Marhofer thinks it bizarre that the company has become indispensable in the fields and cowsheds: "Even we are amazed that agriculture has become the largest customer for our camera system." In particular since it was originally developed for the automotive industry: As a driver assistance system that detects pedestrians in the street and that automatically slows down the car safely. "Well, instead of the driver it now helps the farmer," says Marhofer. "Even though it may sound strange: Without intending we have created a completely new market."
That happens once in a while. At any rate if you - just like ifm - do not only make a big deal of innovation in your own image brochure. Instead of the seven or eight percent, usual in industry, 13 percent of the staff work in development. Good ideas are also promoted by the company-owned venture fund. "We do not put anyone under pressure. New ways take time. Therefore we have to allow lateral thinking", says Marhofer. Above all ifm has changed its way of thinking. "We are about to dramatically cut back all internal processes in development", says the ifm boss and explains: "No doubt, processes are the alpha and omega in production. But in development they kill any creativity." If people only think of ticking the respective boxes in their flowchart, there is no chance for any enthusiasm left. Then everything just goes by the book. Instead ifm sticks to the motto: Do it - and come back when you have got something.
"Others say they want to organise good ideas - what a nonsense!", exclaims Marhofer. "Good ideas come easy.
If you want to organise them via processes, you get mediocrity, if at all.
It is necessary to try something and to be allowed to make mistakes. And then do it in a different way next time. ifm does, of course, also watch the development costs. "But at first we allow time. It is decisive how much turnover we will make with a new product per developer. That is what we measure very accurately. But not the time he needs for it."
Maximum freedom? That sounds like chaos. "So what?", Marhofer shrugs. "You do have to allow a certain amount of chaos." It seems to work: ifm has registered about more than 600 patents and 70 new patents were applied for last year.
"We are a relatively small company and nevertheless we are among the top 50 German patent applicants", he proudly says.
And that is appreciated and recognised: ifm is not just the only company that has been nominated for the renowned Hermes Award twice and won the world-wide highest technology innovation prize in 2005. Just recently the consulting company EY granted Michael Marhofer the title of ‘entrepreneur of the year 2013’. The innovative strength of ifm highly impressed the jury of the award that is granted in more than 50 countries. But that's not all.
ALL EARS, CLOSE THE CASE
Michael Marhofer is sure that success can be very easy. "Listen to the customers", he recommends. "Do listen carefully." He often accompanies his field sales engineers and sees again and again: They want to show the customer the new products they are proud of. The customer is usually amazed - but he needs something quite different. In short: A nice visit but a missed chance. Marhofer's credo: "If you forget about your own enthusiasm and simply listen, you are more successful."
"We are impressed by how Mr Marhofer implements his business strategy. That he holds back as owner and focuses on the teams and their creativity and know-how.
At ifm it is not hierarchy that counts but only competence." That is the reason given by Peter English, partner at EY and responsible manager of competition in Germany for the award.
And, by the way: "The figures speak for themselves."
They do. When Marhofer and his co Chairman and Managing Director Martin Buck followed into the footsteps of their fathers in 2001, ifm's annual turnover was 250 million euros. Today it is 630 million euros. Apart from the crisis in the year 2009 ifm has been growing annually, most of the time a two-digit growth. And always on their own, without borrowed capital or larger take-overs. "We have proven that we can do it even though we do not go by the book", says Marhofer.
It is true, he does take unconventional steps. Not only in development. Another example is the close customer contact. A quarter of the 5,000 employees work in direct contact with the customer. Ten percent would normally be considered above average.
This is not only due to the extraordinarily broad field of customers. ifm consistently sells without any intermediaries. This also goes for countries such as the USA and Russia where representatives and distributors are the rule. "Our slogan is not accidentally 'Close to you'‘“, says Marhofer. "We also mean it."
And then there is quality. "We do not only supply quality, we supply perfection," Marhofer emphasises quite immodestly and acts: As from April 2014 ifm will grant a five year warranty on the entire product portfolio. So far a unique promise on the market. "Nobody does that for a part that is exposed to extreme conditions," says Marhofer. ifm products are indeed often exposed to enormous stress. They operate in the most unfavourable environments, have to function reliably 16 or even 24 hours a day at minus 40 or plus 120 degrees Celsius.
Nevertheless the return rate is in the range of 0.001.
As evidence for the company quality - pardon me: for the company perfection - Marhofer quotes a customer. He uses ifm pressure sensors that are designed for 100 bar in a water hydraulic power pack - where they have to resist up to 1,000 bar when the valve closes. "The man was enthusiastic: We replace your sensors, he told me, only after seven months - those of the competitors already after one to two weeks."
Moral approach instead of pursuit of turnover
By far the least conventional step is: ifm voluntarily waives millions of euros in turnover. The company from Essen does not supply the arms industry as a matter of principle. Why? Very easy: "I personally do not want to step on a mine", explains Marhofer.
"Therefore I do not do anything to make it happen to other people. Period."
The corporate philosophy explicitly states that ifm is a "moral company". The company requests a written guarantee from mixed companies that work for civil and military manufacturers that the products are exclusively intended for civil purposes. And verifies it. "Everybody can rely on it: Even if he supplies to arms producers by mistake - we cancel the business relationship without notice", says Marhofer. He accepts that lucrative business transactions collapse because a potential partner cannot give this guarantee. "This is one of the advantages of being an entrepreneur: Having the freedom of decision - even the freedom to waive turnover because of one's own conviction."
MEASURING AND CONTROLLING
ifm stands for a success story par excellence. The three letters mean "Ingenieurbüro für Messtechnik" (engineering partners for measurement technology): The business start-up by Gerd Marhofer and Robert Buck in the year 1969 has developed into a global player with a two-digit annual growth rate in just four decades.
The sons of the founders, Michael Marhofer and Martin Buck, took over the management of the company in the second generation. By now ifm has become one of the worldwide industry leaders for automation technology. The family-owned company with headquarters in Essen employs about 5,000 staff and is active in more than 70 countries. Currently 115,000 industrial customers are supplied.
ifm sees itself as the embodiment of quality "Made in Germany". Almost 90 percent of the portfolio is developed and produced at five locations on Lake Constance.
Gurun Poised to be the Automotive Hub
Kedah is positioning Gurun as the automotive hub for northern region of Peninsular Malaysia, expecting a production of some 150,000 cars by 2018.
Kedah Industry & Trade Investment, Consumers’ Affairs, and Cooperatives Committee chairman, Datuk Dr Ku Abdul Rahman Ku Ismail said the state expects the output to come from Naza and Green Oranges, which is the franchise holder of the Haval brand vehicles owned by China’s Great Wall Motor.
Besides Gurun, Kulim is also rolling out BMW and Mazda vehicles, he said at a media conference after a Corporate Social Responsibility (CSR) and Contribution Presentation event organised by Yayasan Tan Sri SM Nasimuddin, Naza Automotive Manufacturing Sdn Bhd, and Northern Corridor Implementation Authority (NCIA).
Ku Abdul Rahman represented Kedah MenteriBesar Datuk Seri Mukhriz Mahathir to officiate the event.
Also present were Naza Group of Companies’ Joint Group Executive Chairman, SM Nasaruddin SM Nasimuddin; Naza Group of Companies Deputy Group Executive Chairman, SM Faliq SM Nasimuddin, and NCIA Chief Executive, Datuk Redza Rafiq.
Ku Abdul Rahman said the state targets to attract more than RM5 billion in investment for the manufacturing sector this year, adding that a company would invest RM3.9 billion in the Kulim Hi-Tech Park (KHTP) while another major investment of about RM1 billion is expected later in the year.
Overall for the first five months of the year, Kedah secured some RM6.3 billion, of which RM2 billion came from the duty-free island of Langkawi.
Meanwhile, Naza Automotive Manufacturing Sdn Bhd’s Chief Operating Officer Roslan Abdul Ghani said the company expects to increase its production by 30% next year to 20,000 units from some 16,000 units this year, including six new models for Kia, Citroen, and Peugeot.