The Factory of Tomorrow
Mark Poensgen is in charge of International Group Development at igus, a leading worldwide manufacturer of bearings, linear guides, cable carriers and flex cables.
How has igus adapted to Industry 4.0?
MP: Industry 4.0 requires safe and reliable data flow and performance, which we can promise through our thorough testing process. igus e-chainsytems are designed for the purpose of data transmission. Our chainflex cables have been tested millions of times in our test laboratory, with the results available online, ready to be used for online configuration tools. Worldwide, our customers’ very challenging applications confirm that the data transmission by igus e-chain systems is safe.
Is China ready for Industry 4.0?
MP: In China, automation is more necessary than in any other market, especially if the country wants to maintain or even improve its current position in the global market. For the first time, the country is faced with the challenge of moving from a heavily manual way of manufacturing to one that is automated and “plugged in”. Time and again, China proved that change is possible and I don’t see it being any different when it comes to automation. Of course, Germany is still ahead when it comes to Industry 4.0 but it is only a matter of time until China catches up. In fact, in the long run there is bigger potential in China due to the size of the market and its will to be competitive.
How is your set-up in the Shanghai Free Trade Zone beneficial to you and your customers?
MP: With our entire Asian setup, our goal is to be closer to our customers, offering technical support for their increasingly localised engineering, production and services. By combining our centralised warehouse with customised assembly in China and our network of local warehouses all over Asia, we are able to offer our customers a clear delivery promise for over 100,000 catalogue items. If you consider that the processing time for our most popular product lines is 24 hours from order to delivery, it makes sense that we need a simple customs process. The improvements of the Shanghai Free Trade Zone support our strategy to reach our customers in Asia much faster with a wider product range.
You were the first German company to be granted the APOP status in the Zone. How does this help you?
MP: igus is one of only 20 companies out of the more than 1,000 selected for the Asian Pacific Operation Program (APOP), which is coordinated by the Waigaoqiao Zone Administration. The aim of this program is to support members in setting up their Asian Operations Headquarters in Shanghai. For igus, the Asian market is strongly developing so it was only a matter of time until we centralised more operational functions in Shanghai. These include product management, marketing, and HR, especially training. Local product management allows us to roll out new products faster in Asia, while global product development is stimulated by these divisions.
How do you safe-guard your critical know-how from being copied in China?
MP: We cannot safe-guard our knowledge and in many ways we do not want to, so we openly offer it to the Chinese market, as any other. Of course, we try to defend our properties and innovations with patents and trademarks, but in the end our best protection is our knowledge, experience, and understanding of our customers’ needs. Our aim is to be ahead of the curve by placing our competitive edge in the speed of development. Hence, our products are developed and tested in our 1,750 m2 test centre with the latest technical advantages and a reasonable price tag.
What trends in automation have you witnessed in China?
MP: In previous years, global players were used to selling based on their market position, i.e. they had little competition and could leverage their name to demand higher prices for their products. These days however, many customers have been downsizing their costs, while focusing more on finding individualised solutions that fit their needs. Especially for China, which is fast developing with many new companies popping up competing with our customers, this is a very relevant trend. Global market leaders have to adjust and face the challenge of being competitive.
At igus, we invest more in developing innovative products that fit the requirements of our customers. The properties of our products are clearly defined and well tested, so that we can always deliver the newest technologies to our customers.
Frank Geng is the General Manager of Kemppi in China, a world-leading manufacturer of arc welding equipment and a provider of solutions for highly productive welding.
How big is the knowledge gap between Western and Chinese companies?
FG: Let me take the industrial robot market as an example: there are only 4-6 local so-called big robot manufacturers in China. However, even these top players are considered to be 10-15 years behind, compared to Western and Japanese companies. In recent years, the Chinese government has attached great importance to the robot and automation industry by issuing strong supporting policies to build up the Chinese market. We expect the Chinese market will experience a trial period of 3-5 years and will catch up with advanced countries within a decade.
What are the differences between European and Japanese manufacturers?
FG: Japanese manufacturers dominate with a market share of over 50%. They are characterised with more specific products for a variety of applications. As a result, the complexity of Japanese products is lower because they remove unnecessary functions, while only minimal supporting hardware and software is needed. In contrast, European manufacturers have fewer models and achieve different functions with various configurations. Thus, European manufacturers have a more open interface and also a higher price.
How will the increasing salary levels affect the advancement of industrial automation?
FG: Contrary to popular perception of robots and automation, labor cost is not the only factor for factories to adopt automation. In fact, production with robots and automation equipment can lead to a more complex process set-up, albeit at a larger investment. The major benefits of adopting automation are quality and stability improvement. As they say, “to err is human”, and sometimes there can be consistency issues, as workers tend to make mistakes in the production process. Investing in this new technology will eliminate these risks.
For China, it is only a matter of time until automation technology is adopted on a larger scale. The Chinese government will not allow the country to fall behind and once this next step is achieved, we can expect to see true manufacturing excellence, as was the case in Japan in the 80s.
What trends can we expect to see in the next decade?
FG: While we have seen an increasing number of companies in China investing in automation over the last few years, there are still many misconceptions and unrealistic expectations that need to be dispelled. Many people think robots are omnipotent and cannot see the corresponding limitations, such as the high demand of supporting facilities and the more complicated processes. Currently the majority of Chinese companies are still followers of international companies and local leaders. Once the Chinese automation market has settled into its appropriate demand, Chinese automation and robot solution providers will continue to grow together with the Chinese customers.
The Chinese government will continue to provide very attractive incentives for local companies to boost automation. For example, in Zhejiang province, the local government provides subsidies of up to 30% of the procurement price to local companies purchasing automation and robot solutions. Additionally, there are 30-40 automation/robot industrial parks established along the coastal areas of China.