The clanking, hulking factory in a rural patch of northwest Germany that produces 20-tonne combine harvesters has lately been turning out machines with a technical edge.
Claas Group KGaA mbH, a 104-year-old, family-owned manufacturer of harvesters, threshers and tractors, is hunting for revenue by outfitting machines with sensors, cameras and software to help its products stand out amid slumping demand.
Low commodity prices have hurt farm equipment demand globally and Claas does not expect sales to increase from the US$4 billion made last year.
Since combines only see action six weeks per year, Claas is trying to sell software as well as machinery: for the past year a package of GPS networking, grain-load sensors and smartphone software to choreograph the lumbering dance of combines and 12m wagons that haul away grain.
Based on where the threshers are in the field and how full the loading wagons are, drivers can pinpoint where they are needed next with a glance at a screen, saving time and fuel.
“They’re bigger machines and there’s more horsepower under the hood,” managing director Carsten Hoff said. “The machines need to be smarter.”
An old firm turning to technology to drag it out of a slump is hardly a new story.
However, for Germany, it is a vital one.
Consultancy Roland Berger predicts the value of Germany’s industrial sector could decline by 220 billion euros (US$247 billion) by 2025 if it fails to update its computer and communications technologies, and lets new competitors get access to its customers.
German Chancellor Angela Merkel is urging the nation’s heavy industry to modernize — a policy dubbed Industry 4.0, for “the fourth industrial revolution” — wherein the likes of BMW AG, Robert Bosch GmbH, Daimler AG, SAP SE and Siemens AG are investing billions of euros to defend the country’s world-leading automakers and machine builders from US and Asian competition.
That is not even counting the thousands of mid-sized Mittelstand companies hoping to get on board and several hundred million euros invested by the government.
However, by some metrics, Germany might be a touch paranoid about its need to modernize.
A Boston Consulting Group study from December last year of more than 750 industrial producers in cars, mechanical engineering, plant construction and process industries found 47 percent of German companies have put elements of “smart” factories in place, versus just 29 percent of US manufacturers.
While consultancies are pushing the Industry 4.0 concept hard to market their services, getting companies below the blue-chip tier to put cloud computing, collaborative robots or augmented reality in their budgets will be a slog.
“The actual industrial base will take years to adopt this technology, longer than expected, because it’s extremely risky and they’re conservative,” Kepler Cheuvreux SA analyst William Mackie said.
Bosch is targeting savings of 1 billion euros by 2020 and a further 1 billion euros in fresh revenue through new technologies.
Its Feuerbach plant near Stuttgart started as a headlamp producer in 1914, switched to diesel injection systems in the late 1920s and survived World War II.
Today, product manager Wolfgang Pomrehn shows the company’s APAS assistant robot, designed for collaboration with humans.
One of the robotic arms, clad in soft black plastic, can be wheeled to a workstation or mounted on a bench to work in close quarters with a person, speeding up when it is left alone, slowing by five times when a worker is a half meter away, stopping when someone ventures too close.
Pomrehn’s group is working on new features for APAS that could help it read workers’ intent even if they miss a step and he envisions the robots being deployed alongside refugees who are starting to enter Germany’s factory force.
“There will be a structural change — jobs will disappear and new jobs will come,” said Henning Kagermann, president of the National Academy of Science and Engineering.
The Center for European Economic Research in Mannheim, Germany, estimates 12 percent of German and Austrian workers risk having their jobs 70 percent automated — the highest among 21 countries it studied.
However, Germany’s drive to modernize has created jobs for its robots.
Festo KG, a US$3 billion maker of industrial valves for auto and electronics manufacturing, boasts collaborative robots and has two Bosch APAS robots in a testing area at its Scharnhausen “learning factory” near Stuttgart in southern Germany.
The idea is to roll them among stations this summer at high demand times or on weekends to lay valves on a storage board, Festo research engineer Michael Voss said.
The company is facing competition from Airtac International Group (亞德客) in Taiwan, SMC in Japan and Parker PGI in the US, and invests 8 percent of sales in research and development, high for an industrial producer.
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