Sustaining Capability for Innovation: A German Perspective Prof. Dr.-Ing. Dipl.-Wirt. Ing. Günther Schuh Laboratory for Machine Tools and Production Engineering WZL RWTH Aachen University 6th Annual Manufacturing Summit at MIT Boston, October 28 th 2011
Quick, marketable innovations are the key success factor for highwage countries Success factors for Germany as a high-wage country 1. Achievement of a price premium by offering differentiated products fitting to heterogeneous market needs 2. The use of commonalities offers the possibility of multi-variant product portfolios at high manufacturing productivity and competitive prices Example: Wind power Production of wind power plants: Market share Asia USA 15% 13% 72% Europe Newly installed wind power capacity (in MW) between 2006 and 2010 3. Reduction of the risks of imitation by highly innovative products +35000 (386%) +40000 (98%) +53000 (759%) Source: WZL, BTM Consult ApS 26 March 2007, World Wind Energy report 2008-2010 Page 2
Innovation by alignment of product and production Alignment of product innovation with customer needs by proximity to sales market Assuring and improving manufacturability of products by proximity to production Sales market Product (Innovation) Production (Innovation) Internal & external value chain Missing link for Asian manufacturers? Missing link for U.S. firms? Only manufacturers achieve sustainable product innovation leverage a German perspective Page 3
The three major objectives for manufacturing in high-wage countries Innovation Keeping up with dynamic advancement of customer needs and technologies by rapid evolution of products Meeting heterogeneous market needs by offering a diversified product range Individuality Manufacturing Productivity Sustaining productivity of manufacturing by standardization of products and processes Page 4
The three major objectives form a trilemma for manufacturing in high-wage countries Innovation Management of product and process diversity ties up capacities for actual innovation Trilemma of Manufacturing in High-wage Countries Standardization of product and processes constrains degree of freedom for innovation Individuality Increase in product individualization results in a reduced level of economies of scale Manufacturing Productivity Page 5
Reduction of the dilemma between individuality and commonality by definition of intelligent product and process standards Transverse Modular Product Architecture (MQB) at Volkswagen Sub-Compact Compact Medium Coupe Crossover Standards in product architecture and production Diversity of product range Standardized technical length Standardized rear-axle interface Standardized assembly sequence Sources: Volkswagen Sachsen GmbH, Volkswagen AG, Audi AG, Skoda auto a.s., Seat s.a. Page 6
Harmonization of product and manufacturing by integrative standardization Standardized reference and lifting points allow for standardized processes and equipment Product Production Standardized reference and lifting points constitute available design set for structural parts of car body Sources: Audi MediaServices, Autoreport.at Page 7
The intelligent definition of standards not only effects manufacturing productivity but also innovation Effects on manufacturing productivity Effects on innovation 100% Percentage of common parts +10% 50% 0% 4 2 0 60% PQ35 Sources: Volkswagen AG 70% MQB Sold units (milion units in 2016) +98% 1,91 PQ35 3,79 MQB Several models will get realizable at all, because they become profitable with the new modular product architecture. Dr. Ulrich Hackenberg, Head of Product Development at Volkswagen The resolution of the individuality-commonality dilemma by implementation of the right level of standardization allows for freeing up capacity for innovation. Page 8
Alignment of product architecture and production structure for machine tools at MAG Corcom Standardized product architecture enables defined value streams in manufacturing Standardized value streams constitute product architecture for machine tool program Sources: MAG Corcom GmbH Product Testbed spindle Shipping/ Receiving RT ass. Production Commissioning rotary table Assembly spindle HMC Flow assembly RT Kanban Assembly spindle TC Box assembly RT Commissioning Spindle Demounting repair spindle material Quality control Manufaturing rotary table Manufaturing spindle housing Manufaturing spindle shaft Manufaturing special parts Tool pre-setting SM RT SM spindle Manufaturing medium parts (NBH290/NBH350) Technical Laboratory Shipping Shipping Manufaturing special parts Receiving Page 9
By the implementation of commonalities, niche markets can be opened up economically Standardized spindle diameter Piston rods Gear wheels Cylinder bushings Crankcases Gear housings Cylinder heads Shift slider housings Areas of application Precision turning Drilling Milling Threading Bore honing Peak honing Plateau honing Spherical honing Friction honing Standardized packaging of axial drives The technology of honing could be opened up economically applying the standardized product architecture Sources: MAG Corcom GmbH Page 10
Resolution of the trilemma of manufacturing by harmonization of product and innovation Conclusions: Innovation n There is a trilemma for production in high-wage countries between innovation, individuality and manufacturing productivity Regularized individuality frees up capacity for innovation Individuality Harmonized standardization of product and manufacturing decouples individuality and manufacturing productivity Accurate level of standardization allows for actual innovation Manufacturing Productivity n By definition of harmonized standards for product and production the trilemma can be resolved n This harmonization necessitates a deep understanding of the product and the sales market as well as the production including the entire value chain à Only manufacturers achieve sustainable product innovation leverage Page 11
Thank you! Prof. Dr.-Ing. Dipl.-Wirt. Ing. Günther Schuh Phone: +49 241 80-27404 Fax: +49 241 80-22293 Email: G.Schuh@wzl.rwth-aachen.de
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Integrative product architecture and production research at RWTH Aachen Campus Demo Factory at Logistics Research Cluster Concept of RWTH Aachen Campus n Enrollment of companies at RWTH Aachen University n Joint research and education with labs and institutes of the university n Direct transfer of knowledge and advanced training Page 14