Industry 4.0 and RFID are accelerants for our business!
Turck's Managing Director Christian Wolf recently gave a detailed insight into the business developments along the surrounding market situations worldwide.
In addition to the facts and figures, the managing director outlined the initial steps the company has taken to react to existing and future challenges. In order to break new ground, Turck will place the "corporate DNA" on a global foundation.
RFID & Wireless IoT Global inquired about how Turck assesses the current situation in the field of industrial automation - also in the context of global developments.
Director Product Management RFID Systems
Mülheim an der Ruhr, Germany
Director Marketing Services & Public Relations
Mülheim an der Ruhr, Germany
This includes investments in the globally distributed national subsidiaries. The solutions business will also be expanded further. Turck consistently pursues the path of technology partnerships and corporate shareholdings with product updates from its own development.
Turck secures know-how for future IIoT projects with a minority stake in the technology specialist Asinco. In the future, the cooperation should help to establish Turck in the field of industrial radar technology.
"Industry 4.0 and RFID are - positively formulated - accelerants for our business. However, if a downturn sets in, Industry 4.0 will not help us either. The calculation is simple: Everything we start must aim towards a use case that reduces costs for our customers. This calculation cannot be invalidated by the positive influence of Industry 4.0," emphasizes Christian Wolf.
Mr. Wolf, what is the situation in 2019 and beyond in industrial automation?
Looking at the business climate index, the mood in the German economy is clear: it is pointing downwards. Compared with September 2018, the index has fallen by almost ten points in all three areas - climate, situation and expectations. This affects the manufacturing industry, to which Turck supplies automation solutions, as well as all other sectors. With the exception of Latin America and the sub-Saharan zone, all areas of the world experienced a downturn, leading to recessions.
The VDMA has predicted a decline of two percent for mechanical engineering in 2019 and also for 2020. However, there are also signs of a slight recovery in 2020. The trade disputes between China and the USA in particular, but also between the USA and Europe, hold potential for conflict, which could strongly dampen a positive outlook in the field of industrial automation for 2020.
What influence do global political developments and monetary aspects have?
The strength of the Dollar and the drop of the Yuan by almost 20 percent represent a dilemma for the USA. On the one hand, tariffs have been imposed and, on the other, there is an exceptionally strong currency with the consequence that the US export industry suffers severely. This is a positive fact for the euro-zone. The competitiveness of companies selling products and services to the USA will be strengthened.
The currency difference will compensate customs to a certain extent. However, there is no end in sight to the trade disputes, especially between the USA and China. This has consequences: If a company with electronic components has a strong presence on the US market, the impact of customs and currency differences on business figures is dramatic. This hampers the willingness of companies worldwide to invest. We, too, will drive costs "on sight" in 2020 and decide from quarter to quarter.
To what extent are global supply chains still the right answer to global dynamics?
Global supply chains fulfil their purpose in numerous areas. But every company has to continuously review its business model and compare it with global developments. For a globally active company like Turck, which generates almost 80 percent of its sales outside Germany and 65 percent of this outside Europe, the current developments are a cause for action. Our overseas plants mainly manufacture connectors. The electronic components for these are shipped from Germany.
This fact, together with the implications of currency differences and logistics, raises the question: "Is this concept efficient enough to supply our local customers as quickly as possible on site? Since the company was founded, electronics expertise has been firmly anchored in Germany. The clear objective of the relocation of know-how and the realization of continental supply chains that has now been initiated is speed and agility, while simultaneously being independent of global economic influences.
Visit Turck at the SPS in Nuremberg!
From November 26th to 28th, 2019 Turck will be at the SPS at the Nuremberg Exhibition Centre in Hall 7 / Booth 250.
Condition monitoring live at the Turck booth
Every 30 minutes in front of the large video projection screen at the Turck booth, expert Jörg Tauert provides information on the concepts companies use to keep their machines in good condition.
Further key topics of Turck at the SPS: Smart Sensor Solutions, Decentralized Automation, Sensor to Cloud and RFID Solutions.