Digitalization will gain a global boost after the crisis!
The impact of the global Covid 19 pandemic is enormous in all areas – healthcare, society and the economy. How are companies dealing with the current situation?
RFID & Wireless IoT global contacted Christian Wolf, Managing Director of Turck.
Mr. Wolf, What is the current state of production at Turck?
To this day, the corona crisis has had very little impact on the output volume at our production sites, especially since our Chinese site in Tianjin has been back to 100% production for three weeks, and since output has returned to the level prior to the corona-related closure. In the event of isolated capacity problems, we have been able to compensate for them very well so far by flexible production planning at the other sites within our global production network.
We have naturally taken a number of protective and hygienic measures in all our factories. The main focus here is to protect our employees as much as possible, especially those in production and logistics who are unable to work in their home offices, while still ensuring almost the same production output. Above all, the strict separation into shifts helps to ensure that we could continue production even if an employee were to become infected – albeit in some areas with temporarily lower capacity.
We made every effort at an early stage to secure the supply of raw materials with our suppliers. This is therefore not restricted at present. A challenge that all suppliers currently have to overcome is the shortage of freight capacities, especially in air freight. At one point or another, this will lead to delays and significantly higher freight costs.
How much damage has already been sustained and how are you reacting to it?
The first quarter of 2020 at Turck exceeded the comparable figures of the previous year both in terms of incoming orders and sales, the order intakes in March in particular were extremely high. In the first days of April, however, we are seeing the expected decline in new orders, which is why we are currently taking all conceivable precautionary measures to help us generate maximum liquidity and keep the operational result for this year as stable as possible. With strict cost discipline and a sensible postponement of planned investments that are not relevant in the short term, we are taking the first necessary measures to secure the company for the unknown duration of the current crisis and to ensure our economic stability.
We will also be more cautious with regard to new recruits in the coming weeks and months. It was outstanding that we at Turck were able to adapt to the new conditions very quickly and that we can accommodate the majority of the employees in the home office. This also shows how important our investments in the IT infrastructure of the past years have been, be it in equipping the workstations with notebooks, servers and other hardware or company-wide software solutions.
As a result, the company is now able to work extremely well, even remotely – an important step on our way to becoming the leading digital automation company. Since this situation subjects the company's IT to a sudden stress test, it is important to have a well-functioning infrastructure and reliable business processes here, which are essential in order to emerge from the crisis with greater strength.
By what means do you achieve the 'perseverance' of your employees?
COVID-19 is challenging the whole company, and all employees and teams worldwide have to partially redefine their daily work. All employees are aware of the seriousness of the situation and they do everything possible to keep the company's operations going. I would therefore also like to take this opportunity to sincerely thank all our employees for this, from whom we undoubtedly demand a high degree of flexibility at present. During this time, they are all doing an extraordinary job for our customers and the company.
In particular, we would like to address those employees who work in critical areas where no home office is possible, such as production or logistics. Only through your commitment can our operational readiness be ensured. With this performance, which we are currently demonstrating, we at Turck are certainly among the pioneers in the German industry. This high commitment of our employees is based on our special, open and appreciative corporate culture, which is characterized by values such as team spirit, reliability and respect.
If we all act and communicate with each other in a well-coordinated and transparent manner, we will also overcome the challenges that lie ahead of us together – even if no one can reliably predict at present what exactly these challenges will be.
How will Germany survive this crisis and what changes will the crisis bring?
It is currently difficult to predict how drastic the cutbacks brought about by the corona crisis will be. For this reason, it is not possible to make a serious forecast of the consequences. However, there is one thing I firmly believe in: The digitalization of our society and our industry will receive a significant boost, and this applies to all industries, not only in Germany, but worldwide.