The E-Mobility megatrend leads to a significant change in production requirements. For example, an electric motor for a vehicle consists of approximately 10 parts, while a combustion engine is assembled of approximately 1,250 parts. The interior of electric vehicles will change dramatically due to space constraints. New components are developed and manufactured from combined materials (metal, plastic, rubber) for a completely new customer benefit. The boundaries between classic metal, plastic and electronics are merging.
Companies, e.g. offering hybrid components create a special competitive advantage with innovative products. Excellent earning power leads to above-average growth and thus to a significant competitive advantage. With increasing customer benefit, these innovative hybrid components can be offered 20-50% cheaper than conventionally manufactured components. The result (EBIT) for these companies can be double digit, i.e. between 10 and 50%!
Innovations in production lead to above-average productivity increases. The guiding idea of Industry 4.0 is strongly influenced in Germany. In the rising industrialized nations, this idea is being implemented under the names lean, smart, fast, cloud manufacturing, disruptive production.
The concept of securing our competitiveness is simple:
“The speed to increase productivity must be higher than the rate of change of competitors.”
Many companies have achieved significant growth rates in recent years to increase productivity. These increases were mainly achieved through investment in state-of-the-art production machines and through a volume utilization effect. However, in times of disruptive production technologies, this strategy may lead to a dead end.
Investing even more money in “old” technology leads only to the marginal cost range. The consequence of this production strategy is an overinvestment with falling margins. Finally, in a forthcoming economic downturn, it will be more difficult to service the debt burden. If the cost-cutting programmes do not help, the company may quickly end up with over-indebtedness and bankruptcy.