Hans Turck: Limits between business models are blurred

Interview with

Christian Wolf

Managing Director Hans Turck GmbH & Co. KG, Mülheim an der Ruhr:

"Wireless is more hype today than reality."

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Turck would like to strategically implement one thing in order to be able to do the other from 2010 to 2015. But not only that: developmentscout spoke with the managing director Christian Wolf about the current business model, the strategic orientation, IO-Link and wireless LAN as well as the news that the company will present at the SPS / IPC / Drives. 

development scout: Where does Turck stand today on the ladder from pure sensor provider with middle station solution provider high to the system provider?

Wolf: More and more companies are pursuing several business models simultaneously, with the boundaries between them becoming increasingly blurred. Today, we are certainly even more the classic solution provider with consulting and technology expertise than the system provider. Of course, we already have product and customer segments for which we implement complete system solutions. However, our core competence is the solution business with adjacent expansions. It is not our goal to become a pure system provider, but we want to use the resulting opportunities for our systems expertise. In doing so, we position ourselves on the three business model architectures you mentioned: Complex Components - Problem Solving - Systems Business'.

development scout:  You have set up a strategic agenda for the period from 2010 to 2015. What does this include?

Wolf: In order to master the challenges of the future, we have included eight points in this strategic direction. In terms of sales, verticalization in industries is very important. We need a balanced mix between product / regional sales and solution / industry sales. We have to understand what the customer is doing and recognize their problems. The internal processes must be designed in such a way that verticalization can be carried out in industries - right through to production. We also need the global production footprint in order to be able to implement the topics of “design to cost” and “lean products”. We have to reduce the complexity, cut old braids and let things be, by not fulfilling every customer request, no matter how unusual, but rather come back to modularization and accelerate the modular business. If all the points interlock, we can continue to offer our customers innovative solutions for almost all requirements at fair market prices.

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Temperature Sensor | humidity sensor | vibration sensor

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development scout: Modularization and not fulfilling every wish: Is not that counterproductive, that is, less customer-specific and thus less customer-friendly?

Wolf: It is always a question of 'what do we do' and 'what do we do' in the context of strategic planning? With the mentioned overlapping business models, there is a risk that costs and complexity increase significantly. To counter this, we have to slim down in certain areas from an entrepreneurial point of view and can not necessarily fulfill every customer request. This is a difficult process. Because if you take products from the portfolio, say 'no' to the customer. Of course, we never say 'no' without offering adequate alternative solutions.

development scout:  They have announced gigantic growth rates for 2010 with 30 percent. How do you cope with this on the capacity side?

Wolf: We cope with this at the stop. On the manufacturing side, we get the resources rebuilt as quickly as we shut down last year. For this we are very flexible in organizing work time accounts, modularisation or the redundant working methods of different locations. However, the supply chain is causing problems to sustain growth. Electronic components sometimes have extremely long delivery times or you have to buy them through brokers at horrendous prices in order to be able to deliver themselves. All in all, we do a good job in the supply chain, which enables us to generate good growth rates. Also, we did not shut down our stocks so much.

development scout: Which industries currently pose the biggest challenges for your company?

Wolf: The industries that were more severely affected by the crisis are facing us today with even greater demands than was the case before, such as greater cost pressure and increased efficiency. The requirements always concern the level of technology, speed and output at even lower costs. This exacerbates the classic spiral once again due to the past crisis.

development scout: What is the current state of IO-Link technology in your products?

Wolf: Today, we use IO-Link consistently in many Turck products, where it really adds value to the user. But we do not announce this loudly on the market, because we do not see it as our task to market IO-Link as a system. Rather, we focus on customer advantage. There are areas where IO-Link is definitely beneficial, but there are also areas where this technology is not relevant.

developmentsocut: But you are one of the pioneers who helped drive IO-Link. Are you not interested in being a missionary in this sense?

Wolf: No, our job is not missioning, but providing solutions that the customer needs and that are optimal for his specific needs. Even if we have implemented the technology quickly, we do not propagate it excessively. We underpin our external presentation with unique selling points. IO-Link is not a unique selling proposition, but an initiative of automation providers, which we gladly support in the interests of our customers. But we differentiate ourselves through the particular value of our solutions and products.

development scout: Turck also supports wireless technology. When do you think the cables will disappear completely?

Wolf: In my view, they will not disappear. In the largest automation market in the USA, Turck is the market leader in the connectivity sector with over 90 millions of dollars in sales. This shows the importance of classic connection technology. Like many applications in certain applications, wireless has its justification, but is unthinkable today as the only connection technology in production plants. The susceptibility to interference and a - albeit small risk of default - will not be completely eliminated. Wireless today is still more hype than reality in the nationwide implementation. However, if a customer wants a wireless solution, for example, to cost-effectively bridge longer distances at new measurement points, we have one of the most comprehensive wireless industrial portfolios in the DX family of our strategic partner Banner Engineering.

development scout: What innovations will Turck present at the SPS / IPC / Drives?

Wolf: We have some interesting new developments in our suitcase, including a rotary angle sensor family that works according to the same revolutionary measuring principle as our inductive linear position sensors of the LI series and combines the positive properties of conventional measuring systems in one solution. With the new RI sensors, too, the angular position is not detected by a magnetic position encoder, but by means of inductive resonant circuit coupling. The sensor is absolutely insensitive to magnetic fields such as those generated by large motors or welding fields. In addition, we are showing a new series of evaluation devices for flow sensors. Ease of use, high functionality and a variety of connections that cover all modern requirements were the focus of the development of the FM (Flow Module) family. We should also mention our new Profinet gateway based on the AIDA standard and new modules for our BL compact block I/O system, which is now the most common fieldbusand Ethernet standards.

Interview by Editor in Chief Angela Scheufler.