The $1 Million Story at Endress+Hauser: Our Way To Success With Design For Manufacturing

Richard Howells

Whatever you are doing, at any moment in time, Switzerland-based Endress + Hauser is nearby.

Whether you are drinking or eating, turning the light on, or taking a pill, you are surrounded by things manufactured with industrial process engineering. That is Endress+Hauser’s business.

The company is a leading global vendor of process and laboratory measurement technology, automation solutions, and services. With over 14,000 employees worldwide, Endress+Hauser helps its customers operate their process applications and plants safely, reliably, efficiently, and in an eco-friendly way.

Ensuring a great customer experience

The family business Endress+Hauser is a reliable global partner for its customers around the world. Most of its earnings are reinvested in the company’s business activities, enhancing its global network, and allowing it to create new product innovations.

Company-owned sales centers and dedicated sales reps bring its expertise to customers in the global marketplace. They monitor local sales, services, and engineering.

Its five production centers are knowledge hubs for their respective fields of activity. These entities are responsible for marketing, research and development, and production. Endress+Hauser manufactures in all major economic and geographical regions. That allows the company to quickly and flexibly supply its customers wherever they are located in the world.

With the help of its field devices, customers acquire valuable knowledge from their processes. They measure physical parameters such as flow, level, pressure, and temperature. And they analyze parameters such as pH values, oxygen content, turbidity, etc. or determine density, concentration, or composition of substances.

  • Flow measurement: Endress+Hauser Flow provides flow-measuring devices that measure liquids, gases, and steam in both small and large quantities.
  • Level and pressure measurement: Endress+Hauser Level+Pressure offers an extensive selection of measurement principles for the continuous measurement of levels, interfaces, and densities as well as level-limit detection. The company also provides high-performance devices for measuring process pressure, differential pressure, fill level, and flow. In addition, inventory-management solutions help customers easily keep track of inventories around the world
  • Liquid analysis: Endress+Hauser Liquid Analysis offers a comprehensive portfolio for all parameters in liquid analysis. Advanced optical technologies are used in the gas analyzers as well as the Raman analyzers.
  • Temperature measurement: Endress+Hauser Temperature + System Products provide a full range of temperature-measurement technology, including compact and modular thermometers, thermowells, measurement inserts, temperature transmitters, and accessories. System product and data managers supply energy to measurement devices and protect them from power surges.

In the village of Maulburg in Southern Germany lies the largest product center in the Endress+Hauser Group, Endress+Hauser Level+Pressure.

With more than 2,400 associates, this division provides products and solutions from nine locations across all geographies. In the areas of level and pressure measurement and inventory-management solutions, the company offers a huge variety of configurable measurement transmitters – up to 33 million variants of each specific product line – with a lead time of no less than two to five days.

The SAP Digital Supply Chain marketing team recently had the chance to discuss how new product development works at the enterprise. The following is what Dr. Volker Frey, strategy expert at Endress + Hauser, told us.

Enabling the best cost position for all new products at a strategic target

Q: How did Endress + Hauser build its corporate strategy?

A: In 2016, we released our new strategy “2020+” which consists of 10 major strategic fields. To be competitive in the long run, we needed to improve our product-related cost position. That’s why we decided to focus on cost reduction.

Besides the focus on robust and efficient production processes, we started to concentrate on the development of cost-optimized products. The goal was to develop products that are easy to assemble, based on cost and price-optimized parts.

It was pretty clear that design for manufacturing and assembly (DfMA) was the preferred tool to meet the goal. During a careful selection process of tools, methods, and consulting firms, we ended up with a group of three possible suppliers. We sat down with each of them to discuss their methodologies, software, and support and tested their capabilities in a pilot project.

The supplier that stood out by far was BDI Consulting and its European arm, AMC. Together, we set up our implementation plan, implementation framework, and organizational setup.

A holistic approach to product development

Q: How about the importance of change management, organization, and communications?

A: Endress+Hauser selected one responsible coordinator who stood for the implementation of the DfMA methodology, drove communications throughout the company, explained benefits and organized workshops and trainings, and took care of the software purchase.

Furthermore, there were four DfMA moderators selected together with eight Design for Manufacturing specialists.

Throughout 2017, we ran through a well-scheduled training program for the moderators as well as the DfMA specialists and performed several DfMA workshops together with AMC’s support.

Our major communication was that our focus was NOT about costing or layoffs, but to optimize our product costs through improved and sustainable design, leveraging a corporate team within our development organization.

Coming from a functional view, with single specialists involved in the new product development process (NPDP) process, we promoted a holistic view of the product during the DfMA process.

In addition, we strived to bring the knowledge of many different people into a new product.

And we wanted to challenge the product design from all disciplines of the value-generation process until the first mock-ups and designs were released for purchase or production.

In that first phase, we adopted BDI’s proposed methodology for workshops. Starting with a pick-up workshop where we generated the cost baseline as well as the product structure during disassembly of the first design, we also generated new ideas during reassembly and improved the ideas along the minimum parts criteria.

To evaluate the benefits of concurrent new ideas that were generated during disassembly and reassembly, we decided to go for a methodology developed by our consulting partner, which is called “the delta evaluation.”

We went on evaluating the cost benefit of each new idea created in comparison to the basic design approach we started from. An Excel spreadsheet helped us compare each new solution to other ideas and with regard to the original design in a transparent and traceable manner. This not only led to conclusions but also gave us the option to document and store good ideas for further reuse in future development projects.

The early bird catches the biggest worm

Q: What was the result of these workshops?

A: In combination with a thoroughly designed implementation plan, a stable organizational setup of key players, and a good communications plan, we gained good success during the first year of implementation of DfMA in our organization.

We did four DfMA workshops in the first year, where we jumped onto already running projects and optimized the design of the product according to the rules of DfMA. We had decent success, but the real breakthrough came when we started our DfMA workshops in the very initial phase of a development project. Here, we had much more freedom of ideas and were able to influence the project even more, which ended up with a much higher amount of savings.

Based on this experience, we made a DfMA workshop mandatory for each project. It will be started at a very early phase and is closely connected to the official project release.

Software solutions support product lifecycle management (PLM)

Q: What software solutions did you introduce to support the new product development process within PLM?

A: Our company has a SAP strategy, and we are using its software solutions broadly. We also work closely with SAP experts in many areas. In addition, we co-innovate with SAP and provide input and feedback to help the company develop new software solutions. One of the programs is called SAP Continuous Influence, another SAP Customer Connection.

The direct influence empowers users and helps them develop important improvements for their tasks. This also helps SAP, since that prevents developments from being missed by users. It is only by collaborating that you can make improvements.

We are using the SAP Product Lifecycle Management (SAP PLM) and the SAP Engineering Control Center (SAP ECTR) solutions.

$1 million saved on product development cost annually

Q: How would you rate your success (in facts and figures)?

A: This project directly contributes to the strategic goals of our company. During the first two years of DfMA at Endress+Hauser, we made great progress both in the results and in many employees’ mindsets:

  • 3 DfMA cost evaluations
  • 6 DfMA workshops
  • 26 DfMA evaluation workshops
  • 121 different participants in our company
  • 583 ideas generated
  • $1,070,679 (US) per year cost-saving potential

Even more important than the bare figures of success, which sum up to more than $1 million a year in cost reductions of our new products, we were able to:

  • Tremendously increase the cost transparency of our products and awareness of our people
  • Generate a mutual understanding of development, production, procurement, service, and marketing
  • Reduce development lead time
  • Assemble in a more ergonomic way
  • Increase quality and process stability in production

Today, after two years of DfMA project experience, leaders actively request DfMAs for each new product development. Employees from across the company volunteer to participate in these DfMA workshops.

Meanwhile, not only the Product Center Maulburg runs DfMA workshops, but other companies in the Endress+Hauser Group have started to implement the methodology.

We are looking to harvest the success of DfMA during the next few years, as soon as all our new cost-optimized products enter the marketplace. Today, we already have an estimated benefit of more than $1 million per year and with each new DfMA workshop, we continuously add further savings.

The approach is also supported by the E+H group top management, and we won the E+H Process Innovation Award in 2018, which is a big honor for the team and for our partners. We would like to thank all.

Thank you, Dr. Frey, for this interesting interview and your insights.

Find out more about how to optimize your design processes, take a look at the IDC report “Design as a Critical Element of Digital Supply Chain.”

About Richard Howells

Richard Howells is a Vice President at SAP responsible for the positioning, messaging, AR , PR and go-to market activities for the SAP Supply Chain solutions.