Innovation relates to the organization as a whole
KAMAX Holding GmbH & Co. KG is the world's leading manufacturer of high-strength fasteners for the automotive industry. Over the last seven decades, the company, based in Homberg, Germany, has become an international success story, with 11 facilities spread across three continents today. We spoke with Dr. Wolfgang Scheiding, the Vice President of Business Development at Kamax, to learn more about the company's growth, its international expansion and the way Kamax approaches innovation.
GSC: Your company started manufacturing automotive bolts in Osterode, Germany in 1933 with a 3-person staff. Today, KAMAX is one of the world's leading manufacturers of automobile fasteners, with a staff of around 3,000 and annual revenue of nearly 600 million euros. How would you characterize the growth of KAMAX over the last 80 years? What factors have contributed to this company's consistent and remarkable growth?
Dr. Wolfgang Scheiding: Since the beginning of the company, KAMAX has positioned itself to embody and continue to strive toward technological leadership. This refers to the area of development, in which KAMAX is positioned as a partner to our customers, as well as the manufacturing process and quality of our products. The former allows us today to be present from the very beginning of new developments for vehicles and components, to respond appropriately to customer needs and to use our knowledge for the benefit of both sides. The latter concerns not only the the quality production of our products but also a corresponding efficiency and cost breakdown. Up to today, this is a foundation upon which the success of KAMAX is based, but of course in the course of time other factors have arisen. This includes the development of logistics functions, the consistent expansion of our global customer base and the associated global structure of production.
GSC: Your global expansion began with the acquisition of your fourth production plant in Spain in 1980 (the first plant outside of Germany). Today, you have 11 production facilities covering six different countries and three continents. How important has this international expansion been in the overall success of KAMAX?
Dr. Wolfgang Scheiding: Without the ability to produce close to where the customer is actually located, a successful and sustainable growth strategy in the automotive sector is certainly not possible. This was and is a core requirement from our customers, and it was ultimately the reason why, after maintaining a purely German production base through the 1970s, we finally decided to expand to Spain in 1980. Although expansion was already considered an essential step back then due to the continental customer-supplier relationship as well as the relatively compartmentalized set-up of the manufacturer segment, there are of course different demands today. We furthered our adaption to these new challenges both through the further expansion within Europe and the building and expansion of production plants in the Americas and Asia, so that today we can supply the major regions of production at the actual sites of our customers through producing at that very place. For our customers, it is quite essential that the processes, products and ultimately the quality are according to one KAMAX standard. A corresponding global structure is essential to be successful, and for us in our current situation, it is ultimately an asset.
GSC: In 2013, KAMAX opened its first production plant in China, in the city of Changzhou. What considerations went into the decision to open this plant, and what challenges did you face in this effort?
Dr. Wolfgang Scheiding: The decision to build our production facility in China was a logical step toward achieving our strategic goals. In recent years we have consistently expanded the volume of supply to Chinese customers, and after reaching a corresponding magnitude of sales, we began building a local manufacturing facility. In our product segment, the expansion of local production is always marked by very high initial investment costs, which means that we require a significant local business volume in order to be able to implement localization in an reasonable economically way. The challenge in such an approach is the temporal component, as we could have certainly met our production goals faster through acquiring a local production facility, but in order to ensure a secure implementation that met our high standards, we deliberately built up our own greenfield operation. Overall, we were still able to accomplish this task in a timely manner.
GSC: Similarly, what potential do you see in the Chinese market for your products?
Dr. Wolfgang Scheiding: In principle, the Chinese market alone offers greater potential than the entire European market, but of course we have to be able to compete in this environment. In this view we are benefiting now from the experiences concerning the specifics of the Chinese market, which we already gained through our activities with our Chinese customers and global joint ventures, and especially through our Sales and Engineering Office in Zhenjiang. We are currently building on these experiences. In addition, particularly in the JVs segment, we use our global presence with customers in Europe, America and Japan. Thus we see a definitively high growth rate.
GSC: What has made your fasteners so successful worldwide? What distinguishes them from competing products?
Dr. Wolfgang Scheiding: In the vast majority of cases, the individual product is interchangeable, even if this is accompanied by additional expenses with regards to the validation and administration on the part of the customer. In comparison to our competitors, we are rather set apart by our application engineering skills, mastery of complexity as a result of significant diversity and quantities and extremely consistent high quality and reliability, as well as by our strong customer orientation, which arises from, but also promotes an interchangeable product.
In addition, we do of course also offer products that are distinguished by special characteristics or production processes that cannot be replicated by others easily. Ultimately, this is based on the analysis of customer demands in combination with our command of the processes.
GSC: On your website, you mention that "Seat belt mounting bolts … contribute significantly to ease of assembly, saving process costs at the same time" With specialized products like this, what is the innovation process like at your company? How does an idea go from the initial conception to the finished product?
Dr. Wolfgang Scheiding: Innovation is nothing that we see as related only to the product itself. Innovation relates to the organization as a whole. The innovation process at KAMAX is indeed triggered by the development area, but it includes all the organizational units.
In the area of technology, this process can of course be explained clearly.
Through our work with the customer, we constantly generate information on their requirements and problems, we can use this information accordingly -- this is a pool of ideas. Other sources are information we generate from analysis of components and vehicles which we pursue with our customers, as well as, of course, general ideas brought forth by our employees. Without going into details, we prioritize ideas in a ranking according to various criteria, and we work to bring the top points into reality either internally or with a partner. The most important point is not the specific system or ranking but the input and the willingness of the organization to approach an issue from a different perspective.
GSC: Thanks for your time, Dr. Scheiding.
More information: www.kamax.com