Think globally, act locally

 

Over the past 70+ years, MANN+HUMMEL has built a name for itself as a distinguished development partner and original equipment supplier to the international automotive and mechanical engineering industries. With a global R&D and production network spanning 5 continents and a company culture that revolves around innovation, we recently asked Charles Vaillant, Vice President of Innovation & Corporate Strategy, to tell us more about the company's approach to customer-focused R&D and the considerations made before expanding R&D activities to a new country.

GSC: MANN+HUMMEL has become a global leader in the market for filtration technology, with a global R&D and production network spanning 5 different continents. In terms of R&D, how does the company stay connected to the customers around the globe and innovate based on their needs?

Mr. Vaillant: First, I would like to point out that we have not become the market leader for filtration recently, but have held this leading position for many years and intend to keep it. We generally work in close cooperation with our customers, wherever they are located. Think globally, act locally is very much our approach.

Research and Development, R&D, is a fundamental part of our company culture for achieving innovations. This is why more than one thousand of our 16,000 employees all over the world work for the MANN+HUMMEL Group in R&D. Apart from putting great emphasis on qualified manpower, we invest a substantial portion of our cash flow in R&D, roughly one hundred million euros or about five percent of sales revenue.

We have a global network and are positioned in every region. In other words, we do R&D in the region for the region, which allows us to get really close to our customers to understand their needs at the local level. However, we always provide our German Engineering expertise through the design of our products.

We benefit from our very strong R&D centers, in addition to which we have some hubs in each of the regions that organize the regions and lead them in terms of R&D and innovation.

On top of our own innovative resources, we are also very active in collaborating with excellent partners, such as university consortia and many customers that really are innovative and active themselves. This is the typical win-win situation, as it involves collaborating with them on future technologies while, at the same time, working towards how to address their future needs.

Being close to our customers on a daily basis is terrific, as it enables us to understand their immediate needs and collaborate at the consortium level. In addition, conducting research with our customers at the university level allows us to address their needs.

To give you an idea of our innovative thrust: Last year alone we registered 230 inventions for patent approval. This makes us one of the most active patent applicants in Germany (we presently rank among the top 25). Overall, we hold more than 3,000 patents so far. This is rather a lot considering that apart from all kinds of air filters for cars, water filtration systems, and other industrial use we only cover a relatively small fraction of parts.

 

 

GSC: MANN+HUMMEL will be represented at the GSC event in September, Invest in R&D: USA, in order to share the company's experience with conducting R&D activities in the US and to discuss the opportunities for collaboration between industry and institutes of higher learning. Next to the R&D activities in the US, M+H operates R&D centers around the world. Before establishing an R&D center in a new country, what are the most important considerations to be made?

Mr. Vaillant: For MANN+HUMMEL it was important to be in the US and specifically in North Carolina because of the level of research being done locally. As active as we are in Europe and as much as we participate intensively in research in the European area, we also wanted to utilize the local performance and the local potential in the US. In addition, Ford, General Motors, and BMW, who are all very important customers for us, are close by.

As I mentioned before, this gives us the chance to be closer to our customers and closer to other markets. What shouldn't be forgotten, is that it furthermore enables us to tap into a different set of talents, because of the way education works and the way that research is conducted there.

Taking these factors into account, when we look at a new country, we will first of all investigate its technological potential. In other words, we are interested in areas providing something unique to which we would not otherwise have access. And the second important aspect has to do with our customer. Hence, the question we ask ourselves is how critical it is to have a local R&D team close at hand. It really depends on the level of R&D intensity the local product needs in this area.

So what made us settle on the North Carolina State campus? And what to us is special about the Institute there? The answer is simple: It is about distance. You could almost argue that whether you are two or 3,000 miles away from your customer is not the issue. In both cases you still are away from direct exchange with the customer.

I think the chance of being on campus will enable us to be exactly on the spot, i.e. within walking distance from the students, from the faculty, from the lab. And that will enable us not only to work close to the project, which we could quite easily do from a few hundred miles away, but to intensely collaborate and to think about new topics in these inspiring surroundings. So, this concept of a collision of ideas is really important. We see this on a daily basis – by being there we cannot help being exposed to ideas and innovation that we would not normally experience if we were not right on the campus.

 

GSC: Traditionally associated with the automotive industry, in recent years MANN+HUMMEL has begun to increase its presence in filtration markets in non-automotive sectors. In 2014, for instance, MANN+HUMMEL bought the Swedish company Vokes Air, which is active in the HVAC (Heating, Ventilation, Air Conditioning) sector, and acquired a 50% stake in the water filtration firm MICRODYN-NADIR. How does MANN+HUMMEL ensure that innovation remains an important part of the company's operations as it expands into new industry sectors?

Mr. Vaillant: In regard to our core business, namely filtration, MANN+HUMMEL has developed an approach to innovation that has been standardized across all the business units and all the regions. In other words, we have not and will not set up parallel organizations, simply because this would be counterproductive.

This approach of sharing all of our innovations enables us to accelerate our speed of innovation while keeping a complete level of transparency across the business. What does that mean? It means that we conduct our projects in the same manner all over the world. Standardizing the processes has put us in a position where we can get a complete overview over the entire innovation portfolio. As a matter of fact, over the last years we have observed a sizable and astounding improvement concerning our output.

And as we acquire new business – whether we are talking about  innovation for an automotive filter or for an industrial filter, it really comes down to the same approach.  Some of the basic material developments are the same and can be adapted to different applications. We may, for example, be developing a new fiber that could be used in a filter for the interior of a car, the same can be adapted for industrial filters used in large buildings or even cross over in different applications like life science. Our new customers in our newly acquired businesses can find a level of competence and depth of knowledge not available in their existing supply base.

Enabling innovation also means ensuring that all of our colleagues get trained and have the necessary information about how to run their respective projects. The benefit for them, is that instantaneously they now have access to a large pool of people engaging in innovation. For instance, Vokes Air in Sweden can put in a good idea which will be accessible throughout the company.

From day one to day two, we have created tremendous potential – As soon as they are part of our company they have access to a full research team and they have access to the campuses around the world, both of which can help them to do research and that really helps them boost their innovation performance.

Let me once again emphasize just how seriously we take innovation. At MANN+HUMMEL we firmly believe that the capacity for innovation is one of the most important factors to our corporate success. Thus, with the North Carolina Innovation Center we now have a think-tank on the campus of the North Carolina State University in Raleigh which helps us not only to increase our pace of innovation considerably, but the NCIC also gives us the important capacity to assemble a group of what we call "out-of-the box thinkers". It is this combination of fresh thinking and a wealth of know-how that we have accumulated over decades that makes us a world market leader.

 

GSC: Thank you very much for this interview, Mr. Vaillant.

Further information: MANN+HUMMEL