1 wsm wirtschaftsverband dipl.-ing. ulrich galladé president innovations in the steel and metal...

1WSM Wirtschaftsverband

Dipl.-Ing. Ulrich Galladé

President

Innovations in the steel and metal processing industry –

Challenges for medium sized companies and the entire value chain

METEC InSteelCon 2007

Düsseldorf, June 12, 2007

Wirtschaftsverband Stahl-und Metallverarbeitung e.V.


Contents

Innovations in the steel and metal processing industry –

Challenges for medium sized companies and the entire

value chain

1. WSM

2. SMEs in Steel Processing Supply Chain

3. Innovations

4. Conclusions


1. WSM – Market Data

Steel and Metal Processing in Germany:

4.600 Companies

Family owned Business

410.000 Employees

72 bn. € Turnover

24 Associations


1. WSM – Supply Chain

• Semi-finished Products and Components

• End-Products

• Industrial Service and Treatment

• www.wsm-net.de


1. WSM - Diversity

e.g. Cold Forging, Cold roll forming, Steel Wire, Iron Wire,

Plates, Sheets, Strip Metal, Cold drawn steel, sections

e.g. Fasteners, Chains, Springs, Gates, Wire Products,

Tanks, Vessels, Sheet metal working, pressed and drawn

parts, Powder Metallurgy, tubes

e.g. Surface-, Heat-, Hardening- or Mechanical- Treatment


1. WSM - Core Characteristics

Steel and Metal Processing

Material Costs up to 60% and above

Medium-sized Companies

Market Pressure

by Supplyers and by Customers

„Sandwich-Position“

Politics in favour of SMEs

e.g. Innovation Policy for SMEs, International Accounting for

SMEs, Energy Policy, Tax Policy, Competition Policy

7WSM Wirtschaftsverband77WSM Wirtschaftsverband

1. WSM - Key DataCompanies in Steel and Metal Processing

3.600

3.800

4.000

4.200

4.400

4.600

4.800

5.000

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

8WSM Wirtschaftsverband88WSM Wirtschaftsverband

1. WSM - Key DataEmployees in Steel and Metal Processing

340.000

350.000

360.000

370.000

380.000

390.000

400.000

410.000

420.000

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006


0

10.000.000

20.000.000

30.000.000

40.000.000

50.000.000

60.000.000

70.000.000

80.000.000

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Turnover in Steel and Metal Processing


Tsd. €

1. WSM - Key Data

Ausland

Inland



EU-Definition of SMEs:

250 employees per company

50 million € turnover per company per year

Steel and Metal Processing in Germany:

100 employees per company (average)

15,6 million € turnover per company per year (average)

Family owned business culture



Market Pressure

Steel Industry as a Supplier

highly concentrated in Germany and in Europe

Automotive Industry as an important Customer

highly concentrated in Germany and in Europe

High horizontal Competition

from inside Europe and from outside Europe,

especially from „low cost countries“



Challenges for SMEs in the supply chain

• Differentiation from competitors -

Excellence in price, in quality, in service

• Cost-Efficiency

• Attractive for young academics and skilled personnel

• Global supply chain management


3. Innovations

SMEs meet many challenges by Innovation

• Innovations and sustainable quality are means of differentiation, esp. from producers from low cost countries

• See examples from WSM-publication„Innovations – Values - Growth“, 2006

• Innovations in steel quality and in production process may also reduce costs significantly

• Innovations attract young academics and skilled personell


3. Innovations

Structures of Innovation in Steel and Metal processing

• Hardly ever R&D-results from an SME‘s own research department only

• Cooperation – Vertical (with Supply Chain partners)• Cooperation – Horizontal (WSM: „FSV“ / „GAK“)• Cooperation – with Universities and Research Labs• Exchange of talented Academics / Networks• Role of R&D Funds (WSM et al.: „AVIF“) / R&D State Aid


3. Innovations

Shortcomings of Innovation in Steel and Metal processing

• Lack of political incentives for transfer of technology

• Lack of Engineers

• Lack of Financial Ressources- equity ratio often too low- own innovation not booked as an asset in ballance sheets- revenues often do not cover costs sufficiently- customers often do not pay for innovation and know-how separately

• Lack of effectiveness in R&D-financial support (bureaucracy)


3. Innovations

Improving Innovation in Steel and Metal processing

• Steel and Metal processing must be advertised by the whole supply chain as „innovative“ in order to attract young academics

• - Suppliers must focus on down stream customer‘s demands

- Customers must pay adequate prices for innovations / know-how

• Government should give better incentives for better transfer of technology to more flexible SMEs

- Freedom and Competition for Universities / Research Labs

- „Forschungsprämie“: program extension for horizontal research cooperations of SMEs

- Develop concept of Universities and Research Labs as „non-profit scientific service

providers“

• Procedures for R&D-financial support must be better tailored for SMEs and should be less bureaucratic


4. Conclusions

Steel and Metal processing is an innovative sector, characterised by SMEs

Innovation is a challenge for the entire Supply / Value Chain

• Concerted advertisement for innovations in networks• Fair pricing• Focus on Down Stream Demands

Better Regulation: Government must focus on „transfer of technology“


Dipl.-Ing. Ulrich Galladé

President

Thank you for your attention!

METEC InSteelCon 2007

Düsseldorf, June 12, 2007

Wirtschaftsverband Stahl-und Metallverarbeitung e.V.

1 wsm wirtschaftsverband dipl.-ing. ulrich galladé president innovations in the steel and metal...

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