the form of solid growth in service revenues in 2017. Digital transformation is a must Digital enablement across our entire business will be critical for us to remain leaders in our industry. Digitally enabled services will bring superior value propositions to our customers. Digitalisation will help us to provide the best customer experience. Within Grundfos, digital tools will support learning and knowledge-sharing, they will optimise and automate processes, and help us to reduce time to market in developing new products and solutions. We are investing massively in the digital transformation of all parts of our business. New digital services are being tested with selected customers. An entirely new platform for bringing digital services to our customers has gone live. Major steps have been taken in further improving a seamless and easy-to-use digital buying experience. And we are supplying our distributors’ e-commerce platforms with reliable and consistent product master data in order to be the best possible partner for them. significant share of our turnover will be generated from services that bring superior customer value. More than 1,300 people are engaged in our global functions within R&D and innovation. The main innovation centres are located in Bjerringbro, Denmark, but we have a strong presence across the world including China, the USA, Hungary and India. Operations excellence A key initiative under our Strategy 2020 is the optimisation of our operations footprint, covering both manufacturing and distribution. The aim is to improve delivery service to our customers and to reduce costs. In March 2017, we announced plans to transfer production lines in Switzerland, France and the UK to Hungary, Serbia and China. As regards distribution in Europe, we are consolidating the various distribution centres into one central European distribution centre located in the Netherlands. We expect to see benefits in terms of shortened delivery times, increased availability and reduced costs. Virtual reality tools are used for training. We are developing our “factory of the future” with communication on the shop floor being digitised, which enables fast problem-solving and better machine utilisation. Software robots are automating processes. Advanced simulation tools are being widely used to reduce development time and to optimise production layouts. And not least, we have over many years invested in a coherent global IT platform that is enabling us to scale fast. Innovation As an innovation leader in our industry, it is our ambition to take full advantage of all the benefits new technology can bring to our customers, partners and Grundfos itself. In the future, a substantial part of our offerings will integrate products and digitally enabled services, and we foresee that a In Asia, we have successfully consolidated production sites in Korea, and we have opened new production sites in the Gujarat province in north-western India and in Tianjin in northern China Over the past three years, Grundfos has successfully focused on reducing material costs. We have further professionalised our purchasing function. By collaborating closely across our functions within R&D, product management, purchasing, production and finance, and by working with our suppliers, we have delivered substantial savings. In addition, we have launched a programme with the aim of significantly reducing spend on indirect costs. This will free up resources to invest in our future competitiveness. Our continued efforts within Sales, Inventory and Operations Planning (SIOP) have “We are investing massively in the digital transformation of all parts of our business.” JOURNAL17
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