Mr. Nonnenmann, you have now been at Balluff for around twelve months. Last year was difficult. What proved to be different than expected?
I became managing director of Balluff in February 2020. The very first corona cases had occurred at precisely that time in Germany. Back then, it was still not apparent that this marked the beginning of the pandemic and the numerous restrictions. We had therefore planned, when I took up the position that I would visit the various branches and meet customers there. However, things turned out differently; I only got to know Balluff from Neuhausen. I have only seen the plant in Hungary – I have been there twice. However, I had a successful start at Balluff despite all these circumstances. I have now arrived.
What particularly impressed you during the first year?
Even before I actually started at Balluff and during the recruitment process, I was impressed by the company’s good reputation. I have my very own personal method here: When I visit a new company, I always ask the taxi driver on my way there what the company is like. The reply was always unequivocal during every visit I made to Neuhausen: Balluff? That’s a good company! I now know since I’ve been here, everything which creates a good reputation externally can also be found inside the company – that’s the Balluff spirit. Here at Balluff we have a real sense of togetherness. This can now even be clearly felt digitally during the numerous online meetings.
I am also impressed by the way in which Balluff promotes innovative ideas and approaches in product development. I thinks it’s wonderful that Balluff is testing the Strategic Incubation Program, SIP for short, in this area.
You are responsible for the supply chain at Balluff. In your opinion, what are the characteristics of a good supply chain?
A good supply chain pays into business. It does this when it satisfies customers’ requirements. I, therefore, believe that it is important for a supply chain strategy to focus on customers – we must never lose sight of customer value. I am working on precisely this aspect with my team. What does this mean? Global adjustments must be made to three parameters – speed, delivery time and competitiveness – until optimum customer value is attained. This also involves a certain amount of flexibility. Last year, in particular, clearly reaffirmed how important it is to compensate for fluctuations in production and demand. Of course, our company is also naturally trying to continuously reduce manufacturing costs and, thus, product costs. In short, the maximum level has been attained when the supply chain contributes to our competitiveness. Amazon is one company, for example, where this occurs:, Customers place orders with Amazon on account of easy delivery and return handling.
You therefore focus on customers. Can you briefly explain what you mean by real customer orientation?
Customer topics are made a priority – they must be more important than other projects. It’s a matter of speed here: To see how customers’ requests are fulfilled as quickly as possible – that’s what matters. Because ultimately, the following principle applies: A slow company will be replaced. Long-standing business relationships are not always the decisive factor, success here and now is also important. To date, Balluff has worked in a very solution-oriented manner with a clear focus on products. Customers have also naturally been a focal point at Balluff right up to the present day – customer orientation is an integral part of the company’s value system. Nevertheless, I believe that we can focus even more closely on customers. I see this as a task for Balluff. It is important for us to know: How are we perceived? Are we or rather are our competitors regarded as a customer-oriented company? My motivation for Balluff is to stand out as a customer-oriented company.
You already mentioned the importance of customer orientation in the supply chain. How is this also shown in the company when you think about challenges such as ever shorter development cycles, high uncertainty in markets and the trend toward batch size 1 production?
Balluff can handle batch size 1, i.e. flexibility. “We can do nearly everything for our customers” has always been our mantra. We create individual solutions for customers. As far as we are concerned, the question is rather how we can extend our volume business still further. The topic of scalability is therefore extremely important for Balluff – we want to be able to handle both smaller orders and large projects.
We are also examining the aspect of the time to market. Our ambition: To need an average of less than 18 months from the idea to market launch. This goal can be attained if we parallelize development, industrialization and marketing activities, and generally make the process more agile. The following rule also applies here: In the end customers must see that we are quicker than all other companies and regularly offer new products which represent value-added for customers.
What role does diversification play here?
This is an important aspect for us. In 2021 our focal point is still the food and packaging industry. We are launching many new products in this market. We developed products especially for this area over the last few years – new digital solutions in production automation for our customers. We are aiming for substantial double-digit growth rates in this area. The second large area is electromobility with battery manufacturing and the mechanical engineering companies being established there . We summarize these activities under the term “Alternative Drive Technologies”, ADT for short – we will therefore also have additional leeway for other mobility technologies in future. Our initial task is to gain a better understanding of these markets: What players are involved, what production processes are available, what challenges exist, and what value-added can we use to stand out in the eyes of our customers? The Business Development Team is responsible for both areas. New business is therefore being given more space – and sales has more time for well-established customer relationships.
In your capacity as the supply chain manager, you are also responsible for the production and logistics network at Balluff. Can you briefly describe this network? What’s so special about it?
Balluff has a global product portfolio – the things which we measure are the same everywhere. This enables us to produce for the entire world at our two large production plants in Hungary and China. We have strengthened these production plants still further after the current production relocations. What sets us apart is the fact that we also have a logistics network: Two global distribution centers in Hong Kong and Neuhausen, which supply local distributors. The network is already quite good – but we can become even better, for example, in the area of product availability.
When you think about cooperation in the global production and logistics network, what form does it now take and what will change in future?
We need more direct and quicker communication all over the world. Digital work, something which we are now accustomed to on account of the current situation, is helping us here to a great extent: Everyone is just a click away. I also believe that we can work with even fewer hierarchies at Balluff. My vision is: No ranks, no titles. We all play in one team at Balluff – everyone with a different shirt number on the pitch – and in the end everything we achieve together is what counts. Our prime objective is speed. If we accept mistakes, do things simply and make decisions with “just” 80 percent certainty, everything will not always function, but we will be quick.
Is the corona pandemic endangering globalization?
I do not believe that nation-state tendencies will prevail. In certain areas, for example, the pharmaceutical industry, specific regions may want to be more independent of others. However, I do not believe that this will change fundamentally. The following holds true for Balluff: Our products are so small that we can send them over night by UPS to customers all over the world. There will certainly be changes in the way in which we service markets and the extent to which we travel. However, there will be no significant changes overall in business.
In your opinion, what constitutes a global company?
For me, acting globally also primarily means including global know-how. Not everything that we consider and decide here in Neuhausen must be globally correct. We must listen to people locally and include them. The world looks different from another perspective! I believe that this also includes a global leadership team. Although Balluff comes from Neuhausen, a bit more globality is good for us. And that is also ultimately the reason why I came to Balluff: We want to make Balluff even larger, scale the company and adopt a more global approach. But one aspect is clear here: We will always essentially remain the family-run company from Neuhausen.
Thank you very much, Mr. Nonnenmann, do you have anything else to add?
I am delighted that I chose Balluff and with my role in the company, I really feel that I have now arrived. I am very happy. My work is very enjoyable and I tackle my tasks every day with great enthusiasm. I am looking forward to many successful years at Balluff!