SKF: The Knowledge Factory

It is a recurring fact in modern business life that measuring and managing an unquantifiable resource like ‘knowledge’ is high on the corporate agenda, but low on the actual to-do-list. Although we are well into the information age, managing information as a resource is still in its infancy. SKF’s Ulrich Selig has now given Global Trailer a glimpse of how the company’s Chinese arm is trying to create and sustain a strong reputation for knowledge investment and excellence. In an exclusive interview, he portrays a firm that is constantly seeking to help its people grow professionally.

Q: Erik Nelander, President of SKF China, once used the term ‘knowledge engineering company’ to describe SKF. What does that mean in detail, and how do you ensure the company will live up to that standard?
A: At SKF, creating and maintaining knowledge is a vital aspect of what we do every day. As a global corporation that is present in more than 130 countries around the globe and operating more than 130 production units in 32 countries, we consider it our job to bring global expertise to every local market. But being aware of that obligation is just one dimension of being a knowledge engineering company. The second is what I call knowledge exchange. SKF is currently working in over 40 different industry segments, such as mining, metal, automotive, pulp and paper, food and beverage, wind turbine and railway, just to name a few. That variety enables us to actively utilise the knowledge generated in one industry and apply it to another segment. The third question we keep asking is ‘How can we effectively transfer technology?’ SKF is synonymous with bearing technology and I dare say we lead the way on a global level, but we offer so much more than just roller bearings. We also set the benchmark in lubrication systems, seals, mechatronics, and services, for instance. By tapping that technical diversity we are able to offer our customers a more integrated solution, not only here in China.

Q: SKF has recently announced the relocation and expansion of the Global Technical Centre China (GTCC) to Jiading, Shanghai.  Which role does it play to the development of SKF in Asia?
A: The SKF Campus was inaugurated May 2010 and quickly became an integral part of SKF's global network of technical centres. It will play both a global development role for SKF and a regional role, bringing innovation and technical knowledge closer to SKF's clientele in Asia. We are convinced that the investment will significantly reduce lead times in the region and thereby ensure that SKF continues to develop value-added solutions and reach that ‘critical mass’ in engineering knowledge on the Chinese and North East Asian market. However, the centre will also have global responsibility in regard to specific process- and project-based engineering for the SKF Group and will be a showcase of SKF’s overall knowledge and capabilities to customers, distributors and employees in Asia.

Q: Reportedly you invested some €88 million into that upgrade, which is more than a lot of international companies invest globally. What are you getting for your money?
A: It’s always hard to measure knowledge generation in a monetary unit. What we get is a dedicated Campus that will cover an area of 45,207m2, have a building area of 32,325m2 to begin with, and employ around 900 people in 2015. Construction is due to be completed in the fourth quarter of 2013. The new campus will integrate SKF’s resources of product development and engineering, manufacturing, testing and training to guarantee our leading position as a knowledge engineering company. I know it may be hard to grasp, but to us it is a vital investment, especially here in China where we have been active for a long time.

Q: SKF has been present in China for a whole century. Do you still benefit from that early-bird advantage today?
A: As one of the largest country operations within the global SKF family, SKF China has celebrated its 100th anniversary last September, which is a true milestone. Today we can draw on 18 factories with more than 7,000 staff, and I think part of that is definitely due to our early involvement and active investment in the location. And we are confident that both the Chinese economy and SKF China will keep developing in a positive way. Here at SKF, we want to be part of that development and keep equipping the market with SKF knowledge.

Q: The Chinese government scaled down its GDP growth target to 7.5 per cent for 2012. Is your on-going investment in China a symbol of on-going faith in the market?
A: I believe that the Chinese economy is likely to have another 10 to 15 years of high growth ahead compared to the international average. I every aspect, China will continue to be the growth engine of the world. The relative slow down seen during 2012 in some sectors is more of a reaction to very high growth in earlier years, I think. Overall, the Chinese economy will keep developing strongly compared with the rest of the world, and will consequently become even more important for the SKF Group. That’s why we invested in the new GTCC Campus and already plan a range of new factories in the Asian region.

Q: Where do you want to see SKF China when the next 5-year plan is due?
A: SKF is serving over 40 different automotive and industrial segments in China, so our development is very much a reflection of the general development of the Chinese industry. SKF is undoubtedly contributing to boosting China’s economic transition and the industries we’re involved in by sharing our knowledge. In fact, we hope to help to advance the industry as a whole by helping our customers receive advanced technology and managerial expertise. We are focused on delivering value to them to support them in reaching their own business objectives and help them enhance energy efficiency and productivity.

Q: What does that mean in detail? Do you actively co-operate with the axle manufacturing industry/ OEMs to integrate your product with what’s available in the market?
A: Yes, we are co-operating with all major trailer axle makers around the world to ensure we’re always close to the industry. In Europe and Australia we currently see a strong trend towards our Truck Hub Unit – a maintenance-free wheel bearing unit that integrates various functions such as adjustment, lubrication and sealing – and Asia is just about to follow suit. Produced in our new bearing and hub unit factory in Jinan, it is going out to a number of local axle manufacturers as we speak. As of now, the new factory will not only provide Split Truck Hub Units for the domestic truck market, but also tapered roller bearings, for instance.

Q: In how far will the Truck Hub Unit benefit the local market?
A: We developed the SKF Split Truck Hub Unit to meet the current and future needs of the commercial vehicle industry to raise productivity through longer service life and reduced maintenance. The unit consists of a split outer ring enabling a cost effective manufacturing process, meeting the specific requirements of our local clientele.

Q: Is the Chinese market ready for such technology?
A: Yes. In view of ever tougher competition in the commercial haulage sector, it is important for trailer manufacturers and fleet operators alike to be able to depend on maximum quality and reliable operation, also in China. After all, their vehicles only achieve financial profit when they are in operation – in other words, when they are on the road. Unplanned maintenance can literally throw a spanner in the works for the haulage company. The Truck Hub Unit was especially developed by SKF to meet the tough demands of commercial vehicles and designed to match the vehicle life cycle here in the region.

Q: In your opinion, how does the fleet sector attribute such as performance, weight, price etc.? What’s the key to their decision-making?
A: The fleets always want a reliable, long lasting solution that is lightweight and cost competitive. Ensuring the trailer is running efficiently and economically is vital, and Chinese companies have realised that as well. So the key to decision-making is changing as well, with reliability and weight becoming the main selling points.

Q: When can we expect the next big leap in technology?
A: Focusing on Asia, I predict there will be a major upgrade in trailer technology in the near future, moving to a more sophisticated design. That development has already started in Australia and will probably be replicated in China, Japan and South East Asia in the near future. Overall, we believe that energy efficiency will play an even more important role in the needs of our customers in the future and this is both a challenge and a great opportunity. Our new Shanghai Campus will certainly help us find the right solution to that challenge. 

Q: How important is it for you to retain your heritage in such a fast-changing environment? Which values do you want to preserve in the future?
A: Over the course of the past century, SKF has always been committed to ‘equip the world with our knowledge’, and I believe that is the core value we want to preserve. Based on our experience both globally and in China, there certainly is a need to help people improve on efficiency, competitiveness and profitability – so I think knowledge is the very DNA of our business.

Q: Speaking of values – how do you communicate your corporate values to a vast global network?
A: At the moment, we are moving at a rapid pace to help our company move forward. Of course we want to accelerate our own growth by providing the best possible product to the market. Secondly, just like any other company, we must continuously try to reduce costs. In short, we want to add value to our clients’ businesses, but we try to do so within a decent budget to earn a living ourselves. To achieve that, we must invest into knowledge generation, and that’s exactly what we have been doing all year. But it is not just about money; it’s also about bringing our knowledge to the end customer. Only by sharing knowledge we can create real value.

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