DETROIT — The German automotive engineering company EDAG Group has been helping automakers in Europe implement digital Industry 4.0 factory operations. Now those same automakers are enlisting EDAG to make similar factory changes in North America, says Jan Schulte, CEO of EDAG USA.
"German automakers are already very involved in this change. But now they're saying, why aren't we doing this in the U.S. market?
"We expect significant growth in the United States. Ford is talking about it. GM is talking about it."
But those auto plant transformations will have implications for North American suppliers, he said. It will require suppliers to get involved — meaning new tooling and process.
"The only way it works is with integrated suppliers," Schulte said. "You have to have your suppliers following your practices. So when this new practice comes into OEMs here, it will have to be introduced across their entire supply chain.
"It will be like the introduction of just-in-sequence practices," he added. "You can't achieve it unless everyone in the chain is participating."
Daimler, BMW and Volkswagen have been eager adopters of Industry 4.0 concepts. Industry 4.0 — also vaguely referred to as "The Internet of Things" — refers to factories that are retooled and rewired to allow machinery to communicate, enable greater automation and incorporate data from up and down the supply chain.
But Schulte said EDAG, which reported 2018 global revenue of $871 million, is also working with Detroit automakers, both in North America and Europe, on the automation trend.
What is propelling the interest in the new technology, Schulte said, is a feeling among automakers that updated product portfolios are no longer enough to differentiate brands — that competitiveness now requires tight-running factories with an increased ability to respond to customer orders, market shifts and supply line interruptions.
EDAG and the Detroit engineering company that it acquired two years ago, CKGP/PW & Associates, are positioning themselves to take advantage of this growth opportunity in North America.
The companies previously operated in offices a mile apart from each other, divided by Detroit's I-75, with about 100 employees at each site. Including a satellite Silicon Valley engineering office, the U.S. operations employ about 240 people.
The two firms have now merged into the same new location in Troy, Mich., and Schulte said he anticipates combined employment to reach 500.
Phil Stevens, president of the CKGP business, said the two operations are now working in unison on new projects. CKGP historically was been a paint plant engineering company, largely focused on General Motors and FCA, while EDAG has focused on vehicle engineering, electronics and manufacturing lines, with its primary involvement with European customers.
Stevens said the combined company now has the ability to engineer a complete vehicle launch, from product engineering through complete manufacturing lines.
The cost of introducing 4.0 networks will vary dramatically from supplier to supplier, Stevens said.
"It will depend on where the company is in the life cycle of its equipment," he said. "If they were already at the point of planning to buy new equipment, then the cost of going to 4.0 will be minimal. But if they have fairly new equipment and they're just thinking of layering on 4.0, it could be very expensive."