Jointly organized by the Joint Venture Association and Hammel & Hochreiter Kft., the company executives visited the development and production center of the railway industry in Knorr-Bremse Budapest. The company had started as a family business at the beginning of the last century and was introduced in the stock exchange this year. In recent years, the company has achieved a remarkable growth. In the medium-term further expansion is planned. Knorr-Bremse started as a Bavarian family company, founded by Georg Knorr at the beginning of the last century. World wars and post-WWII reconstruction also played a major role in its growth. Then they moved from Berlin to Munich. In 1985 Heinz Hermann Thiele became the owner, who took over almost the complete competition and was also involved in Asian expansion, said András Sávos, managing director of the Budapest site.
This form of ownership changed in October this year when the company went to the stock market. The company’s market share in Europe is around 70%, in some parts of Asia 100%, and through two significant companies at 30-40% in North America. Radical growth is not expected in any of the regions, said Sávos.
H.H. Thiele founded the Hungarian company for cost reduction purposes. Railway braking system is being developed and manufactured in Budapest while braking systems for commercial vehicles are produced in Kecskemét. The process is complex: In addition to production and development, the company also has a service business activity and a Test Center in Budapest. In 2012, Knorr-Bremse System for Rail Vehicles Budapest won the “Factory of the Year/GEO” Award. In 2015 the Budapest factory was also honored with the “Knorr-Excellence Award”.
In Budapest, production started in May 2010, and the Hungarian site received the German prize in the “Excellent Value Stream Management” category rather quickly, said Tivadar Tavaszi, Managing Director of Knorr Bremse. During the factory tour he introduced the essence of the factory-in-factory concept, which makes synchronization easier. Thanks to the process management, the machines are not working only in 2 per cent of the production time. The Budapest development team is in direct contact with customers, so they can develop on the basis of individual projects to customer needs. The products of the Budapest factory are being developed locally, they are also validated at the on-site Test Center, on approx. 2,000 square meters. The Eastern European procurement group is also based in Budapest – emphasizing the complex activities by András Sávos. As one of the keys to their competitiveness, he highlighted that new product developments are continuously optimized from the cost-side too.
The CEO said that this year’s turnover was planned to be EUR 270 million but is expected to reach EUR 300-310 million. Next year’s target is EUR 340 million. According to the mid-term plans the product portfolio must be further extended. Approximately 60 % of sales are from mechanical braking units, the smallest share is the freight wagon segment, which is at about 1 %.
When asked about the difference between Knorr-Bremse and the competition, Sávos said that a significant emphasis is placed on the employees to think positively, to tighten the boundaries, and to be prepared for disruption. The total number of the factory is currently comprising 900-1000 blue-collar workers, and 700 white-collar workers.
Furthermore, their own internal dual training has been developed as a result of the labour market pressure. 60 students are trained annually in one of the most modern workshops of the country in five different fields of expertise. The factory visit was followed by the presentation “Quantity, quality on time” by Péter Fejős, Partner of Hammel & Hochreiter. He emphasized that compliance can be achieved by meeting quality requirements by providing short lead times. The keyword is efficiency, its achievement and continuous improvement always begins with the cheapest and fastest feasible elements. The increase in earnings then provides sufficient material background for more costly or time-consuming changes.
It is crucial that in defining our goals we avoid direction misinterpretation: The goal is not KPI but the improvement of processes, which automatically results in improved indicators. Perfect processes include clear, concise work instructions for everyone represented by pictures and illustrations instead of many text scans.
According to Péter Fejős’s expectations, the world market trends may decline in the coming years which will result in decreasing quantities ordered, also reducing the current high labour demand. The trends are the same when we look at automation and the realization of Industry 4.0. The processes need to be carefully developed with corresponding flexibility as well as with saving on the workforce.
