Cost Reduction Through Better Automation Solutions

Q: What range of products do you offer to the Mexican automotive industry and which represent the bulk of your revenue?

A: While Balluff has a wide range of products in its portfolio, the company’s main focus is on automation solutions. Besides the product, we offer consulting services to our clients in terms of productivity, quality, and performance of production lines. An important success factor is that we adapt our solutions to the specific requirements of our users. Specifically, in the Mexican market we have acquired expertise in welding solutions by substantially reducing damage in the sensors’ sites, stop lights, and quality problems.

Within our portfolio, Radio Frequency Identification systems are just beginning to take off in Mexico. This product offers data tracking and error proofing solutions, which means the client can trace its production processes, assembly line, machine tools, warehousing, logistics, and distribution. As the OEM transforms a piece of metal into a precise component, it is important to avoid scraps and mistakes in the machining process. If there is damage in an OEM’s machining center this can amount to a cost of almost US$2 million. When we convert certain parts of an assembly line, we reduce errors and avoid human failure. Regarding welding, we have steelface inductive sensors that have been very successful. Sensors are not made to be replaced regularly and when they fail it is due to a connection error, a faulty installation, or a wrong sensor model. To avoid this, Balluff invests heavily in technical training, so that technicians can make the right selection of products for the client’s unique situation.

Q: What success stories has Balluff gathered within the Mexican automotive industry, and what impact has the company’s technology had on manufacturing processes?

A: As a German company, it was essential to approach Japanese players. Our initial belief was that this would be difficult, since they are characterized by being exclusive and only opting for Asian suppliers. We were able to jump this hurdle by listening to our customers’ needs in order to open doors. In fact, we have become really successful with Nissan and it has become one of our strongest customers. In this particular success story, Nissan was facing a logistics setback. The OEM was accustomed to importing everything from Japan, usually waiting a couple of months for orders to arrive. That meant that if the company missed an order, it would have to wait additional time for the products, further delaying the processes. Our solution to this not only included products, but also a logistics strategy that ensured order delivery in less than 24 hours. Thanks to this service we gained Nissan’s trust for the management of a project in its press shop. With our solutions, we managed to save approximately MX$5 million (US$333,000) per year, reducing the damage to the sensors in the shop while increasing overall productivity.

Q: Which links of the supply chain would benefit the most from your solutions?

A: We impact the whole supply chain, all the way from OEMs to Tier 1 and 2 suppliers. Furthermore, international integrators like Comau, KUKA, and FFT also benefit from our solutions. Most automotive players need automation and engineering solutions. However, companies that only want to see a reduction in their costs are not our target client base. Our traditional customers are companies that can identify the long-term cost benefits.

Q: What specific objectives do you have in place to take advantage of the boom the industry is experiencing?

A: Balluff Mexico has become responsible for the whole of Latin America with the exception of Brazil, so it has an ambitious growth strategy in place. We recently opened a subsidiary in Argentina, where we have been really successful despite its precarious economic situation. I am very optimistic about this subsidiary, and I know that the players that prevail will get a bigger slice of the cake. We are carrying out market studies in Central America and we are evaluating our resources to make this expansion happen. Additionally, we are opening distribution centers in Colombia, Venezuela, Ecuador, and Chile. In terms of our Mexican operations, we see many areas of opportunity, especially following the arrival of Audi and BMW in San Luis Potosi.