The strongest link in the chain
January 1st 2006

IP&E visited the heartbeat of igus in Cologne, Germany and discovered that the company is winning the battle against what some see as the inevitable dominance of Eastern manufacturing

We are all familiar by now with the 'cost of ownership' arguments that manufacturers from the West have been using for some time in order to defeat the 'menace' of inexpensive products being imported from the East. We have heard about cheap, flimsy products with no certification and the traumas of trying to get support from a person in China with little grasp of European languages.

Similar cliches also abound about German products - well engineered but very expensive is the common perception but the truth as ever is somewhere in between these extremes.

Plastic advantages

Cable carriers when they were first 'invented' were traditionally made of steel.

However, igus soon replaced the steel with plastic which was lightweight and made less noise but was still durable - the plastic energy chain was born. The situation now according to Ralf Kabus, leader of international sales and marketing is that igus GmbH is "Clearly the market leader in plastic energy chains".

In order to maintain this market leading position igus has 20 people engaged in R&D and has 50 000 components in stock at any one time just for the energy chain systems (It also had many more thousands in stock for its bearing business). Because of this development capability igus is able to solve end user problems and quickly produce 'specials', perhaps for example for high temperature applications. If the company does manufacture a special product though it does quickly become a standard product and part of the catalogue. As Ralf Kabus says "Mass customisation is what we do at igus." This statement is borne out by the fact that igus ships between 700-800 orders per day, six days per week. All individual orders put together with standard components.

Global competition

So how can a manufacturing company in the high cost economy of Germany compete against the low cost economies of China and India? The answer is that the Cologne factory has a high degree of automation or as Ralf Kabus puts it "No people in Germany costs the same as no people in China."

Indeed, igus is not only competing against these markets it is actually exportng into those markets and the company has an assembly operation in the Far East that receives products made in Europe. There is still a proliferation of steel being used to carry cables in these areas but with the cost of that material increasing the igus energy chain is increasing in popularity.

A big factor in the company's growth also comes from finding solutions for new problems and new markets. Its rolling chain innovation has become de rigeuer in the crane industry and its Triflex innovation is gaining popularity in the robotics market.

Measure the difference

Two major factors in igus' own cost of ownership argument are its huge range of products and its strong service network.

i.e. it can get you the products you want quickly and should there be a problem it has the local manpower and the knowledge to be able to deal with it quickly and efficiently.

This model would fall apart pretty quickly though if the products themselves were not up to scratch. Because of its expertise and history igus is able to measure and test its products against competitors and provide full reports regarding strength and tolerances. During the visit we were shown the product testing facility where the energy chain product were tested for thousands if not millions of cycles so that a customer's specific application can be categorised. One test of the Triflex product was also being streamed live via web cam to a particular customer who wanted to see the testing in action! For all of this the cost differential is also not that great. Ralf Kabus estimates that igus products are between 10 and 20% more expensive than other 'non-brand' products but when the saving in installation time and the increased lifespan of the product is considered the igus product offers the better financial investment.

Cables

When you consider that the total costs of an energy chain, complete with cables and connectors, breaks down as 60% of the costs are the cable, 35% are the chain and 5% the connectors it should be of no surprise that igus also offers its own range of cables. The Cologne site has 700 different sizes of cables in stock at all times and customers can buy all components separately or igus's Readychain comes ready assembled for immediate installation.

The Chainflex range of cables offered by the company came about as a reaction to what igus saw as a proliferation of poor quality products on the market. It therefore teamed up with a cable company to manufacture its own range, which like the energy chains comes in different quality stratas to suit all applications.

The visit to Cologne was revealing in a number of different ways and as good an example of how Western manufacturing can compete in the modern environment as I have seen. The main point, I believe, is that igus remains very cost competitive and this as we all know is a huge factor.

People do not want to pay an enormous price premium whatever the cost of ownership arguments. It is only once this small price differential has been seen past that a buyer will really begin to absorb the arguments of availability, delivery, quality, service and support.

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