Industry 4.0 is a vision that evolved from an initiative to make the German manufacturing industry more competitive. Australia needs to be at the forefront of this development but is in danger of slipping behind. Resistance to change could be the Australian furniture industry’s greatest obstacle.
Industry 4.0 creates enormous opportunity for Australia. As one of the developed economies most vulnerable to competition from low wage nations, we have a greater incentive to adopt new, smart technologies. And it’s not just large companies that will benefit from Industry 4.0; it is expected that smart, small and medium-sized enterprises will be more innovative and faster to adopt the change needed to fully appreciate the benefits of manufacturing in the new age.
So, what does an Industry 4.0 company look like? Supplier visited one such company in Obercarsdorf near Dresden in Germany. Sachsenküchen translates as ‘Saxony Kitchens’ and at almost 112 years old is now one of the oldest kitchen furniture manufacturers in Germany. With sales of over 70 million Australian dollars, the company achieved the best result in the company’s history in 2019. The export ratio was 51.7%, which corresponds to an increase in export sales of 7.0%. How did they achieve this excellent result? With Industry 4.0 manufacturing, and professional support from the World’s leading furniture industry consultants, Lignum Consulting.
In the 19th century the company started as a brick manufacturer. After the factory was closed down, Franz Heide took over the company and started manufacturing furniture. Sachsenküchen began producing kitchens in 1908 and saw enormous growth up until the Second World War. In 1955 and now located in East Germany, the company became owned by the state and was merged with other companies. With the political change during 1989 and 1990 and the reunification of Germany, Sachsenküchen started the step-by-step restructure of its assets and began its transformation to independence.
Elko Beeg has been running the business as CEO since 2007. Supplier’s Phil Ashley visited Sachsenküchen and spoke to Elko and Martin Kohnle of Lignum Consulting about the company’s transformation. With professional input from Lignum Consulting, the company enters the next 100 years of its history full of enthusiasm with investments in new production technologies such as a fully automatic panel warehouse with connected cutting-optimization; modernisation of production processes as well as new product designs. Sachsenküchen is not the biggest kitchen manufacturer in Germany but they are one of the best in terms of quality, flexibility, and design.
An overview of the company shows they employ 220 persons in two plants on a production area of 20,000 square metres. They manufacture 800 cabinet carcases every day made up of 25,000 individual parts per week, and produce 18,000 kitchens and bathrooms each year. Their annual turnover in 2018 was just over 72 million Australian dollars. They sell within Germany through resellers and export 50% of what they produce to Europe; Russia; China; the United States and Australia through specialist retailers. Selling to other countries such as China and Russia do not pose any design problems, customers in those countries are buying a German kitchen and it must look German. Curiously, German kitchen manufacturer’s biggest export market in Europe is France.
Their major production is based on a rule-based (130mm grid) system where each new cabinet height increases by 130mm, but the company is flexible enough to produce any size cabinets to order. Sachsenküchen can also supply cabinets where the inside is the same colour board as the outside and the ability to do this leads to their cabinets being suitable for the new, more open-plan design where the kitchen becomes part of the living space. The company manufactures under strict environmental standards and they recycle as much as possible. All their product is tested and certified by the Institute of Wood Technology, IHD in Dresden.
They can supply customers with 172 different doors and 26 carcase decors on request. Increasingly, European customers see the kitchen as an integral part of their living space and so, the kitchen is no longer just a place to prepare meals; it must fit into the overall environment of the home. Because of this, kitchens are constantly evolving and Sachsenküchen needs to be flexible while also cost-competitive. Elko said, “We are not producing kitchens, we are producing individuality.” 79% of Sachsenküchen customers require their home is furnished according to their needs and individual taste and so, the ability to produce individual items in small batch sizes is important.
The technology to achieve these goals is readily available from a number of Australian suppliers. Biesse; Felder; Homag; SCM and Wood Tech Groups are all capable of providing a wide range of processing and handling equipment, connected to seamlessly produce and handle components for cabinet manufacture. Sachsenküchen employ robot saws for order-related cutting of sheet materials; a sorting and storage system that reduces waste; a buffering system that allows sawing and edge banding of parts to proceed at maximum efficiency (the saws don’t have to stop to wait for the edge banders to catch up); interlinked edge banding machines and a buffer with a display-based control of parts.
Sachsenküchen’s ‘journey’ to batch size one started in 2007 with the new concept strategy that each of their customers should have an individual kitchen. Two years later they installed a data connected cutting plant for doors and carcase production and only one year later developed their SK130 rule-based cabinet line. Over the ensuing years the company has completely modernised their production with a range of equipment from multiple suppliers; all fully interconnected. As an example of the complete data connection, literally a handful of people work in the carcase production areas. All the machines; robot handling; conveyor transport and storage is fully connected and works autonomously.
At Sachsenküchen the first advantage of batch one production you notice is that there is no free space. Because every panel is either constantly on the move or waiting in a buffer area to join other parts for a particular kitchen, the entire space is filled with machinery actually producing kitchen parts. On two occasions panels are even raised by conveyor and pass over other machines; every metre of space is utilised to produce and move parts. It’s a fully connected factory. Secondly, cabinets are manufactured in continuous production; there are no stock parts so there is no large warehouse or the need to cut parts that may not be used for months ahead. Sheet material is optimised and when jobs are combined to reduce waste, some parts are held in buffers and re-join the line automatically when the rest of the job is cut. It’s poetry in motion!
Dieter Rezbach is the founder of Lignum Consulting and Martin Kohnle is Partner from the very beginning. Dieter and Martin worked with Elko Beeg at Sachsenküchen over many years to realise their successful Industry 4.0 batch one production. Dieter said, “The nature of a machinery supplier is to sell their equipment and they will have software that links some of their machines with maybe a CAD design and production software. There is however a lot more required for the factory run more efficiently. Lignum Consulting promote seven essential building blocks for an optimal Industry 4.0 connected factory.
These are; a strategy for what you want to achieve; well-designed products that are simple and efficient to manufacture; appropriate-to-task technology and machinery; logistics for the supply and movement of the parts; data integration that ensures all the machines and robots are working together; organisation of the company and production clearly defined, and well-trained and effective human resources. Dieter says, “Elko is a smart guy, he knows what he is doing. That is why he and his team are working with Lignum Consulting to make their production even better.”
And it works; if it didn’t, Lignum Consulting would not be as successful as they are today, not only in Germany but also now with offices in the United States, Canada and South America. Their motto: We build Success! Seventeen years and over 300 completed projects in more than 35 countries (including Australia) speaks for itself! Lignum Consulting operate Worldwide. For more information visit