ifm focuses on innovative solutions at affordable costs
ifm was founded in Germany in 1969 by two innovators: Robert Buck, who was responsible for technology; and Gerd Marhofer, who led sales and marketing. Their vision was to bring solid-state sensors to the industrial market that would have a positive impact on improving efficiency and decreasing downtime.
“The core philosophy of ifm is to focus on innovative solutions that disrupt existing technology and offer value at a cost that customers can afford. We call this sellable innovation,” says Roger Varma, CEO of ifm’s U.S. operations.
At its core, ifm is a sensor company marketing its products in numerous industries including automotive, food and beverage, alternative energy, water treatment, etc. Sensors are becoming more and more important in the manufacturing process, as data becomes increasingly vital to the building of smarter factories for tomorrow’s needs.
Varma joined ifm in 1989. “Over that time, I have had the privilege of growing with the organization to my current position of CEO,” he says. “I’ve been inspired to stay with ifm throughout my career as we have always focused on long range strategies and growth.”
It is not uncommon in ifm to find individuals who joined the company out of college, dedicating their careers to developing with ifm and contributing to its success.
“Our company and our employees are driven by a shared sense of purpose, and that is, to help our customers become successful in their business,” Varma says. “This drives our organization all the way from product development to sales and marketing. This purpose means our products should be reliable, of high quality, intuitive to use, and that the sales organization should be prepared to support customers with application solutions, identifying hidden opportunities for improving the efficiency of the customers’ process.”
The company’s order fulfillment process focuses on making sure it does not waste customers’ time. Lead time from order to shipment is less than one hour. “We aim to ship 90 percent complete orders within 24 hours, respond to emails in less than 15 minutes, and answer phone calls with live personnel in less than 30 seconds,” he adds. “All of this is directly tied to our sense of purpose, giving our best to our customers’ needs.”
The sensor market is shifting from a strictly hardware-based business to a business that can collect data and convert it into useful information, used for developing smarter factories (known in the industry as Industry 4.0.) In the future, factories will have to identify energy waste and consumption at the part-produced level, track and trace production processes 100 percent, control process drifts to ensure 100 percent quality, and finally, work with predictive information to plan for machine maintenance, all in real time. This can only be achieved by having more information from the sensor level to the ERP level.
As manufacturing continues to increase its use of automation, quality is a must, not a wish. This means 100 percent inspection after each automation step and reliable sensors that do not fail or drift. Right now, ifm is focused on a strategy of slowly changing from exclusively manufacturing hardware to also providing software and edge controllers, making it easier to have access to the trapped information at the sensor level. This information is critical for Industry 4.0.
Globally, ifm has sales and marketing locations in 70 countries as they go-to-market direct. “This go-to-market direct philosophy puts us in close contact with our customers, allowing us to understand their challenges and how we may help them,” Varma says. “We have manufacturing facilities in Germany, Romania, Poland, Singapore and the United States. ifm’s decision to build manufacturing plants and technology centers has always been a long-range decision based on availability of skilled people for the development process of innovative solutions and the manufacturing processes of products.”
ifm is focused on safe growth. “This means we strive to be diverse both with our product offering and in the industries we serve,” he adds. “We want to continue to grow the number of customers served, providing us consistent results in the coming years.”
Today, ifm has over 140,000 customers worldwide and projects sales for the 2018 fiscal year to exceed $900 million worldwide.
As an ISO 9001:2008 compliant company, ifm performs extensive testing to ensure reliable performance of every product. Tests include sensing range characteristics, electrical parameters, seal integrity, leakage current, housing display function, voltage drop, insulation and operator current. “Because we believe in high quality customer support, our ISO audit also includes an assessment of order fulfillment and shipping accuracy, as well as key processes and procedures throughout the organization,” Varma says.
ifm does not believe in measuring customer satisfaction. Instead, it measures customer loyalty. For the past seven years, the company has measured loyalty by using Net Promoter Score (NPS). Its NPS has consistently been over 70, a strong indicator that the company is earning customers’ loyalty.
ifm employees often gather together to give back to the community, generously giving their time participating in many charitable events throughout the year. Currently, employees are busy organizing the 7th Annual Orange Run, a 5K run / 2K walk to support local families and children fighting cancer through donating 100 percent of proceeds to the Breathing Room Foundation and the Cure4Cam Childhood Cancer Foundation. This year’s Run takes place June 21st at ifm’s U.S. headquarters in Malvern, Pa.
Other events include the Rise Against Hunger campaign, which packs 10,000 meals to feed those starving around the world; donating to the Chester County Food Bank and hosting a Salvation Army “Angel Tree” drive, just to name a few.
ifm’s R&D philosophy is based on failing fast. This means the company is consistently working on rapid prototyping, and learning on a daily basis what improvements it can achieve. This philosophy is moving it closer to “scrumming,” a methodology that has been applied in the software industry. With 3-D printed parts and an ability to turnaround PCB electronics in less than 24 hours, the company can prototype faster.
ifm manufacturing lines may have a change-over time of once per hour and can have a wide variety of sensor platforms, while at the same time following a one-piece flow philosophy. All one-piece flow lines are flexible to takt, which means depending on customer demand, assemblers can be added or removed from a line to meet the required output. Lines are designed with a three-year view output horizon, and lean daily management is providing valuable input for continuous improvement suggestions to increase output.
“At ifm, we have implemented a lean inventory management philosophy that optimizes our inventory through continual evaluations,” Varma says. “This philosophy ensures that we are regularly identifying opportunities to improve our Kanban systems, eliminate waste and respond to the changing needs of our customers. Our key performance indicator is not inventory cost, but our ability to deliver 90 percent of the orders within 24 hours.”
“To do this, we have short lead times on our production line and a high level of inventory turns in our warehouse,” he adds. “Everybody in the organization from assemblers to management believes in the power of lean manufacturing and removing waste in our processes is helping us to provide high quality products at competitive costs to our customers.”
The company believes the best suppliers are those that exemplify the partnership approach. “Our suppliers are our partners. Our global supply base is filled with these partners that have shared in the growth of ifm over numerous decades,” he says. “We collaborate on an ongoing basis with our suppliers, seeking mutually beneficial opportunities to eliminate waste in the processes, improve our designs and take advantage of market trends. ifm does all planning over a long-range basis, therefore with our suppliers, cost is not the primary criteria. It is quality, availability, and lastly competitive cost.”
When ifm decided to build a new manufacturing center in the US, one of its core goals was to develop and produce temperature sensors for challenging applications within the food and beverage industry. “In this process, we transferred our existing temperature sensors from the production location in Germany, redeveloped the new production process based on lean principles in the United States, and in parallel set up a development group to start feeding the new plant with innovative products that drive growth,” Varma says.
ifm coordinates with universities such as Drexel University, in Philadelphia, and has developed a co-op program, opening up a partnership for developing young talent for research and development. The company also brought in a consultant to configure all new production lines on lean principles and one-piece flow. This had a major impact on the size of the line, dramatically reduced waste and increased overall quality. The greatest challenge in the manufacturing center project was building a supply chain in the United States, producing high-quality stainless steel materials and electronics based on PCB. The company’s goal of having local suppliers based in the United States is a significant factor in this ongoing challenge.
“We also have to invest in the skills of our production employees to handle complex processes such as precision soldering, ultrasonic welding and laser welding,” Varma says. “We find individuals that have the ability to grow and learn these skills, and step-by-step we invest in them through training for our manufacturing process.”
ifm produces over 18 million sensors per year in its global facilities. “We strive to connect every production employee to the ‘why’ behind their role. As an example, we don’t just produce temperature sensors, we produce temperature sensors that help improve the quality of food and beverage products that are consumed by all of us,” he adds. “Our employees are directly connected to our sense of purpose and understand the power of lean production and strategy.”