“It is the customer who determines what a business is. It is the customer alone whose willingness to pay for a good or for a service converts economic ressources into welth, things into goods. What a customer buys and considers value is never just a product. It is always a utility, that is, what a product or service does for him.” (Peter F. Drucker)
Why is the initiative connected with Heidenheim an der Brenz (HDH), Germany?
CS: Heidenheim isn’t Stuttgart, Berlin, New York, or Shanghai. Yet, precisely because of its provincial Swabian character, Heidenheim stands for something special. While OEMs and large tier suppliers are globally positioned and risk losing know-how, provincial SMEs focus on regionality and their own strengths. In a country like Germany with few natural resources, knowledge and innovation are the most powerful values. HDH Eng. builds on the internationally benchmarking concept of “German Engineering.” It aims to contribute to strengthening the regional economy and the sustainable transformation of the engineering branch.
The subtitle of HDH Eng. is: “Think Customer!” What does this mean?
CS: The subtitle expresses that while the initiative is motivated by engineering science, it does not see itself as an end in itself. In a world of complex interconnections, the topics of HDH Eng. are always focused on the overarching benefit, the contribution to the whole. The economist Peter F. Drucker once wrote: “If a person wants to be an executive — that is, if he wants to be considered responsible for his contribution — he has to concern himself with the usability of his product — that is, his knowledge.” That’s what HDH Eng. stands for. The phrase “Think Customer!” is borrowed from a speech given by Professor Günter Kappler in the mid-1990s. Professor Kappler was a member of the management board of BMW Rolls-Royce AeroEngines GmbH. He was responsible for the development of the BR700 engine family at the R&D center in Dahlewitz, Brandenburg. At the time, I was working as a student employee at the “Adam and Eve” engine test benches there. The speech had a lasting impact on me regarding the contribution of that what I had learned in my studies and research.
Data-driven business models are the future of mechanical engineering. Why should traditional engineering knowledge be preserved and expanded?
CS: Future value added may be driven by transformed business models, but without a knowledge-based foundation in traditional engineering, the transformation will not succeed. According to the German Federal Statistical Office, the number of mechanical engineering students has fallen from around 200,000 to 140,000 in the last ten years by 2025. At the same time, the number of computer science students has risen from 180,000 to 260,000. Mechanical engineering has been the field of study with the greatest decline in the past decade, both in terms of the total number of students and the number of first-year students. A reversal of this trend is not in sight. The situation is exacerbated by the fact that the baby boomers are approaching retirement, leading to a further shortage of technical knowledge. These developments are worrying for the key industries in general mechanical engineering, the automotive sector, aerospace engineering, and, more recently, defense technology. In order to continue to achieve business success in these industries in the future, it is necessary to counteract these trends by securing know-how in the traditional engineering disciplines.
Engineering is a service that can be purchased inexpensively on a global market. Why would it make sense to invest in this area locally?
CS: The notion that engineering can be procured cheaply on a global market is partly true, but short-sighted. Since accelerating globalization, engineering has become a typical field for offshoring and outsourcing. The market for engineering services is subject to massive competitive pressure. It is dominated by international service providers, some of which employ more than 10,000 people. Similar to production-related processes, this is leading to engineering disappearing from Germany and being relocated abroad. This trend is critical if the relocation compromises the quality of the final product or the future viability of the company is jeopardized by the migration of intellectual property. Furthermore, strategic considerations, particularly in the defense industry, can play an important role in ensuring the independence of national and European technologies. Engineering companies are currently evolving into complex systems and service providers where, while mastery of specialist disciplines remains essential for business success, their importance for value creation is declining. The focus on the changing core business, coupled with the limited availability of in-house R&D resources, is creating a growing demand for highly qualified services. To manage dependencies and the associated risks, the geographical, communicative, and cultural proximity of the development partner will become increasingly important in the future, in addition to specialist qualifications. For this reason, it is important to preserve high-quality engineering expertise locally.
Who benefits from the initiative?
CS: HDH Eng. is a private, non-commercial project. It is aimed, for example, at students in training who are seeking professional exchange in the field of mechanical engineering with experienced engineers.