The Endress + Hauser press conference that reported their 2019 annual results today also reported minimal effect on output from the necessary measures taken to protect staff and ensure safe working in the face of Coronavirus.
From visits to a few Endress + Hauser locations around Basel, their factories, in marked contrast to most equivalent UK production sites, are spacious, and even historically had a large separation between work stations and production operators. With this in-built advantage it was probably simpler to impose social distancing on the production floor.
Matthias Altendorf, in his comments on the effects of CV over the last few months, said that at peak times, over 10,000 employees were working from home. This was primarily enabled by their concept of a digital workplace, with an IT landscape based on a cloud based architecture. As standard, even without CV, employees are allowed to spend 20% of work time at home.
The major effect of the coronavirus pandemic seen so far has been a 20% drop in order intake over the last two months: this order intake has been assisted by an increase in orders via their website by 90% compared to last year’s levels.
An E+H diary of the effects of CV
Matthias Altendorf gave a comprehensive account of the effects of CV on the E+H operations.
“Ever since the first reports of the outbreak of a novel respiratory illness in January, the coronavirus has dominated our lives, professionally and privately. So you might be interested in how we are dealing with this situation and what impact the pandemic is having on our business.
We reacted early, and extensively, to the new situation. After all, we and our customers have a deeply ingrained safety and protection mindset. A task force at Group level is coordinating and communicating our measures and guidelines related to the pandemic. This team comes together each day – in a virtual environment – to discuss the situation, just like the Executive Board, which holds a daily video conference.
From the very beginning our motto was that we would rather do too much, too early, rather than too little, too late. Our goal is to protect people and our business. To do that, we are following two basic principles:
First, the health of our employees, customers and partners is our top priority. With our measures, we want to protect people from being infected by the coronavirus. And we want to do our part to prevent the pandemic from spreading further. In this respect, we also have a responsibility to society.
Second, we want to provide our customers with the best possible support. Large parts of our business concern system-relevant sectors. Important infrastructures and systems – such as water and energy supply networks, production of food or pharmaceuticals – must be kept running. We have a responsibility here as well.
After the first cases appeared outside of China, we declared a travel ban for Asia as early as January. We then continued to add measures more or less on a weekly basis. We canceled customer seminars, training programs, international conferences and trade fair events. We first banned international travel and followed this up with bans on domestic travel as well.
We introduced strict hygiene measures at our locations. We made hand sanitizers available and made sure that surfaces people come into frequent contact with are disinfected multiple times a day. We reorganized our work environments and workflows so that employees can maintain the required distances between one another. And we made sure that our employee restaurants maintain proper hygiene.
In mid-March we then required practically all office-based employees to work from home. That even included people in areas such as research and development, who rarely work from home. These measures are also designed to protect those who must continue to work at our facilities. Although there is a lot we can do remotely, manufacturing, repairing or delivering instruments is something you obviously cannot do from home.
At peak times up to 10,000 employees are working from home. Because our internal IT service provider Endress+Hauser InfoServe had already raised our IT infrastructure to a high level in years of dedicated work, everything is running smoothly. Secure and uncomplicated access to our data is possible from anywhere. This is the result of a project we launched five years ago: with the digital workplace we completely restructured our IT landscape and went from pure on-site applications to a cloud-based architecture.
The whole time we have managed to maintain the availability of materials at our plants around the world. And we’ve been able to ensure delivery logistics, despite canceled flights and restraints on shipping. However, there was nothing we could do about government-mandated temporary plant closures such as in Italy, India and South Africa. This aside, Endress+Hauser was and is maintaining its delivery capabilities.
Behind this are the tremendous efforts of our employees. These days you often hear talk of new everyday heroes. Our heroes work in production, service and logistics. And they are working under difficult conditions in the office or from home, in small apartments, which they were essentially unable to leave for weeks – for example our colleagues in France, Italy, Spain and Dubai – and sometimes having to take care of children at the same time. Or they are continuing to work at the company under strict distancing and hygiene guidelines. All of them have achieved great things in recent weeks!
Despite all these challenges, we have managed to continue to provide our customers with excellent, extensive support. We are bridging the physical distances forced upon us by the coronavirus through digital and emotional proximity.
Our website endress.com serves as a high-performance platform for a wide range of transactions. With a personalized account, our customers can select the right product, configure it to their requirements and order it directly from us. Much like we are accustomed to in our private lives with online shops, our customers enjoy full transparency regarding the status of the order. This is a function that has been much in demand in recent weeks. And, of course, they can retrieve the latest documents, data and information for their instruments at any time and anywhere.
Interest from our customers in these options has grown enormously during the corona crisis. We currently have more than one million visitors to our website each month, an increase of 20 percent from 2019. Incoming orders via endress.com are running 90 percent above last year’s levels. Online business makes up more than 10 percent of the business in a dozen countries, a notable figure for our products that require such intensive consultation, and an indicator of where we are heading.
This applies to many areas. We have customer seminars and internal events in virtual space, we are successful with webinars and podcasts. We are also breaking new ground in service. With Visual Support we support customers remotely via an app. Using the camera in the customer’s smartphone or tablet, our employees can gain an insight into the situation. They can then provide precise instructions regarding what the customer has to do. We will offer this service to our customers at no charge for as long as the coronavirus is spreading.
Our colleagues at Analytik Jena are facing special challenges at the moment. As you know, our goal is to support our customers from the lab, to product and process development, all the way to the process itself. One step toward this goal was the acquisition of lab specialist Analytik Jena in 2013. Although the business is focused on industry customers, Analytic Jena has also been supplying customers in the medical industry as well as in research and scientific environments.
As the coronavirus broke out in China at the beginning of the year, our colleagues at Analytik Jena immediately jumped into action. Providing evidence of an infection requires preparing and analyzing the genetic material in the virus. Analytik Jena supplies the required equipment: dependable instruments capable of rapidly generating reliable results.
On short notice our colleagues at Analytik Jena China looked into how available coronavirus tests could be used in our instruments. They informed around 1,000 interested participants via webinars how the genetic material in the virus can be reliably detected. They also furnished several hospitals in China with the corresponding lab technology, including the emergency hospital in Wuhan that became famous because it was erected in just 10 days.
Endress+Hauser China has donated equipment during the corona crisis. Our instruments were installed in a clinic in Shanghai to ensure that it has clean water. Liquid analysis technology from Endress+Hauser has also been deployed in Wuhan, where it is being used to monitor the wastewater treatment process.
The past weeks have shown that our Strategy 2020+, which we have been pursuing for five years, is focused on the right areas. The emphasis on our products, solutions and services and on the interaction and collaboration with our customers as well as our employees makes us more agile and creates opportunities. If we had not made such solid progress in the field of digitization in recent years, we would not have been in a position to deal with these new challenges so effectively. That’s why we will continue to pursue this path.
The same applies to our focus in the analysis area, from the lab to the process. The continuous expansion of our sales and production networks has proven its worth, as have the large investments in innovative products. We will continue to work consistently on all of these strategic focal points.
One of these innovative products is the Micropilot FWR30, the first level sensor, which we developed specifically for the Industrial Internet of Things. The FWR30 is a radar-based sensor with 80-gigahertz technology designed for monitoring levels in plastic tanks – so-called intermediate bulk containers, or IBCs for short. These containers are often portable, or they are used at flexible installations. For this reason, refill orders are often placed only after the tank is already empty.
With the FWR30, this approach is a thing of the past. Our IIoT sensor is battery operated. It is fast and easy to commission and automatically connects to the cloud via wireless communications technology. The measurement values and the location of the container can be retrieved with a smartphone, tablet or PC. This service is free of charge for customers who only want to monitor the fill levels. If needed, it can be expanded to a complete inventory management solution including supply chain tracking.
A lot of innovation can be found inside the new Proline Prosonic Flow G300/500. This instrument is an ultrasonic flowmeter for natural and process gas applications in the chemical or oil & gas industries.
Our developers worked on this instrument for six years. What makes the Pronsonic Flow G special is that it measures precisely and reliably even in wet gas applications. And in contrast to the differential pressure method, there is no pressure drop due to an orifice plate that wears over time and requires costly maintenance.
And that’s not all. With optional pressure and temperature sensors and software that we developed in- house, the Prosonic Flow G can calculate additional parameters and process variables such as mass and energy flow, methane content, density or viscosity. No other instrument on the market offers such versatility!
The next product fits in any pocket: the Liquiline Mobile CML18, a multiparameter handheld instrument for liquid analysis. The CML18 can be used to verify online measurement values from the process with sample measurements in the lab. The results from online and laboratory measurements often vary widely because the sensor technology, analysis process or environmental conditions differ.
This is where Liquiline Mobile now builds the bridge. We have taken Memosens, a technology proven in process applications for more than 15 years, and integrated it into a handheld instrument. All the sensor signals are converted into a robust digital signal that is not only resistant to moisture but guarantees data integrity. The Memosens technology also makes swapping out the sensor child’s play. And with our SmartBlue app, the Liquiline Mobile can also be integrated into Industry 4.0 applications.
For laboratory applications, Analytik Jena introduced the PlasmaQuant 9100 to the market. This analyzer utilizes optical emissions spectrometry with inductively coupled plasma – or ICP-OES for short – for routine chemical analyses. A unique feature of the PlasmaQuant 9100 is the high-resolution optics, which provide a high degree of sensitivity, accuracy and precision.
This instrument is designed for high throughput. It’s employed in the labs of our usual customers, such as in the food & beverage, life sciences and mining, minerals & metals industries. The PlasmaQuant 9100 analyzes sunflower oil for heavy metal impurities, tests antibiotics for contamination or determines the percentage of rare-earth elements in rock, for instance.
Product innovations such as these form the foundation of our economic success. But for us that’s not the only benchmark. With everything we do, we want to live up to our ecological and social responsibility as a company. Our goal is to further develop Endress+Hauser in all dimensions of sustainability.
When we erect new buildings, they fulfill demanding standards with respect to energy efficiency. In Canada we are even building a customer experience and process training center that will be energy autonomous. The building, in Burlington in the province of Ontario, will completely cover its energy needs from local regenerative sources and thus be CO2 neutral.
In the past year we launched the Endress+Hauser Water Challenge. With this initiative we’d like to improve access to clean water for people around the world. We kicked off the challenge last October with a charity run in Reinach. 250 employees participated as joggers or Nordic walkers, donating a small amount for each completed kilometer. The company then doubled the final tally.
The first international charity runs took place in Saudi Arabia, Mexico and Argentina. The coronavirus has unfortunately prevented further events from being organized. But we’re happy to report that we were able to complete the initial aid project in Vietnam, where we permanently secured the water supply in a small village. We hope we can continue with the initiative very soon. Other aid projects have been identified in Brazil, India and Cameroon.
How will things proceed from here? The coronavirus will not disappear from our lives quickly. Hopefully, a vaccine and an effective medication will be developed in the very near future. But many months or even years could go by before that happens. Until then we have no choice but to accustom ourselves to the new normal and live with the pandemic.
In many countries we are in the process of returning some of the work-at-home employees to their offices in the company – maintaining the required distance to one another and strict hygiene measures including protective masks for when we leave our desks. Each loosening of the restrictions will require additional measures. This special situation will constantly demand new sets of behavior and novel approaches from us for an indefinite period of time, both at work and in our private lives.
We are still unable to estimate the economic impact of the coronavirus pandemic. But this crisis will no doubt leave its mark – on our customers and us. Furthermore, the coronavirus is not the only issue we are dealing with. The financial consequences of the pandemic are impacting us in an already difficult political and economic environment.
Tariff conflicts and political tensions, the structural crisis in the automotive sector and the pressure to decarbonize industry – all these things continue underneath the current crisis. The debt and low- interest problems were prevalent beforehand, and these issues will again gain momentum due to the measures governments and the central banks have implemented to shore up the economy and cushion the effects of the pandemic. It remains uncertain what the short-, medium- and long-term consequences will be for the global economy and our business. But there will be changes.
That can create a lot of concern. But fear and panic are not good advisers, and we cannot let ourselves be guided by them. Instead, we have to address the challenges with a cool head and a warm heart. We have to focus on responsibility and solidarity and reflect on our freedom. Because even in such a situation, we have a wide range of options at our disposal when it comes to taking action and shaping the future. And we will do everything we can to bring Endress+Hauser through this period.
As a company we are focused on safeguarding the health of people, securing jobs, doing our best to serve our customers and maintaining and developing our external network of suppliers, service providers and partners. To do that we are also prepared to accept financial losses in the short term.
Our experience from the 2008/2009 financial crisis will help us during this acute phase. Flexibility and agility are important whenever we find ourselves in a highly dynamic situation – that means moving only as fast as we can respond to new situations as they arise and adjust the course when required. At the same time, we should not lose track of our long-term objectives. The combination of operational agility and long-term objectives is best mastered by people, our employees.
We can offset fluctuations in the workload of our production and sales centers by adjusting capacities and restructuring resources, by lowering working time accounts – even into the minus – and by making flexible use of vacation and additional company holidays. If necessary, we will also resort to working reduced hours for a while, but only after we have exhausted most of the other options at hand.
It goes without saying that all expenses will be subject to a detailed review. We will avoid expenses that under the circumstances are not necessary or at least not necessary at the moment. Some minor projects may be delayed. But we will carry out and complete the large investment projects as planned. We want to continue to develop our future capabilities; we want to maintain and strengthen them.
Because only when we adopt a long-term perspective can we safeguard the interests of our customers, employees and shareholders by strengthening the resilience and longevity of the company.
Endress+Hauser has always emerged from crises stronger. I’m convinced this time will be no different. Why? Because we have always performed solidly and made provisions during good times. Because we have a shareholder family behind us that is loyal to our customers and employees and takes its entrepreneurial responsibility seriously. And because we are an excellent company with enthusiastic customers, tremendous employees, an outstanding infrastructure and a unique portfolio.
But above all, we have a sustainable business model. At Endress+Hauser, everything we do is important for our customers. We can help them become even better and help them make their processes, products and production more efficient – in all aspects – so that they can increase quality, raise productivity and use fewer resources. This brings our customers forward in good times and even more so in difficult times. And, after all, this makes the world a better place in which to live.
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