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Localization as the key to cost engineering and increased customer appreciation

Illustration | hensel kommunikation GmbH; Bosch Rexroth AG
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The demands of customers located in different regions are increasingly coming to the fore. In Europe, a high-wage region, industrial enterprises combine a great degree of automation with the greatest possible level of flexibility. These demands can only be met by high-performance machines and systems. In the USA, global players dominate both mechanical engineering and industry. They have production locations all over the world and rely on standardization of both machines and processes.

Locations like China, which until now had low wage levels, are rapidly changing. The quality levels demanded by industry are rising, as are wage levels. By far the highest growth figures are likely to be generated there in the sector characterized by modest performance. Cost engineering must target key customer requirements, and they vary greatly around the world. Customers concentrate on life cycle costs in Europe, transaction costs in the USA, and procurement costs in Asia.

Bosch Rexroth has taken these modified operating conditions as the starting point for an organizational structure that focuses entirely on markets and industries. While doing so, the company forcefully pursues a “local for local” strategy. Local companies are expanding value addition in their own regions and are thus strengthening customer benefits by providing products and processes closely suited to local demands.

Bosch Rexroth implements the following five “locals” in this strategy:

- Local manufacturing

- Local purchasing

- Local development

- Local commissioning

- Local management


In this way, regional companies are able to increase local content beyond pure manufacturing and play an important role in cost engineering. They recognize changes in customer demands and can quickly alter their products accordingly.