Production and logistics
NORMA Group manufactures and markets more than 40,000 products and operates 27 production sites all over the world. In addition, the company has a broad network of distribution, sales and competence centers through which it ensures timely delivery to its customers in the respective regions.
Production and capacity utilization
The degree of capacity utilization of NORMA Group’s production and distribution sites varies between the global sites. In the emerging markets, where NORMA Group’s business is still being established, the capacity utilization of the production plants in terms of floor space is still relatively low. Forward-looking investment decisions there ensure that sufficient space is available for the flexible expansion of production. In industrialized countries and markets where NORMA Group already has a long-standing market position and production space is largely utilized, investments in additional space are avoided wherever possible. NORMA Group’s goal here is to optimize production processes by increasing efficiency in such a way that additional capacities are created within the existing area.
The capacity utilization of the production facilities can be varied according to customer demand and the order situation. Several different products with various specifications can be manufactured using the current production lines within the individual product categories by performing minor retooling measures. This allows production to be optimally aligned with current customer demand.
In fiscal year 2022, NORMA Group’s production activities at individual sites worldwide continued to be impacted by the interruption of supply chains due to the corona pandemic and the difficult international supply situation. In addition, the Ukraine crisis led to the interruption of supplies to Russia and Belarus as a result of the foreign trade laws enacted.
Measures to bundle production activities under the “Get on track” change program further implemented
In fiscal year 2022, NORMA Group continued to implement the “Get on track” change program initiated back in November 2019 to increase its efficiency and competitiveness.
In connection with the closure of the Gerbershausen, Germany, site by the end of 2022, which was announced in June 2020, additional product groups were relocated from Gerbershausen, Germany, to Hustopeče, Czech Republic, and to Maintal, Germany, in the reporting year. Manufacturing of the relocated product groups has already started.
NORMA Group expands production capacities in China
NORMA Group commissioned its fifth production plant in China in 2022. The plant is strategically located near the Guangzhou Automobile Group (GAC) and other automotive suppliers (OEMs) for electric vehicles. NORMA manufactures and assembles thermal management systems for battery-powered vehicles (BEV) and plug-in hybrid cars (PHEV) at the new site.
By opening the new facility in Guangzhou, NORMA Group is expanding its market position by making another targeted investment as part of its localization strategy. By offering its products and services where they are in demand, logistics processes can be designed to be more efficient, freight costs can be reduced and engineering services can be implemented in close exchange with customers.
The plant on the site of Datang Auto Technology Park has a total area of 2,500 m² and currently a capacity of 4 million parts per year. 80 people were employed there at the end of 2022.
Investments in capacity expansion
NORMA Group invested in the expansion of its capacities in fiscal year 2022. The focus of investment activities was mainly on the areas of water management and electromobility. The following table provides an overview of the most significant strategic investments in the current reporting year.
Strategic investment highlights 2022
Continuous optimization of the entire value chain
At NORMA Group, all internal process steps in the value chain are constantly examined for optimization potential. The Global Operational Excellence Management System is an important tool for meeting this objective. This system is used to analyze existing processes, identify potential for improvements, introduce the appropriate measures for implementation and realize cost saving projects. As a result, many processes have already been automated and standardized in recent years, so that significant economies of scale have been achieved.
NORMA Group has been implementing the NORMA Group Production System (NPS) at all of its production plants worldwide since 2014. The goal of the NPS is to increase operational performance, safety, delivery reliability and quality at the plants and to identify and realize further cost savings. NORMA Group uses a “toolbox” of lean methods for this purpose. These include the 5S methodology, the daily Gemba walk, setup time optimization using SMED (Single Minute Exchange of Die) and TPM (Total Productive Maintenance). Furthermore, a standardized
problem-solving process ensures that internal and external customer complaints are processed more quickly and effectively.
Customer proximity and a secure supply chain
In order to keep its supply chain costs as low as possible, NORMA Group strives to keep the geographical routes of the value chain as short as possible and avoid intermediate steps that do not add value via other NORMA Group sites. The goal is to manufacture close to the customer, which not only leads to an optimization of working capital and supply chain costs, but also minimizes delivery risks, reduces negative effects on the environment and ensures the higher flexibility that is increasingly being demanded. The corona pandemic, the war in Ukraine and the related short-term fluctuations in availability and demand once again underscored the importance of short and direct supply routes in fiscal year 2022. Due to capacity bottlenecks in ports and the resulting shortage of sea containers, sea transports in particular pose new challenges for the logistics of internationally operating companies, including NORMA Group. The company strives to be able to react flexibly to fluctuating customer demand at all times despite longer transit times.
Despite the demand for short logistics routes, cross-border deliveries are often unavoidable for NORMA Group in order to meet customers’ needs and requirements at all times. Optimized and secure customs processes are therefore indispensable. For this reason, NORMA Group participates in various customs trade partnership programs in the US, China and the EU, for example. Through the supply chain security programs, in particular the Authorized Economic Operator (AEO) and the Customs Trade Partnership against Terrorism (C-TPAT), which are part of the global Compliance Program, NORMA Group strives to ensure a legally compliant supply chain. By conducting regular audits of all its business partners, the company is able to rule out the supply of legally sanctioned third parties. In addition, internal organizational instructions and regular reviews ensure compliance with the relevant statutory export control regulations.
These contents are part of the Non-financial Group Report and were subject to a separate limited assurance examination.