Production and logistics

NORMA Group produces and sells more than 40,000 products and has 25 production sites worldwide. 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 can still be increased. 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 aligned with current customer demand.

In fiscal year 2023 again, the Ukraine crisis led to the interruption of supplies to Russia and Belarus as a result of the foreign trade laws enacted.

The war in the Gaza Strip and the conflicts in the Red Sea that emerged at the end of 2023 did not lead to any relevant supply bottlenecks or delivery difficulties in fiscal year 2023. The effects of these conflicts on the supply chains are continuously monitored, supported by digital risk warning systems.

Production capacities optimized and expanded in fiscal year 2023

The US subsidiary NDS opened a new plant on May 4, 2023, thereby expanding its production capacities for water management solutions. The site is located in Lithia Springs, Georgia, near Atlanta. Valve boxes for irrigation systems and products for draining storm water are manufactured on a production area of 10,900 square meters. The products manufactured at the Lithia Springs plant are sold to wholesalers and retailers in the USA. The new site represents a further milestone in the strategic expansion of NORMA Group's water management business.

As part of the consistent implementation of NORMA Group's localization strategy, production capacities were also expanded in China. At the Changzhou production site, a total of 9,900 square meters of additional space was created for production, warehousing and offices. The site is now better positioned to meet the increasing demand for high-quality metal fasteners in China. In this context, the second production site in Changzhou was closed in November 2023 for efficiency reasons following the relocation of capacities to the expanded production site. This helps to utilize production capacities in order to serve customers in a targeted manner.

NORMA Group also further enhanced its production facility in Guangzhou, China, in fiscal year 2023. 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 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 issue of optimizing production processes is also essential given the objective of using resources in the production process to extract a high economic gain. The focus here is particularly on the automation of processes. In fiscal year 2023, work was carried out to identify further potential for improvement. Based on this, a roadmap for automation processes was defined. Important production processes were also fully automated in the past fiscal year (see table T037).

Investments primarily in the areas of water management and electromobility

NORMA Group invested in the expansion of its capacities in fiscal year 2023. 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.

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 value of short and direct delivery routes is essential. This also became clear in 2023 in an environment characterized by polycrises. The coronavirus pandemic, which was still clearly noticeable at the beginning of 2023, as well as geopolitical tensions and the associated short-term fluctuations in availability and demand are the main influencing factors here. Consequently, capacity bottlenecks at ports and the resulting shortage of sea containers, sea transports in particular kept posing new challenges for the logistics of internationally operating companies, including NORMA Group. The Company remains committed to reacting flexibly to fluctuating customer demand at all times despite longer transit times. This also includes the "Step Up" program implemented in spring 2023. In fiscal year 2023, for example, targeted measures were implemented to increase efficiencies in supply chain management throughout the EMEA region. The availability of products also improved significantly. This positive development puts NORMA Group in a position to better support the sales of its products in the future.

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 supply chain security programs, in particular the Authorized Economic Operator (AEO) and 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.