Research and development
Strategy and direction
The corporate strategy, enhanced into Ambition 2020+ in the financial year, and the business objectives define the primary framework for the Wilo Group’s research and development activities. Clear risks and opportunities from the megatrends relevant to Wilo are identified by the corporate foresight process. In line with the Wilo Group’s goal of further expanding its leading position in terms of technology, innovation and quality, the following key strategic action areas were derived for research and development: energy and resource efficiency, systems technology and solutions expertise, and digital communication and technology.
The specific implementation of the associated aspects and starting points in research and development is extremely complex. This is especially true of digitalisation, which affects every area of the company. One significant challenge relates to technology and product development, as digitalisation requires entirely new processes and tools. The strategic action areas are addressed in intensive cooperation with outside partners. For this purpose, the Wilo Group has access to a global research and development network to help it conduct the various research projects that are necessary, often in close cooperation with project partners, other industrial companies and increasingly also customers and start-ups. In addition, Wilo also makes use of government grants. Traditionally, the priority was application-related basic issues. However, as a result of digitalisation the focus is increasingly shifting to new business models and complementary services.
The three central research and technology centres in Dortmund carry out all research and technology activities for the whole Group. Key content includes traditional mechanical and hydraulic technologies, microelectronics and software, and production systems and technologies. The new challenges arising from the digital transformation of all areas of the company are thus brought together and tackled as quickly as possible. The reorganisation of the central technology centre for mechanics and hydraulics has resulted in streamlining and accelerating the projects while idea and innovation management has been stepped up. For example, a ‘speedboat’ concept was introduced for the first time for the review of different hypotheses in a development project. In this way, the functionality or economic viability of innovative ideas can be assessed at an early stage of development.
Responsibility for product series development generally lies with the respective local product divisions. This two-tiered structure ensures firstly that innovations and new technologies are prepared and planned and secondly that specific market requirements can be quickly addressed and met in immediate proximity to the customer. Due to the digitalisation strategy, which impacts on all areas of the company, cross-divisional and interdisciplinary project teams are increasingly also being included in product series development. Key projects, methods and technological processes were initiated and continued in the year under review.
As the trend towards efficient, speed-controlled electric motors continues unabated, considerable effort was again made to refine and implement the motor and drive strategy in the year under review. The in-house manufacturing of high-performance permanent magnets, a key component for high-efficiency electric motors, was significantly extended to incorporate additional sizes and greater volumes in 2016. The number of magnets produced surpassed the two million mark for the first time. The advancement of the magnet technology concentrated on the improvement of magnetic and corrosion properties in damp environments in particular. In addition, several publicly subsided research projects on magnet technology were commenced, laying the foundation for the further expansion of the high-efficiency permanent-magnet synchronous motor programme. Motors of this design in the power range of up to 22 kW have already been successfully tested and taken into the field. These motors have the advantage of being particularly compact, extremely efficient and modular. At the same time, new frequency inverter technology in the same power range, likewise characterised by high efficiency and compactness, was also tested.
Structural measures and process improvements were also performed in the area of research and technology. In 2016, the speedboat concept described above was introduced for the rapid qualification and assessment of technologies. The worldwide Wilo-Engineering platform was given a further boost, with the international network now focusing on design and simulation work flows.
In 2016, a key element of product development activities was once again the expansion and renewal of the product portfolio. Work in the year under review focused on maintaining and improving the product range across all product divisions. For example, new mixers were introduced for wastewater treatment with electric motors of the IE4 efficiency class, and fire extinguishing products were certified for new markets.
New product development is focusing on five top development projects for the Group as a whole. These top development projects, defined on a cross-divisional basis, are intended to significantly increase the pace of development and the customer benefit generated. The digitalisation strategy affects product development in particular. Accordingly, the existing definition of interconnected long-term technology, module and product roadmaps was expanded to include this aspect and finalised in 2016. The result of this approach is an enterprise-wide platform and module system that aims to use the results of the various projects across the board, ensure the transfer of technology and thus sustainably reduce development costs. Two of the top development projects are sufficiently advanced for the products to be introduced to the market on schedule in 2017. These products are characterised by a variety of innovations and will consolidate Wilo’s position on the market as an innovation leader. For example, the distinguishing features of the Wilo-Stratos MAXO, which is being presented at ISH, the world’s leading trade fair, in March 2017, include its unprecedented level of system efficiency, bidirectional connectivity, extreme ease of use and optimum range of applications. The Wilo-Yonos Multi is also being presented – an extremely compact pump that meets the most stringent efficiency criteria and can be adapted to the requirements and demands of OEM customers extremely flexibly.
With a slightly larger headcount, the employee structure in research and development remained stable in 2016 compared with the previous year. The proportion of women in research and development was over 11 percent. The proportion of highly qualified university graduates was around 70 percent. The proportion of the total workforce accounted for by research and development also remained stable at a high level. The needs-driven recruitment of excellent young candidates in the disciplines of technology and the natural sciences is still a challenge. With its human resources activities, the Wilo Group seeks to be perceived as an employer of choice. In this way, it shall continue to successfully attract and retain highly qualified employees in the future.
Patents and licences
The Wilo Group pursues a patent strategy that is geared towards the current demand for greater customer benefit. New technology and product developments are closely aligned to the patent strategy, ensuring the broad-based, comprehensive protection of expertise. In order to support the Wilo Group’s continuing profitable growth going forward, research and development are now supported by a value-based patent process. The number of patents filed again reached the level of previous years. The number of patents held increased slightly year on year, since technically obsolete property rights were cleared out in 2015 as a result of technological change.
Investment and expenditure
Investment in research and development in 2016 again focused on expanding laboratory and test facilities and building new types of production facility. A significant measure in the year under review was the complete automation of the test benches for long-term testing, where more than 70 percent of the test benches were successfully modernised accordingly. In addition, further progress was made on the global standardisation of the hydraulic test benches.
Total research and development costs including capitalised development costs again increased by 4.1 percent compared to the previous year’s record to EUR 65.0 million in 2016, reaching 4.9 percent as a proportion of net sales (previous year: 4.7 percent). This was the highest level of investment in research and development in the Wilo Group’s history. Development costs of EUR 18.5 million were capitalised in the 2016 financial year (including borrowing costs). Research and development costs were expensed in the amount of EUR 47.8 million.