Management approach to products and solutions

Part of the non-financial report
NfR: Product-related GHG emissions
NfR: Product safety


Sustainability considerations play an important role in the KION Group’s product development and are incorporated into the product development process at various stages. With its ‘KION 2027’ strategy, the KION Group is clearly committed to the future-defining topics of digitalisation, mobile automation, robotics and e(nergy)-offerings and is working on the targeted expansion of its product range.

Within the scope of the KION sustainability strategy, three action fields specifically address product-related sustainability aspects. One is devoted to the energy and resource efficiency of products. As part of the strategic initiative on e-offerings launched in 2018, these topics will be given additional weight.

Besides the safe and ergonomic use of products, the product responsibility action field also focuses on compliance with legal provisions and standards as well as requirements surrounding servicing and (dis)assembly.

Last but not least, the innovative solutions and customer benefit action field is aimed at the customer-focused further development of the KION product portfolio. Here, the company focuses on process optimisation as well as new or additional services, such as in the area of fleet management. The objective is to continually improve efficiency, safety and resource conservation, which benefits customers, the environment and KION in equal measure.

Product strategy to create synergies and transfer knowledge

As a means to make best use of synergy effects and to pool knowledge Group-wide, the KION Group pursues a cross-brand and cross-regional development approach. The aim is to use uniform standards and global coordination of technical activities to be able to offer more product variants in the future that require less effort and shorter development processes. To this end, the technical functions of research and development (R&D), procurement, quality assurance and the production system have been brought together in a central KION organisation headed by the Chief Technology Officer (CTO).

The product portfolio of the ITS segment is managed using a platform and modular strategy. An evaluation system enables the KION Group to describe the added value of development projects for the product roadmap on the basis of objective criteria. This way, technology topics can be viewed in several dimensions and evaluated, for example, according to their degree of innovation or technical attractiveness in the context of the Group’s entire product portfolio. The system can be extended by further dimensions at any time so that sustainability aspects can also be included in the evaluation in the future.

Based on centrally prioritised activities, specialised product-development teams at KION’s global development locations produce customer-specific solutions for the individual operating units.

Group-wide organisational approach

The Group-wide CTO organisation coordinates and pools development projects set out by the product management of the operating units depending on the needs in their respective markets. Their decisions are based on findings from customer meetings, market research and competitive analyses. The KION Group currently sees major trends in the areas of digitalisation, automation and networking, energy efficiency and robotics solutions. As a consequence, a new Product Sustainability department has been created in the reporting year. It will in future form the interface to the KION Sustainability Team.

The Product Strategy Councils (PSC) are a central element in KION’s product development process. This is where development programmes are discussed, coordinated and submitted to the Executive Board for decision. The approved development projects are then planned and implemented further in the CTO organisation. In 2018, work began on further optimising and formalising the PSC decision-making process. Dematic is to be integrated into this process as well in the future.

Safeguarding the future by investing in product development

The KION Group’s expenditure on R&D in the fiscal year 2018 totalled €221.7 million (2017: €212.4 million). Like in the previous year, this is equivalent to 2.8 per cent of Group revenues.

The KION Group protects its product developments comprehensively against imitation and follows a consistent patent strategy. In 2018, the KION Group registered 105 patent applications for the first time (2017: 101). At the end of 2018, the KION Group had 2,923 (as at the end of 2017: 2,808) patent applications and patents granted.

The number of full-time staff (end of 2017: 1,533) in the various R&D (research & development) departments remained almost constant year-on-year.

Sustainability in product development

Sustainability aspects are taken into account in various ways in the KION Group’s product development activities across all the different objectives and development focus areas. Efforts to achieve the lowest possible Total Cost of Ownership (TCO) for all products in the ITS segment are inextricably linked to the development of the most environmentally friendly and efficient drive technologies. KION’s SCS segment also focuses on solutions that are as energy- and space-saving as possible, thus maximising cost efficiency and minimising their environmental impact.

The KION Group places the highest requirements on product safety and ergonomic design, which means customers can also offer their employees maximum protection as well as optimise occupational health and safety through ergonomic workflows. This also brings long-term cost and competitive advantages for customers. Last but not least, statutory provisions such as those relating to environmental protection, occupational health and safety as well as ergonomics also mean that sustainability aspects are continually being integrated into the development process.

To pay even greater consideration to sustainability aspects in product development activities going forward, the Group is currently considering whether to make this topic a focus area right at the start of the product development process. In 2018, KION worked on the first comprehensive product sustainability vision, which summarises the activities of the operating units in the fields of energy and resource efficiency and product responsibility.

Learning from customers

Close involvement of customers in the product development process characterises the KION Group’s innovation management and product development. Customer requirements are incorporated indirectly into the early phase of product development via product management and sales. In recent times, it has been observed that key accounts in particular are increasingly demanding that certain substances are avoided and, in some cases, even go far beyond the legal requirements, for example to avoid conflict materials.

Field tests give the operating units customer feedback, which they incorporate in their product development process. On top of that, the Group uses tried-and-tested methods such as the Linde TruckClinic. STILL also surveys customers on a regular basis to evaluate their specific requirements. As STILL EMEA has already been working successfully with an extensive customer feedback system for several years, this system will be rolled out throughout the group from 2019 on: The Customer Satisfaction Index (CSI) serves as a daily measure of customer satisfaction, while the globally collected Net Promoter Score shows how likely it is that customers will recommend the KION Group to others.

Newly developed products are also trialled by customers to gain key insights into how well they receive them. And sector trade fairs and customer events also contribute to information-sharing.

Comprehensive quality management to minimise performance risks

Quality is a key component of the promise to deliver the benefits offered by all KION Group products. The quality management systems of the KION Group and its operating units have held ISO 9001 certification since the 1990s. Around 80 per cent of all production plants (23 plants) are covered by the certification. In 2018, the CTO organisation was also successfully certified according to ISO 9001.

Quality assurance plays an important role right from the very start of the value chain, reducing potential quality risks in service provision. When selecting suppliers, the company attaches the greatest importance to quality and reliability. The KION Group expects suppliers to have an established, recognised quality management system, and to document and archive proof of their quality performance. New suppliers confirm they have these systems in place as part of the supplier self-assessment at the start of the business relationship, and are audited by KION accordingly. If suppliers fail to maintain their management system, the business relationship with them is usually terminated (see section on Sustainable procurement). In 2018, task forces were set up for individual cases, which, for instance, support rapidly growing suppliers methodically and also through a local presence to meet the requirements set by the KION Group.

The KION Group can contain quality risks to a considerable degree through demanding quality standards in development,
rigorous checks across the entire process chain, and close customer and supplier contact. Alongside this, the KION Group aims to achieve the ambitious goal of further improving quality-failure statistics over the long term, minimising truck downtimes, and introducing standardised quality assurance processes around the world.