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The Chinese Question

According to Bosch Rexroth (Lohr, Germany; www.boschrexroth.com) chairman Manfred Grundke, the factory automation company must establish an R&D base in China to meet the needs of the indigenous market, protect the company from theft of its intellectual property, and prepare for the day when Chinese suppliers develop products better able to compete with those sold in the developed markets. "They have stolen from us in the past," he says with an air of almost defiant resignation, "so we must keep our top-of-the-line products to ourselves and not share them with the Chinese." Far from isolating the Chinese or belittling their ingenuity, Grundke sees them as able and skilled competitors that are quickly learning their craft.

According to Bosch Rexroth (Lohr, Germany; www.boschrexroth.com) chairman Manfred Grundke, the factory automation company must establish an R&D base in China to meet the needs of the indigenous market, protect the company from theft of its intellectual property, and prepare for the day when Chinese suppliers develop products better able to compete with those sold in the developed markets. "They have stolen from us in the past," he says with an air of almost defiant resignation, "so we must keep our top-of-the-line products to ourselves and not share them with the Chinese." Far from isolating the Chinese or belittling their ingenuity, Grundke sees them as able and skilled competitors that are quickly learning their craft. He compares them to Japanese automakers in the post-war period, but feels the learning curve will be much shorter. "We all may have laughed at the Japanese at first, but no one laughs at Toyota now," he says. "It will be the same with the Chinese."

Rather than bring designs for "40,000 hour European/U.S. pumps" to the Chinese market, where there is little or no need for the level of reliability or features they offer, Grundke envisions producing pumps that are closer to the accepted Chinese standard of a 4,000 hour lifecycle at a competitive price. "The design probably wouldn't be acceptable in the U.S. or Europe where the business dynamics and customer needs are very different," says Grundke, "and it eliminates the problem of giving them our premium technology to copy and sell at a much lower price."

While admitting that Bosch Rexroth currently doesn't have in its portfolio products that "meet the real needs of the Chinese market," the company is investing heavily to increase its R&D capabilities in China so that it can hit these benchmarks. Eventually those involved in building this capability will grow in proficiency and help the company meet the changing needs of manufacturers in developed countries as well. It is a long-term strategy.

"Customers are looking for less complexity and simpler technical solutions," says Grundke, "so they can have both lower costs and greater uptime." This means modular designs, less automation, and simpler equipment. "The customer has less money to spend, which drives both automation and machine cost down," says Grundke. Therefore, he says, best-in-class is determined by the customer and his needs, not by the depth of technology or features found in a production system. Having a Chinese R&D arm that is growing in sophistication and engineering capability will help units across the world produce high-quality, low-cost solutions.

Bosch Rexroth also is reconfiguring its motion control and drive systems to be plug-in components in an overall engineering interface to increase ease of use. This gives customers the ability to rewrite applications for their specific needs without touching the installed base, or core software. "It won't matter whether the technologies are electric, hydraulic, or pneumatic," claims Grundke, "and this will drive the customer to choose the best Bosch Rexroth technology for each axis without having to worry about set-up, monitoring, or control."—CAS