The company ElCoGa (Electrical Components Garz) develops, produces and distributes transformers and

reactors (chokes) in Oberhessen. The company's customers are machine builders who install chokes in
switch cabinets (control boxes), companies in the lighting industry who need transformers for low-
voltage luminaires and companies in the automotive supply industry.
The company generates 30% of its turnover with one customer, 70% with twelve customers and 90%
with the largest 20 customers. A total of 170 customers were supplied in 2017.
The products are manufactured for customers in individual production or with medium series size 5 -
400.
The pressure on prices is high: prices for major customers must be reduced by 2% within the year.
Various material prices (coilformers, metal housings) have risen between three and 6% since 01.03.18;
sheet metal prices have risen by 9%.
In 2018, after wage negotiations, wages were increased by 4.2 %.
Furthermore, employees are granted social security and tax-free subsidies of € 44 per month.

The products are manufactured according to customer requirements and, in the case of smaller
quantities, are manufactured in the company's own production facilities in China, the Czech Republic and
Poland.
It was not possible to keep the supplier in China, as the supplier was designed for series production,
whereas Elcoga could only order small series. Due to a high variety of end products, only different types
with smaller batch sizes (800 - 1400 pieces) could be ordered.
The Czech Republic was used as an extended workbench and also had its own machines on site, on which
the supplier then carried out the work.
In Poland, complete chokes were ordered from the subsidiary of a Scandinavian competitor.
When relocating production abroad, however, it should be noted that the company's own capacities are
first used to full capacity in order to avoid layoffs. stop

At the site itself, attempts are being made to counter the pressure on costs by relocating individual,
simple tasks to a workshop for the disabled or a correctional facility.

The products are developed individually for customers.

17 years ago, the company gained new owners and developed a new strategy "Growth and Innovation".
This strategy is a response to a development that has led to a shrinking of the company since the 1980s.
In 2015, eight employees were laid off for operational reasons. Since 2016, employees have been retiring
due to age and are being replaced by new employees and new trainees.

The company is managed by a managing director who manages the entire logistics chain with the four
task areas innovation and sales/customer care as well as production and logistics on the other hand. One
shareholder is responsible for the Finance/Controlling/HR/ IT/Organisation divisions. Payroll accounting
and finance have been outsourced and are handled by an external service provider.
An experienced technician (Mr Schmidt), who has been with the company for over sixty years, works in
the technical area, as do an electrical engineer (Mr Gottfried) and another technician (Mr Isakow).
Contacts to universities are to be developed.
Ms. Lagentil and Ms. Schmöller are responsible for order processing in order processing and prepare the
production documents after order acceptance.
Mrs. Schmalbach is responsible for procurement.
Ms. Schmöller is also responsible for shipping.
The three ladies are able to represent each other due to their long company service. Mrs. Schmalbach is
employed half day, Mrs. Schmöller and Mrs. Lagentil work full day. Ms. Schmöller is currently working
part-time to look after her mother.
Mr. Weißmüller is a production manager and has a product-oriented view of production; Mr. Van is his
deputy and has an order-oriented view of production.

Interview with Mrs. Lagentil

Mrs. Lagentil receives inquiries by telephone, fax and e-mail.

"If it concerns inquiries for new products, I pass these on for the technical clarification to the colleagues
of the technology, which examine the inquiries for feasibility. I list the forwarded requests in an Excel
sheet and pass them on to the employee, who I believe can process them quickly.

Six years ago, our old software, which was programmed especially for us by a former employee, was no
longer maintained and replaced by standard software. The program was created in PL/1, maintenance
and care were no longer possible. A conversion to a modern programming language and database would
have been possible, but was rejected by the management at that time. Nevertheless, it covered our
requirements very well.

Today, order processing is supported by Sage new classic line. We use the sales module, production
planning module and purchasing. The first introduction of the software a few years ago went badly from
my point of view. We were in a restructuring phase at the time and the management wanted to
implement it as quickly as possible with as little financial resources as possible. That's why less is running
today than originally planned.

When the customer places an order with us, I compare the customer's order with products and prices
from our customer-specific price list, which I created for each customer in a Word document. If it is not
an order from the standard program for the customer, I check whether there is an offer in our offer
folder. If products and prices from either document match the customer's order, I create an order
confirmation in our ERP program after creating the order.
If there is no match between my documentation and the customer's order, I pass the order to the
innovation, who will evaluate the variance from a technical and costing point of view.
I agree the delivery date with Mr Van. I tell him the customer, the product, the delivery quantity and the
customer request date, which he confirms to me or gives me another date, which I then agree with the
customer. Sometimes I have to wait up to three days for a delivery date confirmation from Mr Van. I
don't know how he determines the dates.
Since the beginning of this year Mr. Van, Mrs. Schmalbach, our managing director and I have been
meeting weekly for twenty minutes to coordinate the orders to be delivered in the coming week and to
discuss material availability and the availability of production personnel.
Since the beginning of this year, I have been carrying out the post-calculation of orders in the classic line
and have recognised that when production capacity is low, orders are often completed at a loss.
We were able to record a strong increase in sales due to a customer in the solar industry. Unfortunately,
we had a fire in our production facility in 2013, and the customer immediately cancelled his orders
because we were unable to deliver on time. We then also lost the customer, which led to a major drop in
sales.
Interview with Mrs. Schmöller

We create offers in classic-line and send them by email. In addition, we receive quotations from our
technical colleagues, who process the enquiries from a technical point of view and calculate the
specifications. The created offers are sent to the customer and stored in the offer folder.

Mrs. Lagentil looks after three major customers, I process the remaining customers.

If the customer orders received are components that we manufacture in the Czech Republic, I have to
print out the parts lists so that we can provide the material.

Our Polish partner procures the material itself and supplies us with complete products.

Every day, sometimes around 11.00 a.m., Mr. Van tells me which customers are to be supplied. I then
prepare the shipping documents and determine how the goods are delivered to the customer.

We supply some customers with our vehicle ourselves, for others I order our forwarding agency or select
the forwarding agency with which the customer would like to be supplied. Delivery note and invoice are
printed out by me and sent with the goods. Unfortunately, it also happens that the customer calls us
where his goods are. stop

Interview with Mr Van Thanh Van (Part 1)

I coordinate the delivery dates with Mrs. Lagentil and Mrs. Schmöller. Often I have to accept the delivery
date requested by the customer, which is difficult for me. A secure planning is not possible at all with this
tohuwabohu. In particular with our large customers we try to realize each desired date. It can happen
that orders already processed by smaller customers have to be postponed. I estimate the lead time for
the products and calculate a buffer for missing parts in the material procurement, but this happens very
rarely.

In Excel I do a rolling planning in which I plan our capacity four weeks in advance and compare it with the
available capacity. The work schedules with the target times estimated by me are available in the classic-
line. The confirmed times are recorded in the PDA system.

Our external service provider uses Lexware software for financial and payroll accounting.

The management wants me to use the new classic-line for production control, but I have developed my
own system and store copies of the production papers in a folder with a time grid.
I don't supervise the target times and the post calculation of the production times is currently only of
secondary importance for the management, because they say that the prices are dictated by our
customers anyway.

Yes, and then there are the executive orders and emergencies: In the first case, we have to create
individual samples in a short time, which are intended for a new customer or a new series at an existing
customer. The boss then comes, determines that the prototypes have to be ready two days later and
then I can interrupt current orders again.
In the case of accidents, the products must be delivered two or three days after receipt of the order,
otherwise we may be faced with warranty damage.
This great flexibility in planning has always been a strength of our company.

Another strength is our quality, which the customer receives. But all our products undergo a 100%
inspection before they leave our premises.

Interview with Mrs. Schmalbach

Every day I carry out a disposition and the KHK system then determines the materials that I have to
order.
Since we do not have large quantities, the system often only suggests small quantities to be procured,
e.g. two kg of copper. But then I often have to order the minimum order quantity. Due to our large
variety of variants, our material stock now inflates. We have therefore initiated a stock reduction project,
as we want to reduce stock by 20%. The order proposal list is therefore forwarded to Mr Gottfried, who
checks whether we can also use alternative material available in the warehouse instead of the planned
materials. I then order the missing materials from the suppliers that the classic-line suggests to me. The
order is sent by email to our suppliers and I print it out twice: I file one copy in the orders folder and can
then always check when I have sent an order to whom. The second copy is sent to our warehouse clerk,
who compares the copies with the incoming goods. If the supplier cannot deliver within the required
time, I ask another supplier. Since I have been with the company for a long time, I know the alternative
suppliers for the individual materials. I submit the order to the managing director for signature. In very
rare cases, the ordered materials do not arrive on time: our warehouse clerk then notifies me when the
goods are picked and I put pressure on our supplier.
I check the invoice for correctness and then pass it on to our accountant, who assigns it to an account
and records it in the financial accounting system.

Interview with Mr Van Thanh Van (Part 2)

I am responsible for quality assurance in the company and am responsible for the incoming goods and
final inspection.

Together with an intern, I created a building regulations search system in Excel to retrieve already
created building regulations (BV). We have entered the BVs with their technical data so that the sales
department and the technical department can use our experience from completed projects.
Unfortunately, I have the impression that the program is not being used.

We want to use the planning board for production planning and control in the future. It is a good
instrument and forces us to plan in a disciplined manner.

Interview with Mr. Gottfried

In addition to preparing quotations, I also take care of the entire order processing in the classic-line. We
try to use more and more functionality of the classic-line for us and thereby make the processes more
efficient, but the employees, who have been in our company for a long time, often insist on their old
known processes and are only slowly ready to change. We have recorded all articles, materials, parts lists
and work plans in the classic-line. I have the impression that everything is going too slowly for us.
The planning board of Mr Van's ERP system is currently being introduced. But here, too, there are
problems in breaking away from the old procedure and implementing a new, more efficient planning
procedure.
In the Explorer I create a folder for each building regulation (BV), under which we now store all
documents (parts lists, calculation results, BV, constructions, test reports, photos...) belonging to a BV in
a structured way.

In 2019 we want to start a project "Digitisation of business processes in connection with industry 4.0". I
am not sure what to expect.

In my target system, I have the task of maintaining the product diversity of end products while at the
same time reducing the diversity of individual parts. I am only at the very beginning.

Interview with Mr Isakow

In addition to dealing with technical inquiries and processing technical orders, I have taken on the task of
bringing innovations to the company.
Actually, I don't yet know how to do this.

Last year we introduced a PDA system. The data now allows us to carry out a post-calculation.

I am in charge of the further development of the quality management manual and have taken on the
task of setting up a risk management system.

Furthermore, I largely completed the digitisation of the BVs last year. The digitization of business
processes is one of our major topics for this and the coming year.

Interview with Mr Schmidt

Questions that we receive from Mrs Lagentil, Mrs Schmöller or my colleague when they come by e-mail
will be dealt with immediately. Often I can fall back on similar products which comply with the same
building regulations. The building regulations contain a technical drawing, a parts list and partly a
calculation, which I then have to adjust with updated values. I estimate the material prices and never
have them too low, even if the individual items are not always correct. I also estimate the production
times and partially coordinate them with Mr. Weißmüller. Finally, a material and production overhead
surcharge is added.

In terms of quality, we never have any problems, although we were always clearly ahead of our
competitors in terms of price in the last offers. But then they will certainly have problems with quality.

I bring the processed inquiries to Mrs. Schmöller, who then prepares and sends the offers. With the
inquiries that come via the Internet, I give the information to my colleague if he could not already
process it alone. Via the Internet, we receive many inquiries of small order volumes, which take up a
large part of our time.
Mr. Isakow and Mr. Gottfried support me in processing the orders.

We use a 3D CAD program (Inventor) and record all products in it.

Furthermore, we work with a transformer calculation program (Rale) in order to design the products
better, so that we save material costs and have to build fewer prototypes.
Interview with Mr. Weißmüller

I have a product-oriented view of manufacturing and try to increase efficiency, implement production
improvements, optimize orders that are completed at a loss in the manufacturing process or initiate a
relocation to one of our suppliers. Controlling production orders is therefore one of my most important
tasks.