Annual Report2023
Industrialised Production
How HENSOLDT
creates efficient
processes for its
growing production
Under the banner of “Industrialising the Opportunity”, HENSOLDT is harnessing the opportunities arising from a global rise in demand in the defence sector and is evolving from made-to-measure to series production.
“We need a pact with the defence industry,” said German Chancellor Olaf Scholz when he visited HENSOLDT’s site in Ulm at the beginning of 2023. In the context of Zeitenwende in security policy, his words confirmed the clear intent that the defence industry would have to increase its production capacities and cut delivery times as quickly as possible.
Although HENSOLDT has been working on this for some time, the rise in demand, especially for sensor technology and electronics, the situation in Ukraine, and rising tensions around the world have added a new urgency to ongoing activities. At the same time, the increased demand will have to be met considerably faster than in the past in an environment of high inflation, the energy crisis, unstable supply chains, and skills shortages.
HENSOLDT’s response to these challenges has a name: “Industrialising the Opportunity”. It stands for the transformation of the company from highly specialised made-to-measure to industrialised series production – with significantly faster and more flexible development and production cycles, while maintaining the same high level of quality.
Strong Foundation
for Future Global Growth
To create the conditions necessary for this transformation, the third wave of the HENSOLDT GO! improvement programme was launched in 2023. In addition to industrialising key products, the programme focuses on technical efficiency and robust supply chains.
HENSOLDT CEO Thomas Müller summarised the objective as follows: “Every HENSOLDT transformation programme is aimed at supporting our operating business. HENSOLDT GO! Wave 3 is an essential part of our efforts to actively shape our rapid growth and transformation. In concrete terms, this means that we will increasingly evolve from manufacturing with small batch sizes into a company that produces growing volumes of products with increasingly shorter turnaround times.”
Following the standalone optimisation of the company in the context of its independence from Airbus (Wave 1) and the end-to-end optimisation of the entire organisation centred around the German sites (Wave 2), HENSOLDT GO! Wave 3 is now focusing on future growth.
Production –
from One-off Manufacturing
to Series Production
A few years ago, HENSOLDT took an important preliminary decision that is paying off today: To establish a flexible production line for the 4D radar family. Since then, modules that are identical in all types of radar have been (pre)produced in large quantities, irrespective of their subsequent use.
A process model developed together with customers and improvements in the production layout allow for a significant increase in unit numbers while maintaining the same high level of quality. Workflows are adapted to new requirements, material availability was optimised, efficiency increased, and continuous product improvements are implemented in the production process.
The ground-based TRML‑4D radar is a perfect example: it has been a key component of Ukraine’s air defences since the start of Russia’s war of aggression. In next to no time, production was ramped up in 2023 from initially three units per year to one per month. This kind of mass production also shows that HENSOLDT is ready to deliver significantly faster than its competitors.
Part of HENSOLDT’s radar family for deployment at sea and on the ground, the TRML‑4D radar has been designed for close- and long-range ground-to-air detection. Based on state-of-the-art sensor technology, it is capable of detecting, tracking and classifying various types of air targets. This makes it particularly suitable for the use against small, fast, and low-flying cruise missiles, drones, aircrafts and helicopters.
Engineering –
from Development
to Delivery
In order to boost technical efficiency and further optimise the development process, HENSOLDT considers the entire value chain, from product development through production down to delivery to customers and subsequent deployment. Any experience gained in the process is directly fed back into development and production. Improvements are implemented promptly.
The large number of developments currently being worked on in parallel coincides with skills shortages affecting this segment in particular. Since it is difficult to meet the additional demand, the highly qualified engineers at HENSOLDT focus on tasks with high added value. In order to further increase performance, HENSOLDT also delegates work packages to partners. This ensures that the company's highly qualified developers can optimally utilise their technical skills.
Additional measures contribute to enhancing data security in development and production. And by centralising the AI infrastructure, the foundation has been laid for an AI-capable portfolio across products and solutions.
Supply Chain –
Digital Twins
for Greater Resilience
Against the backdrop of supply bottlenecks during the Covid-19 pandemic, we learnt once more that a robust supply chain is one of the key foundations for planned industrial growth and HENSOLDT’s international expansion. In this context, the full implementation of product quality and supply chain planning, including with the help of digital twins, is to bring significant improvements in material availability.
New warehouse in Laichingen
For instance, in Laichingen, a town in Southwest Germany, a new central warehouse was built for the Ulm, Taufkirchen and Immenstaad sites. It will be connected directly to the HENSOLDT IT system and fully integrated into the HENSOLDT SAP environment. The rollout of the new logistics system will allow all movements in the logistics chain to be tracked and will replace a number of third-party systems. Real-time data will make for better process planning. Different names of materials will be standardised and both inventory management and procurement and production processes will be optimised.
“The construction of the new warehouse in Laichingen and the introduction of a standardised IT solution will maximise our scalability in the future”, says Alexander Dahm, Chief Supply Chain Officer.
OneSAPnow –
A Data-Based Foundation
Supported by new opportunities from advancing digitalisation and in close consultation with customers, this process encompasses and optimises all business areas and processes.
At the centre of the global transformation is the implementation of the new ERP system SAP S/4HANA, as part of the OneSAPnow project. All the company’s business processes will be centrally mapped in this system in the future. A uniform process and system landscape thus allows end-to-end processes – i.e. processes that take in all sub-processes back-to-back in their time and logical sequence – to be standardised worldwide across all divisions of the company.
In the future, this will allow for large data volumes to be retrieved in real time, ready for analysis, including with the help of artificial intelligence, while continuously optimising the business processes on this basis.
Finance –
Managed in Real Time
The long-term transformation through OneSAPnow is also being driven by the internal “Finance Vision” project. In addition to creating a global finance division characterised by transparency, the project will in this process establish a consistent finance management model and forward-looking comprehensive data management to support HENSOLDT’s core business.
Christian Ladurner, CFO of HENSOLDT, says: “The new database technology and data processing in real time will allow our finance teams to access the latest financial data faster, perform real-time analyses, produce better forecasts of financial results and take well-informed decisions.”
Worlds of Working –
Fit for the Future
At the site of HENSOLDT Optronics in Oberkochen, the construction of the new plant reached the topping-out milestone in 2023. It is an example of how the company is responding to the increased need for defence solutions and growing demand from the semiconductor industry, which buys high-precision measuring devices from Optronics.
Rendering Oberkochen
On a campus with short distances, the more than 850 employees will work hand-in-hand and, together with the other sites, develop and produce the solutions of tomorrow. Across functions and with integrated processes in a modern, flexible, and cooperative working environment, the necessary development and production capacities are being created to accommodate the planned expansion. Modern IT infrastructure will support overarching collaboration.
In the production of microchips, extreme ultraviolet technology (EUV) is used to place billions of transistors on a silicon chip the size of a fingernail. HENSOLDT provides the basis for this with its Final Focus Metrology high-precision measuring device. Inside is a high-precision measuring device with an infrared camera, energy sensors and wavefront sensors for controlling the laser required for generating extreme ultraviolet light.
“As an industrial company, we have to create modern worlds of working. We will have to consider how much time we are going to spend in the office, what this means for the design of office workstations, and – most importantly – how we can collaborate successfully in this world of working. And we will have to organise production in such a way that different product variants can use a shared structure without creating a static chain and new variants and technologies can easily be integrated. The HENSOLDT campus in Oberkochen provides the blueprint for this endeavour.”
At the same time, HENSOLDT is also investing in new buildings and infrastructure at its sites in Taufkirchen, Ulm and Wetzlar to secure the existing business and realise future ambitions.
Dr Lars Immisch, CHRO HENSOLDT
All Divisions –
One Goal
All the measures taken in this regard contribute to one common objective: The industrialisation of all processes will enable HENSOLDT to realise the planned international growth in a successful and profitable manner. Thanks to the new ERP system, SAP S/4HANA, it will be possible to digitally track, retrieve and analyse all data across all legal entities and organisational units. The transformation of all digital processes will globally standardise the HENSOLDT process and system landscape, turning HENSOLDT into a data-based “real-time company”.