Finstral AG is a pan-European owner-managed window manufacturer from South Tyrol. With 1,400 employees and 1,000 specialist business partners, Finstral develops, advises, manufactures and sells to a total of 16 European countries. The headquarters of this family business is located in Unterinn, near Bozen/Bolzano. It is not just within South Tyrol that Finstral has the reputation of being an exceptionally process-oriented, dynamic and innovative company: megatrends such as digitalisation were clearly recognised very early on and implemented step-by-step.
When did Finstral deliberately begin to dedicate itself to digitalisation?
The fundamental step in digitalisation was the decision to develop a proprietary ERP system. A core feature of ERP (Enterprise Resource Planning) in manufacturing companies is material requirements planning, which has to ensure that all the materials needed to manufacture the products and components are available in the right place, at the right time, in the right quantity. This strategic decision, i.e. that we needed our own ERP system, was taken in the 1990s, even before digitalisation became a major issue. We deliberately did not want to rely on a standard ERP system, but rather wanted to develop one ourselves. After all, ours is a unique industry — each of our products is custom-made and we do not produce anything off the shelf! And everything that we produce could theoretically also be produced in millions of other variants. In this respect the demands on Finstral’s ERP system were particularly high.
In the early phase of development, data was transported by means of floppy disks and post — these were the first, rather cumbersome steps towards digitalisation. Everything became more networked with the arrival of the internet.
Does your ERP system now provide you with a competitive advantage?
People enormously underestimate our industry in terms of the sheer diversity of variants that can be offered. The fact that we manage to maintain an overview of this diversity, producing everything flawlessly and delivering quickly and flexibly — all this is to a large extent due to our ERP system, of course. It is both a safeguard and a competitive advantage.
With 15,000 window units produced each week — all of which can be completely different — it is sometimes hard to believe that everything works so smoothly! And not just that — our system allows us to track the entire chain, from when the order is placed all the way through to delivery!
Will this ERP system last? Can it cope with growth?
That depends on numerous factors — in particular it depends on whether the product itself will stay that way! Computer technology of course requires constant adjustment and optimisation. We no longer work with the system we once had — the system has grown with us, even if it is essentially the same. Advancements come from our in-house staff who know the system better than any outsider — you can optimize what you see every day at any time, which is another advantage if you have everything in-house.
In our industry, 95% of suppliers are fabricators, meaning that they buy components to measure and then assemble them. But we go one step further — we practically create the components ourselves! We make the PVC profiles, maybe buy the aluminium, then paint and cut it ourselves. In the case of wood, the boards are bought, profiled, varnished, etc. For glazing, too, the flat glass is also bought, but it is processed here — cut to size, hardened and painted. And all the semi-finished parts first have to be organised, of course! All this is done by means of digitalisation.
Having fourteen locations is very good, but they all have to be coordinated first. That is why it was not just a question of handling technical data — networking was another major issue! One important question was: How can I reach individual locations with the data? We decided relatively early on to set up our own data centre to which all plants and machines had access. If the product development department decides that something has to be changed somewhere, it will be adjusted once, here on the Ritten — and tomorrow this change will be updated in every plant. Sure there is a great risk that I could make a mistake here that would then be spread throughout the works. But what is the risk compared to the problems involved in having to communicate all changes to our works non-digitally?
“it is sometimes hard to believe that everything works so smoothly!”
Speaking of data: where are the big datasets located and how do you handle them?
We have a second system which is of course in a different location. If one fails, the parallel system can replace it. We also have a third backup with a lower performance, as well as a backup against attacks. There are thousands of attacks from the internet every day on our system. Some data is stored in the Cloud, but sensitive data always remains in house.
How far has digitalisation replaced work areas? Where have new areas opened up?
First and foremost, digitalisation simplifies many work areas. Anything that is extremely repetitive can be digitally controlled, leaving more time for people to deal with complex or complicated matters — digitalisation should primarily have a support role. What machines do is standardised, while people have the ability to think out of the box, to think ahead, to optimise, to consider: where can the whole system be made even better, even quicker, even more flexible for the customer? Every form of optimisation requires the ability to think — that’s where people are required.
In recent years we have been intensively engaged in paperless production. Each window has the appropriate instructions for use or installation — in digital format! In addition to the cost savings, this above all means a tremendous reduction in workload for individual employees. The idea is not to save on staff, but rather to make their work easier and free up more time for customer service and optimisation.
Staff acceptance is high when we interpret digitalisation in this way. Nevertheless, while digital innovations are a matter of course for some, others have difficulties with them – especially the older generation.
How can you ensure that the older generation will keep up?
Older employees definitely have qualities and potentials that differ from those of younger staff. They have plenty of manual skills! Today it is simply a question of deploying the right people. The main question that every manager has to ask is: Where can I make best use of my staff? Like in a football team — who plays as striker, who are the midfielders and who are the defenders? Everyone running a factory has defined goals and has to see how these goals can be achieved with their team.
What is different today? Especially with Generation Y, what differences are there between generations?
Members of Generation Y will often contribute a different type of education and are more project-oriented. They arrive in the morning, leave in the evening and care just as much about their lives outside the company. The topic of “millennials in the world of work” is often pushed harder in the media than it actually merits. Maybe we have just been lucky! In the past there were completely different bonds, you had to play-act more. Today, people think more about matters, they question them — which increases the opportunities for optimisation. In any case you can expect more self-reliance from young people today — as a manager you have to be less of a “boss” and more of a “coach”. Young employees ask: “Why are we doing this? How could we do it better? Does that make sense?” We are not afraid of such developments — on the contrary! Considerable flexibility is of course expected of managers. Employees are much more receptive today and they can learn new skills incredibly fast.
“Every form of optimisation requires the ability to think — that’s where people are required.”
Will you address Generation Y’s “new expectations of the job”?
By that do you mean the supposed demands of the new generation for everything from home-office working to opportunities for sabbaticals? That isn’t a major problem in our experience. We even offered flexible arrival times, i.e. flexitime, on our own initiative — and it was rejected by our employees!
In general we are pleased to design individual workplaces with a certain commitment — but it is not the employee’s wishes that are paramount, but those of the customer! This is in fact made very clear to our employees in all areas and aspects. We do not offer feel-good rooms, massage sessions or football tournaments. We do however offer definitively high-quality food and we attach great importance to everyone taking a lunch break, as we are convinced of the importance of breaks combined with energy-rich, tasty food. Our employees see this as a valuable contribution to their quality of life.
Further education programmes are also very important. Each employee can for example learn a language, English, Spanish or French, whether or not they need it in their work. There is one thing however that to a certain extent will meet the expectations of Generation Y: we offer yoga — after working hours. Employers too have to move a little with the times, even if we think these things are rather overrated. They are good for the image, good to communicate but, in all honesty, employees are in reality concerned with completely different matters: a good working atmosphere, a job that really suits them — and fair pay, of course. The compatibility of family and work is an interesting and important issue and this is an area where we really believe we must try and offer something. Maybe compatibility is sometimes misinterpreted — it doesn’t mean that everything has to be as one! Compatibility can sometimes also mean separation, can’t it?
Has it become harder to find employees?
That depends on the region. In South Tyrol it has become more difficult to find personnel to work in manufacturing and production. Interestingly, the higher the level of education required for the post, the easier it is to find staff. It used to be the other way round.
“Print is required in parallel with an online presence. When we print, we print in high quality!”
How do you look for new employees?
In many different ways. For open positions in production we use the local press. Lately we have achieved good results via LinkedIn. Of course we are increasingly searching online. Only very occasionally will we work with headhunters. We do not yet recruit via social media or with targeted employer branding: we have had other priorities and it has so far worked out well.
Social media: how has this changed marketing in recent years?
Overall, of course, a lot has been relocated online, with today’s customers simply wanting access to information at all times. But we have never neglected print — on the contrary! Print is required in parallel with an online presence, just for the touch and feel of a business card, for example. While we do not print as many different products as before, we now for example concentrate on our Finstral Magazine. When we print, we print in high quality!
It is important to involve as many senses as possible, especially for the initial contact with a customer. Digital media will only involve two senses, while “haptic” also affects our sense of touch and even smell! Investment products in particular must be high-quality haptic products, this is simply vital. Ours are long-lasting, high-quality products: this must be communicated through all the materials used. Digitalisation is a must in marketing, so a sophisticated social media strategy is the next step. Nevertheless now is the right time to pick up on the counter-trend at an early stage and present ourselves as a brand that also has outstanding skills when it comes to print. Trends and counter-trends, that holds for everything. We will continue to try and spot trends early on, just as our predecessors always did.