Munich management colloquium.automotiveIT

VW CEO Winterkorn (left) and Bosch Automotive CEO addressed the Munich management conference March 20

MUNICH -- Top industry executives speaking at this year's Muenchner Management Kolloquium provided various interpretations of the conference topic: Growth through resource efficiency.

But they agreed that, by making better use of available resources, companies can save money, boost productivity and improve their competitive position.

Volkswagen CEO Martin Winterkorn highlighted his company's drive to become the world's most sustainable carmaker. VW is cutting energy consumption at its plants and reducing the CO2 output of its cars.

Through 2016, Europe's biggest carmaker is committing more than two thirds of its planned €62.4 billion in investments to making its cars and powertrains more efficient and reducing the environmental footprint of its plants.

Winterkorn stressed the size of the necessary investment. "Efficient technology and resource efficiency doesn't come for free," he said.

Bosch Automotive CEO Bernd Bohr cited two factors in reducing costs and improving efficiency. One, he said, are the economies of scale that let suppliers lower the cost of components. "Economies of scale are the most under-appreciated levers for cost reduction," he told the conference.

The other, he said, are lessons learnt from providing parts to companies in emerging economies. These companies, Bohr noted, force automotive suppliers to perfect "the art of leaving things out." He noted that in start-stop systems Bosch provides to Indian carmaker Mahindra, it had to leave out "all features that are nice to have" but are not essential to the functioning of the system.

Peter Bauer, CEO of semiconductor maker Infineon, provided a range of examples how better electronic management of components, systems and processes can yield huge savings. He said semiconductors can help lower electric motors' energy use 25-40 pc. The savings potential for lighting is 25 pc, while between 5 pc and 10 pc energy savings can be realized in IT systems.

Professor Horst Wildemann, who organizes the annual Munich conference, warned of impending shortages of raw materials in general and rare earths in particular. "We need to reduce or substitute our consumption of rare earths," he said. Rare earths provide some of the key components for mobile phones and other IT products.

Wildemann, a professor at Munich Technical University and a management consultant, said better resource management needs to cover a range of areas, including r&d, building management, logistics and recycling.

IT systems, Wildemann said, can also make a major contribution to more efficient resource management. "The growth market of the future lies in the efficient use of resources."

Wildemannn notes in his introductory notes to the conference that, though labor productivity is growing by 5 pc - 8 pc a year, increases in resource efficiency are only 2 pc - 3 pc annually. Companies need to use raw materials more economically, as prices rise and some materials are becoming scarce, he said.

-By Arjen Bongard