Products & Supply Chain

4.1 Product Responsibility

Dialog with Customers

Responsible Marketing

Corporate Marketing and our Code of Conduct, which every Voith employee abides by, ensure Voith products are presented to customers truthfully and transparently. The actions of each and every Voith employee are bound by the unwavering principle that information should be presented fairly and truthfully. We provide regular instruction on the scope of our Code of Conduct through online training sessions (including compliance training sessions) and in employee appraisals.

Moreover, Voith Paper’s marketing approach ensures that technically complex solutions are presented by select experts from our R&D centers (York, Heidenheim, Västeras, Shanghai), and discussed with customers. If necessary, the marketing activity is supported by the Group Division’s, or even the holding’s, top management team. Internal coordination meetings ensure that global knowledge is bundled in relevant projects.

Research & Development

Research & Development Expenditure

Research & Development expenditure

GRI

in € million

FY 2015/16

 FY 2014/15

 FY 2013/14

 

R&D Expenditure

208

210

216

in %

 

 

 

Percentage of Revenues Dedicated to R&D

4.9 %

 4.9 %

 5.2 %

Collaborations Deliver Key Findings on Future Viability

Voith Paper Collaborative Projects

Since its launch in 2015, Voith Paper has been involved in the industry-wide “Fibres & Paper 2030 – Shaping a Sustainable Future” project, which is coordinated by the German paper-technology foundation PTS. During the project’s 15-month timeframe, a scenario analysis was produced which addressed future business fields and customer requirements for fiber-based materials.

Furthermore, Voith Paper, together with some 30 other paper-industry customers and suppliers, is part of a pre-competitive cluster being developed by the CEPI (Confederation of European Paper Industries). The project centers around the use of DES (deep eutectic solvents), which are used to dissolve fibrous materials to produce pulp with minimal energy, emissions, and residues. In accordance with the CEPI roadmap, the aim is to achieve an 80% reduction in CO2 emissions and increase value in the sector by 50%.

Additionally, Voith Paper is one of the initiators of the pan-EU Provide project. It aims to achieve a dramatic reduction in the carbon footprint in terms of the use of wood, particularly in the production of cellulose and paper. Together with several universities and research institutes, the consortium of almost 20 industry partners is researching a radically new process to separate wood, and in doing so to produce cellulose, hemicellulose, and lignin with low CO2 emissions. It is also researching ways to process used paper in a more environmentally friendly manner. The project runs until summer 2018.

In the 2015/16 fiscal year, as part of the recently launched Kopernikus program, Voith made its own application under the SynErgie consortium, the scope of which was approved as planned. The project was launched on September 1, 2016 [Link in German only].

Voith Hydro Collaborative Projects

Voith Hydro is one of nine industry and science partners involved in the Hyperbole research project. It is funded by the European Union, and is investigating ways to enhance the operating range of Francis and pump turbines. The aim is to improve the integration of renewable energy sources into the grid through the more flexible operation of hydropower plants.

Furthermore, Voith Hydro is also collaborating with the Leibniz University of Hanover, Germany, on the further development of hydroelectric power generators.

Reliable and Safe Products

Quality Management in Our Business Areas

GRI  
G4-DMA (Customer Health and Safety); G4-PR1 Through its internal management system, Voith Hydro ensures that quality standards and certificates are uniform for all units globally. All of Voith Hydro’s locations are certified according to the ISO 9001 international quality management standard. Regardless of the operating location, the European standard applies at all times as the minimum standard for machine and plant safety. Through active product monitoring of the installed machines, Voith Hydro also ensures that new findings gained from operation are incorporated into machine optimization.

With its EPEX (Excellence in Project Execution) project, since the 2014/15 fiscal year Voith Hydro has aimed to achieve excellence in executing projects. EPEX focuses on process and product standardization as well as on strengthening customer focus.

As KPIs Voith Hydro uses our internal GPS Standards for turbines & generators and their auxiliary systems, which we developed internally and which are based on our own extensive experience as well as harmonized standards.

In the reporting year the Owner Quality module was established as part of the project. All internal and external inspection and test plans have been revised, and now reflect current market requirements.

Moreover, several major successes have been achieved during project implementation in the reporting period. Among them, many pilot projects are already up and running according to the new standards. Furthermore, numerous employees have been trained using the train-the-trainer model.

In addition, as part of the continual development of Voith Hydro’s quality management system, a special fault-classification code was developed and implemented in the SAP fault documentation system in the reporting year. Now, according to the Pareto principle, fault clusters can be calculated and displayed at the press of a button. On the basis of this, the various functional units in the company are now regularly asked to initiate targeted improvement measures.

Voith Paper sees quality as a key differentiator that distinguishes it from the competition, and has anchored the subject in the top management level. The fundamentals of the Voith Paper quality management system are set out in Group Directives, process descriptions, and work instructions. Necessary reviews and corresponding documentation are controlled mainly via the internal ERP (enterprise resource planning) systems. Potential health, safety, and environment impacts are taken fully into consideration. To continuously improve the processes, Voith Paper uses various tools such as Ishikawa, FMEA (Failure Mode Effect Analysis), and 8D reports.

KPIs in the area of quality at Voith Paper include quality costs, based on the German DIN 55350 standard, which also serve as the basis for recognized benchmarks. They are complemented by internal and external fault analyses. The operational excellence results are recorded and evaluated in an Excellence database. The development of results has been positive on the whole since the project started in the 2014/15 fiscal year.

Internal Voith standards exist for the design of safety equipment. Risk assessments are performed routinely, whose results are taken into consideration during the product development process. Special regional aspects are taken into account by the Voith Paper Quality Order Manager organization, and allowed for when implementing the contract.

In the reporting period, one of the focus areas for Voith Paper was the further roll-out of its Modular Key Component project, which targets the consistent improvement of product quality. Under this project, paper machine components are harmonized irrespective of the paper grades to be produced, resulting in a reduction in mechanical engineering variance. This way, components can be used more universally and can be better combined, resulting in a drop in the error rate and an increase in quality. The other area Voith Paper focused on in the reporting period was the production and material quality of suppliers’ products, which always need to meet the same high standards we expect of our own products.

Voith Turbo maintains a uniform and comprehensive quality management system, which is also certified to ISO 9001. All employees are trained on quality issues and consistently implement this system. Several quality programs are currently running at Voith Turbo to increase the reliability of its products even further. At the same time, Voith Turbo seeks a close relationship with customers to allow their experience of daily system operation to be incorporated into further product development.

In the reporting period, the existing Quality departments were consolidated within the CTO organization. The idea behind this is to achieve global harmonization and standardization, allowing for individual industry and customer requirements. The three main certification activities are now taken care of by a single point; this also ensures that the shared document control system is used uniformly and efficiently. The various methods to ensure quality, such as Six Sigma, 8D, and FMEA, are also bundled in a dedicated unit for the entire Group Division. The holding and evaluation of customer satisfaction surveys, the corresponding internal lessons learned, and the handling of customer complaints are also coordinated centrally. Last but not least, attention is paid to ensure that quality assurance processes are efficient around the world, and that regulatory and legal requirements on future products are met.

The new organization at Voith Turbo also ensures that the relevant experts in the field of quality are involved early on in innovation processes. Among other things, this ensures that material quality and/or compliance regulations are respected. In doing so, we generally follow the principle of only promising what we can deliver – on time, in high quality, and to the agreed specification.

Voith HydroSchool

 GRI  
 

Voith Hydro is faced with a particular challenge, as the long operating life of hydroelectric power plants requires several generations of employees to be trained on existing technology to ensure optimal operation and maintenance of the plants. The Voith HydroSchool takes these requirements into account through targeted training courses.

4.1.2 Our Products’ Environmental and Social Impacts

Product Impacts by Group Division

Voith Paper

Progress Regarding Social and Environmental Impacts

 GRI  
G4-EN27

23 of the 34 new products launched are noteworthy for consuming fewer resources.

For instance, the InfiltraDiscfilter (IDF) disc filter when used in a SaveAll application considerably reduces water consumption. Thanks to the wear-free construction of the filter segments, fibers can be maintained efficiently in the process, and the circulation water can be reused in a huge variety of ways. Furthermore, less organic sludge accumulates in the water treatment plants.

The following three products offer energy savings of between 10 and 30%:

  • The EvoDry drying cylinder, made from high-strength steel, increases heat transfer by 7% compared to conventional cast iron cylinders. This not only brings benefits in terms of energy consumption – it also reduces construction costs thanks to its smaller footprint (shorter oberall length) and places up to 30% less weight on the sole plates.
  • The new InduraClean solution requires around 20% less electricity to deliver the same filtration efficiency and production throughput.
  • The new The Wall disperser filling offers a higher service life alongside a 30% energy saving. And the new PeakElement felt dewatering fabric helps reduce thermal energy by over 10%.

In the reporting period Voith Paper also developed a new steam-heated hood for tissue production. It is highly beneficial in regions where gas is unavailable as a fuel or where excess steam can be utilized from other production processes. Three of these hoods, which also greatly reduce the risk of fire, are already being used successfully by customers.

Another new product for the tissue market is the TissueLev unit, which increases dryness, reduces thermal energy consumption, and increases both production safety and efficiency. In the reporting period the product was tested successfully in the market, with the product launch planned for the current fiscal year.

Furthermore, the following Voith Paper products are helping to conserve resources:

  • The new MasterJet headbox with IntegraDamp reduces energy loss compared to the previous generation of technology.
  • HydroSeal technology brings sealing-water savings and reduces the amount of drive energy required.
  • CleanWeave dryer fabrics offer improved cleaning efficiency with constant dryer-section drying performance.
  • The HHT coating for Yankee cylinders delivers energy savings with improved heat transfer.        

Recycling in Detail

 GRI  

G4-DMA (Products and Services); G4-EN27

The loss of large amounts of graphic paper such as newspapers and magazines means that fewer fibers, which are often only used once, are introduced into the recycling loop. In turn, this reduces the strength potential of the used-paper mix. This relationship represents a specific challenge for Voith Paper, so it is working on new solutions to improve the strength potential of fibers before further processing. It is an important contribution to maintaining the recycling loop.

As a specific example of this, in felt production pure polyamide fibers are reused as standard in the production process. In the Business Line Fabric & Roll Systems, polyphenylene sulfide (PPS) and used PPS fabric production waste is recycled and used to produce PPS yarns. The plastic is produced as a byproduct of dryer fabric production.

At Voith, we use KPIs to depict and monitor the recycling rate: The percentage shares of recycled PPS yarn and recycled internal waste in relation to total waste represent two important KPIs in this regard.

Voith Hydro

Reducing Noise Emissions

 GRI  
 

Voith Hydro takes noise reduction into consideration right from the system design stage. An Acoustics Officer at the central engineering department promotes developments in the field of noise reduction, with the corresponding soundproofing knowledge available globally to employees in the operating units. The aim is to expand the spectrum of technical solutions, and to publicize them even more widely. Power plant operator employees also benefit from these activities, especially as they are exposed to a lower noise level when performing maintenance work or inspection tours. Furthermore, this means the neighboring community does not notice the noise as much, thereby further increasing the acceptance of green electricity generation from hydropower.

To examine and improve the generator soundproofing solution, Voith Hydro analyzed the noise generated by a hydropower generator as part of two large special measurements. To obtain insights on reducing turbine noise emissions, a load was introduced in the housing structure. Noise reduction was investigated computationally by increasing the turbines’ casing thickness. The vibration and sound radiation of an exposed penstock was analyzed using numerical calculation methods (FEM – finite element method) and initial measures evaluated.

Progress Regarding Social and Environmental Impacts

 GRI  
 

An ever-increasing number of projects globally are using Voith's environment and resource-friendly technologies. Among them, last year we installed the first of four Francis turbines at Brownlee Dam in Idaho. Similar turbines will also be used in coming years at the US Army Corps of Engineers’ Center Hill Dam, where they will increase the oxygen content of water flowing into the valley from 0 to 6 mg/liter.

Furthermore, in the previous fiscal year a new turbine with fixed impeller blades was put into position at the Ice Harbor run-of-river hydropower plant in Washington State. Through modifications to the components, the conditions for fish swimming downstream is improved. Moreover, two variable blade turbines will also be installed at Ice Harbor which are also specially designed to aid the passage of fish.

In the United Kingdom, in the reporting year Voith was commissioned to modernize the Mucomir small hydropower plant in Scotland, which has been in operation since 1962.

Voith is taking care of the rebuild, installation, and commissioning of the plant’s turbine unit, the exchange of the digital controller and hydraulic power units, and the rehabilitation of the generator. The construction works are set to be completed by fall 2017.

Once it has been modernized, the Mucomir small hydropower plant will meet high environmental standards. Thanks to the special design of the new turbine impeller, the negative impact on fish will be reduced, allowing them to pass through the turbine. The power plant operator, SSE, is thus taking into consideration regional fishing interests, and recognizing the significance of the plant for fish migration in the local fishing area.

Voith Turbo

Challenge: Long Service Life

GRI  
 

In the reporting period Voith Turbo developed an obsolescence management system, which identifies, manages, and controls the natural and artificial aging or non-availability of a product, not least from an innovation viewpoint. To give an example, Voith Turbo offers a system for use in buses that allows driveline monitoring over the entire lifecycle. The bus operator is informed automatically of any impending malfunctions, which in turn improves operational reliability and almost completely rules out spontaneous vehicle failures.

4.2 Responsibility for Supply Chains

High Procurement Volume, Heterogeneous Product Range

Purchasing Volume

Procured Production Materials by Value

GRI

in € million

FY 2015/16 

FY 2014/15 

FY 2013/14 

G4-12 

Total purchasing volume production materials

1 823

 1 830

1 770

Electricals/electronics

 173

 171

 156

Cast parts

 138

 138

 141

Subcontracting

 196

 149

 129

Structural components

 280

 253

 247

Steel/semifinished products

 53

 59

 51

Welded structures

 85

 84

 78

DIN/standard components

 60

 50

 46

Roller bearings

 42

 38

 34

Hydraulics 

 39

 39

 37

Forged metal parts

 39

 35

 31

 

 

Active Suppliers

Active Suppliers

GRI

Number

FY 2015/16 

FY 2014/15 

FY 2013/14 

G4-12

Total

23 159

21 543

22 555

of which new suppliers

n.d.

n.d.

 n.d.

of which preferred suppliers

n.d.

 n.d.

n.d.

Regional distribution in %

 

 

 

Germany

35.4

33.9

33.9

Europe excluding Germany

 23.0

 21.6

20.8

Americas

 27.8

 28.3

29.8

Asia

 12.7

 14.8

 14.1

Other

 1.1

 1.4

 1.4

 

Procurement Markets

Procurement Markets

GRI

Regional distribution of purchasing volume (in %) 

FY 2015/16 

FY 2014/15 

FY 2013/14 

G4-12

Germany

38

40

42 

Europe excluding Germany

 23

 22

21 

Americas 

 23

 22

27 

Asia

 15

 15

10 

Other

 1

 1

in € million

 

 

 

Purchasing volume

 2 479

 2 540

2 473

Number

 

 

 

Different countries of origin for suppliers

84

 84

 82

Country-specific GPTs

Country-specific GPTs

GRI

Number

FY 2015/16 

FY 2014/15 

FY 2013/14 

 

Country-specific GPTs

21

21

n.d.

of which new

 none

 none

n.d.

of which updated

 none

none

n.d.

Updating of GPTs in FY 2016/17.

 

 

 

 

Use of Conflict Minerals

 

GRI  
 

The EU has still not clearly defined its position on the US’s Dodd-Frank Act concerning the use of conflict minerals. In addition to a current amendment to EU legislation, it remains to be seen whether the US government, which has been in office since 2017, will revise or abolish the Dodd-Frank Act, as announced. To prepare in good time for the new regulations, in the 2013/14 fiscal year we established a working group consisting of representatives from Purchasing, the Legal Department, and the central function Corporate Sustainability. The aim is to record and evaluate all information centrally, including related customer inquiries, and prepare action recommendations for Voith.

 

Scope of Training

Training Purchasing Employees on the Scope of GPTs and/or Workers’ Rights and Supplier Working Conditions

GRI

Number

FY 2015/16 

FY 2014/15 

FY 2013/14 

 

Purchasing employees globally

 520

n.d.

n.d.

Trained Purchasing employees globally

 520

 n.d.

n.d.

Hours of training of Purchasing employees

 5 128

 n.d.

n.d.

Employees = persons according to Job Family model

Supplier Self Assessment and Evaluation

Supplier Self Assessment

 

Suppliers Who Have Filled Out a Self Assessment

GRI

Number

FY 2015/16

FY 2014/15

FY 2013/14

G4-EN32; G4-LA14; G4-HR10; G4-SO9 

Initial self assessment

2 430

2 156

1 400

 * When reviewing existing and new suppliers, Voith always takes their working practices into consideration. A separate evaluation of the percentage of new suppliers that have been evaluated is not available

Supplier Evaluation

Evaluations of Existing Suppliers

GRI

Number

FY 2015/16 

FY 2014/15 

FY 2013/14 

G4-EN33; G4-LA15; G4-HR11; G4-SO10

Evaluations (individual processes)

2 441

 4 655

6 386

Suppliers evaluated

1 956

 3 814

 4 890

Suppliers audited

k.A.

 k.A.

k.A. 

in %

 

 

 

Supplier Self Assessment ratio (share of the invoice volume obtained from suppliers
for whom there is a valid self assessment)

59.2 

61.7

36.0 

Sustainability ratio

 85.4

 84.0

74.0 

Share of invoice volume placed with evaluated suppliers

 68.0

 62.0

71.0 

Invoice volume in € million

 

 

 

Volume of invoices with suppliers for whom an up-to-date, approved supplier evaluation was available 

 1 274

 947

1 188 

Supplier Compliance

Supplier Compliance

GRI

Number

FY 2015/16 

FY 2014/15 

FY 2013/14 

G4-EN34; G4-LA16; G4-SO7; G4-SO11; G4-HR12; G4-PR2

 Reports regarding suppliers via the Compliance Helpdesk

0

 0

 0

 of which reported violations against environmental standards

0

 0

 0

 of which reporting violations against social standards

0

 0

 0

Blocked suppliers*

10

7

1

 * Only in the context of the Blocked Supplier Concept (violations of compliance and/or sustainability guidelines), excluding bankruptcies and blocking owing to technical quality defects or export controls.