Maflow: air conditioning hoses for the automotive industry

Maflow is an international group specializing in the production of air conditioning hoses and other applications ensuring the transport of liquids and gases in passenger cars and utility vehicles. In 2009, as a result of the crisis on the automotive market, the company went bankrupt, but a year later it was bought by one of the largest industrial groups in Poland – Boryszew SA – so today it aspires to be the world’s largest manufacturer of air conditioning hoses.

Dr. Piotr Wiśniewski, managing director of the Maflow group, tells Mariusz Krysiak about the road to success.

What is the situation of the group today? Did you manage to get Maflow out of the worst oppression?
Certainly yes. Today, the situation in the company is stable, we observe a tendency to improve significantly. In other words, we generate consolidated profits within all units, which is key to thinking about further business development.

But it is not a simple task …
As part of the security policy, our clients do not depend on one supplier – one supplier may have no more than 50% of the market. We, as a group, have a 50% share in the production of air conditioning hoses for brands such as Audi or Volkswagen in Europe. We were also appreciated by other concerns: Jaguar Land Rover, Volvo and Renault. Summing up, the package of orders is already very large, and I would like to remind you that when Maflow was acquired by Boryszew in 2010, the same customers who entrust us with the maximum part of production today hardly believed that this could happen.

They saw that the restructuring was successful and did they believe it?
When we started our partners wondered if we would be able to go straight at all. It is true that four years ago the Maflow group was not in practice a group, but only a collection of several companies with the same name. It was necessary to develop a management concept and strategy, using a substitute for an organizational structure to follow this. In Poland, such an approach to management is still a new thing, because few people in our country come up with the idea to answer the questions about the main thoughts and principles of governing a group or a large plant. Additionally, the organizational structure must be built in such a way that it supports the improvement of efficiency, diligence and honesty. If there is no such organizational structure, it is not easy to come up with it. We did it and in 2011 we published a common strategy for the entire group, which primarily involved rebuilding relationships with regular customers. It wasn’t easy …

Why?
Let me give you such an example. One day in 2009, all orders from BMW suddenly disappeared, and thus the large company overnight ceased to be a customer of Maflow, explaining that it was not interested in further cooperation. It is worth emphasizing, however, that it happened at a time when the Italian company was going through the liquidation bankruptcy process, and today we are a different organization and a completely new entity with Polish capital.

Without trading, it was hard to look for efficiency improvements, so this blow motivated us to act. Fortunately, we were able to quickly rebuild the trust of our clients. Today we have huge projects with VW. Practically from 2016, only Maflow will supply air conditioning components used in Porsche cars.

What about this BMW?

I am speaking already because it is a very important matter for me; the moment that inspired us to continue working. In November, we were to restart production for BMW, one of the most demanding customers in the entire industry. Then their representative came to us for the “Run at Rate” audit. It was the same man who made the decision in 2009 that BMW would end its partnership with Maflow. For two days he watched the production very closely. This time he assessed us positively and the road to orders from BMW was opened.

After the meeting, I invited him to dinner and asked him what he would have thought back then, in 2009, if I had told him that four years later he would run a production line at the same factory without any incompatibilities. He replied very bluntly: “I would have thought you were crazy.”

At the end of this thread, I would like to recall one more story from an audit in China. We then heard from the auditor that he was “the fan of Maflow”. It’s hugely uplifting and motivating when the greatest people in the world come up to you and say you’re really good.

Fot. Maflow

The story with BMW actually ended well.
I would summarize both this case and our entire journey – from the takeover to the present day – with the phrase “from zero to hero”. If a company comes out of bankruptcy and becomes profitable in four years, that’s something, and we’ve gone even further and in 2016 we intend to be the largest producer of air conditioning ducts in the world. It is worth asking yourself how this is possible. I would like the answer to be clear …

Well, we can buy the machines that everyone has. If we are more experienced and wiser, we will position them a little better than the competition. We have to use the same components as everyone else and we will not perform miracles in this regard. So how can one company differ from another? Certainly the team, the quality of people’s work and their enthusiasm, as well as the approach to the tasks performed. We are a relatively young team, yet we are trusted by clients from all over the world. It seems to me that building this team and eagerness to solve problems are the key to success.

This key is also the good quality of products.
Yes, it was the improvement of the efficiency and quality of the product that was the second point of our development strategy. In order to be a partner of large concerns from the automotive industry, you cannot exceed the level of 50 ppm, i.e. deliver more than 50 defective parts per million. In Maflow, this ratio is 17 ppm. It is the quality of our products that means that we have the best possible ratings for all clients and we are approved for all projects. In addition to quality, of course, price matters. But without quality, standardization and high-level production, we would not be able to offer the right price.

And how do you take care of this quality in practice?
It is commonly believed that the quality department is to work on controlling product quality. But it’s not like that! All departments of the company at every stage of the process – from purchasing, through accounting, production, technical departments and logistics – are to do their job well and thanks to this, the end product will also be good. This is the key to success. Until three years ago, we had a firewall in production. We no longer use this method today. We send the products to the customer immediately. But to get to this point, you had to get to know the employees and machines very well and improve the workplace at every stage, so that in the end you get the best possible product.

Improving the quality and lowering the unit costs of manufacturing products also means investments …
Over the last three years, we have spent EUR 30 million on various projects in Poland. As a result, it was possible to acquire new projects with higher margins. Today we have a new machine park, we have replaced devices with hydraulic drive for electric ones. There is little to be done in Poland. Toyota auditors told me that the Polish factory is the best A / C hoses plant in the world. We do not invest that much in the country today. Now it’s time for the rest of the bets, because there the wave of winning projects came about a year later and there is a lot to do.

And the development of the technology itself?
We are the owners of several important patents in the field of automation of the production process. We manufacture hydraulic hoses for the transport of gas and liquids, which must be resistant to vibrations and twisting and in which no leakage of more than 5 g per year can occur. Leaks appear most often at joints and as far as the mentioned technologies are concerned, we are the owners of the patent for joining aluminum with rubber. It is clear that some of the activities that we are implementing today were invented by Italians, but the automation of production processes is only our solution.

I’ll change the subject. Since you started practically from scratch, how did Maflow come to be bought by Boryszew?
This is the business risk that is sometimes worth taking and then winning. The owner has had little experience with a very large and extremely demanding Automotive market. From the first day after the acquisition of Maflow, my job was to go to and talk to clients. They asked what we were going to do to fulfill their orders. Let us remember that the company in bankruptcy has been acquired. Then I replied to them: “I believe in something,” which means that I simply believe in our success and success. I needed time to gain experience myself, and when I meet my clients today, I don’t say “I believe” anymore, but rather firmly say “I know” because I am sure of what I am saying. The last four years of our history are the best proof of this.

Are there any synergy effects between Maflow and Boryszew?
At the moment, there are no major benefits from the presence in the Boryszew capital group. We are working on a project of jointly purchasing some components, but it is still in its infancy and we have a lot of work ahead of us in this area. We also have several projects at an advanced stage of planning. Maflow brings non-material support to the Boryszew group. New management systems, global presence and great enthusiasm are what we want to share with other companies in the Boryszew group.

Fot. Maflow

Finally, I am asking for a forecast regarding the Automotive market.
The automotive market is so specific that so far in the case of major problems that appeared in 2008, it had to slow down, but was supported by governments. At this point, it is no longer necessary as the market is growing. Additionally, we have markets with a lot of potential. There is an indicator to show this, and that is the number of cars per 1,000 inhabitants. In the US it is over 700, in Europe around 630, in China only 37, and in India just 13.

There is a lot of work to be done in emerging markets, and most importantly, they are starting to mature and customers will want better quality cars than before. It is obvious that in Europe and in developed markets the status quo will be maintained, but I would expect the development of the Automotive market in countries such as India, China, Brazil and Mexico. I will say more: Maflow is already there! In addition to European locations, we have our plants in China, India and Brazil, and we are preparing to launch a plant in Mexico.

So what are the plans for the future?
We are fighting very hard to cooperate with GM and Nissan. That’s about 14 million cars in the world, so it’s a huge piece of cake to eat. Our company grows by approximately 20% year on year in terms of sales volumes, so to be able to do all of this in the future, we must employ people in all positions – from production to engineering. Maflow is a great opportunity for talented people from Poland to go out into the world and gain invaluable experience.

We send our employees on such 2-3-year episodes, for example to China. We arrange for them an apartment, school, insurance, and normally we relocate managers. It is one of the few such companies with Polish capital. We also have a very extensive internal recruitment program. Some of the directors at Maflow today started out as plant operators or machine setters in production. We sent them to study, provided training, and helped them develop with the organization.

So, as I mentioned, the conclusion is obvious – you can buy the same machines everywhere, implement identical procedures, operate on similar principles, etc., but the most important thing in all this is people. This is what makes us stand out on the market and it is in our team that we will invest the most in the near future. In addition, I am currently working on a new strategy for our development for the coming years, but it will not be announced until the end of the year, so I cannot yet reveal the secret.

Volvo appreciates the Polish factory
Boryszew SA The Maflow branch in Tychy is the first A / C hoses factory to receive the Volvo Cars Quality Excellence Award. On December 18, 2013, a representative of Maflow received a prestigious award in Sweden for the high quality of the cables produced, including for Volvo XC70, XC90, C30, S80 and V70.

The Volvo Cars Quality Excellence Award recognizes the car manufacturer’s outstanding efforts to meet Volvo’s highest standards. Every year, companies working with Volvo are assessed in four categories: corporate social responsibility (CSR), technology, quality and cost optimization.

Boryszew SA. The Maflow branch in Tychy obtained the highest grade – A – in 12 assessed criteria, such as having the necessary certificates or meeting the MMOG / LE standard. This award is a recognition of the commitment of the Tychy factory to achieve the highest quality products.

The high quality of air-conditioning ducts produced in the Maflow factory in Tychy is also confirmed by the JLRQ status obtained in 2012 and maintained to this day by JLR. Just like the VQE Award, the JLRQ status means that the supplier meets all the manufacturer’s requirements in terms of, among others, high-quality products, optimization of production costs or timely deliveries.