The first step towards expanding our product portfolio was the acquisition 25 years ago of MULTIVAC Marking & Inspection. The company was called MR Etikettiertechnik in those days and today it is a firmly established part of our Group. The proof that this step was absolutely correct strategically is shown by the fact that most of our packaging solutions supplied to our customers today are equipped with a labelling, marking or inspection solution, which is manufactured within the company. In all these areas we have systematically extended our product range in recent years. In addition to inline, cross web, and transport conveyor labellers, as well as a wide range of printing systems, today we can also offer our customers visual inspection solutions, X-ray inspection systems, metal detectors, and checkweighers.
That is correct. But a much more crucial milestone was in fact the founding of the Systems Business Unit, which is celebrating its ten year anniversary this year. We now have the most comprehensive expertise in line systems and automation of anyone in the market, and we are able to offer our customers complete solutions for every requirement from one single source. Our product portfolio includes a wide range of handling solutions - from the automatic loading of products into packaging machines to intelligent converging concepts and right up to fully automatic crate and box loading.
Seen overall, we have established that today more than ever the decision is being made by our customers to purchase complete packaging lines, so that they can utilize the clear benefits in their daily operation. We are also observing a growing interest in our higher-level systems for the control of line functions, since these enable the complete line to be operated significantly more efficiently, because the settings on the individual modules are largely replaced by a central line control.
Very successfully, I am pleased to say. Our objective is to be the best-in-class supplier in our market segment and to systematically expand our market share. We have definitely been successful in this for both traysealers and thermoforming packaging machines. Today our machine range covers all the possible output requirements of our customers.
In this regard I would particularly like to highlight our new generation of thermoforming packaging machines, the X-line, which we presented for the first time at interpack 2017. The X-line sets a new benchmark in the market. Thanks to its comprehensive sensor system, it offers our customers many benefits in terms of process reliability and pack quality. In addition to this, the X-line is also IoT-enabled due to its network capability, and this contributes significantly to its future-proofness.
We actually owe our success primarily to our organic growth. But acquisitions do however assume greater relevance, when one wants to expand the equipment portfolio with products, which have not up to now been part of the core business. By acquiring companies or branches of companies, which have specialised in these products, we are able to significantly reduce the time and effort in building up the know-how within our own company. This also includes, for example, the relevant product and market expertise. The biggest challenge however is to integrate the new company or individual business units intelligently into one’s own company organisation and to fully embrace the benefits, which are presented by such an acquisition.
MULTIVAC’s strategy on acquisitions is geared towards ensuring that in future we can position ourselves much more strongly in the market as a supplier of complete solutions - such as being able to supply solutions for process stages, which are upstream of the packaging procedure, like portioning or slicing for example. It is for this reason, that we have recently acquired the slicer branch of VC999 and a majority holding in TVI. The benefit of these acquisitions for us is that we have significantly reduced the development time and therefore the time-to-market for these products.
To get straight to the point: it increases the complexity in our organisation enormously. Today things move on a completely different scale - and an organisation must be able to cope with this. In order to illustrate this point, let me give you a few numbers: in 2007, in other words just eleven years ago, our product portfolio comprised a total of 48 product groups. Today there are 135. In the case of thermoforming packaging machines, there were then just eight machine groups, and today we offer 26 machines in this product segment. This shows that we have continued to adapt our product portfolio to the requirements of the market as regards different output categories and technical specifications. Our product portfolio has therefore almost trebled - partly thanks to the development of new products but also due to the expansion of our core business.
In order for all this to succeed, it is necessary to have systems capable of reflecting this complexity. And we need staff who are able to master this complexity. And not just in our Sales organisation but also in other sectors of the company, such as the Design and Manufacturing departments.
That is true. In recent years we have, for example, continued to expand our business in the medical and pharmaceutical sectors. Today we offer a complete range of entry-level machines for automatic thermoforming packaging, and our product portfolio in this sector extends right up to highly complex lines, which are equipped with automatic infeed systems. When it comes to packing industrial products, we are also undertaking many interesting projects, where our customers benefit from our comprehensive expertise. If one looks at our market coverage in all regions of the world, we now have our own global network of 85 Sales and Service subsidiaries.
In the medium term we are concentrating on further expanding our position as a system supplier. We will achieve this by extending our product portfolio, but this requires organisational changes in order to be able to reflect the high level of complexity within the company. I am convinced that, only by employing this holistic approach, will we be able to exploit all the benefits of synergy and continue to offer added value to our customers.
In the longer term we will develop from a supplier of solutions to a digital company. From this will come new business models and also new products for our customers. We have already undertaken the first steps in this direction, since we can now already offer digital services such as our Customer Portal with integrated Spare Parts Webshop, through which we currently generate a third of our global spare parts turnover. This sales channel offers our customers clear benefits - the time and effort in processing orders for example can be greatly minimised by linking our customers’ purchase order systems to the MULTIVAC Shop. We are also currently working at high speed on further developing our Customer Portal, allowing us to offer our customers many other digital services.
Yes, because it heralds the start of a new era in thermoforming packaging. The X-line is today already equipped for digitalised production and future technology. Thanks to its comprehensive sensor equipment, process data is constantly being generated, which is then transmitted to the MULTIVAC Cloud for further analysis. We have also prepared the X-line for other ongoing solutions such as Industry 4.0, preventative maintenance and optimisation of overall equipment effectiveness.
In more concrete detail: The machine is equipped for example with Pack Pilot, which offers our customers huge additional benefits when setting the parameters on their packaging machine. Pack Pilot is based on expert knowledge, which results from more than 1,000 projects that are implemented every year. This enables the machine, for example, to be set up to the optimum level using machine control support. When new recipes are created, Pack Pilot sets the parameters for the machine by itself to the optimum operating point, using the features for product, pack, and packaging material that have been selected. This means, for example, that start-up times can be drastically reduced during product changeovers.
By this I mean all types of services, which we can provide for our customers on the basis of the process data collected from their machine. The first stage is the visualisation of process data, and this offers our customers an important basis for the optimisation of their processes. The objective is ultimately to offer our customers a range of services, which are based on the analysis of this data, such as analysis of overall equipment effectiveness, condition monitoring, and predictive maintenance. We want to support our customers in operating their equipment as efficiently and cost-effectively as possible, so that they can produce packs with maximum quality.
Our medium-term aim is to continue developing our Service portfolio to include these Smart Services, and thereby to open up new areas of business through digitalisation. Here too we want to be the most innovative company in the market. It is for this reason, that we are investing between 15 and 20 million euros annually in research and development. We already employ some 120 highly qualified and motivated engineers in this area alone. We protect our intellectual property rights through a sustainable patent strategy; we have at least twice as many patent families as all our competitors put together. It is our claim that our solutions, both in their technology and their cost-effectiveness, are the leaders in the market and therefore create the lowest total cost of ownership (TCO) for our customers.
And justifiably so. When developing new areas of business and new products such as digital services, the main objective has to be to generate added value for our customers. It is only through this, that they are marketable and relevant to our customers. As I have already mentioned however, one needs an organisation, which can also implement the rapid development of our range of services. When developing these digital products, other preconditions are required from those necessary for developing new machines. Our organisation therefore requires specialised staff, who can also adopt an interface function with the traditional business units, when it comes to developing these new products, and who can then exploit the synergies with the existing areas of business. It is precisely for this reason, that we have created a new Digitalisation Department, which can undertake these tasks.