AUMA, a German manufacturing company, knows a thing or two about how to keep things moving. It is in the business of manufacturing valve actuators and gearboxes that are used in process plants, in sectors as wide-ranging as water, oil, and military shipbuilding. The firm opened for business in 1964, and more than four decades later it employs 1,700 people worldwide and has a turnover of around €340m.

But AUMA did not escape the downturn, most notably in the area of workforce management. The family-owned company's biggest challenge has been to reduce its workforce while maintaining productivity within the confines of Germany's 35-hour working week, according to Matthias Dinse, the company's managing director. In part, this has been achieved by keeping things in-house: AUMA has retained core staff while axing those supplied by external labour agencies. The rationale is that by investing in training and education of in-house employees, experience is more likely to stay within the company. Creating value through efficiency drives, however, is not new to AUMA. "This is not a one-off as a result of the recession," says Mr Dinse. "We are constantly analysing and assessing our business processes to see where we can make improvements."

Indeed, German manufacturing firms are globally renowned for their efficiency, which Mr Dinse attributes to two main factors. First, Germany's education system continues to provide skilled workers. Second, over the past ten years German manufacturers have invested heavily in scientific research to acquire knowledge of their business, while simultaneously using specialised management consultants to implement changes necessary.

But Frank Krause, director of competence at Staufen, a lean consulting firm, is keen not to "amplify the cliché" that German companies are more efficient. "Germany has been hit by the recession just like every country," he says. While it may be true that German companies have successfully acquired knowledge, it is important to distinguish between having this knowledge and the ability to implement it competently. "This is a fundamental distinction and one which many companies deviate from," he says.

AUMA, it would appear, has understood the distinction and has taken some steps to eliminate aspects of the business that detract from the creation of value, including excess transportation, overproduction and using more inventory than is necessary to complete a project. Mr Krause warns that companies that fail to evaluate their business and then take steps to address unnecessary waste are unlikely to survive in the current climate.

As a result of research instigated by Staufen, AUMA has moved from using a conveyor assembly to what is known as a one-piece flow process or concept. This means that instead of building five units simultaneously, it now completes one and only then moves on to the next. The outcome is that it takes 30 rather than 50 minutes to manufacture a single unit, thus eliminating costly waste. Another focus for AUMA has been to make information technology (IT) an integral, more efficient part of the business. From the time of their initial enquiry, customers can have their product in their hands in six weeks; ten years ago, they would have had to wait four months.

While AUMA continues to manufacture the core modules of its products in Germany, the recession has led to assembly and modification taking place in wholly owned subsidiaries in different parts of the world. "This way we maximise efficiency without compromising quality," explains Mr Dinse. Because AUMA produces just 80,000 to 100,000 units a year, it made sense to keep the manufacture of the core components at home, thus ensuring quality of materials and suppliers. However, rising import costs, varied industrial standards and increasing demands for local content production in international markets could be addressed by assembling and modifying the product in the local market.

The upside of this is that AUMA now has a better understanding of the requirements of its international markets, knowledge it hopes to put to good use in plans for future expansion into Russia, eastern Europe, Asia and South America. Mr Dinse describes the company's moves to add value by driving efficiency as a "cascade". "We initiate certain things at home and then transfer what we have learned to different countries—always taking into account the different mentalities and levels of education," he says.