NOTE: I wrote and first published the following article on March 22, 2010. In case you missed it, here it is again, with minor edits --MF)
At the very end of 2009, without fanfare, IWC launched a new factory. With the increase in production of IWC in-house movements, the current set-up was simply too small. Even the newer East wing to IWC’s new building didn’t help. I was told that it was too long and narrow, and not well-suited for a sufficient number of machines. With IWC’s growth over the past several years, the factory was bursting at the seams.
To solve this, IWC found a new factory in the town of Neuhausen (pronounced “noy-hausen” and not “noo-hausen”). It was used by SIGG, a large Swiss conglomerate that produces, among other things, water bottles but also arms. Neuhausen is where Rhine Falls is located and, most importantly for IWC, is in the Canton, although not the city, of Schaffhausen. That means that IWC production can still be from Schaffhausen, and just about 5 kilometers away from the main facility.
IWC therefore entered into a long-term lease for the factory. It was intended for use as a center for components, and specifically for the production of movement parts and cases. Assembly still would take place at IWC’s main factory on Baumgartenstrasse in the city of Schaffhausen, A messenger once a day would move completed parts to the main factory.
I had heard about this facility in January, shortly after it was opened, and inquired about it during my visit last week to Schaffhausen. I was surprised when Karlheinz Baumann, IWC’s chief operating officer, asked me if I had seen it. Herr Baumann runs IWC operations, so I was more surprised when he said “wait five minutes, I need to see if I can rearrange my appointments” and then he took me there. I skipped out on some of the press interviews on the new IWC book –getting a private tour of this facility hosted by IWC’s COO really was a scoop. 
Off Herr Baumann and I went by taxi, to a nondescript building without any IWC signage. This was a real factory, and not designed for tourists or tours. We were greeted by a young guy, Christian Indlekofer, whose title reflects his importance: “head of production movement parts”. To the marketing people back at the main facility, there’s no romance or story-line to that role. To me, as a collector, this is what watchmaking is all about.
But technically Herr Indlekofer is not a watchmaker. He runs a factory, including supervising people, orchestrating production schedules, maintaining complex production machinery and dealing with logistics –from raw parts to deliveries. He is not trained in watches but rather is a specialist is “micro-mechanical” work. To him producing a movement plate is like producing a metal component for the medical industry. The issue is how to produce small and precise metal parts.
Currently, 35 to 40 IWC employees work there. Only one floor is open, by early 2011 there should be close to 100 employees at the new production facility on all three floors. I thought the employees might not like being remote from the main buildings, but reportedly they really like it. The smaller group feels more like a “team”. Also the atmosphere appears relaxed, and the facility is convenient. It’s close to public transportation, parking is easier, and –above all else—there is the magnificent Rhine Falls. There’s a ladder leading up to a window, and you can get on the roof and see the Falls. Out there, and indoors at a different area, it’s a nice place for lunch. 
Production launched last November, and now 40 to 50% of movement parts for in-house movements are made in Neuhausen. Some parts can’t be made by IWC –jewels, Glucydur balances, Nivarox springs, etc. For others, like screws, it makes little sense not to buy them. But “in-house” movement part production has more value than claiming parts are “in-house” –it allows control over the supply chain and therefore production timing. Above all else, it allows control over quality.
Previously there were 2 machines and now there are 15. Each costs more than 500 thousand Swiss Francs, which reflects the major investment that IWC is making toward movement production. Even other companies, like executives from Vacheron, have visited this new facility to understand its processes.
In addition to the production machines –some for stamping and milling, and others for spark erosion production of fine parts—there are two Zeiss quality control machines, These use optical analysis by a computer controlled program to measure each part for exact precision. The idea, of course, is to minimize incorrect production, which of course wastes time and costs money. Every part is now individually evaluated for exact quality control. Currently about 1 or 2% need reworking –which is considered very small. A major production goal of IWC is absolute quality control at every step of every process.
All the machinery is either oil or water cooled, and can work 24 hours a day. Around 500 to 1000 pieces are now produced daily, with production in trays of varying sizes. Also, there is an area where prototypes are produced, which can be done on a one-off basis. Except for hand finishing –engraving—the entire component process is generated from computer input.
There are three shifts, so the facility is open all the time, although the 12am shift now doesn’t do actual fabrication. Later this year or early next, the third floor will open and be used for case construction. The first floor also will open for additional finishing. The entire facility is intended to handle production of movement and case components, including anticipated growth, for at least the next 10 to 15 years.
The Neuhausen factory isn’t a glamorous facility designed for tours. It’s a real facility, where the metal is processed. The pieces start out as small barquets of brass or steel, and evolve into plates and bridges and rotors. It’s the heart of the movement construction process. And if movements are the heart of IWC’s watches, it’s the heart of IWC.
But, even more significantly, this factory demonstrates where IWC is going: to more production, more in-house fabrication, and with absolute quality control. Neuhausen reflects IWC’s development and IWC’s plans for the future. It’s a smart move.
