Mechanical & plant engineering
In light of increased internationalism and more professional end customers, large projects increasingly require better project cost monitoring, risk management and claims management.
In brief
Challenges and trends
At first glance, the German systems engineering industry appears to be growing strongly. However, this is not true for the entire industry. The order books of power plant, steelworks, rolling mill and chemicals plant producers are full. Yet others such as printing machine manufacturers are facing ever fiercer competition, mainly from low-wage countries. All companies attract a large proportion of orders from export markets, particularly the Middle East.
Some areas of systems engineering are still grappling with the challenges of costs, location and efficiency to become more competitive. Many other manufacturers of large-scale plants have refocused on growth strategies.
In light of greater internationalism and more professional end customers, large projects increasingly require better project cost monitoring, risk management and claims management.
Our approach
Together with our client, we first put together a balanced product portfolio that meets market requirements and reflects strategic goals. We then leverage cost potential, particularly by optimizing the global footprint and adjusting vertical integration. The product portfolio is also optimized with the help of our sales-boosting methods.
To ensure our clients can handle the special challenges of major construction projects, we place particular emphasis on contracting. This involves professionalizing project cost monitoring, establishing systematic risk management and expanding claims management in a targeted way.
Sample projects
Optimizing value creation and location structure
Together with a producer of forming facilities, we agreed on sales and profit targets for each product division. The first step was to adjust personnel capacity in all companies to the standards set. The proportion of outsourced work in design, manufacturing and assembly was also optimized. The location structure was improved by shifting some manufacturing and assembly tasks to Eastern Europe. Finally, to clearly define the individual application areas, we formed business units based on product groups. These business units then took over responsibility for product management, order processing and design.
Program to improve sales and profits
A power plant manufacturer's output and profits were in freefall. To boost EBIT, we developed an action plan for sales and costs. This involved realigning the product portfolio to focus on high-tech products, and value creation was optimized in terms of vertical integration and locations. We also professionalized the handling of major projects. In particular, we established standard procedures and tools for preliminary and final project costing, while at the same time professionalizing technical project cost monitoring to document services and monitor deviating costs. In addition, we developed a risk management system and risk checklists for various stages of the project, and expanded the existing range of claims management tools.
