The engineered products industry has always been a cyclical one. Many companies have been expecting slower growth as far back as in late 2007. The events we witnessed in the years 2007 to 2009 nevertheless went far beyond any normal cyclical fluctuations. For many businesses in the industry, new orders collapsed by 45% and more. Nor was there any sign of improvement, at least not in the short term. Since then, many companies managed to recover and rebuild their business by streamlining processes, retargeting their sales and marketing efforts and realigning their cost base. Quite a few industry segments consolidated or saw the forming of new strategic alliances. Now is the time to think about new strategies on how to grow with the market after these drastic changes, enter into new emerging markets and make use of changing consumer habits, trends and technological developments.
We have developed ways to help engineered products companies emerge from the current turbulence in better shape than before. And we are not just talking about short-term effects. The fact is, there is a positive side to the massive upheavals that are shaking the engineered products industry right now. For those who act swiftly and intelligently, precisely these upheavals now present tremendous opportunities.
Drawing on our project experience, we present an array of tools that are essential in helping companies not only master current challenges, but also get them in shape for the time after the crisis. These tools include methods to boost efficiency, ways to optimize the structure of capital, bold approaches to human resources development, even in the midst of crisis, and the potential afforded by purchasing activities.
Despite all the turbulence that is understandably capturing our attention right now, we must not forget one thing: Global challenges such as population growth and climate change have not gone away – and they are still crying out for solutions. This is precisely where the future holds attractive growth opportunities, especially for German engineered products firms.
Our approach covers all strategic issues for this industry, from reducing costs to achieving operational excellence and supporting growth. In the environment characterized by medium-sized players we tackle different issues in holistic cost reduction or operational excellence programs.
Furthermore, we develop strategies to expand business fields and boost sales. Growth strategies come into play when coordinating the product portfolio, developing new service business models and making the sales organization more professional. Opportunities for optimizing the cost base can be found in product design, improved purchasing and supply chain management and in the professionalization of the global footprint.
Restructuring an industrial conglomerate
We assisted with the turnaround of a systems engineering company. Its product portfolio was streamlined and the predefined target market and segments were adapted. Sales and project management organization was professionalized, and a focus was placed on adding value in engineering, supply and service. Along with cost-optimization actions, this led to a permanent improvement in earnings and the successful continued existence of the company.
Developing a new machine series for the Far Eastern market
A midsize engineered products manufacturer was looking for opportunities to meet increased demand in South Korea and China for standard-segment products, so we jointly revised the machine concept. Design-to-cost programs reduced features of the machines to the exact standard expected in the target market, thus leading to dramatic cost savings. Additional savings were made in purchasing through e-sourcing and supplier-base optimization, thus further reducing the production costs of the individual machine types.
Optimizing the global footprint
The sales markets of a leading manufacturer of lighting systems were steadily relocating to Eastern Europe. We assisted the client in adapting its vertical integration and supply chain to the changing conditions. In the process, wage-intensive and standardized process steps were offshored to Eastern Europe and service/sales organizations were expanded in the key Eastern European markets. The result was lower costs and shorter lead times.