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RESULTS, RESULTS, RESULTS Diagnosing your business - 30 days to identify opportunities to revitalize and secure your competitiveness The scale and severity of the current economic crisis are unprecedented, and the growth forecasts are hardly encouraging. Given the high levels of uncertainty and the complex nature of today’s business environment, most of European countries are on red alert in terms of industrial competitiveness. The crisis will affect companies in the long-term, forcing them to make rapid and in-depth changes to their approaches and organizational models. For senior executives it is becoming more and more difficult to strike the right balance in terms

of change. They must show greater operational flexibility to better absorb crises and develop their potential for sustainable growth. However, the design and implementation of these change initiatives often proves to be a complex process. Time has come to take rapid and substantial measures. The success of a competitiveness improvement initiative depends on a rigorous analysis, focused approach, a broad and pragmatic organizational engagement, and a sustainable implementation.


Business Insights

T

he crisis has reinforced the need to sustainably change companies.

These days, all companies have ambitious plans to improve their competitiveness. Cost control, the quest for gains in productivity and innovation are all top priorities. Only companies which see the crisis as an opportunity to launch true organizational change will resist and secure future ahead of them. With so much at stake, such plans often come up against resistance to change, which, for understandable reasons, becomes the main fear of managers, who know that they need to implement radical changes from time to time in order to maintain or boost competitiveness. Internal threats

Difficulty of bringing together multiple stakeholders with a view to achieving shared targets and putting the main drivers in place to improve performance. Strong pressure felt by middle managers. Now, more than ever before, they need to bring teams together to weather the storm. To overcome these challenges, Celerant Consulting has developed a managerial model which takes into account environmental, social, financial and legal constraints as well as factors with an influence on competitiveness (productivity, innovation, quality, flexibility).

Priority actions to be taken

53%

Resistance to change

78%

Improve productivity

42%

Reliability of forecast systems

56%

Develop new products/ services

42%

Increasing number of concurrent projects

50%

Streamline structures

42%

Excessively high production costs

39%

37%

Lack of human resources in growing markets

33%

Managerial Model for Competitiveness

Reduce overheads Reduce purchasing costs

Barometer of Major European Companies – Celerant 2012

It should nevertheless be noted that while simply reducing costs might seem like a good idea, in practice it may prove to be a misguided approach during times of crisis. It is a response that only meets short-term needs and is often just a knee-jerk reaction to the situation. Reducing costs can only be done by asking yourself the right questions in terms of operational efficiency and work organization. Overlooking this second consideration will only send the company into a downward spiral. Spending less does not always guarantee an improvement in net income and productivity.

Sometimes, the need for change within companies comes up against problems in terms of resources, internal commitment and sustainable results. All studies which analyze current developments in the situation – be they economic, competitive or social in nature – and factors with an influence on competitiveness highlight the strong need to develop collaborative management within companies, while rigorously overseeing improvements in performance. But while organizations need to design and deploy their projects more quickly, in practice, management is faced with several difficulties: Insufficient time to establish precise project frameworks. Lack of experience with project tools that are properly suited for use in times of economic crisis. Lack of hindsight to be able to identify new opportunities to improve competitiveness and implement the best practices to resolve issues.

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Competitiveness Levers

Constraints

Management Dimensions

Within this context, the success of competitiveness projects is dependent on three essential factors: Following a Top Down – Middle Up approach. While the vision and targets are defined by top management and shared with middle managers, the latter need to pass on these strategic concepts to operational activities. They need to effectively set out the key factors for success to enable the strategy to be implemented at operational level.

Structuring and overseeing projects over short periods of time. Market uncertainties naturally lead many companies to adopt a more prudent approach. Managing projects over short periods of time makes it possible to focus on those actions which are essential, taking advantage of opportunities for rapid gains. The flexibility of companies when faced with the unexpected therefore needs to be taken into account when structuring projects. Adopting the change project and the changes it requires more quickly. The committed involvement and mobilization of internal resources is the best way to ensure a sound understanding of how important change is. These changes should be implemented quickly, and be permanent.


Celerant Consulting

The Celerant approach enables an efficient implementation of competitiveness projects

O

ur approach « Scan - Focus - Accelerate » will help you support your teams and put your projects on a secure footing.

Over the past 25 years, Celerant Consulting has been helping its clients implement their strategy. On the strength of this expertise, we have developed a customized range of solutions which will provide you with the keys to make your competitiveness projects a success during times of crisis.

• Top management in line with this roadmap, with quantified targets. • Substantive action plans to be implemented. • Clearly identified areas for improvement. • Motivated teams and a system to speed up improvements set in motion.

Example of a roadmap created in 30 days Leadership Organization

Our “Scan – Focus – Accelerate” approach comprises two phases:

Managers

Accelerate

Scan

Connection bottom - top

Accélération Projets Projects Speed up

Top 80

Operations

Efficient Partners network

Focused Flexible

Aligned

+15% Sales

Efficient

• • • •

Focus

Strategy Operations Organization Leadership

Quick Actions

Ability Implement-Sustain Implement

Quantified target New products

-10% costs and stocks

Actions & Projects Implement - Sustain

2013 2013 Analyses & Design Phase I

2013 H1

Phase II

“Scan - Focus” Phase

This phase enables top management to launch, within 30 days, a plan focusing on the priority measures to implement with quantified targets, supported by a team of senior Celerant experts. This plan sums up the goals of top management as well as external and internal constraints. Furthermore, teams are brought together thanks to our “top-down – middle-up” approach. Our approach We assess the strengths and weaknesses of the company in 5 key areas: strategy, operational maturity, leadership quality of top and middle management, organizational efficiency, ability to deliver and develop. How we do it We adopt a three-pronged approach: • Analysis of internal and compared data (benchmarks) to provide reasoned, quantified and external observations. • Assessment of existing practices in relation to our maturity benchmarks, developed over our 25 years of operational experience. • Series of interviews with top management and a selection of targeted managers from every level in the chain of command. Your results obtained in 30 days • A competitiveness roadmap comprising: new opportunities for competitiveness which have been identified. additions to or strengthening of opportunities which already exist but are not used to their full potential. a good mix of growth, innovation, cost-cutting and organizational efficiency to provide short and long-term solutions with positive momentum.

2013 H2

2014

"Accelerate” Phase

We also help our clients deploy identified actions to speed up the implementation of this competitiveness roadmap in all areas:  Projects, Analyses & Design • Support internal teams with the implementation of complex projects, in particular during the start-up phase. • Provide expert analysis on issues identified as requiring further analysis.  Implementation • Provide a methodology to manage a range of action plans, projects and analyses and ensure that they remain consistent. • Implement a system to measure results to highlight real balance sheet gains or savings.  Sustain • Facilitate the creation or improvement of skills on internal teams in charge of projects. • Help to develop expected team leadership and behavior.

For more information about our “Scan – Focus – Accelerate” approach, please contact Edwin Vercruysse, Vice President Celerant Consulting, on +31 36 52 95 938, or by email at edwin.vercruysse@celerantconsulting.com

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Client Success Stories

Automotive Sector Client

Objectives: Underpin the 2020 growth strategy of doubling global vehicle production volume by delivering industry benchmark production quality and efficiency and significantly improving the new model introduction capability. Approach: • Undertake a Global Manufacturing Operational Strategy assessment and define the Operational Roadmap to 2020. • Develop a Lean Operations Leadership model to move the organization to a true Lean Thinking organisation. • Define and implement the Organizational and Performance Management pre-requisites to support the Lean transition. • Enhance the New Model Introduction & Engineering Lean capability through early phase process improvements and ‘Design for Lean’ competence development. • Design and implement a Lean transformation capability to support line management in the implementation of Lean and delivery of results in all functions at all levels. • Integrate future Lean governance into the ‘business as usual’ management system and people processes to secure sustainability and continuous improvement.

Results: • Successful pilots for the Lean transformation capability demonstrating the operational, financial and behavioural results that can be achieved. • A sustainable approach to deliver the organizations 2020 ambitions, supporting the potential to double worldwide vehicle production: o Predictable year on year productivity improvements. o Best in class ‘first time through’ capability in all facilities. o Improved ramp-up time for new models, reduced overall time to market. o Supporting the potential to double worldwide vehicle production.

Objectives: Identify new competitiveness drivers and opportunities.

Energy Sector Client

Approach: • Local support of the Executive Committee to improve the organization of their priority projects and speed them up. • Identification of warning points to report to the Executive Committee (interdependency with other projects, identified stumbling blocks). • Coaching of the project sponsor on the management of relationships with the various stakeholders. Results: • 32% increase in productivity. • 50% reduction in stock levels. • 33% reduction in faults. • Annual savings of € 8 million.

Chemicals Sector Client

Objectives: Improve performance and maintain positive cash flow to stay competitive, whatever the economic situation. Approach: • Implementation of resources and tools to improve the decision-making and efficiency of the organization. • Design and implementation of a new organizational structure. This should enable the organization to respond quickly and efficiently in a rapidly developing market. • Greater visibility in terms of production to highlight issues before they become more serious. Results: • Cumulative savings of + € 20 million in savings. • + € 34 million annualized cost reduction (50% better than the target). • The value chain is more efficient thanks to a clear definition of individual expectations and responsibilities.

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Celerant Consulting is a leading global operations management consultancy. Founded in 1987, Celerant pioneered a value-based consulting approach which delivers certainty of results and creates the conditions for lasting performance. This focus on sustainable results has been a key aspect of Celerant’s outstanding levels of client satisfaction over the past 25 years. On December 31st , 2012, Celerant Consulting was acquired by Hitachi Consulting, a subsidiary of Hitachi Ltd. and a leading global consultancy providing a range of strategy, implementation and technology services.

Examples of some of the competitiveness projects we have conducted

Chemicals

Consumer

Rohm & Haas

Inbev:

« 21st Century Manufacturing »  5% increase in productivity each year  Reduction of manufacturing times for new models

« From the biggest to the best »  € 270 million in savings  Improved reputation with customers  Improvement of margins

 Doubling of worldwide production

Worldwide

Europe

Energy

Oil company « From good to great »  € 304 million in savings  Number 1 in production efficiency benchmark

Europe

Industrials

Automotive

Pharmacie Life Sciences

Metals & Mining

DSM

NACG

« Best-in-class manufacturing »

« Operational Excellence »

« No challenge is ever too great »

 € 24 million in savings

 Improved industrial performance

 Increased profits

 An organizational structure to meet commercial challenges

 Improvements in efficiency and flexibility

Europe

 Optimization of performance

 20% improvement in operating capacity

 Production flow up by 15% and OEE up by 1520%

Europe

Americas

Belgium • Brazil • Canada • Denmark • Finland • France • Germany • Netherlands • Norway Oman • Sweden • United Arab Emirates • United States • United Kingdom

celerantconsulting.com


Opportunities to Revitalize and Secure your Competitiveness