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Recipes for success for business transformation

Recipes for success for business transformation

Selected "best practice" solutions for a forward-looking orientation of companies in Eastern Europe were the focus of an event which was organized jointly by TMG and the leading Romanian management consultancy firm, Ensight, on 20th March 2013 in Bucharest.

In his presentation, TMG director and partner, Friedrich Steisslinger, strongly emphasized that for manufacturing companies, there are a great number of reasons why it may appear advisable not to start the process of globalization without an "industrial strategy" based on strategic concepts and developed in a targeted way. "Globalization and decreasing margins on the traditional markets are forcing more and more industrial companies to structurally reduce their costs and further increase their production efficiency. Without a fundamental reform of their production and logistics networks, many of these companies will not be able to make the required improvements." In any case, in Steisslinger's experience, structural disadvantages to production costs can only rarely be compensated for by individual cost savings.

Quite a number of companies are therefore facing the task of fundamentally reforming the "operations footprint". However, according to Steisslinger, many medium-sized companies lack the required personnel capacity to cope with such a complex task with the required professionalism and strategy funding. This is all the more true if, as part of the upcoming adjustments to the production and logistics structures, a company is to benefit from the opportunities and advantages which result from the possible construction of new production facilities in Eastern Europe or the optimization of existing production locations there. Without in-depth expertise with regard to the various country-specific general regulations and cultural aspects, projects such as this cannot be carried out, at least not with the efficiency needed.

In his other remarks, Steisslinger stressed the importance of an integrated approach and of considering all relevant influencing factors when optimizing the "operations footprint". "The decision to outsource production or to build new production facilities should never be taken solely on the basis of superficial advantages regarding wage costs or general differences in labor costs. In each situation, the costs and possible benefits of measures such as these must be meticulously examined, weighed up and situated in the overall production footprint context". What may be right for one company may not work in the same way at all for another company.

To conclude, the TMG partner talked briefly about the long-standing project history of the company in Eastern Europe: "We have been supporting our customers in Eastern Europe for more than fifteen years with our own "on-site" local presence. The focus of our consultancy services has been and will continue to be on factory planning, layout planning, support for ramp-up management as well as production optimization in ongoing operations." As a result of help from TMG, more than 15,000 new jobs and over 400,000 m² of new production space have already been created in Eastern Europe.

Planned continuation

Approximately 60 representatives from companies of various sizes and from various sectors, as well as from economics-related institutions, accepted the invitation to this first business dialog organized jointly by TMG and Ensight. The organizers were clearly very pleased with the response. A follow-up event is already being considered.

Friedrich Steisslinger,
Director and partner, TMG Consultants GmbH

"Companies must learn to live with globalization.
Taking the opportunities as well as the risks."