As an executive interim manager, consultant and active advisory board member for challenging corporate situations, I can look back on a large number of successfully completed mandates. Here is an excerpt:
Description
A Japanese Tier 1 supplier supplies automotive OEMs from its plants on all continents. It wants to expand its global aftermarket activities in all regions and manage them efficiently.
Sector
Automotive Aftermarket
Objective
Implement a decentralized product information management (PIM) system that accesses product data from various internal systems and externally purchased market data, and which the aftermarket sales organizations in Asia, Europe, and America use to manage their respective regional product portfolios.
The project in brief:
– Transformation to decentralized organization and processes in the aftermarket
– Information gap in IAM potential per country closed by purchasing external data suppliers
– Use of external consulting firm for pre-selection of suppliers shortens process and provides know-how in a short time
– Agile sprints ensure initial commissioning before the end of 6 months
A process geared towards series production is not suitable for the aftermarket
IHI Corporation, a Japanese €15 billion conglomerate, is the global number 3 in exhaust gas turbochargers and supplies automotive OEMs as a Tier 1 supplier from 6 plants worldwide.
In the downstream Independent Aftermarket (IAM) business, which supplies the manufacturer-independent spare parts market, regional Group sales organizations (VO) in Japan, China, Thailand, the USA and Europe supply independent distributors with exhaust gas turbochargers under their own Group brand. The distributors, in turn, supply the free workshop market via wholesalers and retailers.
The group is geared towards series production processes and supplies the series products to the regionally based OEM, which installs them in its vehicles and sells them worldwide. As a rule, a Tier 1 does not know which vehicle models the series products are installed in, nor to which countries which quantities are exported. In contrast, the needs in the spare parts market arise from the number of vehicles registered in the countries, the Vehicles in Operation (VIO), the age of the vehicles and the average mileage. The different vehicle fleets in the regions and countries result in different requirements for the regional product portfolio.
The Interim Manager (IM) Christian Lukas managed the global IAM business on behalf of the group headquarters in Yokohama, Japan, and optimized processes from markets/customers via the VO to regional procurement/production.
He convinced the relevant stakeholders of the need to invest in a modern Product Information Management System (PIM) in order to efficiently manage the group-wide product portfolio in the IAM and improve the IAM result.
PIM pre-selection with the support of an external consultancy, agile implementation
IM established a global project team and commissioned the external consultancy PROTEMA, Stuttgart, to analyze the market and draw up a shortlist of potential suppliers. The requirements for the future PIM were specified as a real-time system with global access to data from existing internal data sources and externally sourced data.
As a result of a selection process, Bertsch Innovation (BI), Stuttgart, was chosen as the supplier and commissioned to carry out the PIM customizing using agile project methodology.
IM agreed strict specifications from the corporate headquarters for the IT security structure with BI and the cloud provider and anchored these in the PIM.
A key component of the project’s success was communication: In addition to the regular coordination at a global project level and with the external partners PROTEMA and BI, the continuous exchange at the various levels was decisive: Group, region, country, location, operating mode, department, employee.
After completion of the essential modules, the PIM was gradually rolled out in the respective VO and used operationally.
Decentralized control of the product portfolio implemented
The PIM software is located on a server in Germany and enables 24/7 access in real time via global licenses. Internal product data (e.g. dimensions, weight, OEM numbers, production volumes…) and drawings can be uploaded via interfaces from the regional IT systems (e.g. ERP). External data (such as VIO data per country, OEM cross-references, OEM replacement references and OEM numbers for which vehicles/series/models in which years) is purchased regionally from established third-party providers and also imported into the PIM via interfaces. Certain additional product features can be set manually.
The main advantages of PIM:
– Data quality increased and standardized; response time minimized
➔ All data is available globally and live – no more error-prone communication with e-mail and Excel
– IAM requirements per region/country/district/city/vehicle are available
➔ Unused sales potential can be specifically addressed
– Actively manage product portfolio
➔ Procurement and warehousing can be optimized regionally via features such as product launch, phase out and bans
Due to the considerable investment volume, the IM selected an innovative procurement and financing model and negotiated and coordinated it with the parties involved: the European Group organization purchased the PIM including hosting and maintenance from BI and resold it to the Japanese Group headquarters. The latter leases the PIM to the five globally distributed IAM sales organizations over 5 years – thus the costs are predictable and relatively distributed.
Finally, the IM described the processes and handed over the project to a group-wide IAM team, which continues to operate the PIM successfully.
Description
A Japanese automotive Tier 1 supplier manages its Independent Aftermarket (IAM) business in EMEA from Japan. The absolute size of the business and the growth rates are unsatisfactory.
Sector
Automotive Aftermarket
Objective
Establishment and implementation of a profitable IAM organization in Europe, which can also access series products from the European production plants, establish additional distributors in relevant markets and exploit market potential.
The project in brief:
– Market development in EMEA from Japan not satisfactory
– New processes within an existing organization enable new organization IAM
– Go Live after only 6 months of preparation with strong profitable growth
Number 3 worldwide in series production, but with disproportionately low EU spare parts business
A Japanese conglomerate is the global number 3 in the field of exhaust gas turbochargers and supplies automotive OEMs with series products from plants in Japan, China, Thailand, the USA, Italy and Germany.
In the downstream Independent Aftermarket (IAM) business, i.e. the supply of the manufacturer-independent spare parts market, a Group subsidiary from Yokohama, Japan, works with independent distributors worldwide, including in Europe. Exhaust gas turbochargers were supplied to these under the brand of the Japanese Group, which were then supplied via wholesalers to the independent workshops (such as ATU, Bosch Car Service, 1a Autoservice) for repair purposes.
The Interim Manager (IM) Christian Lukas was commissioned to identify solutions as to how sales and earnings in the European IAM business can be significantly and quickly increased.
He analyzed 3 main weaknesses:
– No access to series products manufactured on tools owned by European OEMs
– Incomplete understanding of the European IAM market
– Difficult interaction between Japanese IAM headquarters and the European group plants and external customers (= distributors)
After six months of preparation, Go Live
IM set up a cross-functional project team from existing employees at the four locations in Germany and Italy and managed it for the duration of the project. The team analyzed and evaluated options and decided to set up a regionally independent IAM sales organization for EMEA (Europe, Middle East, Africa) in Germany. The logistics location was moved to the plant in Italy, from where all EMEA customers are supplied with IAM goods from a warehouse.
The IM quantified the total costs and investments required over the next three years and anchored these in the European company’s budget planning.
The new IAM processes were defined and integrated into the existing SAP ERP system.
At the same time, IM organized the creation and group-wide coordination of a new brand for global use in IAM and commissioned external agencies to create a corporate IAM design and set up an independent website with an integrated B2B portal for customer connection.
IM concluded new, updated distributor contracts with existing customers (from the previous collaboration with the Japanese IAM headquarters in Japan) and with newly acquired customers in EMEA and changed the pricing model to “market based”.
At the same time, the IM negotiated tool usage agreements with the German OEMs in order to manufacture IAM products on the tools owned by the OEMs against payment of a per-piece license fee.
Successful go-live after six months of hard preparation
IM communicated regularly with the key stakeholders (Group management in Japan, management in Germany and Italy, works councils, employees, customers…), thereby increasing understanding of the lucrative IAM business model.
He coordinated the gradual development of the new IAM organization in Germany and Italy with a mix of existing employees with product and process experience from the series business and with new external employees with IAM market experience.
In the first full financial year, sales grew by 42% compared to the previous market cultivation from Japan, and by a further 50% in the following financial year – despite the coronavirus crisis. From the second financial year onwards, this new division contributed a considerable profit to the overall result of the European subsidiary.
After 12 months, the IM successfully handed over the newly created IAM area to the new IAM manager and withdrew completely from this project after 15 months.
Description
An automotive Tier 1 supplier in Europe manufactures series products using tools that are partly owned by OEMs. This means that these products are not available for sale through the independent aftermarket (IAM).
Sector
Automotive Aftermarket
Objective
Negotiation and conclusion of tool usage agreements with OEMs in order to be able to market these products in the IAM.
The project in brief:
– The independent aftermarket (IAM) as a lucrative part of the aftermarket
– OEM tool ownership blocks market access in the IAM
– Conclusion of tool usage contracts as a win-win for OEM and Tier 1 manufacturers
Sales organization without access to products
An Asian automotive tier 1 group supplied independent distributors in EMEA with products from global production via the Italian-based sales organization (VO). These near-series products were sold in the Independent After Market (IAM), the non-manufacturer-bound spare parts market, which is much larger than the manufacturer-bound Original Equipment Service Market (OES) with a share of approx. 60%.
The problem was that the VO could not access the series products manufactured in the European plants for their sale in the IAM, as these were partly manufactured on tools owned by the European OEM customers.
The management of the Tier 1 manufacturer commissioned the Interim Manager (IM) Christian Lukas to identify solutions and then also to implement how the products manufactured in Europe, which accounted for considerable global sales potential, could also be sold profitably in the IAM.
Analysis: Investments or license fees
Christian Lukas calculated potential sales volumes, turnover and margins for the IAM sales channel based on the number of series products manufactured to date, an estimate of the failure rate and the volume distribution in sales between OES and IAM over the life cycle.
In contrast, the IM presented the necessary investment costs in own tools and prioritized those product lines on the basis of Return on Investment (ROI) for which investment in own tools should be made and implemented the rapid procurement of these tools.
For the far larger proportion of the products, only the option of concluding a tool usage agreement (WNV), also known as a license agreement, was therefore available.
With this, the OEM manufacturer grants the (Tier 1) manufacturer the right to manufacture products on the tools / machines that are owned by the OEM manufacturer, which the (Tier 1) manufacturer can then sell independently in the IAM. In return, the (Tier 1) manufacturer undertakes to pay a per-piece license fee to the OEM manufacturer.
Profitable additional sales from license agreements
Christian Lukas successfully negotiated WNV with various automotive OEMs and achieved three key milestones for the commissioning Tier 1 company:
1. Additional near-series products could be manufactured on existing machines and tools with relatively little additional effort, resulting in increased capacity utilization.
2Global IAM sales opportunities were agreed with the OEMs so that non-European VOs can also access these products and sell them in their markets in IAM, resulting in additional sales and margins.
3. The license amount to be paid to the respective OEM manufacturer is overcompensated by the much higher margin that can be achieved in IAM compared to series production business, resulting in additional earnings.
The deep and broad experience of Christian Lukas in the Automotive Aftermarket also paid off in the negotiations of the WNV with the purchasing aftermarket departments of the OEMs, which took place on an equal footing. In this way, he was able to convince them that it is also in the interest of the OEMs to have a partner like the (Tier 1) manufacturer at their side in the long term in order to ensure the long-term supply in the aftermarket with high-quality products and to jointly secure the market against products of dubious quality, imitators and counterfeits.
By concluding the WNV, the commissioning Tier 1 company was able to generate considerable additional sales with a profitable margin from new products – not only in EMEA but also globally.
Description
A global automotive Tier 1 supplier has a high dependency on the classic combustion engine business with its series products and is looking for additional pillars to secure sales, earnings and employment.
Sector
Fuel cells for industrial, maritime and automotive applications
Objective
Establishment of an independent business unit that industrializes the product pre-developed in Japan in Europe and markets it to customers worldwide.
The project in keywords:
- Focusing the respective co-project management on external customer/market and internal processes/organization
- Breaking down the goals and measures with regular tracking and agile project management
- Rapid establishment of a hybrid project structure with a mix of internal specialists and know-how carriers from external sources
Declining capacities and sales declines due to the decline in the classic combustion engine business are to be compensated
A Japanese conglomerate is the global number 3 in the field of exhaust gas turbochargers and supplies automotive OEMs with series products from its plants in Japan, China, Thailand, the USA, Italy and Germany. The high volume, low mix plant at the Erfurter Kreuz, where the European HQ is also located, mainly supplies German OEMs.
The OEMs reduced their call-offs sharply below the originally planned quantities due to the general decline in the production of vehicles with combustion engines (boom in battery-electric vehicles, semiconductor and supply crisis).
The Japanese parent company had developed an electric turbocharger for optimizing the air supply of fuel cells and supplied it to a German premium OEM in a small four-digit quantity for its vehicles that are operated with hydrogen and fuel cells.
The Interim Manager (IM) Christian Lukas was commissioned to set up an independent Business Unit at the European HQ in Thuringia, which is to bundle and expand the global activities of the Japanese Group in the field of air supply for fuel cells.
Strategy with measures and budget planning as the basis for project success
The IM shared project management with a permanent employee who was responsible for the areas of technology and market. Together, a strategic basic concept with measures and a timetable was developed.
The necessary total costs (including personnel) and investments over the next 5 years have been quantified by the IM and anchored in the budget planning of the European company. He updated this monthly.
Mr. Lukas broke down the planning of the employees required for the project to months, designed the requirement profiles of the individual positions, coordinated them across the board and managed the process together with HR until the position was filled.
Using a mixture of Balanced Scorecard and OKR (Objectives + Key Result), the IM defined and coordinated objectives and measures for project sub-teams or individual employees on a monthly basis and discussed them in the team on a monthly basis, making adjustments where necessary. The summary served as a regular monthly report to the management.
Mr. Lukas coordinated all BU-related contracts (non-disclosure, supply, cooperation [with system partners] and funding contracts) from creation, through coordination with the specialist departments, the external law firm and the contracting parties to signature.
For the networking of the internal and external project employees located at several locations, the IM set up the MS Teams + Sharepoint, which had only recently been introduced, as a central platform. This was used to control project communication for the team among themselves and to all employees of the four European companies.
Mr. Lukas coordinated the steering committee meetings, which take place every two months, with the stakeholders of the European companies and the Japanese parent company, recorded the meeting results and completed the follow-up of the open points.
(Partial) coverage of the fixed costs via a funding project and first pre-series order after less than 12 months
Within 12 months, 30 employees have been set up for the project; this includes 15 employees who work exclusively for the new Business Unit and were either hired externally as new employees or transferred internally to the new Business Unit.
The investment volume for the next 5 years was in the low double-digit millions; the break-even point was planned for the fifth year.
The Federal Ministry for Economic Affairs and Energy is funding a joint project submitted together with the TU Chemnitz and Silver Atena (power electronics) for the optimization of air supply in fuel cell systems with €11 million over 3 years.
Initial prototype sales of the electric turbochargers have been realized to 9 customers from the automotive heavy-duty, industrial, and maritime sectors.
A letter of intent for the first series delivery, starting in 2023, has been concluded with a major customer from Scandinavia.
It was agreed with the Japanese parent company that all global group activities for the electric turbocharger for use in fuel cell systems will be bundled at the European HQ in Thuringia.