With the prospect of continued industry turmoil and uncertainty in the year ahead, European manufacturers want to become more agile. But many face technology and cultural challenges in becoming so.
If there’s one piece of advice I have for European manufacturers in the year ahead, it’s ‘Be flexible!’ ” says Heinrich Flegel, a member of Daimler AG’s supervisory board in Stuttgart, Germany. “You’ll have to be, because, these days, marketing can’t even foresee what’s likely to happen in the next four weeks.”
Now, more than ever, manufacturers are in turbulent and unpredictable economic times. Last year’s stock market meltdowns and global reverberations only underscored the importance of being able to react quickly and effectively to change.
One of the key management strategies to enable manufacturers to respond and adapt rapidly to changing market circumstances is the concept of business agility. And if ever there was a time to get more agile, it’s now.
In an exclusive Manufacturing Executive readership poll of 138 senior European manufacturing executives conducted late last year, more than two-thirds of companies revealed that they are rapidly modernising their IT infrastructures to support greater business agility. The time frame for many is imminent, with more than a third of respondents saying they will implement new agility plans this year and a further third in 2010.
“Agility is more important than ever in times of economic turmoil,” says Nigel Montgomery, a research director at AMR Research based in Oxford, United Kingdom.
“When everybody is flush with funds, there’s lots of business opportunity to go round. You can even turn some business away. But when times are hard, every single bit of business is essential. You have to be agile enough to make sure you can meet new customer requirements, win the deal, deliver quickly and efficiently, and, most importantly, make money on it,” he says.
Harnessing technology is critical to an agile strategy, Daimler’s Flegel says. “Nobody knows how long this crisis will take. We have to install new intelligent technologies so we can make things cheaper, make our factories more flexible and agile, and use new processes to make things faster.”
Cutting Business Costs
The search for greater cost reductions and faster speed to market is driving much of the agility activity in Europe in 2009. Survey results from Europe’s manufacturing technology leaders show almost half the executives rank these key factors as high priorities for the year ahead.
“We are beginning to focus more on just-in-time manufacturing to be more agile and to be as efficient as we can at keeping costs down,” says Paul Martin, group director of information management at London-based Rexam Group.
