Business Insights

� e 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.

� e crisis will a� ect 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 di� cult to strike the right balance in terms

of change. � ey must show greater operational � exibility 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. � e success of a competitiveness improvement initiative depends on a rigorous analysis, focused approach, a broad and pragmatic organizational engagement, and a sustainable implementation.

Diagnosing your business - 30 days to identify opportunities to revitalize and secure your competitiveness

RESULTS, RESULTS, RESULTS

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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 opportuni-ty 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.

It should nevertheless be noted that while simply reducing costs might seem like a good idea, in practice it may prove to be a mis-guided 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 organi-zation. 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 de-velop 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.

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).

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 op-erational 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 essen-tial, 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 quick-ly. 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.

T

Business Insights

78% Improve productivity

56%Develop new products/services

50% Streamline structures

39%Reduce overheads

33% Reduce purchasing costs

Priority actions to be takenInternal threats

53% Resistance to change

42%Reliability of forecast systems

42% Increasing number of concurrent projects

42%Excessively high production costs

37% Lack of human resources in growing markets

Barometer of Major European Companies – Celerant 2012

Managerial Modelfor

Competitiveness

Constraints Management DimensionsCompetitiveness Levers

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

“Scan - Focus” Phase This phase enables top management to launch, within 30 days, a plan focusing on the priority measures to implement with quantifi ed targets, supported by a team of senior Celerant experts. This plan sums up the goals of top management as well as external and inter-nal constraints. Furthermore, teams are brought together thanks to our “top-down – middle-up” approach.

Our approachWe assess the strengths and weaknesses of the company in 5 key areas: strategy, operational maturity, leadership quality of top and middle management, organizational effi ciency, ability to deliver and develop.

How we do itWe adopt a three-pronged approach:• Analysis of internal and compared data (benchmarks) to provide reasoned, quantifi ed and external observations.• Assessment of existing practices in relation to our maturity bench-marks, developed over our 25 years of operational experience.• Series of interviews with top management and a selection of tar-geted 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 identi-fi ed.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 organiza-tional effi ciency to provide short and long-term solutions with positive momentum.

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

"Accelerate” PhaseWe also help our clients deploy identifi ed actions to speed up the implementation of this competitiveness roadmap in all areas:

Projects, Analyses & Design• Support internal teams with the implementation of complex pro-jects, in particular during the start-up phase.• Provide expert analysis on issues identifi ed as requiring further analysis.

Implementation• Provide a methodology to manage a range of action plans, pro-jects 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.

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Accélération Projets

Scan

AbilityImplement-Sustain

Accelerate

Focus• Strategy• Operations• Organization• Leadership

Scan

Focus• Strategy• Operations• Organization• Leadership

Phase I

AbilityImplementImplement-Sustain

Accelerate

Phase II

Quick Actions

Analyses & Design

Projects Speed up

Th e Celerant approach enables an effi cient implementation of competitiveness projects

Celerant Consulting

O

Managers

Top 80

2013

Quantified target

Operations

OrganizationLeadership

2013H1

2013H2

2014

Flexible

Partners network

Efficient

Connection bottom - top

-10% costs and stocks

New products

Efficient

Aligned

Focused

Actions & Projects Implement - Sustain

+15% Sales

2013

Example of a roadmap created in 30 days

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

Objectives:Underpin the 2020 growth strategy of doubling global vehicle production volume by delivering industry benchmark production quality and effi ciency and signifi cantly 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-requi-sites 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, fi nancial 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 ‘fi rst 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.

Automotive Sector Client

Objectives:Identify new competitiveness drivers and opportunities.

Approach:• Local support of the Executive Committee to improve the organization of their priority projects and speed them up.• Identifi cation of warning points to report to the Executive Committee (interdependency with other projects, identifi ed 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.

Energy Sector Client

Objectives:Improve performance and maintain positive cash fl ow to stay competitive, whatever the economic situation.

Approach:• Implementation of resources and tools to improve the decision-making and ef-ficiency 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 expecta-tions and responsibilities.

Chemicals Sector Client

celerantconsulting.com

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

Celerant Consulting is a leading global operations managementconsultancy. Founded in 1987, Celerant pioneered a value-based consultingapproach which delivers certainty of results and creates the conditions forlasting performance. This focus on sustainable results has been a key aspectof 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.

PharmacieIndustrials

Automotive« Best-in-class

manufacturing »

€ 24 million in savings

An organizational structure to meet

commercial challenges

Life Sciences

DSM« Operational Excellence »

Improved industrial performance

Improvements in efficiency and flexibility

20% improvement in operating capacity

Energy

Oil company

« From good to great »

€ 304 million in savings

Number 1 in production efficiency

benchmark

Europe Europe Europe

Metals & Mining

NACG« No challenge is ever too great »

Increased profits

Optimization of performance

Production flow up by 15% and OEE up by 15-

20%

Americas

Chemicals

Rohm & Haas

« 21st Century Manufacturing » 5% increase in

productivity each year

Reduction of manufacturing times

for new models

Doubling of worldwide production

Worldwide

Consumer

Inbev:

€ 270 million in savings

Improved reputation with customers

Improvement of margins

Europe

« From the biggest to the best »

Examples of some of the competitiveness projects we have conducted