Strategically anticipated

Growth by investments in Germany

There are over 300 producers of aluminum die-cast components in Germany. Julius Schüle, a die casting company from Schwäbisch Gmünd, has been an industry player for many decades and is a reliable supplier and development partner to international clients in the automotive and automation industries. The solutions supplied by Schüle, a technology leader with 650 employees, have always been the epitome of quality, technical delivery and value for money. However, even industry champions notice the tremors when clients and markets start shifting. The future strategic business development, however, needs to be planned in due time in case the company wants to keep on leading. The Steinbeis Consulting Center for Business Excellence supported Schüle in this task.

Leading from the front in terms of strategic business development sometimes means not to follow every trend but sometimes to set the trend. Thus, Schüle decided to make major investments in its operations in Germany and, apart from its existing factory in Slovakia, not to set up any further production facilities outside Germany, even if these measures contradict the general trend of its industry. The company’s decision was the result of a comprehensive strategic review spearheaded by the Steinbeis Consulting Center for Business Excellence (BE).

Schüle is set to discontinue entire product groups in the years to come, although they will be replaced by new ones. This requires proactive planning in good time. The markets Schüle operates in may have been relatively stable for a number of years, so conceivably, it would be possible to extrapolate existing strategic plans to the future years. However, as the recent market turmoil has had a more far-reaching effect than past changes, Schüle decided to bring in professional support in the form of experts from the Steinbeis Network. Despite all of its in-house expertise, the company wanted to be sure it was choosing the right course in the long term.

Developments in Schüle’s market forced the manufacturer to make an important decision if it was to strengthen its existing competitive advantages and to enjoy continuous business growth: Which products should be produced, at what cost, and where? The effects of recent developments had been so far-reaching that using the previous approach to strategic decision-making would have been highly risky. 2009 was a difficult year, and although Schüle survived it very well, its competitors became much more aggressive. The challenging market had begun to expose cracks in communication processes and management systems at Schüle. Previously this was not necessarily a problem, but now the firm needed new ways to plan its business strategy and run management. The BE team from Steinbeis would be able to make an objective assessment of these processes from the outside.

The aim of the project was to work systematically towards an adapted business strategy, in keeping with changes in the market. For the project to succeed, it was important to look at the company from as holistic a standpoint as far as possible. The EFQM business excellence model, which is the main technique used by the Steinbeis Consulting Center, proved to be invaluable. It was important not just to use the model as a template, but also to weight individual factors according to Schüle´s needs. Taking a holistic view at Schüle meant understanding the impact each strategic change would have on the rest of the company and the people involved. It would have been counterproductive to change the strategy based solely on individual factors. This does sometimes have advantages, but the impact in areas that are not considered can be devastating. The holistic approach made it possible to plan key steps properly. This included aspects like seeing the company as a single business unit split across two sites. Systematically analyzing location issues, based on objective facts, allowed the team to plan production options and set the ball rolling in a way that matched future market require ments. For example, the much lower labor costs in Slovakia were crucial regarding some product areas to enable the company to safeguard its turnover and revenues. In others, being close to clients in Germany was much more important than labor costs. Once Schüle had taken this and other factors into account, it concluded that it would have to keep investing in Germany. Even if this goes against the general trend, it will help the medium-sized company to remain a professional and reliable partner to its customers and provide world-class quality. The stronger standing of the company has also affected the factory in Slovakia, which can boost growth by tapping into the experience and expertise of German co-workers on-site. This approach to company leadership takes both technological and management issues into account. The BE team from Steinbeis was able to help Schüle chart a course for future success by using a systematic, tailor made and methods-based approach that considers each issue holistically. The experts will continue to support Schüle as it now implements its strategy.

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