Filip vercauteren - Experience The Future 28/11/2012
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Filip vercauteren - Experience The Future 28/11/2012

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Experience The Future 28/11/2012

Experience The Future 28/11/2012

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Filip vercauteren - Experience The Future 28/11/2012 Filip vercauteren - Experience The Future 28/11/2012 Presentation Transcript

  • Re-shoring: The next Goldrush Filip Vercauteren
  • Tiscotex “The story of a small manufacturing company in turbulent economical times”
  • The future of manufacturing“A promising future as consumption of goods is set todouble next 15 years, but labor intensive manufacturingwill remain abroad.” McKinsey, Nov 2012
  • 5 different segments• Global innovation for local markets – Machinery & Motor vehicles• Regional processing – Food & Beverage• Energy-/ resource-intensive commodities – Wood products and basic metals• Global technologies/ innovators – Computers & Medical supplies• Labor-intensive tradables – Textiles & Toys
  • Labor-intensive tradables• Production is globally traded• Migrates to countries where labor costs are lowest• Our advanced economies have a trade deficit in these goods• Employment has fallen to 65% of level of 1995• It is here where we believe our opportunity lies.
  • A Golden opportunity• Organisation is key, not the way products are made – Fusion between trading and own production – Lean manufacturing in a lean organisation – Pushing the limit as to which products can be made locallyChange Productivity Rebuilding ownstructure gains production
  • A Golden opportunity A more complex and volatile environment promises aperfect battleground for lean small companies that can quickly change gears.
  • Re-shoring: The next Goldrush Case study: Tiscotex
  • 4 activities• Weaving• Carpet bindings
  • 4 activities• Automotive industry• Cargo securing and lifting
  • Tiscotex in 2007• 45 People of which 8 white collars• A Turnover of 3.000.000 € (67.000 €/ person)• Old machines: latest big investment was in the beginning of the nineties• No unique products and no R&D• Clients leaving rapidly to competitors selling “made in China” products which were on average 30% of the Tiscotex price
  • 2007 – AmbitionDeliver the best range of highly qualitative products at the best price Entrepreneurship – Trial and Error
  • What have we done at the organisational level?Question everything and fine-tune all details
  • 1. Think global- Even small companies can and should operate globally • Purchasing in e.g. China is done through a Chinese person working on a quality commission • Payments are done through professional trader software giving us an edge in exchange rates • Production is done in Tunisia and Asia • Sales are everywhere in Europe through our network of independent sales people. Being able to shift quickly between these production and sales options is a key driver of being competitive
  • 2. Sales people– Simply too expensive, as the cost of 80.000 €/ sales person/ year cannot be earned back.– Focus on big exhibitions: director should be performing as sales and feel the market– Clients do not expect sales people anymore; still too many companies have the typical sales guy.– Sales are easier when client finds you Since that decision sales are up 66%...
  • 3. Outsource accounting– Full time accountant replaced by a professional company for 20% of the price • Savings on computer and office equipment, working space, sick leave, holidays etc. • Accounting company gives advise month to month as opposed to once a quarter/year. This improved margins by a fenomenal 15%
  • 4. Focus on Marketing
  • 4. Focus on Marketing- Very small companies can efficiently create a brand • With outsourcing to professional companies and efficient use of internet • Our products are “Made in Belgium” • Service is best advertisement 25k vs. 80k for 1 sales person
  • 5. Focus on quality- Quality is the only argument left for asking aprice premium • Price advantages can erode fast. • When you deliver the best quality, you always have a seat at the table (DAF) 30% of our time is spent on quality
  • 6. Invoices- Director should do this to see where every € goes to • Invoices are checked and approved on the same day • If discounts exists, paid instantly • All invoices are paid in 30 days Timesavings, less errors and instant feedback on spending
  • 7. Meetings– The flow of information can be continuous in the very small company– No need for time consuming meetings (300 €)– New ideas vs. complaining– Replaced by Friday lunch session in relaxed atmosphere.
  • 8. Lean Manufacturing– Re-evaluate operations on a daily basis (Stitching)– The search for simplicity in processes is continuous– Automation vs. Cost– Vertical integration leads to flexibility– Lay-out for both high volume trading as customized production– Prepare for increasing amount of SKU
  • 8. Lean manufacturing– System of economical unemployment in Belgium is unique– Efficient production processes vs. full capacity utilization– Energy costs: taking heating into consideration when planning production– Giving employees more responsabilities (eg planning, wages, quality control, improvements).
  • End Result:– Turnover is now 5.000.000€ = +66%– From an operational loss of -200k +400k/year– Ebitda = 8% of turnover which is fully (!) reinvested in the company– 29 employees of which 3 people now handle all white collar (vs. 8 before): a productivity gain of a whopping 345%– Turnover/ employee = 172.000 € = +157%
  • End result– Cost of quality claims less than 0,1%– Customer loyalty in top 50 = 100%– Employee loyalty = 100%– Purchase of first company in Denmark, exporting our organizational model.
  • Vision of the future– The hunt for the big distributors is open!– Internet will lead the way, not so many producers sell directly– Doing the right thing = preparing organization for a world of mass customization