© ann vereecke / staten generaal - 1 manufacturing in western europe survival of the fittest...

© Ann Vereecke / Staten Generaal - 1

Manufacturing in Western EuropeSurvival of the fittest

Lessons learned for Flanders

Professor Ann Vereecke

Vlerick Leuven Gent Management SchoolUniversiteit Gent


Headlines in the business press


Added value of the industrial sectors


Markets in emerging countries are growing

Kasra Ferdows, Sept 2009


GLOBAL PLANT NETWORKSLessons learned from a Flanders DC research study


The board room of a global company


Research set-up

1995-1996 study

2005-2006 studyCompany A: globalized by establishing greenfields

Company B: global player after merger

Company C, D: acquired by globalizing player

Company E, F, G, H: rationalization by closing down some plants

In total: 59 plants in 1995-1996; 82 plants in 2005-2006


Evolution in number of plants

0

10

20

30

40

50

60

70

80

90

1995-1996 2005-2006

greenfield

acquired

gone

survived


Plants by City in 1995

A E

B F

C G

D H


Plants by City in 2005

A E

B F

C G

D H


The strategic role of the plant

Low-costinput factors

Technological know-how

Market

Reason for exploitation

Con

trib

utio

n to

str

ateg

y

high

low

© Ferdows, HBR 1997


The strategic role of the plant

production

maintenance

quality assurance

logistics

process development

product development

Low-costinput factors

Technological know-how

Market


Con

trib

utio

n to

str

ateg

y

high

low

© Ferdows, HBR 1997


© Ann VereeckeBased on Ferdows, HBR 1997

input factors skills & know-how

market


Leve

l of

stra

tegi

c ro

le

low

source contributor

off-shore outpost

lead

server

medium

high expertmarket-master

brain


1995

labor Skills &knowhow

market none

1,0

2,0

3,0

4,0

5,0

6,0

7,0

8,0

9,0

role

_199

5

adv_1995knowhow

labor

market

none

skill

serv

er

offs

hore

sour

ce

cont

ribu

tor

lead

mkt

mst

r

stra

tegi

c ro

le -

199

5


Sta

tus

stra

tegi

c ro

le -

199

5

16

adv_1995_nr

1,0

2,0

3,0

4,0

5,0

6,0

7,0

8,0

9,0

role

_199

5

statusgone

survived

labor Skills &knowhow

market none

Survivors by 2005 ?



market


Lev

el o

f st

rate

gic

role

low

source contributor

off-shore outpost

lead

server

medium


brain

-3

-2

-1

-4

-2

-2

-1

no role

-3

© Ann Vereecke 2009Based on Ferdows, 1997

18 plants left the networks


© Ann Vereecke 2009Based on Ferdows, 1997


market


Lev

el o

f st

rate

gic

role

low

source contributor

off-shore outpost

lead

server

medium


brain

+7

+2

+1

+21

+4

+3+2

other role

+1

other role

+1

42 plants added to the networks


1st set of conclusions

1. The market was and still is the main driving factor of factories

2. Server and off-shore plants are flexible assets in the multinational plant networks

3. Lead plants have a safer future.


Sta

tus

stra

tegi

c ro

le 1

995

Bel

gium

20

adv_1995_nr

1,0

2,0

3,0

4,0

5,0

6,0

7,0

8,0

9,0

role

_199

5

statusgone

survived

labor Skills/knowhow market none


Network position of the plant

Degree of communication between plants

daily, weekly, monthly, less frequent

Exchange of innovations between plants

Product, process, managerial innovations

Visits to and from other plants

Number of days spent by manufacturing staff people


isolated plant receiver plant

innovations

hosting network player

mfg staffinnovations

active network player

innovations mfg staff

Network position of the plant



innovations





Network position of the plant - 1995



innovations





Surviving plants?



innovations





Surviving plants in Belgium?


Conclusions

1. The market was and still is the main driving factor of factories

2. Server and off-shore plants are flexible assets in the multinational plant networks

3. Lead plants have a safer future.

4. Network players have a safer future.5. Isolated and receiver plants are vulnerable


Lessons learned for management


Lessons learned for Flanders


For more information:

[email protected]


References• Changing Landscape of Global Supply Chains, Kasra Ferdows,

presentation for FDC, Vlerick Leuven Gent Management School, Sept 16, 2009

• How to optimize knowledge sharing in a factory network, Arnoud De Meyer & Ann Vereecke, McKinsey Quarterly, Sept 2009

• Network relations in multinational manufacturing companies’, Ann Vereecke, FDC research report, July 2007 (ISBN 9789078858065)

© ann vereecke / staten generaal - 1 manufacturing in western europe survival of the fittest...

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