A long conversation about the present and future of the biggest Italian group in woodworking technology production and not only. Between radically changing markets and shrinking orders, the guidelines of the new industrial plan.
One and a half year has gone by since the beginning of the Rimini revolution. Eighteen very complicated months. Stefano Monetini, general manager of Scm Group, had been clear the very first time we met him, few days after his debut in woodworking mechanical engineering coming from Brembo (automotive): “The cake is getting smaller and we must do the impossible to gain new market shares”.
A seemingly contradictory sentence that we have finally asked him to explain.
Mr. Monetini, the first question is fixed: how do you feel in the wood industry?
“I must admit I imagined a richer sector, with a strong link to a construction sector that seemed to be growing relentlessly.I found myself in a world with mature dynamics, similar to household appliances or automotive, where you must be able to do more with less, where effectiveness and efficiency must go hand in hand.
We thought we could have more time to achieve top efficiency, and instead, the crisis we felt ever since the first months of 2008 forced us to act quickly:since October, the sector has stopped, although we could leverage a buffer of previously acquired orders.We realized immediately that the reorganization of the group we were carrying on had to be pushed stronger and faster:three years to start working in a totally different way from what we were used to.Now, eighteen months later, we are seeing a half-full glass:we are not fully benefiting from the changes we have enacted, yet, but we see the future will be clearly better!
In the past two years, we also had to use redundancy funds.However, as a result of the successful outcome of the industrial plan, we could take back most of our resources, reducing people on the dole to one hundred approximately, and this figure is still decreasing.
But don’t let us be misled:the strong growth we are recording will not bring us back to the record levels of 2007 in terms of orders. We are still “suspended” for three reasons:the crisis is delaying the purchase of durable and instrumental goods, investments in technology are planned when recovery starts over, and the construction industry is in a saturation phase in mature markets.
A different evolution will characterize the new markets we are approaching.We cannot expect the usual growth rates in Europe or the United States, so we have to look around to identify more brilliant economies.A couple of examples:in Brazil we are acquiring the majority share of a company we have been involved in for a long time; in China we are looking with great attention to our subsidiary, as well as further developments for which we have already identified key contacts.
China has become the main destination for some luxury cars, the same will happen with furniture and high technology…“.
What’s the impact of this trend on your industrial plan?
“We have created a platform to look into different directions.First of all, the acknowledgment that this market has matured and now demands that you give a better price and adequate service to customers.Effectiveness and efficiency together, as I said, in a market where company size is more and more important to face global challenges.Our key customers are located in different areas and will increasingly select technology suppliers who can follow them
all over the world, with sales and service.And I’m not just referring to giants like Ikea.
Another element is market polarization:at one end, high-performance machinery and plants, created for those who want to obtain a productivity edge on their competitors; at the opposite end, machines with an excellent price-performance ratio, especially in emerging markets, designed for new market actors.
What have we done?We have turned from a bunch of independent companies to a consolidated group.While maintaining the peculiarities, the product lines, the competence of each brand, we have created four divisions:“Industrial”, “Premium”, components production, service and spares.
The “Industrial” division offers solutions to customer needs, it delivers processes thanks to skilled engineers who know the needs of companies that process wood and wood-based materials.A team of engineers collect market needs and design a turnkey solution with our technical and engineering departments.This division includes two engineering companies, Delmac Engineering based in Thiene and specializing in panel technology, and Scm Group Engineering for solid wood in Rimini, with a focus on innovation and the creation of real competitive edges.Their mission is to deliver a solution, not a machine, be it a large plant or a single product to be inserted in a high-performance line, pursuing direct contact with customers.And let me add that this activity represents a huge portion of our turnover.
The “Premium” division is dedicated to “simpler” machines, easy to configure by the customer himself.Our resellers have these machines “on catalog”, with a number of options that allow to achieve the required solution very easily.Our effort was focused on an extensive rationalization of aggregates, in order to support configuration and deliver an excellent price-performance ratio, a target that can be achieved only through maximum convergence.
The same rationalization principle was applied with the creation of one single “Components division”:now, at Villa Verucchio, we have just one brand new factory of more than 30 thousand square meters, where all components and technological units for all the machines of all brands are manufactured.A futuristic plant including about one hundred machine tools, three laser cutting plants, an advanced painting plant that offer huge scale economies.
The fourth division deals with service and spares.Also in this case we have optimized both the central warehouse and our service network around the world, with significant results in terms of customer satisfaction”.
A particularly complex industrial plan…
“…which I am just describing in macro points.I might also mention 500 thousand Euros we have invested in one year for classroom training of our managers and the reorganization of our technical departments, from thirteen to five units.We have revised our brand policy, putting the group on top and then the different companies below.
We have cleaned up, if you allow this definition, and eliminated overlappings, very similar machines offered by different brands, accurately defining each range with our customers in mind, and not the catalogs of our companies!Each application is conceived to create an enduring competitive edge for our customer”.
This rationalization and incorporation of functions previously distributed across many companies has also involved the purchasing area:we have invested huge resources in Siemens’ Plm, product lifecycle management solutions, a very powerful system that supports us significantly in the “modular and standardized design” of our solutions.Also in this case, there are scale economies and an irreplaceable tool for an accurate, orderly and cost-effective re-design (for us, sure, but also for other customers…) of the entire Scm Group range.
By 2012, we will have reviewed all our solutions, revolutionizing not just single machines, but rather each range as a whole.An example can be useful to understand the scope of this activity:at present, we machine some 118 different bases for our working centers.The new range will be built on 18 bases only, covering all application needs, and 100 will go out of production.We might robotize many stages, automate most processes by achieving high-end technology at lower costs, raising the bar of competition.The number of product codes will decrease massively at the end of this process that will be finalized in2012”.
Mr. Monetini, listening to you, the future seems to be only for the “big ones”…
”…we will certainly see a new period of consolidation.From 1985 to today, big groups have acquired companies and businesses to strengthen their structure, a consolidation that will continue.I want to be quite clear on this subject.
Big companies will inevitably increase their weight, but this does not mean that small ones will be thrown out of the market.There will always be a small businessman finding a market niche where he can be successful with his skills, flexibility and creativity.Business concentration is inevitable in all industries because, as I mentioned, size is increasingly a differentiator.For companies like ours, half a billion Euros is an adequate size, but for organizations involved in a narrower range of technology areas, much lower volumes are enough.So far, we have invested 40 million Euros in our new industrial plan.We strongly believe in it and we are confident that big companies will get out stronger from the crisis.Smaller companies will also have good opportunities, provided they keep a close eye on what’s going on, because the market will be more and more competitive.We must hold on tight to the relationship between effectiveness and efficiency”.
What was the reaction of your distributors to all these changes?
“I cannot deny there was some perplexity at the beginning, but as soon as we explained our plans in detail, their response was very, very positive.We are enhancing their role in customer relationship, providing them with supporting tools that allow them to work better, more easily and profitably.
Also for them, we have built our new showroom, over three thousand square meters where the “Industrial” division can create technology days dedicated to specific topics and application industries.For the “Premium” division, instead, we are thinking about “open days” organized by distributors themselves with our support, so that they can show machines and the place where they are created to their customers.
With this approach we also want to bring a touch of innovation in a market that has long been sticking to tradition: and reactions are really positive”.
Dr. Monetini, it’s time to end this interview. Can you leave a remark, a suggestion to our readers?
“We are looking out to the day after tomorrow, not just tomorrow.You must have the energy, will and passion to look further ahead, to search new visions, to figure out new perspectives.It’s a commitment that should involve everyone, small and big businesses.We have undertaken major projects, but we are a strong group and we are confident we will soon ripen the benefits of this effort.The crisis has forced everyone to look at their work differently:when things go very well and the market grows, you just sit down, monitor sales and nothing else.Now we all sell less and have narrower margins.We have woken up and we are looking around.In other industries, the impact of the crisis was slower, for us it was a sudden blow:we had and have little time, but we also have great skills to deploy.We are proving we are an excellent team who can keep on the route and sail safe, even in stormy waters!”.
by Luca Rossetti
A conversation with Stefano Monetini:
"Here’s to you the new Scm Group"
ultima modifica: 2011-04-08T00:00:00+00:00
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