Köngen – Although even well before the COVID-19 crisis, the German mechanical and plant engineering industry had been struggling with a global economic downturn, trade conflicts and structural problems in the automotive industry, many companies were suffering from neglecting their efficiency potential. As can be seen in the survey conducted just before the lockdown by Staufen AG among close to 90 German mechanical and plant engineering manufacturers, themselves global market leaders, based on their own assessment, a good two-thirds of the companies had considerable efficiency reserves at the time the pandemic broke out. Now that the German industry is starting back up again, the challenge is to quickly elevate them.
“As our study also shows, even among the global market leaders, more than 50 percent of the companies admit that despite the long tense situation in mechanical engineering over the past few years, they have simply become complacent”, explains Dr. Björn Falk, responsible for the mechanical engineering sector at Staufen management consultancy. “However, the companies surveyed are fully aware of the reasons for the lack of efficiency measures. For example, almost three quarters of the companies (71 percent) have problems planning their investments, given that the wheel of economic, technological, political and social developments has been speeding up ever faster.”
Nonetheless, many of the companies were confident in their ability to face the challenges of the future – at least prior to the outbreak of COVID-19. As an example, a majority of the companies indicated that over the past three years especially, their corporate culture (in 77 percent of the companies), their innovation strategy (73 percent) and their product range (64 percent) had been adapted strongly or very strongly to the new framework conditions. More than 40 percent of the companies had even changed their business model.
Based on the statements of the industry managers surveyed, their ability to respond to external influences had also improved. Despite this, however, the planning horizon of almost all of the companies (94 percent) is still at least one year, and for 21 percent of them even five years. “There are many indications that a large part of the companies is still too sluggish in their response and simply not agile enough,” observed mechanical engineering expert Falk. “Moreover, a two-third majority of the survey confirmed that instead of applying far-sighted planning and seeking out economically viable savings measures, many companies are still using a scattergun approach to distribute cost cutting across all units as fairly as possible. This is an approach that might turn out to be a strategic trap, especially for any restart after the pandemic.”
The fact that the participants in the survey agree that crises are always the best time to make necessary changes and that courage, patience and, above all, farsightedness are the critical qualities needed to successfully dig oneself out of a hole gives us hope that in the end things will not turn out quite as bad. “In our daily work, we have experienced first hand how companies have been successful in moving to a position of taking action instead of having to urgently respond” commented business consultant Falk. “The rapid implementation of coordinated measures and short-cycle tracking of these measures form the basis for the necessary degree of flexibility in these highly dynamic times. Acting quickly, deliberately and with foresight is the key to remaining successful during and, above all, after the crisis.”
For more information:
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About Staufen AG – www.staufen.ag
Inside every company there is an even better one. With this conviction, Staufen AG has been advising and qualifying companies and employees for more than 25 years. Markets are on the move – the competitive pressure is enormous. Staufen helps to quickly bring about the right changes, increase productivity, improve quality and increase innovative strength. With the appropriate strategies and methods, the international transformation consulting company ensures rapid and measurable success. In order to leverage the potential available in every company, Staufen consultants establish a lively and sustainable culture of change together with executives and employees. Staufen subsidiary Staufen Digital Neonex supports medium-sized industrial companies on their path to digital transformation. The Academy of Staufen AG also offers certified, practice-oriented training courses. From the international locations, more than 340 employees serve customers all over the world. In 2020, Staufen AG was recognized by “brand eins” as “Best Consultants” for the seventh year in a row. According to the renowned industry study “Hidden Champions 2020,” the consulting firm is Germany’s best lean management consultancy and was honored several times with the “Best of Consulting” award by the “Wirtschaftswoche” journal.