Kick-Start Industry - Immediate action

• How can production be made to be flexible and adaptable?
• How can critical production bottlenecks in the network be eliminated or overcapacities reduced?
• How can production output be adjusted?
• How can lead times be accelerated or made more flexible?
• Which services can be mapped internally and externally?
• …

Of course, the significance of the individual issues or levers in the area of production varies depending on the scenario being considered, sometimes significantly so. While in the case of a rapid upswing we tend to focus more on the immediate activation of resources and capacities and pursue the issue of short throughput times, these issues are less or not at all important in the case of a recession.

A recession scenario on the other hand is more likely to bring to the fore issues of cost reduction or the adjustment of the depth and structure of value added (make-or-buy).

However, it is often difficult to commit to a specific follow-up scenario. In this case, our Operations Readiness Check with its specific approach quickly provides an overview of necessary areas needing action, as all relevant topics are examined, and the necessary insights gained. After initially determining your company's current position, an individually tailored risk assessment and a plan of action resulting from this are used to develop a suitable roadmap for a quick and successful restart or ramp-up after shutdown.

• High simultaneity factor for restart
• High order back log and minimized buffer stocks
• Planning uncertainty of future customer call-offs
• Uncertain availability of internal capacities
• Bottlenecks among suppliers and logistics service providers

Supply chain management and logistics therefore play a key role in ensuring a coordinated restart. All the information on demand, stocks and internal and external capacities should be pooled here so as to serve as a central control unit. To be able to fulfil this role, a three-stage "Supply Chain Recovery Program" must be established.

The first stage involves consolidating all necessary data centrally in order to model possible scenarios and prepare appropriate action plans. This preparation should preferably still take place during the shutdown in order to be prepared for Day 1 of the restart.

During the start-up phase (stage 2), it is important to be able to react quickly and flexibly to volatile changes in demand, but also in internal and external capacities. A basic prerequisite for this is a central organizational unit that compares customer needs with available resources and initiates appropriate measures. In doing so, the necessary transport resources must also be taken into account and well-regulated communications with suppliers and customers must be established.

Once a stable foundation has been created and a return from "crisis mode" to a regulated mode of operation is possible, measures to increase resilience should be launched in stage 3. This includes, in particular, establishing risk management functionalities and developing integrated S&OP planning.

1. Take advantage of this time of reduced or stopped production to tackle issues with your suppliers today and secure your established supply chains. This requires achieving 100% transparency of your entire supplier portfolio:
   • Overview of dependencies on suppliers
   • Overview of critical components and groups / Evaluate set-up & approval of alternatives
   • Identification of real bottlenecks per supplier and component both over time and regarding their impact on your own products, lines and customers.

2. Securing market capacity – You need to ensure that your existing suppliers have sufficient resources available and to target any suppliers experiencing shortages by supplementing or replacing them with 2nd source suppliers. Also, in this phase, some basic rules are essential to resolve supply bottlenecks successfully:

• Requirement profiles and criteria for searching the market for 2nd source suppliers must be defined
• An efficient search for suppliers supported by appropriate (digital) tools – keyword "digital sourcing" – helps to identify market opportunities quickly
• Total market stocks for standard components must be determined, competitive requirements estimated and quantities available on the market screened
• Activating a task force "Special Clearance and Evaluation" to create a suitable framework for prompt and secure approval of 2nd sources is essential
• Focusing your search on your own country or on nearby regions/Europe (NearShore-Sourcing) in order to shorten transport routes and minimize risks
• "Old suppliers" and phased out materials etc. must be reactivated to meet demand

3. Continuous supplier tracking with the aim of minimizing known risks and identifying new problem areas – including:

• Safeguarding against the legal effects of contractual penalties and fines from suppliers and customers
• Drawing up a comprehensive action plan that covers all activities related to risk minimization and ensures ongoing transparency of short-term decisions
• Open communication with customers and suppliers at an appropriate frequency to maintain a relationship of mutual trust
• Using task force methods to help suppliers overcome specific output problems
• Embedding the insights gained into the medium and long-term supplier management strategy

Once the situation has returned to normal, it is important to reduce special activities to a standard level and to establish the issue of supplier risk management as a fixed element of purchasing and procurement processes.

Companies that have so far been operating at the limit may be efficient, but they are not viable in the long term. Successful companies will set themselves up organizationally in such a way that they can survive even major fluctuations in the market and remain capable of functioning even if their core business experiences a decline.

A key feature of resilient organizations is strong risk management as an integral part of operations at all levels of the business. The aim is to identify risks as early as possible in order to be able to initiate timely and targeted countermeasures. Resilient organizations are also characterized by the fact that they prepare themselves more intensively and much more consistently than other companies for imponderables in a preventive manner and, among other things, simulate alternative scenarios and explore optional courses of action. Acting in a resilient manner means strengthening the personal responsibility of the people involved and building up financial and organizational reserves in the main risk drivers in order to reduce vulnerability.

Especially for indirect functions this means to

• allocate critical resources and expertise within the company
• make these functions crisis-proof and resilient
• at the same time reduce the service level to the minimum in order to
• benefit from cost savings opportunities.

There will continue to be restrictions due to social distancing. Not only for the purpose of restarting should mobile forms of cooperation be used and systematized. Typical questions for the indirect areas are:

• Which areas will continue to be suitable for efficient mobile working in the future?
• How are virtual collaboration models implemented in organizational terms?

We are convinced: In many companies a rethinking will (have to) take place. The chance to prepare for the future is now!

Especially at the present time, companies are dependent on their processes being resilient, stable and crisis-proof. Only if this is guaranteed can the continuity of the entrepreneurial activity in the organization be ensured – on site at the company premises or remotely at the home office.

The impending restart following the Corona crisis offers companies opportunities, but it is also a test of strength. Because, analogous to the image of the nervous system, a new start and ramp-up involve a high density and multitude of impulses that affect the company's business processes. Restarting after the shutdown therefore carries the risk of over-stimulation or even temporary paralysis of the nerve tracts in the company.

For restarting the process, this directly results in the following process challenges within the company:

• How can our business processes ensure that our level of cash flow is increased?
• Where can bottlenecks in the processes endanger a smooth restart?
• Can processes help us to monitor corporate performance during the restart?
• Can process digitalization support the restart in the short term and make it more efficient?
• Can our processes be made sustainably resilient based on our experience during the crisis?
• …

The relevance of the various questions is to be evaluated individually depending on the company situation and the start-up scenario. A rapid upturn will be decisively characterized by efficiency and dynamics and must ensure that bottleneck resources and process weaknesses do not become a predetermined breaking point. A slower upswing, on the other hand, should always be accompanied by transparent controlling and should sustainably reduce frictional losses and increase efficiency. Should the current crisis lead to a recession in the long term, companies must secure themselves permanently through resilient and automated processes and transform their processes into a central controlling instrument in order to ensure cost-optimized and efficient processes in the organization at all times.

To give you a quick and transparent overview of your business processes, you can use the BPM Quick Check to obtain a quick assessment of your processes in the relevant dimensions. The result is a transparent and objectively measurable assessment of your current situation. On this basis, you can implement the most important quick wins for the immediate start-up after shutdown. However, the strategic implications also allow you to develop a medium and long-term roadmap for a sustainable (cost) efficient and permanently resilient business process world: a reactive and anticipatory as well as digitalized nervous system.

COVID-19 has not only changed the needs of customers, but also influences the kind of products to be developed in the future and the way this will take place. The following challenges arise:

• Fast optimization of the product portfolio
• More efficiency in research and development and in the entire product development process
• Mastering the increasing complexity due to changing circumstances

In a first step, the basis for optimizing the product portfolio is establishing absolute transparency. An overview and evaluation of all current and planned projects, products and initiatives must be compiled. Connections, dependencies and overlaps must be identified.

Parallel to this, a close client relationship enables us to analyze customer needs and any changes in market relevance and identify the solutions required. The results are mirrored against one's own core areas of expertise in order to identify those areas in the product portfolio that require optimization. The core of these efforts is to focus on the important issues!

In a second phase, the efficiency of the product development process and the value of the products to the company must be increased. This includes two approaches to optimization: Firstly, how new products are developed, and projects are executed, and secondly, the cost optimization of products and their correct positioning in the market and compared to competitors. Potential resulting from this must be identified and implemented accordingly.

In a third stage, the aim is to optimize the product portfolio by introducing modular systems with components and platforms for high external product variance. Establishing standards in development is the basis for a homogeneous product portfolio. For example, strategies must be developed to inspire customers for new products and to withdraw old products from the market. Modular systems and portfolio streamlining contribute to mastering the complexity of the product portfolio and gaining new freedom

Thanks to precise real-time measurement, analysis and notification at one-second intervals, the “SafeZone” solution enables us to meet the criteria of “social distancing” when in personal contact with our customers at any time, to minimize any risk of infection and, in case of risk, to trace contact chains.

HOW DOES TMG USE “SAFEZONE”?

Our project teams (and our back-office) have been equipped with “SafeZone” and make this technology available to our clients' project team members, thus securing the plans and projects of our customers. This enables us to support our customers in the realization of:

• an undelayed project start and effective and efficient project work
• a lower risk of infection through proactive distance regulation
• a heightened sense of safety for the project staff and thereby effective handling of the project
• traceability of contact chains in case of suspected or actual infection
• selective intervention instead of a complete shutdown in case of suspected infections