The customer had a situation where nobody from Germany had the expertise of management in China. Same for the needed changes after an acquisition and the leadership to motivate and hire Chinese staff. Therefor everybody was glad that an efficient and fast “refurbishment” of the acquired company became realistic.
Working together was only possible through a close information flow and regular update with the German board. Essential was the trust to do the right thing to bring the Chinese company on a level where it can be integrated into the global organization.
The company was then handed over to the regular successor who is now in charge to create constant growth on the new solid basis.
Restructure subsidiary in China after acquisition
Packaging and Containers
Manager:
Mr.M. G.
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Customer:
Confidential
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Role:
General Manager
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Location:
China
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Turnover:
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Time frame:
15 months
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No. of employees:
approx.. 230
About the Customer
The customer is a hidden champion for specialized packing machines. They play a key role on global markets in their industry with high-tech, top performing machines and sophisticated process control. Emerging counties are a huge market for machines of high quality but less functionality, less complexity and lower in price. The German company acquired a similar company in China, producing machines far below of German level. This was a strategic decision to get better access to Chinese and Asian markets.
Testimonial from Сustomer
Situation (Challenge)
The change management after the acquisition had not the attention of the head quarter as needed. The Chinese General Manager couldn’t cope with the challenge of improvements on all levels to lead the transition from a pure Chinese run company to a Western managed one. All parts of the company needed a new set-up: quality, purchasing, warehouse, production, process management, R&D, planning, reporting, finance, controling, branding and marketing, treatment of new kind of customers.
Finally there were compliance issues which made an instant dismissal of the general manager unavoidable. At that time half of the 2nd management level left the company already, lots of experts too. Low quality and machine performance caused huge complaints of the customers and the existing brand reputation in China was about to fade away. Not talking about profit and efficiency and especially the motivation of the staff still working in the company.
At that point I took over the responsibility as general manager in a location in the countryside, far away of any other foreign investor.
Solution (Achievement)
The major task at first was to create trust of the staff into the future of the company and their individual future in the company. During the following months the agenda consisted of a long list of topics:
• Recruiting of managers for QM, production, HR, finance, R&D, warehouse
• Recruiting in total 60 employees in 11 months for operations
• Create a new C&B system (compensation & bonus) for all staff
• Restructure production, introduce lean management, reduce factory stocks
• Set-up financial reporting and planning
• Set-up QM department for incoming inspection and products
• Analyse existing business processes, create future process landscape
• Prepare IT, documentation, organization and processes for ERP
• Restructure incoming processes and warehouse management
• Reorganise R&D to work efficiently on machines with Western concept
• Redesign Chinese product lines to make them more competitive
• Produce prototype of new machine, expose them on the trade fare
• Reorganise and streamline sales, prepare sales for new products
• Learn how to approach new customers with high level products
• Create new branding and homepage for the company
• Plan and budget the renovation and extension of the factory site
The biggest challenge was that most of the tasks had to be started and boosted without having the managers and experts on board.
Furthermore the whole job was only possible with intense cooperation with leaders in the head quarter and tremendous support from Germany.
After totally 14 months the organization was complete in terms of managers and experts. The complaints of customers stopped. The delays in delivery times disappeared nearly completely. Reporting channels and tools were established and the company went through a real planning process in the context of the global organization for the first time. The trade fare was a full success as all standard machines as well as the prototype of the new generation were sold on the fare.