28th September 2020
 

Panelists:

• Beatrix Praeceptor, Chief Procurement Officer, Mondi Group

• Simon Kuchelbacher, VP Projects & Business Support, RHI Magnesita

• Werner Horn, Co-Founder & CEO, Securikett

Moderator: Arnold Schuh, Competence Center for Emerging Markets & CEE, WU Vienna

Although this is a global crisis, industries, companies, markets and countries are differently affected. For many internationally operating companies this crisis comes in addition to other international trade conflicts (e.g., US-China, US-EU) and a rising nationalism and protectionism in global trade. The robustness of international supply chains is under discussion and the digitalization of business processes is on the rise. Employees, customers and other stakeholders are following closely how firms stick to their core values and how they interact with them. Such a crisis often highlights weaknesses in existing business processes, organizational arrangements and go-to-market approaches. Furthermore, the importance of the foreign markets is reappraised, especially the role of emerging markets in the international portfolio of the firm.

The panel started with brief introductions of the businesses/organizations of the panelists and a statement on their view on the topic – these presentations are available for download below. The impact on industries, successful management of crisis and learnings from crisis were then discussed with the audience

The main conclusions are summed up here:

Management

• Firms kept all plants and supply chains running throughout the crisis except for government lockdowns.

• While the Covid-19 pandemic is a global crisis, the responses are local. Empowering the regional management is the best solution as they are closest to customers and other stakeholders.

• Quick establishment of a Covid-19 project team: this dedicated cross-functional project team with participating top managers tackles issues critical to the performance of the firm such as implementing a new management structure, capacity optimization, cost reduction and increased digitalization of business processes.

• You have to rely on strong local teams due to disconnect in communication.

• Hands-on approach

• Inclusive leadership

• Winning new customers is difficult in this situation: projects with potential customers are on hold, sales come from existing ones.

Global Supply Chains/Operations

• Crisis is forcing firms to optimize their production networks, faster than before thought possible.

• The regionalization of global supply chains is often not possible due to highly specialized plants – in order to sell effective solutions to B2B customers you sometimes need products from geographically dispersed plants.

• Global firms will always try to reap economies of scale and synergies on a global level, not just on a regional one (e.g., procurement). Protectionism may hinder these initiatives.

• Discussion of the robustness of global supply chains:

  • How can you convince key accounts to keep you as a single supplier?

  • To be on the safe side: Develop a second supplier at a geographically distant location for each core product.

Digitalization

• Accelerated digitalization of global business operations is a huge opportunity.

• Fast adoption of digital communication tools in the organization came as a surprise.

• Crisis triggers the development of new digital approaches in technical services, selling (“virtual salesroom”) etc.

Learnings for the future

• Management was impressed

  • By the capability of their organizations to cope with such a huge crisis (“Unbelievable what was possible in such a short time!”).

  • That it was possible to run a company nearly entirely remotely in a lockdown.

• Better preparation for dealing with uncertainty, meaning having tools ready and clear structures (what is decided centrally, what decentrally?)

• Identify risks in business processes, operations and supply chains earlier before a crisis hits.

• High value of a decentralized organization with a strong cooperation between the sites.

Download presentations:
Beatrix Praeceptor
Simon Kuchelbacher
Werner Horn
Arnold Schuh