© ann vereecke / staten generaal - 1 manufacturing in western europe survival of the fittest...
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© Ann Vereecke / Staten Generaal - 1
Manufacturing in Western EuropeSurvival of the fittest
Lessons learned for Flanders
Professor Ann Vereecke
Vlerick Leuven Gent Management SchoolUniversiteit Gent
© Ann Vereecke / Staten Generaal - 2
Headlines in the business press
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Added value of the industrial sectors
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© Ann Vereecke / Staten Generaal - 5
Markets in emerging countries are growing
Kasra Ferdows, Sept 2009
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GLOBAL PLANT NETWORKSLessons learned from a Flanders DC research study
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The board room of a global company
© Ann Vereecke / Staten Generaal - 8
Research set-up
1995-1996 study
2005-2006 studyCompany A: globalized by establishing greenfields
Company B: global player after merger
Company C, D: acquired by globalizing player
Company E, F, G, H: rationalization by closing down some plants
In total: 59 plants in 1995-1996; 82 plants in 2005-2006
© Ann Vereecke / Staten Generaal - 9
Evolution in number of plants
0
10
20
30
40
50
60
70
80
90
1995-1996 2005-2006
greenfield
acquired
gone
survived
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Plants by City in 1995
A E
B F
C G
D H
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Plants by City in 2005
A E
B F
C G
D H
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The strategic role of the plant
Low-costinput factors
Technological know-how
Market
Reason for exploitation
Con
trib
utio
n to
str
ateg
y
high
low
© Ferdows, HBR 1997
© Ann Vereecke / Staten Generaal - 13
The strategic role of the plant
production
maintenance
quality assurance
logistics
process development
product development
Low-costinput factors
Technological know-how
Market
Reason for exploitation
Con
trib
utio
n to
str
ateg
y
high
low
© Ferdows, HBR 1997
© Ann Vereecke / Staten Generaal - 14
© Ann VereeckeBased on Ferdows, HBR 1997
input factors skills & know-how
market
Reason for exploitation
Leve
l of
stra
tegi
c ro
le
low
source contributor
off-shore outpost
lead
server
medium
high expertmarket-master
brain
© Ann Vereecke / Staten Generaal - 15
1995
labor Skills &knowhow
market none
1,0
2,0
3,0
4,0
5,0
6,0
7,0
8,0
9,0
role
_199
5
adv_1995knowhow
labor
market
none
skill
serv
er
offs
hore
sour
ce
cont
ribu
tor
lead
mkt
mst
r
stra
tegi
c ro
le -
199
5
© Ann Vereecke / Staten Generaal - 16
Sta
tus
stra
tegi
c ro
le -
199
5
16
adv_1995_nr
1,0
2,0
3,0
4,0
5,0
6,0
7,0
8,0
9,0
role
_199
5
statusgone
survived
labor Skills &knowhow
market none
Survivors by 2005 ?
© Ann Vereecke / Staten Generaal - 17
input factors skills & know-how
market
Reason for exploitation
Lev
el o
f st
rate
gic
role
low
source contributor
off-shore outpost
lead
server
medium
high expertmarket-master
brain
-3
-2
-1
-4
-2
-2
-1
no role
-3
© Ann Vereecke 2009Based on Ferdows, 1997
18 plants left the networks
© Ann Vereecke / Staten Generaal - 18
© Ann Vereecke 2009Based on Ferdows, 1997
input factors skills & know-how
market
Reason for exploitation
Lev
el o
f st
rate
gic
role
low
source contributor
off-shore outpost
lead
server
medium
high expertmarket-master
brain
+7
+2
+1
+21
+4
+3+2
other role
+1
other role
+1
42 plants added to the networks
© Ann Vereecke / Staten Generaal - 19
1st set of conclusions
1. The market was and still is the main driving factor of factories
2. Server and off-shore plants are flexible assets in the multinational plant networks
3. Lead plants have a safer future.
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Sta
tus
stra
tegi
c ro
le 1
995
Bel
gium
20
adv_1995_nr
1,0
2,0
3,0
4,0
5,0
6,0
7,0
8,0
9,0
role
_199
5
statusgone
survived
labor Skills/knowhow market none
© Ann Vereecke / Staten Generaal - 21
Network position of the plant
Degree of communication between plants
daily, weekly, monthly, less frequent
Exchange of innovations between plants
Product, process, managerial innovations
Visits to and from other plants
Number of days spent by manufacturing staff people
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isolated plant receiver plant
innovations
hosting network player
mfg staffinnovations
active network player
innovations mfg staff
Network position of the plant
© Ann Vereecke / Staten Generaal - 23
isolated plant receiver plant
innovations
hosting network player
mfg staffinnovations
active network player
innovations mfg staff
Network position of the plant - 1995
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isolated plant receiver plant
innovations
hosting network player
mfg staffinnovations
active network player
innovations mfg staff
Surviving plants?
© Ann Vereecke / Staten Generaal - 25
isolated plant receiver plant
innovations
hosting network player
mfg staffinnovations
active network player
innovations mfg staff
Surviving plants in Belgium?
© Ann Vereecke / Staten Generaal - 26
Conclusions
1. The market was and still is the main driving factor of factories
2. Server and off-shore plants are flexible assets in the multinational plant networks
3. Lead plants have a safer future.
4. Network players have a safer future.5. Isolated and receiver plants are vulnerable
© Ann Vereecke / Staten Generaal - 27
Lessons learned for management
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Lessons learned for Flanders
© Ann Vereecke / Staten Generaal - 29
For more information:
ann.vereecke@vlerick.com
© Ann Vereecke / Staten Generaal - 30
References• Changing Landscape of Global Supply Chains, Kasra Ferdows,
presentation for FDC, Vlerick Leuven Gent Management School, Sept 16, 2009
• How to optimize knowledge sharing in a factory network, Arnoud De Meyer & Ann Vereecke, McKinsey Quarterly, Sept 2009
• Network relations in multinational manufacturing companies’, Ann Vereecke, FDC research report, July 2007 (ISBN 9789078858065)
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