FLSMIDTH BEATING COMPETITION FROM EMERGING MARKETS THE CHALLENGE How can you best meet the growing competition from emerging markets when you have been firmly rooted in Europe for 130 years? FLSmidth was losing market shares to competitors from emerging markets, particularly China. At the same time, the company struggled with a number of specific problems when delivering their products, such as a lack of product standards where products were redesigned for each customer, complex processes, specialist functions taking turns on driving the process, errors and defects, heaps of documents and unsolved tasks, insufficient planning of future work load and capacity, poor data quality, and insufficient project management. THE SOLUTION ABOUT FLSMIDTH FLSmidth is a global EPC (engineering, procurement, and construction) business with presence in more than 40 countries and project and technology centres in Denmark, India and the USA. The company is a leading supplier of equipment and service to the global cement and mineral industry. FLSmidth delivers solutions ranging from individual machines to complete cement and mineral plants, including services before, during and after construction. The group’s internal resources primarily include engineers who develop, project, construct, mount and service the equipment, whereas most of the manufacturing is outsourced to sub-suppliers. Over the course of 130 years, FLSmidth has developed a business culture based on three basic values: competence, responsibility and cooperation. TESTIMONIAL ”The main focus in our development process has been on value creation – partly for the customer, partly for ourselves” Bo Steffensen, Chief lean officer, FLSmidth “With help from Valcon, we have developed our ability to deliver projects quicker, better and at lower costs. Until 2005, our self-image was that what we did was and had to be unique. We have changed this to focus on what really creates value for our customers.” Bo Steffensen, Chief lean officer, FLSmidth FLSmidth carried out a major business development process to meet these challenges. This involved many different measures: For example, order processing was offshored to the company’s Indian branch, thereby cutting costs by 50% while improving quality and achieving greater flexibility when additional capacity is required. The company also introduced better IT tools, which helped improve process integration, decision-making, and efficiency. Procurement in low-cost countries has reduced equipment costs by up to 70%. Very importantly, FLSmidth has focused on areas where it offers something that the competition does not, such as a better environmental profile and faster lead times on projects; the latter can save customers millions. Overall, internal processes have been optimised, and there is a general shift towards focusing on customer value.
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