Dress warmly and do your homework!

The wind is getting colder and it’s time to prepare for it:

While most of Europe is struggling, Germany has come out of the economic crisis well and now has many years of continuous growth behind it. However, there are increasing warning signs that this could change quickly in the near future:

Hardly any other country benefits as much from global trade as Germany, and global trade is now in danger: Wars in Syria, Iraq and Afghanistan, anti-globalization movements, resistance to TTIP and CETA, the rise of isolationist and populist movements everywhere in Western countries, a looming real estate bubble in Germany, the threat of a rapid transition from the combustion engine to the electric motor, and the renewed threat of inflation in Europe…

There are enough problems that we should be preparing for in our companies, but too little is being done. In companies, I come across increasingly long project backlogs that are not being worked through. In my conversations, five reasons for this emerge: lack of budget, staff overload, lack of transparency, lack of awareness of the problem and – unfortunately not infrequently – convenience.

I worked intensively in corporate restructuring for many years and found that all companies in financial difficulties and insolvency had one thing in common: a long list of unfinished ratio projects.

Current calculations by the German Economic Institute show just how long this list has become in German industry. Significant increases in unit labor costs, 19% in the metal and electrical industry since 2010 (the employees should be forgiven), are offset by a lousy 5% increase in productivity

If it is handled skillfully, the project and productivity backlog can be reduced; what can be achieved in a difficult restructuring phase can be accomplished much more easily in (still) profitable business operations:

An important lever is always the optimization of the supply chain and, even more focused, inventory management: this is where liquidity can be gained in every company and earnings improved at the same time. Supply chain optimization and inventory management measures do not require a budget; they not only bring their own budget with them, but also create liquidity for further project activities. A lack of personnel capacity can be compensated for by a clever distribution of project work between consultants and companies, without the desired transfer of know-how falling by the wayside. Supply chain projects generate enough liquidity to be able to finance consultants. Using supply chain constraint analysis and situation analysis, problems can be identified and made aware of, intrasparent causes of problems uncovered and starting points for their elimination identified, fields of action structured and prioritized.

The prerequisite for all of this: comfort must be overcome and the sense of urgency strengthened: Optimize in time, then you won’t get into trouble.

[1] DIE WELT from 18.10.2016:

Picture of Prof. Dr. Andreas Kemmner

Prof. Dr. Andreas Kemmner

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