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Germany -- Volker Feyerabend
Management' Survives Tough Times
By Volker Feyerabend
the first two months 2003, the German PCB market showed some
strength. Orders were up 10% (unofficially) from last year
according to the last CEBIT. However, the outlook still remains
cloudy, mostly due to the potential implications of rebuilding
Clearly, 2002 was a tough year for everybody. The latest
figures were worse than expected. The German (and worldwide)
PCB market output continued to shrink. This industry is
undergoing a painful consolidation process. The distribution
of market share has remained fairly stable, with 65% of
the market in the hands of the top ten manufacturers. Some
are making money while others are filing for Chapter 11.
List of "Top 20" German PCB manufacturers.
separate the winners from the losers, one only need ask which
adaptations and changes were successful, and which were not?
Which companies in the supply chain positioned themselves
to weather tough times and cash in when the market turns around?
The following describes how one German PCB equipment manufacturer,
Pill e. K., successfully adapted to changing market conditions.
1. Pill staff behind D-E-S line.
in 1960, Pill e. K. produces Horizontal Wet Processing Equipment,
and is known for creative engineering, excellent service (see
Karl Dietz' article "Germany: Europe's Technical Powerhouse,
/i> March 2002, page 40). Pill is represented in most European
countries, in the U.S. (ECI Technology, East Rutherford, NJ)
and has also distribution channels in Africa (Egypt), and
the Far East (Singapore, Taiwan and China).
The company has actively pursued marketing their products,
such as Clean-Master products, to new market segments. To
this end, Pill has expanded its product portfolio to include
and target PCAs, plastic and metal parts, and the related
industries. The company expects moderate revenue growth
in 2003 and additional market impulses (also from Productronica)
in the second half of 2003.
Pill e. K. has also watched its expenses, implementing
several cost-cutting measures, including lay-offs, material
cost reductions, and adding flexibility by outsourcing some
of its production during 2002. "While these were difficult
decisions, we have reduced our operating expenses and brought
us in line with the market," said Frank Baron, the company's
sales manager. "With the strategic changes we areand
will bepositioned to benefit from any upswing in the
The company is facing challenges such as increased price
pressure, on-time delivery requirements, reduced lead times
as well as diminished demand. To operate effectively, Pill
will focus its marketing efforts on the markets with the
most profitable margins. It concentrated on key projects
such as optimizing its planning process, increasing productivity,
augmenting its R&D efforts, fostering a market orientation
among its technical staff (i.e., instituting product manager
positions), and finally extending its product and service
portfolio. Basically, it has changed its culture to an even
more customer-focused company.
1. Pill is pursuing the following markets.
manage and drive these changes internally, Pill encourages
open communication lines among their employees and across
hierarchical lines. "We proactively inform, and involve our
people without a time lag to avoid rumors, build trust, and
we avoid reactive information," explained Baron.
Feyerabend is President of APROS International Consulting (www.APROS-consulting.com).
He has a degree in Engineering and Economics. He has worked for
Hewlett Packard, Agilent Technologies, Groz-Beckert in various international
senior management positions. He also headed a European Outsourcing
Organization with the focus on EMS/ PCB companies. Contact him at