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Inside Germany -- Volker Feyerabend
'Adaptive Management' Survives Tough Times

By Volker Feyerabend

—Posted: 06/01/2003

During 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 Iraq.

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.

2002 List of "Top 20" German PCB manufacturers.


To 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.

Photo 1. Pill staff behind D-E-S line.

Founded 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 are—and will be—positioned to benefit from any upswing in the market."

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.

Graph 1. Pill is pursuing the following markets.

To 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.

Volker Feyerabend is President of APROS International Consulting ( 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

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