Hilti – Gearing the Supply Chain for the Future
Case Study SCMMS II – Hilti – Gearing the Supply Chain for the Future
1. Evaluate the three scenarios proposed by the project team along the lines of the criteria presented in the case
2. What would be your recommendation to the board in the current situation of world economy in December 2011
1. The project team has proposed three scenarios for Hilti’s management board which all have the potential to help the company compete in an ever more competitive and cost-driven environment. Hilti has still the competitive advantage over most other important industry players, because it has a very high-quality approach and is able to charge 30% premiums for their products. The first approach the project team has
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“Greenfield” would be in line with the premises of the Champion3C strategy and the brand would stay protected but such a huge change cannot be made without alienating the company’s workforce. Hilti would need to keep their highly specialized workforce in Western Europe and move it to Eastern European facilities since it would be hard to find a comparable workforce in Eastern Europe. Even if an essential part of the workforce could be transferred the questions remains if giving up all the supplying and sourcing relationships could be severed without big implications for quality of products and the high service quality. The direct sales force would be a stand-alone unit without direct contact to the manufacturing units which normally would lead to a lower quality service for the end-customers. In “Greenfield” a lot has to be considered first in order to make this not only a cost-effective effort but also one that delivers sustainable cost-efficiencies without having a negative influence on the company’s high service quality. If the company loses its competitive advantage it loses the ability of taking a 30% premium over its competitors and with it the ability to deliver innovative, high-end products.
2. What would be your recommendation to the board in the current