It is almost a year since MANN+HUMMEL completed its takeover of the Affinia Group. The company’s worldwide presence has grown as a result but we are also facing new challenges. For example, it was necessary to design a project organisation so as to quickly integrate the international purchasing departments and thus enable quick savings to be made. Meanwhile, the various purchasing departments are being reorganised at global level according to a new hub structure. I spoke to Hanno Höhn, Group Vice President Purchasing, who talked about what has been happening since the acquisition was concluded and the new MANN+HUMMEL purchasing organisation was developed.
Mr Höhn, by acquiring the Affinia Group, MANN+HUMMEL has been able to press forward with its objective ‘Leadership in Filtration’; which aspects of this merger were the most significant for Purchasing?
Hanno Höhn: Our first concern following the acquisition was to exploit any synergy and bundling effects as quickly as possible. In order to do this, we quickly put together a project team consisting of the heads of our most important material groups, buyers from Wix and Filtron, and controlling and system specialists. We were able to recruit an American colleague from our old organisation to take on the role of project manager. For me personally, this was particularly important, since inter-cultural aspects play a key role in integration. Essentially, you need someone who understands the culture.
Inter-cultural teamwork – this implies that the employees are working towards an objective within an international context. What exactly is this objective?
Hanno Höhn: The Wix and Filtron brands have a very similar supplier structure to MANN+HUMMEL on the aftermarket. The acquisition of these brands means that our purchasing volume for production materials has grown to around 1.6 billion euros. The aim was to identify common suppliers, common parts, substitution options, prices and purchasing volumes quickly using a spend cube. This was no easy task as, at the time, we were of course neither working on the same domains nor with the same ERP systems. The data analysis was incorporated into the work of ‘quick-savings teams’, who used this to prepare two supplier days in the USA and Europe. Right from the start, it was clear that from now on we would be speaking to suppliers with one voice.
So, what message will this voice be conveying to suppliers in future?
Hanno Höhn: For our part, these were very high-level events, with the CEO and Chairman of both companies in attendance. It was not simply a matter of providing suppliers with information, we held face-to-face discussions on conditions with around 30 common suppliers with the aim of generating immediate input. This proved to be a very successful strategy for us. We made it clear that our ultimate goal was consolidation, and, of course, it is also possible to exploit the psychological momentum of this kind of event. However, the most significant aspect is the level of detail put into the preparation. Meetings of this kind can only be successful if the preparation is right. The time pressure in this situation – there were only a few months between the acquisition in May and the two events in July and August – helped us to quickly win over our most important suppliers.
In your personal experience, what is the most efficient way to bring together buyers from different companies and cultures as quickly as possible?
Hanno Höhn: Speed plays a pivotal role in the success of processes like this, and not just from a business perspective – it also helps to bring the employees together. We helped the parties get to know each other by organising reciprocal visits. It is important to see how and where your colleagues work, and to know the locations, and this shouldn’t just apply to purchasing but also to the associated plants. That said, it was the events in particular that brought people together. Around 40 colleagues were involved in the preparation for the supplier days, and this shared responsibility acts as a catalyst for integration.
With this variety of people, you would expect there to be a wide range of opinions. How did you manage to get all employees on board and involved in the change process?
Hanno Höhn: I think it is very important that, in the old MANN+HUMMEL organisation, we already have a top team that is used to working on a global level and which has some experience of incorporating new locations through earlier acquisitions and organic growth. It is also essential to develop an understanding of the new divisions and how they are organised as well as getting to know, understanding and respecting new colleagues. I’d like to add that the fundamental basis on which the overall acquisition has taken place has been a positive one. The general conditions are also good. Nonetheless, it is important for us to create a common identity.
Transparency is an important factor in achieving this goal, wouldn’t you agree?
Hanno Höhn: Yes, of course. Anyone entering into a process like this without transparency or a structured project plan in place will quickly lose their way. It is also important for everyone to have quantifiable targets to aim for, and to put in place a tracking system for the work carried out, which everyone can access. There needs to be ‘one single point of truth’. This is crucial.
With hindsight, would you approach a project like this in the same way in future?
Hanno Höhn: Absolutely. Supplier days are an excellent way not only to act consistently with regard to suppliers, and to make some quick initial savings following the acquisition, but also to bring the organisation together. Having a specific objective and securing certain outcomes provides tremendous motivation. Organising a project like this also has the benefit of enabling you to act swiftly and gives you an initial insight into how everything is running. At this point in time things are actually moving along pretty nicely. We wanted to give ourselves a bit more time to develop and implement the new organisation on this occasion, and this has also been beneficial.