Adapting a manufacturing company to dramatic changes ‐ experiences from the former East Germany

Abstract

German unification led to a total change in the environment of East German factories. Describes a manufacturing company where these changes led to a massive, multi‐step reduction in size and a change from mass production to one‐off production. Traditional analysis methods did not give results adequate to inform strategy making. Size reduction without appropriate strategic orientation led not only to heavy financial loss, but also caused a “brain drain” effect, and initiated a vicious spiral of downsizing. The identification of employees’ skills and experience provided information about what the company was actually good at doing. Direct costs and sales were then analysed to determine how best the factory might be structured in order to support the core process. A cost accounting system was established and a system for controlling the engineering process was implemented. Order processing was simplified and supported by the tailoring of the production planning and control computer system.

Citation

Mertins, K. and Neubauer, G. (1996), "Adapting a manufacturing company to dramatic changes ‐ experiences from the former East Germany", Integrated Manufacturing Systems, Vol. 7 No. 2, pp. 37-43. https://doi.org/10.1108/09576069610111882