Bringing a Factory 'to life' in
Saudi Arabia
Industry & Scope :
- Local Business Unit for the full range of products, systems & services related to High-Voltage Products, being part of a large international technology group.
- The entity was fronting and supporting the import business related to High Voltage Products - i.e. 66 kV to 420 kV for Saudi Arabia, as well as providing all the local services for these products and systems in Saudi Arabia & Bahrain.
- It also included the first factory in the Middle East for GIS (gas-insulated switchgear) systems for high voltage in the range of 66 kV to 420 kV to serve the local market of Saudi Arabia, as well as other GCC countries.
Role / Function :
- Local Business Unit Manager, being responsible for the entire product and service portfolio (local and imported business), covering the entire value chain with a staff of 160.
Business Context :
- The factory had been set-up 2 years earlier, but as the required local qualification of the factory itself, as well as for its first GIS product had not been granted, the factory and its staff were not fully utilized, such that it became questionable, whether the factory could be 'brought to life', also considering the significant financial losses, which resulted from that situation.
- Correspondingly, the motivation of the staff started to deteriorate, and the enity lacked clear directions on the way forward. The staff was mixed of Saudi nationals, other Arabs from the region and Asians.
- The macroeconomic downturn of the Saudi economy during that period and correspondingly the lack of funds in the market place additionally hampered the development of the local business.
Actions :
- Implementation of a sustainable business model and organization in line with the changing market characteristics and legal requirements (like 'Saudization', i.e. the need to increase the number of Saudi Nationals as part of the workforce).
- Technical as well as commercial 'clean-up' and execution of a portfolio of imported projects, including a large frame contract for GIS 115 kV.
- Changing the corporate culture from the usual, autocratic approach to a participative and inclusive culture, as well as developing the related leadership skills, which were required to be able to implement Continuous Improvements and to introduce Lean Principles in production.
- Process and quality improvements along the entire value chain, incl. related tools.
- Stringent cost management and cash collection in order to reduce the outstandings.
- Setting-up of a local center for Power Quality Management and assembly of Capacitor Banks and Filters, as well as strengthening the performance of the local Service activities, including a merger with the service business of a related Local Business Unit.
- Merging the Service units for High Voltage Products and Transformers to utilize synergies, as well as to improve the service offering towards the market.
Outcome :
- The factory itself and the first product were successfully qualified for utility and industrial customers in Saudi Arabia, as well as the process was initiated for additional products and for other GCC countries.
- Production was ramped-up with a good order backlog for more than one year.
- A well developed and highly motivated team, delivering in good cooperation and at an above-average performance level.
- Reaching Break-Even after several consecutive years with losses.
Publication :
- Related to the engagement in Saudi Arabia, a case study was published in the book 'International Leadership' by Springer Gabler.
