Where can improvements be made at thyssenkrupp Steel? And how can they be implemented? Sudhakar Sivaji, who is responsible for corporate planning, development, and strategic orientation, is looking for answers to these questions.
Interview: Judy Born
How do you describe your job to people?
Strategy and supply chain management are tasks that have clearly defined goals. We strive to make optimal use of our Group’s capabilities, generate more value for our customers, and thus also achieve our corporate objectives.
Do these goals conflict?
The market is demanding more and more flexibility and differentiation these days. Production, by contrast, hopes to achieve stability and standardization. My team and I are tasked with finding a solution that advances our customers and can be readily implemented.
What is your approach here?
At a strategic level and at the interfaces between sales, supply chain management, and production, it is absolutely essential to know the customer’s value chain. How is our product processed? What is it used for? How does logistics function for the product? Why does the customer have a particular set of requirements with regard to a product?
You studied engineering. Has your practical background helped you?
Definitely, especially since my experience comes from another industry – aviation technology – and from other markets, namely India and the United States. That adds another dimension to my approach and helps me make pragmatic decisions. It keeps me from approaching issues from a perspective that focuses on production to the exclusion of sales, and vice-versa. I try to impart this to my coworkers, too.
You are also responsible for delivery performance. How do you intend to make improvements here?
Until recently, we had only a single index for evaluating delivery performance throughout thyssenkrupp Steel, namely punctual delivery. It only indicated how much of the agreed quantities were delivered on time, independently of specific customer requirements and needs, project operations, and scheduled orders. We are now in the process of changing that. We are implementing control models for different delivery requirements and offering a range of different solutions on a customer-by-customer basis. But only – and this is the controller in me speaking – insofar as it makes financial sense. The new processes will enable us to manage delivery requirements individually and operate our plants better. We will continue to work on this transition in the years to come.
How will thyssenkrupp Steel develop over the next five years?
We are still in the middle of a process of renewal. Some things have already been done, but there is still a lot more to do. Our portfolio already enables us to react effectively to changes in the market. In the years to come, we will continue to differentiate our portfolio and will work in a much more customer-oriented way.
What about our activities abroad?
This area will also continue receive our attention. At present, ten percent of our sales are generated outside of Europe. That is approximately a million tons of steel from in and around Duisburg being sent all over the world.
Are joint ventures the only way to gain a foothold in a foreign market? And are they worth the risk of possibly losing expertise?
The pros and cons have to be weighed. Joint ventures are not the only way, but they do make entry easier, especially with regard to understanding a country’s market, customer expectations, and cultural differences. Another important advantage is that the financial risk is shared. As far as expertise is concerned: The loss is unavoidable. Whether in China or India, there are enough clever people who will develop these technologies themselves sooner or later. And they may even do it better. Therefore, we at thyssenkrupp should not allow ourselves to miss these opportunities.