Successful Cost Management in Stormy Times

The approximately 80 invited guests listened to keynotes close the topic: “Which chances are offered by cost management in unsecure times?” The motivated, open and also controversial discussions after the keynotes showed that this event hit directly the nerve of that time. There was enough time in the breaks to network and intensify the discussions in smaller groups. Besides that our exhibition partners provided extra information. Castle Kronberg in the Taunus area provided an exclusive setting.

The congress started - the same as the year before – with the rollout speech by Stefan Prüße. The automotive expert form PriceWaterCooper conferred about the core topic of the automotive industry: product development. Subject of this speech was the question on value proposition of R&D in times of the crisis. After a brief scribble of latest challenges in the automotive industry he went into detail on the value beater and features of the innovation process. Afterwards he introduced the approaches on the increase of R&D performance.

Second speaker was Prof. Dr. Hermut Kormann, a very successful businessman in the economy (Voith AG), science (University of Leipzip/ Zeppelin University) and society (“Wissensfabrik – Unternehmen für Deutschland e.V.”).

In his speech “Are there strategies for the unforeseeable?” he explicitly pointed out the necessity of securing strategies for the success of a company just now in the recessive environment. Prof. Dr. Kormann described measures and requirements in the frame of a “fail-safe-strategy” in a fetching keynote.

He noted that the most important goal and minimum requirement to the management is always the economic survival of a company, even before measures for increase of revenue and expansion. His thrilled listener spectacularly pointed out how internal strategy mistakes can lead to an existential treat above and beyond the consequences of the crisis.

In the third speech Prof. Dr. Andreas Hoffjan form the University of Dresden spoke about a very delicate topic in the industry. The topic “A fine line between exploitation and cooperation” illustrated the latest results of studies on cost publication between companies. Tributary to the data on dispersion and development tendencies in open book accounting the audience was very interested in the questions: What is the reason for companies to reveal their cost structures? Is it about the “development of a common cost understanding” and the “fair cooperation on the product cost reduction”? Or does only the assertion of a lower purchase price count in the end?

The methodically elaborative examinations had the result that the power relation is the main determining factor between the supplier and buyer. Powerful buyer can demand maximum cost transparency but risk with this opportunistic acts of the supplier. Open book accounting is therefore good to apply pressure but also favors in reverse misrepresentation. The results also showed: buyer demand open book accounting above all, because they want to master an active price management. This point is as important as the common search for cost reduction potential.

Thomas Brand, managing consultant at PA Consulting Group talked about the topic “Sustainable restructuring management” and showed with the help of various field reports what is really meant and to be understood by the often used terminus sustainability. In the area of operative restructuring Brand sites an urgent duty on the topic capacity adjustment. To this belongs location consolidation as well as restructuring of the product portfolio, optimization of the overheads and partnership in buying. Especially interesting and clear was the precise illustration of measures from successful restructuring projects.

As closing act of the specialized keynotes Daniel P. Jeschonowski, consultant at Bain & Company and Ph.D. student form the WHU Otto Beisheim School of Management hold a speech as well. In the keynote with the topic “Bad times for companies – good times for controllers” he showed the exclusive results of the latest survey wave in the controller panel of the WHU. In the panel of the WHU controller from DAX companies as well as from SBUs of different industry sectors are represented. Even though the majority of the companies was hit hard by the crisis only few fundamental changed in the creation of the planning processes. The operative planning (budget) for the next term was only adapted partly to the new situation. Only a minority of the questioned controllers expected a mid- to long-term changed spectrum of duties in controlling. Those facts lead to a controversial discussion: Has controlling the obligation to and must it actively make suggestions for the company management - or is it ongoing the obligation of the management and controlling has a serving function?

As concluding speaker of the whole congress Dr. Frank Schirrmacher had a word as the year before. The coeditor of the F.A.Z. reported on how media and politics act in times of crisis. He did not only give a good insight in roundtables that are normally public excluded but also lead to an aspect of special brisance: The crisis is in the Bundestag election year. All political acting is influenced by the election campaign. Schirrmacher stated that the full results would only be clear after the election.

Furthermore he warned of a crisis after the crisis. He believes that right after the financial and economical crisis a “demographical crisis” of tremendous dimension is ahead of us all. Only with responsible action of the companies, especially of the SBUs and investments in education this second crisis will be overcome. Dr. Schirrmacher emphasized here the special importance of technical, engineer scientifically education – only through innovation in this area the competitiveness and wealth of Germany will be secure in the future.

After the closing of the lectures there was enough time for sharing experiences and networking. Furthermore the excellent kitchen of the Schlosshotel Kronberg provided food and drinks.