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Green shoots of recovery
Page 24
Page 25
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Andy Salter talks to MAN/ERF sales and market ing boss Fred van Putten who has led the group out
of tough times.
We doubt if he'd admit it, but there must have been times during the past four years when Fred van Putten wondered why the hell he'd left a decent and well paid job as sales and marketing director of Daf for the trouble and difficulties of MAN. He'd been recruited to the German truck builder by chairman and chief executive Hakan Samuelsson, himself a recent arrival, and to put it mildly, there was much work to be done.The takeover plan for ERF was in tatters, the company was losing money hand over fist and warranty claims were rocketing in the wake of the TGA launch. Under previous generations of management
MAN had developed an unrivalled reputation for engineering excellence. Smart marketing and the development of a truly international company had not,however, been one of its strengths.The brand, while inevitably a significant force in its home market of Germany, was not among the front runners elsewhere in Europe. Changing focus Attempts to change this with the takeover of ERF and Star of Poland had been riddled with errors and when Samuelsson arrived on the scene there was an unholy mess to unravel. No doubt using some of the les
sons he'd learned at his previous employers Scania, Samuelsson set about changing the focus of the company from engineering-led to international market player with close attention to the needs of the customer.
In attracting van Putten from Daf Trucks, Samuelsson pulled off a major coup. Without wishing to flatter van Putten too much, he does appear to be a very smart performer with a clear understanding of the strategy required to turn MAN around. "One of the first tasks was to identify the major issues affecting MAN and develop a strategic plan to address them," he says.
The list of tasks covers pretty much every area of the business from sorting out the ERF mess (the financial black hole had been noticed shortly before van Putten's arrival) through integrating the newly acquired Neoplan (a similar basket-case to ERF), to improving efficiency at its factories. "We also needed to develop a more professional sales and marketing organisation and focus on the correct marketing of the company," says van Putten. "We were a very good engineering company, but our skills were not in marketing and selling the vehicles." A total of 30 projects were identified by the board of management and these were communicated to the rest of the organisation and acted upon. Mulling around any organisation is a slow process, but the results finally appear to be coming through: "At the time I joined we had a 16% market share in Europe, but we were losing money," van Putten explains. "We now have a 15% share, but there has been no fall in margin and we are now in
a position of positive cash flow. We've reduced our debts drastically through improved housekeeping in all areas. I think the industry analysts need to be more concerned about some of our competitors than us at present."
Van Putten is the first to admit that some of the new systems the company is developing for sales, logistics and networks aren't industry firsts, "but they're new for MAN."
Basically, he's taken the best bits from his rivals and adapted them for MAN. The new sales organisation, for example, involves the clustering of territories which, he believes, will give savings in back-up functions, including network development and distribution. MAN will move from a central parts warehouse in Munich to regional parts centres in the UK, France and Spain in addition to Germany. "The aim is to shorten the supply time to the customer by 50%," he says. "Our business is global, but we have to think and act locally." Paying lip service
This is where the 'new' MAN differs from the old. In the past lip service would have been paid to the needs of the customer; now it appears to be a central tenet in its development, and this can only be good news for operators. Van Putten has been keen to get this message across, and while four years ago many, including CM, brushed it off as more cliched marketing speak, MAN genuinely does appear to be making efforts to engage and listen to customers.
By way of example, van Putten often trots out the fact that one of his first recommendations was to delay the introduction of the replacement for the Land M ranges because "it was over-engineered and overweight... We put the launch back to ensure the product was right for the customers." The new range will now be launched next spring — we'll be interested to see if it lives up to his promises.
In any discussion with van Putten, ERF will always feature highly. He was instrumental in setting the strategy for the future of the company following the problems of 2001 and has taken a personal role in ensuring the survival of the brand. Frankly, we were sceptical regarding MAN's commitment to the marque. But while some might say there's little left of ERF these days, you can't fault MAN's efforts in keeping it alive. Yes, it's been well and truly integrated, possibly consumed by the parent. But the fact that ERF still exists as a brand when others would
probably have thrown in the towel is testimony to the strength of van Putten's word — as is the fact that Cummins power is still offered in the chassis. He told us back in 2001 that MAN was committed to retaining ERF, and while many of us didn't believe him, the fact that registrations of ERF-badged trucks are on the rise would indicate that his faith was not misplaced. Green shoots of recovery
In the UK, MAN/ERF appears to be emerging from a very difficult period this year. The network integration is nearing completion, registrations are showing the green shoots of recovery and customer confidence in the two brands appears to be returning. With a healthier parent now fighting on all fronts things seem to be looking up. Indeed with the corner seemingly turned, van Putten can begin to look at ways to expand the business and there is much significance in the whisper (see CM 18 March) that he is considering a van franchise to offer the networks. Clearly this is a business that's shaping up...•