1、Restructuring,- 1 -,Appendix:Roland Berger & Partner success story: Turn-around of Lufthansa German Airlines,Restructuring,- 2 -,LH case study: The starting point,Restructuring,- 3 -,The critical economic situation of Lufthansa in 1991 and 1992 demanded radi-cal and lasting measures to guarantee the
2、 companys future competitiveness,Since 1990 the operation profits had been negative and had continued to worsenThe intensity of competition and extreme cost pressure were increasing in the aviation industryThe Lufthansa board therefore decided on a radical, three-stage program to guarantee future co
3、mpetitiveness:down-sizingrestructuringrebuilding,Restructuring,- 4 -,The three-stage competitiveness program addressed critical short-term prob-lems first before tackling deeper restructuring,Restructuring,- 5 -,The down-sizing and restructuring stages unfolded in three phases,Restructuring,- 6 -,LH
4、 case study: A radical turn-around was the first priority,Restructuring,- 7 -,Turn-around phase I was marked by short-term cost-cutting and a retreat from unprofitable markets,Turn-around Phase I,Consultant Input,Evaluation of route networkCoaching of top-management for personnel reductionIdentifica
5、tion of other short term cost-cutting opportunitiesCost reduction of 400 Mio. US $ achieved in 1993,Restructuring,- 8 -,The results of the turn-around phase: costs fell and productivity rose,Restructuring,- 9 -,LH case study: Designing a new corporate structure was the next step,Restructuring,- 10 -
6、,The most important goals in the restructuring phase were:,Build units which are smaller, better manageable and closer to the marketSegment the organization into business units which reflect market needs and can be benchmarkedAchieve balance responsibilities among the business unitsBuild clear custo
7、mer-supplier relationships within the company, the performance of which can be benchmarkedAchieve a competitive cost structureForce constant internal and external benchmarking,Restructuring,- 11 -,Phase II was marked by a market-oriented restructuring of the entire group,Turn-around Phase II: Market
8、- and process-oriented restructuring,Consultant Input,= outsourced or outsourcing planned,Restructuring,- 12 -,The new structure was selected according to six criteria,Process- and client-orientation,Delegation of competence andresponsibility,Increased trans-parency of resultsand accomplish-ments,Po
9、tential for mergersand alliances,Increasing flexibilityand responsiveness,Possibility for addi-tional thirdpartybusiness,New,structure,Restructuring,- 13 -,The new structure entailed significantly less complexity, making the company easier to manage effectively,Tech-nical,CargoAG,Sys-temsGmbH,Luftha
10、nsa AGOld Structure,Lufthansa AGNew structure,outsourced,Source: Lufthansa, 1996, 40.300, 16 billion DM,23.750, 13.410,10.400,4.450,1.000, 2.320, 3385, 420,Restructuring,- 14 -,The project was carried out through intensive communication with manage-ment, employees and the unions,Executive boardLeade
11、rship committeeBusiness unit managementfrequent face-to-face-meetings,TVDAG,Works councilsMany face-to-face meetings,Restructuring,- 15 -,LH case study: Phase III achieved wide-ranging process redesign and innovation,Restructuring,- 16 -,The aim of phase III was to improve competitive differentiatio
12、n and turnover/ market-share as well as to achieve further substantial cost reductions,Phase 1,Clear cost cutting,Phase 2,Improved customer orientationthrough outsourcing,Phase 3,Customer focus not only on business unit level, but also on process-levelincreased turnover/through process based improve
13、ment of reaction-times and innovative strength,Cost-reduc-tions,Competitivedifferentiation/market impact,Restructuring,- 17 -,Roland Berger & Partner was heavily involved in designing and implementa-ting Phase III at Lufthansa,Phase IIIObjectives,Phase IIScope,Consultant Input,Intensification and an
14、choring of the new market orientation by carrying the structural innovations over to the process level,Reengineering of multiple pro-cesses:Network Management/Marketing Processes:SchedulingPricingYield ManagementOperations Processes:Production/Operations PlanningGround ServicesFlight OperatorsServic
15、e ProcessesService developmentService deliveryLine maintenanceNetwork management Cargo:hubbing conceptscorporate planning & controlling,Intensive training of 20 client reengineering-teamsWorkshops and methodological support for running reenginee-ring projects as well as project managementConducting
16、of worldwide bench-marking exercises in the aviation industryPhase III is still running at this time. Projected savings of US$ 300-500 million p.a. after project completion,Restructuring,- 18 -,The Lufthansa Redesign Projects have already delivered significant results, and the savings potential will
17、 continue to rise in coming years, with approxi-mately 75 % coming from revenue increases,* measured only until middle of 1996,Source: Lufthansa,After 1999, savings/revenue increasesexpected to total $ 300-500 million p.a.,Restructuring,- 19 -,Analysis of the key processes at Lufthansa identified hi
18、gh revenue-improve-ment and cost-reduction potentials through greater market orientation,Process,Improvement method,Potential,Planning and steering (marketing)Yield managementPricingCentral resource planning and controlling11 other processes with high im-provement potential were also identified,Redu
19、ction of planning expense by more effective steeringImproved prognoses and greater market transparencyFaster reaction-time in price-set-tingCoordination of resource planning according to long-term cost-reduc-tion,High revenue potential through centralized network steeringHigh revenue potential throu
20、gh more precise steeringHigh revenue potential through better reaction to market develop-mentCost-savings potential through better coordination,Restructuring,- 20 -,Process innovation at Lufthansa occurred in five sub-phases,Status-quo process analysis,Design of new process,Implementation,Identifica
21、tion of relevant processes,1,2,3,4,5,Identification of core processes (process-client and process-productTwo selection criteria:Is there a need for improvement?Would improve-ments bring signifi-cant competitive ad-vantages?,Process-mappingAnalysis of process deficits and causesBest-practice bench-ma
22、rking,Brain-storming of new process formsdetailed development:ObjectivesProcess flowsInfo flowsProcess controllingImplementation of immediate measures,Communication of im-plementation planInstallation of IT-infra-structureEmployee training,Creation of necessary organizational unitsDevelopment of a con-trolling system to measure successAnchoring the process-orientation in the corpo-rate culture,
