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  • Setting Standards: A Strategy for Europe

    Setting Standards: A Strategy for Europe

    As emerging economies seek to influence global standards, Europe's role as a shaper becomes a priority.

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    Standards are the rules, guidelines, and definitions that describe repeatable ways of doing things. Standards are a crucial element in the EU's industrial strategy as Europe seeks to remain a shaper of global standards rather than a follower.

    The European Round Table of Industrialists worked with A.T. Kearney to study the issue of developing and implementing standards. We found six recommendations for establishing standards in European industry:

    • Establish performance targets to foster innovation. Standards spread collective knowledge, bringing together industry players in a working environment of sharing and collaboration. The use of standardized parts and business processes can reduce early investment costs and risks, and provide a platform from which industries can innovate.
    • Consult with experts. Involving technical and industrial experts, even when standards are initiated by governments, can help build standards on solid foundations.
    • Coordinate industry players. European standardization bodies can play a larger role in facilitating standard-setting along the value chain and across industries.
    • Balance speed and consensus. Standards must be put in place quickly in the face of accelerating technological change and market competition, and they must be built on a foundation of consensus to broadly address the requirements of all players.
    • Encourage a global approach. European companies that adopt and participate in setting global standards increase their market access to other countries.
    • Encourage SME participation. Despite their importance to the European economy, few small and medium-sized enterprises (SMEs) are actively involved in setting standards.
  • Compliance in Manufacturing: A Very Personal Affair

    Compliance in Manufacturing: A Very Personal Affair

    Noncompliance can ruin corporate reputations, shatter financial performance, and destroy careers, families, and lives. With so much to lose, doesn't compliance deserve our undivided attention?

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    Corporate compliance—or, more accurately, the risk of noncompliance—has become a major concern over the past decade, especially for global manufacturers with operations in many different countries and jurisdictions. When a practice commonly accepted in one country could be a serious criminal or civil offense in another, companies had better know about it.

    Many firms understand that compliance can lead to competitive advantage and are making their suppliers commit to compliance standards that go far beyond those required by law.

    To understand how companies reduce the risks of noncompliance, A.T. Kearney surveyed execu¬tives at leading manufacturers, conducting in-depth interviews with compliance executives at nearly 40 top companies worldwide. While most studies approach compliance from a legal perspective, we focus our attention on compliance management.

    Five major findings emerged from our examination of compliance management in these areas:

    • Most companies expect to expand their compliance systems.
    • Lower management has a much less favorable perception of compliance systems than top management, indicating a strong need for administrative efforts to generate acceptance at all levels.
    • Most companies do not have an independent compliance department that reports directly to the executive board.
    • External resources are especially useful for setting up a compliance system.
    • The most effective compliance systems integrate compliance and process management.
  • The Summer Champions

    The Summer Champions

    How do the leaders stay consistently ahead of their markets while formerly thriving businesses fail?

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    What causes one leading company to stay consistently ahead of the market while another formerly thriving company flounders? The question is intriguing—and pressing, too, during these times of volatility. To explore the reasons and possible solutions, we conducted a study of industry champions. The result was a matrix that measures market success—a combination of growth in sales relative to market growth, and market share relative to the next largest competitor. Where BCG's matrix was created to help companies plan their portfolios, this matrix is used to chart a company's evolution and derive insights about its strategies. We call it the four seasons matrix:

    • Spring. Companies that have outgrown their market but are not (yet) market leaders
    • Summer. World leaders that have outgrown their markets
    • Autumn. World leaders with below-average growth, gradually losing their positions
    • Winter. Market followers that are growing more slowly than their market

    We chose the axes of growth and market share because both metrics have a strong, proven relationship to long-term profitability and shareholder value. Combining those measures provides a solid basis for picking long-term winners.

  • Conflict Minerals: Yet Another Supply Chain Challenge

    Conflict Minerals: Yet Another Supply Chain Challenge

    As lawmakers target conflict minerals, companies could face significant costs to comply.

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    Manufacturers will face significant raw material cost pressures as lawmakers target conflict minerals. The legislators' current focus is on the war-torn Democratic Republic of Congo (DRC) and adjoining countries.

    In the recent past, the supply of and demand for raw materials forced manufacturers to cope with radical market-price fluctuations for commodities such as iron ore and steel; as they formulated successful market strategies, the impact of commodity price spikes became manageable. More recently, procurement professionals have been tested by the scarcity of rare earth metals such as scandium, yttrium, and cer. China, which has the world's largest known deposits of these metals, has exacerbated the challenge by enacting stringent export caps. Again, manufacturers adjusted their strategies and are managing their predicament.

    Now on the horizon is a new federal regulation to require companies that make products using certain minerals to disclose whether their supply comes from or near the Democratic Republic of Congo, where mining revenue has funded violent military groups. When this regulation passes, companies with global supply chains will face the daunting task of adapting once again.

  • Proven Approaches for Catastrophic Risk Management

    Proven Approaches for Catastrophic Risk Management

    Offshore Magazine, October 2011

    To manage the risk of catastrophic events, offshore operators might take a page from the broader oil and gas industry.


  • Predicting and Mitigating the Risk of Catastrophic Incidents

    Predicting and Mitigating the Risk of Catastrophic Incidents

    Fuel, September 2011

    What are the risk factors and predictors of catastrophic incidents?


  • Driving Top-Down Change from the Bottom Up

    Driving Top-Down Change from the Bottom Up

    Supply Chain Management Review, March / April 2011

    Implementing standard processes requires strategies that build emotional commitment and rational compliance.


  • Manage Risk in a World of Wild Cards

    Manage Risk in a World of Wild Cards

    ICIS Chemical Business, 22 November–5 December 2010

    How to improve your risk management capabilities to address supply threats.


  • Becoming a

    Becoming a "Multi-Global" Company

    Success in booming emerging markets requires meeting customers' needs as well as or better than the locals.

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    Emerging countries—particularly China and India—are changing the face of global markets, as their economies grow by as much as 10 percent per year. In the wake of this growth, these countries are producing some of the world's fastest-growing, most competitive companies. In the steel market, American and European companies were the undisputed market leaders 20 years ago. Today, steel giant ArcelorMittal—formed after India's Mittal Steel acquired Europe's Arcelor—is the world leader. In chemicals, players from emerging economies, including Sabic and Sinopec, are now among the biggest. The quality and knowledge gap between these companies and those from developed countries is shrinking rapidly as their home markets mature. These companies are no longer low-cost alternatives—they are fierce competitors in the export markets.

    While many developed-market companies have succeeded in this changing world, a recent A.T. Kearney survey of executives at German industrial companies indicates that there is more that companies from the developed world can do. Many companies have gone "glocal"—meaning they make global products with some local adjustments— but few have the full range of local value chains in these vital emerging markets, resulting in lower market share and growth that lags their local competitors.

    To succeed in these booming emerging markets, companies from developed countries must meet client needs—as well as, or better than, local players.

  • Steel's Challenge

    Steel's Challenge

    The future market for iron ore—the main raw material in steel production—will be marked by higher, more volatile prices. To stay competitive, steel producers must be vigilant in managing the steel price-volume equation, while continuing to work closely with their suppliers and customers.

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    Higher, more volatile prices for iron ore mean that steel producers must be vigilant in managing the price-volume equation.

  • Pulling the Capex Lever

    Pulling the Capex Lever

    How much money a company spends and where it is spent are questions that must be answered in radically different ways.

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    Capital expenditures are never far from a CFO's agenda, but the issue has received more attention than usual these days, as global capex spending has risen to $10 trillion per year. Using a comprehensive long-term approach, CFOs can "pull the capex lever" to determine how much to spend, where it should be spent and how that spending translates to real returns.

  • Oil-Sands Lessons

    Oil-Sands Lessons

    Oil and Gas Investor, April 2010

    Reducing life-cycle costs in oil-sands capital projects


  • Mining + Steel: How Will M&A Play Out?

    Mining + Steel: How Will M&A Play Out?

    Is recent merger and acquisition activity in steel and mining the result of an adjustment to economic trends?

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  • Oil at the Crossroads

    Oil at the Crossroads

    Oil and Gas Investor, January 2010

    The combined efforts of IOCs, NOCs, and OSCs provide the best path to a sustainable future for the energy industry.


  • The Inside Story on Organic Growth

    The Inside Story on Organic Growth

    While many companies look to external factors to sustain growth, the leaders know that internal actions are the most effective.

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In the News

Read insights from A.T. Kearney consultants quoted in the media.

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