Introduction

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The GEXSO initiative

GEXSO (Global Excellence in Supply Chain Operations, cf. www.gexso.com) is a co-operation between Darmstadt Technical University, the magazine LOGISTIK HEUTE and the management and technology consultancy firm BearingPoint. It examines current state and medium-term development perspectives of internationalization in the machinery and plant engineering sector and the industry and automotive supplier sector in German-speaking regions.

The industrialization process of European industrial companies has been, for some time now, of great importance for their competitive position in worldwide markets. The need to attain cost advantage and growth potential and to achieve customer proximity to global customers was the driving force behind globalization in the past. Global presence, concepts and processes are therefore a crucial topic for the management agenda of domestic industries.

GEXSO examines requirements for successful internationalization as well as established practices in the context of globalization and thereof suggests necessary competencies. Therefore, we do not analyze reasons for globalization or underlying economic analyses for expansion, but focus on the implementability of a global strategy, and where applicable, existing globalization competencies and deficits.

Three aspects characterize the GEXSO approach:

Industry focus!

According to our findings, trading, chemical, service and mechanical engineering companies internationalize very differently. Companies that are examined by GEXSO within the machinery and plant engineering sector and the industry and automotive suppliers sector differ particularly because they produce globally, have a high rate of variant diversity, sell products with advanced technology, often produce semi-finished products and maintain spare parts and service businesses. These characteristics result in individual globalization approaches.

Geographical focus!

GEXSO concentrates on companies from Germany, Austria and Switzerland. Companies in these countries have a peculiar interrelation and concentration within the examined industries. Furthermore, many companies that have emerged from these countries that have achieved sustainable success are referred to as technology leaders in many cases, and have undergone unprecedented industrialization. The focus on countries that have shaped these industries lends authenticity to the GEXSO study, gives it a benchmark character and reinforces its findings.

Recurring studies!

The GEXSO initiative discusses various globalization topics for industry companies in recurring studies. Thereby, the progress of internationalization processes will be described consistently on the basis of key figures regarding production sites, purchasing volume and customers over many years. In addition, particular subject areas are treated separately in specific studies – e.g. the maturity level of company processes as a prerequisite for successful globalization, or the impact of technology change on industrial supply chains. Thus, on the one hand GEXSO offers a time series analysis over many years and different surveys, and on the other it also focuses on current topics.

Technology change as a catalyst for globalization

In the past few years, many industries experienced radical technological leaps that often resulted in a renunciation from familiar technologies within short time periods, which lead to the establishment of a completely new technological basis. The electrification of cars, carbon-based components and other lightweight materials, electrical drives, assistance systems, the Internet of things, cloud solutions – these are all examples of technological breakthroughs that have radically changed the way in which customers use products. Technology change and technological leaps also change established supply chains, involve different, new suppliers, and lead to a transformation of production infrastructure. Therefore, the current GEXSO study examines the extent of technology change, how it is organized and what impact it has on established supply chains. Motivated by our experiences in supporting our clients‘ internationalization of their supply chains, and through the organization of technology change in these companies, we were able to identify two theses that we will examine in this GEXSO study:

Thesis 1: The internationalization process is ongoing, and globalizes production and purchasing continuously and dynamically.

GEXSO expects that client bases will predominantly relocate from domestic markets to emerging markets. New clients are the drive behind a shift in supply chain resources. Due to high growth rates within emerging markets, capacity requirements and the significance of supply chain parties increase disproportionately in comparison to those of markets that are already saturated. Global regions become more and more important for sectors such as machinery and plant engineering and automotive and industry supplier industries.

Thesis 2: The industrial technology change is a catalyst for globalization and facilitates it.

GEXSO expects that technology change will lead to a rethinking of present supply chain structures. For instance, a greater emphasis on electronic product components can lead to a larger purchasing volume in East Asian manufacturing countries and where applicable, the relocation of purchasing capacity towards the same. A different material combination might lead to a different assessment of location factors for production and to a relocation of production capacities. Or a greater proportion of software could lead to a new development center in a location that is attractive to developers. We observed such tendencies in a wide range of different individual cases. Therefore, we put forward the thesis that technology change promotes and accelerates further internationalization of industrial companies.


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