Establishing Manufacturing & Sourcing in Poland.: The Why & The How

Webinar:

Establishing Manufacturing & Sourcing in Poland:
The Why & The How

Establishing Manufacturing & Sourcing in Poland

About The Webinar

East West Associates Roundtable with Senior Executives


Who Should Watch?

Executives of US companies:

      • Expanding Supply Chain & Manufacturing to better service European customer base
      • Facing manufacturing, contract manufacturing or sourcing challenges in China

US companies are establishing or relocating to Poland for a number of reasons, not the least is diversification from China. Poland has become a preferred destination as China labor costs and geopolitical concerns increase, and as US/China tariffs remain.

Poland is the fifth largest manufacturing country within the EU and contributes 22.4% of the country’s GDP. Germany is the largest importer of Polish products, followed by the rest of Western Europe.

The leading Polish industrial sectors are automotive, aviation, pharmaceuticals, household appliances, metal products, electrical equipment, electronics, chemical products, and rubber & plastic. As a result, Poland has a large supply chain base of raw materials and component products servicing these manufacturing operations.

East West Associates’ speakers addressed these questions, including:

    • Why are companies diversifying from China and leveraging Poland’s Supply Chain & Manufacturing capabilities?
    • How are US companies developing sourcing, contract manufacturing & manufacturing capabilities in Poland?
    • What industry sectors are finding sourcing & manufacturing success in Poland?
    • How to identify & qualify Polish suppliers?
    • How to conduct Site Selection in Poland to establish Polish manufacturing site?
    • What financial & operational incentives does the Polish government provide to US companies to establish operations on leased or owned facilities?
    • How should our investment strategy be designed to best meet the Polish Investment goals?
    • Can you summarize the Polish/US trade relations and tariff policies?
    • What is the availability & quality of local labor (production & engineering talent)?

Our speakers presented two recent case studies:

    • EWA & a PA-based manufacturing client identifying and qualifying Polish suppliers
    • EWA & a MN-based manufacturing client relocating their European operations from Spain to Poland
Establishing Manufacturing & Sourcing in Poland

Speakers

Mike Jacobs | Chief Operating Officer, Weber, Inc.
  • Responsible for end to end product life cycle, including product management, research & development and end-to-end supply chain and operations functions (Strategic Sourcing, Demand & Supply Planning (ES&OP), Global Manufacturing, Logistics & Distribution and Quality)
  • Former Vice President, Logistics & Material for Rockwell Automation (NYSE: ROK)
  • Director, Global Sourcing – Fabricated Components for Schneider Electric 
Dariusz Pielach | Director, Central Eastern Europe
  • EWA Director of Poland/Central Eastern Europe
  • Resides in Warsaw, Poland
  • Former Project Manager/Director and Interim Manager for Western multinationals 
  • Primary focus in strategic and operational procurement, sourcing, and project management 
Mark Plum | Director, East West Associates
  • Former President of Briggs & Stratton Asia (NYSE: BGG)
  • VP Sales & Marketing, American Standard Thailand & American Standard China
    Establishing Manufacturing & Sourcing in Poland

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    OPERATIONAL & COMMERCIAL PERFORMANCE: Employee Turnover & Compliance

    OPERATIONAL & COMMERCIAL PERFORMANCE:

    Employee Turnover and Compliance

    Operational & Commercial Performance: Employee Turnover and Compliance

    BACKGROUND

    A Florida-based mid-size private company engaged EWA to advise on performance improvement for their 160 employee plant in Zhongshan China. The client’s owner was concerned over recent productivity declines in the plant.

    The operation served the mother company as a captive supplier. It exported nearly all its product to the company’s Distribution Centers that served customers in Latin America and the southern U.S.

    Initially, EWA was tasked to look at process improvement and productivity issues, and perform some staffing in anticipation of growth. However, the EWA team’s evaluation of plant operations uncovered internal process issues; certain financial irregularities; and unacceptable employment practices. The client then commissioned EWA to investigate further.

    Operational & Commercial Performance: Employee Turnover and Compliance

    APPROACH

    Step 1

    Series of structured interviews

    EWA conducted a series of structured interviews over several weeks with senior management, middle management and a sample of the hourly workers, to take the pulse of employee relations and to assess compliance with employment law.

      • Top Management
      • Middle Management
      • First line managers
      • Conducted individual interviews with members of a representative stratified sample of hourly employees
      • EWA team members also made many plant tours to see employees at work and observe their interactions with managers and fellow employees.
    Step 2

    Gathering Information and Data

      • The EWA team spent two months in the plant gathering data through interviews and observations of the interactions among workers and their leaders.
    Step 3

    Delivered Report to Company Executives

    Turnover

      • EWA implemented new employment standards and expanded the recruiting base. The plant was a shrine to nepotism which caused problems in discipline and accountability, thus fueling the turnover and lack of productivity. EWA revamped training and set up a mentor system.

    Outside and Child Labor

      • The practice of taking work home was abolished, with pushback from some employees. We made it clear that underage children could not be employed in any capacity. Also, with food-related products, quality assurance and hygiene are essential for both end-user safely and regulation compliance. We explained that after the proper employee and management incentives were put into place, the plant would become more productive and experience fewer quality problems.

    Welfare Benefits Compliance

      • EWA performed a full benefits audit, and calculated the costs of remediation based on three start date options:
        • Beginning of benefit program;
        • Beginning of current year; or
        • Now and into the future.
      • The client selected the third alternative.
      • EWA re-designed a new benefit plan, and the communications of the plan presented several options to employees.
      • Most enrolled under the least expensive benefit alternative; employees were more interested in today’s take-home pay than future benefits.

    Living Conditions

      • The leased factory complex was located near the ocean, and consisted of two L-shaped 4-story production facilities facing the main road, with a large 5-story dormitory 150 yards in back, with a grassy field in between. The facility was prime breeding ground for vermin attracted to the canteen on the ground floor of the dorm. While many of the resident employees were not deeply troubled by the conditions, they were simply unacceptable from a Western management standpoint.

    Management and Culture

      • The client insisted that negative and ineffective management behaviors be corrected immediately.
      • The EWA team coached the facility’s GM, and teaching him how to coach his subordinates.
      • EWA introduced Basic Supervisory Training on interpersonal skills needed to improve management’s attitude and behavior toward employees.
      • EWA designed and implemented simple recognition programs to reward good results in production, quality, housekeeping and safety.
    Operational & Commercial Performance: Employee Turnover and Compliance

    RESULTS

    Based on the data we gathered, EWA made recommendations for recommended tactics and strategies to address the issues.

      • Employees responded positively to all these changes and programs. A number of employees openly expressed gratitude that the Company was finally showing that it cared about their welfare.
      • As employees enjoyed better living and working conditions, employee turnover declined, and the attention to hygiene was sustained.
        Welfare Benefits compliance was achieved, and employee contributions implemented.
      • The client avoided a potential six-figure liability.
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    Human Resource Services: Resolving Employee Relations Issues

    Human Resource Services:

    Resolving Employee Relations Issues

    Human Resource Services: Resolving Employee Relations Issues

    BACKGROUND

    EWA was engaged by a large multinational manufacturer to address their U.S. headquarters’ perception that employees of their Guangdong area factory were disgruntled, unmotivated and underperforming. Factory management had reported to client headquarters an increase in complaints regarding workload and work hours, and the plant was experiencing rates of employee turnover that were high even by Chinese standards.

    Client Headquarters (HQ) management asked EWA to visit the Guangdong plant to validate the reported issues and recommend solutions.

    Human Resource Services: Resolving Employee Relations Issues

    APPROACH

    Step 1

    conducted a series of structured interviews

    EWA sent a small team to the plant and conducted a series of structured interviews with Senior management, middle management and a sample of the hourly workers.

    EWA team spent more than a month interviewing Guangdong employees and management, and observing and documenting interactions among workers and their leaders.

    Step 2

    Implement recommended actions

      • Spent several months coaching the General Manager of the facility, and teaching him how to coach his subordinates
      • Provided Basic Supervisory Training on the interpersonal skills needed to improve management’s attitude and behavior towards employees
      • Implemented Job Rotation where practical and employees with potential were identified and given greater responsibility
      • Trained supervisors to focus on finding and rewarding good deeds, rather than on policing and criticizing unwanted behaviors
      • Created basic employee consideration programs to reward positive results and quality-saves, such as departmental “Employee of the Month” awards, birthday recognitions, and more frequent rest breaks to allow employees to refresh and socialize
      • Introduced a structured compensation approach, and opened up the employee welfare benefits program to assure fairness and full legal compliance
      • Defined Employee Standards and implemented a realistic job preview process to acquaint prospective hires with the realities of the job environment, enabling them to set realistic expectations
      • Launched a semi-annual Employee Attitude Survey program to measure results in the collective temperament of the workforce and their perceptions of change
    Human Resource Services: Resolving Employee Relations Issues

    RESULTS

    The solutions that EWA implemented resulted in sustained levels of improvement in plant performance: Product Quality, First-Pass Acceptance, Scrap, Throughput, On-time Delivery, and Safety.

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    HUMAN RESOURCES SERVICES: Solving Root-cause Employee Relations Issues in U.S. Multicultural Company

    HUMAN RESOURCE SERVICES:

    Solving Root-cause Employee Relations Issues in U.S. Multicultural Company

    HUMAN RESOURCE SERVICES: Solving Root-cause Employee Relations Issues

    BACKGROUND

    A mid-west U.S. private equity firm retained EWA to address problems in two recently-acquired portfolio holdings with complementary lines of analytical testing equipment products. Along with their U.S. locations, one of the companies had a plant in China, the other in Vietnam.

    EWA was asked to conduct an Organization Assessment to validate the issues and their causes, and provide solutions to resolve them.

    HUMAN RESOURCE SERVICES: Solving Root-cause Employee Relations Issues

    APPROACH

    Step 1

    Data collection, analysis and recommendations

    Performed the Organizational Assessment by conducting 3 group interviews to obtain information in the context of their Core Values, and to get input on what managers perceived as conditions on the floor:

      • Top Management
      • Middle Management
      • First line managers
      • Conducted individual interviews with members of a representative stratified sample of hourly employees
      • EWA team members also made many plant tours to see employees at work and observe their interactions with managers and fellow employees.
    Step 2

    Implement recommended actions

      • EWA prepared a report to management that included recommendations for improvements. EWA reviewed the report and recommendations with management to get agreement on specific steps and priorities.
      • After joint review, EWA finalized a roadmap for improvement. In addition, EWA helped management establish metrics to measure change in hard issues (productivity, financial results), and soft issues (employee relations, complaints).
    Step 3

    Measure near-term, mid-term and long-term results

    Short Term

      • Reset all branding to new company
      • Improve top down and upward communications
      • Establish and reinforce formal recognition programs
      • Accelerated start to develop more effective supervisory skills

    Mid Term

      • Expand ESL classes to improve facility communications and foster better team work
      • Resolve lingering transition issues
      • Improve retention of new hires
      • Develop HR systems
      • Continue to develop more effective supervisory skills
      • Identify and rectify any internal equity issues
      • Develop a meaningful Safety program with accountability

    Long Term

      • Study ways to adapt effectively to changes in workforce and labor market demographics
      • Develop innovative approaches to recruiting sources
      • Continue supervisory training and bench strength development
    HUMAN RESOURCE SERVICES: Solving Root-cause Employee Relations Issues

    RESULTS

    Based on the data we gathered, EWA recommended short-term, mid-term and long-term tactics and strategies to address the issues.

      • Created a “One Company/One Culture” environment using the PE firm’s Corporate Core Values as a framework.
      • Suggested resolutions to employee relations issues.
      • Gained consensus with Executive Management on issues, priorities and next steps.
      • Developed metrics to measure progress and to guide clear and open communications.
      • Facilitated implementing solutions to enhance employee cooperation, engagement and participation.
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    Establishing Manufacturing & Sourcing in Vietnam

    Webinar:

    Establishing Manufacturing & Sourcing in Vietnam

    Establishing Manufacturing & Sourcing in Vietnam

    About The Webinar


    Who Should Watch?

    Executives of US companies who are facing manufacturing, contract manufacturing or sourcing challenges in China or other countries

    Executives of US companies expanding Southeast Asian operational and supply chain capabilities to better service customers


    US companies are establishing or relocating to Vietnam for a number of reasons, not the least is diversification from China. Vietnam has become a preferred destination as China labor costs and geopolitical concerns increase, and as US/China tariffs remain.

    Vietnam has a significant manufacturing base, which was traditionally focused on textiles, apparel, and furniture.

    Vietnam has increased their manufacturing capabilities and are now major producers of consumer electronics, telecom equipment, machinery and auto parts. Samsung produces a third of their total output in Vietnam and is the country’s largest exporter.

    East West Associates’ speakers addressed these questions, including:

      • Why – and How – are US companies developing manufacturing, contract manufacturing & sourcing capabilities in Vietnam?
      • What industry sectors are finding sourcing & manufacturing success in Vietnam?
      • What are the advantages of Vietnam as compared to the other ASEAN Countries?
      • What financial & operational incentives does the Vietnamese government provide to US companies to establish operations on leased or owned facilities?
      • How should our investment strategy be designed to best meet the Vietnamese Investment goals?
      • How does Vietnam compare to China & Thailand? Lease rates? Building costs? What are the relative advantages of Vietnamese Business Park options?
      • Can you summarize the Vietnamese/US trade relations and tariff policies?

    Our speakers briefly presented two recent case studies:

      • How a Minnesota-based manufacturing client established a Vietnamese contract manufacturing arrangement to diversify from China and service the US market
      • Key experiences of a Michigan-based automotive manufacturing plant for an operational and supply chain audit
    Establishing Manufacturing & Sourcing in Vietnam

    Speakers

    Mark Plum | Director, East West Associates
    • Former President of Briggs & Stratton Asia (NYSE: BGG)
    • VP Sales & Marketing, American Standard Thailand & American Standard China
      Establishing Manufacturing & Sourcing in Vietnam

      Presentation

      Jacob Miller | Director, East West Associates (Vietnam)
      • Former Operations Engineer for Caterpillar
      • Focus in Supply Chain development, procrurement process improvements and facility establishment
      • Currently based in Ho Chi Minh
      Establishing Manufacturing & Sourcing in Vietnam

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