Cost optimization in the construction industry: LUXHAUS GmbH
Industry: Construction
Turnover: EUR 60 million
Employees: 300
Products: Prefabricated houses
Optimization measures, among others:
- Market and supplier research, tenders, supplier days, negotiations
- Workshops with existing suppliers to identify potential savings that can be realized together
- Supplementary suppliers in the areas of: Castings, C-parts, personnel services
- Examples of processed material groups: Castings, contract manufacturing, investments, auditing,
Heiko Jäger, Commercial Director of LUXHAUS GmbH, talks about his experiences with a Kloepfel project in an interview.
Were you skeptical or rather open-minded at the start of the project?
Heiko Jäger: Personally, I was very open-minded because I knew that we had great savings potential in purchasing. I was skeptical because there are many consultants in this area and in the end it is usually only the consultant who earns. Another challenge was that we are a very technical company and are therefore tied to technology in the area of purchasing. I particularly liked the fact that Kloepfel Consulting's payment was based 100% on the savings achieved, so I had a 100% cost guarantee. In addition, the savings effects were guaranteed for two years. This was important to me so that I didn't just get a cheap bait offer and then have to talk about price increases shortly afterwards. It was also good that experienced experts, not just any consultants, got to work. It was also important for me to involve my employees right from the start.
What were the biggest challenges at the start of the project?
Heiko Jäger: We didn't have any data transparency; this had to be created first. This was achieved by Kloepfel right at the start of the project. Long-standing supplier relationships were the second challenge and are also a common problem in the construction industry. For example, in tenders, existing suppliers almost always had an information advantage over new suppliers, who were not able to compensate for this so quickly. In addition, the buyers were confident about the price structure; they assumed they were already getting good prices. By taking the purchasers and our technicians into negotiations with new suppliers, for example, the Kloepfel team was able to convince them that a change of supplier was necessary. What's more, a change of supplier has to be carefully considered and doesn't make sense for every euro. In the case of subcontractors, initial trial construction projects were often agreed before a final offer could be made. This was the only way for the subcontractor to get to know us and for us to get to know them.
To what extent has the optimization had a lasting effect on your day-to-day business?
Heiko Jäger: The fact that our people were involved in the negotiations gave them renewed negotiating strength. You could tell that my employees' ambition was awakened as the project progressed. This is very important, as suppliers want to raise prices every year. It was also positive that the Kloepfel team expanded our team so that we had more time to concentrate on other business objectives.
How would you describe the way the Kloepfel project team works in three words?
Heiko Jäger: Goal-oriented, collegial and transparent. But I have to expand on the last point. This transparency during the Kloepfel project was very important. It meant that we were always in control, were prepared for every next step and were able to understand it.
Joint project successes are also always dependent on people. We say that we are temporary colleagues in the projects. How did you feel?
Heiko Jäger: Of course, this always depends very much on the people involved. But in our case, the right people were involved at the right time.
Some suppliers first had to get used to seeing new Kloepfel faces at the negotiating table alongside the familiar contacts from your company. How did you experience these situations and what were the reactions of the suppliers?
Heiko Jäger: Some suppliers were reluctant, most of them were professional and reacted in a sporting manner. In any case, Kloepfel Consulting obtained our approval before every step of the negotiations and informed the supplier in advance.
What is your conclusion at the end of the project?
Heiko Jäger: An exciting and successful project that is definitely worth spending a moment of your time on.
Thank you very much for the interview!
