German Values Tailored to Mexican LogisticsMon, 09/01/2014 - 12:24
Although logistics are often seen as a cold succession of processes, human capital, strong values, good interpersonal skills are often the key to success for a logistics provider. With 75 years of experience, German company Schnellecke decided to shift from being a transportation company to becoming a logistics solutions provider. In Mexico, it first entered the market as a joint venture with a Mexican company, known as Seglo. However, Schnellecke has owned 100% of Seglo since April 2010, but decided to keep the brand name. The main reason behind this decision is the presence that the brand already has in the market, although cultural matters also played a significant role. “Schnellecke is a very German word that might be complicated to pronounce and remember in the Americas, so we have no plans to change the name of our Mexican branch,” explains Volker Vossler, Vice President of Operations of Seglo.
The company has expanded to 11 business units in the country, and logistic solutions for the automotive industry make up 85% of its operation in Mexico. The company caters to OEMs like Ford, GM, Chrysler, Fiat, and Volkswagen, as well as to Tier 1 suppliers like TI Automotive. “In the future, this line of business will become more important because Tier 1 companies will grow and need to improve their processes and plants,” explains Vossler. In Europe, Tier 1 companies are already an important business for Schnellecke.
Vossler says there are notable discrepancies in Mexico’s education system, with knowledge and skills varying greatly among people graduating from different universities. For this reason the company has stressed constant training of its staff. Vossler is aware that offering career and personal development might sometimes be more attractive for people than money. “We focus on retaining our people. The salary has to be fair, but you also have to give recognition for the job a person does and consider growth opportunities. Sometimes in Mexico, a worker can be receiving good remuneration, working conditions, and benefits, but if the working environment is not healthy, they may quit. We have a system in which people are recognized before the entire department in which they work. At first I was very skeptical about that system, but it works and it has improved the personnel’s satisfaction levels and the productivity in the company. As a result, we have been able to reduce the turnover in the company.”
Few companies outsource their logistics in Mexico, but a growing interest in doing do so is becoming evident, according to Vossler. He says the most underestimated problem with outsourcing logistics solutions is that many companies do not understand how this process really takes place. “Many customers do not realize that they have to establish their expectations and be able to translate these into KPIs. There cannot be an improvement in the process if there are no standards to be measured against, and that is what Seglo emphasizes when talking to its possible customers.” Another problem with outsourcing is that companies might not want to give control over part of their operations to a third party. “The company needs to understand that it will give away certain responsibilities, but that we engage with them while doing so. We familiarize ourselves with our customers in order to learn how to handle the business and culture of each company,” says Vossler. “The key for having a good relationship with the customers is for both parties to respect the principles and values of each other.” Once a good relationship is established, customers can see the real benefits Seglo can offer. “We are experts in logistics; we offer everything from IT, to process systems and personnel management. We can eliminate problems and interruptions in the supply chain, reduce costs, and even change fixed costs into variable ones,” explains Vossler.
Seglo already participates in the consumer goods industry with P&G and Danone but is looking to expand into other sectors, with automotive being a particular focus. As more industries are looking at entering or increasing their investment in Mexico, Seglo has prepared itself for a new and more diverse customer base. “Everybody knows that Mexico is a logistics platform with great geographic conditions and HR. It would be better for new companies to focus on their business and not try to fully tackle the logistics areas in Mexico, which can be complicated. We have adapted some of our German values and programs to Mexico and have taken the best out of both cultures to serve the market,” says Vossler.