Addtech’s value-adding processes evolve in close collaboration with customers and suppliers, which is essential to create an attractive offering.
Product development
In its role as refining link, Addtech works closely with customers and suppliers to develop different product and service solutions. The Group focuses on adapting applications to improve product functionality as well as on developing cost-effective aftermarket services in areas such as logistics, education and service.
Development work related to various product and service solutions as well as production processes are carried out in line with current quality standards for each industry. The Group limits risk related to product development because it is based on identified customer needs and it takes place within the framework of the existing network of suppliers and customers.
Customer co-operation
The subsidiaries invest in their business relationships for the longterm. Employees spend a considerable amount of time on-site with customers to be able to identify needs and propose solutions, which often generate collaborative projects over time.
The subsidiaries handle their own sales and they provide both technical and commercial solutions. Companies co-operate to varying extents to take advantage of each other’s complemen- tary skills and business relationships.
The Group provides support to the subsidiaries in creating effective business solutions. The companies have guidelines for customer limits and the like to limit risk exposure.
Co-operation with suppliers
Addtech works closely with its internationally active suppliers to further develop technical applications and service solutions. Collaboration involves sales of the supplier’s standard components as well as modifying them to develop new application solutions that meet specific customer needs.
Addtech’s subsidiaries are always on the lookout for new suppliers through established contacts or at venues such as trade fairs. Developing close collaboration places stringent demands. A good supplier is one that allows Addtech to add value. The supplier must also
• be a market leader in its niche
• work with high quality standards
• have attractive product development
• be accountable in its approach to ethical and environmental
issues.
The choice of strategically important suppliers is of crucial importance to Addtech and requires major commitment. The responsibility for choosing suppliers therefore ultimately rests with the companies’ management and boards of directors.
Governance
Each subsidiary is managed by a Managing Director who has responsibility for developing the company’s business within the financial frameworks that apply across the Group. Subsidiaries are grouped in business units headed by managers who report to the Business Area Managers. Business Unit Managers often also hold the position of subsidiary Managing Director, while a Business Area Manager may also be in charge of a business unit. This structure ensures close contact with the operating side of the business.
Addtech’s key financial ratio is P/WC. This stands for operating profit divided by working capital and is how Addtech measures profitability. As well as a measure of profitability, P/WC may also be used as a barometer of performance at product, customer or market level.
At Addtech there is a healthy spirit of internal competition among business units and subsidiaries. Addtech also benchmark performance between the Group’s various subsidiaries and business units. Business area and business unit managements are closely involved and play an active role at board level and in operational discussions.
Administration and IT
The same enterprise resource planning system (ERP) is used at Group level and in several subsidiaries. Some companies also share administrative services in order to achieve higher cost efficiency.
Purchasing and logistics
When several subsidiaries have identified common opportunities to take advantage of synergies in purchasing and logistics, they do so whenever possible. However, in some cases the differences among Addtech’s market niches limit the opportunity to develop comprehensive solutions.