While best known for its performance in the automotive industry, the Porsche Group has diversified into other growing sectors through subsidiaries like Porsche Consulting, which helps companies improve their operational processes and increase productivity.
Particularly prominent in Brazil – where it grew by 10% in 2013 and aims to grow 20% this year – Porsche Consulting has a partnership with German IT solution provider GFT, which enables it to offer complete operational solutions for companies in the financial and services sectors.
In an interview with Nearshore Americas, Rüdiger Leutz, who took over as Porsche Brazil CEO in January 2013, explained how Porsche Solutions aids Brazilian companies to improve their competitiveness and eliminate waste. Leutz first joined the Porsche team in 2001, leading Volkswagen projects in Brazil and Argentina, as well as working for Porsche in Germany. The German executive graduated in Industrial Engineering and has a Master’s degree in Business Administration and in Automotive Industry Studies.
Nearshore Americas: Porsche is famous for its operations in the automotive industry. How did the idea of creating Porsche Consulting arise?
Rüdiger Leutz: In the early 1990s, Porsche AG, a German automobile manufacturer, was facing a difficult financial situation. At that time, the Porsche family hired Japanese specialist consultants, who had worked at Toyota and implemented Toyota’s production system based on Lean Manufacturing and continuous improvement in the operational process (kaizen). After two years, Porsche became the most profitable automobile manufacturer in the world. Duo to its success, the family decided to found Porsche Consulting in 1994. Initially, the company served primarily its own automaker, Volkswagen, which had accounted for the most part of its revenue. Nowadays, almost 70% of the company’s turnover, which reached 85 million Euros in 2013, comes from other companies.
NSAM: When did Porsche Consulting open a subsidiary in Brazil?
Leutz: We have worked with Volkswagen in Brazil since 2006 and in March 2010 we opened a second international subsidiary from Porsche Consulting, in Sao Paulo with the aim of serving South America. Besides Brazil, Porsche Consulting has operations in Germany – where its headquarter in Bietigheim is based – Italy, the US and China.
NSAM: Which segments have required Porsche Consulting’ services in Brazil?
Leutz: We work for the automotive industry, construction, the financial sector, IT, the food industry, the aviation sector and the shipbuilding industry, where we have a few client shipyards in the south of Brazil.
NSAM: What does the partnership with GFT add to the Porsche Consulting?
Leutz: Porsche Consulting has expertise in improving production and administrative processes based on operational excellence. In some sectors, such as banking, the process also involves IT services and we need a partner with specific know-how to implement IT systems. So we established a partnership with GFT, a German company that specializes in implementing IT solutions for the financial industry, to offer a full service for companies in the banking and service sectors in Brazil.
NSAM: How do you think IT can help to optimize processes?
Leutz: IT solutions have an important role in reducing wastage and optimizing processes. In Germany, Porsche Consulting worked in a project with SAP to improve its software development process, with a focus on adding value and reducing waste. In 2013, Porsche Consulting won an award for best German consultancy firm with this project.
NSAM: Could you give an example of a success story of your partnership with GFT?
Leutz: A good example is the work we developed for Cetip, the largest Brazilian banking service provider, in partnership with GFT. The company spent too much time trying to put new ideas into practice on the dynamic financial market. So, we implemented new systems at Cetip and formed project dedicated teams with the result that the company started to deliver the products on time and without any reworking.
NSAM: What are the main types of waste in a company?
Leutz: We have a measurement methodology that works with seven basic types of waste in a company: waiting time, which refers to machines and/or operator downtime; reworking due to frequent failures in the process or defective products; excess inventory, which requires the rental of large spaces; over-production; transportation, which doesn’t add value to the business; motion, if the employees have to walk large distances to do a task; and redundant or incorrect processes. If a company wants to improve its efficiency it should start by measuring the time it takes to do the task. The second step is to identify the percentage of wastage. If a company eliminates wastes it will reduce the time required to deliver a service or a product, thus increasing productivity.
NSAM: Which kind of waste is more common among Brazilian companies?
Leutz: I would say that the need to rework the tasks and the lack of synchronization in the supply chain are the main problems which we see in Brazilian companies. In the construction sector, for example, if you have any employee waiting for some equipment or material in a civil construction job, it represents waste. On the other hand, administration area people take too long to fix failures in the process.
NSAM: How can Brazilian companies improve their competitiveness?
Leutz: Some time ago, the workforce cost was cheaper than now and if there was any failure in the process, the company simply hired more employees to increase the production. In fact, the business grew, but there wasn’t any increase in productivity. But now, with workforce costs increasing, the companies are seeking to expand production with a lower fixed cost. So, it is possible to increase Brazilian companies’ productivity by 10% to 20% by just optimizing the process and eliminating any wastage.
NSAM: What is the main challenge for Porsche in Brazil?
Leutz: Porsche Consulting is particularly focused on process and the speed in convincing people that change itself is a good thing is quite a challenge. I think Brazilian people are open to learning the new methodology of continuous improvement of processes. Brazil is a strategic market for Porsche Consulting. From Brazil we serve companies in Mexico, Peru and Argentina. Many of our Brazilian clients are multinationals and we serve them in the different countries with our international consulting team. In Brazil we have 15 consultants and more than 364 employees in the world.