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ABC-Printer-3D: Navigating Autonomy and Efficiency in Organizational Analysis


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Role: Consultant
Industry: Metal 3D Printing


Situation:

I have to report on an organizational analysis I carried out. ABC-Printer-3D Italy is a small company owned by ABC-Printer-3D Germany. It is made up of three business lines: commercial (sales), customer assistance (services) and machine design for the German parent company. The company management does not have the service activities under control because they are managed directly by the German parent company. The German parent company designs and produces innovative machines for additive manufacturing. There are also two independent functions Business Development and Information Technology with only one person that depend only on Germany and the management of the Italian branch is not aware of what they do. The companies were recently purchased by a major Japanese company, JapanCompany, which supposedly wants to have the situation under control. • There are three CEOs and their respective areas of responsibility are unclear • The company is not compliant with Legislative Decree 81/2008 consolidated text on health and safety at work; • Management does not have control over expenses: approval and allocation to the various cost centers; • There are employees hired without management having been informed; • It is not clear who is responsible for the company's income statement and for signing the balance sheet; • It is a company that is making a loss because all the design activity is done for the German parent company and therefore all the costs do not have a customer to charge them to. This means that criteria must be defined to attribute the costs of design and development to the German parent company in order to balance the income statement. It is not correct to just write them off at the end of the year without keeping them under control. • The company objectives are not clear; • The lack of a clear direction of the company generates disorientation towards employees; • The consultants they relied on were not adequate. The result that emerged is that the management of the German parent company (ABC-Printer-3D Germany) must be convinced that the Italian branch (ABC-Printer-3D Italy) needs greater autonomy and their interference in the management of the company must cease have negative impacts. In my notes I wrote the following notes: • The corporate mission of ABC-Printer-3D and its corporate objectives are not defined and communicated • Business processes and their interrelationships are not defined. Indicators are missing. • Review the structure of ABC-Printer-3D Italy and the mutual relationships with the parent company ABC-Printer-3D Germany • Define more clearly the responsibilities and tasks among the managing directors, avoiding overlapping of powers • Defining the safety organizational chart and formalizing the figure of the Employer until it can fulfill the non-delegable obligations of appointing the RSPP and carrying out and updating the Risk Assessment and related issuing of the DVR with the obligation of a certain date • Defining the internal organizational processes and the related mutual interrelationships and reviewing and formalizing the intragroup ones, avoiding bypassing the top management and managing people and activities from Germany without the ABC-Printer-3D top management being informed • Uniform purchasing procedures and provide clear and defined procedures in relation to the type of product/service supplied. • Clearly define the cost and responsibility centers within ABC-Printer-3D Italy and avoid interference from ABC-Printer-3D Germany. • Clarify intragroup economic relationships, especially for those activities carried out in favor of the German parent company which are not invoiced to a specific customer. Define an hourly cost for the product design and development activity (engineering) and for the Business Developer and IT Manager figures who carry out activities in favor of ABC-Printer-3D Germany but whose salary pertains to the income statement of ABC-Printer -3D Italy. The management of ABC-Printer-3D Italy should be guided by the logic of effectiveness, efficiency and legislative compliance. The balance sheet of ABC-Printer-3D Italy should be in balance. The Enginnering, IT activities carried out for others (Singapore), Business development as they are carried out exclusively for the benefit of ABC-Printer-3D Germany The activities carried out must have an economic justification within the annual and non-annual management income statement be based on covering losses at the end of the year. • Identify who will have responsibility for the economic-financial management of the company and will consequently be responsible for signing the financial statements. • Define a management planning and control system based on a forecast of the economic-financial management (budget) divided between the main cost centres, with clear attribution rules and verification of deviations. • Provide for greater autonomy of the management of ABC-Printer-3D Italy and avoid interference by ABC-Printer-3D Germany • Review relationships with suppliers of the main consultancy services (SSL, RSPP, training, legal, personnel management, accounting, ...) • Regulate and clarify the procurement methods of products (spare parts, metal powders, consumables, ...) for supply to end customers • The end customers of the machines can purchase the metal powders both from ABC-Printer-3D and from other existing suppliers on the market • The management of PPE for service workers is not formalised, even if they have it and they are adequate and effective • Need to better define the role of managing directors by delegating tasks and responsibilities to them, including that of managing relations with the German parent company to avoid interference and interference in the management of ABC-Printer-3D • There is a risk of sanctions for failure to comply with legislation on health and safety at work, with employment legislation (management of the employment relationship) • There is the possibility that the intragroup operations between ABC-Printer-3D Italy and ABC-Printer-3D Germany, if there are no reasons for the economic subsistence of the operation, could be considered as maneuvers to evade tax legislation to alter the balance sheet and reduce taxation in Italy.


Question to Marcus:


Can you help me to wire the report?


Based on your specific organizational details captured above, Marcus recommends the following areas for evaluation (in roughly decreasing priority). If you need any further clarification or details on the specific frameworks and concepts described below, please contact us: support@flevy.com.

Corporate Strategy

ABC-Printer-3D Italy is at a strategic crossroads, requiring a comprehensive reevaluation of its Corporate Strategy, particularly given the complexities introduced by its relationship with ABC-Printer-3D Germany and the acquisition by JapanCompany. In the context of metal 3D Printing—a sector characterized by rapid technological advancements and intense competition—the strategic alignment of ABC-Printer-3D Italy with the overarching goals of its parent and grandparent companies is crucial.

This alignment should focus on leveraging synergies across the group, especially in areas such as R&D, market expansion, and innovation. A clear, articulated corporate strategy that aligns with the metal 3D printing industry's dynamics and capitalizes on ABC-Printer-3D Italy's strengths can create a competitive edge. This strategy must also address the autonomy of ABC-Printer-3D Italy, ensuring that it can operate effectively within the broader corporate structure while contributing to the group's global objectives.

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Financial Management

The lack of clarity and control over Financial Management within ABC-Printer-3D Italy poses significant risks, not just to its operational integrity but also to its strategic positioning in the metal 3D printing market. Effective financial management is paramount in this high-tech industry, where R&D and capital investments are critical.

Streamlining financial operations, including cost allocation, expense approval, and financial reporting, is essential. The introduction of an Integrated Financial Model that accurately reflects the design and development costs—and attributes these to the German parent company—will ensure financial transparency and accountability. Implementing robust financial controls and defining clear financial responsibilities will support strategic decision-making, enabling ABC-Printer-3D Italy to invest in innovation and technology development, which are Key Success Factors in the metal 3D printing industry.

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Learn more about Integrated Financial Model Financial Management Key Success Factors

Organizational Design

ABC-Printer-3D Italy's current Organizational Structure, characterized by unclear leadership roles and responsibilities, is unsustainable, especially in a field as complex and rapidly evolving as metal 3D printing. A redesign of the organizational structure to clearly define management roles, responsibilities, and reporting lines is imperative.

This redesign should aim to enhance agility and foster a culture of innovation, essential in the metal 3D printing industry. The structure should support the strategic goals of the company, enabling efficient decision-making and fostering a more dynamic response to market changes. Ensuring the alignment of the Organizational Design with the operational and strategic needs of the business will facilitate better management of resources, improve Employee Engagement, and enhance the company's ability to innovate and grow within the Competitive Landscape of metal 3D printing.

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Learn more about Organizational Design Employee Engagement Organizational Structure Competitive Landscape

Supply Chain Management

For ABC-Printer-3D Italy, optimizing the Supply Chain is crucial to maintaining a competitive edge in the metal 3D printing industry. This includes managing the procurement of metal powders and other materials, ensuring the reliability of supply, and optimizing inventory levels to meet production demands without excessive capital tie-up.

Given the specialized nature of metal 3D printing, establishing strong relationships with suppliers and developing a diversified supplier base can mitigate risks and ensure the quality and availability of critical inputs. Additionally, considering the global trends towards sustainability and responsible sourcing, integrating these considerations into Supply Chain Management can further strengthen ABC-Printer-3D Italy's market position and appeal to a broader client base.

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Learn more about Supply Chain Management Supply Chain

Change Management

The need for greater autonomy for ABC-Printer-3D Italy and the restructuring of its internal processes and relationships with ABC-Printer-3D Germany necessitates a comprehensive Change Management strategy. This is particularly relevant in the fast-paced, innovation-driven metal 3D printing industry, where the ability to adapt and evolve can significantly impact a company's success.

Facilitating this change will require a clear communication plan, stakeholder engagement, and the establishment of a change management team to oversee the transition. This team should focus on aligning the Organizational Culture with the new strategic direction, ensuring employees are engaged and supported throughout the process. Effective change management will enable ABC-Printer-3D Italy to more rapidly adapt to industry trends, embrace new technologies, and meet the evolving needs of the market, thereby securing its position as a leader in the metal 3D printing industry.

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Learn more about Change Management Organizational Culture

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