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28.03.2017

INVALUABLE COMPARISONS AND BENCHMARKS

Companies need to continuously put all elements of their management through their paces. VDMA develops important key performance indicators and processes for this purpose.

By Bianca Illner

For Otto Schulz-Mehrin, the innovator of business management at VDMA, uniform accounting fundamentals were the prerequisite for breaking new ground in business management. He envisioned the appropriate tools to objectively measure the structure, efficiency and profitability of a company. Inter-company comparisons of key performance indicators seemed to him to be most suitable. It was important to overcome psychological obstacles, to identify which parameters provided practical, valuable information and how these can be obtained.

Site analysis through comparison

In 1927, the first comprehensive intercompany comparison was carried out - a completely new challenge. Today, the use of VDMA key performance indicators obtained from comparisons has become a matter of course, with "inter-company comparisons" and "VDMA benchmarks" being indispensable services of the association. The survey methods have been refined on an ongoing basis. For example, VDMA has been conducting online surveys since 2009. At present, the Management Services department provides about 750 benchmarks for VDMA member companies. In 1954, Schulz-Mehrin published "Betriebswirtschaftliche Kennzahlen als Mittel zur Betriebskontrolle und Betriebsführung" (Key performance indicators as a means for operational control and management), from which the annual publication "Kennzahlenkompass" (KPI directory) was developed. The Management Services committee ensured that the key performance indicators were constantly being developed further. Designed as a joint service for the mechanical engineering industry, VDMA members have been using inter-company comparisons and VDMA benchmarks for decades to analyze their sites. This data proved its worth just as well after the time of the fall of the Berlin Wall as during the crisis of 2008/2009 - and it will remain indispensable in the future as an instrument of company management.

The Management Services committee

Today's Management Services committee was founded in Frankfurt on June 14, 1955. In 1982, the committee was renamed the "Business and Company Management committee (BwU)". The committee's history dates back to a commission founded in 1906, which compiled the "Allgemeine Grundsätze und Anhaltspunkte für eine geordnete Kalkulation im Maschinenbau" (General principles and indications for an orderly calculation in mechanical engineering) and created a new accounting framework and the new "Gemeinschaftsrichtlinien für das Rechnungswesen" (Community guidelines for accounting) between 1947 and 1950. At the time, 45 mostly highranking company representatives together formed this top committee. New basic technologies and the liberalization of world trade unleashed a dynamism in the following decades that required enormous adjustments of the economy and society. Management services were no longer limited to accounting. All elements of company management were analyzed theoretically and empirically with changing focus. The Management Services committee was responsible for defining the objectives and tasks, ensuring the involvement of outstanding scientists for developing the foundations and making sure that the results could be put into practice.

Events and publications

With its meetings "Management Services at the Service of Company Management", the committee provided its members with first-hand information and enhanced its prestige in public. Numerous brochures, such as "Maßnahmen zur Neu-Strukturierung im Maschinenbau" (Re-structuring in mechanical engineering), which won the Schmalenbach Award in 1994, have also contributed significantly to increasing the committee's reach.

The number of managers from member companies who actively participated in the planning and implementation of the tasks increased steadily. While the committee focused more and more on the direct link between the Management Services department and the management of member companies, a large part of the work was divided among into subject-specific working groups. For example, central working groups were created for Controlling (1991), Human Resources (1992), Quality & Management (2003), Customer Service (2003), Risk Management (2006) and Construction (2008). A new VDMA committee was established in 1999 from the central working group (ZAK) Purchasing and Materials Management, which was founded in 1988. In 1991, the VDMA Marketing committee was created in order to allow for the growing importance of marketing and sales. The central working group Production started its work in 2016.

Practical relevance and benefits

In the committees, working groups and project groups, 200 to 300 permanent employees from mechanical engineering companies ensure an optimum level of practical relevance and benefits. In the Management Services department, 12 committed specialists and moderators are currently on hand to offer support in optimizing the organization and processes along the entire value chain. 165 meetings and seminars were held over the past ten years via the VDMA Maschinenbau-Institut and 26 publications were widely disseminated by the VDMA-Verlag. In
addition, about 150 exchange of experience events and about 50 company visits are organized every year.

VDMA's Management Services department develops solutions for current and future challenges in mechanical engineering, including growing volatility, globalization and digitization. The goal for the future remains the same: strengthening the competitiveness of the VDMA members. For the association, this means moving the business forward by sharing knowledge and connecting people.

Further Information

VDMA Management

© VDMA
Contact
Bianca Illner, VDMA Management Services.