CEO Spearline

Spearline: Taking practical steps to promote gender balance in leadership roles

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A diverse staff to meet the diverse needs of their target audience – to Spearline, gender balance in every part of the business, particularly in senior roles, naturally makes sense. But for the Cork-headquartered company working in the field of telecommunication technology, getting good gender balance is much easier said than done.

“In the field we’re in, it’s hard to get a gender balance, particularly with regards to software development,” explains Spearline CEO Kevin Buckley. “But it’s important – we believe that the more diversity a company has, the better it performs – and countless studies have backed this up.

“I think most companies within our sector are aware of the importance of gender balance; we would hear this constantly referenced when on training courses or meetings. But achieving it can be tricky.”

 

People-focused business

Established in 2003, Spearline has developed a cloud-based platform that proactively monitors critical business telecommunication services, replicating the experience of a client’s customers and callers and allowing them to diagnose, escalate and resolve issues before they become noticeable problems. With clients including Zoom, Mastercard and Global Call Forwarding, Spearline is a problem solver with a diverse customer base – so having a diverse workforce to match is a must.

“I believe that the more diverse your thinking as a company, the better it will be,” says Kevin. “Men and women have slightly different ways of thinking, and I mean that in a positive way. Bringing these together can only improve our thinking as a business. And our users and clients would be both men and women, so I don’t understand why a company wouldn’t try and go for a 50-50 balance. Basically you’re trying to get a diversity of thought within your organisation, whether that’s gender, ethnic or more. A nice way of describing it is that we’re citizens of the world – we’re looking for a broad understanding of the world, and that is down to diversity.”

 

Practical steps

With teams based in Skibbereen, Waterford, Bucharest in Romania and Ahmedabad in India, Spearline is working hard to achieve a good gender balance in every part of its business. “We’re currently at 31.6% but by 2030, we’ll be setting a goal for ourselves to meet 40%,” says Kevin. “The software development side, which is about a third of our team, is very male oriented, but the other parts of the company tend to be less so – we would be pushing 40% in most of the other areas.

“We constantly look at the issue when hiring, especially in the last few years as we have matured as a company.” says Kevin

“Entry level positions for software development are dominated by men, but when hiring, we strive to identify people with strong leadership skills and support them as they progress their career with us. For instance, we interviewed one prospective candidate who was self-taught and had huge ambition and potential. She is now head of the QA team. We believe that this approach helps out gender balance policy in every area of our business – and in terms of leadership roles both our Chief Commercial Officer and our Chief People and Culture Officer (CPCO) are women.”

To attract more women into leadership roles, the company has put in a number of benefits to suit both women and men who are juggling work and family. “Two years ago, we brought in maternity, paternity and adoptive leave, and we’ve just introduced a hybrid model of working, which is two days in the office and three days at home. We also have flexible working hours, to accommodate school runs, and we offer career development opportunities through subsidised study. Our aim is to keep pushing the whole time, to create a workplace that is inclusive and diverse.”

Lorraine McCarthy, CPCO, adds, “I think it’s definitely working. We have a lot more women coming through in India, and that’s a growing team, we have 45 there now. Our country lead in India is female; we made her head when she came back from maternity leave, and to make someone head just after returning from maternity leave would be virtually unheard of in India. But she was the right person for the job, it’s as simple as that.”

Visibility of women in leadership roles also supports another important strategy in promoting gender balance which is role modelling. “Yes, we have 40% women in our Indian team now, which absolutely proves the point,” says Kevin.

 

Leading the way

Spearline is one of the progressive businesses that have seen the business benefits of gender balance in management teams, and have been working hard to attract more women into every aspect of their business. This strategy is aligned to The Level Project, a campaign by Enterprise Ireland to increase the number of women in senior management and leadership positions in Irish companies. This was a key aim highlighted in the 2020 Action Plan for Women in Business.

“I do see a difference in the world in terms of promoting gender balance; society has moved on and there are a lot of people doing a lot of good things in making that change.” says Kevin

Enterprise Ireland has great weight and clout, and by getting behind gender balance, it’s really putting a spotlight on the issue – we’re constantly bombarded by information, but when it comes from a heavyweight like Enterprise Ireland, people do listen.”

 

Start improving gender balance in your company with The Level Project Toolkit.

Recruiting in Germany

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Finding the right person to represent your company internationally is one of the most important decisions you will make. Your company is judged not only by the products and services you offer but by the people who are offering them. Finding the right people to do this at an excellent level is a constant challenge at home and overseas.

Enterprise Ireland has developed this recruitment guide to provide Irish businesses with expert insights on executive search and selection from one the leading executive search companies in Germany and internationally, Signium.

Our team of Düsseldorf-based market advisors are available to help you grow your businesses within Germany, Austria and Switzerland and to advise on the vital process of international recruitment.

Download our guide to recruiting in Germany and find the right people to grow your business overseas.

Inside Innovation Show – Combilift

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Inside Innovation brings you the stories of Ireland’s leading innovators and changemakers. Across the series we will cover a whole range of topics from innovating in a crisis, to looking at the future of many business areas. We go behind the stories, to understand what drives these innovators and what the innovation success factors are, from capability building, to culture and leadership.

The podcast is hosted by innovation expert Aidan McCullen.

Episode 1 – Interview with Martin McVicar, CEO & Founder of Combilift

The first episode is part of a series ‘Innovating in a Crisis’. An Irish innovator who innovated in the Covid-19 crisis is CEO and Founder of Combilift, Martin McVicar. The Irish engineering firm leveraged the innovation skills that make it a world leader in forklift trucks, to solve a global shortage of the ventilators required to fight Covid-19.

Evolve UK Webinar – UK Water Sector – AMP 7 Update and Net Zero Outlook

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Enterprise Ireland UK’s webinar: UK Water Sector – AMP 7 Update and Net Zero Outlook provided attendees with an update on the UK water sector and discussed the Net Zero 2030 Routemap.

Experts from across the industry gave their perspective on key issues, including the AMP 7 investment cycle, the sector’s plan to deliver upon a net zero strategy and the role that supply chain companies will play in achieving the sector’s carbon reduction targets.

Watch the webinar to hear expert insights from

–             Lee Horrocks, Director, LCH Executive

–             Lila Thompson, Chief Executive, British Water

–             Samuel Larsen, Programme Lead, Water UK

–             David Riley, Head of Carbon Neutrality, Anglian Water

 

Fitzgeralds

Going against the grain with Fitzgeralds Family Bakery

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How Fitzgeralds Family Bakery has risen to the challenge during the Covid-19 crisis

“We have been very busy during the lockdown as retail demand has increased significantly,” says Simon Fitzgerald, Director of Fitzgeralds Family Bakery. “Unfortunately, while retail sales have increased because consumers are mostly eating at home, the food-to-go and food service suppliers have been very badly hit.”

Simon is part of the fourth generation to run his family bakery, Fitzgeralds Family Bakery, which was first opened on Blarney Street in Cork city in 1910 by his great-grandfather. It is now run by Simon, Suzanne and Garry FitzGerald, with a whole new generation of little tasters by their feet.

The bakery sells to retail businesses including SuperValu, Tesco, Dunnes Stores, Eurospar, Mace, Londis, and Costcutter in Ireland and also exports its products to Waitrose, Sainsbury’s and Ocado in the UK. The range of baked goods includes wraps, Bake-at-Home French and Italian breads, pittas and naans, pizza bases, and their most popular product, bagels. Due to being a retail business, they benefited from the initial stage of panic buying and being an essential service.

“When the lockdown hit, our sales increased by more than 30%,” says Simon. “Now the panic buying has settled, and we are still seeing an increase of around 10 to 15% for the next few months potentially. As hotels and restaurants were forced to close, the manufacturers supplying those customers suffered badly. We were fortunate that our main service was retail and we had success in the UK market too, so that really helped us.

“Although we have had to make a lot of changes to our ways of working to make sure everyone can work safely, we have been very fortunate that we have had the full co-operation of our great staff and that everyone has stayed safe and well.” explains Fitzgerald.

 

Essential service

During the Covid-19 crisis, many businesses struggled, either through enforced closures or too much demand in a stressful environment.

Simon says, “Our aim was to produce enough product to meet the demand for our customers. And there was such a demand! We were also very fortunate that we had ordered a second bagel production line in October, which has been delivered and commissioned in recent weeks.”

Fitzgeralds Family Bakery was able to face this task with the help of Enterprise Ireland and their supports. They have gained support and grant aid over the years, including capital and employment grants to help the business grow.

“We have been able to go from having fewer than 50 employees to nearly 100. This is due in no small part to the support and guidance we have had from Enterprise Ireland. We have been incredibly well supported by them. They invest in businesses to help them provide employment and I think we have achieved those goals.”

Having such support is important for the future of the business and the industry at large as the pandemic has changed everything about the business landscape. It has vastly changed lifestyles, which in turn has changed working lives and even the way people eat.

“With the lockdown and social distancing, it has made people stop, re-think, and change their eating habits. Going forward, there will definitely be fewer people going out to eat. More people are working from home and that is likely to continue to some degree and children may well see some of their education being delivered by remote learning, so there is more demand to eat at home.

“It really does feel like an opportunity for those of us in the retail food industry as it’s more likely people will buy food in a shop and take it home than eat out. This means an increase in business.” says Fitzgerald.

“We are a modern family craft bakery and we want to keep producing high-quality products. We will continue to develop our range of products and continue to be innovative and bring new exciting products to the market. We have nearly doubled our retail sales in the last two years, and I think that’s due to this commitment.”

 

Three EU flags in front of a Eurozone recovery banner on the Berlaymont building of the European Commission

Eurozone Recovery, Irish Opportunity: How Irish companies can benefit from the EU’s recovery plan

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Key takeouts

  • NextGenerationEU funding represents an opportunity for Irish companies to break into new markets or scale their presence in existing markets
  • From digital health care and green technology to smart cities and cybersecurity, there are hundreds of Eurozone recovery projects that will be fully funded by the EU
  • The Enterprise Ireland Eurozone team can help you find the right markets and projects to target

 

 

What is NextGenerationEU?

We are living in extraordinary times, but it’s not all bad news for Irish business. Over the next couple of years, those who can or who are keen to export can take advantage of a significant opportunity, fuelled by the NextGenerationEU funding package put in place by the European Commission. At €750 billion*, it’s the largest ever stimulus package in Europe and some is directly aimed at SMEs.

“The objective is twofold,” explains Marco Lopriore, at the European Institute of Public Administration (EIPA). “It is recovery, to help the European economy recover from the past year, but it is also resilience.

“This is a push for a radical transformation of consumption and production to prepare European economies to withstand future crises in a better way. We’re speaking in Brussels about a paradigm shift. This is basically changing the way we function completely.”

Within the overall project, the EU level of investment is supplemented by the agendas and priorities of each national government.

*The current value of the funding is €806.9 billion. It was €750 billion when agreed in 2018.

 

 

What does the Eurozone recovery plan mean for Irish SMEs?

This Recovery and Resilience Facility (RRF) means a wave of funding unrolling across all 27 EU member states to support investment in public services and infrastructure, to make Europe greener, more digital and more resilient.

As Ireland seeks to build a deeper trade relationship with Europe, that funding represents an excellent opportunity for Irish companies to break into new markets or to deepen and scale their presence in existing markets.

Across everything from digital health care and green technology to smart cities and cybersecurity, there are hundreds of Eurozone recovery projects to complete across the EU over the next few years. All of them will be fully funded.

“SMEs are not always directly affected by macroeconomics,” says Anne Lanigan, regional director, Eurozone at Enterprise Ireland, “but when that volume of money is going into it, especially to drive the green and digital agenda, it has to have an impact on what is happening at a business level.”

 

 

Core focus on green and digital

European Commission bannerThe overall fund is focused on six pillars, with the green transition and digital transformation being top of the list. The European Commission has specified that each country must assign at least 37% and 20% of their spending to those pillars, respectively.

“Several member states have gone beyond those minimum thresholds,” says Lopriore. “Luxembourg, for example, is putting 60% to green, while Germany is putting 50% to digital.

The green transition covers everything from clean tech, renewable energy and energy efficiency, sustainable transport, improving water quality to creating greener cities and making farming more eco-friendly.

Digital projects to get funding span 5G, digitalisation of public service, cloud computing, smart cities, artificial intelligence, blockchain and more, including projects focused on reskilling and upskilling to improve digital literacy.

 

 

Leaning into Irish tech expertise

Areas in which many Irish firms specialise, such as cybersecurity and the digitalisation of health are a significant focus in many plans, says Lopriore, who wrote extensively on national areas of focus for NextGenerationEU funding in a recent paper.

“In Belgium, for example, the plan is to spend €585m on digitalisation, of which almost €80m is allocated to cybersecurity. Spain wants to reinforce cybersecurity on its rail network, its air traffic control, its central public administration and in the tourism sector.”

When it comes to providing health and medical services online, France will invest €2 billion in the digitalisation of health, while Germany will invest €3.8 billion.

 

 

Breaking into a new European market

The funding offers new momentum to Irish exporters targeting Europe, a trend that was already soaring, says Lanigan.

Anne Lanigan, Patrick Torrekins, Leo Varadkar, Leo Clancy“Since we implemented our Eurozone strategy in 2017, we’ve seen a 33% jump in exports from Ireland to the Eurozone,” she says. “Even in 2020, when some sectors were hit very hard, we still saw a 1.6% growth in exports, which is significant considering economies across Europe shrunk.

For companies that want to export for the first time or to diversify their export markets, Enterprise Ireland can offer support and advice. This includes everything from market research and helping a company to get export-ready to tapping into a wide network of contacts and making the right introductions.

“The easiest model is where a client is looking for a customer and we can introduce them,” says Lanigan. “Exporting often involves a local partner and we introduce companies to the right people– the local influencers, the potential partners and those they could collaborate with, including other Irish companies.

“We work to build clusters that bring companies in the same space together,” she explains. “If there is an opportunity around smart mobility, for example, we can bring companies working in that area together and introduce them to the right people.”

 

 

Finding the right market to target

The markets of interest to individual companies will depend on the nature of the products and services they offer. Those selling into the tourism and hospitality sector, for example, will find more extensive opportunities in Southern Europe, where governments are placing more emphasis on this sector.

Many countries mention renovating buildings to be more energy-efficient and installing more electric vehicle charging situations, but Germany is putting particular emphasis on hydrogen production and AI, for example.

Detailed country-by-country information in English on the plans and priorities of each Member State can be found here.

 

 

How will the Eurozone recovery funding work in practice?

  • While SMEs may believe trying to tender for public contracts is too complex and likely to be choked by red tape, 15% of the NextGenerationEU funding will benefit SMEs – more than half of that in direct business.
  • Furthermore, Enterprise Ireland can advise on the tendering process.
  • In practice, each EU state has its own national Resilience and Recovery Plan (RRP), with all projects in it open to public tender on an online portal.
  • Some of these portals, such as those of France, Italy and Portugal, are already up and running.
  • Every project linked to this Eurozone recovery funding must be completed by 2026.

 

 

Rising to the export challenge

While deciding to expand export operations can seem daunting to some, Lanigan encourages Irish business owners and managers to examine the RRP options open to them. That includes going beyond the UK, even as a first export market.

“Diversifying our export markets has become even more important since Brexit,” she says. “Now, 29% of our clients’ exports go to the UK, but that is down from 45% a decade ago.

A marked improvement in marine links is helping, she adds, as more routes with more capacity mean it is much easier to trade directly with EU customers.

“We have a huge market on our doorstep. After all, we have the biggest free trade agreement in the world, with no customs, no tariffs and no regulatory challenges. And, of course, for 19 countries in the Eurozone, there are no currency costs.”

“Irish companies have a great reputation across Europe, with customers having a really positive view of them. And when you see the Irish products and services selling into Europe – they are top notch and born of incredible innovation – it’s evident why they are well regarded.”

 

If you’re interested in starting to export to the Eurozone or in growing your exports to the Eurozone, get in touch.

Evolve UK Podcast – Local Authorities

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Enterprise Ireland’s Evolve UK podcast series shares market insights to help Irish businesses identify opportunities across the UK.

This episode is hosted by Deirdre McPartlin, Enterprise Ireland UK manager in conversation with Brendan Barry, Director, EI Electronics and Steve Trafford, National Sales Manager, AICO.

EI Electronics, one of Ireland’s largest electronics manufacturers, acquired AICO, a market leader in domestic fire and Carbon Monoxide (CO) protection,  and now has almost 1000 employees globally with revenues in the hundreds of millions. EI electronics and AICO joined the podcast to discuss what makes the partnership work and their success over the last 30 years.

 

 

Industry Bulletin – Automotive – New mindset to focus on future solutions

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AVL is the world’s largest independent company for the development, simulation and testing of powertrain systems for passenger cars and commercial and industrial vehicles and is directly exposed to the deepest and most rapid business downturn in the history of the automotive industry. Dr. Daniel Kürschner, Head of the Company’s Munich-based advanced driver assistance systems (ADAS) centre, remains optimistic, however.

He points out that AVL is not a traditional Tier 1 supplier to the industry and is not directly connected to the supply chain. It is therefore also not directly affected by vehicle sales as many other companies.

While some projects are subject to renegotiation and delay, there are positives to the current environment, he notes. “We as a German or European car industry need to see this crisis as an opportunity to rethink our traditional mindset and to focus on more sustainable, future-oriented solutions, following the CASE trends (connectivity, autonomous, sharing/subscription and electrification) and also noting different demands of the younger generations.” says Kürschner. “Car makers would have the time now to catch up on delayed technology developments which they have not focused on over the past decade. A lot of companies worldwide, particularly innovative start-ups, have technologies available that could be combined with those of the traditional corporations in order to speed up launching competitive products at the end.”

AVL is already moving into new areas such as e-mobility, fuel cells and ADAS. “We see a big opportunity to grow within these new business fields and it would be great to see a green economy emerge in the near future,” he adds.

As a direct impact of Covid-19, also AVL has successfully switched to remote working. “Like for others, it has affected us in the sense that people can’t come together in person , but that we are currently working in home offices but, luckily, our teams are experienced in digitalisation and web-based communication so that we can keep the productivity levels very high.”

The downstream effect of the industry downturn is being felt, however. “The car industry in general is very cautious at the moment, so capital expenditure is on hold and also AVL – as one player in the industry – has changed over to short-term work,” Kürschner explains. “As a technology and engineering provider we are dependent on the automotive industry reopening, and we will continue to provide our technological expertise as best as possible, trying to overcome all hurdles resulting from the crisis.”

 

Addressing future market demands

Many of the challenges the industry is currently facing, already existed before the current crisis, he adds. “The current situation just accelerates the formation of fundamental structural changes within the market. The structural changes basically result from the green trend and because younger generations are demanding greener and more sustainable yet still safe and superior technology. However, they are still willing to spend money for this, so the industry must adapt to these changing circumstances and take measures to understand and accept future market demands.”

This superior technology includes ADAS.

“More and more customers will expect to find ADAS and autonomous driving features within their cars,” says Kürschner. “Moreover, autonomous driving is providing the technical basis for future concepts such as mobility as a service.”

He also mentions the upcoming development of the centralised electronic control unit. “This has a lot of benefits for maintenance and remote updates. It allows the provider to keep the product updated all the time, and will also feature active safety and cybersecurity functions.”

Innovation will continue to play a major role in automotive industry, he believes. “As we had already seen in the e-mobility trend starting over 10 years ago, today, also ADAS and newer trends will cause shifting supply chains, with innovative solutions looking to alter and take over from traditional fields within the industry.”

He takes a positive view of the industry’s future. “Looking at the business perspective, the focus will be on measures over the near term to keep the industry and economy running, which is partially a government responsibility, but also the companies themselves need to sharpen their product portfolio, ready to keep up with the latest customer demands. People will continue to need mobility despite the deep crisis and despite the current uncertainty and therefore, for now I am not concerned that people will stop buying cars. However, in the medium and long term, I would focus on the technologies following the CASE trends in order to maintain our global competitiveness within the future car industry.”

 

 

 

 

Managing Cashflow

Managing Cashflow in a Crisis

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As managers reset the business for recovery, companies need to adopt a lean culture where expenditure is minimised and every cost is questioned.

One of the greatest risks facing many businesses in the current environment is running out of cash. A company that can’t pay its bills, regardless of how profitable it is, will quickly go out of business. Cash conservation is therefore key to survival.

While in the medium to longer term companies will have to look at reengineering their business and operational models in order to meet challenges presented by the post-Covid-19 world, the short term is going to see a focus on cash according to Business Financial Consultant Brendan Binchy.

“There is much more urgency relating to cash now,” he says. “And there are many things a business can do to manage its cash. Almost everyone out there is availing of debt payment deferrals, for example. They are trying to hit the pause button on cash going out wherever they can so that they can preserve the status quo as much as possible. They are also looking at other areas like aged debtors. You almost have to look at it like a company threatened in a pre-receivership condition.”

Binchy recommends a structured approach to cash conservation and this starts with the balance sheet. “The profit and loss account is a record of a business over a period of time, but the balance sheet gives a snapshot of the business at a particular moment in time.”

Companies should pay particular attention to their gearing, he advises. This is the ratio of debt to equity on the balance sheet. “The lower it is the better, but losses will erode equity and increase the gearing ratio,” Binchy continues.

A healthy gearing ratio will allow companies to borrow judiciously in order to bolster their cash position. “This can be very helpful, but companies need to be aware of the associated debt service costs.”

The next step is to look at asset funding, where they may be scope for some reverse engineering. “Businesses frequently purchase assets for cash during good times,” Binchy notes. “They could be re-financed now with bank debt and this will improve the cash position. Generally speaking, the asset lifetime and the funding cycle should be the same. It is important to remember that trade debt, like invoice financing, is for working capital not capital expenditure.”

The sales lead to cash cycle is the next area for examining.

“It takes time for marketing effort to translate into sales leads, buying decisions, billing, and cash collection”, Binchy explains.

 “This can be quite protracted, and companies need to look for ways to get to close sales quickly and speed up invoicing.”

The supply chain should also come in for attention to slow the outward flow of cash. “Companies should identify strategic supplier relationships, tighten stock management overall, improve workflows, and negotiate new arrangements such as stockholding facilities with key suppliers. Talking to key suppliers and developing strategic partnerships is a very good ongoing strategy for companies. The more they do it the better.”

And then there are what Binchy calls the common-sense measures.

“Defer capital expenditure and other spending decisions wherever possible,” he advises. “Companies need to adopt a mean and lean culture where expenditure is minimised, and every cost is questioned. But this must come from the top down and everyone must share the pain and to be seen to share it.” 

Once those actions have been taken, it is time to put together a budget plan. “Having these measures in place means you already have your fingers on the pulse and you can make a budget plan to take you from where the business was before the crisis to what’s likely to happen afterwards. The most important thing about the plan is that it should be iterative. You’re not going to get everything right first time around. The plan gives you a framework to forecast and plan for what might happen. You can adjust it weekly and monthly rather than having to build new plans all the time.”

And businesses don’t have to do this on their own. Binchy recommends the Enterprise Ireland Lean Business Continuity Voucher as a good starting point. This offers eligible companies up to €2,500 in training or advisory services to help them identify and implement the measures needed to ensure they can continue to operate during the Covid-19 pandemic.

There is also the Covid-19 Business Financial Planning Grant, which is worth up to €5,000, and can be used by companies to pay up to 100% of the cost of engaging an approved financial consultant to assist them prepare a financial plan, understand their immediate financial position, manage costs and identify their funding requirement.

When it comes to cash for the business, Binchy points to the Temporary Covid-19 Wage Subsidy which he says has been very helpful to businesses throughout the country.

Sources of working capital and loan finance include the €450 million Covid-19 Working Capital Loan Fund and the €200 million Future Growth Loan Scheme fund available through the Strategic Banking Corporation of Ireland. Businesses which have difficulty accessing bank finance can apply for funding of up to €800,000 from the Enterprise Ireland Sustaining Enterprise Funds. There is also a fund for smaller companies which offers funding of up to €25,000 and €50,000 depending on the size of the business.

 

    Hear from financial expert, Brendan Binchy and Enterprise Ireland’s finance team in our Accessing Liquidity & Managing Cashflow webinar.

    manufacturing

    Seismic change on global auto production could offer opportunities for Irish suppliers  

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    Continental AG addresses fresh challenges as a result of the Covid-19 pandemic

    The company was forced to shut down all of its global tyre manufacturing operations within a short space of time as a result of the Covid-19 pandemic and has recently begun a return to production. “During that period, we had to wind down operations efficiently as well as implement cost mitigation measures such as short-term work initiatives from national governments, having workers take holidays, as well as unpaid leave along with salary reductions at management level,” says David O’Donnell, Global Head of Passenger and Light Truck Tyres at Continental AG.

    The company is now seeing a welcome but slow return to activity among key automaker customers globally. 

    “We are observing more build-to-order in response to a concrete need for the vehicles in contrast to before, where they were built for an assumed level of demand.” said David O’Donnell

    O’Donnell believes it will be several years before production levels recover. “We will be looking at 2022 or 2023 best case before we get to anything like 2019 volumes. Everybody will have to react to the seismic shift in volumes. We are looking at 70 million vehicles this year versus more than 80 million last year. If you can get used to the current level somehow, then you likely have two years of growth. The question is do you hold your capacity to be able to access more opportunities, or do you reduce your cost exposure in order to go into a new growth mode in a different way? That will put pressure on cost management and will also make them look at systems efficiencies and internal company structures.”

     

    Focus on Agility

    One impact of the global pandemic has been an enforced increased level of agility on the part of manufacturers. “How quickly can you ramp something down? Can you run with a portion of the plant and do that cost-effectively? How do you align it better system-wise to orders?” O’Donnell asks.

    “They might have full orders for a certain vehicle and then change it completely from week to week or month to month. It will take time for people to get over their nervousness to rely on orders and feel comfortable with the new processes,” he adds. “Those who can adapt to that uncertainty will be winners in this situation.”

    He believes this may present opportunities for Irish firms, which have a reputation for agility and flexibility. According to O’Donnell, anything a company can offer in terms of productivity, improving potential efficiency or agility such as adjusting payment terms for a period, holding more stock, or quickening pace of production would be beneficial.

     

    Supply Chain

    Opportunities may also exist in the dual procurement structure and more localised supply chain which could result from the crisis. “When China went into lockdown there were war room discussions in our organisation concerning who’s going to stop the slide first. It was a pivotal moment because you had electronic equipment coming from the huge manufacturing hub of China and that affected the batches in Serbia, for example. The aftershock will see OEMs discussing a change in tactics with their purchasing groups, as well as sourcing from multiple and more local suppliers going forward.”

    Noting that the Trump administration’s policies have already led to a discussion about what operations can companies relocate to the US, O’Donnell says more nationalisation in Europe may bring more opportunities than in the past.

    “A friend and colleague of mine is doing relatively small batch production of printed circuit boards and prototypes. He’s based in Germany and he has had a lot of requests because he is both local and agile as well as an alternative supplier to China. He might be more expensive but he’s offering the flexibility these companies need.”

    But customers won’t be willing to pay higher prices forever. “Once the OEMs are back at full capacity with high volumes again, they will come very aggressively with price discussions as they try to regain profitability.”

    He advises suppliers to be proactive in going after these opportunities. “It’s a question of arguing yourself into that space as a potential partner and bringing the advantages forward. Become ready for agility and be customer-centric by assessing challenges they have, look at the macro picture and present yourself as a local and flexible supplier. If you can do something there, you may have an advantage in winning long-term business.”

     

    Market Watch Germany – Webinar – Managing and supporting channel partners

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    Enterprise Ireland’s offices in Germany have launched a series of Webinars: Market Watch Germany. Every Wednesday at 14:00 BST/15:00 CET a new theme will be addressed to help Irish companies exporting to Germany navigate the challenges and opportunities presented by Covid 19.

    Managing and Supporting Channel Partners in the German market’ is the fourth installment of Market Watch Germany webinar series. The purpose of this webinar is to help Irish companies exporting to Germany navigate the challenges and opportunities presented by Covid-19.

    Panellists:

    Brian English an Engineer and Marketer with over 30 years international sales and routes-to-market experience.

    Dr. Andrea Seidel, with a wealth of experience in business development and strategic partnership.

    Paul Browne from Enterprise Ireland’s Client Management Development & Client Skills department.

    Financial planning to accelerate your recovery

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    The global economic crisis triggered by the Covid-19 pandemic is unlike any seen before in history in terms of the rapidity of its onset and its scale. It has been variously referred to as a black swan event or as a perfect storm, and for individual businesses worldwide its effects have included state- mandated shutdowns, a near total collapse in demand and, for the lucky, an enforced shift to new ways of working and business models.

    As Ireland begins its first tentative steps towards a return to something approaching normality, businesses too must start planning their pathway to recovery and beyond. According to Business Transition Consultant Brendan Binchy, the first step for business owners is to analyse the company’s current position and develop a vision for the future.

    He advises people not to panic. “It’s not a question of asking if the crisis will impact on the business and worrying about that,” he says. “It is self-evident that it will impact. You have to be proactive, not reactive. You might know how it will affect the business this year, but what about next year? Where do you want to be then? You need a to have vision for that. And from there you can work out what to do and what not to do and what you need to change.”

    There are also actions which need to be taken immediately to stabilise the business. In Binchy’s view, these actions require businesses to examine and reset their business models, develop and implement very tight cash management strategies, and adapt and modify their operations to meet the new conditions in which they find themselves.

    “You have to look at where you are financially, ask where your customers are coming from and why they buy from you, and if it is possible to recalibrate the business, to come up with a new model which will see it through the current period,” he advises.

    That might be termed the firefighting or survival phase. The next stage is to plan for recovery and beyond. While planning in such times of massive uncertainty may seem an impossible or even futile task, Binchy believes it is worthwhile and an absolute necessity.

    But the plan must be flexible and adaptive in order to deal with sudden changes in a highly dynamic environment. “We have to accept that what we think will happen may not come about. But if you don’t have a flight plan, you have no way of getting to your destination. When you’re up in the air you need to know where you’re going. You may get knocked off course from time to time and you will need to adjust the plan in response.”

    Even the process of putting the plan together can be helpful, he notes. “It is cathartic and helps clarify things.”

    This clarity comes from the examination of the business and its environment. Questions Binchy puts include:

    • Is your industry shut down or is it still working?
    • Are there opportunities there?
    • What has been the impact of the crisis on customers?
    • Do they still have money?
    • Do they still need your products or services?
    • Are there customers you no longer need?
    • What has been the impact on competitors?

    Fortunately, there is help out there both to develop plans and implement them.

    He points to the Enterprise Ireland Covid-19 Business Financial Planning Grant as a very important support. The grant, worth up to €5,000, can be used by companies to pay up to 100% of the cost of engaging an approved financial consultant. The consultant will work with the company to prepare a robust financial and business plan that identifies the funding needs and the potential sources of this funding.  

    Another valuable support Binchy advises businesses to take note of is the Lean Business Continuity Voucher, which offers eligible companies up to €2,500 in vouchers for training or advisory services to help them identify and implement the measures needed to ensure they can continue to operate safely during the Covid-19 pandemic.

    Support for the implementation of the plan is there in the form of the Enterprise Ireland Sustaining Enterprise Fund, which offers funding of up to €800,000. Very importantly, no repayments are required for the first three years of the five-year term of the advance and there is an annual administration fee of just 4%, making it a very attractive source of finance.

    Smaller businesses can also apply for advances of up to €50,000 depending on their size under the Sustaining Enterprise Fund – Small Enterprise scheme.

    “Businesses can also look to shareholders to put in new capital or go to the banks,”, Binchy concludes. “The important thing is to develop a plan and have the finance in place to implement it.”

     

    Watch our webinar addressing the critical challenges facing Covid-19 impacted businesses – Accessing liquidity and managing cashflow.

    Get advice from financial expert, Brendan Binchy on how best to navigate these issues and hear from Enterprise Ireland’s finance team on the financial supports available from Enterprise Ireland.