4.3 KIARA programme boosts performance

The main aims of the KIARA performance enhancement programme, which was launched in 2009, are a lower break-even point by means of systematic cost management, optimised structures and more efficient processes. This programme has enabled the KION Group to sustainably improve its cost structure and considerably boost its performance.

The far-reaching programme is divided into various modules: sales & service, production, hydraulics, research & development, purchasing and administrative functions. It comprises almost 200 individual initiatives, which are managed using relevant key performance indicators and whose progress is measured on a monthly basis. The appetite for change within the organisation is one of the key factors driving the success of the KIARA performance enhancement programme, which has contributed approximately €250 million in its first two years and has thereby exceeded its target of €212 million.

Steps to reduce fixed costs were initiated promptly in 2009 and have lowered the break-even point. Adjustments have been made to capacities in production, sales & service and the administrative departments to reflect changing market conditions. Capacities that will not be required in the short to medium term were reduced by laying off contract workers, reducing time accounts and introducing short-time working. In cases where capacities will not be required in the longer term, the KION Group worked in cooperation with employee representatives to find and implement solutions with the minimum possible social impact.

These optimised structures enable the KION Group to adjust capacities more flexibly. They form the basis for being able to fully participate in the market recovery and therefore emerge from the crisis in a stronger position. The KION Group has transferred the production of products from smaller plants to larger plants, thereby increasing the use of available capacity and benefiting from economies of scale. This has also strengthened the capabilities and competitiveness of the remaining plants. The Group successfully implemented its plans to relocate production facilities and consequently eliminate overcapacities in 2010.

Production at the LMH plant in Basingstoke ended in the first half of 2010, and the plant's production was relocated to the LMH core site in Aschaffenburg, the Châtellerault plant and the STILL core site in Hamburg. After production of reach trucks was relocated from the STILL plant in Reutlingen to the STILL core site in Hamburg, the Reutlingen plant was expanded to create a centre of competence for VNA trucks and systems engineering. In the hydraulics division, axle assembly for diesel trucks was relocated from the Kahl plant in Germany to LiPo, the plant run by Linde Pohony in the Czech Republic.

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