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Progress on our core strategies

The delivery on the 2019 Must Win Battles was visible in the numbers and drove good progress on the five core strategies of the Group. 

Drive the customer into the heart of our business

Bekaert has always believed in customer collaboration and co-creation as drivers of sustainable partnerships and customer satisfaction. However, we want to do better and become a truly customer-centric organization. This strategy is about gaining insight into what value means to our customers and acting on it. It is about continuously prioritizing our customers in whatever we do, at all levels and wherever in the world.

In the course of 2019, Bekaert Customer Excellence (BCE) adjusted its course. Where the focus was on creating a well-functioning commercial organization in the first stages of the program, it has evolved towards creating value through customer excellence.

Gaining better insights in our markets, competitors and customers enables us to focus on what creates value to our customers and our business. One way of gauging what our customers expect from us and how satisfied they are, is the Net Promotor Survey. The overall score for the Net Promoter Survey of 2019 was 44, a confirmation of the strong results last year, compared to the Net Promotor Score benchmark of 20 for international B2B manufacturing companies. 

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Mais Valor puts spotlight on value creation in Brazil

One of the 2019 success stories was the introduction of Mais Valor in our Brazilian joint ventures. This program is oriented towards value creation across all commercial processes and in the way of working. The objectives of 2019 related to customer segmentation, service levels, account plans, dedicated pricing tools, and people development plans that clearly define all commercial team members’ roles, responsibilities and goals. 

Building supplier-customer relationships in Russia, Turkey and India

In 2019, multi-functional teams of the Bekaert plants in Russia, Turkey and India visited the respective neighboring tire plants of Yokohama and Bridgestone to learn how our tire cord is processed. They also saw first-hand how important it is to deliver consistent high-quality products, as the slightest variations can have serious effects on the production process of tires. 

Such meetings and visits contribute to building constructive customer-supplier relationships. The teams exchanged ideas about customer stewardship, mini-company approaches and safety programs, and concluded that even after working on common goals for many years, they can still learn from each other. 

Value driven growth

In implementing this strategy, Bekaert is making a clear statement about where we want to grow and how we can provide superior value to differentiate ourselves from the competition.

  • The economic slowdown led to a contraction in demand across various sectors in 2019 and prevented us from achieving substantial sales growth in our markets. Other factors that adversely impacted our sales volumes were a deliberate choice we made: better segmentation has helped us focus on value-creating business areas and exit those markets where our competitiveness and margin performance had been structurally affected.

    This was most visible in the progress made by Bridon-Bekaert Ropes Group and in some of the restructuring programs of the past two years that dealt with loss-making and low-margin businesses. These programs and other profit restoration actions aimed at turning around weaker performing activities will drive more value creation in coming years.
  • Our actions to further increase the market penetration of more advanced products, which lower the total cost in the value chain and are more value creating for our customers and for our business, gained traction in 2019. This applies particularly to the ever stronger and lighter tire cord constructions that allow tire makers to produce tires with a lower weight, thinner plies, and lower rolling resistance, and to the continuous innovation of the product and services portfolio of our building products platform.
  • To enable value-driven growth, we have defined several target markets with a long-term value growth potential. We have the intention to expand our presence in these target sectors, both in existing and into new markets, and are considering partnerships that will leverage complementary technologies, combined product solutions, and extended sales channels. The goal is simple: we want to take a leading position in the winning markets of tomorrow.

Bekaert established a joint venture with AGRO, a world leading manufacturer of high quality innersprings, to produce high-end steel wire mattress spring systems in Colombia. Where Bekaert will contribute with steel wire technology and regional market expertise, AGRO brings in steel spring technology and sectorial market know-how. A fine example of leveraging strengths in a market with firm growth potential.
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Technology leadership and speed

Our third core strategy is about accelerating Bekaert’s technology leadership and speed in alignment with our strategy to drive value-creating growth. Co-creation is one of the leading principles: we help our customers differentiate themselves in their markets and enable fast progress and effective results through effective collaboration. 

Find out more in the Technology and Innovation chapter of this Annual Report.

Leverage scale, reduce complexity and reach lowest total cost

This core strategy is designed to leverage our scale to greater effect, by reducing complexity and focusing on our opportunities and strengths with more standardization at best-in-class levels. We also want to ensure that in the process of providing the best value-creating solutions to our customers, we organize ourselves in a very cost-effective way and provide a total cost reduction through effective process and product innovations.

The Bekaert Manufacturing System (BMS) helps us to make progress on this strategy. BMS is a program designed to ensure manufacturing excellence in all our processes and locations worldwide. BMS brings together the collective effort of all Bekaert plants to drive the lowest total cost offering to our customers.

Enabled by the BMS methodology and tools, all plant teams identify and implement actions to increase safety, quality and efficiency, and to reduce costs. With the key elements of the Bekaert Manufacturing System firmly adopted by all plants worldwide, we progressively seize the cost and quality benefits from standardization and best practices.

Maintenance staff goes paperless

Mobile devices and apps become increasingly important on the Bekaert shop floor. The work order management of maintenance employees is now digitized. This means that they can access their planning from anywhere in the plant and receive updates in real-time when new priorities arise. Moreover, the app is linked with the spare parts inventory data, which helps even more in creating efficiencies. 
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Engage and empower people

The engagement and empowerment of people have been key success factors all along our transformation journey. We empower our teams with responsibility, authority and accountability, and count on the engagement of every Bekaert employee to drive higher-levels of performance. 

Along with the development and implementation of Bekaert’s new Enterprise Performance Management (EPM) model, Bekaert introduced a People Performance Management (PPM) program as our new way of looking at people performance and how we can better achieve our goals in the future. As such, PPM is part of a larger effort to become a much more performance-driven organization.

Enablers for the new people performance management practice are: a clear alignment of team and individual goals with business priorities; frequent performance steering and coaching; fair recognition in line with the achieved performance; and better supporting tools that allow employees to keep track of their performance and ‘feedforward’ actions throughout the year. These enablers make it easier for everyone to own goals and own the achievement of their objectives.

An engaged organization

It takes some time before a large organizational change is fully understood by everyone in the organization. For that reason, we have organized several communication cascade sessions to ensure that all team members understand the relation between their individual and team objectives and those of Bekaert as a whole, and how the new structure will enable us to revitalize our growth and profitability. With regular surveys, we have measured and increased the understanding and adoption of the benefits of the new organizational set-up. 

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Bekaert University

2019 saw the full roll-out of the Bekaert University. Through the Bekaert University, we support our employees’ development and help them to reach their objectives by offering training tailored to different professional areas. The Bekaert University provides our employees with inspiration, knowhow and peer support from colleagues and leaders in order to turn knowledge into action. In close collaboration with internal experts and external learning institutes, we continuously evaluate and develop our training portfolio to make sure that we are always equipped to meet the future demands of our customers and employees. 

Commercial Academy teaches how team members can contribute to our bottom-line result

Because not everyone is familiar with financial principles, the Commercial Academy regularly organizes a Basic Finance for Commercial workshop. Participants learn, for instance, which profitability indicators are driving commercial decision-making. Gaining this kind of insight helps them with how they can positively influence Bekaert's performance. As one participant said: "The practical cases makes us aware of how we can contribute directly."

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