Case Study – Finding the optimal position in the value chain for fast charging

The number of electrical vehicles on the market is rapidly increasing, and forecasts show that more than 2.5 million Swedish cars can be chargeable by 2030. Along with the increased number of electric vehicles, the demand for public charging and especially fast charging will increase during the coming years.
 
During this autumn we supported a publicly owned energy company in Sweden to investigate their optimal position in the value chain for fast charging. To tackle the assignment, we created a large factual basis for what battery electrification looks like in terms of the number of electric vehicles and fast chargers, as well as their location, battery capacity and range. Based on the factual basis and several interviews with representatives from the automotive and energy industry as well as other trade organizations, we forecasted the development of fast charging in Sweden. Furthermore, we mapped the value chain with all included actors and their key success factors. Drawing from this, we were able to help the client to investigate possible choices and positions in the value chain for fast charging. By evaluating the choices and positions with respect to the client´s existing position and capabilities we could find their optimal position and provide them with a roadmap for how to reach that position.
 
Due to the constantly increasing and changing market for electric vehicles, all publicly owned energy companies will in some way have to decide how to address the charging issue, and especially fast charging will be an interesting subset for most of these actors. This will also be an issue of investigation for many other companies related to the automotive and energy industry.
 
Are you interested to know more about this topic or do you want help to find your ultimate position in the value chain, don’t hesitate to get in contact with us!

How to understand price changes in the rapidly changing materials market

How do I know if the dramatic price increases from my suppliers are based on actual cost increases or are market opportunistic?
 
– Montell & Partners and Prognos MKA support companies that seek to enhance their knowledge about cost trends and strengthen their purchasing organizations.
 
During the last years the characteristics of the materials market have changed rapidly and the context in which many purchasers operate has become significantly more difficult. Handling the large movements and keeping track of price changes is often accomplished by the consultation of price indices and multiple source checking. But what if the sources show contradicting results and how to know what indices that accurately display the price changes for your specific products? 
 
Together with our partner Prognos MKA, we have recently arranged several training opportunities for purchasers and management in industries affected by the current price fluctuations. The aim of the training sessions has been to strengthen the participators knowledge about price sources and index selection, in order to improve the client’s ability to assess and benchmark their own purchasing prices. Our partners Jacob Axenbord and Jacob Mannheimer have also shared their advice on how to best handle specific situations presented to the client, drawing from their experience and expertise in purchasing. 
 
Do you also want to know more about how to find reliable price references for your products? Contact us.

M&A – How to prepare for success

M&A – How to prepare for success

Professor Clayton M. Christensen (et al.) states in Harvard Business Review that “Study after study puts the failure rate of mergers and acquisitions somewhere between 70 % and 90 %”. However, this doesn’t undertake the fact that corporate performance has potential to shoot sky high through successful M&As. We at Montell & Partners have the experience of successfully working with M&A and integrations for over 15 years in Europe, Asia and Africa with great results, meaning that targets have been reached and/or exceeded. 

By following three logic steps the success of the integration will be within your control at the same time as risks are minimized

1 Start by clearly defining the wanted long-term position

It may sound strange, but in the early stages of M&A it’s common to find that the wanted long-term position is unclear and undefined. Make sure to define, secure and anchor the wanted position and establish a detailed business case within the organization.

2 Use the negotiation phase to validate and agree on wanted position, goals and future organization

Include wanted position in Sales Purchase Agreement and utilize success fees connected to the outcome.

3 Perform a strategic due diligence and use this phase to develop a first draft on the business plan, including integration activities

Perform a strategic due diligence and thereby reduce risks of failing in a later stage. By anchoring the joint future business plan with existing organization, it can be aligned with the wanted position before signed contract, which saves valuable time.

Five ways to reduce costs

Five ways to reduce costs

1 Always be prepared to change supplier, both mentally and practically

Long supplier relationships can lead to increased costs and prices. A comfortable mind-set is easily developed as well as a supplier cooperation set-up that makes it difficult to switch.

2 Invest time in purchasing improvements

Usually buyers put too much time on administrative and operational work. Yet, challenging current and potential suppliers as well as running improvement projects together with suppliers needs to be prioritized.

3 Divide operational purchasing from strategic purchasing

If these two are not separated or planned well, operational purchasing and the day to day activities will always be prioritized over the strategic work. Hence, valuable time is chewed up. Divide these roles either with assigned employees or through a clear division of work time.

4 Run fact-based follow-ups with your suppliers

A large part of value is added under the control of your suppliers; therefore, it is critical that you support them to always improve their performance. Follow up on KPI’s with your strategic suppliers, give specific feedback and require improvements on a regular basis.

5 Choose your staff wisely and train the purchasing organization

Good purchasing competence as well as recruits with a degree in purchasing can be hard to find. Since purchasing departments are responsible of decisions with large financial impact, consistent training of your purchasing team should be highly prioritized.

R&D Management – Five fundamentals often forgotten

R&D Management – Five fundamentals often forgotten

From ”The Machine that Changed the World”, via case books like ”Skunk Works” and ”The Toyota way”, R&D practitioners and researchers have attempted to spread stories on what tends to work well for developing successful products. Many have read, listened and learned, but few have really excelled in getting the fundamentals right. In the automotive industry, many companies are now looking at Tesla Inc, which has focused on the key fundamental, supported by researchers, taken in part from the old learnings of the AeroSpace industry, and adapted to the new Silicon Walley boom in the new millennia. These are five of their key areas that all should learn from.

1 Shorten the distance between your customer and your engineers
In the short term, attentiveness to customer feedback, and having very short time between errors and their solution, is key. Customers can take problems, as long as they feel they are getting addressed quickly. Managing long term customer expectations requires communication of goals, which your customers can share and relate to, presenting solutions to their problems, or giving them teasers of the future. Also, customers agree to you collecting and analyse your customer data, if they feel it will improve their product. Continuously updating and improving the products build a stronger relationship over time.

2 Manage product/part complexity
Complexity is a silent killer. 100 % backward compatibility of new parts, continuous removal of unnecessary parts, carry over of parts between product models are key for hardware. The big challenge is however to build a software and electronics infrastructure that allows for maintainability and improvements. Having parameter-controlled updates rather than software builds reduce software complexity to single digit numbers. This is built on the core philosophy that all vehicles need very few selectable variants (5 colours, two engine set-ups), all equipped from start with all the hardware functionality you plan to make available during the product life.

3 Rapid internal communication
Cross-functional co-location of people who need day-to-day communication is key. This affects the way the organization is set-up, and the way the buildings you utilize are built. Smaller is better, big organizations tend to have bigger problems with communication.
Organizational complexity tends to manifest in the product” – Elon Musk

4 Manage your technical platforms
One example is when the Model Y was launched on the US market in March 2020, it was the first to have the heat pump, utilizing excess heat from using the battery to heat the interior, increasing efficiency during winter with ~25 %. Since then, the heat pump has seen 9 revision changes, and has been installed in all the other models. Update and improve the hardware continuously, and manage the interfaces to other parts. This solution was developed for all models from start, with the complete product family in mind. One solution, less complexity.

5 Invest in your long term strategies
Investing in battery production and chemistry has proven a core area. The same goes for manufacturing technologies. They are both state of the art in the industry today, and have been clearly set strategies from 2014, communicated to both customers and investors. This has driven the recruitment of some of the world’s leading experts in these areas, the incorporation of some leading smaller companies, as well as the selection of suppliers and the location of factories. 

Portfolio Management Framework

Portfolio Management Framework

Do you feel that the business goals seem further away after each finished project? Perhaps you are focusing on the wrong projects and need to clearly prioritise what your business spends its time on. Montell & Partners has helped multiple companies structure and prioritise incoming projects so they are aligned with the business overarching goals. Our framework illustrates how each building block in the business is interlinked.

Are your projects aligned with your company’s strategies and goals?
Are you lacking a clear tool for prioritizing incoming projects, leading to inadequate planning and possibly dissatisfied customers as a result?
By setting up a clear method to prioritise your portfolio management, you will be able to free available capacity and leverage your time to focus on the most important projects that significantly impacts the bottom line results as well as contributes to the company’s strategies and goals

The upper part of the framework deals with the connection to the company’s overall goals & strategies and how these are translated into evaluation criteria for the portfolio.
The middle part of the framework describes the active management of the portfolio and the projects from start to handover to management.
The bottom part is about which forums & tools support the process as well as resource allocation and competence development of involved resources.

Recent posts

M&A – How to prepare for success

Professor Clayton M. Christensen (et al.) states in Harvard Business Review that “Study after study puts the failure rate of mergers and acquisitions somewhere between 70 % and 90 %”. However, this doesn’t undertake the fact that corporate performance has potential to...

Five ways to reduce costs

1 Always be prepared to change supplier, both mentally and practically Long supplier relationships can lead to increased costs and prices. A comfortable mind-set is easily developed as well as a supplier cooperation set-up that makes it difficult to switch. 2...