The new MVI Group is positioning itself with a changed performance profile. Managing Director Rainer Kurek is determined to develop process management as a service for the international automotive industry.
Mr. Kurek, the MVI Group, which was founded at the beginning of 2003, developed out of the former IVM Engineering Group. Why were IVM’s German development activities sold at all? After all, the business was successful.
In fact, the business was very successful. In 2001 we recorded by far the highest volume of incoming orders in our corporate history. However, the successful acquisitions also increased the required level of advance payments. Following the well-known events on the Neuer Markt (Germany’s Nasdaq), it became increasingly difficult to find banks willing bear the necessary project finance risk.
What risks do you mean?
The risk for development service providers today lies above all in the need to provide upfront finance for large-scale projects. This can comprise anything between EUR 10 million and EUR 100 million. Another aspect is the fact that companies active in the classic development service sector are increasingly losing business to system suppliers, which are being progressively more closely involved in the product development process by automobile manufacturers.
You foresaw the current developments in the engineering market?
Yes. It became clear to us a number of years ago that it would become increasingly difficult to maintain our success on the classic development service side of the business. I described this scenario in my book “Gewinner von morgen handeln heute” (“Tomorrow’s Winners Act Today“), which was published eighteen months ago. The current excess market capacity has materialised predominantly in areas where development service providers lack clear and sharp performance and expertise profiles. An unmistakeable process of consolidation can currently be seen here, and capacity is being cut back. By contrast, specialists within the sector, such as engine developers or electronic experts, remain in demand and are continuing to grow.
The MVI Group describes itself as a “new type of service provider.” What do you specifically mean by this?
By this we mean the results-focused linking of our specialist engineering know-how with methodological expertise drawn from the classic corporate consultancy field. The intelligent linking of both expertises is necessary, as it enables us to configure development processes efficiently in our capacity as a service provider for automobile manufacturers and suppliers, and to manage these effectively. We see huge market demand for this neutral process and project manager function, co-ordinating the product development process within complex networks. At the same time, however, we do not currently offer engineering services in the field of automobile development in Germany.
But other companies also offer project management services. What is so different about the MVI Group?
Only very few companies today are really capable of providing good and effective project management with well-founded know-how of the entire product development process. Efficient processes require not just product expertise, but also production planning expertise. The MVI Group has expertise in both fields. This means that when we discuss processes that extend all the way to the SOP, then we really know what we are talking about. Companies which don’t have a full understanding of the associated interdependencies quickly risk deadline overshoots and cost-budget overruns as well as substantial losses.
So what makes the difference?
One of the key factors behind our success is our ability to develop and configure effective methods and instruments on a project-specific basis in such a way that projects can be realised more effectively and more efficiently. The objective is to optimise processes on a customer-specific basis and to create individual structures. A project at VW, for example, does not proceed like one at DaimlerChrysler.
And how is the market responding to your new range of services?
The market reaction has far exceeded our expectations. We have received positive responses not just from automobile manufacturers and system suppliers, but also from the circle of our former competitors.
Why are you finding yourself welcomed by development service providers?
Today, following the sale of the German IVM Automotive activities, we are no longer competing in the development business. In our new capacity as a neutral partner and process manager, we are now far more able to mediate and guide projects initiated between automobile manufacturers, development service providers and suppliers. Due to our long-standing experience, we know the sort of problems that can arise in this three-way relationship, and are able to offer practical solutions. It is only abroad that we still retain classical engineering resources. This is important to us, as it enables us to sustain concrete development know-how in the vehicle development field, and maintains our presence in emerging regions such as the Brazilian market.
Interview by Bernhard Rose