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Company News, 2016-07-04, 12:00 PM

Reorganization of thyssenkrupp Industrial Solutions puts customers at the center

  • Business units to be reorganized and focused more strongly on sectors and customer groups
  • Service business to be expanded, regions further strengthened
  • Pooling of company-wide engineering and project management capacities to increase efficiency and competitiveness

The Industrial Solutions business area, the engineering, construction and naval shipbuilding arm of the thyssenkrupp Group, is being reorganized as part of its transformation program “planets”. The aim is to secure growth, enhance performance, focus more strongly on customers, markets and high-margin service business, and drive culture change within the business area. A central element of this is the further development of the organizational structure towards a modern management structure focused on customers and business fields and integrating the Marine Systems and System Engineering units more closely.

In parallel with the organizational changes, the company is currently examining whether the individual operating business units have a viable setup and how performance can be further improved in a dynamic and very challenging competitive environment. This review is being carried out in close consultation with employee representatives and will be completed by the fall.

Jens Michael Wegmann, CEO of the Industrial Solutions business area of thyssenkrupp since October 2015: “We are operating in a challenging environment. Plant engineering is a volatile business per se. We have many strengths that have made us very successful in the past. But we have also identified potential for improvement and scope for further development.” Wegmann wants to make the business area faster, more flexible and more efficient. Wegmann: “With our new network structure, the expansion of service business and the reorganization of our business units we are putting customers at the center of our actions. This is the basis for ensuring customer satisfaction and achieving our long-term growth and profitability targets.” At present, the company can make the necessary changes from a position of strength. “We are not waiting, we’re doing our homework now to safeguard our profitable growth and become more stable overall,” says Wegmann.

Elimination of a management tier to increase efficiency
In the future the plant engineering business will have one less management tier. The current Resource Technologies and Process Technologies business units are to be dissolved. The operating units previously one level down in the organization will now in part be restructured. In the future these units will have global responsibility for the development of their business, project management and profit and loss. They will report directly to the management board of the Industrial Solutions business area. This will shorten decision-making paths, increase market focus and give the businesses greater entrepreneurial autonomy. The new structure will be implemented at the start of the new fiscal year on October 1, 2016. Industrial Solutions will then have eight business units: Industrial Specialties, Mining Technologies, Cement Technologies, Electrolysis & Polymers Technologies, Fertilizer Technologies, Services, Marine Systems and System Engineering.

Strengthening of service business and pooling of project execution capacities
To strengthen service business, the service activities of Industrial Solutions will for the first time be combined in the new Services business unit. Going forward, the aim is to more than double the share of service business from the current level of around 13% to around a third. Project execution and management functions will be combined in a Network of Excellence and thus managed centrally for the entire business area. This step will improve efficiency and competitiveness, help absorb seasonal and project-related underutilization, and improve closeness to customers in project execution by providing more services locally.

New team to secure changes
To handle the extended management duties of the business area board, the new position of Chief Operating Officer has been created. A decision on who will fill this position will be made shortly. As of June 1, the new CFO is Stefan Gesing (38), who previously headed the Controlling, Accounting & Risk department at the thyssenkrupp Group’s head office. Johan P. Cnossen (56) from the Netherlands joined the leadership team of Industrial Solutions in May 1, 2016 as head of the transformation office responsible for implementing “planets”. Overall, around 50 percent of the business area’s higher management positions are to be refilled.

The name “planets” stands for “people leading a network of engineering technology and solutions”.

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