“There were three main reasons for us to choose the Romanian supplier of ERP program.First and most important one is related to better correlation of local ERP to local legislation.Romanian interface also helped a lot. Second reason that was also very important was technical support we can get very quickly from our local supplier. Not all technical issues can be fixed remotely and in such cases we cannot afford to wait for someone to come from Poland and fix it. And last but not least price of the ERP system and its implementation costs helped us to make the decision that today we really don’t regret.”
Please provide us a brief description of the company and of the relationship with the headquarter.
Koelner Romania is a part of international Koelner Group – the leading manufacturer and distributor of fasteners and fixings worldwide. For more than 20 years Koelner Group has been a major producer of general fixings, insulation fixings for facades and roofs, accessories for drywall systems, cable suspension systems, self-drilling screws, wood connectors, mechanical and chemical anchors and other accessories.
Koelner Group is also an important player on the national market of tools and electric tools. Complete product range includes over 30.000 products offered under different brands as Koelner, Rawlplug, Modeco, Globus and Srubex.
Export strategy is based on the distribution and sales centers situated throughout Europe and Far East. Our continually developing distribution and sales centers expands over the area of 14 countries and exist today among the others is UK, Dubai and most of the European Union countries.
One of such subsidiary company is Koelner Romania established in 2001. Our logistics and sales center is located in Bucharest from where we distribute our products all around Romania. Beside that we also have the network of Sales Agents that covers the whole country. We are presented with our products in the main selling channels available on the market as DIY, big and medium distribution centers and local chains of construction warehouses. This year we also started a very promising collaboration with some big construction companies and we hope to continue developing these relationships in years to come.
Please describe the industry trend within the last two years.
The construction market is usually the first one to be affected by any type of crises, so first strong signals that economic conditions were getting worse appeared at the beginning of 2009 and continue to negatively affected market in next months. Especially important was a significant decrease in the number of new construction projects that were started in that period. However I have to say that for most of our Clients the overall market situation in 2009 was in fact less severe than this year. Everyone was talking about the crisis but there were still many companies stating an increase in their revenue. This year the situation got worse, not only regarding the sales but also general financial situation of companies in our business. So in 2010, our market not only has to struggle with decreasing level of sales but also with cash flow problems that hit huge percentage of companies dealing with construction business. It’s enough to compare last two years to notice that almost 50% more companies have problems to pay their debts on time and this must have very negative impact on the whole chain of companies involved in construction projects. Finally as a result of this problem many companies went bankrupt within last few months.
In case of Koelner Romania last 2 years looked a little bit different compared to the market tendency. After difficult period 2006 – 2008, Management of Koelner Group decided in 2009 to run significant restructuring process that was aimed to bring the company back on the right track. So for us 2009 was a year of defining new company strategy that could guaranty us success in near future.
And in 2010 this new strategy started to bring first positive results. We managed not only to retain our old Clients but also get many new ones from our competition. Constant pressure on improving our supply chain management helped us to offer better quality of our services, cut costs and become more competitive on the market. As a result when all our competition complains about huge drop in sales level, we can pride oneselves on 40% sales increase after first 8 month of 2010.
What is your forecast regarding the industry you activate in?
On the market dominate very pessimistic prediction regarding situation on construction market in 2011. According to 90% of the companies we spoke, things will get even worse next year. Unfortunately there are many premises that support this pessimistic forecast.
In my opinion the most important one is connected with putting on hold most of the infrastructure projects funded by the state. In many countries – as for example in Poland – these infrastructure projects give the necessary impulse to the domestic markets struggling with stagnation and help to accelerate the economic recovery. Unfortunately we already know that most of programs that existed in Romania in years 2007 – 2010 will be shut down by the end of this year. As a result many companies may find themselves without their main source of revenues.
Another very important reason to believe in the pessimistic forecast is connected with very unstable political situation that doesn’t encourage foreign investors to invest money in Romania. For example the decision regarding the TVA tax was announced only few days before it actually became a new regulation. Such signal tells investors to stay out of Romanian market. Also local entrepreneurs are affected by this factor. Many of them stopped their development plans because nobody can really predict what is going to happen, if the government won’t come out with other taxes or employment policies. The current attitude most of the companies present I would describe as “let’s try not to spend too much money, not to lose too much market and wait until good times come back”.
However we share some of these worries but we are also quite optimistic about ourselves in 2011. This year our new strategy started to bring first positive effects and we are sure that also next year this trend will continue. We have many plans for next year regarding almost all areas of our company activity, starting with new marketing strategy, development of new sales channels and improving our supply chain management. We have young and very ambitious sales team here so I have no doubt we will succeed on all these new challenges.
What is the company’s strategy for reaching the business objectives?
One of the most important targets for our company is to produce and offer to our Clients products and services of the highest quality. Our strategy is not to compete only based on the price – we want to maintain the high quality of our products, combined it with good pricing, reliability and enhance the customer experience through several value-added services, like for example 24 hours guaranteed delivery anywhere in Romania or loyalty program granting our Clients better commercial conditions if they stay with us for a long period of time.
We believe that in Romania there are many companies that are looking for that kind of “service package” and we would like to invite them to join us and develop our business together. So again in 2011 we shall continue our efforts to bringing even more useful incentives in the relationship with our customers.
What is the ERP role in Koelner’s business strategy?
There were three main reasons for us to choose the Romanian supplier of ERP program.
First and most important one is related to better correlation of local ERP to local legislation. We wanted to avoid long and time consuming process of adjusting our Polish ERP to Romanian law, especially related to financial issues. Romanian interface also helped a lot.
Second reason that was also very important was technical support we can get very quickly from our local supplier. Not all technical issues can be fixed remotely and in such cases we cannot afford to wait for someone to come from Poland and fix it.
And last but not least price of the ERP system and its implementation costs helped us to make the decision that today we really don’t regret.
As a subsidiary company we are oblige to rapport effectively to our head quarter and here we got very efficient and easy to handle tool from our ERP supplier. It’s some kind of a wizard developed by Senior Software that allows us to import and export from Senior ERP directly into the Polish ERP system. We don’t have to operate data manually and thus we avoid human mistakes. It takes only a few minutes to report the weekly sales and costs which help our colleagues in Poland to be all the time up to date with current results of our company.
Which are the main business indicators you take into consideration?
I would say that the most important indicators for a commercial company are turnover, profit and with an increasing importance, the financial discipline over costs and cash flow. Many companies have big scale plans but don’t have the resources to sustain them in the longer period. So especially now it’s very important to use professional tools as long term financial planning and SWOT analyze to identify the threads but also to find new possibilities that market can offer.
In Koelner Romania we put a lot of pressure to make sure that we always know where exactly our company is heading. To be able to do that you need an efficient ERP system that helps you to control on the inside and be flexible on the outside.
“Times when you could keep and sort your data in Excel file are over
– there is too much information coming from different sides to lose
one’s time on handling it. Communication must be fast and efficient
otherwise you may go out of the market. The success of a company is
based on a unique offer, good and motivated seals team, management that
knows where the company is going, financial resources and last but not
least good administrative support. To be able to do that you need an
efficient ERP system that helps you to control on the inside and be
flexible on the outside.”
When I first came to Koelner Romania, the IT system was not helping us a lot but since then we made several changes and we keep updating it. Now it helps us to our control all Koelner fields of activity as: sales, accounting, logistics supply chain, costs control. We have very effective tracking system on the stocks level, orders, invoices, due payments and all other indicators that contribute to effective management. To sum up – without good ERP system you can forget about being an effective company on the long term.