DUESSELDORF, Germany—A recent restructuring move by BASF S.E. will help the chemical company attend to customers and improve efficiency, according to Martin Jung, president of performance materials.
Launched to enable themes such as cocreation and empowering the future, the "small revolution" involves a decentralization process, which will give business units greater authority over functions such as human resources, engineering, finance and procurement.
"In the past, we very much believed in keeping our functions central," Jung said. "And these functions were serving all the diverse businesses of BASF."
The old structure, however, did not allow for the level of differentiation BASF needed for its businesses.
The move will see "a couple of thousands" of employees from central functions moved into individual businesses, Jung said.
"One of the big topics for BASF is to refocus on customer centricity. BASF has a huge variety of businesses, from crackers all the way to downstream businesses like ours. These operations require different levels of customer centricity," Jung said.
A prime example of cooperation with customers, said Juergen Becky, head of BASF's performance materials Europe business unit, is the VisionVenture campervan, which was launched last month by German recreational vehicle maker Hymer GmbH and uses more than 20 different BASF materials.
"This is a concept that was developed together with the customer, and the point is to start from what the customer needs and developing that product together with the client," Becky said.
But the restructuring goes beyond designing and cocreating new products. The move will balance the rhythm of the business.
"If you have a shortage in the market, you have to act immediately; you have to orchestrate your supply chain, your procurement and your sales force, in a very short time and in a very coordinated manner," Jung explained.
Under the central structure, functions did not necessarily work in the same direction, meaning that responses to market developments and to customer demand were hampered.
"Today, everyone wants to have everything fast, no one wants to have an inventory, and you have to be very fast in terms of your reaction. And this is what we are trying to do here," the unit president added.
With about $8.5 billion in sales last year, the business unit represents approximately 10 percent of BASF's consolidated sales, and the size makes the process even more critical.
Jung expects the restructuring move to be completed by the end of the year, and he is ready to reap the rewards next year.
Also by the end of the year, Jung expects to complete the $1.8 billion acquisition of Solvay S.A.'s nylon business and start the integration process.
As a company with strong reputation in vertical integration, the acquisition of the Solvay business is of strategic importance as it offers BASF access to the only European production site for essential precursor adiponitrile.