Domestic bliss from Electrolux
While established as a world leader in the production of domestic appliances and equipment for kitchens and cleaning, AB Electrolux is also one of the largest global producers of similar equipment for professional users.
Accounting for 93 per cent of sales, the group is renowned for its kitchens, fabric and floor care appliances, selling refrigerators, dishwashers, washing machines, vacuum cleaners and cookers, under a number of esteemed brands, including Electrolux, Zanussi, Eureka and Frigidaire. Focusing on innovations that are thoughtfully designed, and based on extensive consumer insight, its products are industry leading and have helped to build a strong reputation across the globe.
Introducing the European branch of the group, senior VP of industrial operations for the region, Horst Winkler says: “As the biggest producer of white goods appliances in Europe, we manufacture approximately eight million cookers, dishwashers, washing machines, dryers and refrigerators every year. We have 22 sites across Europe, predominantly in Italy, Poland and Hungary, employing 18,000 people.”
With other sites also in France, Spain, Germany, Russia and Romania, the company is in a process of restructuring, as it relocates production from West to Eastern Europe. Explaining the reasons behind this strategy, Horst comments: “One significant factor is the high reduction in prices, as we battle against strong competition from Turkey and Korea. With washing machines now 30 per cent cheaper than three years ago we have to look for an improved cost structure and as a result have moved some production from Western Europe to Central-Eastern Europe. For example we closed a laundry factory in Nuremberg, Germany, and moved the production of washing machines and dryers to Poland where the labour cost was lower.”
With the opening of three new plants in Poland last year, and a further two more in Hungary, the company now produces over eighteen million units across these countries. “Another reason for this restructuring is that the market growth is very strong in Eastern Europe – between eight and ten per cent in Poland, Hungary, the Czech Republic and Russia – so we need facilities there to help keep our logistics costs down,” explains Horst and “no matter where the production sites are located, we are working in cross-functional international teams in order to reach in higher speed cost and quality targets to fullfil the market’s need in best way.”
Complete with the latest technology, these new sites are state-of-the-art. The facilities have to comply with the Electrolux Manufacturing System (EMS), to ensure high quality and efficiency. “Based on Toyota’s production systems, we began running EMS one and a half years ago. Applied across all our plants, this worldwide production benchmark ensures that we have very good efficiency and offer the best possible quality. With efficiency improvements of between six and eight per cent each year, the programme is a key success factor for us, and will never stop, so that we continue to deliver the best possible products to our consumers.”
While looking to expand its physical presence and efficiency, Electrolux constantly looks to improve the quality and increase the range of its products, believing that the way to succeed is by working closely with customers and always considering their requirements and desires. “R&D is very important because to be a leader in the market you have to come up with innovative products; and I think we are a very innovative company. We have a strong customer focus and develop our products based on their needs,” Horst says.
Highlighting some of the recent developments, he continues: “We have released Iron Aid, a very innovative washer dryer that includes a special steam generator that helps to avoid ironing after drying the shirt. We have also been developing our kitchen appliances, adding induction hobs to make cooking easier and a rapid cooling function in our refrigerators for wine and champagne.”
A significant part of Electrolux’s drive to offer technologically leading products is its focus on energy efficiency, and as a result it has been awarded a sustainable energy award. Recognising the company’s ongoing efforts to reduce energy consumption, which has seen the energy efficiency of its appliances improve by 40 per cent in the last decade, the prize was part of the European Commission’s Sustainable Energy Europe 2005-2008 initiative, which aims to increase public awareness for renewable energy, energy efficiency, clean transport and alternative fuels.
“We have made placed a strong emphasis on reducing the energy consumption of our products, and have found a lot of success through our A+ appliances,” explains Horst. “The challenge is to maintain the pace of innovation, offering excellence in delivery, pricing and quality, while adding value with features such as rapid cooling and Iron Aid.”
Globally renowned for the quality and efficiency of its domestic appliances, Electrolux’s success is a product of its EMS, continuous focus on innovation, and close monitoring of the market. Outlining the plans to continue the company’s development, Horst concludes: “It is very important that we maintain our leadership position, and to achieve this we will increasingly concentrate on the higher end products, to make Electrolux the most profitable company within the white goods industry.”
Products: Household appliances
Sites: 22 across Europe