International Case Study
day in the life of a company in crisis is like a month in a healthy company.”
Harvey Kibel, Kibel Green, Inc.
Hong Kong and
The Schmidheiny group (Anova, AG) purchased a controlling interest in the
$1.5 billion Cosa Liebermann Group (CLG), an industrial and consumer products
marketing group with operations in seven European countries and twelve Asian countries. CLG
subsequently merged with Hagemeyer Asia/Pacific, the Far
East activity of Hagemeyer, N.V., a very large Dutch-based marketing
company. The resulting new entity, The Hagemeyer-Cosa Liebermann Group was owned
50/50 by Hagemeyer and Anova and had operations in fourteen Asia/Pacific countries.
The Chairman and CEO came from Anova.
Technology Division strategic business areas included:
and Printing Technology
and Food Processing Technology
and Control Technology
Consumer Goods Division strategic business areas included:
(sports shoes, winter equipment, outdoor
Products (appliances, electronics and house
(fashion, cosmetics, watches, leather accessories,
(photography and imaging products and services)
and Beverage (wines, spirits, tobacco confectionery)
products included Bally, Karl Lagerfeld, Louis Feraud, Porsche Design, Cartier,
Chanel, Puma, Ray-Ban, Parker, Mistral and Kneissl.
Integration Advisory Services
Thornburg served as a principal advisor to the Schmidheiny group on
the development of new management information systems for the newly acquired Cosa
Liebermann Group. Prior to the implementation of the system, the local company
in each country had its own accounting system and procedures at the operating
level. Computers and systems were not networked across borders and operating systems,
particularly in Japan
where there extensive retail and wholesaling operations, were incompatible.
As a result the primary means of inter-company communication was by fax and telephone.
Results by division and product were laboriously consolidated and summarized in
Hong Kong resulting in unacceptable time delays
and errors. Inventory management and cash management was Balkanized and ineffective.
MIS project involved the establishment of a comprehensive, multi-discipline approach
to sales planning, budgeting, financial reporting, purchasing, logistics, cash
management, accounting, taxes, retail sales, wholesaling and industrial customer
sales. To assure ownership of the new systems, at critical points in the development
process two dozen selected top and middle managers met in week-long brainstorming
sessions with the advisory team in
Phuket , Thailand
where interruptions from the outside world were all but impossible.
When completed, the system allowed management to review its operations by item,
product line, division and country in a timely manner. Extensive training in each
country preceded the roll-out of key elements of the system. Data centers were
established in Hong Kong and Zurich
and an internal email system was established to link
all of the offices and operations together. Satellite communications were used
where local telephone service was inadequate. Rather than build a customized MIS
system from scratch to control retail, wholesale and financial reporting activities,
packaged software vendors in Europe, the US
and Asia were reviewed and visited by CL teams.
The software integration team was moved from the headquarters in Hong Kong to
where there was a larger pool of skilled programmers. Ultimately
several major software systems were selected and integrated to form the core of
the new system, which performed as intended.
Liebermann ( Thailand
at the time of the merger of Hagemeyer-Cosa Liebermann, Hagemeyer's Thai
company had an antiquated computer system that was not integrated into the new
CL MIS system. It soon became clear that the company was in trouble as the
Thai economy worsened, the Baht weakened against the major currencies resulting
in foreign exchange losses and unsold inventories mounted. Thornburg
& Co. was hired to review the operations and prospects for each of the following
Products and Cosmetics (e.g. Dior, Givenchy
products sold by company employees at retail counters within department stores)
Products (e.g. Moulinex, Coleman products
Products (sold to large and small bakeries
and Wines (nationwide through local stores)
Goods (e.g. refrigerators, washing machines
sold at major stores)
Chemicals (sold to direct to industrial
a result of this review the Liquors, White Goods and Specialty Chemicals activities
were discontinued and headquarters staff downsized accordingly. Thornburg traveled
to Hong Kong and Bangkok
on a monthly basis while the plan was being implemented. The country
manager, MIS manager and a controller were replaced and product line management
reorganized. Each SKU, customer and distribution point for in the remaining three
product groups was analyzed and unprofitable activities or slow moving items eliminated.
The MIS system was rapidly upgraded to interface with the HCL system described
above. The warehouse operations were totally reorganized to eliminate theft, handling
damage and improved repair cycles for returned goods. The reorganization of the
company was substantially complete prior to the devaluation of the Baht,
thus saving HCL from a disaster of significant proportions.