Less is more
Element System (Germany) produces wall shelves, clips, cantilevers, furniture legs and tool storage solutions, all for household applications. The company is virtually the only European manufacturer in its branch. The family business was run in a traditional and meticulous way. It had promising contracts with DIY-chains in Europe. Problems arose when the steel price went up while the selling price remained the same.
The first thing Nimbus did was reopen negotiations with the customers. Together with the sitting management, they accomplished a higher selling price and included a steel price clause in the agreement. Logistics in the factory and the warehouse were scrutinized and the number of products went down from 5,000 to 1,000. At the same time the products were differently presented to the end-users. From ‘just’ shelves it went to ‘kitchen solutions’, ‘attic solutions’ and ‘garage solutions’. So a lot less actually looked like a lot more.
The new marketing approach and the other measurements put Element System back in business. The production and handling is automated in such a way that the company is currently worldwide cost leader, even when compared to China. The only temporary drawback these days is the poor situation of the DIY-market, which of course is caused by the suffering house market. Once this improves, Element System will be flying off the shelves.