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CBE SPOTLIGHT - Sustainability in Emerging Markets
09-02-2017

Both Frank Lu and Rubén Fabbi are fairly new to Concentric – Rubén joined in February 2015 when Concentric acquired his employer, and Frank was hired in April that same year. Despite the fact that they live and work many thousands of kilometres apart – Frank in China and Rubén in Argentina – they share very similar outlooks when it comes to sustainability.

Interview with Frank Lu, Managing Director at Concentric in Suzhou (China) and Rubén Fabbi, Head of Operations, Engineering and Quality at Concentric in Chivilcoy (Argentina)

"Sustainability is a culture," Rubén says. "It includes many technical activities such as environmental audits but it is much wider – it is about our communities and their families, our customers, our employees and our shareholders. Of course productivity improvements are a crucial element of having a sustainable business, as are cost savings. It is also about having a learning culture, though, that continuously grows and evolves, as well as a strong focus on increasing profitable sales."

"Yes," Frank agrees. "Sustainability and performance go hand in hand. Only a business that's performing well has a chance of being a sustainable business. Our commitment to our customers in terms of delivery, performance and quality ensures that they, in turn, can meet their commitments to their customers. This enables us to win more business and is helping to establish Concentric as a strategic partner for our customers."

Rising to new heights
To continuously improve performance, Frank tells us that he and his team in Suzhou have created a suite of key performance indicators which are regularly monitored. "And in Operations, we are concentrating on developing lean methods of working and adopting best practices to make sure our processes are as streamlined as possible. This helps to make our products more cost effective," Frank says. "The quicker we can achieve critical mass the better we will be able to meet our goals and improve our competitive position."

Frank says that keeping a close eye on performance enables him and his team to take swift action to ensure they deliver the product goals and meet agreed targets. He has a robust routine of daily, weekly and monthly meetings with his team, with Finance and with Group. These regular meetings keep each function on track for cost, quality, delivery and overall performance.
Similar activities are ongoing in Chivilcoy, Rubén says. He adds that he and his colleagues on the management team have also introduced local management training for newly appointed lead supervisors for Engineering, Quality and Production.

"In addition to that, we're running training sessions in health & safety and quality for a wide group of employees," he adds. "We're working to improve health and welfare more generally, with a process to improve internal communications and a programme to encourage employees to stop smoking. All of these activities have been put in place to make improvements today and enable a sustainable business for tomorrow." 

Frank is also passionate about ensuring that Concentric offers a good work environment for employees. "Employee loyalty is so important," he says. "Employees in a business that is performing well tend to choose to stay with the business. In Suzhou we have well trained, engaged employees who know our products and are committed to good customer service. This strengthens our reputation with the customer for reliable supply which in turn results in repeat orders and will help fuel our growth."

Working sustainably in South America
Rubén describes Chivilcoy as a close-knit community with a heavy emphasis on agriculture. "Perhaps this helps to explain why our employees have such a passion to take care of our natural resources," he adds. "This includes our use of water, our disposal of effluents, our reduction in waste and our reuse of resources as well as recycling waste, where possible."

Rubén explains that prior to Concentric aquiring the business liquid waste – coolants and other effluents – was stored in underground storage tanks and metal barrels above ground. Both represented potential spillage and contamination risks. "But we've managed to both reduce the risks and the costs associated with liquid waste management by switching to stackable, above-ground plastic storage containers and a new, environmentally-certified collection and disposal service provider that is less costly than the previous contractor," he says. "Yes, there are environmental benefits to taking this action but that was not the driving reason. It was a normal, logical business decision that helps build our future."

Rubén is convinced that a culture of sustainability makes good business sense because it has benefits for all stakeholders. "In a small community like Chivilcoy, we can make a big impact," he says. "In their private lives, our employees are friends and they socialise together. Our professional standards of health, safety and welfare, for example, have a direct bearing on their immediate wellbeing. For our customers, our focus on quality, training and productivity reduces their risk. Our certifications reassure them that we are prepared, accredited to the correct standards and capable to deliver and maintain their supply chain."

Rubén explains that what is happening in Chivilcoy is not only important for the Argentinian market – the Chivilcoy business is, in fact, leading the development of Concentric in South America. "With our learning culture, we are adopting best practices from around the Group and other sources, and we're sharing our knowledge too. Our employees have lots of ideas that we are tapping into to make improvements. I'm convinced that this close teamwork and collaboration will help us build a sustainable future." 

Growing environmental awareness in China
Frank reports that there is a clear trend toward rising environmental standards in China. In fact, he predicts that it won't be long before China's environmental standards will be on par with those of Europe and North America.

"It's still fair to say that China's commercial vehicle market, particularly the domestic market, is very cost driven," he explains. "Nonetheless, when I visit customers and attend conferences, it's obvious that the commitment to the environmental framework is becoming an important criteria for commercial suppliers."

He says that Chinese society is now paying much more attention to the environment. "You only have to take a look at the daily press to understand that air quality in cities like Beijing is an important consideration for many Chinese," Frank says. "This is why, for example, the commercial vehicle market is taking a much greater interest in promoting hybrid and electric buses. In the past emission standards have been at Euro II levels but from October 2017 any new commercial vehicles sold in China must comply with the Euro IV emission standards. Concentric products meet Euro V and Euro VI standards, so we make it easy for our customers to commit to environmental regulations."

Involving employees on the journey is fundamental to achieving growth goals, Frank stresses. He says that's why he takes the time to generate awareness about the KPIs, what they mean and their impact. He encourages each employee to be accountable and propose improvement actions.

"I'm optimistic about the future," Frank says. "We have serious products and sustainable technical designs. Our hydraulics business is well established and there is a growing opportunity for our engines business in China. The trend to reduce emissions only strengthens our position.

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