ERIKS is a leading specialised industrial service provider in Europe, with a presence in Asia. The ERIKS tagline Let’s make industry work better emphasises the company’s mission to increase efficiency, reduce waste within industrial processes, and ultimately support customers to work more sustainably. To maintain its position as a leading industry provider, ERIKS’ strategy is focused on digital solutions, innovation, and sustainability as a business driver for growth. With a presence spanning Europe and Asia, ERIKS serves customers in Original Equipment Manufacturing (OEM) as well as Maintenance, Repair, and Overhaul operations (MRO) across a wide variety of industrial segments.
In 2022, following the ease of COVID-19 restrictions markets circumstances for ERIKS improved, but were still characterised by inflation, rising energy- and raw material prices, a tight labour market, ongoing supply chain issues, and product scarcity. However, thanks to the successful execution of the first phase of Fuel for Growth, the strategic improvement program, solid progress was made to return ERIKS to benchmark profitability. A number of organisational initiatives have consolidated parts of the workforce and reduced the cost of support functions. This has already delivered cost savings in both indirect procurement and discretionary operational costs.
In an environment of inflation, pricing was of crucial importance to protect ERIKS from rising purchasing costs. Best practices were implemented globally that have enabled the business to identify and capitalise on opportunities to pass on the impact of inflation to customers.
The supply chain has been optimized by consolidating the warehouse footprint into fewer, automated distribution centres. New distribution centres in the UK and Germany helped to integrate operations and supply chains across multiple countries in Europe. A Procurement and Core Assortment Enhancement (PACE) workstream has led to cost savings and improved margins. PACE has optimised the procurement process by developing and focusing sales on a core product range.
To further drive the transformation a new Operations leadership team has been formed that has taken ownership of coordinating and delivering the changes to drive consistency across operations, scope and prioritise new capabilities to be developed. The team will be responsible for the operational daily execution, while expertise and sales is further developed locally.
In March 2022, the company sold its North American businesses to LKCM Headwater Investments, a US-based private investment firm and was an important step in the process to create more focus on Europe as well as Asia.
Marketing has further strengthened the ERIKS brand story and launched campaigns to increase customer awareness. International Sales Development is building new business upon this increased brand awareness image with sales plans for targeted international customers. These efforts are paying off as sales to ERIKS' International Key Accounts grew well above average in 2022. A good example has been the development of new opportunities in the semi-conductor industry with a new investment in clean room manufacturing being sanctioned in 2022 for delivery in 2023.
IT systems are key to support future strategic programs and activities. Digital efforts were focused on creating lean and efficient structures that provide a resilient technology foundation. A new, improved solution platform for customers was launched, that enables them to directly build and configure their own specialist products online.
Overall, following higher sales levels, effective pricing initiatives, strict cost control, improved organisational efficiency together with the timely execution of the Fuel for Growth program resulted in a better performance compared to 2021.
Fuel for Growth