The Schaeffler Group’s three-dimensional matrix organization divides the company’s business not only into divisions and functions, but also groups the company’s activities into the four regions Europe, Americas, Greater China, and Asia/Pacific. Each of the Schaeffler Group’s four regions is managed by a Regional CEO, who is a member of the Schaeffler Group's Executive Board. This organizational arrangement allows for flexible management of the regions and facilitates cooperation with regional customers.
The basis for the Schaeffler Group’s economic success is its proximity to the customer. With approx. 170 locations worldwide, 74 production facilities, 18 research and development centers, and a tight-knit sales and service network, the Schaeffler Group ensures that its customers always find it close at hand – true to its guiding principle: “We are a global player with a local presence”. Cooperation across divisions and countries thus leads to a high degree of flexibility in solving new customer requirements and the opportunity of anticipating emerging trends early on.
In its Global Footprint initiative, which is part of the “Agenda 4 plus One”, the Schaeffler Group is continually working to further develop its global stature. Among other things, the initiative includes creating and expanding regional research and development expertise, enhancing the structure of the global plant network and logistics activities, as well as realigning the distribution locations. In light of this, proactively localizing activities in the markets of the future constitutes one of the key challenges in implementing the strategy “Mobility for tomorrow". It also demands thinking even more deeply in terms of global connections and delegating responsibility away from head office in the future. In addition to better acceptance due to cooperation with local customers and suppliers, the Schaeffler Group’s increasing localization results in efficiencies in purchasing and logistics as well as several benefits regarding sustainability and the environment. The resulting growing regional presence is also reflected in a high degree of localization. The degree of localization describes the relation of a region’s total sales to sales volume manufactured in that region.
The Europe region combines the subregions Germany, Western and Southern Europe, Central and Eastern Europe & Middle East and Africa (CEEMEA), as well as India. The Western Europe and Southern Europe subregions were combined into one subregion in 2017 in order to further simplify the organizational structure. The Germany subregion represents the Schaeffler Group’s most important sales market. The Europe region contributed 51.2% (prior year: 53.1%) of consolidated revenue in 2017. The degree of localization amounted to approx. 96% (prior year: 96%) in 2017. The Europe region employed a total of 61,554 employees in 2017, representing 68.3% of the company’s entire workforce. This figure includes the employees of the group’s global head office in Herzogenaurach. The region has 47 plants and 10 R&D centers. Its regional head office is located in Schweinfurt. In 2017, the Schaeffler Group further strengthened its network of plants in Eastern Europe, which is already quite strong, by opening the new plant in Svitavy, Czech Republic. As part of the measures taken to intensify the company’s research and development activities in the growth region India, the Hosur location was developed into an R&D center focusing on clutch systems. Another focus was on streamlining the legal structure and on the synergies to be realized from better collaboration across companies in India. The result is a plan to merge the three Indian subsidiaries into one company. The merger is subject to the required local regulatory approvals and the consent of the minority shareholders. The transaction is expected to close in the third quarter of 2018. The company will be known as “Schaeffler India Limited”.
In addition, a new shared service center will be set up for the Europe region as part of the strategic Shared Services initiative. The objective of the initiative is to develop a global, forward-looking, and cross-functional shared services concept, standardize and harmonize transaction processing, and further improve processes. The first processes to be combined, optimized, and digitized with a view to these objectives are those in Finance, Human Resources, Purchasing, Logistics, and IT. The improvements in the indirect areas resulting from the new shared service center for the Europe region affect several German and European locations.
The Americas region consists of the two subregions North America and South America. This region contributed approximately 20.8% (prior year: 21.0%) of revenue in 2017. The degree of localization amounted to approximately 71% (prior year: 71%) in the Americas region. A total of 13,056 staff were employed at 14 plants and 5 R&D centers as well as at distribution locations in North and South America. The Americas region has its regional head office in Fort Mill in the U.S. The Schaeffler Group has been manufacturing in this region since 1953. In 2017, the plants in Fort Mill were expanded and a new multifunctional administrative building, adapted to the new work environments of the New Work initiative, was opened. The company also invested in an expansion of the production area at the Wooster location in the U.S. Starting in 2018, the plant will manufacture products including hybrid modules on the additional production area of 8,900 square meters. This makes Wooster one of the Schaeffler Group’s centers for further developing electric mobility in the U.S.
As China is a strategically important sales market for the Schaeffler Group, China, Taiwan, and Hong Kong are managed as a separate Greater China region. The regional head office is located in Anting in metropolitan Shanghai, China. Schaeffler’s first subsidiary in this region was founded in Taicang, China, in 1995. The region generated 17.5% (prior year: 15.4%) of group revenue in 2017. The degree of localization amounted to approx. 73% (prior year: 74%). A total of 12,537 staff were employed in Greater China. 8 plants and 1 R&D center are located in this region. As a consequence of the especially dynamic trend in recent years, it is important to the company to further expand not only E-Mobility, but also its local presence and to consistently raise the degree of localization in the future. At its Xiangtan location in China, the Schaeffler Group is building its first “Factory for Tomorrow”. While the first production plant is scheduled for commissioning n early 2019, a training center was already opened officially in mid-June 2017. Employees are qualified based on the German dual system of vocational training.
The Asia/Pacific region comprises South Korea, Japan, and the countries in Southeast Asia. The Schaeffler Group has been represented in this region since 1953. 10.5% (prior year: 10.5%) of group revenue was generated by this region in 2017. The degree of localization amounted to approx. 38% (prior year: 38%) in 2017. The Asia/Pacific region had 3,004 employees. The regional head office is located in Singapore. The Schaeffler Group operates a total of 5 plants and 2 R&D centers in this region. By opening a new plant in Bien Hoa City, Vietnam, the group is considerably expanding its production capacity in the Asia/Pacific region. Furthermore, due to the strong presence of robotics manufacturers in this region, it was agreed that Schaeffler Asia/Pacific would take the lead in creating a robotics competence center in consultation with the Industrial division. Along with the current component business, the competence center will also coordinate development and testing of mechatronic systems and Digitalization services for robotics applications.