Strategic transformation of production in the VELUX Group

The VELUX Group is undertaking a strategic transformation of its manufacturing and logistics functions in order to boost the Group's competitive strength.

The VELUX Group, manufacturer of energy-efficient roof windows and skylights to the world market, is proposing to reorganise its operations in Europe. Over the years, the Group's manufacturing and logistics systems have grown organically, keeping pace with the develop-ment of markets and product ranges. The result has been an increasingly complicated set-up when it comes to production and transportation that in today's market is no longer cost efficient. The VELUX Group is therefore proposing to concentrate its production at fewer factories.

"If you look at the map of our production units, they are spread all over Europe. As a result, the cost of production and transportation of products and components has grown too high in today's competitive market. If these proposals are implemented, we will be able to save around DKK 150-200 million in total on an annual basis," says Michael K. Rasmussen, Director of Communications of the VELUX Group.

UK and Denmark affected
Consequently, the VELUX Group is considering closing two factories in 2015; one in Bagsværd, Denmark and the other, Fife Joinery Manufacturing, in Fife in Scotland. Any phasing out of production at the two factories would affect 180 jobs in Scotland and 63 in Den-mark. Consultation with the affected employees has now commenced.

"Regrettably, if these proposals come to pass, it means we will lose extremely competent people in both countries, all of whom have made an invaluable contribution to the company. The VELUX Group will offer assistance to any of those affected to move on," says Director of Communications Michael K. Rasmussen.

Expanded sales activities in the UK
Following any closure of Fife Joinery Manufacturing, it is proposed that the distribution centre will be moved south to the Midlands to be closer to the centre of the British market, thereby reducing distribution costs. Altogether, the United Kingdom will remain a large and vital mar-ket for the VELUX Group, as the Group is experiencing growth in the UK market.

Focus on energy efficiency
The proposed transformation will improve internal flows of products and components by up to 30% and is part of a comprehensive globalisation strategy aimed at reinforcing the Group's long-term competitive strength. As part of its continuous aim to sustain its market leadership, the VELUX Group recently launched a new generation of roof windows that lets in more daylight and introduces qualities such as a positive energy balance and passive solar gains, likewise saving energy used for lights in homes, offices and institutions.

"The transformation is an essential step if we are to boost our competitive force and keep supplying new energy-efficient solutions for our customers. We have previously globalised our finance and IT organisations. Now we are creating a more globally-coherent manufacturing and distribution network that will be more competitive and cost efficient, without compromising on quality and supply reliability," concludes Michael K. Rasmussen, Director of Communications of the VELUX Group.