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Tadano Makes Significant Strides with Integrating Demag Business

Thu March 12, 2020 - National Edition
Construction Equipment Guide

The combination of Tadano and Demag is changing the landscape of the crane industry. A little more than six months into joining two businesses sharing 300 years of experience in the lifting industry, Tadano is making great strides in integrating the Demag business into its operations. The acquisition added roughly 1,600 team members to the Tadano family, and Tadano is working to leverage synergies and take advantage of the extended team by increasing the level of support for all Tadano customers.

"Both Tadano and Demag share common values such as passion for the crane industry, delivering the best possible customer service and commitment to customer success," said Kenichi Sawada, chief commercial officer for Tadano. "The merger is infusing the best of both worlds working together as ‘One Tadano.' Demag is now owned by a company who focuses solely on the lifting industry, and this holds significant benefit for customers."

Tadano has organized multiple cross-company teams with the mission to find and implement the best practices across the company and leverage technological and operational capabilities across Tadano. Demag integration in European operations has resulted in back-office departments like engineering, procurement, human resources, marketing and accounting being combined to better support Tadano and Demag as "One Tadano."

Many regions have seen sales force realignment, allowing Tadano and Demag to deliver improved customer services and faster response times. New markets are being developed jointly between Tadano and Demag with combined back-office supporting processes being standardized.

"We want to integrate Demag to offer a full range of lifting solutions from a single source to meet customer needs," Sawada continued. "We are moving forward with the objective of avoiding double structures with multiple Tadano and Demag representatives calling on the customer. We are showing one face to the customer."

Sawada points to North America as an example of the successes achieved when working together as "One Tadano." Tadano America Corporation (TAC) has combined the Tadano and Demag sales teams in North America to maximize sales coverage for rough terrain, all terrain and crawler cranes. The Demag sales operations and Tadano sales administration teams are also moving toward working under one Tadano America process. In addition to the marketing and customer service teams being combined, TAC is currently studying the Tadano and Demag parts distribution businesses to leverage synergies.

Dual Brand Strategy

The Demag acquisition brought Tadano one step closer to achieving its goal of being the number one worldwide supplier in the lifting equipment industry. This acquisition elevated Tadano to a full-range supplier of lifting solutions, as it filled product gaps for both companies, allowing Tadano to meet customer needs on a wider scale.

As a result, Tadano has announced it will continue with the dual-brand strategy of Tadano and Demag for the foreseeable future. All models currently available today will be kept in order to increase market share worldwide, even cranes that compete in the same capacity class.

"We will allow Tadano and Demag products to follow their normal lifecycle, launch new products and phase out old for both brands," said Jens Ennen, president and CEO of Tadano Demag GmbH and Tadano Faun GmbH. "As with other products that have been phased out, Tadano and Demag will continue to support these products and the customers who own them."

The Tadano and Demag engineering teams are being integrated to jointly develop new crane equipment. Tadano is leveraging synergies and sharing technologies across both companies to infuse equipment with the best that both companies have to offer. "Centers of Excellence" for new product development are being created to reach the company's commitment of increasing product performance and quality. These centers will help Tadano deliver a faster new product development cycle to meet customer needs.

Tadano is launching several new product in 2020. Both the Demag and Tadano brands will present in the second half of the year new all terrain cranes in different capacity classes, and with this will close further gaps in the product line-up. In addition, a new Demag-developed telescopic crawler crane, the GTC-1800EX, will be introduced under the Tadano brand that incorporates some of the best that Tadano and Demag have to offer, including the Demag IC-1 Plus and IC-1 Remote technologies.

Increasing Production

With an eye toward the future, Tadano's long-term plan includes manufacturing lift equipment at both Lauf and Zweibrücken facilities in Germany. The cross-company teams are working to exploit and leverage synergies between the two facilities, while creating manufacturing "Centers of Excellence," where team members from both facilities learn from each other and implement best practices across the company.

Tadano's strategy includes investing in and increasing production at both plants, as evidenced by the recent announcement that a new paint facility in Lauf is being installed to improve machine paint quality and longevity. The company has a long-term goal of increasing market share significantly. To reach this goal, production capacities from all facilities are needed..

"Integrating Demag and developing synergies between both facilities will give Tadano more supply flexibility to meet our customers' needs," added Sawada. "Working together and having both facilities will result in faster delivery and throughput times, improve product quality and deliver consistent quality for customers."

This story also appears on Crane Equipment Guide.

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