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Miele Focuses On Old-Fashioned Quality

(by Peter Marsh)

At a time when life has rarely been tougher for manufacturers in the developed world, Miele's strategy for survival is to break almost all the rules. The German company, a global leader in high-quality domestic appliances such as washing machines and vacuum cleaners, is renowned for its exacting manufacturing standards and its refusal to move down-market and compete on price.

Miele bases nearly all its manufacturing in high-cost Germany and is self-sufficient to a high degree. Rather than outsource to low-cost suppliers, it makes 4m electric motors a year (enough for all its products) in its own plant near Cologne, which it says is essential to maintain its quality standards. Sales last year were 2.2 billion (£1.5bn).

The approach is respected by Miele's industry peers. Andres Guerra, Chief Executive of Marloni, the Italian white goods maker, regards it as the icon of quality in the industry - 'with a fantastic position at the top end'.

The company sells appliances ranging from dishwashers to a coffe machines, at a price premium of up to 70 percent over their competitors' products. It spends 12 percent of its revenue on product development - far more than the industry norm. Miele's attention to detail is legendary. Ovens are tested using machines that open and shut their doors 60,000 times to simulate the use they will have in their owner's kitchens.

The company also believes it can make its German plants more competitive by changes in working practices. According to Markus Miele, co-owner of the company, 'We have a plant near Gutersloh that makes 50 percent of all the plastic parts we need. But we make this plant compete with outside contractors to see who gets the work for specific jobs. We make sure that the Miele plant charges prices no greater than the other bidders. This is one way we encourage our factories to make improvements and innovations in their production processes.'

Even though Miele's manufacturing costs are higher than those of its competitors, the company says these are justified by its ability to produce appliances that - despite their high prices - people want to buy. Roughly 50 percent of Miele's manufacturing costs come from components it makes itself compared with about 30 percent for equivalent companies. But, the company says, most Miele appliances will work for 20 years, which is longer than comparable products. This it says, is linked to the reliability of individual parts.

The policy pays off, syas Mr Miele. 'My father [who was in overall charge of Miele until 2002] once had a letter from an old lady in Eastern Germany. She said she didn't have much money but she's willing to pay 50 percent more for a Miele washing machine because she knew it would last for the rest of her life.' Nick Platt, a home appliances specialist at the GfK market research company, says such feelings are not uncommon. 'The company has built up a tremendous loyalty among consumers who know that the brand stands for quality,' he says.

Miele faces a tough few years as it strives not just to keep ahead of competitors at the top end of the white goods market but also to interest new generations of increasingly cost-conscious consumers in buying machines that - in terms of kitchens- are the equivalent of luxury Swiss watches.

Заранее огромное спасибо!
Я, к сожалению, знаю только французский и итальянский, а эта публикация сейчас очень нужна.