Ceva transforms operating model to go local

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Ceva is transforming its operating model to increase the velocity of the business by adopting a local rather than regional model. From next year it will have 17 local geographical clusters – some will be a single large country, others will contain several countries in close proximity.

CEO Xavier Urbain said: “For our customers, local ownership of execution is very good news, enabling faster decision-making and greater responsiveness to their needs.”

The company’s sales and operating profits have risen between the second and third quarters, the group said. EBITDA, at $64 million, was up 6.7 per cent on sales up 0.7 per cent to $1.99bn.

“Our focus over the course of 2014 has been very deliberate: we have rebuilt the management team with executive leaders who know the industry which has had an immediate impact, and have organised our go-to-market plan based upon our major business lines – Airfreight, Ocean freight and Contract Logistics – to enhance customer value. “

The new operating model eliminates the existing region-based structures across the globe, opting instead for an operating model consisting of 17 local geographic clusters of countries with standardised governance and business rules across all clusters. Clusters may consist of a single large country, such as China, or may consist of several countries in close proximity. The new structure takes effect 1 January 2015.

“This is a transformative announcement for Ceva,” Urbain said. “The new operating model supports our objective to be the most professional logistics company by enhancing our ability to provide impeccable execution to our customers. We expect it to increase our velocity across the board, enhance customer responsiveness, enable faster decision-making and provide numerous opportunities to leverage speed as a competitive advantage.”

Ceva expects the new operating model will drive increased network efficiency and productivity by eliminating duplicate work and functions, as well as strengthen communication across the business.

In addition to announcing a new operating model, Ceva implemented a number of cost-saving initiatives during the course of the third quarter which are expected to show savings results in the second half of 2014 and into 2015. These measures include restructuring in a number of European countries, inauguration of e-auctions to drive transport savings, continued focus on SG&A reductions and site consolidation in Singapore, among others.

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