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Combining the best business practices from different cultures

Combining the best business practices from different cultures

James V. Nudo, President of DMG MORI USA, believes the vibrant mix of cultures is key to success.

As the president of a company that brings together the best of three cultures, James V. Nudo believes the greatest asset he offers DMG MORI USA is precisely his ability to understand and exchange learning experiences with colleagues abroad.

“It’s all about how well we respond to customer needs. If we can’t do that, why would a customer have an interest in buying another machine?”

As a lawyer, Nudo spent ten years working in Japan, where his parent company DMG MORI Co., Ltd., is headquartered, and quickly learned that viewing the art of doing business from different cultural perspectives was crucial to building a globally successful company.

“By background, I’m an attorney and I was in charge of the international legal department in Japan for several years,” he explains. “But you can get anybody to read contracts. I believe my main value to the company is in the intercultural aspect. Having worked in Japan, I developed all sorts of relationships, including with the president and CEO Dr. Mori. Since 2010, we’ve been involved in a kind of slow-motion merger with our German partner Gildemeister. During that process, I developed relationships with all the German management as well. I became familiar with both styles of doing business.

“I like to call someone up and get a resolution and be done with it,” he adds. “My colleagues are the same way. It allowed the globalization of the company to move forward pretty easily.”

Founded in Nara, Japan, in 1948, Mori Seiki Co., Ltd. recently entered a strategic partnership with Deckel-Maho-Gildemeister of Germany, creating DMG MORI, one of the leading machine tools manufacturers in the world. Nudo believes that globalization has been the key factor in enabling the company to shape and take advantage of market needs. DMG MORI enjoyed revenues of $4.1 billion in FY2017 and with its market share currently running at 11 percent, the company’s goal is to raise that share to 20 percent by 2025.

“We’re moving more and more strongly towards integration between our factories around the world,” Nudo explained. “We’re in a position now where we’re right next to the customer, but at the same time we have the power of the global organization behind us. I think it’s this rush towards globalization that gives us the resources to maximize our efficiencies.”

Looking to the future

DMG MORI produces cutting machine tools for turning and milling, along with a range of operating and support systems, which ensures its equipment functions efficiently and meets the challenges of today’s increasingly demanding marketplace.

Yet as in any industry that depends on technology, its business is rapidly evolving to include an increasing emphasis on software and automation. is has meant constantly rethinking the way the company operates as a whole.

“For example, two or three years ago, we went from a primarily independent distribution net- work to a direct sales network,” Nudo said. “We don’t have to accomplish things in two or three places anymore. It gives us an amazing ability, not only to produce designs and machines in Japan and Germany, but also in our factories in Davis, California, and China. We have an amazingly large product line, with excellence coming from both the German and Japanese product.

“It’s the brand that’s important to us, along with having integrity with our customers,” he added. “It allows such a wide offering to the customer that in all honesty we have the ability to integrate operations. They don’t have to go somewhere else if they don’t want to.”

According to Nudo, this ability to integrate products and services involves embracing the most cutting-edge technology available, so that customers can trust in the capability of the products they purchase through DMG MORI right through the life cycle.

“We feel that we have the expertise that we can put it all together for the customer,” he explained. “It’s one thing to sell a product, it’s another thing to guarantee the customer that the product will be up and running and be operational for them and meet their needs and expectations.”

Overcoming challenges

Nudo does see a key barrier to progress, however, which is a lack of engineers and programmers that can guarantee the quality control DMG MORI is known for.

He believes that over the past 20 years, the U.S. has not been turning out enough highly skilled individuals in this area, comparing the phenomenon to Germany and Japan where work study and apprenticeship programs guarantee a constant production line of talent.

“We can sell machines to customers but our customers cannot necessarily find people with the expertise to run them,” he insisted of the U.S. market. “As a result, today we have an academy where we train our own people as well as customers’ employees. In some cases, it’s almost from square one. In other cases, they’re people who have a very good skill set but they need more specialization for our machines.

“One of the things our CEO, Dr. Mori, says is that maybe the first sale comes from a salesman,” Nudo added. “After that first machine is installed, future sales come from our engineering and our service departments.

Supply chains
“I believe that we have a true integrity when it comes to our belief in our product, and I believe that integrity shows through in our relations with our customers. That to me is the really exciting part.”

To enable efficiency in its supply chains, DMG MORI has a worldwide program known as DMG MORI Qualified Products, or DMQP, through which the company identifies suppliers for accessories, most which are locally sourced in the various countries the company operates. Yet Nudo stresses that the organization produces the vast majority of what it needs through its own facilities in Japan, China, Europe, and the U.S.

“Even spare parts, we get through our factories,” he said. “In each of those cases, there are alternate suppliers. But none of those are essential to our business in the way our machines are. We manufacture all our primary high-end components. If we do have a problem, we can go back to the factory for expertise. For additional things customers may want, there are probably 25 to 50 additional products that we sell.

“In the past, somebody would buy one of our products and then they’d go somewhere else,” Nudo explained. “If they had four or five different accessories, they might have to go to four or fve different places and then they might have the problem of who integrates it, or what happens if it doesn’t work. With our program, it’s all covered under the same warranty.”

Nudo returns to the issue of culture as the key driver of the reputation of DMG MORI for quality. He is excited about the prospect of a new cultural awareness and integration initiative whereby the top 200 managers across the company will meet in 2019 to help increase employee awareness of the importance of the mix of business cultures that he believes provide DMG MORI with its unique competitive edge.

“I think it’s difficult to change culture,” Nudo said. “Even company cultures. The first step is making people aware of how they respond to things. What are their triggers, what motivates them, what excites them, and, what upsets them? The purpose of the initiative is to start making our managers aware of who they are and how they respond.”

“From there, how we integrate best practices from different countries and have them flow back and forth,” he added. “I believe that we have a true integrity when it comes to our belief in our product, and I believe that integrity shows through in our relations with our customers. That to me is the really exciting part.”