Dematic SWOT Analysis
Dematic is a leading supply chain solutions company that implement automated systems for warehouses, distribution centers and production facilities. Its Global headquarters are in Atlanta, Georgia, and features more than 60 engineering centers in 25 countries, with more than 7.000 employees worldwide. Dematic is part of the KION Group. The company has over 200 years of history and has always been at the forefront of innovation in its sector. In this report, we provide an analysis of the strengths, weaknesses, opportunities and threats (SWOT) of Dematic.
- Dematic is the largest manufacturer in the Supply Chain Solutions market. Also, it is the leading vendor in the Automated Guided Vehicles (AGV) and Automated Mobile Robots (AMR) market segments.
- The company has innovation ingrained in its culture. From the development of Automated Storage and Retrieval Systems (AS/RS) to the pioneering of sorting and accumulation conveyor systems, it has always been at the forefront of the introduction of new changes and technologies.
- Beyond its long history, Dematic is still a top innovator. Examples include new designs in high-speed order assembly for mixed case goods and high-speed conveyor sorting. Also, it introduced a Micro-Fulfillment system, a hardware-software solution for rapid online order fulfillment.
- As the industry shift from being hardware-centric to software-centric, Dematic has successfully positioned itself to make this transition. For example, they hired Bernard Biolchini, an executive with ample experience in the IT industry, into their leadership team.
- The company has over 6,000 systems installed of all sizes and levels of complexity. As a result, they can offer solutions that are proven, optimized and well know in the market.
- Dematic is also a leader in promoting a culture of wellness. For example, the National Association for Business Resources named Dematic as the Best and Brightest in Wellness for 2019. The award highlights organizations that implement efforts to foster a healthier place to work and live.
- The company continuously expands its offering through strong strategic partnerships.
- The company has experienced high levels of growth in the past years, and with those come management and organizational challenges. Some employee reviews point out to the side effects of management transitions and not optimal change management. It is essential to mention that this is expected to happen to any company that experiences sudden growth and changes.
- Employees reviews point out to lots of travel, long hours and understaffed projects. Dematic sales have increased at a staggering pace. The challenge for the company is to hire and onboard new personnel to keep pace. Otherwise, it risks a decrease in employee morale (which in turn could increase turnover rate).
- As a result of growth, the company has become very large. In a sector increasingly exposed to new tech disruptions, large companies like Dematic could have more difficulty integrating change that smaller, leaner new competitors.
- The Kion Group, Dematic parent company, and its subsidiaries are involved in some pending lawsuits. While there is no way to ascertain if existing risk provisions will be sufficient, they are not expected to have a material impact on the finances of the company.
- The supply chain market is likely to reach $75 billion by 2030, from $32 billion in 2019. Such growth represents a significant opportunity for Dematic to expand and develop its services.
- While the company's position on the North American market is strong, it has a high potential for growth in the EMEA region, especially in central and Eastern Europe. To accomplish this objective, Dematic can leverage the sales structures that its parent company, KION Group, has in place.
- Leveraging new technologies to optimize supply chains is a top priority of companies in all industrial sectors. Major players are implementing changes in crucial logistics functions, including supply chain planning, procurement, sales, operations and customer services. These represent good opportunities for new sales for Dematic.
- Supply chain logistics are becoming increasingly digitized. As a result, companies will need to increase investment in new supply chain solutions. Dematic can capitalize on this trend with its unique portfolio of products and services.
- The company business is exposed to risks arising. However, dependency on sound project management can also be an opportunity. Achieving excellence in project management makes Dematic more profitable and foster better customer relations than its competitors.
- As new technologies for supply chain automation consistently appears, so does the need for replacement investment, which represents an excellent sales opportunity for Dematic. This especially true in emerging markets, which still lags on these technologies.
- Economic cycles affect the market for automated supply chain solutions. Downturns could lead to fewer sales or customers not fulfilling payments on time. However, the market has some degree of immunity to these cycles.
- Dematic business is project-based. As a result, threats can arise if schedule and budgets deviate from those agreed with customers. Therefore, the company needs to focus on project management excellence.
- The company business is often dependent on individual customers and sectors. As a consequence, any adverse issue experienced (e.g., drop in revenue or financial matters) by major customers could threaten the business.
- As supply chain technologies rely more on software interconnectivity, the Dematic exposition to risks arising from IT systems not working flawlessly increases.
- Furthermore, new laws like the European General Data Protection Regulation (GDPR) and more data privacy laws expected to come, bring new, unforeseen software requirements to an industry increasingly dependent on it.
- Dematic parent company KION Group consolidates its earnings in Euros. Therefore, it is exposed to currency risk because the bulk of business of the company is conducted in North America, on US Dollars.