Operational risks

Project management
Adequate project management is essential if new products are to enter the production phase with success, and the risks associated with inadequate project management can exert a significant effect on the results. In addition to project management, this definition also extends to greenfield operation and acquisitions. The progress in the organisation at new locations and recent acquisitions is reported at a number of management levels, thereby ensuring continual attention and, where relevant, implementation of the necessary measures.

Quality
High-quality finished products and just-in-time deliveries are core values for production companies, and failure to meet these criteria can result in damage to the company’s reputation or financial loss. The operating companies’ core competence relates to the use of adequate production planning, and to the use of specific performance indicators for quality and just-in-time deliveries. In addition, virtually all Kendrion companies have been awarded ISO certification, and customers regularly conduct audits.

Technology and innovation
Kendrion imposes stringent requirements on the finished product. Customers request the company to develop products complying with specific functional requirements that can, on occasion, come close to the limits of the technologically achievable. Project teams and the requisite disciplines assess the feasibility, since an incorrect estimation of the technical feasibility can result in the (potential) customer’s loss of confidence. Moreover, the available capacities are scarce and the successful completion of projects is of great importance. For this reason the company is also confronted with the risk that our engineers succeed in developing a technologically-acceptable solution, but that the customer nevertheless decides not to proceed with the approach.
Kendrion adequate a number of patents for its operations, although it is impossible to state with certainty that patents provide sufficient protection from third-party infringements. In general, the majority of the development costs are borne by the customer.

ICT
The major ICT risks include the risk of interruptions, loss of data, and unauthorised access to data. ICT is of importance to Kendrion, both in terms of the risks and business support. Kendrion has implemented a corporate IT policy: Kendrion’s CFO bears the overall responsibility. The corporate IT policy extends to issues including:

• the arrangements for IT decision-making and what can be decided at which level (central or local);
• the manner in which IT systems are to be implemented;
• the arrangements for the sourcing of IT products and services for the business units and their op