🚨 Continuous improvement isn’t enough anymore and Volkswagen’s actions show why.
When we talked in our recent post about the limits of incremental improvement, we weren’t talking theory.
Volkswagen’s decision to pursue around 20% cost reduction through a major restructuring is a clear signal that margin tweaks and efficiency programmes are no longer sufficient.
This isn’t about belt‑tightening. It’s a response to structural pressures:
- A fundamentally different trade and tariff environment
- Sustained cost disadvantages versus local competitors
- Capacity and footprint misalignment with market reality
You don’t take 20% out of a global business with lean projects alone. That level of change only comes from re‑shaping the operating model itself.
That’s the uncomfortable truth for many organisations today:
- Continuous improvement helps you run the current model better
- But it won’t fix a model that’s no longer fit for purpose
VW has accepted that reality and moved to decisive, step‑change action.
The leadership question for the rest of the market is simple:
➡️ Are you still optimising around the edges or confronting the scale of change the environment actually demands?
📖 Volkswagen article (Automotive News): Tariffs force capacity cuts, shift to local production
📩
If your organisation knows step‑change is needed but struggles to deliver it at pace or make it stick, we’re happy to talk: info@jigsawbusinessgroup.com
