“You need to understand the difference between ‘the job to be done’ and ‘the job to be done today.”
field site, even if it didn’t work out at Schindler.”
It must have helped having the time to think and then working for a supplier? “Absolutely. I was very protected when I was at Schindler because I was part of an internal organization. The life cycle of product is in the hands of many different departments and the destinies of the departments are linked. When you are a supplier you have to fight for a contract which doesn’t last forever. The life cycle of your product depends on your capability to stay competitive, be innovative, not only technically but also in managing and devel- oping distribution networks. A lot rests on your capability to develop a good relationship with a manufacturer and make it feels dependent on you, even though it’s not.
This was a very good learning experience and is something I’ve been able to use here so that everyone sees the value of supply chain.”
How did you get commitment from the board for the transforma- tion?
“Optimization had been a topic for many years, even when I was here the first time but no one was addressing it because the com- pany was not ready for it. In the meantime the board changed a lot. I was able to make it happen by focusing on tax leverage, rather than making it a supply chain issue, so my sponsor was in the finance department.
When you go through a transformation, you need to ensure that you don’t become too complex when you explain it. It needs to be very simple to ensure people don’t become scared because they don’t understand it. My concept of the single entry point was written on one page, nothing very sophisticated.”
You received the APICS Award for Excellence for spearhead- ing the “Transform to Outperform” initiative that improved the company’s operational performance. What was your approach? “In 2014 our service level, especially on-time delivery, quality and costs were not at a level that permitted Schindler to develop fur- ther. These therefore, were my starting points. I used the SCOR model as a framework for end-to-end integration and went for the lean approach.
My entire team, an internal organization of 152 people, was involved in the transformation. We held endless workshops and went through months of number crunching. The main problem was the enormous complexity of bringing everyone together and getting inside information from both our suppliers and inter- nal customers: Our stakeholders and internal customers were very fragmented as every factory works independently and we deliver to branches in 55 countries. The issue in 2014 was that internal customers did not see the value of supply chain as every factory and management organisation had and still has its own profit centre. Therefore we changed the business model to a sin- gle entry point. This has given transparency to our internal cus- tomers, we are able to avoid duplication of margin and we have
improved the service level, quality and costs in the organization.”
Do your colleagues enjoy this journey of transformation or has it been a struggle? “They enjoy is because suddenly they are involved. It has been customized to their needs and they have been really part of it. We have all had to dive in deep to get to the basic principles. However, the change management process has be in place first and I sought help on this. It was an unmissable expense. You need to prepare the people because you have different maturities, different levels of experience and different perception of change within the different disciplines: Knowing your people is very important.”
What is the next step for the Schindler supply chain? “Schindler has been developing and investing a lot in the Inter- net of Elevator and Escalator (IOEE) with two main partners, GE for the strategy (using Predix) and Huawei for the technology. An elevator is an integral part of the building but if you live in an apartment it’s the last thing you notice. You only notice if it goes wrong which doesn’t happen very often because it is usually well maintained. By means of digitalization we want to connect it to users and make each individual elevator visible in terms of functionality, positioning and life cycle. For example, if you are a passenger about to leave your apartment, you will be able to use your smart- phone to call the elevator so it is available at the moment you need it, or maybe it knows your movements already. As a facility manager you can see the status of your lifts on an app and receive a warning if something needs to be repaired in order to take preventative action rather than rely on an alarm when things do go wrong. We don’t only service Schindler elevators, we service all eleva- tors which is why it is very important for us to understand the state of each elevator and what it will need in the future. We are also looking at augmented reality helmets for use by service engi- neers, which goes hand in hand with digitization.”
What are your next priorities? “For me it’s Industry 4.0, and how we manage and use the net- work of digitally collected data. If we only use it to improve cus- tomer needs it’s a waste; we want to understand what we deliver, what data we can generate from the installation base in order to make us more agile in terms of spare parts availability, life cycle of components etc, and understand where the supply chain net- work needs to be. We want our factories and machines to be part of a network rather than an individual location to improve actu- alization and capacity management. Because we do a lot of our own assembly, the key in future will be collaborative robotics; robots doing the repetitive activities with a person nearby doing value added activities. It is getting cheaper and cheaper and the ability to maintain agility, which was an issue in past with robot- ics, is improving.”
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SUPPLY CHAIN MOVEMENT, No.29, Q2 2018
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