Joe's Jottings
Jottings Number 13, by Joe Podolsky:
From: uunet!opnmail3.corp.hp.com!PODOLSKY_JOE/HP0000_02
Date: Tue, 20 Dec 94 16:37:00 -0800
Last spring, I heard Percy Barnevik speak at a manufacturing conference
at Stanford, and I've become a real fan of his. Barnevik is the CEO
of Asea Brown Boveri, a $28 billion global company based in Zurich. ABB
makes a wide variety of large equipment like robots and power plants.
ABB may be the ultimate decentralized company. When Barnevik took over
the company in 1988, he broke the organization into 1300 independently
incorporated companies and cut the headquarters staff from 2000 to 176.
These independent companies average 160 people each!
The ASAP supplement to the 12/4/94 issue of Forbes Magazine published
an interview with Barnevik. Here are some quotes from that interview.
ABB will stand or fall on efficiency and the way we operate globally.
And this has to improve ALL the time...speed, quality, cost, and service:
You're married to it...even if you have the world's best physicists and the
best material scientists...
ABB MUST reduce its cycle times...engineering, 30%; manufacturing, 60%;
field work, 90%. Engineering reductions come from computer simulation...
manufacturing reductions are even greater. Computer simulation up front
reduces the potential for mistakes on the back end. Robots directly
reduce time and costs...finally, supply management...adds to speed. Field
work reductions are most dramatic: 90%, because of zero defects in
engineering and manufacturing.
...if you don't have an understanding of speed in the world and the impact
of IT on business, now and in the future, you are going to be a loser...
There's another aspect of IT: not how to make products but how to SELL
them...If you don't use IT to connect to your customers, it's like moving
in the wrong direction on the escalator...today you can show a customer
a plant configuration on a computer screen...you can customize the
technical specs and immediately show the effect on price...
You can say philosophically that these advances in computer power can
go in two different directions. It can be a powerful centralizing force...
and it can be a fantastically innovative decentralizing force, where you
really dare to give people responsibility...
Speeding up IT competence - that's the key to competitiveness today...
Europeans have a hard time understanding that. When I arrived (in
European Community Headquarters) in Brussels, they were all worried about
whether to subsidize Bull...I wouldn't give a damn about Bull if I was a
commissioner. I would worry about the whole industry - steel, autos, ships,
power plants, railroads...I thought, "My God - don't they see that every
company is an IT company?"...
How do you feel HP would measure against the standards that Barnevik is
setting?
Joe