Siemens EC cuts costs and goes global to become market leader – with Lotus Notes and KES Enterprise Solutions
Cycle time reductions of 50% achieved as relay components company implements Lotus Notes
The challenge: to integrate disparate groups into a single organisation able to meet customers‘ global needs for prompt response and lower costs The solution: implement Lotus Notes for information sharing, workflow and electronic mail „Lotus Notes is one of the reasons why we have grown so fast in five years, from nothing to market leader. We are using a system where all processes are going faster than before. And we can make faster, better decisions, based on up-to-date comprehensive information“. Stefan Vandevelde, president Relay Components, Siemens EC With a 25% market share, Siemens EC is now the worldwide market leader in relay components for the automotive business. Yet just five years ago the company hardly featured in the market. While the industry has been growing at around three or four per cent annually, Siemens EC has seen average growth of 16% a year. Key to the company’s success has been a 50% reduction in cycle times, and its efforts to become a truly global organisation in response to customer demands. In both cases success has depended heavily on the software being used to re-engineer the business – Lotus Notes. Lotus Notes is also key to developing methods of collecting and sharing knowledge throughout the organisation, allowing staff to learn from others‘ experiences and cutting down the effort involved in product design and development. And it’s been highly instrumental in delivering a rapid, effective problem resolution service to customers.
A single solution to improved communications and cost cutting
The company’s growth has come through continuous internal growth and acquisitions. Important purchases have included companies in Japan and Austria, while an American affiliated company has also been integrated into the organisation. Mergers and acquisitions bring their own problems though. A major challenge for Siemens has been to turn these disparate groups into a single global organisation, able to meet the demands of global customers who want local service around the world. At the same time, increasing cost pressure on the side of the automobile industry has forced Siemens EC to seek constant improvement and expedition of processes. EC management found it hard to find an appropriate solution for all its needs. Communication was a major issue. Every plant and department had its own messaging system, incompatible with the idea of a worldwide electronic communications programme. It was also very difficult to access information from an inflexible IT infrastructure. As a result any communication across the organisation came in the form of letters and faxes. Major corporate issues would be discussed during quarterly review meetings, but day-to-day matters never made it onto the agenda. Stefan Vandevelde, president of Relay Components, explains that „We looked for a solution for many years. We needed a platform that was easy to use, and easy to change.“ Finally Siemens EC was shown a demonstration of how Lotus Notes could work. The initial pilot project started with selected employees from the product management team in Berlin, and was aimed at improving information flow and cooperation within teams at that location. One of the pilot applications was a customer database, that tracks all activities such as meeting minutes, letters, faxes, memos etc.
Ideas to pilot in days
Lotus Business Partner, KES Enterprise Solutions, a member of the K Consulting Group, undertook a detailed analysis of the processes within the business and possible improvements, showing how some actions could be scrapped or changed. Says Stefan Vandevelde: „We were very surprised at the speed of development. We had a prototype up and running within just a few weeks. A solution using other systems we had looked at would have taken as long as one or two years to develop“.
Stefan also emphasises how quickly the solution could be altered, even after it had been produced. Again, he compares Lotus Notes to other systems, where it would have taken weeks to implement changes and test the system again. „With Lotus Notes you can change the software as quickly as you can change your mind“, he says.
It was quickly clear that the advantages of such information-sharing would be increased many-fold if it could be extended across the organisation. Lotus Notes has now been rolled out throughout the enterprise as a tool for communication and for handling workflow applications. There are currently more than 100 Lotus Notes applications established in every part of the company.
Cycle times cut by 50%
With three headquarters around the world, the company has had to find a way to bring together the separate parts of its functional groups, such as customer services, engineering and quality control.
The answer lay in Lotus Notes, which allows people to take part in group discussions electronically regardless of their location or time zone, picking up or leaving the conversation whenever suits them. They can also use Lotus Notes to pass around important documentation, and even CAD drawings, to use, discuss and enhance. As a result, says Stefan, „We can work on projects using the best specialists in Siemens EC around the world, not by bringing them together, but by using Lotus Notes to develop new products and discuss problems.“
The working hours of each country also becomes less important. For example, staff in Berlin may finish work in the evening, only to have their efforts promptly picked up by staff in the USA. As they finish their working day, Berlin staff are just starting again, and can take up the reins once more.
This continuous project working has proved to be a huge benefit, with cycle times being reduced by a massive 50%. All the processes within the design stages for product, tooling and machining have been speeded up.
Meeting customer demands for rapid, global service
The trend within the industry is for customers to work with fewer suppliers, within a global framework. Absolutely vital to Siemens EC therefore has been the need to show customers that it can fulfil orders and provide service on a worldwide basis, wherever the customer is based.
To this end Siemens EC is setting up manufacturing facilities across the globe, all working on a just-on-time basis. The company has also been successfully proving to its customers that it can respond on a global basis to their requests and problems.
On of the most important and successful applications for Siemens EC has been the expedition of responses to customer problems. Using Lotus Notes, the company can set up ad hoc groups of experts across the company to address specific customer issues, with everyone in the group able to view what contributions have been made to the discussion to date. Solutions can now be provided within 24 hours, and Siemens EC has been showing its customers how well the system works to reassure them about its global responsiveness.
It’s an added advantage for Siemens EC that many of its customers use Lotus Notes – and that many of its competitors don’t. According to Stefan Vandevelde, „This is one of the reasons why we have grown so fast in five years, from nothing to market leader. We are using a system where all processes are going faster than before. And we can make faster, better decisions, based on up-to-date comprehensive information“.
Sharing vital information, saving costs
As well as providing a focus for discussion and workflow processes, Lotus Notes serves as a repository for any information that needs to be shared. ISO9000 manuals, job descriptions, the internal phone book (with photographs) are all on Lotus Notes, making the information not just easily accessible, but easy to update. The phone book, for example, used to be updated, printed and distributed to all staff five times a year. Now all those costs can be saved by updating and holding the information electronically.
It’s not just formalised information that can be shared. Siemens EC has been setting up knowledge databases around the organisation too. As Stefan Vandevelde says: „We know that for every problem there is a solution in someone’s mind“. That’s the philosophy behind the „Lessons Learned“ database, which provides a place for staff worldwide to share their experiences and learn from each other.
Including everyone, everywhere
Stefaan Vandevelde is highly enthusiastic about the way Lotus Notes has affected his own job. „I am often out of the office for as much as two weeks at a time. Previously I would come back to a mound of paper on my desk.“ Now Stefan runs Lotus Notes on his laptop, and can easily keep working on the move. The replication facilities of Lotus Notes mean he can receive and send information and e-mails, working just as he would in the office. His office, meanwhile, has become almost paperless.
Around 80% of staff are now using Lotus Notes. That’s 2,000 users in 22 locations, introduced over the past two and half years. Stefan Vandevelde is keen that this figure should rise above 90%, driven by the clear advantages that it gives. Another thousand users are expected to come online in the next six months.
Stefan predicts that there are still many processes that can be speeded up. And as processes are changed, more opportunities for greater improvement are uncovered. He adds that „Lotus Notes has helped us communicate during the process of reorganisation. Now it is helping us to re-style and re-model all our processes and improve our communications.“ As customer demands require ever-increasing global service, alongside ever-decreasing prices, Siemens EC has the flexibility and the technology to change its own processes to meet these and other shifts in world demand patterns.