a magazine about
                                       engineering, services &
CONTENTS #2.2010

2   futu r e by semcon 2.2010
Website: www.semcon.com Letters: future by semcon, semcon ab, 417 80 göteborg, sweden.
Change of Address: future@semcon.co...
PEOPLE #2.2010

  Outsourcing has created opportunities for people across ...


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futu r e by semcon 2.2010   7

Let someone else do the job - it can be the
recipe for a successful business. This especially
Sunil Bharti Mittal was a rela-


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Long-term and well-defined
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16   futu r e by semcon 2.2010
Outsourcing the production and delivery of its
information for dealers and car owners to Semcon
proved beneficial to Jagua...

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 initial phase was to establish
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premises in Kineton, Warwickshire, UK, a few
miles down the road from JLR’s main develop-
ment centre at Gaydon.

      Torsten Sundin
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If the manual disappears for some reason, you just order a new one.           An owner of a new car may not necessarily lo...

the assignment: Elos Fixturlaser AB deve...
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futu r e by semcon 2.2010   25
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  1. 1. a magazine about engineering, services & product information # 2 2010 These nine are better than you Focus on what you do best – and let someone else do the rest 1 Go green with eco-design 1 Jaguar Land Rover focus on cars 1 C.M. Hammar lifesavers are buoyant 1 MAN succeeds on a tough path
  2. 2. CONTENTS #2.2010 ARTICLES IN THIS ISSUE OF FUTURE BY SEMCON 2 futu r e by semcon 2.2010
  3. 3. Website: www.semcon.com Letters: future by semcon, semcon ab, 417 80 göteborg, sweden. Change of Address: future@semcon.com Editor: björn strömberg. Semcon Project Manager: anders atterling. Phone: +46 (0)70-447 28 19, e-mail: anders.atterling@semcon.com. Editorial production: tidningskompaniet, göteborg. Project Manager: peter mohlin. Editor: suzanne Kordon. Designer: charlotte sundberg. Website: www.tidningskompaniet.se Reproduction: tidningskompaniet, göteborg. Printing: trydells tryckeri, Laholm. ISSN: 1650-9072. Translation: cannon språkkonsult, Kungsbacka. 6 let someone else do the work Product development and innovation are be- coming increasingly frequently outsourced. Outsourcing is a strategic decision that requires more than just recognizing your company’s own limitations and others’ competencies. Future by Semcon investigates the concept. EDITORIAL 30 Eco-dEsign – a challEngE Towards better times A for producT dEvElopErs fter a tough start to the year, For a product to be as eco-friendly as possible, you positive winds are starting to sweep slowly into the market must think of the environment when the product is again. In Semcon’s business ar- developed. Tim McAloone has written an eco-design eas, advanced engineering skills and project- guide for product developers. based delivery are most in demand. Semcon has a solid base here with our expertise and experience of leading industries. We also have the size and strength needed to ensure that what we have to offer is at a top inter- national standard, today and tomorrow. 16 Two parTnErs, Specialist skills are one of the keys behind onE parTnErship the concept of outsourcing, and we’ll be looking at this concept in Future by Semcon. Jaguar Land Rover outsourced all the production and We visited Jaguar Land Rover in the UK, who delivery of information to dealers and car owners to can now focus on making cars after Semcon took over the production and delivery of Semcon. A decision that proved to be a good one for information to dealers and car owners. The both parties. Semcon takes care of the information fact that companies are concentrating on while Jaguar Land Rover can focus on what they do their core business and letting other experts best - developing and manufacturing cars. take care of the rest can make for a succes- sful mutual cooperation. It’s about working together towards a common goal, which is 34 MEET sEMcon’s bEsT Minds the foundation for successful outsourcing. In this issue, you can also read about how In Semcon Brains you’ll meet people with excit- Semcon in Brazil has become one of the ing skills and assignments. Mats Gustavsson, Peter truck manufacturer MAN Latin America’s leading providers of engineering services Mohlin and Peter Nagy create excellent sound en- and how the maritime safety company C.M. vironments, Katalin Tisoczki writes and coordinates Hammar built a new production line for its technical information and Nayyar Rahman designs main product, with help from Semcon. dashboard technology. KjELL NILSSON semcon ceo futu r e by semcon 2.2010 3
  4. 4. PEOPLE #2.2010 PEOPLE IN THIS ISSUE OF FUTURE BY SEMCON Outsourcing has created opportunities for people across the world at the top of their game to do what they do best. Meet some of these people in Future by Semcon, talking about outsourcing. page 34 peter mohlin, senior consultant acoustics, semcon göteborg Who are the world leaders in acoustics? ”It varies from industry to industry. The automotive industry is doing well in Ger- many, for example, where they have large resources devoted to sound and vibra- tion. If you’re talking about mobile telephony Finland and the United States, for example, are a long way ahead. ” page 13 ingvar gillgren, aftersales manager, semcon trollhättan What is the greatest advantage of outsourcing? ”You can proceed a lot faster than is pos- nayyar rahman, sible in a larger organization. Partly because product designer engineer, it is more cost-effective, and partly because semcon india it does not require the approval of material What can India offer when it comes to outsourcing on so many levels, which is common in larg- jobs from different parts of the world? page er organizations. The benefits of outsourc- ing can be summarized by the higher speed of processes and decision-making.” ”You can summarize it as follows: high quality with flawless delivery and low operating costs, which provide cost-efficiency.” 37 4 futu r e by semcon 2.2010
  5. 5. page 30 mats gustavsson, acoustics specialist, semcon lund Is there any country which stands out in particular in terms of acoustics? ”Belgium. They have companies that make the world’s best- known measurement systems for sound and vibration. They also have the famous University of Leuven, as well as many reputable companies making calculation software for sound and vibration.” page 34 tim mcaloone, lecturer in product development, technical university of denmark, copenhagen How does outsourcing product development affect eco-design? ”If product development is given to the right partner, outsourcing can lead to better and more specialized solutions. But of course it’s important to remember to be very careful to give exact specifications for the desired product, even in terms of environmental improvements.” katalin tisoczki, technical writer and coordinator, semcon hungary What benefits are there for companies in outsourcing their technical information production? ”In addition to the high level of language skills and great under- standing of the product, it’s worth it to outsource, as specialist page tools are used, and more technology. Different amounts of data should be used in a project, so a smaller but more flexible com- pany can manage the workload better.” 36 futu r e by semcon 2.2010 5
  6. 6. foCus: OUTSOURCING STOp DOINg WHaT YOU’Re DOINg, aND LeT SOMeONe eLSe DO IT BeTTeR aND CHeapeR text johan andreasson and suzanne kordon ILLUStratIon james montgomery Flagg, charlotte sundberg 6 futu r e by semcon 2.2010
  7. 7. futu r e by semcon 2.2010 7
  8. 8. foCus: OUTSOURCING Let someone else do the job - it can be the recipe for a successful business. This especially applies to product development and innovation, which is increasingly common to assign to an external party, known as outsourcing. But it’s not enough to recognize your own limitations and the skills of others to succeed. Future in- vestigates the concept of outsourcing and what it can mean if everyone does what they do best. he year is 2003. lion subscribers. By 2010, the company has The Indian established operations in 19 countries, has businessman over 100 million subscribers and now ranks Sunil Mit- as the world’s fifth best technology company tal, CEO and according to Business Week, and Sunil Mittal founder of is one of India’s richest people. India’s leading mobile carrier, how did This happEn? Well, the road to this is brooding incredible growth was made possible by going over how he down a typical Indian path: outsourcing - del- should keep up egating parts of their business to other firms. with the fast- Today, Bharti Airtel outsources many of paced mobile its most critical processes and functions to phone market. The number of subscribers is outside companies. Their IT management has doubling every year and to maintain its lead- been outsourced to IBM, Nortel and Wipro, ing position, the company needs to expand the telephone network to Ericsson and Nokia sharply, from managing 3 million subscribers Siemens Networks and customer manage- to about 25 million in only a couple of years. ment systems to Nortel and Wipro. “I was sitting in a meeting with people from Because of this, Sunil Mittal can now focus Vodafone, Orange and T-Mobile and realized on what the company does best: marketing that these were big companies with huge re- and business development. sources. It struck me: we need to be like them. Releasing resources enabled the company But could we afford to be like them? We would to take on around 32 million new custom- need to recruit 10 000 people, maybe 20 000, ers in just one year, 2008. They say that they within two years. Did we have the resources? have the capacity to grow by 100 million cus- And were we the right company to attract the tomers within a few years. skills? And Bharti Airtel is not alone in choosing “The answer was obviously no,” said Sunil outsourcing as a strategic tool to achieve their Mittal, in an interview with Fortune magazine. vision. Outsourcing is growing as more and Three years later, Bharti Airtel, as the com- more companies outsource more of their activ- pany is now called, had more than 30 mil- ities to subcontractors and consultancy firms. 8 futu r e by semcon 2.2010
  9. 9. Sunil Bharti Mittal was a rela- tively small player who needed the help of specialized exper- tise from much larger compa- nies. It made his company reach new heights and helped him become one of India’s rich- est people. Arie Lewin is a professor of economics accounting, marketing and internal audit are product development for some time. Stephen and sociology at Fuqua School of Business at some examples. The internet breakthrough of Eppinger, professor at the Massachusetts In- Duke University, USA. He leads the research the 1990s and the development of distance- stitute of Technology (MIT), USA, argues this project International Offshoring Network spanning technology has paved the way so that in his book Product Design and Development. (ORN), which collects data on outsourcing and even advanced features such as product de- “What I found is that it sometimes reduces offshoring from companies all over the world. velopment and innovation can be outsourced the cost, perhaps not to such a great extent, Data shows that offshoring - a company del- effectively. but more important is that companies use the egating part of its business to an outside party Video conferencing and sophisticated solu- global product development network, espe- in another country - is common in virtually tions to address common presentations and cially in order to gain access to new markets every sector. working papers mean that important meetings in places in the world where they want to be “ORN data points to a sharp increase in off- can be conducted without time-consuming active and sell their products, but also to be shoring in the innovation field,” he says. and expensive air travel. The IT sector was the able to gain access to unique expertise avail- first case in point. Work on setting require- able in various places in the world,” writes iT sTarTEd in ThE 1960s and 1970s when sim- ments, project management and specifications Stephen Eppinger. pler support functions such as cleaning and was kept in-house while programming and reception were farmed out to stand-alone systems design were outsourced to compa- Many coMpaniEs rEcognizE that they can- companies. nies in other countries. India still dominates, not be best at everything. When lead times Nowadays it’s also common to contract out but China and countries in Eastern Europe are shorten and the capacity for innovation has strategically important functions to external taking market share in the offshoring of IT to increase, it is not infrequent that strate- partners. Purchasing, logistics, information, services. gically important innovation and product every kind of administration, financial and hu- The outsourcing of product development development are also outsourced to a separate man resources departments, customer service, has been one of the major global trends in company. futu r e by semcon 2.2010 9
  10. 10. foCus: OUTSOURCING 5 ADvANTAGES AND OPPORTUNITIES wITh OUTSOURCING: 1 outsourc- 2 it enables 3 specialist 4 can give 5 Lessens risk ing can companies knowledge more flex- of getting lead to lower to concentrate can be used to ibility - you caught up in costs and save on their core improve the only need to your own time. competencies. quality of pay for what is practices and service and needed at the missing oppor- products. moment. tunities. The pharmaceutical company Eli Lilly & Co the automotive and telecom industries, who ing. The study was presented last spring, and let suppliers in China take care of part of the choose to let experts take responsibility for shows that the number of companies plan- development of new products, writes Busi- developing and translating everything from ning to increase in scope or to outsource more ness Week. And Cisco, who in the early 1990s the development of service and diagnostics activities to external parties is increasing. realized that they could not rely on internal re- information to installation and configuration The approach to outsourcing is changing. sources to meet their growth plans, is building instructions, as well as the development of Previously there was a feeling that outsourc- long-term relationships with several producers training material for service organizations. ing was purely about cost-cutting, with and opening up their systems and processes. It is within areas that a company does not companies going from country to country Today, Cisco’s partners are responsible for define as their core business and has not cho- depending on the cost of labour. Today, out- many innovations within components, soft- sen to increase their own skills that external sourcing is becoming increasingly strategic ware and hardware. partners are chosen. One example is product and even includes complex and critical ele- The car manufacturer Toyota claims that information, where companies in the automo- ments of a company. price has become less important when part- tive, telecom and pharmaceutical sectors have “Outsourcing programmes are not only ners and suppliers are chosen. Instead, the outsourced all or part of their activities to expanding but becoming more strategic. Japanese car manufacturer looks at the sup- Semcon. This increase in the strategic importance of plier’s ability to innovate. However, in its extreme form, a company’s outsourcing is reflected in both a change in Many people associate outsourcing with entire product development could of course motivation for companies using outsourcing companies contracting out a smaller single be outsourced, the company’s core business and the level of senior management commit- project - with a start and an end. However, it concentrating instead on market knowledge, ment,” write IAOP in their report. usually means that companies outsource parts distribution and sales. Naturally, short-term cost savings are al- or functions of the product chain, such as all ways an important factor, but money is not testing operations, or the production of prod- ThE facT ThaT ouTsourcing is an increasingly the most important factor when making a uct information, or perhaps methodological important tool for businesses is clear in the decision, even in times of recession. developments. regular survey conducted by IAOP, an interna- “Even if companies increase their out- Within product information, it is becoming tional interest group consisting of hundreds sourcing programs across the board - as dis- more common to outsource, especially among of thousands of experts working in outsourc- cussed earlier - the trend is to outsource the 10 futu r e by semcon 2.2010
  11. 11. 5 DISADvANTAGES AND RISkS Of OUTSOURCING: 1 can lead 2 depend- 3 the com- 4 can cause 5 shortcom- to a loss of ence on pany may loss of ings of the skills that take others can lose the abil- goodwill and client organi- time to get lead to less ity to deliver financial loss zation can lead back. flexibility. when skills are if the quality is to delivery transferred. substandard. problems. more highly skilled, knowledge-based activi- ardized products and peripherals, and this The white goods manufacturer Electrolux has ties,” reports IAOP. happens through increased cooperation with its manufacturing and product development Today’s leaner organizations often use component suppliers. across the world in different forms - direct la- outsourcing as a tool for cutting back. The Another impetus may be to get close to a par- bour, outsourcing contracts, joint ventures - and cost aspects are important but not crucial. ticular market, finding suppliers who have the is, of course, also a buyer of consultancy services. One important reason for the outsourcing of ability to customize products for that market. product development is increased innovation. Outsourcing deals, which are badly thought- björn dEllås is rEsponsiblE for the develop- Companies need access to the knowledge that out, are more likely to fail. Bad planning and ment of Electrolux dishwashers. Of course, people such as component suppliers, research short-term planning are often the causes. But there are times when he contracts out product institutions and specialist consultants have. if the company is careful and works in a struc- development, primarily when special skills But if the aim is to reduce costs, companies tured and methodical way, it can overcome are required or when there are insufficient re- gain most from outsourcing with more stand- these risks. sources. Often, it is about more unusual projects, “In the case of offshoring, where new methods or technologies have to be used. Recently, a new development project was completed, where an external company in other challenges arise, such India had broad responsibility for the develop- ment of a new dishwasher mechanism. “The project was very successful. The cus- as language and cultural tomer had its own development team in their own environment and was responsible for developing the models,” says Björn. The choice differences.” of the company in India was due to a combina- tion of price, expertise and that the firm was also established in Europe. Björn Dellås, Development Manager, Electrolux “In the case of ‘offshoring’ - when the ex- futu r e by semcon 2.2010 11
  12. 12. foCus: OUTSOURCING “My research shows that it is very much about companies fitting together.” Mattias Johansson, PhD student at Linköping University, Sweden porter is in another country - other challenges “It is built on trust and respect for each quality is not the most important thing. arise, such as language and cultural differ- other. Both parties must of course gain from Rundquist’s research shows ‘Good enough’ is ences, in addition to the long distance. But we the cooperation,” he says. enough, as long as the contractor has a cultur- maintain our own development management. Mutual respect is a factor in any successes. al, geographical or social proximity that allows We never give that up. The same applies to “In Scania’s case there have been frequent for a smooth and predictable cooperation. activities where we have a technological ad- visits. Not just at management level but also at “Ten years ago the talk was almost exclu- vantage,” he says. He points out the customer operational level - it’s important,” says Mattias. sively about price. Now there is talk of trust naturally has a great responsibility. and intimacy,” says Jonas. “It is always important to work on becom- jonas rundquisT is a researcher at Halm- Another risk with outsourcing produc- ing a better client. Technicians are tradition- stad University in Sweden, and has studied tion or product development to an external ally good at specifying a product, but we tend outsourcing and innovation. His focus is on party is that the ability to deliver may suffer. not to be so good at describing a service. What Swedish small and medium-sized businesses. Of course, this is most noticeable in aspects happens if there are changes? All this is im- Studies show that in the case of the slightly previously regarded as ”core business” The . portant if the cooperation is to succeed. How- smaller companies, things don’t really go ac- prevailing view that the outsourcing of pro- ever, a competent consulting company will of cording to the rulebook. duction is mainly about simple production is course help us with this, and should flag it if Instead of first identifying what should be put untrue. there is an unclear mandate,” says Björn. in the outsourcing contract and then selecting Data from the international research Mattias Johansson is a doctoral student the best suitable partners, many smaller compa- project ORN shows that outsourcing and at Linköping University in Sweden, and has nies do quite the studied the truck manufacturer Scania’s co- opposite. First, operation with the U.S. company Cummins, the company will a manufacturer of fuel injection systems for find a partner it OutsOurcing is grOwing Scania trucks. feels comfortable in size and scOpe The cooperation has been long and success- with and then iaop’s survey shows that companies believe that outsourcing will increase, both in the ful. An important factor is good communica- select an activ- size of outsourcing contracts and their scope. the study also shows that despite the eco- tion and the ability to care about their partner. ity that suits its nomic downturn has cost aspect has not become more important in terms of reasons for “It’s not enough that you can communicate partner. outsourcing. instead, the survey shows a clear trend for outsourcing to include increas- and speak the same language. It is about dif- “My research ingly complex operations and that the decision to outsource is taken on ever higher ferent cultures - the culture of the country and shows that it is levels within companies. that of the company,” he says. It may not sound very much about the international association of outsourcing professionals, iaop, is an international as- that difficult, but many examples demonstrate the companies sociation for outsourcing professionals, with over 100 000 members, from outsourcers that it is precisely the lack of understanding of fitting togeth- to customers and advisory consultants. the association conducts regular surveys among cultural differences that can trip up any such er,” says Jonas. its members to identify trends in the industry. cooperation. World-class 12 futu r e by semcon 2.2010
  13. 13. fACTS Ingvar Gillgren age: 45 Title: Head of aftermarket information office: semcon trollhättan diagrams, diagnostics and repair meth- ods. In short, any information needed in order to be able to repair cars.” Much of Ingvar’s work depends on the confidence of the customer, something that Semcon has managed to instill in their clients. “As a customer, it is important to be aware that outsourcing can sometimes be tricky to start with. You have to be sensitive to unique requirements when ingvar gillgren became making products together. I usually say that it takes courage and maturity to take part in an outsourcing deal. As a part of the company he hired customer, you must have the courage to delegate responsibility and you must be brave enough to hand over control. Flexibility and short decision-making processes are advantages a smaller com- Ingvar Gillgren switched sides. One day, he changed from pany has over larger companies. being a customer to being a supplier. Now he works for “Saab is, for example, a relatively large organization, and there I was in a position Semcon in aftermarket information. where I worked mostly on the cost side of the business. Now I work on the big pic- ture and have full responsibility for both text marcus olsson photo nicke johansson the costs and the revenues of projects. It’s S about everything from hiring consultants even years ago Ingvar Gillgren left The work was the same as at Saab, also a process we learned a lot from. to translation costs. his job at Saab Automobiles after but a new organization called for new The day-to-day work is about taking “You can proceed a lot faster than sales department. Instead, he joined approaches. care of the entire customer informa- what is possible in a larger organization. Semcon, who he himself had previously “Of course, it took a while to settle tion chain. Often, Semcon takes over the Partly because it is more cost effective, hired, when they took over the business. down, but I finally stabilized. In the entire product information area. This was and partly because it does not require the “When I look back on it, it still feels absence of a formal interface to relate the case in outsourcing deals with both approval on so many levels, which is com- exciting. Between one Friday and the to, we had to create a brand new one on Volvo Cars and Jaguar Land Rover. mon in larger organizations. The benefits following Monday, I changed sides. I went its own. It was a challenge, not least be- “We produce products used primarily of outsourcing can be summarized by the from being the customer to becoming cause so much was very new and there in dealer workshops. These may include higher speed of processes and decision- the supplier.“ were many things to take in. But it was manuals, owner’s information, wiring making. 1 futu r e by semcon 2.2010 13
  14. 14. Long-term and well-defined objectives create a healthy environment for successful outsourcing. fACTS joakim Zetterlund age: 45 Title: vice president, semcon informatic office: semcon, göteborg thing: long initial discussions. This is where you work out the shared vision. And it is here that customers and part- ners try to find a way to combine their two corporate cultures. These ‘soft’ issues are difficult to codify in a written contract. “This part is important, and difficult to put into print. It is more to do with the parties sitting down and talking to one another, so that everyone is on the same platform when working together. You must be able to trust each other,” says Joakim. These formal (or informal) talks will hopefully lead to a functional client successful outsourcing organization, clear lists of requirements and sustainable methods of cooperation. However the customer must first think begins with a simple question through and clearly answer what may well be the key question: is the chosen field part of our core business or not? This is very much the question that What is our core business? This is the first question relating to determines whether it is realistic and effective to outsource. If the answer is successful outsourcing.“After that it is important to develop yes - if what you’re looking to outsource is a core competence within your company a shared vision about what you want to achieve,” says Joakim - then according to Joakim Zetterlund it is probably a bad idea that another com- Zetterlund, Vice President of Semcon Informatic. pany takes over. If the answer is no, there is every possibility of improvment. text simon bynert photo nicke johansson “This is really where it starts. The T customer has to have thought through here are pitfalls. Risks that parties in Outsourcing should therefore never be Because if you don’t share the same this question. Is this a core competency or an outsourcing business must take an emergency solution. vision from the start, there will be more not? If you haven’t done your homework, into account. Short-sightedness Another important detail is common discussion later.” then everything becomes difficult,” he caused by stress is one example. goals. It may sound like a truism, but half- “It’s not enough to say ‘we want to re- says. “The decision to outsource is not way into a collaboration, it is absolutely duce costs and improve quality’. How will “The customer should always choose a operational, but strategic. Therefore, you critical that everyone agrees on where you reduce costs? And in what way does partner who has extensive experience in shouldn’t say ‘we’re doing this for six we are actually going. quality need to be improved? What are outsourcing, and has a proven methodol- months and then we’ll change it again.’ “Everyone must have long-term, the short- and long-term priorities?” ogy for implementation as well as long- That’s not strategic,” says Joakim. clearly-defined objectives to achieve. A lot depends on a seemingly simple term development.” 1 14 futu r e by semcon 2.2010
  15. 15. foCus: OUTSOURCING Offshoring - helping companies expand one of the most prevalent trends in offshoring is the hir- ing of highly-skilled engineers working in offices in india and china, for example. ibm is the multinational company with the most employees in india. the company opened a branch there in 1998 and today, twelve years later, ibm has more than 80 000 employees in india. in march 2010, ibm announced that they will open a new branch in brazil. offshoring are common in all sectors and that model, where they have not included any new “There can be issues with roles. This is development are outsourced to independent costs incurred in integrating suppliers into something that the company must take into companies. organizations,” says Nicolette Lakemond, a account. They suddenly become a coordina- Jonas Rundquist argues that if the assign- doctor of outsourcing and product develop- tor, a role that they might not be accustomed ment is not primarily to benefit the contrac- ment at Linköping University in Sweden. to,” she says. tor, companies need to work hard on devel- “There still have to be people within the The Indian telecom giant Bharti Airtel is an oping methods that enable the integration of organization who ’solve problems’ that always example of a company who has embraced out- knowledge, a particular market, customers, arise,” says Nicolette. sourcing and built a large network of partners or approach, to improve their own innovation Outsourcing also places new demands on who are engaged in everything from IT to the process. the organization when a function is out- operation of the mobile network. As outsourcing is increasingly becoming a sourced to another company. What role tool for the management of strategic plan- should the employees then have? Should they whEn cEo sunil MiTTal took the decision to ning, commissioning skills are becoming a be administrators, and keep in contact with outsource their networks, many raised their growing priority in the industry. the outsourcing company? eyebrows. But for the CEO, it was no big deal. He had never really felt that he sTaTisTics froM iaop show a had control over the telephone sharp increase in businesses network. planning, through various OutsOurcing is grOwing “If something happened or measures, to improve their in size and scOpe went wrong with the net- competence in the specific con- work, there was no-one from text of outsourcing. changes in companies’ future plans with regard to outsourcing, 2009-2010. Bharti who could do any- However, work does not just percentage of companies planning to increase the scope and size of their outsourcing thing about it. Someone from contracts. disappear because a certain Ericsson would come to fix function is outsourced. Com- it. I didn’t build it, couldn’t january 2009 36 pEr cEnT panies need to build a different take care of maintenance and kind of organization, albeit on a sEpTEMbEr 2009 47 pEr cEnT I couldn’t do any upgrades. So smaller scale. I didn’t feel as if it belonged january 2010 56 pEr cEnT “It is not unusual for many to me. Better to hand it over companies to base their deci- Source: International Association of Outsourcing Professionals, IAOP to someone else,” said Sunil sions on an incomplete cost Mittal to Fortune. 1 futu r e by semcon 2.2010 15
  16. 16. foCus: OUTSOURCING A RelAtionship Built on infoRmAtion 16 futu r e by semcon 2.2010
  17. 17. Outsourcing the production and delivery of its information for dealers and car owners to Semcon proved beneficial to Jaguar Land Rover. Now, the British automotive manufacturer can concentrate on its core business – to develop and produce new vehicles, whilst its specialist partner takes care of the information. text gittan cedervall photo sam lee, jaguar land rover futu r e by semcon 2.2010 17
  18. 18. foCus: OUTSOURCING “Our main challenge during this initial phase was to establish Internet connections of the right specifications and performance.” Torsten Sundin, manager Semcon Informatic Production Ltd. O uTsourcing can resources were spent on managing and delive- Communications & Diagnostics Manager at be tricky and ring the information. The work was in need of JLR. finding the right some serious rationalisation. Chris Roberts was part of the JLR mana- partner is es- The automotive company also realised that, gement team that went on the lookout for a sential for a suc- for some time, customer focus had received suitable outsourcing partner, and it was his cessful working too little attention. The company’s technical responsibility to get the partnership up and relationship. and owner information needed to be updated running. He is now in daily contact with the However, Jaguar and modernised in order to become more user team at Semcon and spends one and a half Land Rover (JLR) friendly. days a week at the information specialist’s seems to have JLR concluded found their perfect match when the com- that this needed pany turned to Semcon. Following a tende- to be continuously ring process in 2007, Semcon was chosen as monitored by JLR’s partner for the production and delivery specialists in the of technical dealer and owner information. field. And as an During the past three years, this outsourcing automotive manu- relationship has strengthened into a success- facturer, JLR isn’t, ful partnership, praised by everyone involved. and doesn’t want Before JLR decided to outsource the produc- to be, an informa- tion and delivery of information for dealers tion specialist. and owners, the company was in a situation “Therefore, where their Service Development and Com- from the outset munications Department had grown into an of the tendering organisation made up of some 70 different process, we were suppliers and service providers at several dif- looking for so- ferent locations. mebody to work To manage all these suppliers was a major with, rather than task and the communication chain was often somebody who Every car comes supplied with a comprehensive manual containing everything the broken. Simply keeping all contracts up to date could work for driver needs to know about their car. The manual should always be in the car and had become a full-time management task. The us,” states Chris therefore jLR has also posted it on the internet so that the owner can access it even company felt that too much time, effort and Roberts, Technical when not in the car. 18 futu r e by semcon 2.2010
  19. 19. premises in Kineton, Warwickshire, UK, a few miles down the road from JLR’s main develop- ment centre at Gaydon. “Semcon stood out among the companies we had discussions with during the tendering process. They are very proactive in their ap- proach. They tell us what they are providing in units of work, for instance a workshop manual, rather than telling us how many people they assign for a job. That way we know exactly what we are paying for and what we are get- ting,” he continues. When Semcon was awarded the outsour- cing contract with JLR, their first step was to set up an office in close proximity to their new partner. During a hectic period in the spring of 2007, Semcon took over the production of in- formation while still busy installing themselves in their new premises. In the transition phase the company took over some JLR personnel, Chris Roberts sub-contractors and supplier contracts in order Age: 45 to quickly form an efficient organisation. Title: manager, technical communications & diagnostics “Our main challenge during this initial Office: Jaguar Land rover technical phase was to establish Internet connections of academy in Leamington spa, uK the right specifications and performance,” says Torsten Sundin, Manager of Semcon Informa- tic Production Ltd, the new arm of Semcom problem – not as many JLR employees as the owner information as the natural progression Informatic set up to serve JLR. management had hoped made the move over of a process that the automotive industry em- With a background as manager of the to Semcon. barked on decades ago. Swedish car manufacturer Saab Automobiles “Some of our staff hesitated to transfer to “During the 1980s car manufacturers technical communication and owner informa- the new and unknown company, which is un- started to focus more on efficient production tion, Torsten Sundin was headhunted for the derstandable. This led to a short-term shortage and they began to outsource development of job as manager of the new unit. He still lives of people who were capable of handling the certain parts to system providers such as for in Sweden and commutes weekly to work in work. But I don’t think anyone who then or instance Bosch. Now, this development has the UK. since has made the move has any regrets, as reached the after-market side of the automo- “The partnership worked smoothly from their chances to further their careers in techni- tive industry as well,” he says. the outset. We’ve had no disagreements and cal information are better within Semcon than With five current Land Rover models and cultural differences have had no impact at all,” if they had stayed with JLR,” he explains. four current Jaguar models, the work Semcon he says. is undertaking on behalf of JLR is substantial. However, his close JLR working partner TorsTEn sundin viEws the outsourcing of Apart from owner handbooks including ma- Chris Roberts remembers another initial after-market services such as technical and nuals and information regarding accessories, futu r e by semcon 2.2010 19
  20. 20. foCus: OUTSOURCING Torsten Sundin age: 54 Kevin Phelps Title: manager, semcon age: 50 informatic production Ltd Title: director of service operations office: Kineton, Warwick, uK office: Jaguar Land rover in gaydon, uK “For the partnership to work, ges can lead to alterations in all manuals and handbooks, which are produced in some 20 different languages. everyone at JLR needed to “But as a specialist company we are able to respond and adjust quicker than a large cor- know who Semcon were.” poration to such variations in workload,” says Torsten Sundin. boTh chris robErTs and Torsten Sundin agree Chris Roberts, Technical Communications & Diagnostics that trust is the key to a successful outsour- cing partnership. But as Chris Roberts stres- Semcon produces technical information for Monthly reports from Semcon provide JLR ses, trust needs to be established throughout dealers and technicians including operational with useful quality metrics, which can identify the organisation, not just at the top manage- descriptions, repair methods, schematics, di- potential problems or highlight a need to im- rial level. agnostic information and fault finding proces- prove or update information. “For the partnership to work, everyone ses, as well as technical training information. “Whereas JLR is responsible for the techno- within JLR needed to know who Semcon were Semcon also handles queries regarding re- logy, it is our task to make it easy to under- and to learn to trust them. For instance, our pairs. Here, several targets have been set. For stand,” says Torsten Sundin. engineering staff mustn’t be suspicious and instance, queries should be answered within Semcon’s workload varies considerably reluctant to answer questions posed by staff 24 hours, and the number of queries relating and can become particularly intense during from Semcon,” he says. to any one specific repair method should not the latter stages of the development of a new However, with trust firmly in place, the exceed a certain amount each month. vehicle model, when late engineering chan- relationship is working smoothly. 20 futu r e by semcon 2.2010
  21. 21. If the manual disappears for some reason, you just order a new one. An owner of a new car may not necessarily look at the manual jLR has, for example, manuals for virtually every jaguar model over straight away. Therefore, jLR has also created a quick guide for the the last 20 years. impatient. “The main reason it has worked so well is Phelps mentions the development of new The current web delivery service, the GTR that JLR has used the partnership in the right symptoms driven diagnostics equipment, a (Global Technical Reference) is also being re- way. They realised that they needed to trust us. project managed by Semcon and involving placed by TOPIX, a service based around the And we have delivered and proved to them that several other partners. Chris Roberts points vehicle identification number (VIN), which they can trust us. The fact that we have never to other examples of innovative work using delivers more detailed and vehicle specific had to refer to what was set out in the contract animations to describe particularly difficult information. we signed three years ago is proof that our part- processes in workshop manuals. “The TOPIX software is delivered by an- nership is working,” says Torsten Sundin. “We now have a few working examples that other company, but Semcon is responsible for Chris Roberts agrees, calling it “a relation- we will start to use in manuals during the the data migration relating to some 60,000 ship to be admired” And his manager, Kevin . next month or so. Apart from being easier to documents, ensuring that the right informa- Phelps, Director of Service Operations, JLR, is understand it brings cost benefits as the infor- tion ends up in the right place. A huge and equally enthusiastic, preferring to refer to the mation doesn’t have to be translated,” he says. very important task that we trust and expect JLR/Semcon relationship as a strategic part- Semcon to handle,” Chris Roberts explains. nership rather than outsourcing. sEMcon is also helping JLR to gradually move Johan Ekener, President Semcon Informa- “Semcon has become part of the family, and away from posted delivery of manuals to a web tic, based in Gothenburg, Sweden, views the there is a very high level of trust between us. based solution. Although a web delivery servi- outsourcing partnership with JLR as a model I feel the relationship has now reached seam- ce is acceptable for the majority of the market, for work within other sectors apart from the lessness. The partnership with Semcon has there are still areas where Internet connection automotive industry. filled gaps in our expertise. But it has also speeds make it non-viable. “Since 2007 we have gained valuable ex- brought innovation to the informatics sec- To overcome this, a drip feeding solution periences which we can apply to outsourcing tion,” he says. of smaller packages of information has been contracts within any sector of our business,” As an example of such innovation, Kevin adopted. he says. 1 futu r e by semcon 2.2010 21
  22. 22. ThE SOLUTION HOW SEMCON SOLVED THE CUSTOMER’S PROBLEM FReeHaND pReCISION the assignment: Elos Fixturlaser AB develops, manufactures and markets laser-based measuring instruments for various industries and sectors. Semcon was commissioned to develop the concept, design, manage and carry out engineering design for a new ergonomic arm- carried computing device designed for service and maintenance in areas such as the wind power industry. The unit is part of a shaft alignment system, which uses laser-targeting axles to reduce friction and energy loss in the connections. the solution: UPAD XA is based on touchscreen technology and designed for use in harsh environments. The unit is both waterproof and shockproof. The software can handle both geometric measurements and advanced shaft alignment. Using colour-coded, clear symbols, the user is taken through the measurement and alignment process. Semcon led the product development from the initial concept work to the delivery of production data to the manufacturer. the result: Since its launch last autumn, the UPAD XA has been demonstrated and praised at several trade shows around the world. The media, competitors and customers have been interested in and impressed with the final product. text marcus olsson photo johan ekstam 22 futu r e by semcon 2.2010
  23. 23. disPlay 3d animations the 3.5-inch screen is a tft screen in a small package. the entire alignment process is shown on the the user interface contains all the necessary data in screen with 3d animation in flash, which is easy clear menus, and the information is only ever a few taps to understand and helps the user get started away on the touchscreen. the angled display, with Led quickly. symbols and arrows show the results and backlighting, provides an instant overview. alignment requirements. it’s easy to interpret the results quickly. Wireless communication thanks to bluetooth technology, no cables are needed between the transmitters, detectors and the display. this allows the user to move about, choosing to take measurements in one place and then adjust the alignment in another. usb transFer the files from the device can be transferred quickly and easily to a hard drive. With the help of a usb port, the device can be connected di- rectly to a computer or another external storage device. tPe coating Portability a moulded, rubber-like plastic material makes the user can attach the device to his/her arm, the device both waterproof and shockproof, leaving both hands free to work. the light- and it is especially suitable for use in changing weight and ergonomically-designed unit offers environments. the unit is also designed for use in great flexibility and simplifies the measurement harsh weather conditions. and alignment process. futu r e by semcon 2.2010 23
  24. 24. SMaLL BUT IMpORTaNT LIFeSaVeRS When their machine supplier went bankrupt, the maritime safety company C.M. Hammar was suddenly left with a half-finished production line for its flagship product, a hydrostatic release for life rafts. They con- tacted Semcon, and a year later the new production line is operational, more reliable and easily serviced than they could have hoped for from the start. text Florence oPPenheim photo nicke johansson, c.m. hammar 24 futu r e by semcon 2.2010
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  26. 26. “C.M. Hammar sees any deviation as a potential security risk and they have very strict A seemingly small detail that can requirements for their save your life. With Semcon’s help products.” c C.M. Hammar now has a more reli- able production line. Bertil Nelson, Automation Engineer, Semcon Göteborg M. haMMar ab develops begins to sink. The pressure activates a sharp 70 million per year. But within the industry and manufactures mari- knife. Without such a release the raft would the company is a major player, with approxi- time lifesaving prod- remain in position unless there was time to mately 80 per cent of the worldwide market ucts. The company was release it manually. for their main product, H20. founded in 1856 and If the ship is sinking, the release activates a “A few years ago we noticed that we had was originally a tin plate sharp knife to cut the rope, separating the raft reached our limit in terms of capacity and works. It produced from the vessel. As the ship continues to sink, felt the need to increase the reliability of our lanterns and eventu- the liferaft’s painter extends and the lifeboat supply by building two lines for our main ally compasses, among begins to inflate. products,” explains production manager Stig other things. Part of the design is a purposely-weak link Malkolmsson. Today, C.M. Hammar’s two main products that detaches the rope from the ship when the are releases for liferafts and triggers for life liferaft comes to the surface so that survivors wiTh only onE producTion line per product jackets. Their main product is the Hammar can board the raft. Everything happens auto- and a maximum delivery time to the cus- H20, a hydrostatic release that is integrated into matically. tomer of three days, the company was very the lifeboat mooring up on the ship’s deck. More than 95 per cent of the company’s vulnerable to disruption. The old machines The release is a mechanism to automatically production is exported, to over 70 countries were also quite improvised and maintenance release a life raft from the deck or its cradle at worldwide. It is a small company, with 35 em- staff were forced to disassemble many parts a predetermined water pressure, i.e. if the boat ployees and annual sales of approximately SEK in order to service them. 26 futu r e by semcon 2.2010
  27. 27. johnny Rydberg Stig Malkolmsson age: 41 age: 64 Bertil Nelson Title: production engineer Title: production manager age: 31 office: c.m. Hammar ab, västra office: c.m. Hammar ab, västra Title: automation engineer frölunda frölunda office: semcon, göteborg Stig Malkolmsson invited bids for two new machine and production line according to our “We had a plan and we knew we would need special purpose machines and ordered one needs. In addition, we have better documen- to rebuild just about everything,” says Johnny. to start with. Some of his requirements were tation about how the machine is built, which “We have collaborated with each other, taking improvements in service, maintenance and makes future maintenance easier,” says Stig. one aspect at a time and made changes and reliability. Fairly soon they experienced prob- Bertil Nelson is an automation engineer improvements over time. And we have built lems, because the company that supplied the with extensive experience in packaging ma- in a lot of smart features that probably would machine did not have sufficient programming chine maintenance and programming control not have existed with a ready-made machine.” skills. They quickly had to get the help of an systems. He has also worked with buying-in engineer with experience in automation and machinery. johnny rydbErg has worked on repairing ma- who had worked with the building and main- Together with production technician Johnny chines, custom manufacturing machine parts tenance of machinery. It was then that Semcon Rydberg he started from the beginning to and service for many years. He designs and and Bertil Nelson came into the picture. change and rebuild the half-finished machine draws himself and knows what is needed to “We began with our flagship product - the and production line. The collaboration has make servicing and maintenance easier. Hammar H20. When the company that had worked well, largely thanks to the fact that “We have avoided all the potential secu- supplied the machine went bankrupt before the their special skills overlap and complement rity risks that existed in the old machine, machine was ready, we turned to Bertil Nel- each other. or moved them backwards in the process. son. He has now been here full-time for a year Both agree that a ready-made machine We have better control over every element and has helped us rebuild and customize the would never have worked as well. now and discover any errors much earlier in futu r e by semcon 2.2010 27
  28. 28. Although C.M. Hammar is a relatively small company The new H20 line is bigger it has 80 per cent of the than the old one but has a world market with its smarter module design, main product, the H20. making it easier to maintain. the chain. We have done most of the work product must be discarded because it is an to be in charge of the new machine, but who ourselves, but we also employed other skills absolute must that all the details supplied does not have the same skills as Bertil Nelson. where necessary,” he explains. to the customer are correct. Now the error is Therefore, he will be available as a consultant The new H20 line is certainly better than spotted much earlier in the process instead,” for some time if any more questions should the old one but is made up of smarter modules, says Bertil. arise. making service and maintenance easier. The “C.M. Hammar sees any deviation as a po- goal has always been to make production safer, producTion has bEEn up and running for tential security risk and they have very strict both in terms of products and operations. about six months, and “We have tried to ensure that you can- together they have not continue the assembly in the process if continued to pursue im- C.M. Hammar - going way back in time something is incorrectly mounted,” says Bertil provements. They have the blacksmith carl mauritz Hammar came to göteborg on may 9, 1856. the Nelson. not had a deadline - the same day, he received written permission from the King to start Hammar, a sheet He shows an example, a plastic back cover. most important thing metal shop and company. the company specialized in ship lanterns and received To ensure that the casting of the plastic has has been the end result. an award at the World exhibition in Liverpool in 1886. worked, a small camera is installed that checks In the autumn of 2010 at the turn of the century Hammar started to make compasses, and by 1978 had sold over 7000. in the ‘30s, they began to focus on better solutions for mari- the contour of all backs before mounting. Bertil Nelson will move time safety. Hammar has manufactured both sonar and radar. Hammar launched “A defective back could be mounted without on to a new assignment. inflatable life rafts in 1956, which have saved hundreds of lives at sea over the anyone noticing until afterwards, when the C.M. Hammar has hired years. today, Hammar’s leading product is the hydrostatic release. whole product is finished. Then the whole a new member of staff 28 futu r e by semcon 2.2010
  29. 29. h20 - a DeSIGn that SaVeS LIVeS 1 2 1 ropE and sliphooK hammar’s h20 is secured to the deck and connected to the life- raft’s lashing with a sliphook. The liferaft’s painter is shackled to the “red weak link”. 2 waTEr prEssurE and KnifE if the ship sinks, the water pres- sure, within four meters, activates the sharp knife that cuts the rope, and the liferaft floats free. 3 4 3 painTEr sTrETchEs when the painter is stretched the lifeboat starts inflating. 4 linK brEaKs The weak red link breaks, the ship continues to sink, and survivors can board the inflated liferaft. “They didn’t have time to raise the ibly important in the production process. “Between 300 and 400 ships sink every year. This means that our products are used alarm but all of our life rafts were somewhere in the world every day,” says Hen- rik Pålsson, CEO of C.M. Hammar AB. “Our released and 30 hours after sinking, product is very reliable, and we have not had any real problems with the product in ‘emer- all 64 passengers were rescued.” gency situations’ over the years.” hE MEnTions ThE S/S Concordia, a school ship Henrik Pålsson, CEO, C.M. Hammar AB built in 1992, which encountered a microburst (similar to a tornado) off the coast of Brazil requirements for their products. The assign- whenever an accident should occur and they and sank unusually quickly in February 2010. ment has taken time but on the other hand, are needed to save lives. The temperature can “They didn’t have time to raise the alarm we have ensured that people in-house have be anything from +40°C to -40°C, coping with but all of our life rafts were released and 30 knowledge of the machines,” says Bertil. sun, salt and wind on deck for several years. hours after sinking, all 64 passengers were C.M. Hammar’s products are used for life- If the release unit doesn’t work in an emer- rescued. It feels good to be able to contribute saving at sea. The strains on such liferafts gency, there is a great risk that people will to such a positive outcome,” says Henrik Påls- are huge and they have to work perfectly die. Therefore, quality and safety are incred- son with pride. 1 futu r e by semcon 2.2010 29