Abb Relays

Q1) At your next steering committee with Baker and Gundemark, how are you going to deal with Comsys issue that has been giving you so much concern?

Answer: Come September 1990 and a report was submitted to the BA management team by the nine-member task force carved out by Gundemark, which comprised high potential task managers. The report focused on seven core elements of relays business future development viz. total quality, customer focus, technology, human assets, organization, image and growth, all of which were in conformance with the broad vision of the organization. As a consequence, the rootage of "Strategy 2000" took place, and the worldwide relays management meeting got a first glimpse of it. "Strategy 2000" majorly focused on developing COMSYS (Common Systems) as an evolutionary process for creating modular, locally acceptable products by the use of common tools, methods and design. In 1990, Gundemark threw a challenge to the relays R&D council to come up with a common platform for future product development across units. For the implementation of COMSYS, a cross-country team was devised comprising technical experts from each of the four production centres. Further, nine sub-project teams were also formed. Implementation of COMSYS was not an easy task. There were the following problems.

a. Early 1992 saw the nine sub-project teams still shaping up the details of product design, operating standards and overall project implementation and the attainment of tangible results was a distant task.

b. To implement the COMSYS project, the funds received by the managers of profit centres were not sufficient.

c. The operating margins of local development centres were taking a serious beating due to the diversion of resources from local development priorities.

d. The difference in framework, standards and regulatory structure in the B2B segment in North America created problems in acceptance of a product due to non-conformity with the American standards despite being welcomed in India.

e. ABB, Sweden has an idea about the markets of developed countries and thus can apprise the R&D council operating from Sweden about the demand in these countries.

f. Gundemark asked Don to invest in people and take the long-term technical development forward but Joe Baker pushed Don towards operating profits of local Centre.

g. Any R&D expenditure has to be in line with the guidelines set by US GAAP, which erodes the operating margins of US Holding Company. Further, Allentown and Coral Springs witness the highest S&A expenses.

h. Standardization of relay products was a monumental task due to the fact that the bids were for individual relay products in North America, Europe and Australia.

i. Therefore, the standardization of relay products in developed markets would take a lot of effort. Complementing