ABB’s Daniel Helmig: “We are moving to virtual centres of expertise”

One year ago global technology company ABB launched the second stage of its Next Level Strategy. this is a huge company-wide transformation that will put more focus on its customer offering as it aims to become leaner, faster and more agile. to help achieve its goal it cut its regions from eight to three and streamlined its divisions from five to four. As part of the Next Level Strategy, ABB will accelerate the implementation of its previously announced 1,000-day programs to drive white-collar productivity and working capital management. the company aims to achieve a $1 billion run rate by the end of 2017 in gross cost savings. Improved working capital management is expected to free up at least $2 billion in cash by the end of 2017.

Daniel Helmig, head of ABB’s Supply Chain management, is currently busy implementing supply chain transformation throughout the company’s 450 plants and many project sites as the company consolidates back end processes and establishes ten global transportation management centres. “It took nine months to design and draw up blue prints for the Next Level strategy. I’ll be fully committed to this for the next two years.”

Interview conducted by Martijn Lofvers and Oskar Verkamman
Written by Helen Armstrong

For around 125 years, ABB has been empowering utility companies and facilitating electricity flow, from power plants to household plugs. Its high voltage cables transport power further than ever before and its substations stabilize and supply power to a wide range of urban and industrial applications. This US$ 35-billion giant in power and automation is also one of the largest producers of industrial robots such as YuMi, the You and Me robotic co-worker that enables people and robots to work side-by-side. Its innovative technologies drive ships as well as electrical cars and e-buses. The company also collaborated on Solar Impulse, the first aircraft to recently make a solar powered flight around the world. This engineering feat is typical of the innovation the company prides itself on: Integrating renewable energy into the electricity distribution systems. It is currently undergoing enormous internal change as it implements its Next Level Strategy. Daniel Helmig explains how the supply chain will strengthen the company’s global position.

What are your responsibilities?

“I am the Global Head of Supply Chain Management (SCM) in some companies referred to as the chief procurement officer. My job entails procurement as well as transportation and logistics. Sales and operations planning and material planning are run by a different function. The total supply chain spend is US$ 20 billion, plus another US$ 8 – 10 billion on the internal supply chain as many operations support our business. I’m responsible to the Executive Committee for the overall performance of SCM, and all systems and processes that come with it.

The SCM teams of the company’s three regions report to me directly and our four divisions – electrification products; discrete automation and motion; process automation; and power grids – report to me functionally. Under the divisions we have 20+ business units and on top of that we have 126 different product groups, 450 production plants and a similar number of projects such as sub-stations, laying power cables across continents and seas, or providing the infrastructure to manage the electricity grid of entire countries.”

What are the main projects on your agenda?

“I am fully committed to our ABB Next Level Strategy which will in the SCM area transform the supply chain and optimise productivity. It includes integration into our so-called 1,000-day projects which were kicked off by our Executive Committee in 2015 to bring us even closer to the customer.

Even though individual plants and business units had been operating very successfully, we saw an opportunity to drive three main transformational levers to bring SCM to the next level: consolidate transportation management into transport management centres (or control towers), establish Global Business Services for back end processes in procurement, and increase the degree of collaboration inside and between business units in the area of strategic sourcing via virtual Centres of Expertise.

Focusing on the transport & logistics; we are establishing ten Transportation Management Centres (TMC) worldwide that will be located on the Arabic peninsular, China, Singapore, India, Poland, Italy, Switzerland, Finland, Brazil and the USA. They will coordinate and carry out network optimisation for everything we do in terms of transport, logistics, trade and customs management. It is a massive project that impacts most employees in this field, and opens up new career opportunities for professionals. Getting these process and systems in place will certainly be one of my priorities for the next 18 months.”

What exactly will the transport management centres do and why have them in these particular countries?

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This article was first published in Supply Chain Movement 22 | Q3 – 2016