Dear colleagues,
In line with ABB’s and Power Products Division Next Level strategy aimed at accelerated sustainable value creation, I now take the opportunity to share with you the key elements of the High Voltage Products 2020 strategy. Our BU Next Level strategy is designed to fit in with the division priorities of broadening our market leadership, continuing to deliver industry leading performance and be the partner of choice. I would also like to stress that our strategy is in continuity with the strategy period just gone by and is an evolutionary journey.
Innovating our business model
In 2009 we started our strategy journey adding market and customer focus to the traditional focus on technology that has always been and continues to be a leading differentiator in the High Voltage Products business. In this period we started the journey to innovate our business model with the objective of becoming a truly global organization that is closer to customers. This includes global supply chain management, feeder factories and production units well integrated with local service centers. The production units are strategically located in major markets and together with the territory marketing managers, flexible sourcing and Energize First program will continue to form the foundation of a customer focused organization. We also went a long way in the direction of growing our multichannel approach and improving our understanding of customer needs with the different initiatives we together as a team succeeded in and which are now part of our culture. The continuous improvement of our NPS score is a clear indicator that we are progressing in the right direction.
Leveraging new opportunities and attractive growth areas
In parallel to our traditional markets, there are new opportunities and attractive growth areas developing in the high voltage arena: concrete solutions are becoming available to develop more eco-efficient products, the need of very long distance transmission lines going up to 1000s of kilometers in major developing markets has pushed the voltage rating at and beyond 1,000kV both in AC and DC applications. Enhancing the efficiency of power networks is driving the need for digital grids which requires high voltage products capable of easily interacting with network management systems. Power Quality and DC applications both in the utility and in the industrial environments are growing trends together with the need of life-cycle service and the standardization of solutions toward more integrated products. The fast pace of changes taking place in utilities, the major segment of our business, is leading to very fluid developments in the market requiring extreme flexibility in our organization and consequent cost structure: on this base and on the new opportunities that are developing in our business we have clearly identified the areas to drive our strategy for the forthcoming years under ABB’s key strategic thrusts of profitable growth with penetration, innovation and expansion, relentless execution and business led collaboration.
Next Level operations and processes
To bring the high voltage business to the next level we have added to the business opportunities a clear focus on operational subjects.
An inter-functional approach towards operational processes is the common denominator of all the strategic initiatives we want to develop during the next strategic period. Global and local initiatives in Health and Safety to ensure sustainable top-class performance in this area is and will be top priority. Quality in our products and processes will be a major operational program where we aim to be recognized as the global quality leader in our business. A widely distributed Lean culture will be implemented in all our processes while aiming for an Integrated Business Plan (IBP) - where Sales, Engineering and Operational Planning (SEOP) is the first concrete step. Developing our suppliers for better quality, technology and operational excellence processes is the next step of our global Supply Chain Management; other initiatives will follow. Developing new products is a process requiring an integrated approach among technology, suppliers, manufacturing and quality. In this direction we have taken our first concrete step with the Product Implementation Management (PIM) Initiative. This is to ensure that new products in addition to being innovative and closer to the changing customer needs are cost effective and easy-to-manufacture.
Market Heat-Map for PIE initiatives
From a business perspective, on the basis of the market Heat-Map, our Product Groups have developed strategic initiatives to increase the Penetration in the served markets and Expand in growth areas while Innovating to ensure we remain leaders in technology and market share. We will also continue to innovate our business model to better leverage global competencies while being close to the customer. Last but not least we will enhance our collaboration with other business units to leverage the potential we have together as ABB.
People are the key success of any strategy: no strategy can work without the best people driving and implementing it with competence, motivation and enthusiasm. With the ‘HV people’ program we want to develop in our business an environment of opportunity that allows people to learn and grow.
I am excited to launch this new strategy period and look forward to successfully implement with all of you the visionary strategies our teams have been developing to meet the ambitious targets and scale the heights our high voltage business deserves.