assa abloy - KTH
assa abloy - KTH
assa abloy - KTH
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Strategy to action<br />
From mechanics to innovative embedded systems with high<br />
customer value<br />
ICES 2011<br />
Anders Cöster<br />
New technology and Process Development<br />
ASSA ABLOY, Shared Technologies<br />
1947<br />
1<br />
2011
ASSA ABLOY<br />
2
ASSA ABLOY is the global leader<br />
in door opening solutions, dedicated<br />
to satisfying end-user needs for<br />
security, safety and convenience<br />
3
Our business is total door opening solutions<br />
seamlessly connected to the building
ASSA ABLOY divisions 2010<br />
Product<br />
Offering<br />
Mech & el mech<br />
locks, cylinders &<br />
security doors<br />
Electronic access<br />
& identity<br />
Automatic<br />
entrance solutions<br />
Americas<br />
26%<br />
EMEA<br />
34%<br />
Global Technologies<br />
(HID & Hospitality)<br />
Organization<br />
ASSA ABLOY Entrance Systems<br />
5<br />
% of Group Sales<br />
Asia Pacific<br />
15%<br />
75%<br />
14%<br />
11%
Our vision<br />
� To be the world-leader, most<br />
successful and innovative provider<br />
of door opening solutions<br />
� To lead in innovation and offer<br />
well-designed, convenient, safe<br />
and secure solutions that create<br />
added value to our customers<br />
� To be an attractive company<br />
to work for<br />
6
Financial targets<br />
Over a business cycle<br />
� Organic growth based on innovation is the main value driver<br />
� Acquisitions add complementary growth and value creation in a<br />
consolidating industry<br />
� EBIT Margin is the measure of efficiency and shows our ability to<br />
convert organic and acquired growth to value
Operating income*<br />
EIBT (Earnings Before Interest and Taxes) MSEK<br />
Quarter 12 months<br />
*Excluding restructuring costs quarter 2-4 2006, quarter 3-4 2008 and quarter 4 2009
Who we were…<br />
…and who we are today<br />
9
Historical locks<br />
Padlock, China<br />
Ming dynasty, 14 th century<br />
Roman key<br />
Approx 200 B.C.<br />
The oldest known lock was found in the Khorsabad<br />
palace ruins, Assyria (Irak)<br />
Estimated age: approx 4,000 years<br />
Door lock, Nepal<br />
Medieval
130 years of growth and innovation<br />
� 1881 August Stenman AB (hinges and screws)<br />
� 1939 Start of lock production<br />
� 1947 Worlds first 7-pin cylinder<br />
� 1990s electro-mechanical lock breakthrough<br />
� 1994 ASSA + Abloy merge = ASSA ABLOY<br />
� 2000 Yale + ASSA ABLOY = Worlds largest lock company<br />
� 2001 Cliq; platform for intelligent cylinders<br />
� 2008 Aperio; first lock with wireless technology<br />
� 2010 Worlds first mobile key service built on NFC
ASSA ABLOY today<br />
� Own operations in more than 60 countries<br />
� Authorized distribution covering the world<br />
� About 37,000 employees<br />
� Sales of about SEK 37 billion<br />
12
Strategy<br />
13
Our strategy is product driven with<br />
customer focus<br />
� Product driven<br />
– We believe that the product is the driving force for growth<br />
and we develop innovative high quality products, solutions and<br />
services which meets or exceeds customers’ expectations<br />
� Customer focus<br />
– We believe that customer focus and relevance is best built through<br />
a segmented market approach offering a superior<br />
understanding of the customer need
Strategic actions<br />
� Increase market<br />
presence through<br />
customer relevance<br />
� Product leadership<br />
through innovation<br />
� Radically reduce<br />
our break-even<br />
cost through<br />
cost efficiency
� Increase market<br />
presence through<br />
customer relevance<br />
� Increase market<br />
�presence Product leadership through<br />
through Innovation<br />
customer relevance<br />
� Radically reduce<br />
our break-even<br />
cost through<br />
cost efficiency
Sales split<br />
Group overview<br />
End users Recurring business Product mix<br />
Residential<br />
25%<br />
Commercial<br />
and institutional<br />
75%<br />
New<br />
construction<br />
33%<br />
After market<br />
67%<br />
Mechanical<br />
Locks &<br />
Security doors<br />
36%<br />
Electromechanical<br />
and<br />
electronic locks<br />
64%
Increased share of fast growing products<br />
– electromechanics<br />
Electronics/<br />
electromech<br />
20%<br />
2000<br />
14 sek bn<br />
Security<br />
doors<br />
14%<br />
Mechanical<br />
locks &<br />
accessories<br />
66%<br />
22%<br />
36%<br />
36%<br />
2010<br />
37 sek bn<br />
Security<br />
doors<br />
22%<br />
Electronics/<br />
electromech<br />
Mechanical<br />
locks &<br />
accessories<br />
42% 42%
Our brand strategy<br />
ASSA ABLOY as master brand<br />
United sales force and progressive<br />
implementation on products<br />
Product brands capitalizing<br />
on installed base<br />
Two focused brands in<br />
special segments<br />
Four Global brands where<br />
market position is unique
Customer focus through segmentation<br />
The segmented approach assures customer focus and relevance<br />
and provides us with a superior understanding of the customer<br />
needs.<br />
YALE<br />
Residential<br />
Locksmiths<br />
DIY<br />
ASSA ABLOY<br />
HID<br />
MUL-T-LOCK<br />
Distributors &<br />
Wholesalers<br />
Integrators<br />
PEU<br />
High<br />
Security<br />
ABLOY<br />
Hospitality<br />
ASSA ABLOY<br />
HOSPITALITY<br />
Automatic<br />
Doors<br />
ENTRANCE<br />
SYSTEMS<br />
OEM<br />
ASSA ABLOY
� Increase market<br />
presence through<br />
customer relevance<br />
� �Product Product leadership<br />
through Innovation<br />
through innovation<br />
� Radically reduce<br />
our break-even<br />
cost through<br />
cost efficiency
Product leadership – boost benefits<br />
Major leaps on customer benefits with every new product<br />
Boost benefits<br />
Reliability<br />
Functionality<br />
Security<br />
Performance<br />
Integration of functions<br />
Design<br />
Security and safety standards<br />
Open towards other systems<br />
Ease of installation<br />
Ease of operation and maintenance<br />
Life cycle costs<br />
Design<br />
Convenience<br />
Safety
Product leadership through innovation<br />
� We are convinced that innovation is the most important driver for<br />
growth<br />
� We have more than doubled investments in R&D the last five years<br />
and have over 1 200 engineers<br />
� We assure long term competitive advantage by continuously<br />
improving our products in terms of benefits, costs and quality
Product leadership – cut costs<br />
Sustainability and VA/VE.
� Increase market<br />
presence through<br />
customer relevance<br />
� Radically reduce<br />
� Product leadership<br />
our through break-even<br />
Innovation<br />
cost through<br />
cost efficiency<br />
� Radically reduce<br />
our break-even<br />
cost through<br />
cost efficiency
Radically reduce our break-even cost<br />
through an efficient manufacturing footprint
Radically reduce our break-even cost<br />
through lean operations<br />
� Every main site in ASSA ABLOY has dedicated lean resources<br />
� Lean starts from the customer and gives:<br />
– Improved quality and customer<br />
benefits<br />
– Reduced lead time<br />
– Less cost and improved<br />
efficiency<br />
Information flow<br />
Material flow
Voice of the customer<br />
29
Voice of the customer process<br />
Initial analysis Insight/foresight<br />
based idea<br />
generation<br />
30<br />
Gateway development<br />
process<br />
Evaluation and<br />
control
Voice of the customer process<br />
Initial analysis:<br />
Scan environment<br />
� Stake holder map<br />
� Customer segmentation<br />
� PEST<br />
� Market intelligence<br />
� Channel analysis<br />
� Competitor analysis<br />
� Omnibus research<br />
Insight/foresight<br />
based idea<br />
generation<br />
31<br />
Gateway development<br />
process<br />
Evaluation and<br />
control
Voice of the customer process<br />
Initial analysis Insight/foresight: Gateway development<br />
Generate options &<br />
select opportunities<br />
process<br />
� Observational research<br />
� Customer visits<br />
� Focus groups<br />
� Surveys and questionnaires<br />
� Problem detection study<br />
� Value analysis<br />
� Creative idea generation<br />
32<br />
Evaluation and<br />
control
Voice of the customer process<br />
Initial analysis Insight/foresight<br />
based idea<br />
generation<br />
33<br />
Gateway development<br />
process: Select &<br />
refine options<br />
� Experiments and choice models<br />
� Field experiments/prototype tests<br />
� QFD<br />
� User clinics<br />
� FMEA<br />
� Validation of qualitative data<br />
� Package testing<br />
� Copy testing<br />
Evaluation and<br />
control
Voice of the customer process<br />
Initial analysis Insight/foresight<br />
based idea<br />
generation<br />
34<br />
Gateway development<br />
process<br />
Evaluation & control:<br />
Evaluate success<br />
� Brand awareness<br />
� Customer satisfaction<br />
� Tracking studies<br />
� Returned items
Voice of the customer – a continuous process<br />
35
Voice of technology<br />
36
Voice of Technology<br />
� To search for and explore new technologies and<br />
methodologies with potential applications within present<br />
or future ASSA ABLOY products and platforms as to<br />
create innovative and competitive solutions.<br />
� Voice of Technology and Voice of Customer are two<br />
connected iterative processes – one is dependent on the<br />
other
Development risks<br />
� Technical research<br />
projects creates<br />
innovation and long<br />
term value at the<br />
cost of higher risk<br />
� Research in process<br />
potentially brings<br />
risk down<br />
New<br />
technology<br />
Primary drive<br />
Customer<br />
need<br />
Innovation level High<br />
Low<br />
ROI Slow<br />
Fast<br />
Aperio<br />
ver 2.x<br />
38<br />
Aperio<br />
ver 1.0<br />
Added<br />
function<br />
project<br />
MBS<br />
New product<br />
project<br />
Keyless<br />
entry<br />
New physics<br />
Concept project<br />
or prestudy<br />
Process innovation<br />
reduces risk!<br />
Industrial<br />
research<br />
Scientific<br />
research<br />
Voice of the customer<br />
Voice of<br />
technology<br />
Low Risk<br />
High<br />
“Voice of<br />
Science”
Lean Product Development (LPD)<br />
39<br />
The company’s vision<br />
Product<br />
vision<br />
Product<br />
vision
Front load the process — and succeed<br />
Ability to influence outcome<br />
High<br />
Low<br />
5%<br />
This is how we<br />
should spend<br />
the time<br />
60%<br />
Pre-Study Requirement Definition Specification Product & Design Industrialization Launch Follow-up<br />
40<br />
This is how we<br />
normally spend<br />
our time<br />
35%<br />
Time
Aperio – A case study<br />
41
The recognition<br />
� Aperio receives Integrated Security Product of the Year<br />
award at IFSEC 2011<br />
42
The start (back in 2006)<br />
Or how we listened to the voice of…<br />
� …the customer<br />
– Dramatically reduced installation cost<br />
– Easy integration<br />
– Lower unit cost<br />
– Same (almost) functionality as standard products<br />
� …technology<br />
– New radio technology<br />
– No wires<br />
– New microprocessors with very low power consumption<br />
– Battery operated (40.000 opening during 2 years on same battery)<br />
– New actuators<br />
– Small size & low power<br />
� …business<br />
– The product should be adopted to the strategy and current business model<br />
43
The challenges<br />
� On the very limit to what we could do<br />
– Several innovations necessary<br />
� Develop a lock product dominated by software<br />
– Especially firmware underestimated (4 embedded microprocessors)<br />
� Weak in-house radio competence<br />
– Had to be built up<br />
� Waterfall development process didn’t work<br />
– Not possible to write a ―complete‖ spec up front<br />
� The change of goal<br />
– From a new product to a new generic platform<br />
� Very high expectations on sales volume<br />
– ―It’s an product with electronics!‖<br />
44
How did we actually succeed?<br />
� Customer & Market<br />
– Clear customer value<br />
– Thorough market survey before project start<br />
– Open communication protocol<br />
– Key factor for wide market acceptance<br />
– Aperio finds new market segment<br />
– Wireless technology was disruptive in the lock industry<br />
� Technology and process<br />
– New micro-power processors, radio technology and actuators<br />
– Long battery life a key performance factor<br />
– Shift from waterfall to agile (SCRUM) methodology<br />
– Dramatic increase in development productivity<br />
45
Challenges in<br />
front of us<br />
� The lock industry has been ―protected‖ for 100+ years<br />
– How to sell new technology in traditional markets?<br />
� The mechanical key will disappear<br />
– Physical vs logical access<br />
� Shorter product life cycles<br />
– From many years to months<br />
� Software and the cloud<br />
– ―Real‖ products vs services and hosting<br />
� New security threats<br />
– Mechanical manipulation vs ―hackers‖<br />
46
Finally<br />
47
Thank you for listening!<br />
� Partners (consultants<br />
and experience<br />
exchange)<br />
� Skilled engineers<br />
(embedded systems,<br />
mechatronics)<br />
� Researchers and<br />
diploma workers<br />
48<br />
ASSA ABLOY AB<br />
Shared Technologies<br />
Anders Cöster<br />
anders.coster@<strong>assa</strong><strong>abloy</strong>.com<br />
+46(0)70 3336028
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