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Supply Chain Dynamics

Velzen, April 16, 2015!!(c) Henk Akkermans, www.supplychaindynamics.org

http://www.supplychaindynamics.org

Your hostACADEMIC TRAINING: MSc. Mgt Information Systems (Tilburg University, 1987), MA Japanese (Leiden University, 1988), Ph.D in Industrial Engineering, (TU Eindhoven, 1995) BUSINESS EXPERIENCE:

Business Analyst at Philips Electronics (1987), Consultant at BSO (1991-1995, McKinsey (1995-1996, Origin (1996-1999) Owner, Minase BV (2000-2005), Research in Business BV (2006-NOW) and Asset Health Dynamics BV (2015) Scientific director Dutch Institute World Class Maintenance INDUSTRIES: Electronics, Telecom, Aerospace, Maritime AREAS: operations management, SCM, Product development, Maintenance

ACADEMIC EXPERIENCE: Researcher at Utrecht University (1988-1990), Assistant professor at TU Eindhoven, 1990-1995, 2000-2005) Professor of Suply Network Dynamics, Tilburg University (2005-NOW) KEY INTEREST: CO-ORDINATION IN DECENTRALIZED SUPPLY NETWORKS

Where are we coming from? September 1, 1987: Drs. Henk Akkermans becomes employee of Philips Electronics

Mission: Applied Ph.D Research within corporate staff group (Corporate ISA/BSA), where mulitple colleagues who all did their Ph.D.’s within Philips

His department has contributed to SCM theory building on intergral supply chain control*

He lives in a rental home from Philips Housing, in a street with Philips-owned houses

His house is filled with electronic equipment from the Philips store

This is a wide array, from refridgerator to CD player

This equipment is assembled from Philips-made components and assembled in a Philips-owned factory

He sports at the Philips Sport Vereniging (PSV) nearby

He is still too young to build up pension at the Philips Pension fund.

He of course has his insurances at IAK the Philips-owned insurance fund

From the 1980s-1990s until now: “The modern firm”*, or “From spaghetti to aspargus”

• Large, vertically integrated firms were split up in smaller business units, under labels such as “unit management”, “unbundling of the firm”

• All non-core functions, from cafetaria to IT, were outsourced • Component production and assembly were outsourced to suppliers and contract manufacturers • To a lesser extrent, even customer care and engineering were outsourced as well • Middle management labelled “the Leemlaag” or in Dutch, or “clay layer” in English, was cut out

of the organization • Performance evaluation became more formal, and more geared towards the shor term, and on

measurable (financial!) criteria • Combining of diverse business activities in one conglomerate, which was once rewarded by the

stock market, was now disapproved of • Management became even more a generic skill (“the MBA manager”, not necessarily founded in

an-depth knowledge of the nature of the business being managed

*: Roberts, J. (2004): The modern firm. Organizational design for performance and growth. Oxford University Press, The Economist book of the Year

Market demand

Technological developments

The idea: the integrated firm, that coordinates everything from a centralized

and optimized decision-making core

Centralized decision-making

Internal value chain

The ideal world in the 1950s and 60s: integral control

Market demand

Technological development HISTORICAL REALITY:

Integrated firms, but with local and non-

optimized decision-making

In reality, decision-making wasn’t all that central and clearly aimed at local interests, also because of IT impediments

Product life cycles

Technological development

Ashby’s Law of Requisite variety: an organisation needs to be as flexible as its environment

From: To:

From: To:

The rate of change in the environment has increased, and therefore the need to respond quickly

Market demand

Technological develpment

The managerial response to the need for greater flexibility has been to fragment these integrated chains into networks

of semi-independent organizations (from super tankers to work boats)

TODAY’S SUPPLY CHAIN REALITY: Multiple, (Semi-) independent organizational units, with local,

ad-hoc decision-making, who jointly serve final customers

Market demand

IDEAL SITUATION TODAY: Multiple, independent organizational units,

that effectively coordinate their actions through joint and joined-up decision-making

We need new structures and mechanisms that will assure coordination throughout the network

Technological development

Diffusion Assy/Test FLEX. OPU LOADER Engine

Conventional wisdom

MRPMRPMRPMRPMRPMRP

demanddemand

Diffusion Assy/Test FLEX OPU LOADER Engine

A better way demanddemand

Collaborative Planning

Example 1: Collaborative Planning (Chapter 10, Courtesy of Philips Electronics)

• In collaborative S&OP meetings: –Weekly –With representation on all supply network

partners

–On basis of current data: –Workloads –Quality –All phases in the network are – (a) monitored, (b) forecast and , (c) kept

consistent and (d) within control limits

–Based upon an underlying formal model that caluculated the relations between performance in the network and customer-facing performance

Strategic and financial planning

Forecasting

Hardware availability

Distribution PlanningInstallation

capacity

Connection capacity

Engineers planning

Call Center capacity

one consensus

plan

Example 2: Sales & Operations Planning (Chapter 9, Courtesy of KPN)

Example 3: Collaborative KPIs Courtesy of KPN and Atos Origin)

Time (months)

NOW N+6

€Strategic Supply Chain Buffer

Maximum Market consumption of tools in case

Market gets in a positive sentiment

Expected number of sales based on Purchase orders and today's outlook of

the market

The green line represents the plan which has to be executed in SAP

Example 4: Operations planning with scenarios

BusinessPerformance

History ofSuccessful

Collaboration

Trust

Quality ofDecision-Making

in SCM

+

+

++Intensity of

Communication

Habituation

+

+

+

InformationTransparency

+

Gaming

-

-

Openness ofCommunication

+

+

TRAVAIL

+

+

+

-+

Source: : Akkermans, H.A. Bogerd, P., van Doremalen, P. (2004): Travail, Transparency and Trust:

A case study of computer-supported collaborative supply chain planning in high-tech electronics. EJOR 153: 445-456

Weekly S&OP planning meetings

Sharing relevant performance data from

various parts of the network

Habituation leads to greater trust

“the sweet smell of success”

In all these examples, the hard work remains to turn around the vicious cycles of the soft factors into virtuous ones

We need a new perspective on management, one that starts from the notion of business dynamics (Sterman 2000)

Organizational Culture differences

business tsunami

business tsunami and ecological tsunami

Happen rarely, once-twice in a lifetime

Occur sudden, from distant, hard-to-monitor origins

Result from sudden release of long-building pressures

Have some advance predictability but within longer time horizon

Remain barely visible while travelling to hit zone

Short advance warning signals

Severity depends on morphology of impact zone (the “Manning number”*)

Dramatic immediate impact

Major long-term formative impact on landscape**: Manning, R. (1891) : On the flow of water in open channels and pipes. Transaction of the Institution of Civil Engineers

(Ireland). ** Mastronuzzi et al (2013): Tsunami from the open sea in the coastal zone and beyond. In: Mambretti S. (ed) Tsanami. From

Fundamentals to Damage Mitigation. WIT Press, Southampton

The severity of an ecological tsunami depends on the coastal geomorphology

Coastal Types Manning number (100*n)

Lagoon, fluvial plain 1-1.5Mediterranean vegetation 1.6-2.5

Farm area 2.6-3.5Discontinued dune belts without vegetation 3.6-4.0

Dune belts 4.1-4.6Rocky coasts 4.7-5.2

Urban area discontinuous 5.3-5.8Urban area with concentrated buildings 5.9-6.4

Mangroves 6.5-6.9Forests, pinewoods >7.5

Impa

ct se

verit

y

Xmax= (HT)1.33n-2kXmax= wave height, HT = height tsunami at coast line, n= Manning number, k=0.06 tsunami constant

Research topic: What could determine the “Manning number” for business tsunami?

Sensemaking

Decision- making

Implementation

Learning

The sluggish decision cycle

The demand bubble tsunami in action @ CISCOThis copy is for your personal, noncommercial use only. You can order presentation-ready copies for

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May 10, 2000

Cisco's $662 Million Profit Tops Forecasts

By LAWRENCE M. FISHER

SAN FRANCISCO, May 9— Cisco Systems Inc., the leading supplier of hardware for theInternet, said today that its third-quarter profit beat expectations while it posted a 55 percentgain in sales.

For the quarter, which ended April 29, Cisco reported earnings of $662 million, or 9 cents adiluted share. That compared with $636 million, or 9 cents a share, a year earlier. Per-sharefigures reflect a stock split that was effective March 22.

Sales rose 55 percent, to $4.92 billion from $3.17 billion. It was the company's ninth consecutivequarter of higher revenue growth.

The quarter included acquisition-related charges of $488 million, or about 6 cents a share,after taxes. Pro forma net income, which excludes the acquisition charges, payroll tax on theexercise of stock options and gains realized on certain investments, was $1.03 billion, or 14cents a share, up 58 percent from $649 million, or 9 cents a share, in the comparable period ayear earlier.

Analysts had expected Cisco to earn 13 cents a share, according to First Call/ThomsonFinancial, which tracks such estimates.

Before Cisco reported its results, the company's shares closed unchanged at $62.75. Cisco'sshares had dropped earlier in the week after an article in Barron's questioned the company'shigh valuation and acquisition strategy.

''It was another amazing quarter from Cisco,'' said Paul Johnson, an analyst with RobertsonStephens & Company. He said he did not think the company's valuation or ability to continueacquiring other companies was an issue, at least not this quarter. ''Most of the growth camefrom home-grown products,'' he said. ''The growth has continued despite the acquisitions.''

In a conference call with analysts, John Chambers, Cisco's president and chief executive, said:''Globally, business and government leaders are beginning to dramatically transform theirtraditional business models into Internet economy business models. Business leaders arebeginning to get it, and as they get it they begin to bring the applications up and spend at anaccelerated rate.''

This copy is for your personal, noncommercial use only. You can order presentation-ready copies fordistribution to your colleagues, clients or customers, please click here or use the "Reprints" tool that appearsnext to any article. Visit www.nytreprints.com for samples and additional information. Order a reprint of thisarticle now. »

September 28, 1995COMPANY NEWS

COMPANY NEWS;; CISCO SYSTEMS AGREES TO

BUY GRAND JUNCTION NETWORKS

Cisco Systems Inc. agreed yesterday to buy the privately held Grand Junction Networks Inc. ina stock swap valued about $348 million based on Tuesday's closing price of Cisco, which was$68. Grand Junction makes Fast Ethernet and Ethernet desktop switching products, whichallow information to be passed around on a network of personal computers. The acquisitionwould give Cisco, the largest maker of equipment for computer networks, a broader line of hubsand switches used to route information. Cisco said it would exchange five million of its sharesto acquire Grand Junction. Grand Junction employs 85 people at its headquarters in Fremont,Calif.

Copyright 2013 The New York Times Company Home Privacy Policy Search Corrections XML Help ContactUs Back to Top


March 10, 2001

Cisco Plans Steep Job Cuts And a Charge

By CHRIS GAITHER

SAN FRANCISCO, March 9— The slowdown in information technology spending hit thesturdiest of computer-networking companies today, as Cisco Systems Inc. said it intended toeliminate as many as 5,000 jobs, or 11 percent of its full-time work force.

Cisco, based in San Jose, Calif., said it would take a one-time charge of $300 million to $400million, eliminate unnecessary programs and cut employee travel budgets by 60 percent.

About half of the job reductions will come from layoffs, the other half through normal attrition,according to a person within the company who spoke on the condition of anonymity.

Networking companies, which have been financial bedrocks during the Internet boom, havehad their business fall out from underneath them during the troubled economic times in recentmonths. Cisco, the leader of the group, said the slowdown in capital spending by its customerscould extend beyond the next two quarters, dampening hopes for a comeback in the secondhalf of the year.

''We're taking these steps because of the continuing slowdown in the U.S. economy and initialsigns of a slowdown expanding to other parts of the world,'' John T. Chambers, Cisco's chiefexecutive, said in a statement.

Cisco does not plan to cut research and development spending, said Tom Galvin, a companyspokesman. To save money as its revenues slow, Cisco intends to cut its pool of temporary andcontract workers sharply. From 2,500 to 3,000 of the 4,000 temporary jobs will be eliminated,Mr. Galvin said.

Its regular work force of 44,000 could face cuts of 3,000 to 5,000, or as much as 11 percent.Cisco said it would eliminate the positions by the end of its fiscal year.

''Demand for the Internet has been explosive,'' Mr. Galvin said. ''But now with the economicclimate more uncertain, these are the kind of steps a prudent company takes.''

Cisco's shares tumbled nearly 10 percent after the midday announcement, dropping $2.19, to$20.63. The stock hit its 52-week high of $82 last March.

Cisco became a bellwether of high-technology stocks, as it rode gains of 30 percent to 50percent, much to the delight of investors. But in February, the company stunned Wall Street

May 12, 1999

Strong Growth Is Continued By Cisco Systems in

Quarter


April 13, 2001

Cisco to Offer 6-Month Severance

SAN JOSE, Calif., April 12— Cisco Systems said today that it would offer as much as six

months of severance pay and discontinue additional products as part of its plans to reduce its

full-time work force by as many as 5,000 people.

Cisco, the largest maker of computer networking equipment, said employees would receive two

months of pay and benefits and, in return for signing a severance agreement, four months

more, according to a memorandum to employees from Larry Carter, the company's chief

financial officer.

Mr. Carter did not give any details on the ''less profitable'' products that Cisco said it would

stop selling.

The company, based in San Jose, and rival telecommunications equipment makers like Nortel

Networks are reducing their work forces and financial targets as demand for their products

falls.

Clients, including phone and Internet companies and other large corporations, have shut down

or scaled back spending as sales of services have not kept up with increases in network

capacity.

''Our decisions will be based on doing the right thing for our business, and all employees will be

treated fairly and with compassion,'' Mr. Carter wrote in the memorandum, which was posted

on a Web site unaffiliated with Cisco and confirmed by a company spokesman, Steve Langdon.

Shares of Cisco rose 58 cents today, to $17.98. So far this year, they have fallen roughly by half.

Employees representing about 5 percent of the company's work force will find out by the end of

the month if they are being dismissed. Cisco will also let employees exercise vested stock options

that are currently worthless for a year after their termination, the memo said.


Source:


April 13, 2001

Cisco to Offer 6-Month Severance

SAN JOSE, Calif., April 12— Cisco Systems said today that it would offer as much as six

months of severance pay and discontinue additional products as part of its plans to reduce its

full-time work force by as many as 5,000 people.

Cisco, the largest maker of computer networking equipment, said employees would receive two

months of pay and benefits and, in return for signing a severance agreement, four months

more, according to a memorandum to employees from Larry Carter, the company's chief

financial officer.

Mr. Carter did not give any details on the ''less profitable'' products that Cisco said it would

stop selling.

The company, based in San Jose, and rival telecommunications equipment makers like Nortel

Networks are reducing their work forces and financial targets as demand for their products

falls.

Clients, including phone and Internet companies and other large corporations, have shut down

or scaled back spending as sales of services have not kept up with increases in network

capacity.

''Our decisions will be based on doing the right thing for our business, and all employees will be

treated fairly and with compassion,'' Mr. Carter wrote in the memorandum, which was posted

on a Web site unaffiliated with Cisco and confirmed by a company spokesman, Steve Langdon.

Shares of Cisco rose 58 cents today, to $17.98. So far this year, they have fallen roughly by half.

Employees representing about 5 percent of the company's work force will find out by the end of

the month if they are being dismissed. Cisco will also let employees exercise vested stock options

that are currently worthless for a year after their termination, the memo said.



May 8, 2002

Cisco Buoyed By Earnings, But It Sees No

Turnaround

By CHRIS GAITHER

SAN FRANCISCO, May 7— Cisco Systems reported profits for its fiscal third quarter todaythat were better than expected, as belt-tightening, drastically lower costs for parts and a slightrise in sales helped the company turn around from a steep loss a year before.

Cisco, the leading maker of Internet networking equipment, said it earned $729 million, or 10cents a share, for the quarter ended April 27. Cisco cut its expenses nearly in half from thequarter last year, when it took a enormous charge to eliminate 5,000 jobs and had a loss of$2.7 billion, or 37 cents a share.

Yet the company, which is based in San Jose, Calif., predicted no quick recovery from theslowdown in spending by its customers at telecommunications providers and largecorporations.

John T. Chambers, the president and chief executive of Cisco, said he saw encouraging signsfor a recovery, but he cautioned that the rapid growth that briefly made Cisco the world's mostvaluable company would not resume until its customers started reporting profits of their own.For the current quarter, he said sales would be about the same as or slightly better than the$4.82 billion reported today for the third quarter, which would improve upon the $4.3 billion insales last year.

''We're not calling a turnaround, but we are seeing some early indications that are of interest tous,'' Mr. Chambers said, citing signs of strength in manufacturing in the United States.

Cisco shares gained 19 cents, to $13.08, in regular trading before the earnings release.Encouraged by the report, investors hurried to buy Cisco shares in after-hours trading, sendingthem as high as $14.80.

Cisco's sales for its third quarter were up 2 percent over last year but $40 million less thanexpected by Wall Street analysts. Despite the shortfall, Cisco's profits excluding one-time itemsexceeded expectations by 2 cents a share.

After removing items related to acquisitions, taxes on stock options and other charges, Ciscoearned 11 cents a share, nearly quadrupling its pro forma earnings last year of 3 cents.


September 11, 2003

Technology Briefing | Internet: Cisco Reports

Increase In Order Backlog

Cisco Systems, a leading maker of equipment that directs Internet traffic, said yesterday that itsorder backlog was up 14 percent from last year, increasing hopes that business is recovering.The company, which is based in San Jose, Calif., said in a regulatory filing that its orderbacklog on Sept. 8 was about $1.6 billion, up from about $1.4 billion on Sept. 9, 2002. Backlogincludes orders for products to be shipped within 90 days and is used by analysts to gaugesales. ''It tells you that business looks to be firming up, and more important is that businesslooks to be less volatile,'' said a CIBC World Markets analyst, Steve Kamman, who has a sectorperform rating on Cisco and an underperform rating on the networking sector. ''That gives yousome confidence that we've got a little more momentum behind any growth here rather thansome of the head-fakes we've seen in the last three years,'' added Mr. Kamman, who does notown Cisco stock. CIBC has done banking for Cisco. Investors tend to see Cisco as a benchmarkfor corporate and government spending because the bulk of the company's sales come fromthose customers.


The demand bubble tsunami in action @ ASML

0,00#

0,20#

0,40#

0,60#

0,80#

1,00#

1,20#

1,40#

1,60#

jan.-98#

apr.-98#

jul.-98#

okt.-98#

jan.-99#

apr.-99#

jul.-99#

okt.-99#

jan.-00#

apr.-00#

jul.-00#

okt.-00#

jan.-01#

apr.-01#

jul.-01#

okt.-01#

jan.-02#

apr.-02#

jul.-02#

okt.-02#

Book$to$Bill(ra+o(Semiconductor(manufacturers(

Book-to-Bill#ra8o#SC#

Source: Wall street Journal

The Quality Cascade Tsunami in action @ KPN

Timeline with key event

Champagne in MT september 2006 for record sales

Rising complaints in Q3-4, rising OM problems

Complaint tsunami on national TV in Q4-Q1 2007

TMT Stop on sales in Q1 2007

Slow recovery in Q3, 100 million lost

Strategic decision to move proactively into

VoIP

At start date not 100 but 10,000

orders/day

Champagne in MT for record sales, some

ops issuesFast-growing order

pipeline, customer-calls, complaints

Complaint-explosion on national TV & social

media TMT Stop op promotion & sales

Gradual recovery of sales, after 100 Mill

avoidable costs

The schedule pressure tsunami in action @Airbus A380

Dec ’00:A380

programme launched

June ’05: 1st delay

announced

Jan ’05 1st A380 shown to public

Search All NYTimes.com

INTERNATIONAL BUSINESS;; Airbus Unveils A380, aGiant Fit for 555By MARK LANDLERPublished: January 19, 2005

Europe heralded a new era in air travel here on Tuesday, christeningthe Airbus A380, a gargantuan double-deck plane dedicated to theprinciple that size matters.

As a blue curtain rose in an assembly hall here to reveal the A380, theplane loomed like some kind of preternatural earthbound bird -- witha 262-foot wingspan, a 239-foot-long fuselage, a cabin that cancomfortably seat 555 and a takeoff weight when fully loaded of 1.2million pounds.

It was welcomed by a retinue of European leaders, includingPresident Jacques Chirac of France, Prime Minister Tony Blair ofBritain and Chancellor Gerhard Schr? of Germany, for whom theA380 represents not just an ambitious industrial project but a proudsymbol of the economic integration of Europe.

''It is a technological feat and a great European success,'' Mr. Chirac declared to anaudience of 5,000 officials, airline executives, suppliers and journalists. ''When it takes tothe skies, it will carry the colors of our continent, and our technological ambitions, to evengreater heights.''

The A380's maiden flight is not scheduled until March. But the pomp and ceremony ofTuesday's unveiling underscored the critical importance of this plane to Airbus and itsfierce battle with Boeing. Airbus, part of the European consortium EADS, surpassedBoeing in 2004 in the number of planes delivered to airlines for the second consecutiveyear. With the A380, the company, which is owned by Europe's aerospace industry, willdominate the lucrative segment of very large planes that Boeing pioneered in the 1970'swith the 747.

For Airbus, a once-balky assemblage of French, German and Spanish aerospacemanufacturers that barely nipped at Boeing's heels, the completion of the A380 project isa remarkable coming of age. The attendance on Tuesday of four government leaders --Prime Minister Jos?uis Rodr?ez Zapatero of Spain was also there -- attested to the politicalsignificance of the project. The A380 could be a model for European collaboration incapital projects, though some economists warn that it may embolden politicians to meddlein ventures best left to private industry.

Mr. Schr? gently lampooned the competition, recalling the doubts of non-Europeans inAirbus's early days, with remarks like, ''Well, if the Europeans ever get their act together,''and then adding, ''Lord knows if they will ever do it.''

His comments carried a hint of defiance. He urged the European Commission to negotiateaggressively with the United States in its continuing trade dispute over subsidies to Airbus.And he extolled Europe's cooperative style as a cornerstone of the A380 project.

''There is the tradition of good old Europe that has made this possible,'' Mr. Schr? said,alluding to Defense Secretary Donald H. Rumsfeld's quip about ''old Europe'' before theIraq war.

Building the world's largest passenger plane, of course, is not the same thing as turning a

50 Years Later,Fighting theSame Civil RightsBattle

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June 14, 2006

Airbus Faces a New Delay In Delivery of Its BiggestJetBy MATTHEW L. WALD

Airbus said yesterday that it would produce only 9 of its giant new A380 jets next year, not the25 planned, because of numerous design changes.

The delay is the second, and John J. Leahy, the chief operating officer, said he could not ruleout the possibility of more. Airbus will have to pay penalties to customers, Mr. Leahy said, buthe does not expect to lose any orders.

The plane will be certified by regulators on schedule by the end of this year, Mr. Leahy said in atelephone interview from the company headquarters in Toulouse, France. He attributed thedelays to ''industrial issues,'' specifically, ''a bottleneck in wiring harnesses.''

Airbus described the delay as being six or seven months. The program has already been delayedsix months for the same reason.

Small changes, like moving small pieces of equipment, were cascading through the system andcreating the need for additional adjustments in wiring, Mr. Leahy said. But these changes willnot delay certification, he said, because ''all of the little changes required for certification go tothe top of the queue, pushing the in-flight video and the 132-channel DVD system to the back.''

Under the current production plan, rather than building 35 planes in 2008, it will produce 26to 30, he said. Airbus will not begin shrinking the backlog until 2009 or 2010.

Singapore Airlines, Emirates and Qantas are planning to fly the A380 next year. ''Althoughthey'll all still get airplanes next year, it will be less than half what they thought they'd begetting,'' Mr. Leahy said. ''You can imagine, they're not particularly happy about that.''

An aviation consultant, Darryl Jenkins, former director for the Aviation Institute at GeorgeWashington University in Washington, said that in most airplane purchase contracts, ''thepenalties are usually reasonably severe'' for failure to deliver on time. ''If I were a buyer and thiswere happening to me, I might use this as leverage to get something additional out of them,'' hesaid.

But he added that the buyers ''don't have any other place to go for this size of an aircraft.''

June ’06: 2nd delay

TOULOUSE, France — On Jan. 18, 2005, top executives of Airbus and its parentcompany, European Aeronautic Defense & Space, staged the aviation industry's equivalentof a Broadway musical for the A380's coming-out party here, complete with strobe lights,smoke machines and chorus girls. Before a rapt audience, Jacques Chirac, the Frenchpresident, extolled the colossal, twin-deck jet as an unparalleled symbol of Europeanmanufacturing prowess.

"When it takes to the skies," Chirac said, "it will carry the colors of our Continent, and ourtechnological ambitions, to even greater heights."

But as the dignitaries gathered at the Toulouse-Blagnac Airport to toast the world's largestcommercial airplane, a multibillion-euro industrial crisis was already unfolding inside theplane's windowless, 125,000- square-meter, or 1.35 million- square-foot, assembly hall.

Beginning in the summer of 2004 — about six months earlier — large sections of theplane's forward and rear fuselage had been arriving unfinished from Airbus's other mainA380 production site in Hamburg. By late autumn, a team of around 200 Germanmechanics was in Toulouse along with several hundred kilometers of electrical cables to beinstalled in the first planes. But after weeks of painstakingly threading thousands of veinsof copper and aluminum wire around the walls and floor panels of the airframes, the teamshad run into a maddening snag: the cables were too short.

"The wiring wasn't following the expected routing through the fuselage, so when we got tothe end they weren't long enough to meet up with the connectors on the next section," saidone German mechanic, who said he arrived in Toulouse in early 2005. He asked not to beidentified out of fear that he might lose his job. "The calculations were wrong," he said."Everything had to be ripped out and replaced from scratch."

Throughout the autumn of 2004, assembly line managers duly reported the problems atthe plane's regular progress review meetings. But no one, at that stage, seemed to believethey were significant enough to merit a red flag to top management.

"It doesn't matter if it's short by 40 millimeters or 40 meters," said Tom Williams, chief ofaircraft programs at Airbus. One such miscalculation, or even several, do not amount to aproblem, he argued, and were natural given the mammoth task of building a 555- seat flyingmachine. "But after a while it becomes a cumulative problem."

Airbus did not acknowledge that "cumulative problem" until almost six months after

June ’04: 1st schedule delays internally visible

June 14, 2006

Shares Plummet After Delay in Airbus Jet DeliveryBy NICOLA CLARK International Herald Tribune

PARIS, June 14 — Shares in the parent company of Airbus plummeted today, wiping nearly $7 billion offits market value, as a fresh delay in the delivery of the new double-decker A380 airplane raised questionsabout the company's management and strategy.

The stock of European Aeronautic Defense and Space slid as much as a third after the French-Germancompany warned late Tuesday that a six- to seven-month delay in the A380 delivery schedule wouldprobably reduce operating profits by $2.5 billion between 2007 and 2010. Several leading customers forthe aircraft, including Singapore Airlines, Emirates and Qantas Airlines, suggested that they would seekcompensation for the delay, adding further momentum to the sell-off.

"This is in our view very damaging both to the credibility of EADS management, and also to Airbus'sreputation for program management," Sash Tusa, an analyst at Goldman Sachs, wrote in a note toinvestors.

EADS stock closed down 26 percent at 18.73 euros, or $23.65, the lowest since the stock debuted in July2000 and on par with some of the biggest one-day plunges in corporate history. Enron shares, forexample, fell by 23 percent on Nov. 20, 2001, after the company restated earnings a second time.

Vivendi's shares fell 26 percent on July 2, 2002, after its debt was cut to junk.

Airbus is betting its future on the A380, the world's largest passenger jet, but the plane has been doggedwith problems, ranging from engine noise to weight and fuel consumption. The latest delays compoundconcerns about the company's direction that had already been raised after it was forced to admit that iterred in the design of another key plane, the mid-sized A350. The A350 was announced in 2004 as acompetitor to Boeing's new Dreamliner 787.

In the short term, the latest fumble casts a cloud over the future of Noël Forgeard, a Frenchman who isnow EADS's co-chief executive but who oversaw the launching of the superjumbo project when he washead of Airbus from 1998 to 2005.

Over the longer term, analysts said, Airbus's troubles were likely to give a competitive lift to Boeing,which last year fell behind Airbus in terms of total aircraft orders but has been regaining lost ground asAirbus stumbles.

"This sets up a scenario for further market share gains by Boeing with its 777 and 747," said HowardRubel, an aerospace analyst at Jeffries & Company in New York. "And when the 787 Dreamliner comes online, Boeing will have a relatively modern and attractive product line."

Singapore Airlines — unhappy that its A380 orders will be delayed — announced today that it would buy20 Boeing Dreamliners worth $4.52 billion, and take options on another 20 planes.

Jun ’06: EADS Shares fall 26%


October 4, 2006

Airbus Faces More Delays For A380 JetBy NICOLA CLARK

The first deliveries of the troubled A380 superjumbo jet by Airbus have been delayed yet again,this time by as much as another year, pushing the program off by a full two years.

The European Aeronautic Defense and Space Company, the parent company of Airbus, notonly confirmed the delays late Tuesday, but also warned that persistent assembly-line problemswould cut earnings over the next four years by 4.8 billion euros ($6.1 billion), more than doublethe amount forecast in June.

And for the first time since the latest problems surfaced three months ago, Emirates Airline, thelargest customer for the A380 plane, signaled publicly that it might cancel part of itsmultibillion-dollar order from Airbus. Emirates, which hopes to expand its long-haulinternational service through its base in the Middle East, was originally scheduled to receive itsfirst planes this year;; now the earliest it would receive its initial jetliners is 2008.

The EADS board said that it would investigate the conduct of individual managers at thecompany, a European alliance of the governments of France, Germany and Spain that controlsAirbus.

EADS said it would examine the actions of managers at Airbus and EADS during the periodpreceding the announcement in June of the A380 delays. It said it was reserving the right topursue legal action against managers.

''Shareholders have lost billions of dollars,'' the EADS co-chief executive, Thomas Enders, said.''This is very serious. We are not excluding anything.''

In separate statements, EADS and Airbus said that just one A380 would be delivered next year,to Singapore Airlines in October, down from nine that had been promised as recently as June.

While further delays are not being ruled out, 13 planes would be delivered in 2008 and 25 in2009, while 45 planes would be delivered in 2010, the companies said.

From 2011, the delivery schedule is expected to be back on track. Airbus has received a total of159 orders from 16 airlines for the $300 million plane.

Christian Streiff, who took over as Airbus chief executive in July, insisted that the ''root cause''of the delays remained in the complexity of installing hundreds of miles of electrical wiring,

Oct ’06: 3rd delay


November 8, 2006

FedEx Rescinds Order for Airbus A380s

By CARTER DOUGHTERY and LESLIE WAYNE;; Carter Doughtery reported from Frankfurt and Leslie Wayne from New York. Nicola Clarkcontributed reporting from Paris.

FedEx canceled an order for 10 Airbus A380s on Tuesday, becoming the first customer toabandon the European superjumbo jet in the wake of production delays that have shaken thecompany.

The order will instead go to its American rival Boeing, which will supply FedEx with 15 Boeing777 freighters, a plane also designed for long-haul cargo flights.

Frederick W. Smith, the chairman and chief executive of FedEx, faced with a rapidly growingcargo market, cited Airbus's recent decision to delay delivery of the superjumbo jet for at leasttwo years as the reason for shifting its order to Boeing.

''This is a watershed event,'' said Howard Rubel, an aerospace analyst with Jeffries & Company.FedEx was ''meticulous, thoughtful and analytical when they made their decision to buy theA380. They are an ideal lead customer, and for them to turn around in relatively short timeand pull out is a stunning reversal.''

Mr. Rubel noted that this was the first time in a decade that FedEx would buy new Boeingplanes. One reason, he suggested, was Boeing's ability to deliver the 777 as early as 2009, aswell as the flexibility of the twin-engine long-haul plane for many different routes.

FedEx also dropped its options for the purchase of 10 A380s at an unspecified date in thefuture.

The cancellation goes beyond a dollar loss. Because FedEx has a reputation for carefuldecision-making, the switch bolsters the reputation of the 777 at a time when the market forlong-haul international cargo planes is growing faster than the international passenger market.

''It's like the 777 just got the Good Housekeeping seal of approval,'' Mr. Rubel added.

Until FedEx abandoned the A380, Airbus had 159 firm orders for the plane. Far more ordersare needed for Airbus to break even, much less earn profits. In the past, Airbus has said itexpected to sell about 750 planes -- the A380 will be the largest commercial jet ever built,seating at least 555 passengers -- during the life of the program.

The value of the FedEx contract for Airbus was confidential, but the passenger version of the

Nov ’06: FedEx cancels 10 freighters

March 10, 2007

First Loss Ever at Airbus, and Profit Drops at EADS

By NICOLA CLARK

PARIS, March 9 — Profit at European Aeronautic Defense and Space Company, or EADS, plunged 94percent last year after its main unit, the aircraft maker Airbus, reported its worst year ever, theconsequence of major production troubles that have plagued its flagship superjumbo jet, the A380.

The results, which were released Friday — along with predictions of another substantial loss for Airbusthis year — were seized upon by the co-chiefs of EADS to underscore the “urgent need” for an overhaul atthe plane maker.

An overhaul plan announced in February, which includes eliminating 10,000 jobs, has already promptedmajor protests by labor unions in France and Germany, home to about 40,000 of the company’s Europeanwork force of 55,000.

EADS reported that its net income dwindled to 99 million euros ($130 million) in 2006, down from 1.68billion euros a year earlier. That was largely because of 2.5 billion euros ($3.3 billion) in charges relatedto a two-year delay in A380 deliveries, as well as a weak dollar versus the euro.

Airbus recorded its first operating loss ever, of 572 million euros ($749 million). In 2005, the companyreported a profit of 2.3 billion euros.

Louis Gallois, the EADS co-chief and Airbus chief executive, described 2006 as “the worst year for Airbusin its life” and warned that the financial pain was likely to continue with another “substantial” lossexpected this year.

The dismal performance at Airbus largely offset significant growth in the group’s military and spacebusinesses. EADS, Europe’s largest military contractor, reported a 15 percent increase in revenue, to 39.4billion euros ($52 billion), which included a 30 percent rise in military revenue.

Mr. Gallois and Thomas O. Enders, the other co-chief executive of EADS, said the disappointing results atAirbus illustrated the “urgent need” for an overhaul. Their cost-cutting plan calls for the elimination of10,000 jobs across Europe over the next four years and the sale of up to six of its factories.

The plan “will make Airbus substantially more integrated and efficient,” the two men said in a statement.

For the fourth quarter of 2006, EADS recorded a net loss of 768 million euros ($1 billion), versus a profitof 405 million euros for the period in 2005, on revenue of 12 billion euros.

Airbus had a quarterly operating loss of 1.7 billion euros ($2.23 billion), compared with operating profitof 453 million euros a year earlier.

The 2.5 billion euros in A380-related charges — including cost overruns and compensation payments tocustomers — that EADS booked in 2006 represented slightly more than half of the 4.8 billion euros ($6.3

Mar ’07: EADS reports loss, $3.3 billion for A380

March 1, 2007

Plans by Airbus to Eliminate Jobs and Shed Plants Set Off

Labor Protests

By NICOLA CLARK

PARIS, Feb. 28 — Nearly 14,000 blue- and white-collar employees at four Airbus production sites inFrance stopped work as long as two hours on Wednesday afternoon to protest the company’s decision toeliminate 10,000 jobs and sell as many as six factories over the next three to four years, union officialssaid.

The cuts, confirmed earlier in the day by Airbus, are part of a turnaround plan aimed at saving billions ofeuros as the company, a unit of the European Aeronautic Defense and Space Company, or EADS, facescostly delays in its A380 superjumbo jet, as well as a strong challenge from Boeing and shrinking profitresulting in part from a weak dollar.

But the plan has raised the risk of additional labor action by the company’s unions across Europe.

“The response has been massive,” said Julien Talavan of the Force Ouvrière, the main Airbus union inFrance. “This is just the beginning.”

He added that French and German workers were discussing the possibility of coordinated protests inmid-March.

The head of the Airbus Germany works council, Rüdiger Lütjen, said, “We will not simply accept theconcept of the EADS board,” referring to the corporate revamping plan approved on Monday. “We willfight for every job.”

The Airbus chief executive, Louis Gallois, said the company expected to eliminate around 4,300 jobs inFrance, 3,700 in Germany, 1,600 in Britain and 400 in Spain. About half of the cuts will come from in-house subcontractors and temporary workers, limiting the losses among regular employees to 5,000, or 9percent of the total European work force of 55,000. Mr. Gallois said the company expected the cuts tocost around $900 million.

He emphasized that Airbus would seek to achieve the cuts through attrition, early retirements andnegotiated severance agreements. But Mr. Gallois did not rule out the possibility of layoffs.

The painful measures at Airbus follow a devastating two-year delay in deliveries of the A380, the result ofmanufacturing problems linked to the installation of the plane’s electrical wiring. Last month, thecompany said the delays, combined with the weakness of the dollar against the euro, would push Airbusinto a significant financial loss for 2006. Commercial planes are priced in dollars internationally, butmost of Airbus’s costs are in euros.

On Wednesday, Mr. Gallois again emphasized the impact of exchange rates and argued that policies of theEuropean Central Bank favoring a strong euro had worsened Airbus’s financial troubles.

Mar ’07: EADS fires 10,,000 staff

July 3, 2006

Top Officials of Airbus and EADS Step DownBy CARTER DOUGHERTY

FRANKFURT, July 2 — The head of Airbus and the co-chief of its parent company resigned on Sundayafter the disclosure of production delays for the Airbus A380 jumbo plane and an investigation intoinsider trading, which together have sent its shares tumbling.

Noël Forgeard, co-chief executive of the parent company, the European Aeronautic Defense and SpaceCompany, and Gustav Humbert, the chief executive of Airbus, stepped down under pressure from theirlargest shareholders, the French government and the Lagardère Group of France on one side, andDaimlerChrysler of Germany on the other.

Airbus said last month that the A380, which is to be the largest commercial jet in the sky, would bedelivered to customers six months late, reducing projected earnings by 2 billion euros ($2.6 billion) overthe next four years. Shares of EADS have declined more than 10 percent since then.

"As president and C.E.O. of Airbus, I must take responsibility for this setback and feel the right course ofaction is to offer my resignation to our shareholders," Mr. Humbert said in a statement.

Mr. Forgeard, 59, was criticized after French regulators found that he had sold $2.5 million worth ofEADS stock shortly before a March 20 announcement that DaimlerChrysler and Lagardère would bereducing their stakes in the company, and three months before news of the A380 delays erased billions ofeuros from the company's market value. He has denied wrongdoing and said the stock sales werecoincidental.

Though he later softened his tone, Mr. Forgeard struck a defiant note as recently as Wednesday when hedefended his conduct to French legislators. The French government owns 15 percent of EADS.

The resignation put an end to Mr. Forgeard's stint as co-chief executive after only a year but did notimpose the thorough reorganization on the management structure that shareholders were calling for. Hewill be succeeded by Louis Gallois, the current head of SNCF, the railway company owned by the Frenchgovernment.

Mr. Gallois, 62, who is already an EADS board member, had served as chief executive of the airplaneengine manufacturer now known as Safran. He was also chief executive of Aérospatiale, one of thecomponent companies of today's EADS, from 1992 to 1996.

Mr. Humbert will be succeeded by Christian Streiff, 51, the deputy chief executive of the French buildingmaterials group Saint-Gobain. Mr. Streiff, a French citizen, will head to Airbus with a background incompanies that straddle borders. He has experience running operations in Germany, France, Italy and theUnited States.

Mr. Humbert, 56, a German who had been the first non-French chief at Airbus, was a less polarizing figurethan Mr. Forgeard. But he nevertheless paid the price for the A380 delays, which Mr. Forgeard had

Jul ’06: top officials step down

The Relationship spiral* tsunami in acion between Atos and KPN

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-8.000

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0

2.000

4.000

1998 1999 2000 2001 2002 2003

Valu

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Profit in € 1 mln

Profit

log in met e-‐‑mailadresen wachtwoord ok

WachtwoordvergetenRegistreren

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KPN verkoopt datacenters aan Atos Origin

30-07-2001 00:00 | Door Marten Dijkstra | Lees meer artikelen over: Datacenters | Er zijnnog geen reacties op dit artikel | Permalink

Na de recente verkoop van zijn belang in het Ierse Eircom en het Hongaarse Pannon,heeft KPN opnieuw een deel van zijn bedrijf de deur uitgedaan.

Het gaat om de elf datacenters van het bedrijf, die voor 163 miljoen euro overgaan in handenvan het Frans-Nederlandse automatiseringsbedrijf Atos Origin. De beide partijen zijn nog ingesprek over de overdracht van twee bedrijfsonderdelen: het Software Huis, dat internesoftware voor datacenters maakt, en de Werkplekdiensten, een afdeling die de 35 duizend pc'svan KPN-employees beheert.Met de verkoop van zijn datacenters en de eerdere verkopen, heeft KPN inmiddels zijnomvangrijke schuld van 23 miljard euro weten te terug te brengen met 2 miljard euro. Eerderdit jaar verklaarde het telecomconcern dat het dit jaar zijn schuld met een bedrag van 5 miljardeuro wil terugbrengen.Door de overname van de KPN-datacenters wordt Atos Origin een van de grootste datacenter-dienstverleners in Europa. In totaal bieden de centers werk aan 1.040 employees. Hethoofdkantoor komt in Groningen, onder de naam Global Telco Competence Center. Voor 2002moeten de datacenters Atos Origin 200 miljoen euro aan extra inkomsten opleveren.De overname van de datacenters betekent het startsein van een strategische alliantie tussenKPN en Atos Origin. Beide bedrijven onderzoeken met name de mogelijkheden voor eensamenwerking op het gebied van applicatie management services (AMS) en oplossingen voorwebhosting.

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Source: (in Dutch)

July ’01: Data centers sold to AO



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KPN verkoopt datacenters aan Atos Origin

30-07-2001 00:00 | Door Marten Dijkstra | Lees meer artikelen over: Datacenters | Er zijnnog geen reacties op dit artikel | Permalink

Na de recente verkoop van zijn belang in het Ierse Eircom en het Hongaarse Pannon,heeft KPN opnieuw een deel van zijn bedrijf de deur uitgedaan.

Het gaat om de elf datacenters van het bedrijf, die voor 163 miljoen euro overgaan in handenvan het Frans-Nederlandse automatiseringsbedrijf Atos Origin. De beide partijen zijn nog ingesprek over de overdracht van twee bedrijfsonderdelen: het Software Huis, dat internesoftware voor datacenters maakt, en de Werkplekdiensten, een afdeling die de 35 duizend pc'svan KPN-employees beheert.Met de verkoop van zijn datacenters en de eerdere verkopen, heeft KPN inmiddels zijnomvangrijke schuld van 23 miljard euro weten te terug te brengen met 2 miljard euro. Eerderdit jaar verklaarde het telecomconcern dat het dit jaar zijn schuld met een bedrag van 5 miljardeuro wil terugbrengen.Door de overname van de KPN-datacenters wordt Atos Origin een van de grootste datacenter-dienstverleners in Europa. In totaal bieden de centers werk aan 1.040 employees. Hethoofdkantoor komt in Groningen, onder de naam Global Telco Competence Center. Voor 2002moeten de datacenters Atos Origin 200 miljoen euro aan extra inkomsten opleveren.De overname van de datacenters betekent het startsein van een strategische alliantie tussenKPN en Atos Origin. Beide bedrijven onderzoeken met name de mogelijkheden voor eensamenwerking op het gebied van applicatie management services (AMS) en oplossingen voorwebhosting.


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Oct ’01 KPN Fires 4,800 staff



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KPN stuurt duizenden werknemers naar huis

25-10-2001 00:00 | Door Marten Dijkstra | Er zijn nog geen reacties op dit artikel |Permalink

KPN ontslaat 4800 werknemers, ruim 10 procent van zijn totale personeelsbestand. Het

ontslag hing al een tijdje in de lucht.

De forse inkrimping, een van de omvangrijkste in de Nederlandse bedrijfsgeschiedenis, isvolgens het telecomconcern nodig om ingrijpend op de kosten te kunnen besparen. KPN torstzoals bekend nog steeds een omvangrijke schuldenlast van om en nabij de 22 miljard euromet zich mee.De aankondiging over de aanstaande ontslagen komt niet als een donderslag bij helderehemel. Eind vorig jaar maakte KPN al bekend dat het 6800 banen zou schrappen. En in hetvoorjaar werd dit aantal nog eens opgeschroefd naar achtduizend. Hoewel ook tijdens dezemededelingen gedwongen ontslagen nooit werden uitgesloten, zal dit voor KPN hetbelangrijkste struikelblok vormen in de onderhandelingen met de vakbonden.Voorlopig wachten de vakbonden nog af hoe KPN de ingrijpende ontslagronde denkt teregisseren en of er voor het (gedwongen) afvloeiende personeel een sociaal plan komt. Inieder geval is wel duidelijk dat de opvolger van de 'sociale' Paul Smits, Ad Scheepbouwer, zijneerste daad als saneerder heeft gesteld.Oorspronkelijk zouden de eerder aangekondigde achtduizend banen over een periode vandrie jaar worden geschrapt, waarmee vanaf 2003 een jaarlijkse bezuiniging behaald zoukunnen worden van 700 miljoen euro. Maar het ziet er nu naar uit dat de nieuwe topmanScheepbouwer haast heeft en eerder fors wil ingrijpen.


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Mar ’02: Record loss for KPN



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KPN boekt recordverlies

22-03-2002 00:00 | Door Sytse van der Schaaf | Er zijn nog geen reacties op dit artikel |Permalink

Eenmalige afschrijvingen, reorganisatiekosten en andere verplichtingen hebben het

resultaat van KPN over 2001 dieprood gekleurd. Het telecombedrijf plukt nu de zure

vruchten van zijn Europese expansiedrift en stukgelopen allianties.

Ondanks een omzetstijging van 6,9 procent tot 12,4 miljard euro heeft KPN over 2001 eennettoverlies geleden van 7,5 miljard euro. Veruit de grootste kostenpost vormde deafwaardering van de Duitse mobiele-telefoniedochter E-Plus, waar KPN 12,4 miljard euro vooruittrok. Deze exercitie was nodig omdat dat bedrijf veel minder waard is dan de twintig miljardeuro die er in 1999 voor betaald is. Eind vorige week meldde het telecombedrijf dat dezeafschrijving hoger uit zou vallen omdat het het belang van Bellsouth in E-Plus (23 procent)heeft overgenomen.Tegelijk met de jaarcijfers maakte KPN bekend dat het Perot Systems uitgekocht heeft uitContrado. Mei 2000 zette KPN samen met deze Amerikaanse dienstverlener dit bedrijf op omKPN-software voor de communicatie met klanten commercieel uit te baten. Afgezien van KPNzelf was er weinig animo voor deze dienst. Perot Systems gaf dan ook begin 2001 aan tewillen stoppen met Contrado. KPN weigert aan te geven wat de transactie heeft gekost.Vooral de succesvolle aandelenemissie eind vorig jaar, waarmee KPN 4,8 miljard euro wist opte halen, heeft de schuldenlast verlicht. Ook de verkoop van bedrijfsonderdelen droeg aan ditdoel bij, zij het in veel kleinere mate. KPN drong zijn schuldenlast in 2001 terug van twintigmiljard tot 15,7 miljard euro. Dit jaar moet deze schuld uitkomen op 14,9 miljard euro.


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Jun ’01 KPN loses 90% stock value



KPN zakt tot laagste koers ooit

13-06-2001 00:00 | Door Sjaak Smakman | Er zijn nog geen reacties op dit artikel |Permalink

Het aandeel KPN daalde gisteren met tien procent tot een absoluut dieptepunt van 7,17

euro. Zelfs het nieuws dat KPN miljarden bespaart op het Umts-netwerk in Duitsland, of

de verkoop van de Ierse belangen in Eircom aan Valentia Telecommunications kon

gisteren de val van KPN niet stoppen.

De commissarissen Risseeuw en Eustace zullen niet actiever proberen het negatievesentiment van KPN te keren via de publiciteit. "We kunnen de geruchtenmachine nietbeinvloeden", verzuchtte het tweetal gisteren.KPN gaf daar gisteren verder voeding aan door twee commissarissen te betrekken bij dedirecte dagelijkse leiding van het bedrijf. Normaal gesproken houden commissarissen tochenige afstand. De 'toevoeging' van de commissarissen is gedaan om zo snel mogelijk tekunnen werken. "We willen alle kennis die aanwezig is benutten. Het is alle hens aan dek",aldus woordvoerder Oudshoorn.De druk op het bestuur is enorm, nu onlangs de bestuurders Joop Drechsel en Patrick Morleyook nog zijn opgestapt. KPN lijkt door de megaschuld van 56 miljard gulden in combinatie metde instortende beurskoers in een vicieuze cirkel terecht te zijn gekomen. Voor 2003 moet erminstens 26 miljard worden afbetaald om KPN zijn kredietwaardigheid terug te bezorgen. Dehele telecomsector gaat gebukt onder vergelijkbare problemen, maar boven KPN hebben zichuitzonderlijk zware wolken samengepakt.Dat komt niet in de laatste plaats door de voortdurende berichten over een claimemissie. Dedirectie doet daarover nog steeds geen nadere mededelingen. Ook niet nadat degezaghebbende Financial Times, die het nieuws vorige week bracht, gisteren de komendeuitgifte van nieuwe aandelen nog eens als een vaststaand feit presenteerde. "We moetenzorgvuldig blijven, we doen mededelingen zodra die daar klaar voor zijn", aldus Oudshoorn.KPN heeft de afgelopen twee weken meer dan de helft van zijn koers verloren, en meer dan 90procent ten opzichte van vorig jaar maart. KPN is een aandeel geworden voor gokkers. Diezijn er nog heel wat, want de handel in KPN aandelen is momenteel ruim vijf keer zo hoog alsnormaal.

Oct ’03 Relationship crisis

Aug ’02: Another 800 staff to



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KPN's Software Huis naar Atos Origin

19-08-2002 00:00 | Door Teus Molenaar | Er zijn nog geen reacties op dit artikel |Permalink

Onderhandeling tussen KPN en Atos Origin hebben geleid tot de verkoop van hetSoftware Huis van de telecomaanbieder aan de ict-dienstverlener voor 29 miljoen euro.

Reeds bij de onderhandelingen over de verkoop van KPN Datacenter, dat Atos Origin voor163 miljoen overnam, kwamen het Software Huis en Werkplekdiensten aan de orde. AtosOrigin zou ook voor deze onderdelen belangstelling hebben. KPN wilde ze aan Atos Originslijten, omdat beide bedrijfsculturen goed op elkaar zouden aansluiten. De verkoop van Werkplekdiensten (700 mensen) is in mei rond gekomen. Nu is de handelrond Software Huis afgerond. De 600 medewerkers gaan onderdeel uitmaken van Atos OriginsConsultancy & System Integration in Nederland. Het Software Huis ontwikkelt applicaties enbeheert deze voor KPN. KPN en Atos Origin gaan gezamenlijk een 'Total Cost of Ownership'-programma uitvoeren.Atos Origin heeft zich hierbij verplicht de kosten van de integrale it-dienstverlening aan KPNtot een structureel lager niveau terug te brengen.


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Jan -02: 2nd outsourcing deal



Praktijkcase aanmelden

Werkplekbeheer KPN naar Atos OriginTelecombedrijf blijft nog wel betrokken bij ContradoTechnologies

25-01-2002 00:00 | Door Rik Sanders | Er zijn nog geen reacties op dit artikel | Permalink

Atos Origin is vrijwel rond met de overname van KPN Werkplekdiensten. Zo'n honderdmedewerkers gaan echter niet over naar de automatiseerder. De onderhandelingen overde acquisitie van KPN Softwarehuis lopen nog. Het is niet ondenkbaar dat hetFrans/Nederlandse concern op termijn ook het KPN-belang in Contrado Technologies,de joint venture met Perot Systems, overneemt.

Atos Origin sloeg vorig jaar zomer een grote slag met de aankoop van KPN Datacenter voor163 miljoen euro. KPN opende met de automatiseerder tevens gesprekken over de overnamesvan Softwarehuis, dat software ontwikkelt voor het Datacenter, en Werkplekdiensten. Metbetrekking tot het laatste onderdeel is de kogel door de kerk, al moeten de onderhandelingenover de arbeidsvoorwaarden met de vakbonden nog worden gevoerd. Vakbondskringenmelden dat de besprekingen tussen Atos Origin en KPN langer hebben geduurd dan geplandals gevolg van de zware sanering die KPN momenteel doorvoert. Werkplekdiensten beheertcirca 35.000 desktops voor het telecombedrijf, maar dat aantal zal na afronding van dereorganisatie een stuk lager liggen. Een logische aanname is dat Atos tijdens deonderhandelingen dan ook een lagere verkoopprijs heeft willen bedingen. Bovendien speeltmee dat bij Werkplekdiensten eveneens een krimp plaatsvindt: zo'n honderd van de kleineduizend medewerkers maken gebruik van de vrijwillige vertrekregeling bij KPN, wordengedwongen ontslagen of zullen als ingehuurde kracht niet meer terugkeren.Zowel Atos Origin als KPN wil geen commentaar geven. "Wij melden ons wel als deintentieverklaring definitief is ondertekend", stellen de woordvoerders van beide partijen. Voorde gesprekken met de vakbonden over arbeidsvoorwaarden zijn inmiddels datums geprikt.

Contrado TechnologiesKPN is nog steeds aandeelhouder van Contrado Technologies uit Groningen met een belangvan 50 procent. Het zette deze joint venture in mei 2000 op samen met de Amerikaansedienstverlener Perot Systems om de eigen front-office systemen te verbeteren. Ongeveerhonderdvijftig KPN'ers die met relatiebeheerdiensten te maken hadden, stapten over naarContrado. Het telecombedrijf koos de in Nederland relatief onbekende Perot Systems als

Mid ’03 KPN client satisfaction drops to

4.9

’02-’03 Irritation in KPN over AO’s reactive role

’02-’03 Massive drop in IT budgets

*: Autry, C.W., Golicic, S.L. (2010). Evaluating buyer–supplier relationship–performance spirals: A longitudinal study. Journal of Operations Management 28, pp. 87-100.

Underlying mechanisms and signs of learning

Demand bubble tsunami: Underlying mechanisms

REAL underlying

customer demandspeculative customer demand

MRP-logic driven supply line adjustment

demand

Source: Gonçalves , P (2003) Demand Bubbles and Phantom Orders in Supply Chains by.. Ph.D. Thesis, Sloan School of Management

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Adjust capacity

B2

Adjust bubble

B3

Adjustsupply line

R1

Order ahead

+

Lessons learned in the Semiconductor industry

16

Semiconductor Wafer - Fab Capacity (8”) and Utilization (SICAS Q3 2009, Total ICs)

-

500

1,000

1,500

2,000

2,500

1H 94

2H 941H

952H

951H

962H

961Q

973Q

971Q

983Q

981Q

993Q

991Q

003Q

001Q

013Q

011Q

023Q

021Q

033Q

031Q

043Q

041Q

053Q

051Q

063Q

061Q

073Q

071Q

083Q

081Q

093Q

090

20

40

60

80

100

CapacityStartsUtilization

4 Quarters needed to respond

Quick response! only 2 Quarters

/ Slide 5

Total net sales M€

3,5823,768

Numbers have been rounded for readers convenience.

2,954

1,596

4,508

5,651ASML’s agile response in 2008

Lessons learned @KPN

0"

200.000"

400.000"

600.000"

800.000"

1.000.000"

1.200.000"

Wk19"

Wk22"

Wk25"

Wk28"

Wk31"

Wk34"

Wk37"

Wk40"

Wk43"

Wk46"

Wk49"

Wk52"

Wk03"

Wk06"

Wk09"

Wk12"

Wk15"

Wk18"

Wk21"

Wk24"

Wk27"

Wk30"

Wk33"

Wk36"

Wk39"

Wk42"

Wk45"

Wk48"

Wk51"

Wk02"

Wk05"

Wk08"

Wk11"

Wk14"

Wk17"

Wk20"

Wk23"

Wk26"

Wk29"

Wk32"

Wk35"

Wk38"

Wk41"

Wk44"

Wk47"

Wk50"

Wk01"

Wk04"

Wk07"

Installed)base)2010).)2013)

Installed"base"

2010 2011 2012 2013

Installed base build-up ITV, 2010-2013

Schedule pressure tsunami: Underlying mechanisms*

Staff hiring

Staff available

Staff required

Gap in performance

+

Staff productivity

Taskcompetion rate

Completion raterequired

++

+

-

-

Total taskscompleted in stage+

-Total tasks in stage

Timing ofstage gate

+

-

Schedule problems

+

Staffing problems

+

+

+

Gate slippage

++

Slack in overallproject plan

Perceived slack inoverall plan

B1

Adjust staffing loop

R1

Overall projectslack loop

B2

Scheduleslippage loop

Delay

Delay

Delay

Source: Van Oorschot et al. (2013)

Relationship spiral tsunami: Underlying mechanisms*

The good news: these vicious cycles can be reversed into virtuous cycles through hard work together (travail)*

Informationtransparency

Communicationopenness

Opportunisticbehavior /

game-playing

Quality ofdecision-making in

supply chain

Performancetowards endcustomers

History ofsuccessful

collaboration

Trust betweenparties

Habituation

Communicationintensity

+

+

+

-

-

+

+

+

++

R2

R4

R1

R3

Trust breedssuccess loop

Habituationloop

Murky waters loopDecision quality

loop

Mitigation policies for business tsunami

Slides for Chapter 13 of Supply Network Dynamics

!(c) Henk Akkermans,

www.supplynetworkdynamics.org

Speeding up the sluggish cycle

mailto:[email protected]

Tsunami mitigation policies: Speeding up the sluggish decision

cycleSensemaking

Decision- making

Implementation

Learning

Tsunami mitigation policies: the physical tsunami analogy & the Sluggish cycleTable 4: Possible business tsunami mitigation policies

Sensemaking: • Install advance warning systems

(“condition-based maintenance”) • Look far & wide upstream /

downsteam and below (avoid the Maginot line syndrome”

• Develop simulation models for scenario analysis

Decision-making: • Develop end-to-end coordination processes (Sales

& Operations Planning) • Move culture from “command and

control” to “connect and collaborate” ! Develop relevant theoretical

frameworks on how to act (“Nothing more practical than a good theory”)

Learning: • Learn from near-miss incidents • Foster a high-reliability culture

mindset (c.f. Japanese tsunami mindset)

• Keep an open mind (“the mind of a ten-year old” like Tilly Smith)

Implementation: • Prevent pressures from building up by timely

response to them • Increase the resilience of the supply network

(increase its “Manning Number”) • Increase the agility to recover from major

incidents (“Triple-A Supply chain”)_

In sensemaking, we can learn from the variety of tsunami early warning systems in ecology (e.g., tsunami-alarm-system.com 2013). Another analogy is with the field of maintenance and asset management, where the use of sensors to monitor continuously the current condition of an asset is transforming this field. In general, the trick is to look far and wide. At KPN, there was just no monitoring of rework at managerial levels. At Airbus, there was a recurrent practice of disguising and not communicating delays and quality issues at every managerial layer. A key risk for managers is that they may be focusing on preventing the last “big thing”, while the next one is inherently different, a practice we have labeled the “Maginot line syndrome”.

In decision-making, it is key to have end-to-end coordination structures. In most cases, this will involve interorganizational decision-making, which often is very difficult to implement (c.f. Akkermans et al. 2004), but even effective intra-organisational coordination structures such as Sales & Operations Planning are often difficult to implement. A key role for OM researchers lies in developing good theories that companies can use to guide their actions. After all, there is nothing as practical as a good theory. This is where the current paper aspires to make a modest first start.

In implementation, it may be possible with business tsunami (not with ecological tsunami, unfortunately), to prevent pressures from building up in the first place. If KPN had paid timely attention to its rework backlog or if it had not ramped up so aggressively its new service in the first place, there would not have been a national outrage. If Airbus had not set such overly aggressive delivery schedules in an effort to outmaneuver Boeing, the A380 might not have been so very much delayed, since often one “needs to go slow to go fast” in new product ramp-ups (c.f. Mass and Berkson 1995, van Oorschot et al. 2010). If CISCO had dared to challenge some of the inflated orders from its demanding customers…. What is certainly possible is to make the network more resilient for when the tsunami wave arrives. In geography, this means increasing the Manning number, in OM we should develop something similar. Notions of supply network resilience (e.g. Christopher and Peck 2004, Sheffi 2005) and Triple-A supply chains (Lee 2003) certainly provide practical starting

Sensemaking

Decision- making

Implementation

Learning

Sensemaking

Decision- making

Implementation

Learning

Ready to ride the wave...?

ANNEX: Leverage points

!(c) Henk Akkermans,

www.supplynetworkdynamics.org

Where to intervene in a supply network

mailto:[email protected]

Leverage points are often counter-intuitive*

Real leverage points are often highly counter-intuitive

Forrester’s industrial dynamics (1961): faster inventory adjustment leads to greater fluctuations

Forrester’s World Dynamics (1971s): More growth leads to more poverty and pollution

Forrester’s Urban Dynamics (1969): Low-income housing leads to more poverty and crime in inner cities

Based on: Donella Meadows (1999): Leverage points. Places to intervene in a system. See also http://www.donellameadows.org/archives/leverage-points-places-to-intervene-in-a-system/

http://www.donellameadows.org/archives/leverage-points-places-to-intervene-in-a-system/

Places to intervene in a system (in order of increasing effectiveness)

12. Constants, parameters, numbers (such as subsidies, taxes, standards).11. The sizes of buffers and other stabilizing stocks, relative to their flows.10. The structure of material stocks and flows (such as transport networks, population age structures).9. The lengths of delays, relative to the rate of system change.8. The strength of negative feedback loops, relative to the impacts they are trying to correct against. 7. The gain around driving positive feedback loops.6. The structure of information flows (who does and does not have access to information).5. The rules of the system (such as incentives, punishments, constraints).4. The power to add, change, evolve, or self-organize system structure.3. The goals of the system2. The mindset or paradigm out of which the system — its goals, structure, rules, delays, parameters — arises.1. The power to transcend paradigms.

Incr

easin

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act

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