Académique Documents
Professionnel Documents
Culture Documents
SATMATIC
Note:
this
case
was
prepared
by
Jeffrey
Salahub
with
contribution
from
Reijo
Koivula
for
the
sole
purpose
of
learning
and
class
discussion
at
the
Satakunta
University
of
Applied
Sciences
Innovative
Business
Services
(IBS)
degree
program.
This
case
writer
does
not
intend
to
illustrate
effective
or
ineffective
handling
of
decisions
of
the
company
in
this
case.
Certain
names
and
other
information
may
be
disguised
to
protect
confidentiality.
This
pre-release/
work-in-progress
version
of
the
case
is
meant
to
be
exclusively
used
for
the
IBS
degree
program
and
not
to
be
disseminated
or
used
without
permission
of
the
case
writer.
Copyright.
September
30,
2009.
Updated
May
2010.
Scenario On the floor Where Value Hits the Road Mike leaned over the table across a myriad of wires and components that he had put together over the past few days. Taking another look at the electrical diagrams on the specifications sheet served to him via the Oscar system, he traced the amount of wires and respective colour codes on the work-in-progress in front of him: looks like this power distribution board will be done in good time, but theres no bargaining with quality he thought to himself. Mike systematically went through what he had just done: Cable feeder is in place, fuse-switch disconnector done...yep, attached to the mounting plate...", his thoughts then wandered to one of the many coffee break meetings he's had with his colleagues: "That was an interesting way of speeding up the work Matti brought up, I may have to try it, although I've done these things for a few years already. He grinned to himself: well, this one will be out the door and on the way to the customer in no time, but if we can do it quicker this time with Mattis new ideamaybe well see another bonus soon" Meanwhile, as Mike was taking a look at print-out from the Oscar production management system with all of the info, Karl Salo was considering the extent Satmatic could provide engineering design services in an upcoming deal. We have provided hands-on installation and commissioning services for years, but not a lot of pure design services, but we have done it before and definitely have the expertise: how much would this potential customer trust us to provide several tens of thousands of euros of design work based on the reference customers in the past? he pondered
Page |2
SATMATIC
THE
COMPANY
Satmatic
is
a
privately-owned
company
located
in
the
Satakunta
region
of
Finland,
in
the
city
of
Ulvila.
It
is
a
company
of
approximately
100
employees
and
yearly
sales
revenue
(2008)
of
about
22
million
euros1
(see
Exhibit
1).
A
sales
office
and
production
facility
is
also
located
in
Kerava,
Finland.
Satmatic
is
a
separate
limited
company,
or
loosely
known
as
a
division
or
daughter
company
of
the
Estonian-based
parent
company
of
Harju
Elekter
(www.he.ee).
The
Harju
Elekter
group
employs
approximately
500
people.
All
financial
management
and
reporting
is
done
in
English
and
provided
to
the
Estonian
head
office.
The
core
business
of
Satmatic
(www.satmatic.fi)
is
the
manufacturing
of
equipment
for
power
distribution
networks
which
includes
automation
and
control
systems
for
the
energy
and
industrial
sectors.
The
company
is
specialised
in
electrification
and
automation
manufacturing.
They
develop,
manufacture,
and
market
automation
control
system
cabinets,
drive
cabinets,
and
switch
gears2
(see
Exhibit
2).
In
addition
to
the
manufacturing
of
equipment,
and
provision
of
engineering
planning
services,
Satmatic
has
also
successfully
moved
into
the
development
of
process
control
software.
To
keep
competitive,
the
company
depends
on
production
speed,
product
quality,
expertise
and
accuracy
of
delivery.
The
company
offers
a
wide
range
of
services
(see
Exhibit
3)
including
initial
planning
and
development,
to
installation
and
maintenance
services.
Although
Satmatic
produces
physical,
tangible
products
directly
for
its
own
customers,
it
also
opens
the
doors
to
its
own
production
facilities
to
other
companies
this
means
Satmatic
provides
manufacturing
on
behalf
of
its
customers
and
partners,
who
then
provide
the
products
to
their
own
(non-Satmatic)
customers.
There
are
general
categories
from
a
production
point
of
view:
products
produced
under
1)
contract
manufacturing
terms
and
2)
specific
one-off
project
terms.
This
kind
of
manufacturing
service
provided
by
Satmatic
is
enabled
not
only
by
the
expertise
of
the
factory
personnel,
but
by
the
smooth
electronic
flow
of
critical
information3.
What
started
out
as
a
locally-owned
company
in
1988
moved
into
the
hands
of
the
German
company
Siemens
in
the
late
90s.
Harju
Elekter
purchased
100%
of
the
shares
of
Satmatic
from
Siemens
in
September
of
2002.
Although
ownership
was
officially
transferred
to
Harju
Elekter,
Satmatic
continues
to
cooperate
with
Siemens
by
providing
particular
Siemens
solutions
via
a
licensing
agreement.
Another
example
of
cooperation
with
Siemens
was
in
2006
when
Satmatic
provided
the
electrical
control
panels/cabinets
for
Siemens
customer
known
as
the
Power
Grid
Company
of
Bangladesh
Ltd.
During
that
project,
representatives
from
that
customer
and
Siemens
visited
the
Satmatic
facilities
in
Ulvila,
Finland
to
for
factory
acceptance
testing4.
Through
Satmatic,
Harju
Elekter
purchased
Finoval
Oy
(manufacturer
and
distributor
of
electrical
equipment
and
switchboards)
in
2006
-
this
served
to
strengthen
Satmatics
position
in
the
marketplace.
Satmatics
expertise
and
product
range
developed
over
these
years.
For
example,
Satmatic
provided
industrial
automation
software
for
a
mineral
wool
plant
in
Poland
in
2008.
Satmatic
has
successfully
moved
from
mainly
a
manufacturer
of
equipment
to
a
developer
and
installer
of
process
control
software.
1 2
From 2008 Harju Elekter annual report, 354.9 million Estonian kroons in 2008 From webpage www.satmatic.fi 3 handled by Oscar information system, and internal production management system described later in case this is strategic IT (Information Technology). 4 (The Bangladeshi manager from Siemens had lived in Finland for over half a year and had his own unique cultural experience in Finland). From Siemens Partneri magazine 1/2006.
Page |3
With
parent
company
acquisitions
and
growth
in
the
marketplace
(increased
sales)
meant
that
Satmatic
needed
more
production
space.
The
2008
Harju
Elekter
tells
about
Satmatic
expansion
which
has
continued
until
the
time
of
this
case
writing
(a
large
expansion
to
the
Ulvila
production
facility
began
in
June
2009.
INTERNATIONALITY
ENTRY
STRATEGIES
Although
the
past
7
years
are
marked
by
steady
sales
growth,
Satmatic
like
all
private
companies,
is
looking
to
improve
profitability.
Being
too
dependent
on
the
domestic
market
is
risky
for
any
manufacturing
company
and
Satmatic
is
no
exception.
Due
to
the
demographics
of
Finland,
Satmatic
has
engaged
in
international
business
from
the
outset
as
1)
there
are
only
a
limited
number
of
large
industrial
installations
in
Finland
and
2)
the
international
nature
of
their
Finnish
customers
has
drawn
them
into
the
international
arena.
Satmatic
engages
in
a
follow-the-leader
internationalisation
strategy
or
otherwise
known
as
follow-the- customer
strategy.
Since
the
early
1990s
Satmatic
has
pursued
this
way
of
operations
when
going
across
borders.
Having
developed
expertise
in
the
Finnish
market
and
serving
strong
multinational
enterprises
such
as
Metso
and
Paroc,
the
company
is
considering
its
own
independent
international
strategy.
Understanding
the
expectation
for
growth,
and
fully
aware
of
the
international
nature
of
their
business,
Satmatic
hired
an
export
manager
in
February
2009.
This
is
part
of
the
overall
internationalisation
strategy
of
the
parent
company.
In
the
Meeting
Room
Setting
his
coffee
cup
down
on
the
table,
Satmatic
director
Samu
Piilonen
glanced
over
at
the
white
screen
as
the
projector
rendered
slide
ten
of
the
presentation
Aaro
Lahtinen
methodically
prepared
the
night
before.
Aaro
showed
the
sales
results
over
the
past
few
years
in
and
assortment
of
product
groups
of
various
projects
in
varying
countries.
Over
the
years
the
company
worked
with
their
partners,
usually
quite
large
partners,
and
never
undertook
any
kind
of
direct
exporting.
The
projects
definitely
had
to
leave
Finland,
and
the
installers
and
experts
had
to
physically
travel
from
Finland
to
the
customers
premises,
however
all
of
the
effort
in
terms
of
product
and
work
hours
went
to
and
via
existing
customers.
Samu:
Well
Aaro,
what
were
you
saying
about
Sweden
do
you
think
we
should
test
things
out
there?
Aaro:
Its
a
good
possibility
weve
done
several
projects
over
the
last
15
years
and
its
not
a
lot
different
from
Finnish
industry,
in
my
opinion
Samu:
Yeah,
it
is
probably
the
lowest
hanging
fruit,
although
I
dont
expect
any
attempts
in
Sweden
to
happen
quickly
-
we
would
need
to
expect
fairly
slow
return
on
any
investment
there.
Aaro:
Like
any
place,
but
if
we
could
just
free
up
some
time
from
our
salespeople,
they
are
stretched
quite
thin
The
managing
director
left
the
room
thinking
to
himself
that
the
early
years
included
several
successful
projects
in
Sweden.
Could
those
references
still
be
valid
today?
Maybe
the
contacts
would
be
worth
more
than
the
aging
references
in
the
end.
A
lot
of
deliveries
have
also
been
made
in
the
previous
eastern
Page |4
block
countries
of
Europe,
and
more
recently
China,
but
the
director
felt
these
may
be
just
a
bit
culturally
distant,
in
addition
to
the
fact
that
Satmatic
has
been
a
late-mover
into
China.
And
when
the
language
barrier
is
considered,
it
seems
improbable
that
we
would
start
thereconsidering
our
staff
could
always
improve
on
their
already
good
language
ability
he
pondered.
He
picked
up
his
Nokia
mobile
phone
and
made
a
call
to
sales
manager,
Reino
Nordquist:
Reino:
Nordquist.
Samu:
I
was
just
thinking
about
the
project
with
Metso
Power
in
Sweden
how
much
of
the
effort
has
moved
over
to
us?
Reino:
We
ended
up
doing
more
of
the
management
of
the
project
and
after
spending
all
those
months
working
face-to-face
with
the
end
customer,
well,
as
you
heard,
the
Swedes
kept
asking
for
special
favours
and
extras
to
be
added
into
the
deal.
Samu:
How
is
the
situation
going
there
now?
Have
we
put
enough
sweeteners
in
the
Swedes
coffee
to
be
able
to
use
them
as
references?
Reino:
We
see
more
potential
with
the
customer,
with
possible
upgrades
and
new
contracts
but
sometimes
enough
is
enough.
Having
worked
with
them
just
might
help
us
when
pursuing
other
Swedish
customers
Reino
said
carefully
as
Samu
amiably
ended
the
call.
INTERNATIONALITY
CULTURAL
ISSUES
Paroc
in
Poland
Johan
Leppnen
arrived
at
the
Paroc5
manufacturing
site
in
Poland
around
9AM
as
usual,
parking
his
modest-looking
Volkswagen
near
the
main
building.
The
installation
of
the
electrical
systems
were
taking
lots
of
time,
and
Johan
was
attributing
it
to
a
very
experienced
fifty-something
Polish
project
manager
as
he
muttered
to
himself:
unbelievable
the
nit-picking
that
went
on
yesterday,
and
I
still
cant
get
over
the
fact
that
he
bargained
5%
off
the
price
on
the
first
day!
Manufacturing
facilities
in
the
previous
eastern
bloc
countries
were
managed
quite
differently
and
being
that
many
of
the
people
involved
in
the
Paroc
were
locals,
one
would
expect
some
different
points
of
view.
Some
of
the
attitudes
displayed
were
quite
different
to
what
was
norm
in
Finland.
Not
only
attitudes
but
also
different
customs
he
muttered
to
himself,
remembering
how
just
around
the
time
Satmatic
was
finalizing
commissioning
work
at
a
factory
in
Turkey,
the
Turks
sacrificed
2
lambs
before
it
was
taken
into
operation.
Johan
remembered
that
in
seemingly
difficult
tough
situations
one
needs
to
pause
and
reflect
a
bit,
not
over-react,
but
to
try
to
understand
the
situation
first
ones
own
attitude
is
the
key,
he
thought.
This
requires
a
certain
amount
of
understanding
oneself,
and
this
understanding
often
presents
itself
with
the
suitable
attitude
necessary
to
succeed
in
multicultural
situations.
He
thought
how
humour
can
be
a
bit
risky
and
can
also
reveal
hidden
attitudes
and
remembered
about
how
fairly
soon
after
arriving
a
non-
5
http://www.paroc.com/
Page |5
Polish
site
manager
mentioned
to
the
Polish
construction
workers
that
the
Germans
left
a
lot
of
things
undone
here
50
years
ago.
After
spending
close
to
a
year
living
in
Poland,
upon
returning
back
to
Ulvila
and
the
familiar
Finnish
surroundings,
Johan
was
in
for
a
surprise.
Everything,
although
familiar,
seemed
a
bit
strange.
The
manner
and
behaviour
of
the
people
seemed
different
and
then
he
realized
maybe
some
changes
happened
to
him.
Colleagues
back
at
the
office
asked
how
life
really
was
in
Poland
and
this
led
to
interesting
discussions.
Johan
related
that
it
took
him
about
a
half
a
year
to
get
used
to
living
in
Finland
again.
Malaysian
Upgrade
Its
just
incredible
how
one
is
treated
here
Jussi
Haapala
stated,
mobile
phone
held
to
his
ear,
as
he
sits
down
in
his
comfortable
hotel
room.
Weve
been
on
this
assignment
for
several
months
now
and
the
hospitality
of
the
place
still
has
not
changed:
people
are
friendly
to
me
on
the
street,
in
the
shops
and
particularly
here
where
Ive
lived
for
many
weeks
at
a
time
they
almost
treat
you
like
a
god
out
here!
he
gushed.
Jussi
was
discussing
with
his
colleague
back
in
Ulvila,
and
he
had
a
difficult
time
relating
to
stories
about
making
the
treacherous
drive
to
work
on
icy
roads.
They
ended
the
short
call
agreeing
to
do
a
net
conference
as
both
had
diagrams
and
documents
to
share.
The
Malaysian
project
involved
an
upgrade
to
a
power
network
where
the
main
partner
did
all
of
the
negotiation
and
was
a
main
point
of
contact
with
the
customer.
As
in
most
projects,
Satmatic
is
not
responsible
for
much
of
the
after-sales
service
of
a
large
installation
as
this
is
the
responsibility
of
the
main
partner.
Most
of
the
deals
are
done
via
large
proposals
that
include
a
main
partner6
who
carries
the
most
weight,
and
other
smaller
partners,
each
one
providing
their
own
price
quotes
into
the
proposal
(offer).
The
customers
are
usually
large
corporations
or
government
entities
that
follow
a
strict
Request
for
Proposal/Quotation
(RFP/RFQ)
procedure.
In
Malaysia
it
was
no
different
Satmatic
now
needed
to
fulfil
its
installation
obligations.
Although
ones
eyes
could
not
escape
from
noticing
the
poverty
that
was
clearly
evident
all
around
the
viewer,
the
places
of
accommodation
for
business
people
were
of
first
rate
quality.
High-speed
internet
connections
via
LAN
and
WLAN
networks
could
be
found
in
many
places
and
3G
wireless
networks
were
easily
accessible,
therefore
expatriates
did
not
experience
many
problems
with
making
voice
calls
and
using
data
applications.
Jussi
opened
up
his
laptop
computer
in
his
room,
and
enjoying
a
stable
connection
to
Internet
via
the
local
WLAN
hotspot,
he
opened
his
Skype
application.
Glancing
at
the
time
on
the
corner
of
the
screen,
he
estimated
that
it
must
be
late
afternoon
at
the
home
office:
the
guys
must
be
done
drinking
coffee
and
at
their
computers.
Jussi
connected
via
Skype
and
sure
enough,
two
of
his
colleagues
were
already
online.
Colleague
in
Finland:
Hows
it
going
over
there,
warm
enough
for
you?
Weathers
fine,
you
dont
want
me
to
rub
in
anyway
so
how
about
we
just
talk
about
whats
going
on?
Jussi
joked.
At
least
we
didnt
have
problems
here
with
the
electricity
source
in
Portugal
we
had
to
wait
3
weeks
to
get
power.
Delays
like
that
cut
into
our
margins,
and
even
if
costs
are
recovered,
it
causes
a
6
pmies in Finnish
Page |6
negative
domino
effect,
as
it
keeps
me
from
starting
up
or
continuing
other
customer
projects
just
messes
up
the
work
schedule,
which
seems
to
always
be
changing
Jussi
continued.
Satmatic
needed
to
carefully
consider
which
projects
to
pursue,
as
there
is
only
so
much
one
person
can
do.
The
scarcity
of
competent
resources
would
become
even
more
evident.
Jussi
uploaded
a
few
documents
and
shared
them
to
his
colleagues
in
Ulvila
Ok,
I
know
you
arent
great
fans
of
web
conferencing
but
it
works
well
in
my
opinion,
heres
some
new
documents
I
received
today
theres
just
a
small
change
to
the
specifications
that
we
need
to
consider
for
the
next
shipment.
After
the
meeting
Jussi
reflected
on
the
past
few
days,
I
sure
dont
have
a
clue
what
the
people
around
me
are
saying
but
fortunately
when
talking
to
fellow
engineers
there
really
is
no
language
barrier
we
all
know
and
understand
the
technical
stuff.
ORGANISATION
Ownership
Structure
and
Form
of
Entity
Satmatic,
a
daughter
company
to
a
parent
organisation,
is
essentially
part
of
a
large
corporation
(Harju
Elekter).
The
corporation
is
listed
on
the
Talinn
stock
exchange
and
as
of
the
end
of
December
2008,
there
were
just
over
1000
shareholders
with
about
4.6
million
shares
being
traded.
Some
of
these
shareholders
own
a
fairly
large
piece
of
Harju
Elekter
such
as
the
32%
share
owned
by
a
separate
entity
called
Harju
KEK,
and
ING
Luxemburg
owning
11%.
It
seems
the
shares
are
fairly
well
dispersed
as
43%
of
the
shares
are
held
by
small,
private
investors
(Other
category
in
the
2008
annual
report).
Exhibit
4
gives
a
graphical
depiction
of
the
overall
Satmatic
organisation.
The
managing
director
has
overall
operative
and
strategic
responsibility
over
the
whole
organisation.
Nevertheless,
with
the
relatively
large
size
of
the
company,
the
director
can
not
manage
day
to
day
activities.
Strategically
crucial
activities
of
the
company
are
delegated
to
various
people
and
decisions
are
made
in
these
areas.
Keeping
informed
of
what
is
going
on
in
various
areas
of
the
company
is
a
challenge
in
any
company,
and
Satmatic
makes
an
effort
to
coordinate
activities
and
ensure
the
free-flow
of
internal
information
-
the
structure
of
the
organisation
supports
this
effort,
hence
the
attempt
to
a
matrix
form
of
organisational
structure.
There
are
approximately
6
main
production
teams
(see
Exhibit
5)
at
Satmatic,
one
of
those
teams
focuses
on
logistics
and
another
assembling
the
components
in
to
customer/delivery-ready
units.
Each
team
specialises
in
mission-critical
operations
with
the
objective
of
reliably
speeding
up
the
lead
time
(throughput)
of
product
(time
from
when
materials
come
into
the
factory
to
when
the
finished
product
leaves
the
factory
to
the
customer).
Teamwork
the
team
moves
the
process
forward
towards
the
end
customer
Project
teams
are
set
up
to
look
after
large
customers
-
Satmatic
does
their
own
planning
and
writes
its
own
part
of
the
large
proposals.
Product
development
takes
place
in
teams,
while
the
production
is
conducted
within
groups
or
in
what
could
loosely
be
called
semi-autonomous
work
teams.
Page |7
Project
management
and
warehouse
team
The
project
management
area
of
the
company
consists
of
three
people
who
take
the
customer
orders
and
feed
the
information
into
the
Oscar
information
management
system.
At
this
point,
several
individuals
take
responsibility
for
purchasing
the
materials
necessary
to
fulfill
the
order:
the
materials
necessary
to
build
the
product
the
customer
wants.
Certain
materials
like
cabinets
and
wires
are
purchased
ready-for- installation
meaning
the
cabinets
are
pre-cut
(holes
ready-made
so
that
Satmatic
personnel
doesnt
have
to
spend
time
preparing
cabinets)
and
wires
are
pre-stripped
(so
that
workers
can
directly
connect
wires
and
do
not
need
to
remove
insulation
from
ends
of
wires
to
expose
the
copper
inside).
The
purchasers
ensure
the
right
stuff
is
available
the
installers.
This
purchasing
group
knows
how
to
get
the
deals
and
have
formed
solid
relationships
with
suppliers
the
raw
material
coming
into
Satmatic
needs
not
only
to
be
reasonably
priced,
but
be
of
consistent
quality
and
be
delivered
in
a
specified
period
of
time.
Satmatic
does
not
want
to
lose
any
time
on
any
step
in
this
process.
Each
member
of
each
specific
team
play
an
important
role
in
ensuring
the
time
between
customer
order
and
delivery
to
customer
is
as
short
as
possible:
it
all
starts
with
the
project
and
purchasing
teams.
With
the
completion
of
new
and
larger
warehouse
facilities
in
spring
2010
the
difficulties
in
finding
space
for
incoming
and
outgoing
material
were
all
but
eliminated.
The
materials
are
inspected,
some
parts
are
looked
at
more
closely,
and
all
items
are
recorded
into
the
enterprise
resource
planning
(ERP)
system
this
pre-production
phase
of
checking
and
keeping
these
in
materials
in
order
requires
effort
on
behalf
of
the
receiving
warehouse
team.
The
200
square
metres
of
shelves
and
mechanical
inventory
elevators
provide
a
place
for
the
new
materials,
and
accuracy
is
required
by
the
team
members.
Having
everything
stored
optimally
not
only
reduces
errors,
but
it
facilitates
the
next
step
of
collecting
the
materials
for
the
installers7
(production
staff).
This
area
is
of
strategic
significance,
as
the
company
deals
with
high
numbers
of
various
materials,
approximately
10-15
thousand
different
material/component
labels.
The
Production/
Installation
Team
After
the
warehouse
team
collects
the
materials
from
the
shelves,
they
place
them
on
carts
and
roll
them
to
the
installers,
who
with
their
electrical
gear,
prepare
to
perform
the
critical
task
of
putting
all
those
bits
and
pieces
together.
The
installation/production
staff
is
split
into
two
main
groups
based
on
the
type
of
customer:
1)
project
production
and
2)
contract
manufacturing8.
The
contract
manufacturing
team
deals
with
higher
volumes
of
fairly
standardized
products:
most
contract
manufacturing
jobs
are
done
for
similar
types
of
customers
and
there
is
relatively
little
variability
in
the
products.
Project
production
involves
customized
jobs
and
can
require
different
equipment
and
skill
set.
These
two
types
of
production
lines
are
kept
physically
separate
on
the
Satmatic
premises
but
still
within
a
short
walk
of
each
other.
Satmatic
provides
the
possibility
for
interchangeability
of
teams,
meaning
individuals
can
change
the
type
of
tasks
they
are
doing.
A
certain
amount
of
specialization
has
been
reached,
but
team
members
are
not
permanently
fixed
on
one
task
or
area.
This
is
true
with
the
installers,
who
can
work
on
both
contract
manufacturing
jobs
and
project
jobs,
depending
on
priorities
and
order
volume.
7
Installers in this context are the technical workers who produce the product, putting the components together into finished product. 8 Contract manufacturing is explained in more detail just before and within the IT section of the case.
Page |8
The
production
team
convenes
at
the
beginning
of
a
new
manufacturing
task
in
what
is
called
a
startup/kickoff
meeting
or
aloitus
palaveri
where
the
order,
specifications,
and
other
details
of
the
contract
are
presented
and
discussed.
Each
order
that
comes
into
the
company
is
discussed
directly
with
the
installers.
The
team
decides
how
to
divide
the
work
and
how
to
go
about
doing
it.
The
team
feels
that
they
are
given
responsibility
and
they
take
it
and
do
not
expect
people
of
higher
authority
to
be
giving
orders
the
organization
is
flat
and
teams
are
self-guiding.
Each
team
does
have
their
own
team
leader
but
this
is
more
of
a
point
where
communication
flows
through,
as
not
everybody
can
be
coordinating
the
communication
through
the
place.
As
one
team
leader
described
it,
in
order
for
teamwork
to
be
successful,
which
it
has
been
so
far
at
Satmatic,
the
team
members
must
be
committed
and
have
the
right
attitude
that
is
company-centered,
not
own
specific
task-centered.
Testing
and
Delivery
To
guarantee
reliability,
before
being
shipped
to
the
customer,
all
products
go
through
a
testing
phase.
There
are
several
technical
professionals
on
the
production
floor
responsible
for
this
final
stage.
Electrical
tests
(including
wiring,
alarms,
signals,
voltages,
and
current),
insulation
resistance
tests,
and
grounding/earthing
tests
are
performed.
Just
before
the
final
assembled
product
leaves
the
Ulvila
factory,
digital
pictures
are
taken
and
all
inspection
documentation
is
attached.
These
steps
attempt
to
increase
the
reliability
of
Satmatic
products.
The
product
is
tracked
through
each
phase
with
the
ERP
system
and
when
the
product
is
finished,
it
is
taken
to
the
warehouse
for
delivery.
The
warehouse
team
is
back
in
action
and
end
the
process
with
another
important
task
once
they
load
the
finished
product
on
the
delivery
truck:
make
note
in
the
ERP
system
indicating
that
customer
can
now
be
billed.
Accurate
billing
is
another
key
area
as
this
is
the
trigger
that
initiates
cash
flow
and
the
indication
of
an
asset
on
the
Satmatic
balance
sheet9.
Although
at
times
the
tasks
seem
mundane
and
mechanical,
each
step
requires
special
attention.
Understanding
of
what
is
involved
in
moving
the
material
through
the
production
process
also
gives
the
opportunity
for
individual
team
members
to
make
improvements
in
how
things
are
done
the
motto
is
to
do
the
least
amount
of
work
as
possible:
its
about
working
smart,
not
hard.
The
company
established
a
so-called
initiative
committee10
to
look
at
the
various
suggestions
for
improvements
that
come
up
from
different
areas
of
the
workplace.
Initiatives
are
rewarded
based
upon
their
significance,
but
all
new
ideas
and
suggestions
are
welcomed.
Training
is
delivered
regularly
from
Satmatics
suppliers
so
that
installers
and
the
team
members
in
charge
of
documentation
maintain
their
product
expertise.
All
staff
is
encouraged
to
complete
other
certifications
and
diplomas
and
the
company
will
support
this
financially.
Sales
Team
-
Overview
Sales
projects
follow
an
informal
account
management
structure,
meaning
people
are
assigned
to
key
customers,
and
key
customer
projects,
or
accounts.
Due
to
the
small
size
of
Satmatic,
there
is
flexibility
and
autonomy
within
this
sales
group.
Despite
the
companys
small
size,
the
sales
activity
is
quite
intense
9 10
The terms asset and balance sheet are terms used when accounting (keeping track) of a companys finances. aloitetoimikunta in Finnish
Page |9
making
it
impossible
for
the
managing
director
to
look
after
all
individual
proposals
and
customer
accounts11.
Sales
proposals
are
done
in
mainly
in
Ulvila,
and
the
head
office
in
Estonia
is
kept
briefed
of
the
potential
revenue,
but
the
responses
to
these
tenders
are
done
solely
by
Satmatic.
Communication
is
the
glue
that
binds
the
members
in
solid
internal
teamwork.
One
of
the
key
activities
for
the
sales
team
to
determine
is
something
called
the
scope
of
delivery.
Specifying
the
scope
early
on
in
the
sales
process
saves
a
lot
of
time
and
confusion
internally.
For
example,
the
international
customer
may
make
a
basic
order
of
10
cabinets
without
providing
any
documents,
assuming
Satmatic
does
the
planning
and
engineering.
It
must
be
specified
what
exactly
is
to
be
delivered
and
there
are
two
options:
1)
Customer
does
engineering
service
work
themselves
or,
2)
Satmatic
does
the
engineering.
It
needs
to
be
determined
if
Satmatic
will
do
part
or
all
of
the
commissioning
service
work.
The
scope
of
deviations
in
delivery
varies
across
countries.
In
the
United
States,
typically
only
cabinets
are
delivered
and
the
customer
completes
the
field
cabling
and
installation
by
themselves.
The
Americans
often
do
all
installation
engineering
and
subcontracted
engineering
will
do
the
installation
drawings
based
on
documents
and
schematics
provided
by
Satmatic.
In
Europe,
Satmatic
will
typically
provide
the
installation
engineering
but
the
customer
will
do
the
physical
installation
on
the
site
themselves.
In
Asia
there
also
some
changes
in
requirements.
These
issues
can
be
taken
for
granted
in
various
geographical
areas
and
a
basic
understanding
across
countries
is
necessary.
Networking
and
Teamwork
Across
Organisations
In
the
Malaysian
case,
Satmatic
worked
with
UPCast
from
Pori.
Even
the
deliveries
often
went
through
the
partner
network,
and
not
directly
from
Satmatic
to
the
Malaysian
customer.
The
partnerships
between
Satmatic
and
its
suppliers
and
Satmatic
and
its
customers,
particularly
contract
manufacturing
clients
can
best
be
described
as
relationships.
The
teamwork
across
organisation
is
described
in
terms
of
relationships
but
it
is
based
on
the
same
principles
at
teamwork
inside
the
organisation:
communication
(sharing
information),
trust,
and
mutual
benefit
(attitude)
.
These
relationships
are
more
long-term
in
nature
and
require
mutual
trust
by
both
parties.
Strong
relationships
within
networks
is
a
competitive
advantage
for
any
company,
but
even
more
critical
for
a
technical
high
value-added
manufacturer
like
Satmatic.
MEDIA
Satmatic
has
used
several
types
of
tools
in
communicating
internally
and
externally.
The
customer
magazine
Satsi
is
produced
in
both
print
and
electronic
form,
and
it
is
easily
accessible
from
their
webpage.
This
keeps
customers
informed
and
also
helps
maintain
the
image
of
the
customer.
There
has
been
some
discussion
within
the
company
about
the
role
of
this
magazine.
Other
external
communication
tools
include
basic
digital
marketing
communications
in
the
form
of
group
email
among
stakeholders.
Customer
information
is
maintained
for
future
marketing
and
sales
efforts.
The
Customer
Relationship
Management
(CRM)
tool
will
likely
be
implemented
soon.
Web
tracking
software
is
used
to
track
tracking
The
word
account
does
not
mean
tili
in
Finnish
with
referring
to
a
customer.
It
is
simply
a
business
term
for
customer.
11
P a g e | 10
movements
of
visitors
to
website.
Only
a
very
small
amount
of
traditional
advertising
has
been
used
in
the
past
the
company
enjoyed
more
orders
than
it
could
deliver,
therefore
increasing
demand
via
advertising
was
unnecessary.
However
with
the
decrease
in
orders
over
the
past
6
months
and
the
looming
sense
of
economic
uncertainty
causes
Satmatic
to
re-think
the
importance
of
increasing
company
and
brand
awareness.
Currently
the
company
is
working
with
an
outside
image
consultant
on
its
total
marketing
activities.
Internally
the
company
uses
email
and
production
team
leaders
and
all
managers
use
it
extensively
despite
its
setbacks.
Weekly
or
bi-monthly
face-to-face
meetings
are
held
in
the
various
operative
areas.
The
managing
director
holds
an
information
session
to
the
whole
staff
every
quarter.
Contract
Manufacturing
enabled
by
Oscar
A
significant
part
of
Satmatic
production
is
attributed
to
contract
manufacturing.
Companies,
instead
of
manufacturing
the
electrification
and
automation
products
themselves,
outsource
production
to
Satmatic
on
a
contract
basis.
Satmatic
then
can
focus
on
making
its
own
core
products
and
increase
volumes.
These
contracts
are
created
with
a
longer
term
relationship
in
mind
as
they
bind
Satmatic
and
partner
firm
via
mission
critical
activities
this
involves
a
deeper
level
of
mutual
trust
and
interdependence.
About
9,5
million
or
60%
of
the
total
15,8
million
euro
sales
revenue
in
2007
was
attributable
to
contract
manufacturing.
INFORMATION
TECHNOLOGY
Core
competency
for
Satmatic
business
ERP
The
manufacturing
sector
in
the
1960s
created
something
called
material
requirements
planning
(MRP)
to
be
able
to
integrate
and
automate
production
scheduling
for
systems
where
materials
are
built
into
subassemblies
and
then
assembled
into
finished
products.
The
main
idea
is
to
share
the
information
that
is
used
over
and
over
again
in
a
company.
Logistics,
warehousing,
manufacturing,
assembly,
distribution
and
accounting
are
the
typical
functions
that
are
brought
together
or
integrated
via
MRP.
With
Enterprise
Resource
Planning
(ERP)
the
basic
idea
of
MRP
was
expanded
to
include
the
entire
enterprise.
Business
functions
that
are
brought
together
(integrated)
through
ERP
are
sales,
billing,
customer
contacts,
shipping,
inventory
management,
accounting,
finance,
and
human
resource
management.
ERP
is
used
extensively
in
large
companies
with
operations
in
many
geographic
locations,
often
serving
users
with
various
languages.
For
pure
production
management,
Satmatic
is
using
the
Oscar
system
for
Windows
and
does
not
plan
to
make
any
changes
until
earliest
2012-2014.
ERP
systems
are
cross-functional
and
often
replace
dozens
of
individual
function-specific
software
applications.
Firms
choosing
to
convert
to
an
ERP
model
(like
Satmatic
years
ago)
typically
bought
the
software
and
related
consulting
services
from
specialized
ERP
vendors
or
resellers.
ERP
software
systems
are
typically
not
turnkey
systems
and
the
firm
must
customize
the
system
with
the
use
of
company-specific
business
rules
and
data.
Usually
the
company
would
need
to
make
significant
changes
in
traditional
ways
of
doing
things
or
so-called
business
processes
to
take
full
advantage
of
the
integrated
ERP
functions.
P a g e | 11
Satmatic
has
not
yet
integrated
all
of
its
business
functions
or
processes12
however
the
company
provides
turnkey
deliveries
looking
after
the
whole
electrification
solution
from
the
start
(planning)
to
installation
(commissioning
and
training)
on
the
customer
site.
Oscar
who?
Materials
management
and
production
planning
are
at
the
core
of
the
Satmatic
Oscar
system.
The
Oscar
system
keeps
track
of
an
inventory
of
over
10000
different
products.
The
Oscar
system
is
a
tool
that
provides
Satmatic
with
ability
to
serve
the
production
needs
of
their
customers.
This
is
the
tool
by
which
Satmatic
provides
so-called
process
control
software.
Each
individual
customer
that
requires
power
boards
and
cabinets
does
not
need
to
have
this
tool,
which
is
based
on
solid
ERP/MRP
principles.
It
is
more
than
servers
and
computers
networked
together
with
some
smart
software.
Overview
of
Satmatic
Processes
(described
in
team
context
above,
here
described
in
IT
context):
The
whole
business
process
starts
with
the
customer
some
kind
of
contract
is
sealed
with
the
buyer
of
a
Satmatic
product
or
service.
This
contract,
which
started
with
the
sales
proposals
and
requirement
specification,
is
defines
the
whole
operation
in
detail.
Prices
of
materials
for
the
product
being
produced
by
Satmatic
are
determined,
and
sometimes
the
materials
and
pricing
come
directly
from
the
customer.
More
often
Satmatic
staff
responsible
for
purchasing
will
seek
out
the
materials
and
corresponding
pricing.
Each
product
component,
from
wires
to
brackets
to
switches
and
fuses,
is
labelled
(given
a
name
or
label)
by
the
production
management
system
(Oscar).
The
materials
list
is
a
key
item
of
information
that
describes
each
component
that
belongs
to
a
particular
product.
The
customer
provides
the
materials
list
in
a
particular
file
form
(.csv)
and
it
is
fed
into
the
Oscar
system
which
will
then
make
an
electronic
order
to
the
suppliers
for
any
component
that
is
not
readily
available
in
Satmatics
warehouse
it
is
not
viable
to
keep
all
types
or
a
large
abundance
of
inventory
at
the
Satmatic
premises.
Immediately
the
customer
receives
the
updated
materials
list
complete
with
newest
pricing
information.
After
the
electronic
exchange
of
information
is
complete
as
described
above,
the
production
work
is
ready
to
begin
and
Satmatic
prepares
for
the
arrival
of
materials
to
the
factory.
The
Satmatic
team
is
ready
for
action
(see
section
on
teamwork).
The
efficiencies
created
via
electronic
information
(data)
exchange
in
the
Oscar-assisted
system
are
significant.
A
key
measurement
is
called
lead-time
(lpimenoaika)
which
is
the
time
it
takes
for
product
to
go
from
planning
to
delivery.
Lead-time
has
decreased
by
20%
directly
due
to
the
Oscar
system,
and
more
gains
have
originated
by
work
planning
and
ideas
generated
from
the
Satmatic
team
members.
Due
to
this
system,
Satmatic
is
essentially
providing
a
logistics
service
to
its
customers.
Some
of
the
customers
using
this
system
are
Cimcorp
of
Ulvila,
the
fibre
optics
producer
Nextron,
a
large
Swiss
cable
manufacturer
and
a
large
global
packaging
company
(Ito)
.
Oscar
allows
for
all
the
materials
to
be
brought
together,
tracked
efficiently
and
assembled
into
products
for
quick
delivery.
In
this
industry,
the
material
suppliers
are
quite
concentrated
and
prices
do
not
fluctuate
very
much
and
are
basically
the
same
worldwide.
Therefore
Oscar
can
handle
high
volumes
of
these
materials
and
therefore
Satmatic
can
12
This describes processes/operations in a nutshell. A more closer look at processes covered later on in curriculum.
P a g e | 12
produce
higher
volumes,
meaning
higher
sales.
The
system
also
is
able
to
convert
to
hours,
making
pricing
a
bit
easier.
Satmatic
delivers
over
a
thousand
of
these
electrification
units
per
year
with
the
help
of
Oscar.
Worth
mentioning
is
Satmatics
Customer
Relationship
Management
System
(CRM)
that
is
currently
under
developing
these
systems
help
keep
track
of
the
customer
contact
mainly
for
sales
and
after-sales
service
purposes.
General
IT
Word
processing,
spreadsheet,
and
presentation
applications
are
commonly
used
at
Satmatic.
For
technical
design
and
production
management,
other
applications
are
used.
The
company
runs
Windows
operating
system
on
its
computers,
and
also
the
software
most
critical
to
their
business,
Oscar,
is
optimised
fro
the
Windows
environment.
Examples
of
windows-based
applications
such
as
word,
excel,
and
powerpoint.
Certain
non-core-business
IT
activity
has
been
outsourced.
The
Satmatic
webpage
development
and
hosting
is
done
outside
of
the
company.
AFTERWORD
Satmatic
began
offering
solar
energy
based
equipment
in
addition
to
its
traditional
product
line13.
In
2009
and
2010
Satmatic
ventured
into
the
business
of
providing
electrified
posts
for
heating
vehicles
in
parking
lots
car
parks.
In
addition
to
the
standard
heating
boxes
standing
in
the
parking
lots,
throughout
2011
Satmatic
developed
the
e-tolppa
service
and
by
January
2012
it
broke
the
1000
user
barrier.
E-tolppa
monitors
the
use
of
electricity
and
the
turning
off-and-on
of
the
vehicle
heating.
It
also
can
be
used
to
charge
hybrid
vehicles.
13
P a g e | 13
EXHIBIT
1
Satmatic
Sales
Revenue
2002-2008
(updates
http://www.satmatic.fi/upload/satmatic-oy-2010-katsaus-eng.pdf)
million
Euros
()
million
EEK
(Estonian
kroons)
P a g e | 14
EXHIBIT
2
Satmatic Products Automation Cabinets Control cabinets Control desks Pneumatics Motor Control Cabinets Sivacon 7400A 8PU0 3200A 8H50 1600A Picture of a Switchgear (Motor Control Cabinet): Electricity Substation Compact substations Distribution Switchgear Component Sales Projects Automation Electrification Instrumentation
P a g e | 15
EXHIBIT
2
continued
Satmatic
Product
Groups
-
breakdown
by
industry14
14
P a g e | 16
EXHIBIT
3
Satmatic
Services
Contract
(Franchise)
Manufacturing
Projects
Engineering
software
and
hardware
Documentation
Commissions
Training
Installations
Electrical
Installations
Automation
Instrumentation
Maintenance
Logisitc
Services
electrical
components
or
automation/instrumentation
components
Siemens
System
Integrator
(PCS7,
Simatic)
P a g e | 17
EXHIBIT
4
Satmatic
Organisation-
Chart
Form-
Satmatic
1.6.200915
Sales Sales Director: MG (in Ulvila) AL AF (in Kerava) HH KN AR Purchasing JS RN KM TK TL SJ MR TL JH JL TV JH Logistics PK Production Teams JL JR KL TH KA KH (in Kerava) RL AH AR MK MP SJ MR Finance, Billing, ERP JR Manufacturing Projects, Purchasing Planning/Project Services Production KA (in Ulvila) KH (in Kerava) Administration and Personnel RL
Sales Managers JK
Marketing, Managing Director and 3-4 managers Kokonaisprojektit Administration RL Juha Leppnen Quality and Environment MR, KM
15
P a g e | 18
EXHIBIT
5
Satmatic
Production
Teams16
Team 1 9 members
Team 2 7 members
Team 4 8 members
Team 5
Team 6
Project Management
7 members
3-4 members
Team K Assembly
13-14 members
16