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KONE 2013 | CORPOR ATE RESPONSIBILIT Y REPORT
DELIVERY AND SUPPLY CHAIN
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Customer experience is at the heart of KONE’s
delivery chain process, and our global presence
makes it crucial for the company to be close to
its customers. In 2013, KONE’s delivery chain
comprised eight production sites, eight global
distribution centers for elevators, and four
distribution centers for spare parts. KONE’s ninth
global distribution center is under construction.
Located in Chengdu, China, it will be opened
during the spring 2014. Over 4,100 people keep
KONE’s supply operations running, covering
new equipment, modernization, and spares
supply. In addition, we work closely with a
significant number of material suppliers and
logistics service providers.
Delivery chain is an important part of KONE’s
strategy, and Delivery Chain Excellence
was one of the five global development
programs KONE had in place in 2011–2013
for strategy implementation. Drivers behind
the development program were the needs
of customers in different segments, global
harmonization and the smart integration of
processes and systems. During the three-year
period for this development program, we
managed to increase the effectiveness of delivery
chain through Lean methods, and to improve
the demand - supply planning.
Meeting the needs of customers
KONE’s delivery chain is able to adapt to
different customer requirements. For example
our customers with modernization projects
value timely delivery of certain components,
and in special high-rise projects the role of
well-planned and specified delivery is crucial in
meeting customers’ demanding conditions.
We collect systematically customer feedback
on our quality performance, which we
analyze using Six Sigma tools before taking
corrective action. We set targets and monitor
key performance indicators (KPI’s) such as the
early failure rate of our products. Employees
are actively encouraged to take part in the
improvement of processes, through an
Idea Management System and the Kaizen
continuous improvement practices.
Delivery chain tailored to
customer needs
In 2013, KONE continued to implement Control
Tower, a system developed within the company
in which different units integrate their processes
to improve delivery accuracy. In practice, the
system relies on open communication and
common project management processes.
Its purpose is to provide a consistent supply
forecast to factories and external suppliers and
to give the functions that deal directly with
customers updated information on material and
capacity availability. By synchronizing all delivery
process phases on a daily and weekly level, we
are able to provide customers with precise and
reliable delivery and installation schedules.
A streamlined network through
continuous learning
We are continuously developing our delivery
chain by implementing Lean and Six Sigma
methods and tools to eliminate waste and
reduce process variation. KONE’s target is
to apply Lean and Six Sigma philosophies
throughout the entire delivery chain as well as
in product and process transitions.
In 2013, over 3,000 people completed
the Lean Passport E-learning Program.
Participants included more than 100 supplier
representatives. The learning module is
available in six languages: Finnish, English,
Chinese, Italian, Spanish and Czech. Advanced
training for Lean practitioners was conducted
during the year with about 20 participants.
Furthermore, KONE established a Lean Office
to serve as a dedicated resource to implement
Lean, provide training and serve as a
knowledge center. About 250 people at KONE
have been trained in Six Sigma. Majority of
them have received certification.
The 5S* method, which has been employed at
all KONE offices and distribution centers, was
implemented at all KONE distribution centers
during the year. Implementation at installation
sites is ongoing.
Sharing ideas
To build a culture of continuous
learning, employees are encouraged
to participate and share their
improvement ideas. Idea Management
System is in use in all of KONE’s
factories globally, and by the end
of 2013, approximately 18,500
initiatives have been approved for
implementation, out of which over
16,000 have already been put into
action.
Read more
about our logistics on p. 27.
KONE’s largest
manufacturing unit
In April 2013, we celebrated the
opening of KONE Park manufacturing
and R&D site in Kunshan. This new
site meets the needs of our customers
in China, Asia and other parts of the
world. It is located close to the Suzhou-
Shanghai Expressway, enabling good
connections to suppliers and customers.
It was planned according to the Lean
manufacturing principle to maximize
efficiency and eliminate waste, and
constructed according to modern green
building standards, aiming to earn a
LEED Gold green building certification.
China is by far the single biggest market
for new elevators and escalators.
*The name of the 5S methodology comes from the words
sort, stabilize, shine, standardise, and sustain.