“We want our suppliers to jointly create a ‘polar star’ for us.” Head of business solutions, Michelin
Michelin Group is active on all continents, from of America to Germany and Russia. Michelin manufactures and sells tires for all kinds of vehicles. It is also famous for its Red and Green travel guides that rewards restaurants for their cooking, for its road maps and related online services, and for its emblem, the Bibendum.
What Michelin Needed
Michelin needed to transform its IT applications performance. It was costly to have and maintain a mixed bag of applications in different locations. New, standardized applications across the company would:
- drive down costs
- make processes work better
- help Michelin grow and compete.
The co-management method was untried. Michelin was used to introducing new or substantially improved products and services to solve customer problems or to set itself apart from the competition. This was the first time the spotlight was trained on process innovation. Co-management meant that Logica and Michelin would share risks and rewards. These would be determined by results on key process indicators like project performance, entity performance, supplier cooperation and group performance.
Together the teams studied grass root level business requirements in supply chain management, corporate finance, customer relationship management and order to cash. How could we reduce costs? What could be done to improve application development, maintenance and support? We drew up a plan to:
- deliver the project with the best mix of onshore, nearshore and offshore elements
- carry out end-user testing before rolling-out new services
- acquaint users at Michelin with the new system
- ease change into the organization by making information and tools readily available.
A Success Story
The co-management approach is working well. On a day-to-day basis the team works together to accomplish common goals. Problems are resolved through open communication.
With an eye on bigger savings, more services are being moved offshore to our centres in Bangalore and Chennai through 2009-10. Michelin’s systems perform better now. What’s more, the new systems are helping the company respond to changing business needs. Savings from standardized operating costs are being invested in core business and on promoting environmentally friendly solutions.