ASSA ABLOY's companies in Mexico experienced a significant change in order patterns during 2005 mainly due to a major change in laws affecting the taxation of sales and inventory that impacted several distribution channels. In addition, competition in the residential market continued to be strong. The outcome was that sales declined during the first months of 2005 and began recovering slowly later in the year following the implementation of new commercial strategies for these changing markets.
The Mexican production facilities continued the ongoing implementation of Lean methods in the factories and in business processes as well as realigning the manufacturing footprint.
ASSA ABLOY's Canadian operations are directed exclusively at the non-residential market and consist mainly of sales companies. Despite the impact of higher material prices and a construction market that has remained steady for the past two years, the Group companies showed steady development in 2005 and continued streamlining and coordination of all sales and marketing activities in order to offer comprehensive solutions to the market.
The division's operations in South America are centered on manufacture of door locks and hardware in Brazil and Chile. In 2005 there was good domestic and export sales development based on targeted marketing efforts and increased specification activity. Ongoing implementation of Lean production methods, resulting in improved customer satisfaction and substantial collaboration with many other companies across the Americas division, also fueled South American sales growth.
Offering complete solutions
The division continues to work intensively to offer its non-residential customers complete solutions for their safety and security challenges and thereby provide greater value-added. To achieve this, the Americas division requires precise know-ledge of the true needs of both the installer and the end-user. Collaborative efforts through the entire organization, from production profit centers to product development through to marketing and sales, are continuously streamlining business processes so that the companies can put together better integrated solutions to meet complicated functional life-safety and security needs.
Much of the effort in 2005 was concentrated on consol-idating the sales forces in both the USA and Canada and on integrating and realigning sales and marketing activities to focus on the selling of complete solutions to meet end-users' needs.
Working closer with the market
Working more closely with the market has been a theme of activities in 2005. From developing the specification process to understanding the complex individual needs of end-users and specific types of building, the division has been able to better support the market and its important distributor partners.
Distributor partners are deeply involved with the Americas division in defining the right products and solutions for given applications and recommending them to the end-user. The distributor often acts as the local consultant, engineer, project manager and installer, with the ultimate objective of making sure that the end-user receives the right product, and that it is installed correctly.
The distributor partners are an integral part of the Americas division's plans, and continued efforts are being devoted to ways of giving them additional support and transferring even more knowledge to their contractor and end-user customers.
In 2005 the move to Lean operations, as already employed in the USA Door Group and Architectural Hardware Group, was extended to most companies across the division and to a wider range of functions. The first implementations of Lean methods were focused on cost-efficient production operations, a profit-center organization and identifying purchasing synergies within the division. These had the effects of streamlining product flows, controlling material costs at a time of rising prices, simplifying decision-making, increasing speed to market, and improving interaction with the market and the sales force. The Lean philosophy continues to be a major thrust in all the ASSA ABLOY Americas organizations and has now been extended to functions such as product and solutions design as well as many office processes.
Implement further Lean thinking in all units and business functions.
Collaborate more closely with distribution channels and end-users to identify coordinated marketing initiatives that will sell products and solutions to meet the end-users' needs.
Innovate more targeted end-user-specific integrated solutions.
Further educate the marketplace on the importance of high-security and life-safety solutions.
Continue incorporating emerging new technologies into traditional mechanical door and hardware products.
Americas divisionsales by product group
Raising technology levels
The trend towards higher technology continued through 2005 with the addition of electromechanical actuators and electronic intelligence to many traditional lock products. Electromechanical products are a rapidly growing segment and form crucial components of most integrated institutional and commercial security systems.
The SARGENT v.N1 Access Control lock and the BioFob proximity credential are two recent examples of technology integration into traditional hardware.
The BioFob is a hand-held biometric credential which contains unique access information and fingerprint identification information for a specific user. The biometric technology verifies that the person using it is indeed the person authorized to do so. After the fingerprint is verified, the BioFob activates the 125kHz HID or Indala signal for presentation to the reader, and thus functions as a standard credential for allowing access to the door opening. Because the biometric device is part of a hand-held credential, it allows existing access control systems to be easily upgraded to a higher level of security while allaying the user's personal-privacy concerns typically associated with biometric databases.
Security and design interwoven at arts center
The Overture Center is a private initiative to promote arts and culture in Madison, Wisconsin, USA. The arts center is currently undergoing modernization under the direction of internationally renowned architect Cesar Pelli. His past work includes the Petronas Towers in Kuala Lumpur and the International Finance Center in China.
ASSA ABLOY has been involved in the modernization project from the outset and has worked closely with the architect to create a secure and practical building. The Overture Center has almost 1,300 doorways. All doors and security solutions were supplied by ASSA ABLOY. The design and acoustics dictated the form of the building, which placed strict demands on ASSA ABLOY's products. All hardware is built into the doors, and to ensure that doors to the halls and stages are as quiet as possible they are opened electronically by pushbuttons, a feature that is appreciated by the client. Security was considered right from the start. To prevent unauthorized access backstage or to staff areas, ASSA ABLOY has installed electromechanical locks that require pass cards or the like.
Modernization of the Overture Center will be completed in 2006. The Center will occupy an entire block in Madison and will include several stages, rehearsal premises, a gallery and a lecture hall. The largest venue, Overture Hall, seats 2,250 people. The Overture Center has its roots in the Capitol Theatre, which opened its doors in 1928.