Angela Qu meets visitors personally at the reception desk of the ABB headquarters in Zurich. She shares the office with colleagues as is usual in the corporate headquarters. Those who get to know the Head of Division Supply Chain Management, Electrification Products Division, would never guess that she is responsible for a budget of USD 3.0 billion and 450 employees.
Angela Qu started her career in a Chinese Joint Venture of Siemens in Jinan and Peking after her studies in Economics. What gave a young woman the idea to work for an industrial concern like Siemens or ABB? Don't graduates in China want to join one of the big consumer brands or a company in the field of management consulting?
From China to Germany for Siemens
Angela Qu recalled with a smile:
The name Siemens didn't mean anything to us. There was a Siemens job posting in China in the early 90s. The company name didn't mean anything to me. Keep in mind that, back then, China was much less open than it is today. We had no Internet so I couldn't just Google this German company. My uncle ended up being the determining factor. He is an electrical engineer and had seen the Siemens logo somewhere. That was reason enough for us to assume that it was probably a renowned company, and so I applied.
Since she spoke English well, she helped with the joint venture as an assistant to the general manager in construction and her good work proved impressive. The project was completed the day of the grand opening. However, she had so convinced her manager that he asked her which area she would like to oversee. Qu explained to him: "Sales is not my thing. Alcohol doesn't agree with me." So she made the switch to Supply Chain Management. She knows the statement is very pointed, but there is a serious note to it: In China, it is customary to toast with guests at every table during celebrations, and in a sales environment drinks flow to celebrate successful transactions.
She used to be fascinated by the German corporate mentality. She still actually sees many parallels between the German or Swiss culture and Chinese tradition. For example, she makes the comparison that both value hard work and are very disciplined because people take their jobs seriously.
Supply Chain Management: Negotiating tough but fair
At ABB, she was met with very complex and high-volume responsibilities. Today, Angela Qu is the Head of Division Supply Chain Management of the Electrification Products Division. ABB runs 4 divisions in total. Before that, she was heading the Medium Voltage Products business unit (under the Electrification Products Division), one of ABB's largest. Customers, for example, come from the power sector: The products of this ABB business unit are used in building services engineering, datacentres, harbours, petro-chemistry, railways but also in off shore wind farms and solar parks. Before she assumed full responsibility for the business unit, Qu built an extensive comprehensive program called SCM Excellence that she is proud of and which has since been established group-wide.
It is important to understand our suppliers
Our partners know that I am a tough, but fair negotiator. You can ask around with ABB's suppliers: You will be hard-pressed to find suppliers who complain about us. Above all, we always communicate clearly, openly, and honestly; that is very important. And we are never arrogant or aggressive.
Particularly when suppliers have played an important part in development, it is recognized and honoured over the long term.
One of the company-wide specifications that she needs to keep in mind is the number of suppliers. She strives to keep the number as small as possible. "I think long and hard before I change a supplier." This gives the companies that work for ABB stability.
Qu is not focused on pressuring the price as much as possible, because in most cases, this comes at the expense of quality. "It is really important to have a precise understanding of the suppliers," she explains. "We want to understand the intricacies of the cost structure and the technical principles." Data transparency is an important part of the ABB SCM framework program.
Purchasers technically trained
The team from Supply Chain Management and the development department is therefore already in the process in the new product design phase. Many purchasers have technical training. In addition, the SCM Engineering Specialist position was created as the interface between Development and Supply Chain Management. So, for example, they can evaluate design drawings together: Can we produce it with less cost if we make technical changes? Can we achieve the same values with more economical materials? Where can processes still be optimized? After all, R&D has a different focus than Qu's team.
When we are proactive in making suggestions that can reduce costs, our development department is open to the ideas. Working together always produces the best solution.
She also talks with suppliers to determine if costs could be saved if they were to source the necessary raw materials at ABB terms and conditions. By purchasing many materials in large quantities, the group is able to achieve more economical prices and then pass the savings onto the component manufacturers.
Purchasing strategies with the goal of reducing purchasing costs
ABB and suppliers also regularly hold one- to two-day workshops to investigate potential savings opportunities together. "I have also had very good experiences with AT Kearney's Purchasing Chessboard," says Qu. Depending on supply and demand power, the tool offers 64 different purchasing strategies with the goal of reducing purchasing costs.
Is this joint approach in procurement efficient enough? "When I took over the segment in March 2012," says Qu, "I was certainly given a clear objective. In past years, my unit's Supply Chain Management had to achieve annual savings of three percent. The is goal was doubled in my first year: We were supposed to reduce costs by six percent, but we didn't even have a full year left since it was already the end of the first quarter."
She tackled the challenge as she approaches any other problems: She called the team together and asked for suggestions on how they could achieve the six percent savings. Even if some were sceptical as to whether this objective could be reached, they were able to meet the goal in November of that same year. For Qu it was also a successful team effort.
Women negotiate differently
Does she personally enjoy negotiation? "Yes, definitely. When we were building our house, my husband and I went together to the meetings with all the tradesmen. But after the first negotiations, he stopped coming along," she says, laughing. Even though it was not uncommon for discussions to start with her being asked if she would rather wait until her husband arrived.
Women negotiate differently than men. I would like to say somehow more elegantly. And they can usually communicate very well.
This is why she launched a program especially for female talents within the organisation. Her team is 40 percent women.
As a seller once explained that he really couldn't do any better on the price, Angela Qu countered with a much lower offer. "Just check with your manager," she urged him. Much to the seller's surprise, his manager actually reconsidered and dropped down to the proposed price.
This article was first published in February 2016 in the Interroll Magazine 'moving'. As mentioned above, Angela Qu was just recently promoted to be Head of Division Supply Chain Management, Electrification Products Division. We thank Angela Qu for the interesting insights!