The Thrill of Victory

Siemens CT of Forchheim, Germany, makes computed tomography X-ray machines for hospitals and diagnostic labs all over the world. The machines cost about half a million dollars apiece and they are custom-built for each customer. Four years ago, Siemens CT found itself faced with rising costs and price erosion that threatened its position in this lucrative market. The group's response was to completely reinvent the way they provision, assemble, and deliver their products. They cut out two layers of middle management, switched the entire company to team structures, aligned incentives with supply chain success, and let creativity run rampant. Among other changes, the teams tightened the links with suppliers, eliminated all interim ...

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