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Supply Chain Management of Jack Schwartz Shoes, Inc.
Supply Chain Management of Jack Schwartz Shoes, Inc. - January 12th, 2011
J.M. Voith AG, with headquarters in Heidenheim, Germany, is one of the world's leading producers of paper making machines and turbines for hydropower plants. Four independent divisions are organized under the umbrella of this holding company: Voith Sulzer Paper Technology, maker of machines and systems for the production of mechanical pulp, paper and paper finishing; Voith Turbo Power Transmission, a company that produces automatic transmissions for buses, coaches and trucks, drive systems for rail vehicles, and hydrodynamic couplings and drive systems for industrial use; Voith Fluid Machinery, maker of turbines, storage pumps, and control technology for hydro powerplants and marine technology; and Voith Appleton Paper Machine Clothing based in Appleton, Wisconsin, producer of forming fabrics, wet felts, dryer screens, and measuring technology for paper and board making machines. J.M. Voith is also actively involved in research and development in each of its fields. With production companies in Europe, North and South America, and Asia, as well as sales offices in more than 100 countries on all continents, J.M. Voith is a global player with about 80 percent of their sales generated from exports. As the company entered a new century, it remained a Voith family owned business.
1825-67: Foundations for Solid Engineering Business
When Johann Matthäus Voith took over the family locksmith shop in 1825, his hometown Heidenheim in the Swabian Alps was a rural community of 2,000, still suffering from the devastation of the Napoleonic Wars and as yet untouched by the coming industrial revolution. The local economy--consisting of some iron ore mines, ironworks, and textile factories--relied primarily on water power, as did the young craftsman Voith. While tending and repairing machinery at water powered mills such as paper mills and textile making machines, he moved his own business to a grinding mill where he set up a mechanical workshop with five hired helpers.
Soon thereafter, Voith became involved in developing a revolutionary technology for paper-making. Newspapers and books, as well as the growing needs of an emerging industrial bureaucracy caused the demand for paper to rise sharply. The supply lagged behind demand, since most paper at the time was made by hand in the German kingdom of Wuertemberg. While Voith was already involved in building a paper making machine in Heidenheim in 1830, it would take another 18 years to achieve a major breakthrough.
Beginning in 1848, Voith teamed up with Heinrich Voelter, Jr., a Heidenheim-based paper manufacturer, who owned the patent to a new invention first conceived by inventor Friedrich Gottlob Keller, on that made paper from wood. Until that time, paper was made out of cloth rags, an expensive process. The new technology, which transformed wood pulp into a paste, utilized a raw material that was available in abundance. Voith helped Voelter optimize the new technology. A visit at the Paris World Exhibition inspired and convinced him that only by innovation and developing technologies for niche markets would he be able to keep up with the tough international competition.
In 1859 Voith invented the pulp refiner, a grinder that made better quality paper by diminishing the splinter content of the rough pulp. Voelter became Voith's most important business partner, as together they built wood grinding machines for a growing market, which enabled Voith to enlarge his workshop and construct a brand-new foundry.
When Friedrich Voith, the founder's son, entered the family business in 1864, it had grown into a 30-employee machine building factory powered by steam engines. Friedrich had studied engineering in Stuttgart and spent a few years working as an apprentice in other factories, before he officially took over the business in 1867.
Although his father had been a creative force, he had also been hesitant to make take risks with his business. In contrast, Friedrich Voith was a business visionary and willing to assume large risks in order to realize his ideas. He was reportedly a good organizer, open-minded, dedicated to translating technical ideas into marketable products of high quality, and proud that Voith products were made in Heidenheim. The year in which Friedrich Voith took over his father's flourishing business also marked it's official incorporation as Maschinenfabrik J.M. Voith.
1870-1913: Expansion under Friedrich Voith
Friedrich Voith took over the business at a prosperous time. Following the founding of the German Reich in 1871, fueled by the ongoing Industrial Revolution, the German economy began to take off. Heidenheim got a railroad connection in 1870 and thereafter developed into a rapidly growing industrial town. The demand for energy skyrocketed with the burgeoning use of machinery.
The Voith factory next started designing and building water turbines, a market that J.M. Voith was involved in right from the beginning, when he experimented with his own water turbines to power his mechanical workshop. Friedrich Voith did a great deal of research work as well, maintaining contacts with a professor from the Technical University of Stuttgart and keeping informed about state-of-the-art theoretical research. At the same time, he conducted his own experiments on pulverized coal engines with his friend Gottlieb Daimler at the Voith research laboratories. In 1870, Maschinenfabrik J.M. Voith started building 100 PS-Henschel-Jonval turbines. Two years later the company built the first Francis turbine, an American invention that was greatly improved in design and efficiency by Friedrich Voith, his engineers, and associates. Those improvements made possible a great variety of uses for this turbine type, and J.M. Voith acquired a reputation for his special expertise in turbine design and technology. All this was at a time when power plants were being built all over the world, and turbines to generate electricity were in high demand.
While J.M. Voith was able to equip paper factories with turbines, it also continued its involvement with paper-making technology. Friedrich Voith and his engineers developed large wood grinders, control systems for the grinding process, magazine grinders with automatic wood refilling and vibrating graders that produced the raw material for paper of better quality. The Voith factory also started building machines for processing the wood pulp. Finally, in 1881 the first complete paper machine left the Voith factory. Expanding the product range required expanding production facilities; the machine factory was enlarged, a new and much larger foundry was set up, and a plant for boiler making and an assembly workshop were added, as were numerous research sites for wood grinding system and turbine testing. A new building for administration and a family residence were also built, and the factory was equipped with a railroad connection.
In the late 1890s Friedrich Voith focused his efforts on international expansion, traveling to the United States where he made valuable business contacts at the Columbian Exhibition in Chicago. J.M. Voith was soon able to compete in the world market, but it was one single contract made the company an international brand name. Between 1903 and 1912 Voith delivered 12 of the world's most powerful Francis spiral turbines to the power stations at Niagara Falls, the combined power of which equaled 12,000 HP. The year 1903 also witnessed the establishment of Voith's first foreign subsidiary, in St. Pölten, Austria, from which paper making equipment was delivered to Austria-Hungary and Russia. When Friedrich Voith died in 1913, his company had an international reputation and employed about 3,000 people.
1914-60: Wars and Recovery under Hanns Voith
One year after Friedrich Voith's death, World War I broke out, and his three sons were confronted with a brand new political and economic environment. After the company lost 200 highly-qualified workers in the war, it struggled with hyperinflation, a disturbed economy, and international isolation. However, under the management of the third Voith generation the company managed to recover and even expand.
In 1922 J.M. Voith introduced a new product--the Kaplan turbine. Invented by professor Viktor Kaplan and further developed over many years by Voith engineers, it's economic efficiency for smaller water power plants such as those located on rivers was unprecedented. Other Voith innovations of the time included the "continuous pulper," a machine that made pulp production faster, as well as the "headbox," a device that enhanced the speed of paper machines.
Other companies gained world market share from Voith during World War I; building heavy machinery remained a risky business, depending much on economic stability that encouraged large investments. In order to gain some stability, J.M. Voith entered a new market in 1922 when it became involved in the mass production of power transmissions. Voith engineers had been working for a time on drives for water turbines and paper machines, which also functioned with cog-wheels so this field was not a completely new one. In 1929, when the world economy was shaken by the stock market crash on Wall Street, Voith's first hydro-dynamic couplings were developed and built into pumped storage power stations. Other Voith products in this new field included drives for railway vehicles and buses, and hydrodynamic transmissions and couplings for industrial equipment. Another new area of expertise was the development of ship propulsion systems. J.M. Voith developed a ship drive based on a propeller invented by the Austrian Ernst Schneider. The new drive, called the Voith-Schneider Propeller, became famous for its steerability, stability, and ability to enable ships turn in place, features which were especially useful for tugs, floating cranes, car ferries, and passenger vessels. In 1941 a subsidiary for the repair of Voith-Schneider propellers was set up in the Northern German city of Bremen. During World War II, Voith propellers were intensively used by the fleet of the German Navy.
The end of World War II marked another serious interruption in Voith's history. Not only was 15 percent of the workforce dead or missing, but there was literally no demand for Voith paper machines, and the company found itself once more isolated from its international market. By 1947, of the three Voith brothers only Hanns Voith, the youngest, was still alive. He, along with his close friend Hugo Rupf, led the company out of the postwar dilemma. Fortunately, Heidenheim was not destroyed by bombs during the war. At first, the Voith company survived by repairing damaged bridges, locomotives, and American military vehicles, and even began a foray into the manufacture of saucepans. However, just one year after the war had ended, orders from abroad began rolling in again. Among them was an order from the Turkish government for a brand-new paper factory.
Hanns Voith was dedicated to supporting Voith employees, letting them grow with the firm and participate in its success. When food was in short supply in the years after the war, Voith employees were provided with donations from foreign customers and paid extra money by the company. Other social benefits for J.M. Voith employees included emergency household assistance, a health center, a company healthcare plan, a housing program that sponsored the rebuilding of residential structures in Heidenheim, and the construction of well-equipped training facilities. When the company was transformed into J.M. Voith GmbH in 1950, its workforce was back at its prewar level of 4,000.
1961-90: Growth and Innovations
The three decades after reconstruction saw J.M. Voith expand its capacities and develop new innovative products. In the field of paper making, rising environmental concerns put pressure on paper producers to use less harmful technologies and to recycle. Voith developed a new de-inking technology that removed ink from waste paper, which was used in waste paper treatment and recycling. The company also made headlines when it delivered the world's largest newspaper machine, which was 8.5 meters wide, to a Finnish customer in 1961. Voith then broke its own record five years later with a paper machine of nine meters in lengths for a Swedish company. Moreover, in the late 1960s J.M. Voith brought the so-called Duoformer to the market, a sheet formation system that helped make the paper quality equal on both sides. For Voith's paper machine division, subsidiaries were set up in Sao Paulo, Brazil, in 1965 and in Appleton, Wisconsin, in 1977.
Voith's activities in water turbine building were just as successful. The company's most prestigious project was the world's largest hydroelectric power plant in Itapu, Brazil, which Voith engineers helped plan. Voith equipped it with Voith Francis turbines with a combined power of 13,000 megawatts (MW). During the 1970s and 1980s hydroelectric power plant projects became more complex, given rising safety standards and new control system technologies. Voith responded by expanding its product line, including start-up turbines, shut-off devices, synchronizing transformers and clutches, mechanical and hydraulic control devices, and control systems for whole power plants.
The market for Voith turbo transmissions and hydraulic couplings, which had thrived especially in the 1950s, had resulted in the establishment of a new production facility in Heidenheim and of the Voith Turbo KG subsidiary for transmissions in Crailsheim and other branch offices abroad. In 1961 another subsidiary for managing the couplings market, the Voith Getriebe KG, was set up. Another successful Voith invention was the retarder, a hydrodynamic brake that was nearly wear-free and therefore very reliable. Retarders were built into coaches, trucks, and rail vehicles, and in the 1960s they were used in the United States for diesel locomotives that hauled freight trains almost five kilometers in length through the Rocky Mountains. In the early 1980s J.M. Voith introduced electric speed control systems for mobile and stationary brakes and eventually whole drive systems.
Also during this time, Voith's marine technology division introduced a new kind of tug called the "Voith water tractor." Equipped with the Voith-Schneider Propeller, it offered a great deal of safety and maneuverability. It was an instant hit, given its reliability, and it helped lower the number of tug accidents. By the end of the 1980s there were almost 600 "Voith water tractors" in use in more than 100 ports around the world.
1992-99 Reorganization and New Ventures
In the 1990s J.M. Voith went through fundamental organizational changes and pursued rigorous globalization through joint ventures and acquisitions. Until 1992 J.M. Voith was managed jointly by the successors of Herman and Hanns Voith. In that year, the family holdings were divided between the two family groups. Herman Voith's heirs took over the machine tool construction sector and a large share of the company's financial holdings. Hanns Voith's successors, on the other hand, took over the production facilities. Beginning in 1994, Voith and the Swiss Sulzer Group merged their paper technology activities into Voith Sulzer Papiertechnik GmbH, an independent joint venture based in Heidenheim. In 1995 the other two corporate divisions--Voith Turbo and Voith Hydro--became legally independent. Two years later, in order to strengthen its capital base, the mother company J.M. Voith GmbH was transformed into a public company. The descendants of the Hanns Voith family took over 92.5 percent of all shares, while the remaining 7.5 percent of the company's share capital in the amount of DM 200 million&mdashout $115 million--was held jointly by Deutsche Bank AG, Commerzbank AG, and Sal. Oppenheim & Cie., another German bank. None of the stock was offered to the public.
By the late 1990s, over one-third of all paper produced worldwide was processed with Voith-made machinery and 30 percent of all energy was derived from hydropower generated by Voith-made turbines. More strategic ventures followed. In 1998 Voith Turbo took over Scharfenbergkupplung GmbH, another German coupling-maker. In 1999, the Voith group acquired the paper machine and paper machine clothing businesses from the British Scapa Group. In the same year J.M. Voith AG and the renowned German Siemens AG announced a planned joint venture between their hydro power activities, with J.M. Voith holding a majority share of 65 percent. The main goal of this venture was to make Voith Siemens Hydro the global leader in its field, combining Voith's leadership in turbines with Siemens's strength in generators. In addition to their already existing joint venture in China with Shanghai Electric, Voith's access to the Japanese market through its cooperation with Fuji was well complemented by Siemens' strength in India.
The year 1999 also saw a major change in the upper management of the J.M. Voith group of companies. Dr. Michael Rogowski, who had represented J.M. Voith's management team since 1986, announced at his 60th birthday in 1999 that he would resign as CEO following the Annual General Meeting in 2000, making way for a new generation to lead J.M. Voith into a new millennium.
Principal Subsidiaries: Voith Sulzer Papiermaschinen GmbH; Voith Hydro Kraftwerkstechnik GmbH; Voith Sulzer Paper Technology North America Inc.(United States); Voith S.A.-Paper Technology Division (Brazil); Voith Sulzer Papiermaschinen AG (Austria); Shanghai Voith Paper Machinery Co. Ltd. (China); Voith Sulzer Stoffaufbereitung GmbH; Voith Sulzer Finishing GmbH; Voith Sulzer Papiertechnik Service GmbH; Lindsay Wire Inc. (United States); Appleton Mills Papermaking Supplies Industry Co. Ltd.(China); Voith Vertriebsgesellschaft Antriebstechnik GmbH; Scharfenbergkupplung GmbH; Voith Turbo GmbH (Austria); Voith India Private Ltd. (India); Voith Hydro GmbH (Austria); Voith Hydro Inc. (United States); Voith S.A.-Power Generation Division (Brazil); Shanghai Hydro-Power Equipment Co. Ltd. (China); Voith Dienstleistungen GmbH.
Principal Competitors: Harnischfeger Industries, Inc.; Metso Corporation; Parsons & Whittemore Inc.
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