EDS does not produce its own electronic components such as semiconductors because it says that electronic production is "not an important know-how" and "there are thousands of electronic producers." Instead, it buys components from external suppliers in several areas of the world, including Eastern Europe, China, and Singapore, to make its own electronic controls and devices.

Production and Benchmarking

How does EDS accomplish its high level of production? It knows that to remain profitable and successful, it must stay ahead of the competition. "Although we are an in-house supplier, we are in competition with other suppliers," says Anton Peisl, head of Business Administration for BSH's EDS division. This is important, Mr. Peisl says, because it provides a benchmark for the division as far as cost and technical solutions are concerned.

"We think this is a better way than being the only supplier [and] not knowing exactly from the market what is needed. We think this is the best way to get a good position and to stay in the position," Mr. Peisl adds. "We have to fight every day in the marketplace with other suppliers."

EDS measures its success through the acquisition of new orders in which it had to compete with external suppliers of controls, software, drives and systems, and motors. "If we get the order, then we are the benchmark," Mr. Peisl says.

Helmut Schaff, head of the Development Projects for EDS, and Erwin Helbrecht, head of the Development Department, Electronics Systems, EDS, say that from an engineering perspective, this philosophy is positive. "To have and preserve a good position and a high performance, it is necessary to compete with others," Mr. Helbrecht notes. "You can generate business and sales with a concept similar to sport competitions,"

This is exactly how EDS works. It is the biggest supplier of electronics and drives to BSH. EDS meets more than 50 percent of BSH's in-house needs, and with motors, only about 20 percent of the sales are to external customers.

EDS's frequency-controlled induction motors (pictured) range from 1,200 rpm on the low end to 2,000 rpm for the high-speed induction motor. EDS also develops custom induction motors that have customized features, such as adapted spinning speed, adapted communication interfaces, doubled d.c.-link voltage, and special end shields.

Quality Standards and Employee Management

EDS's history is varied for the different segments of the business unit. The motor side began back in the 1970s as part of the Siemens Corp. However, the electronics side, which was part of Siemens, didn't begin until the early 1990s. Both sides were then consolidated into one business area, and BSH acquired the combined unit in 1998. Although EDS's history with BSH is young, it has a solid background on the Siemens side. Its roots are from the automotive industry, which Mr. Peisl says demands high-quality standards. EDS has adopted these standards, and today, it follows guidelines and quality qualification systems such as Capability Maturity Methods (CCM). CMM began approximately 2 years ago, when Siemens CT conducted an assessment of company hardware and software. Subsequently, an improvement project to design BSH's Product Development Process (PEP) was started. The rollout of CCM is ongoing. "This is how we do our daily business," Mr. Peisl says. "I think we made a step forward in customer orientation."

But constantly competing and remaining innovative can be challenging at times. So how does EDS ensure that it's always turning out a high-quality product, even though it adheres to systems such as CMM? Futhermore, how does EDS grow its employees and keep them up to par? First and foremost, BSH and EDS subscribe to the notion that consistency and continued development breeds quality and innovation. That's why the company is ISO 9001 and ISO 14001 certified. Such certification requires that processes are consistent through all the plants and facilities, and it obligates the company to follow guidelines and processes to keep it this way. "The product development process (PEP) is the same for EDS and also BSH," Mr. Peisl says. "The processes are combined [and] connected together so they are the same. In every site it is the same process. Everyone is working with the process with the same definitions, so every person in BSH knows what you are talking about. The most important thing is that BSH as a whole has the same process and the same understanding of what everything means."

In addition to the consistency and quality bred through standards, BSH works to continually develop its employees' knowledge and help them advance. In fact, BSH has an employee development program and its own company "university," BSH Academy, an on-the-job training program for all BSH staff and the staff of its divisions. Special training is offered in areas such as project management, leadership, working techniques, and foreign languages, just to name a few. "Continuous training on the job is very important to maintain state-of-the-art working techniques and to cover the skills of the future," Mr. Peisl says.

Keeping It Smart

One of EDS's most recent product innovations is its serve@Home Internet-connected smart home appliance system. Introduced in October 2003, the new Internet appliance line is initially being offered to select dealers so EDS can display the new system on the dealer floor, letting customers use the line and see it in action. "You can do a lot of market research, but you come to a point with high technology that you have to go out and let customers play with it," says Horst Werkmann, head of Internet @ppliances for EDS.

However, no matter how well an appliance is designed, how cutting edge its technology is, or what functions it promises to perform, the appliance is futile if it is cost prohibitive. This is how EDS says it differentiates itself from competitors. Being cognizant of this cost issue has pushed EDS to the forefront - it says it is the first company in this market to bring "complete solutions" that are ready to be sold to the customer. This means the appliances must be affordable; therefore, EDS made it one of its main goals to address the cost of the appliance and made it a priority to keep added costs to a minimum. The company was able to achieve this by designing a black plastic housing to make appliances "future proof." This housing is designed to hold another black plastic "node" that snaps into the appliance to make it Internet-ready. The cost to customers is about 99 euros (approx. U.S. $126) for the node and about 50 euros (approx. $63) to purchase the "future-proof" appliance without a node, but with plastic housing. This is the company's smart solution to the alternative: an expensive appliance that would prematurely be rendered useless because of the advancement of future technology.

The serve@Home system works by communicating via powerline technology to offer a "plug-and-play" solution to customers. Therefore, the EHS-/Konnex-bus is used. This allows for the integration of lighting, safety, heating, and other applications and services in the near future.

EDS provides a full system for white goods communication. The communication components include a system interface, which is the powerline node mounted in the appliance; the gateway itself, which uses portable OSGi-software; the interface to the TabletPC via wireless local area network (LAN), WiFi, or through an internal network via Ethernet; and connection to a mobile phone for remote access and control via the Global System for Mobile Communications (GSM) Network.

serve@Home has the functionality to manage appliances from both indoors and outdoors. Inside the house, the appliances can be managed via a wireless local area network (WLAN) based on a mobile Web pad, such as a Tablet PC. For example, a washing machine located downstairs sends the information via powerline to a residential gateway. The gateway then communicates via WLAN with the TabletPC or via GSM with the mobile phone. This means if a person is traveling, he or she has access to his or her appliances via mobile phone. Through the mobile phone, the status of the appliances may be checked, or they may even be turned on or off. The real importance of the serve@Home products for the industry, Mr. Werkmann says, is the new possibility to exchange information with stand-alone appliances. "They can be integrated into a network," he says. "This offers brand-new possibilities for service and customer-relation management."

The gateway software provided with the system is an EDS development. The hardware component is a standard component. The concept is that the OSGi-based software in the gateway is independent from the hardware so different gateways from different suppliers may be used. "The main advantage [of this method] is that it is not forced to incorporate all of the electronics into the product, which means a cost savings for BSH," Mr. Werkmann says. "It is also very flexible in that customers can plug in the module themselves, and it allows for future upgrades."

Through this gateway, EDS has also implemented remote diagnostics service functionality so that if there is a problem with the appliance, the gateway also receives an error message. Customers will receive a pop-up message, and they are able to decide whether to inform customer service. If the customer renders a "yes" decision, EDS sends all the internal information from the appliance to customer services. "Each device has its own specialist," Mr. Werkmann says. The serve@Home name perfectly explains the features of the product, he adds. The "serve" part of the name stands for services and "surfing" the Internet. The "Home" segment is self-explanatory. Services are delivered to and from the appliances, and each appliance is prepared with a slot to install the communication node. This communication node sends the appliance information via the external power line, so no new wires are needed.

Looking to the Future

EDS plans to keep up its momentum when it comes to developing "a totally different type of appliance." Mr. Peisl says he sees "bringing out innovative products" as one of the most crucial ways to keep EDS moving forward in the industry. That, he says, means being able to closely follow the two directions the market place is headed - cost reduction and innovation. But Mr. Peisl says he's confident that EDS will be successful and that it's already accomplishing both goals. "We are going in both directions, I think, because we have a product range at BSH that is from the top segment down to the middle or low range," he says. "We have to follow both directions, being very competitive from the cost side, but also being innovative…bringing new things to the consumers and giving them advantages that are worth paying for."