June 11, 2024 Industry Forum Blog, Insights, Uncategorized With an increase in public awareness on sustainability there has become an increasing need for organisations to demonstrate corporate responsibility on social, economic and environmental issues and how organisations manage these expectations for the benefit on society and the communities in which they operate. ISO 14001 is a means of implementing the required elements that form an effective Environmental Management system. It provides evidence that an organisation has considered any effects on the environment from its activities and how it can manage these and look to reduce its overall impacts. This provides benefits for identifying how waste can be reduced or eliminated, providing a cost-benefit as well as providing confidence that the company have adopted corporate social responsibility. The standard is based on four key elements: Environmental Policy It is important that there is a commitment to apply the requirements of the standard and as an organisation the top management should identify Commitment to Continuous Improvement, Prevention of Pollution and compliance with legislation and regulations this shall be documented, implemented and maintained so it can be communicated to the relevant interested parties. Planning For the implementation of 14001, the organisation needs to consider its risk and opportunities and assess the aspects of its activities on the environment. From this analysis the scope of what it is targeting to achieve can be determined and objectives set that are realistic to bring about improvement in the performance. A further part of planning is to understand what obligations an organisation has relevant to the environment, this could be statutory or regulatory as well as other commitments including those that it has identified as part of the planning processes and those within its own policy commitments. Implementation and Operation Once an organisation has determined what it is looking to achieve, it needs to provide the resources, this includes defining roles and responsibilities in the management system as well as adopting operational controls including any in emergency and abnormal conditions and providing resources so intended outcomes can be achieved. Checking and Corrective Action As with all management systems that adopt a Plan, Do, Check, Act approach, assessment needs to be carried out to understand the level to which its objectives have been achieved. Part of this is auditing the system to see how requirements are effective and identify improvements. Monitoring and measures of the system allow evidence-based decisions to be made on focus and resourcing improvements in the environmental management system. During the 1980s, SMMT, our parent company became increasingly involved in quality matters and in improving supply chain management in the Automotive industry. This culminated in the creation of IF with considerable support from the then Department for Trade and Industry. Its work has spread to other industries and its success is being replicated in other sectors of the economy. SMMT Industry Forum uses its extensive expertise in improving the automotive manufacturing industry to help major, global cross-sector organisations understand, optimise and improve both manufacturing capability and business performance. The course has been developed by experienced 3rd party auditors to provide the tools and techniques to plan, conduct, report and close out effective environmental audits. Industry Forum has over 25 years experience in training auditors at all levels of the certification cycle including 3rd, 2nd and 1st party auditors, it utilises its understanding in the complexities of management systems to develop engaging courses to inform as well as build auditor competence and understanding in the requirements of management systems for effective audits.
September 22, 2020 Insights STOP BREAKDOWNS, STOP DEFECTS, STOP ACCIDENTS Reduce costs now by optimising production and eliminating losses, with Total Productive Maintenance Complete the form on the left of this page today for a confidential, no obligation discussion about how TPM can benefit you. Free Performance Assessment & Report Total Productive Maintenance (TPM) aims to enable manufacturers to optimise production assets to deliver zero-breakdowns, zero defects, and zero accidents. TPM is an effective way to eliminate losses across an organisation and throughout the value stream. Create a Culture of Problem Solving Improve Overall Equipment Effectiveness Make Significant Financial Savings You can rely on us to deliver TPM to the highest standard… As JIPM* has appointed Industry Forum as the only English speaking, certified TPM consultancy, you can be confident in our ability to implement the strategy efficiently and effectively. Our Approach to TPM We utilise the 8 pillars and 12 step deployment model to achieve world class manufacturing excellence. It is the mission of each pillar to reduce loss, with the ultimate aim of eliminating all losses… The Result? Huge, tangible savings for your business. The typical savings realised by SMEs1 is £350k a year. Imagine what you could achieve with that! Want to know how we can deliver you efficiencies on this scale? Complete the form on the left of this page today for a confidential, no obligation discussion about how TPM can benefit you.
October 23, 2019 Insights Earlier this year, 22 international supply chain, technology and recruitment experts from diverse industry sectors spent a day together to discuss the state of the Supply Chain Management profession and the challenges it faces. The lively round table discussion, facilitated by SMMT Industry Forum and jointly hosted with the Association for Supply Chain Management (ASCM), provided an opportunity for senior professionals from companies including Airbus, DHL, John Lewis, Lockheed Martin, Nissan and Volkswagen to compare and contrast the situation in different industries and to look in some depth at the issues common to all. The purpose of this paper is to capture and share the valuable insights of this significant round table event, as a step towards ensuring the SCM profession can rise to meet the challenges ahead [contact-form-7 id=”26931″ title=”Gated Document: Supply Chain: The Missing Link (gated document)”] .
January 14, 2019 Articles, Industry Forum Blog, Insights, Supply Chain Development Supply Chain Training We offer a range of courses from basic introductions to advanced certifications covering all aspects of Supply Chain Management. Whether it’s physical logistics, a broad understanding of Supply Chain theory of inventory management or professional globally recognised certification, we have a course to suit you. For more detail take a look at our Supply Chain training courses or contact us today to discuss your individual needs. Supply Chain Consulting Areas The Supply Chain is so vast, it can often feel overwhelming. Industry Forum’s expert consultants have experience in successful and profitable change projects. Remove the worry and deliver results to be proud of with the support and guidance of our team. We also understand that there are times when you simply need an extra pair of hands. Our consultants can support you in a flexible manner to meet the needs of your business without tying you into lengthy recruitment processes. Benchmarking How well does your business perform compared to your competitors or leaders in other sectors? Benchmarking areas in supply chain can include: Goods In/ Goods Out Processing Warehousing and Distribution Supply Chain Management Procurement/ Purchasing Cost to Serve Analysis We calculate the true cost of buying, handling, storing and moving the products as separate elements of your supply chain, rather than the traditional accounting method of the blanket distribution of costs. This allows you to understand the true costs of supplying your customers and identifies areas for improvement and profit enhancement. Physical Supply Chain Reviews – Warehousing and Distribution Process Improvement: We analyse your processes and workflows to identify strengths, weaknesses and gaps. Warehouse Layout: We review your current layout and process flows and develop and design more efficient warehouse layouts to increase productivity and improve your supply. Systems and IT: Are legacy systems holding you back? Are your team reliant on excel spreadsheets and paper based solutions? If you don’t think you’re getting the most from your current system, or feel the time has come to invest to support growth, one of our advisors can review its performance and help to negotiate and implement an improved offering from your provider. Network Design and Warehouse Moves: Our team can model your future requirements, support you through: Evaluation and remodelling of your current operation Design and build or sourcing new warehousing Negotiating leasing of existing warehousing Managing the exit from your current premises Logistics and Transport The cost of logistics and transport is too often overlooked as a ‘necessity’ without real understanding of the performance, effectiveness and structure behind the operation. Our experts can help you to identify and manage the elements of your logistics and transport operation in order to optimise your solution and improve both service and profit. One of our team will manage any tender and contracting process from beginning to end, ensuring a smooth transition and clarity throughout. Forecasting, Demand and Inventory Management Poor forecasts, poor inventory management, and unsuitable demand planning processes could be costing you significantly; tying up capital and eroding your bottom line profit. We can help you to understand the root causes of the issues within your planning function and identify ways to resolve them. Sales and Operations Planning (S&OP) Sales and Operations Planning brings together Sales, Operations, Finance and Senior Management to ensure the heart of the business is aligned to the strategic direction of the Board. A fully integrated S&OP that allows for collaboration within the business in a structured and controlled way can be difficult to achieve, but not impossible. Our wealth of experience will ensure your S&OP process is right for you. With a focus on a simple, achievable process which delivers instead of a regimented process drowning in theory that does nothing to enhance your performance. Good S&OP doesn’t need to be complicated. We can design, implement and restructure your S&OP process and deliver internal training to ensure your team continue to make it work. Product Lifecycle Management Our unique approach includes a combined process review and improvement project along with tailored training to your team to ensure all future new product launches run smoothly. Managing end of life product to maximise sales whilst minimise remaining obsolete stock within your business is all part of our lifecycle management review. Supply Chain Systems Implementation From design, selection, right through to installation and transfer from legacy systems the potential for failure is enormous. It’s unlikely that the business will regularly do a system change – so why not let us support you? We regularly support businesses through systems implementation in: WMS, Automation in the warehouse, Forecasting and Demand planning systems, ERP systems, EDI systems, Operational Planning System as well as end to end financial management systems. Let us manage the implementation project so that your people can focus on what you hired them to do. At the end of the project, we can train and support your staff to ease the transition.
December 11, 2018 Insights Japan Best Practice Study Tour 2018 This year Industry Forum relaunched the Japan Best Practice Programme. This is a manufacturing best practice study tour where senior leaders and change managers can witness first-hand some of the best examples Japan has to offer. The week long Study Tour included four manufacturing visits to World Class facilities, seminars on Toyota Production System and Industry 4.0, a cultural tour of Tokyo and the Toyota Museum and a day at the Global Karakuri Kaizen competition. Karakuri Kaizen is a creative problem solving technique that utilises any available energy source to move materials or ingenuity, to eliminate errors, risks or difficulties and hundreds of companies from all over the world share their example and compete for the prize of being champion. Day 1 The first day introduced the delegates to the programme, the itinerary and logistics for the week. Once those formalities were complete the group had a guided cultural tour of the amazing sites in Tokyo has to offer, ranging from the oldest Temples to the heights of the Sky Tree – for a time the tallest building in the world. Day 2 The first Plant visit was to Mitsuba Niisato Plant in the Tokyo area. Mitsuba are a global manufacturer of electric motors for the automotive sector, among other things. They have followed the Total Productive Maintenance path since 1996 and achieved great improvements. They describe a ‘Double TPM Approach’ which refers to Total Productive Management as well as Maintenance. This provides a leadership approach that sets clear direction and aligns appropriate resources to meet organisation wide successes. Later the more familiar Pillar approach was introduced to build stable processes and full engagement of people. After a short journey, the second Plant visit was Shindengen, a global manufacturer of car and motorcycle electronics. They owe much of their success to the effective deployment of the Shindengen Productivity Innovation System – which incorporates elements of Lean, TPM and Total Quality and is applied across people, process and products. As you approach the manufacturing facility from reception you are greeted by a wall of clear information that cascades objectives into individual themes, all clearly owned and executed through their small group activities. It is very clear to see how this helps engage everyone in the policy and targets organisation wide. Day 3 The group travelled by bullet train from Tokyo to Nagoya ready to visit the Toyota Museum and also the Toyota Motomachi Assembly facility to have a detailed guided tour through the whole process as well as a lecture on TPS by Mr Ron Haig of Toyota Head Office. The museum is truly a fascinating place to visit. It chronicles the progress through the generations of the Toyoda family and the developments from loom making into vehicle manufacture. In the great entrance the centre piece is the Circular Loom. An amazing piece of engineering in its day, and it holds centre stage as a lesson in humility because in his life time Sakichi Toyoda never took it to the level of perfection he desired, which was to auto change the shuttle. Day 4 At the Motomachi Assembly Plant it was fascinating to be reminded of the mantra Toyota has which is to ‘add value to society by making things’ – which seems simple enough. Following on from this there are some challenging commitments to reduce CO2 emissions by 90% and have zero emissions at the Plant by daily kaizen. There are different types of kaizen and different levels of involvement but the base line is an improvement every 2 weeks per person, this means more than 15,000 ideas implemented each year. You see this in action as you walk around the Plant and see how it differs from contemporary Plants. In Nagoya we had a lecture from JIPM on the subject of Industry 4.0 implementation. Over the course of the week there were many interesting discussions about the role of technology, when and how to invest and then how this relates to 4.0 and IoT. Some of the conclusions included: 4.0 was perhaps more of an evolution rather than revolution. It is important to consider the cost and benefit, for example whether to automate and use robots should target processes at capacity and operating 24/7 Karakuri Kaizen offers a complimentary strategy to 4.0 for low cost automation with zero emissions When considering all the capabilities technology can offer it is important to consider what to measure, how to collect the data and how to process it so it leads to the right action. One key to this is to make the process performance very visual so action is quick and direct There is now a sequence of steps to follow so you can introduce an innovation pillar in line with the other pillars deployed as part of TPM. Day 5 The 23rd Karakuri Kaizen Exhibition and awards takes place every year and provides an opportunity for any manufacturer to show off their ingenuity and compete for the prize of champion. There over 400 companies that participate so there are many examples to see and discuss. Karakuri Kaizen provides creative improvement that achieves a variety of outcomes. Moving items from one place to another and return with no additional energy Providing methods that result in error free processes (Poka Yoke) Methods that provide the correct orientation of parts for the next operation Methods that achieve more than one outcome from a single action Methods to position necessary items in exactly the right location with zero effort (Photo provided by Japan Institute of Plant) Day 6 The final leg took the group to Shiga prefecture to visit Sakata Inx. This is a global organisation processing chemicals and other ingredients to produce a range of ink products that may be applied to paper, metal, plastics and packaging. The application of TPM and Lean in a process industry can have its challenges because the process is dependent on chemistry and processing parameters rather than component parts. To guide this approach a new method to analyse the operation was introduced known as Through Neck Analysis. This led to various activities aligned with autonomous maintenance and planned maintenance, and established standard approaches to share with other facilities. The approach also led the technical team to radically redesign the operation with dramatic effects and established the new generation of Plant and Equipment that would become the Global standard for the company. Finally after all the visits there was a final dinner with awards and prizes for the delegates. The feedback was gathered each day and for the study tour as a whole. In summary the final rating for the overall experience was nine out of ten. In all cases people felt it would be good for others to attend in future. This might target Leaders and practitioners of transformation programmes whether TPM or Lean. Some quotes from participants include: “It triggers the mind to think of the improvements in a simple manner to better implement TPM” “A great opportunity to see some excellent examples of what a mature state of TPM looks like and helps you set some goals for your TPM journey” “A good programme for learning about TPM effectiveness” “TPM Learning through experience in Japan” “It was a clear reminder of what it really takes to be successful in transforming your business”
June 28, 2016 Insights The Current Scene The Industry Forum Manufacturing Advisory Group (MAG) met recently to consider current trends in the development of new manufacturing models in New Product Introduction (NPI). MAG reported that NPI timescales including the timetable for ramp up to volume production continue to be more and more compressed. MAG also observed that NPI these days increasingly includes a revamp of the underlying business model as well as the development of new physical product. Business strategies more and more are seeking competitive advantage through being the first to introduce a new technical concept or practice even though this may involve serious cost control challenges and other significant risks. Fundamental product and business model reassessments can also be triggered by a sharp market adjustment such as the recent crisis with Tata Steel in the UK. MAG reported that the core discipline of engineering is expanding to encompass an increasingly wide range of issues. Technologies which have proved effective in a few sectors, such as composites and 3D printing in aerospace, are being picked up elsewhere in manufacturing but the supply chain processes and arrangements for sharing learning and best practice between sectors are not keeping pace with this spread. A New Manufacturing Innovation Competition from Innovate UK The dynamism of the current manufacturing scene is typified by Innovate UK who have just launched a new-style competition to fund projects for the development of more flexible processes, greater product customisation and the development of novel services opening up new sources of revenue from manufacturing. The priorities include innovation in manufacturing systems, technology, processes and business models including supply chain management, new product introduction processes and remanufacture. Innovate UK are looking for innovation in materials development, materials integration and reuse including light-weighting, energy generation and storage and electronics and sensors or for demanding environments. Materials innovation can include nano-materials, ceramics, metals and inter-metallics, polymers, composites, coatings, smart materials and joining of dissimilar materials. A further competition for additive manufacturing is to be launched shortly. Industry 4.0 and revised national manufacturing competitiveness rankings Industry 4.0 is a term which is gaining currency to describe the large scale step change which is anticipated in manufacturing thanks to digitisation presenting particular opportunities for established economies. In fact, Industry 4.0 (known in Germany as Industrie 4.0) started as a strategic programme to shape the development of German manufacturing up to 2020 and beyond but it is now attracting serious attention in other major manufacturing economies such as the United States, China and the UK. Members of MAG see this development as a potential game-changer. The emergence of this broad manufacturing innovation agenda globally has led to a sharp upward revision in the assessment of the UK ‘s relative manufacturing competitiveness. The US Competitiveness Council has just published the third round of its Global Manufacturing Competitiveness Index (GCMI) prepared with Deloitte Touche Tohmatsu. The UK has risen dramatically in the rankings to sixth place behind China, the US, Japan and Germany . The UK scores a GMCI of 75.8, less than one point behind South Korea at 76.7 . The UK was ranked 17th in 2010 and 15th in 2013 so the current score and ranking in 6th place indicates a step change improvement in the UK’s prospects. The UK’s university sector with its increasing output of STEM graduates and top quality research are recognised in the rating, as is the strength and innovativeness of the UK’s aerospace and automotive manufacturing sectors. Additive Manufacturing, Predictive Analytics and the way forward Although additive manufacturing (3D printing) is several decades old, the technology continues to develop and the UK research base is very active in the field. The technology has made the greatest inroads in new product development where it is very well adapted to the agile product development methodology. The agile method involves frequent rapid cumulative iterations of prototypes each of which is tested ideally on real customers in a kind of joint development process. Some commentators have suggested that the agile approach is so powerful that it will eventually lead to a substantial reallocation of responsibilities within manufacturers. In terms of progress towards digital manufacturing, the key point is that when the prototype is fixed and becomes the final product, a digital model of that product is available for use downstream within the value chain making a potential digital bridge between development and manufacture. In some military applications the additive manufacture of replacement parts in the theatre of operations is being trialled thereby reducing stockholding and downtime for repair. MAG report that the introduction of additive manufacturing downstream from product development can in certain instances generate very substantial cost savings. In theory a digital model of the product might feed into volume manufacturing using other processes than 3D printing such as a new level of artificial intelligence within industrial robots. This kind of digital interoperability across an organisation requires an IT infrastructure which can handle very large quantities of data, a strategic investment for any firm. Many of the relevant standards required by this way of working have yet to be agreed and there also serious security considerations. This decade the global volume of data has been increasing more rapidly than either world GDP or world trade. It follows that firms need to develop a strategic approach to exploiting this expanding resource. MAG suggests that a good place to start might be the development of a predictive analytics capability given that maintenance costs are significant part of most manufacturers’ operating costs. As manufacturing becomes more capital intensive, profitability depends on achieving very high availability of manufacturing assets. The familiar TPM approach can be supplemented by predictive analytics whereby data from the manufacturing equipment such as temperature, pressure and vibration is acquired and added to a large historical database in real time. Analytics is used on the database to predict when various maintenance interventions are necessary to keep the equipment operational. The term ‘just-in-time maintenance’ has been coined for this approach which is also of potential value to equipment manufacturers in developing improved machinery. The power of this approach and its potential returns has prompted the development of new offerings by major companies such as SAP and IBM. Management of Change The digitisation of manufacturing and the development of associated business models with a more prominent service element require significant organisational change and should be managed as such with top level support, a senior champion plus capable programme leadership and management. If there is to be a revised or extended business model then good customer buy-in is also essential. Customers must understand the new offering and see it as providing a credible solution to an existing problem especially if a new payment model is involved. Delivering the new benefits to the customer is likely to involve a large scale communications programme within the company including better communication across the company. This will mean a major training programme both to build up the necessary capabilities and to generate the particular mind-set that can deliver high value services properly. Some skills may well have to be acquired by recruitment where they cannot be quickly developed within the company. Implications MAG believe that this wave of change in manufacturing will require companies to decide how they will compete in future. To manage this strategically, manufacturers should include the new digital manufacturing technologies in a strategic roadmap and should define what they expect their factory of the future to look like in 10, 15 and 25 years-time from the point of view of process, people and supply chain. MAG suggest that NPI is getting to be as much about process as it is about the final product. Firms that succeed in securing a leading position via NPI will do so by focusing on the human dimension, creating the right culture and securing the right skills. There is a risk that the new generation of technologies involved in ‘Industry 4.0’ might lead people to feel disconnected from the factory floor. Accepting there will be such issues and preparing for them including budgeting can eventually save costs overall. NPI leaders need to prepare the expectations of the new approach to NPI of all stakeholder, the workforce, suppliers and customers to with care. For example, early identification of major potential issues may be perceived by senior management as a failure in the project, whereas that is exactly what high performing agile NPI should do. The ‘don’t bring me problems…’ mentality can hinder the early recognition and early correction of NPI problems. For example, there are occasions where the supply base tends to be common across an industry sector so NPD in one OEM or assembly manufacturer may impact on other OEMs as suppliers commitments become stretched. Management tools like Advanced Product Quality Planning need to be applied in a disciplined realistic fashion. Although new technologies will continue to be introduced, manufacturing leaders must never lose sight of the basics of performance measurement and methodology. The risks will increases exponentially with increasing volume of production which is why the iterative agile development approach is so important to solve problems thoroughly during the introduction process.
January 25, 2016 Insights It is a common understanding that some of the most effective businesses globally devote a great deal of attention to managing and developing their supply chains. In recent years the Government, the CBI, the Automotive Council and the All Party Manufacturing Group have all published important reports and studies of the performance of the UK supply chain and the scope for improvement and expansion. This focus of attention is partly because there are major growth opportunities in the short, medium and longer term thanks to the investment undertaken and planned in various sectors including rail, civil nuclear energy, renewable energy and automotive. Aerospace and medical equipment are two more sectors where the growth prospects are good. But supply chain firms may well not understand these growth prospects or be properly equipped to make the most of them. Current Supply Chain Challenges and Opportunities The Industry Forum Manufacturing Advisory Group (MAG) met recently to discuss current supply chain challenges and opportunities. They looked at recent data from the premier professional association for supply chain and operations management, APICS, which shows that chronic supply chain disruption persists but is not always easily visible. As a result, it is often neglected by management who underestimate the adverse consequences. A survey of over 500 businesses found that 73 per cent experienced supply chain disruption with an average of five incidents. In nearly 40 per cent of cases, the disruption originated below tier one in the supply chain. One in five firms experienced losses in excess of one million Euros. MAG confirmed that there are difficulties in getting supply chain information about 2nd level suppliers and beyond. Difficulties can have serious impacts on the whole supply chain. Problems are not necessarily a matter of large scale external upheavals, although they can be damaging. Common business issues like access to finance with the prospect of insolvency can be major risk factors too. As is in any risk management exercise, it is important to gather specific information about the situation under consideration and examine it for significant patterns. APICS suggest that primary manufacturers often do not realise the extent to which their own behaviour is part of the problem, especially their failure to communicate effectively what their actual requirements are. Often, this is because these requirements have never been properly specified.There is, unfortunately, a widespread tendency to place all the accountability for supply chain performance on the suppliers. Skills gaps are a problem and even where procurement professionals are actively involved, there is a tendency for them to see their role narrowly in accountancy terms and to be dominated by short term financial pressures. Higher levels of management are often, quite simply, unaware of the situation and may lack the background to appreciate the potential seriousness of the situation. This state of affairs would be of concern if the business environment was static but current and future developments make it more urgent to address the issues. Many commentators believe that competition is no longer company to company but supply chain to supply chain. In some cases, stakeholders see this in national terms, as for example competition between the Indian and Chinese automotive supply chains and their ability to support ambitious national medium term goals. A number of important trends are relevant to the growing importance of supply chain competitiveness, including the blending of manufacturing and services offerings (servitisation), the opportunities arising from strategic re-shoring elements of supply and a clutch of digital developments, including the emergence of the Internet of Things (IoT) and the insights available from Big Data analytics. MAG emphasise the increasing importance of customer value as a driver, especially as customisation becomes a key competitive differentiator. All of this is making supply chains ever more complex, as product life cycles are getting compressed in many sectors. Benefits, barriers and bridges to effective supply chain alignment MAG stress that effective supply chain management is about much more than materials management or basic purchasing parameters. It is important that supply chains managers are able to think on a broad scale – in terms of the value chain, for example. This means that quality rather than cost or delivery becoming the key driver, with quality evolving to mean the provision of superior quality through a personal offer for each customer. Supply chain management is often introduced to a firm as part of new product development. This is quite understandable but the approach needs to be elevated to company level and integrated into the overall product strategy. This means getting a proper alignment between the marketing strategy and the supply chain approach. Without this degree of integration, the scope for productivity growth is limited. It is important that the performance metrics used for the supply chain align with the firm’s overall performance yardsticks and those used to drive marketing. MAG have found that questions of the firm’s overall global configuration come to the fore as supply chain management improves. The firm’s components and processes should be placed in the localities and countries which offer the best combination of cost and efficiency. This is often a matter of the suitability of the workforce, particularly as supply chains become more complex and the capability to respond immediately to changing customer requirements grows in importance. However, firms need to recognise that creating a comprehensive supply chain map takes time and resource to construct. Nonetheless, the benefits of a full description of the whole global supply chain are substantial. How to embed customer responsive supply chain practices MAG stress that the core of better supply chain management is developing higher levels of trust. An important tool in this regard is the Mutual Value Index, which measures the customer value to supplier and supplier value to the customer, and provides the overall context for improvement initiatives. It is vital to stabilise the relationship with suppliers so that there is sustained engaged relationship with suppliers. MAG members have concluded that it takes on average, ten years to establish real trust between customer and supplier. It is important that primes are careful with their supply chain during a downturn as a prime will depend on the supply chain when demand picks up again. Sharing cost savings between customer and supplier is also vital. Any programme of this kind must have high level sponsorship within the business if it is to succeed. This should be expressed in overall corporate objectives and metrics that are aligned to this. A good understanding of the balance between cost and value is essential. This must be at the heart of any New Product Introduction (NPI) programme which is to succeed and value will always be value as perceived by the customer. Suppliers must be involved as early as possible in the NPI programme. Primes must appreciate that developing a good understanding in the supply chain is as important as upgrading their own staff. Companies throughout the supply chain must understand the value chain forward as well as back. Everyone needs to understand their position in the value chain and the influence that flows from that position, especially the influence that they have on the delivered end product. Better information flows are important and social media is an important new tool for this. Job shadowing is another way of developing better overall strategy understanding along the supply chain. The global automotive supply chain uses the Materials Management Operations Guideline/Logistics Evaluation (MMOG/LE) as a self assessment questionnaire for suppliers to score their competency in materials planning and delivery. It is designed to validate that a supplier has robust materials planning and delivery processes in place to support business objectives. In the global automotive supply chain, many vehicle manufacturers require suppliers to use this took. MAG suggest that this approach might also be useful in other industry sectors. Balancing supply and demand can raise productivity The formal definition of supply chain management is the process which integrates, coordinates and controls the movement of goods, materials and information from a supplier to a customer to a final consumer. More and more sectors are getting to be like automotive, where the cost of bought in goods and services are a high proportion of total revenue. This means that the total purchased cost is often a lot greater than added value. This trend alone justifies making supply chain management a priority. It is vital to assess the costs of different potential suppliers in terms of total landed cost. With customisation and rapidly changing consumer preferences, re-shoring can emerge as the most cost-effective solution. When supply and demand are in balance, the supply chain is increasingly value driven and this means a greater contribution to added value without unproductive limitations. Higher added value means higher productivity. This way of looking at the supply chain is described as ‘holistic’. Adopting an integrated perspective in this way overcomes limitations on productivity growth. This means making planning rather than manufacturing the centre of the management process. The keywords in the best approach are supportive, collaborative, dynamic and flexible. If you’d like more information on our Supply Chain Courses, and also the opportunity to complete a free Supply Chain self-assessment, click here to find out more. Further information: [email protected] +44 (0)121 717 6600 Download Article (pdf)
January 5, 2016 Insights These guidelines have been put together for the use of current and potential suppliers into the automotive supply chain. It is intended to be used as an aid to understanding what an automotive customer will expect in terms of service and documentation and explain why this is the case. The guide has been constructed with help from Rolls Royce Motors, Bentley, Aston Martin and Jaguar Land Rover in order to align it with the needs of original equipment manufacturers (OEM’s), who are required to mandate certain requirements in order to comply with their own and also international standards. Most notably the automotive specific standard ISO/TS16949. A central theme of this standard is that the OEM’s need to demonstrate that they have control of the whole cycle of making a vehicle from concept through to launch and even beyond into spares/warranty. In order to be compliant with this, the OEM’s need to be able to prove they also have control of all the supplied parts that they buy. Due to this, they will need a lot of information from a supplier in order to be able to satisfy this requirement. Further information: [email protected] +44 (0)121 717 6600
November 19, 2015 Insights Introduction “Lean” has been applied to a wide variety of manufacturing processes for many years. It began to be defined in the automotive sector, but has since expanded into a wide variety of manufacturing environments. Increasingly, the approach and tools are being applied in service industries such as retail, finance and healthcare. The application of Lean into New Product Introduction (NPI) seems to have been strangely neglected. Can Lean be applied to NPI? After all, it is just a different type of process. This insight document aims to discuss how Lean and its underlying tools can be applied to NPI. Back to Basics Although some of the tools and techniques of Lean can be traced back through the decades and even centuries to Adam Smith and beyond, the philosophy was defined in the late 1980s and early 1990s. This was primarily from the experiences of the automotive sector. Since then, the approach has been applied to varying degrees of success in a wide range of transformational processes from manufacturing, pharmaceutical, finance, healthcare and elsewhere. In comparison, little seems to have been done in applying the approach to the design and development phase of the process as opposed to the delivery. At best, various tools, such as Quality Function Deployment (QFD), Design Failure Modes & Effects Analysis (DFMEA), p-diagrams and Design to Target Cost (DTC), have been developed. However, these appear to have been applied without a clear overall strategy. Similar issues were encountered with the early application of Lean when tools such as Kanban, Single Minute Exchange of Dies (SMED), Statistical Process Control (SPC) etc were implemented without a clear understanding of how they fit together. In some cases, what could and could not be achieved by applying the tool was also poorly understood. So, what is Lean? Many attempts have been made to define Lean. It is useful at this point to refer to the 5 Principles developed by Womack and Jones in their book Lean Thinking. 1. Define value; 2. Map value streams; 3. Create flow; 4. Establish pull; 5. Pursue perfection. Although perhaps not a concise definition, this provides a structure to developing Lean. We will now look at each of these principles in turn. Define Value Understanding value is at the heart of Lean. Does there need to be a different definition of value added and non-value added activities in NPI when compared to the production process? A standard definition is that to be value added, an activity needs satisfy the following: 1. Change the fit, form, or function of a manufactured product, or service, or progress a design to meet the customer’s requirements; 2. It must be done right first time; 3. The customer must be willing to pay for it. However, some activities may progress a design even though, or even because they are not right first time. Examples include prototypes that do not work as anticipated, or simulations that demonstrate areas for further development of the design. An overzealous definition of Non-Value Adding (NVA) may discourage the very creativity that is inherent in the design process. Also, activities are completed early in order to save a greater amount of NVA later in the process. An answer may be to more clearly define what is of value to internal as well as external customers. With care and thought, each of the seven wastes of Transport, Inventory, Motion, Waiting, Overproduction, Over-processing and Defects can be applied to NPI. In manufacturing, various other wastes have been suggested including Talent and Energy. An 8th waste in NPI could be wasted Knowledge. It could be used to capture issues where the design is not right first time and the information gained from this is not identified, or used appropriately. Map Value Streams A difficulty with the early application of Lean in manufacturing was the effective identification and analysis of the value streams. Rother and Shook came to the rescue with the publication of Learning to See. However, it is still a challenge to apply the tool in NPI. When developing a Value Stream Map (VSM) of a NPI process, there is often confusion between material and information flow as the material is not always in a physical form. The addition of “Knowledge Flow” to the three flows of Material, Information and Time defined in Learning to See can help to resolve this confusion. It can also help with mapping the flip flop between knowledge and material flows in prototyping and simulation activities. Create Flow Many companies have attempted to define their NPI activities through a gated process. However, even then NPI can be a catalogue of delays and problems as effort is spent to negotiate the blocks and bottlenecks along the way. Too frequently, this results in new products failing to meet the customer requirements, being late to market, exceeding their target costs, overspend on the project budget, or a combination of these problems. Where a company does not have a defined and documented gated process, the first step in creating flow is to define and document the gated process. Other tools and techniques that have been tried and tested in the production process can then be, with a little imagination, applied to NPI. In Lean, a key method of reducing the variability in a process and improving flow is the application of standard work. NPI is often defined as a variable even random process reliant on inspiration to succeed. However, when it is broken down into its constituent step,s it becomes “90% perspiration and 10% inspiration”. How many new products are completely new and how many are developments of existing designs? If modular designs and effective product data management are developed, the process can become even more predictable. The use of multi-disciplined, co-located teams, e.g. skunkworks is highly effective at unblocking the flow of NPI. Teams involved in developing sub-systems can be grouped in clusters around a central location used for system integration. This can present challenges to large programmes and where teams are spread around the world. Set-based concurrent, or simultaneous engineering can be applied to reduce changeover and handover losses, as well as ensuring the impact of decisions on other parts of the design are considered early in the design process. The key to these techniques is effective team work and the management of knowledge. A major issue with creating flow in NPI is the tendency to launch development projects without any consideration of the availability of sufficient resources. Projects launched are often under resourced at the crucial early phases of the project when critical decisions are made sometimes by the least experienced people, or by people with little time available to fully consider the decision. As a consequence, problems are stored up and need to be solved by the most experienced people when time pressures are at their greatest. This creates a viscous cycle that is difficult to break. If models are developed to estimate the resources required on projects, a view of load and capacity can be taken. Decisions can then be taken to adjust the timing of projects in order to level schedules, or at least efforts made to flex resources to meet the demand. Take time can be calculated and used to aid the management of resources, monitor flow and highlight bottlenecks. Establish Pull In NPI, projects can be launched almost on the basis of infinite capacity. This leads to waste as insufficient time is allocated to do activities properly due to the volume of work that is expected to be completed. If pull is introduced, projects won’t be launched until capacity is available and there is demand from the customer. A tool that is synonymous with Lean is Kanban. Indeed, it is often mistaken for Lean. Nevertheless, it is highly effective at managing flow by preventing production without demand from the customer, or to stop upstream production when there is an interruption to flow downstream. Can Kanban be applied to pull NPI through the process? In manufacturing, Kanban is used to provide signals between the areas of continuous flow. Co-located development teams can be considered as areas of continuous flow in NPI. However, where there is still a functional element to the organisation of NPI, Kanban can be used to indicate demand from downstream. Upstream areas can then begin the next scheduled project in order to meet that demand. The use of kamishibai boards can also be used to make the workflow more visible. They can either be used to illustrate the volume and flow of work through the process, or T-cards used to highlight individual tasks and workload. Pursue Perfection As with any process, structured problem solving, e.g. PDCA, DMAIC, 8D, etc. can be used in NPI to drive continuous improvement, especially if it is perceived to be any other process. However, it is extremely difficult to complete problem solving effectively without KPIs to measure the process. Development project budgets are usually tracked, but other measures of NPI are often missing. How closely the product is to its target unit cost is often measured at the end of the project, but may not be tracked through the project. Useful measures that could be introduced include lead time through the different stages of the development process. The amount of work backlog could also be measured. As with Work in Progress (WIP), this Design in Process (DIP) could be used to identify bottlenecks and target improvement activities. In Lean manufacturing, Overall Equipment Effectiveness (OEE) is used as a key metric. Can OEE be used in NPI? How about Overall Engineer Effectiveness? Availability, performance and quality losses could then be used to identify opportunities for improvement. Conclusions In reality, Lean has been applied to NPI for many years. Specific tools for the elimination of waste in NPI have been developed including QFD, FMEA, DTC, Design for Manufacture/Assembly (DFM/A), etc. However, much as with the early application of Lean in manufacturing, the underlying principles and reasons for the use of these tools is often overlooked, e.g. Kanban does not reduce inventory, it manages it. As a result, the effectiveness of the tools is diluted, or lost completely. In order to gain real benefit from Lean in NPI, it must be applied strategically as well as tactically and in its entirety, rather than cherry picked. [email protected] +44 (0)121 717 6600 How can we help you with your NPI?
October 14, 2015 Insights Introduction The UK productivity puzzle continues to be in the news, partly because the bald facts are so startling. The UK economy’s long term productivity growth trend (around 2 percent per year) has deviated from a standard growth curve from 2008 since and has flatlined. The UK in competitive terms is now apparently weaker than Italy and Spain, never mind Germany and the US. This puzzle remains even after due allowance is made for the unusual reliance of the UK economy on financial services – which have suffered various obvious troubles – and the extractive energy sector where resource depletion has combined with other turbulent factors. Job Growth The economic debate surrounding the 2015 election made us all aware that the UK has nonetheless been very successful at creating jobs (although the latest numbers raise the question of whether this trend is now waning.) How these jobs have been created and filled has fed into the debate about immigration which remains high profile because of this Government’s commitment to renegotiate the terms of UK participation in the European Community and the refugee crisis. The think tank, IPPR, has just pushed a detailed productivity analysis and has found that between 2012 and 2014 around half of the weakness in productivity growth can be attributed to an unfavourable shift in the structure of the economy. Jobs growth may have been strong over these years, but it was disproportionately in low value-added and low-paid sectors of the economy, and a larger proportion of the labour force now works in these relatively Manufacturing Advisory Group (MAG) While the Manufacturing Sector adds significant value to the UK economy, the Industry Forum Manufacturing Advisory Group (MAG) is strongly of the view that the country needs more volume manufacturers to raise national productivity. It considered this issue in depth when it met in September 2015. The Manufacturing Advisory Group, or MAG for short, is a programme of meetings aimed at providing senior executives the opportunity to share, hear and debate topical issues and challenges with leading experts and thought leaders. The Group led by Industry Forum’s Chairman, Mike Baunton, aims to provide a focus for those responsible for manufacturing in their organisations to enable open discussion on best practice, identify the critical influences on sustainable success, as well as shaping the future of Industry Forum. MAG – Productivity MAG considers that productivity must be a hugely important driver for those responsible for manufacturing, whether in large multi-national corporations or single site SMEs. MAG points to the example of South Korea where labour rates are not so different from the west and yet productivity is highly competitive. It is impossible for a high wage economy such as UK to compete with lower cost countries on cost reduction – even China is discovering that a low wage strategy is a vulnerability for its manufacturing sector. MAG – Skills Dimension MAG believes that the skills dimension is critical to making progress on productivity. UK PLC needs to incentivise manufacturers to develop people skills appropriate for manufacturing. MAG is well aware that many manufacturing firms are experiencing a difficulty recruiting qualified engineers. Engineers must possess a portfolio of skills that is widely applicable in today’s economy such as teamwork, project management, numeracy and familiarity with the digital domain and digital tools. Part of the solution to the engineer shortage felt by manufacturers is to make sure the offer is truly competitive in today’s labour market. Top candidates seek work in firms that match a broad set of personal requirements. MAG thinks that Corporate Social Responsibility is becoming a fundamental requirement for manufacturing organisations as gifted employees want to work for companies that are socially responsible MAG – Added Value MAG stresses that added value rather than, say, cost reduction must be the focus. Producing high customer added value at high levels of productivity is the way forward and the right organisational culture and leadership are vital. Management needs to retain responsibility for quality plus a number of key HR operations. MAG observes that currently in the UK workforce a significant proportion of university graduates are in roles that do not require a degree. This must raise questions about the quality of management and leadership in many UK firms . Some analysts believe the decline in workplace training in the UK comes from employers relying on graduates to pick things up as they go. MAG is aware that too many people are still doing jobs that generate more low added value. Employee Engagement MAG knows from practical experience that employee engagement is a crucial aspect of the organizational culture that is a major driver of high and rising productivity. For example, a member of the MAG was able to achieve a 45% increase in productivity (measured by OEE) by allowing employees to implement changes without their manager’s permission, as long as they met safety standards. In the experience of one MAG member, if a competent employee makes a mistake care is needed in the feedback given so that it does not come across as blaming. Good employees will blame themselves anyway and you risk demotivating them. Sustaining high motivation is essential in achieving workplace change. The basic requirement of people to feel secure is a major cause of resistance to change so make sure any change development is worth the effort. Understanding Costs MAG points out that a degree of sophistication is needed to develop an appropriate productivity strategy in a specific firm. While various measures can be used to monitor productivity there is no one methodology that is applicable in every situation.From ‘OEE’ to ‘Added Value per £ of Payroll’ , the choice of which one to use depends on the maturity of the company and situation. It can be misleading to work just with averages when the study of specific extreme cases can be very valuable. MAG also recommends a careful approach to calculating individual product costs. The allocation of development and marketing costs for example has to be done in a way that makes sense in the context of how a firm operates. Improvements can be made by clearly understanding costs, but this is easier said than done. In particular, most costs will be incurred on operations that add value. The lean capability of learning to see waste is the foundation of driving productivity up. Where the cost arises from outsourcing an operation it is important to establish that the value added is commensurate. Where the outsourcing involves foreign currency transactions extra complexity comes into the assessment. To make manufacturing processes more productive some areas should be de-skilled by using automation but at the same the workforce should be given extra value adding skills such as problem solving. Even though autonomous systems capability is progressing all the time it is important to realise that currently problem solving has to be a workforce capability. What are the implications for UK Productivity? So what are the implications for UK productivity? The transport equipment manufacturing sector which includes automotive, aerospace and rail has been forging ahead on productivity and is set to maintain this progress. UK aerospace has linked its growth ambitions to a strong focus on national supply chain development through Sharing in Growth, SC21 and related programmes. This work confirms the importance of pushing higher aspirations all the way down the supply chain. The quality of the supply chain is also vital for automotive and has been a major priority for the UK Automotive Council. Major improvements have been secured in the last four years. Tesla in the US, the innovative and potentially disruptive maker of electric powered high performance cars, shows just how challenging it can be sustaining the growth mindset within a fast moving hi-tec supply chain. Tesla are revising downward their current year projections even as they strive to ramp up production volumes because of difficulties in their supply chain. Here in the UK the new Hitatchi manufacturing investment in Darlington will almost certainly lead to performance improvements in that part of the railway equipment supply chain in the UK. The North East engineering sector has already benefited a great deal from Nissan’s long term commitment to developing its supply chain and so supply chain development is firmly embedded in the regional manufacturing culture. This is another good example of how the UK transport equipment manufacturing cluster has in depth experience of raising manufacturing productivity. These approaches can be transferred to other sectors within the UK economy as part of the national drive to raise productivity. Further information: [email protected] +44 (0)121 717 6600 Download Insight (pdf)
