European Regions

for

Innovative Productivity

Dr Colin Herron

• 31 years experience of the automotive industry.

• 17 years with Nissan.

• Worked in Nissan Quality, Engineering, and

Purchase departments in the UK, Spain and Japan.

• 9 years in the Nissan Supplier Development Team.

• 4 lean benchmarking visits to 27 companies in Japan.

• Visiting Professor of Engineering (Newcastle University).

• Manager and founding member of the NEPA team.

• Responsible for manufacturing in Regional Development A

Agency (RDA).

•With a regional economy of £38.8bn, North East England is

the smallest UK region, However:

•North East England produces 1 in every 5 cars made in the UK

•Over 500 leading international companies, including 40% of

Dow Jones listed businesses, have made the region their home

•The North East is well connected to Europe with:

- two international airport

- three main ports

• Five universities

Regional profile

•One-fifth of the UK’s production capacity for process industries is

based in the North East, including 58% of its petrochemical

industry, 35% of its pharmaceuticals and a major share of its

speciality chemicals sector.

•Over 70% of the platforms operating in the North Sea were built on the region’s major rivers

•Over the past three years, North East England has had the highest

number of new technology start-ups in the digital media and

animation field, outside London, according to the London Business

School

Regional profile

Low cost economies

The conscious or unconscious

ability of our manufacturing to run their own businesses effectively.

Energy prices

Lack of innovation

Problems!

NMUK has been the most productive plant in Europe for the last several years, and the largest car producer in the UK for the last three years.

Our 6th University

Semi-Direct

Indirect

Direct

14%

63%23%

People Facts

NMUK’s total workforce of c.5000 is split into three areas

of operation.

- Direct staff (manufacturing)

- Semi-direct (eg QA, maintenance)

- Indirect (engineers, administrative)

- Capacity 500,000

- 2007 production 353,000 vehicles

- About 75% of NMUK output is exported to over

55 countries worldwide

- Workforce is currently 4,500-5,000

Production Facts

What can we learn from an exemplarsuch as Nissan?

•Nissan is split into autonomous units which are interlinked.

•The Supervisor is in effect a plant manager of an SME.

•Every year the Supervisor has to make his business more effective.

•The Supervisor has no spare staff.

•Planning works on JIT

•The Sunderland plant is designated the training centre for:

UK, Russia, Africa, India, Morocco and Iran

Individual responsibility of

a Nissan Supervisor

Facility

SafetyProcessChange

Quality

NPW

CostOperation

Training

People

NISSAN PRODUCTION WAY (NPW)

IDEAL MANUFACTURING SYSTEM

DOUKI-SEISAN

ACHIEVEMENT OF QCDP TARGETS

Genba Kanri (shop floor)

QCS PLM

JIT

Production

Prod Control EngineeringQuality Assurance

IMPROVEDCUSTOMER

SATISFACTION

IDS

GK (shop)

The Nissan productionway (NPW)

Safety Quality Productivity Cost HR

Set up standard

Check abnormality

Kaizen

PD

CA

TPS = Make problems andopportunitiesfor kaizen visible

J. K. Liker Toyota culture 2008Without kaizen the tools of TPS

would be useless

Nissan definition of Kaizen

“ Renew the heart to let it make good”

KaizenChange / New Begin / Spirit

Kaizen = Continuous Improvement

The North East ProductivityAlliance (NEPA)

� Operational in 2003

� Led by industry, focusing on the needs of industry

� Improving the productivity of all manufacturing sectors

� Developing long-term sustainability

� Maximising the return on public and private investment

� Provides a tailored package of support

� Has a provenance back to Honda, Nissan and Toyota

NEPA

IndustryEducation

The North East Productivity Alliance

Regional Development Agency

The founding conceptof NEPA was to disseminatethe best practice of Nissaninto general manufacturing.

This will be the basis of theERIP methodology

The concept for NEPAand ERIP

What is Lean manufacturing?

TQC

Pull systems

Andon

5 S

Kaizen

Agile

OEE

FMEA

Toyota production system

SMEDKan Ban

Quality circles

MRP

TPM Genba kanri

6 sigma

Poka Yoke

Hoshin Kanri

RCM

VSMERP

TQM

JIT

MRP 2

Jidoka

Heijunka

Kaizen blitz

Kaikaku

Chaku-chaku

MudaTAKT

My image of what can happening

The theory of abstractionand application

Theory proposed by Paul Lillrank

Recipient

Transfer

CopySource

Application

Abstraction

CopyJAPAN

Transfer

Application

Abstraction

Basis of the NEPA methodology

CopyingCompany

Copying

Transfer

Abstraction

Application

Transfer

Application

Abstraction

Abstraction

Application

ExemplarIPC

IPC

IPC

North East model

Anybody who makes something

Target is less than 150 staff

Who is it for?

SME

SME SME

SME

SME

SME

The concept for NEPA and ERIP

(Using the UK as an example)

Exemplar

University

IPC

Development Agency

Current performance

metrics+

Diagnosis of current

manufacturing needs =

Business

needs

Support group

Strategy

Activities

Training

Local government

Industry

University

Local government

Industry

University??

Knowledge transfer

Local government

Industry

University??

Local government

Industry

University??

Local government

Industry

University??

Local government

Industry

University??

Partner A Partner B Partner C

Partner D Partner E Partner F

RDA RDA RDA RDA

HEI HEI HEI HEI

SME SME SME SME

EX EX EX EX

IPC IPC IPC IPC

Transnational

Transnational

Optional transnational(not funded by the programme)

High level of transnationalexchange

High level of transnationalexchange

Country A Country B Country C Country D

Internal

Main transnational work

Knowledge transfer

Main transnational work

1. IPC to IPC

2. IPC to Exemplars

3. HEI conferences/seminars

4. RDA Strategy setting

5. Lead SME meetings

6. SME conferences

7. Communication

Role of IPC

1. Manage the regional programme

2. Work with HEI (universities) to measure impact

3. Produce case studies

4. Attend/organise transnational events

5. Pilot the methodology

6. Collate and feedback outputs/findings

•Identify the IPC members

•Identify the participating

SME

WP 2

SME ClusterMembers/partners

Country A

HEI (University)

Exemplar

RDA

Chamber

Others

Wo

rk p

ackag

e 1

Wo

rk p

ackag

e 7

SMEPartners SMEPartners SMEPartners SMEPartners

Country A Country B Country C Country DWP 2

WP 4

WP 6

IPC IPC IPC IPCWP 3

IPC IPC IPC IPCWP 5

Copyright (c) Colin Herron One Northeast 2007

Evaluation

Copying

Recipient

company

Transfer

Application

Abstraction

P

N

A

IPC

A word of cautionA word of caution

90% of change programmes fail

Up to

The NEPA Programme Statistics

�Jobs Safeguarded 3,042

�Jobs Created 200

�Total Number Trained 5,900

�SME’s engaged 183

�Non-SME’s engaged 119

©Colin Herron 2007

TMD Friction Ltd could this year increase production on one of

their pressing lines by up to 30% - saving them almost £500,000 a

year.

TMD

An historic North East manufacturer with links to the region’s

proud rail past has embraced the latest business productivity

techniques to win new orders worth over £300,000.

Henry Williams

A WEARSIDE manufacturing company has won valuable new

contracts worth nearly £100,000 after adopting the latest

business improvement techniques to make it more productive.

Faraday

The firm which employs 316 staff in the North-East needs 30 extra

machinists to help make 20,000 of its world famous wax jackets at its

South Shields base. Barbour is now in a position to bring work back

in-house after training from NEPA, an advisory body.

Barbour

©Colin Herron 2007

“The result has been increased staff retention – 35% up from 2004 - and currently we are on track to achieve

a further 25% retention increase this year. “We have also improved efficiency in terms of throughput rates

and cost reductions, both of which have enabled the company to increase profitability year on year.”

International Cuisine

Rosemary Bertram, A&J Scott finance director said: “Our data collection so far has proven that by adopting all the

lean manufacturing techniques learned on the NEPA masterclass we can achieve an increase in turnover of £1.1m

with an initial investment of £40,000 to automate some of the changeovers.

A and J Scott

2008 2009

J J A S O N D J F M A M J J A S O N D

IPC Membership

WP 2

Close IPC membership stage

IPC Strategy and business plan

WP 3

WP 4

•Collate outputs from WP 2 and 3•Bring together existing tools/models/experience etc

•Develop a common toolkit and methodology for SME change

Apply PDCAWP 1 and 7

2010 2011

J F M A M J J A S O N D J F M A M J

WP 5

Closure event

WP 6Trial and modify

Evaluation and final format ofthe methodology and materials

Total project review

•Conference

•Speech

•Commission feedback

Suggested next stage

WP 7HEI to continue

post closure

Communication

• Between partners

• The rest of the EU• EU policy

• EU Outcomes

• With WP 1WP 1

Management (governance)

Copyright (c) Colin Herron One Northeast 2007

Thank you for your attention

Special thank you to translators

Also