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2017Manufacturing & DistributionExecutive Forum
Welcome!
Thank You Sponsors!
2017Manufacturing & DistributionExecutive Forum
Guest Speaker
Sponsored by:
Revised October 23, 2017
56.6%
61.7% 61.0%
77.8%
93.3%
89.5% 89.8%
2016:1 2016:2 2016:3 2016:4 2017:1 2017:2 2017:3
NAM Manufacturers’ Outlook Survey by Quarter(First Quarter 2016 – Third Quarter 2017)
Source: NAM Manufacturers’ Outlook SurveyNote: Percentage of respondents who characterized the current business outlook as somewhat or very positive.
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
Q1:2016 Q2:2016 Q3:2016 Q4:2016 Q1:2017 Q2:2017 Q3:2017
Expected Manufacturing Growth Over Next 12 Months(First Quarter 2016 – Third Quarter 2017)
Sales Exports Capital Investments Full-Time EmploymentAvg. 12-Month Growth Rates
Sales: ↑ 4.5%Exports: ↑ 1.3%
Capital Investments: ↑ 2.7%Full-Time Employment: ↑ 2.2%Source: NAM Manufacturers’ Outlook Survey
Note: Expected growth rates are annual averages.
6.0%
15.7%
21.5%
27.1%
39.2%
51.4%
71.6%
72.0%
Challenges with access to capital
Weaker global growth and slower export sales
Strengthened U.S. dollar relative to other currencies
Weaker domestic economy and sales for our products
Rising raw material costs for our products
Unfavorable business climate (e.g., taxes, regulations)
Attracting and retaining a quality workforce
Rising health care/insurance costs
Primary Current Business Challenges(Third Quarter 2017)
Source: NAM Manufacturers’ Outlook SurveyNote: Respondents were able to check all that apply. Therefore, responses exceed 100 percent.
6.2%
8.5%
34.2%
52.2%
57.3%
64.3%
64.7%
None of the above
Unsure
Invest more dollars in the community
Increase employee wages and benefits
Hire more workers
Expand your business
Increase capital spending
If comprehensive business tax reform is enacted, would it make your company more likely to do any of the following?
Source: NAM Manufacturers’ Outlook SurveyNote: Respondents were able to check all that apply. Therefore, responses exceed 100 percent.
46
48
50
52
54
56
58
60
62
64
66
Sep-16 Oct Nov Dec Jan-17 Feb Mar Apr May Jun Jul Aug Sep
ISM Manufacturing Purchasing Managers’ Index(September 2016 – September 2017)
Purchasing Managers' Index New Orders Production Employment Inventories
Source: Institute for Supply Management
-1.2%-1.0%-0.8%-0.6%-0.4%-0.2%0.0%0.2%0.4%0.6%0.8%1.0%1.2%1.4%1.6%1.8%2.0%
Sep-16 Oct Nov Dec Jan-17 Feb Mar Apr May Jun Jul Aug Sep
Percentage Changes in Manufacturing Production(September 2016 – September 2017)
Manufacturing Durable Goods Nondurable Goods
Source: Federal Reserve Board
-1.5%
-1.0%
-0.5%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
Sep-16 Oct Nov Dec Jan-17 Feb Mar Apr May Jun Jul Aug Sep
Year-Over-Year Industrial Production Growth(September 2016 – September 2017)
Industrial Production Manufacturing Durable Goods Nondurable Goods
Source: Federal Reserve Board
-0.2%
-1.3%
-1.5%
-1.6%
-3.2%
-4.9%
-8.9%
Aerospace & misc. transportation equipment
Textile and product mills
Miscellaneous durable goods
Apparel and leather
Chemicals
Motor vehicles and parts
Petroleum and coal products0.0%
0.0%
0.7%
1.2%
2.9%
3.2%
3.6%
3.6%
4.1%
5.6%
5.6%
6.3%
Printing and support
Paper
Furniture and related products
Plastics and rubber products
Computer and electronic products
Fabricated metal products
Food, beverage and tobacco products
Electrical equipment and appliances
Primary metals
Wood products
Nonmetallic mineral products
Machinery
Year-Over-Year Growth in Manufacturing Production by Sector(September 2016 to September 2017)
Source: Federal Reserve Board
YEAR-OVER-YEAR GROWTHManufacturing (NAICS): ↑ 1.6%
Durable Goods: ↑ 1.7%Nondurable Goods: ↑ 0.6%
55.0
52.8
51.0
52.9
55.9
60.6
50.6
60.0
51.2 50.9
56.1
53.7 54.255.1
IHS Markit Purchasing Managers’ Indices for the Top 15 Export Markets for U.S. Manufactured Goods
(September 2017)
Emerging Markets Manufacturing PMI: 51.3Eurozone Manufacturing PMI: 58.1
Global Manufacturing PMI: 53.2U.S. Manufacturing PMI (Markit): 53.1
N/A
Source: IHS Markit
74
76
78
80
82
84
86
88
90
92
94
96
98
Trade-Weighted U.S. Dollar Index Against Major Currencies, 2014–2017
(Currency Units per U.S. Dollar, 1973=100)
2014 2015 2016 2017
Source: Federal Reserve Board
The U.S. dollar is up 16.2% since June 2014 against major currencies, but down 8.1% year-to-date in 2017.
249
124
164155
216232
50
207
145
210
138
169
-33
-12 -5 018 12
2211 9
021
-11
41
-1
Sep-16 Oct Nov Dec Jan-17 Feb Mar Apr May Jun Jul Aug Sep
Monthly Changes in Employment(September 2016 – September 2017, in Thousands of Employees)
Nonfarm Payrolls Manufacturing
Source: Bureau of Labor Statistics
4.0%
4.2%
4.4%
4.6%
4.8%
5.0%
5.2%
12.30
12.32
12.34
12.36
12.38
12.40
12.42
12.44
12.46
Employment Situation, 2016–2017
Manufacturing Employment Unemployment Rate
Millionsof Workers
Unemployment Rate
Source: Bureau of Labor Statistics
0.6%
2.2%
2.8%
1.8%
1.2%
3.1%
2.6%
3.0%
2.0%
3.2%
2.4%2.2%
2016:I II III IV 2017:I II III IV 2018:I II III IV
Real Gross Domestic Product(Chained 2009 Dollars)
Real GDP Forecast:↑ 1.5% (2016)↑ 2.2% (2017)↑ 2.6% (2018)
Source: Bureau of Economic Analysis, NAM calculations using Moody’s Analytics simulation model
-0.30%
-0.16%
0.12%
0.13%
0.21%
0.56%
0.61%
0.82%
1.08%
Change in Private Inventories
Federal Government Spending
Net Exports
Durable Goods Consumption
Nondurable Goods Consumption
Nonresidential Fixed Investment
Service-Sector Consumer Spending
Contributions to Percentage Change in Second Quarter 2017 Real GDP Growth
Second Quarter 2017 Real GDP Growth
↑3.1%
State and Local Government Spending
Residential Fixed Investment
100
101
102
103
104
105
106
107
108
2014 2015 2016 2017 2018
Actual and Predicted Manufacturing Production Growth(NAICS, 2012=100)
Actual Manufacturing Production Predicted Manufacturing Production
Manufacturing Production Forecast:↑ 0.2% (2016) ↑ 1.4% (2017)↑ 1.6% (2018)↑ 1.5% (2018)
Source: Federal Reserve Board, NAM calculations using Moody’s Analytics simulation model
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
Sep-16 Oct Nov Dec Jan-17 Feb Mar Apr May Jun Jul Aug Sep
Year-Over-Year Percentage Changes in Producer Prices (September 2016 – September 2017)
Final Demand Final Demand Less Food, Energy and Trade Services
Source: Bureau of Labor Statistics
2017Manufacturing & DistributionExecutive Forum
Guest Speaker
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THE EFFECTIVE ORGANIZATION IN THE NEW ECONOMY
2017
OUR WORLD IS EVOLVING AT AN EXPONENTIAL RATEAdoption rates for various technologies and the number of years until used by 25% of the U.S. population.
CHANGE AGENTS OF THE 21ST CENTURYThe factors are in place today to have as pervasive an impact on the next 25 years as the industrial revolutions of the 19th century.
GET READY FOR A POST-MILLENNIAL WORLD
Similarities Differences
Four out of five say they want to get married and the majority that do have married in their 20s
Social media highly influences relationships and consumer behavior
Aspire to own homes, but are hindered by affordability
Most do not see value in owning a car
The majority expect to stay more than five years at their current employer
They have never lived without the Internet, smart phones, tablets, etc.
Desire regular feedback not for trophies but for knowledge
Comfortable with technology driven decision making, if not completely relying on it in some instances
Most are willing to work beyond what is required of them to help the business succeed
First generation to have a scheduled childhood
Contrary to many of the assumptions and stereotypes of Post Millennials, these generations share many similar aspirations and traits as previous generations. However, it is a mistake to consider them the
same or that they will make life and business decisions no different than Baby Boomers, Generation X, and even Millennials.
Post-Millennial and prior generations…
THE RISE OF THE MACHINES
Internet of ThingsProcess optimization via a
network of sensors and other devices for data collection,
monitoring, etc.
Advanced RoboticsHuman augmentation and/or
task automation that enhances precision and
speed of delivery
Autonomous VehiclesMachine-to-machine communication and elimination of human operation
Additive ManufacturingIncreased customization, creation of unique products, and reduction of waste
Artificial IntelligenceReplicating or replacing knowledge-work tasks
OutsourcingOff-site production to lower cost and timeline
Rapidly responding to marketplace changes to enable growth:• Configuring a Supply Network adapted to business needs• Accelerating time-to-market • Gaining end-to-end visibility • Managing short term volatility Drive competitiveness through: • Reducing supply chain complexity• Inventory optimization• Reducing costs to improve profitability Leveraging digital technologies to generate competitive advantage
VOLATILE SUPPLY CHAIN - REQUIREMENTS
WORST JOBS CHART EVER
THE FUTURE FOR M&D
• Old purchase patterns are under pressure.• Boundaries between buyer groups are overlapping and changing -
– Challenging the go-to-market assumptions of even the most established players.
• Product life cycles shorten as innovation increases.• Economic forecasts are being changed rapidly across almost all markets.• This volatility places new pressures on the supply chain, which must now
accommodate rapid change.• There is increased pressure on margins.• Expectations of price increases in the future are low.• Prepare for the next recession – while times are good.
• “Existing companies will need to embrace the on-demand economy andtransform to meet consumer demand, or find themselves disrupted bythose who do embrace this shift.” - HBR
• More than 300 companies provide on-demand goods and services across16 industries today. This is up from only 76 companies operating in just 6industries 2 years ago.
THE ON-DEMAND ECONOMY
THE NEW ECONOMYThe last Recession may be due to the evolution of business…• The Economy is moving toward 100% visibility!• Competitiveness - strive for 100% efficiency!
• Eliminate any activity or expense that does not add value• The Role of Government
• Taxes & regulation!• The Role of Technology
• Having the data real time to manage for results• Balancing of Supply & Demand
• There is an oversupply of all product & services today!
ARE YOU READY FOR THE “NEW ECONOMY?”
THE EFFECTIVE ORGANIZATION 21ST CENTURY
1. Vision – Mission – Values 2. Focus - Strategic Plan3. Organization – Succession 4. Communication5. Lean – Continuous Improvement6. Culture of Execution
VISION – MISSION – VALUES
• Companies that enjoy enduring success have core values (Values) and a corepurpose (Mission) – that remain fixed. While the Vision – the strategies andactivities continuously adapt to a changing marketplace. (Harvard BusinessReview)
• Truly great companies understand the difference between what should beopen to change and what never changes – what is scared & what is not.(Harvard Business Review)
• The Effective Organization – driven by formal – Vision –Mission - Values
STRATEGIC PLANNINGAn organization's process of defining its direction and making decisions on
allocating its resources to pursue its VISION
A Strategic Plan:• Focuses the business• Guides strategy implementation using control mechanisms• Gets an organization out of the day to day in order to:
– Envision a company with no limitations on resources & activities– Transform a company & change the rules of an industry– Involve the entire organization– Analyze the market– Create consensus– Common Goals and incentives
• Creates options for a company
STRATEGIC PLANNING – MASTER SCORECARD - CEO
Scorecard – Leader – The scorecard is the mechanism by
which the team/company tracks its progress towards attaining its goals/strategic plan and it drives the Incentive Plan.
– The CEO is completely responsible for achieving the KPIs which are integral steps in attaining the overall plan and the Vision.
ABC CORP. 20XX MASTER SCORECARD - CEOThe Company must attain all activities indicated below by the agreed due date to insure the 20XX Plan is attained:
TOPIC STRATEGIC INITIATIVE or KPIs DUE DATE1. FINANCIAL 1.1 Increase Company EBITDA to 15% 12/31/20XX
PERFORMANCE: 1.2 Lean Initiative - Gross Margin Improvement from 45% to 47% 12/31/20XX
1.3 Lean Mistake Proofing - Expense Reduction of $420,000 ($35,000 per month) 12/31/20XX
1.4 Lean Initiative - Improve Inventory Turns from 2.8X to 3.5X 12/31/20XX
1.5 Accounts Payable increase days paid by 10 days 12/31/20XX
1.6 Accounts Receivable DSO improve 5 days 12/31/20XX
2. SALES & STRATEGIC
GROWTH: 2.1 2013 Sales Targets - $42,000,000 12/31/20XX
2.1.1. East Region Sales Target $17,200,000 12/31/20XX
2.1.2. Mid - West Region Sales Target $14,800,000 12/31/20XX
2.1.3. West Region Sales Target $10,000,000 12/31/20XX
2.2 New Account JKL - Placement Target $250,000 12/31/20XX
2.3 Account XYZ Plan Sales increase $800,000 - re-launch of brand 12/31/20XX
2.4 Grow Industrial Sales increase $400,000 12/31/20XX
2.5 CRM Selection & Implementation - Increase Sales Funnel to 22 Prospects 6/1/20XX
2.6 Lean - Sales Processes - Revise Returns & Warranties cost savings $100,000 7/1/20XX
3. MARKETING &
INNOVATION: 3.1 ABC Brand reinvention - new packaging & new placement $1,600,000 revenue 12/31/20XX
3.2 New Product introduction - 10 products - new revenue of $2,000,000 12/31/20XX
3.3 Implementation of new advertising campaign - budget $3,000,000 4/1/20XX
3.4 Market research - update competitor analysis 9/30/20XX
3.5 Retain 2 outside designers to create new product funnel of 10 - 20 items 7/1/20XX
4. OPERATIONAL
EXCELLENCE: 4.1 Lean - Reduction of SLOB Inventory by $1,400,000 reserve for loss $400,000 12/31/20XX
4.2 Lean - Improve Customer Fill Rate - from 90% to 96% 7/1/20XX
4.3 Lean - Revise Order Processing consolidate customer service & inside sales 5/1/20XX
4.4 Lean - Improve On-time Customer Shipments from 85% to 90% 7/31/20XX
4.5 Lean - Improve New Product Development Process - on time introduction 12/31/20XX
5. HUMAN RESOURCES:
5.1 Communicate ABC 20XX Strategic Objectives & Values to Staff - update monthly 2/1/20XX
5.2 Restructure Organization - Sales - Marketing - Product Development 5/31/20XX
5.3 Conduct study on IT Software utilization - develop gap training program 7/31/20XX
5.4 Revise Sales Compensation & Incentive for 20XX - focus on Brand re-launch 2/1/20XX
STRATEGIC PLANNING – SCORECARD VP SALES
Scorecards – Fieldwork – Key team member Scorecard –
Drives each managers Incentive Plan and Initiatives / Objectives
– In addition to the Master Scorecard a Scorecard is created for each team lead who is responsible for the activities that are critical to the success of the plan
ABC CORP. 20XX VP SALES SCORECARD The Company must attain all activities indicated below by the agreed due date to insure the 20XX Plan is attained:
TOPIC STRATEGIC INITIATIVE or KPIs DUE DATE1. FINANCIAL 1.1 Increase Company EBITDA to 15% 12/31/20XX
PERFORMANCE: 1.3 Lean Mistake Proofing - Expense Reduction of $420,000 ($35,000 per month) 12/31/20XX
1.6 Accounts Receivable DSO improve 5 days 12/31/20XX
2. SALES & STRATEGIC
GROWTH: 2.1 2013 Sales Targets - $42,000,000 12/31/20XX
2.1.1. East Region Sales Target $17,200,000 12/31/20XX
2.1.2. Mid - West Region Sales Target $14,800,000 12/31/20XX
2.1.3. West Region Sales Target $10,000,000 12/31/20XX
2.2 New Account JKL - Placement Target $250,000 12/31/20XX
2.3 Account XYZ Plan Sales increase $800,000 - re-launch of brand 12/31/20XX
2.4 Grow Industrial Sales increase $400,000 12/31/20XX
2.5 CRM Selection & Implementation - Increase Sales Funnel to 22 Prospects 6/1/20XX
2.6 Lean - Sales Processes - Revise Returns & Warranties cost savings $100,000 7/1/20XX
3. MARKETING &
INNOVATION: 3.1 ABC Brand reinvention - new packaging & new placement $1,600,000 revenue 12/31/20XX
3.2 New Product introduction - 10 products - new revenue of $2,000,000 12/31/20XX
3.3 Implementation of new advertising campaign - budget $3,000,000 4/1/20XX
3.4 Market research - update competitor analysis 9/30/20XX
4. OPERATIONAL
EXCELLENCE: 4.1 Lean - Reduction of SLOB Inventory by $1,400,000 reserve for loss $400,000 12/31/20XX
4.3 Lean - Revise Order Processing consolidate customer service & inside sales 5/1/20XX
5. HUMAN RESOURCES:
5.1 Communicate ABC 20XX Strategic Objectives & Values to Staff - update monthly 2/1/20XX
5.2 Restructure Organization - Sales - Marketing - Product Development 5/31/20XX
5.4 Revise Sales Compensation & Incentive for 20XX - focus on Brand re-launch 2/1/20XX
INCENTIVE PLAN - LINK PAYOUT TO PERFORMANCE20XX INCENTIVE PAYOUT SCHEDULE*QualifierBonus Target is established at the beginning of the year and will be paid as follows:Below 85% of Plan EBITDA No Bonus Payout85% of Plan EBITDA 85% of Bonus Target90% of Plan EBITDA 90% of Bonus Target95% of Plan EBITDA 95% of Bonus Target100% of Plan EBITDA 100% of Bonus Target110% of Plan EBITDA 110% of Bonus Target115% of Plan EBITDA 115% of Bonus Target
20XX INCENTIVE VICE PRESIDENT OF SALES POOL $100,000 EBITDAa. Meet ABC EBITDA TARGET for 20XX Qualifierb. Meet Overall Sales Target 20XX 20,000$ 20%c. Meet DEF Belt & Sales Target for 20XX 20,000$ 20%d. Meet XYZ Sales Target for 20XX 20,000$ 20%e. Meet RST\Other Sales Target 20XX 10,000$ 10%f. Complete & implement Sales Plan on time 10,000$ 10%g. Meet installer targets on time 10,000$ 10%h. Meet inventory reduction Target 10,000$ 10%
TOTAL 100,000$ 100%
WHAT IS LEAN?
• Lean is a system of process improvement– Eliminate waste– The most efficient use of resources - Capital, People, Equipment & Materials
• Lean lowers costs, improves competitive advantage• Lean is applicable to all types of businesses• Lean is a cultural transformation• Perfected by Dr. Shingo – Toyota Operating System
LEAN – CONTINUOUS IMPROVEMENT
Key Organizational Responsibilities:
• Generate profits – for the Stakeholders• Provide a healthy happy work environment • Perpetuate the Business• Reinvent the Business• Cultural Transformation
PROCESS IMPROVEMENT IS AWARENESS TRAINING
Turn on all employees’ reticular activating device• You are shopping for a new SUV• After test driving the SUV – suddenly notice more on the road• There are actually no more SUVs – your reticular activating device has
been turned on• The information is often right in front of us – but it is shut out unless we
think it is of value or needed right then• Discernment is defined as the ability to grasp what’s not obvious to the
average mind – looking beyond the obvious• Successful companies have all employees engaged to identify processes
that do not work & how to fix them
PROCESS ISSUES DISTRIBUTION COMPANYABC
Feb, 2015PROJECT PROJECT DESCRIPTION ASSIGNED COMPLETIONNUMBER PROJECT DATE DATE
1 Wrong labels on products 2/6/20152 Wrong products picked for kits 2/6/20153 Poor planning - missing order ship dates4 Typos on transcribing customer PO's to order entry system - missreading customers POs 2/6/20155 By passing order stop signs - credit limits, special packaging, etc.6 Order picking for customer - wrong item/amount7 Incorrect forecast for purchasing8 Incorrect lead-times from vendors 2/6/20159 Incorrect pricing on purchased material
10 Incorrect minimum order quantities in ABC system11 Incorrect item maintenance - causing not having product for customer orders 2/6/201512 Not getting total & correct specifications on product (motors) - EXTERNAL13 Vendors sending wrong parts for repair & everything14 Rework due to incorrect & insufficient specifications from ABC mgmt - INTERNAL15 No forecasting from sales on new items16 No forecasting from changes of items & customers17 File maintenance - B.O.M wrong - sourcing issues, missed sales18 ABC does not vet specification for market products - dependent of supplier19 Stock locatior inventory items not in right spot20 Multiple items in 1 storage location (Up to 10) - cause wrong pick21 Not removing empty boxes from inventory 2/6/201522 Loss of ABC time due to spam orders and email viruses 2/6/201523 Time sheets not completed correctly24 Time sheets not completed on time25 Employees not clocking in and out correctly 2/6/201526 Payroll not beiing notificed timely om PTO27 Vendor file maintenece - vendor pay address/remit missing 2/6/201528 Supplier does not notify of bank change information29 Shipping damaged product - dropped & improper packaging30 No EDI with suppliers31 Too many meetings to develop PM - to manager 15 initiatives32 Do not kill products - it is part of a program. SLOB initiative 2/6/201533 Open suppliers cannot meet minimums - too much inventory - need small amounts but can't buy34 XYZ-acquisition and impact. Communication to org. - especially purchasing35 Incorrect translation on special/maintenance items36 Lack of define roles - brand mgmt & sales - gaps and overloads37 Over allocation of individuals to various projects38 Project status display is too short in Sage - (active, no suggestions)39 No process for quotes/feedback/specifications - extra check40 To identify replacements/incomplete vendor databases41 Sales info not timely for new and expanding customers42 ABC departments no honoring times lines and requests43 Enforcing order cut-off times44 Phone orders need confirming documents45 No centralized product database to grow/change 2/6/201546 Lack of responsibility/accountability on everyday work - caliber & process47 Focus on 1 thing at a time/process - flow of work48 Change kits/assortments without final approval49 Development of new product packaging issues50 EOQ's are wrong on kits51 EOQ's are wrong on packaging materials52 Work order generation requiring product startup production multiple times53 Work orders s/b case pack onliy54 Stop opening kits to pack other kits inventory shortfall55 Safety issue move egress lane or mirrors 2/6/201556 Inventory updates lag - cannot find product in receiving and warehouse57 Need more high reach trucks - stopping work to get high truck58 Not following IT service request process 2/6/201559 Lack of visibility on shared services - more & more projects - do not get done/priority issue & feedback60 Shift rotation/stress61 Business closing process not consistent62 Warranty claim process - mfg denies claim - good customer will honor by ABC - strop going thru the motion63 No defined sales rules - all64 Only print checks Monday/Tuesday
LEAN PROCESS IMPROVEMENT ACTION PLAN PROJECT LEAN MISTAKE PROOFING DASHBOARD TEAM TARGETED OVERALL ADDITIONAL NET COMPLETION LEAD PROJECT NUMBER PROJECT DESCRIPTION NUMBER IMPACT SOLUTION COMPLETION DATE SAVINGS EXPENSE SAVINGS DATE PERSON UPDATE
1 Wrong labels on products, kits, master pack -Error found by quality team
-Rework-Parts go out wrong-Customer Rework charge-back-Quality department involvement-Warranty claims (120,000, net 20,000)
-IT set up functionality to print inside and outside labels simultaneously when work order is scanned
4/15/2015 10,000$ -$ 10,000$
8 Incorrect lead-times from vendors -Shortages and excess inventory-Company fill rate is short-Increased air freight & partial shipment freight
-Correct all lead times on top 20% of items -Feed into system to accurately order -Improve fill rate by 1% = $1M of additional revenue for the company
7/15/15314,000$ 314,000$
25 Employees not clocking in & out correctly - timesheets -Additional 30 mins spent correcting time input -Find a way to program the clock to restrict people from clocking in/out at incorrect times
5/1/2015 100$ -$ 100$
2 Wrong products picked for kits -Rework-Parts go out wrong-Customer Rework charge-back-Quality department involvement-Warranty claims (120,000, net 20,000)
Have a complete catalogue for all kits with item numbers and pictures thru SharePoint to be viewed with workstation tablets (11 tablets)
6/1/2015 31,000$ 8,000$ 23,000$
Gross Savings Cost of Savings Net Savings355,100$ 8,000$ 347,100$
SAME LEAN SONG, DIFFERENT TRANSFORMATION TEMPO McKinsey 2017
• So the song is the same. Unfortunately, so is the ending.– A key change from major to minor as initial optimism fades to disappointment. In a
recent survey, only 26 percent of executives characterized their organization’s most recent transformation as successful. McKinsey, 2017
• Manufacturers are used to change: the survivors have transformed themselves time and again. McKinsey, 2017
– You have adapted to surging demand as economies boomed. – You have adopted production innovations such as lean management. – You have built new networks to take advantage of economies of scale and scope.
• But those changes took years—to take hold. – Digital technologies won’t allow that luxury. McKinsey, 2017
• The creation of a Lean – Competitive Advantage is your ticket to success.
GRASSI PERFORMANCE INSTITUTE
THE GRASSI PERFORMANCE INSTITUTE (GPI) 3 DISTINCT DIVISIONS:1. Grassi Consulting – to assist & guide Grassi clients to be best in class –
creating Effective & Lean organizations2. Grassi Executive Training - to train clients to effectively operate in the
“New Economy”3. Grassi Performance Institute – Seminars – Symposiums – Books – Articles
– as guides to success in all types of businesses
2017Manufacturing & DistributionExecutive Forum
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