world cls mfg
TRANSCRIPT
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World-Class Manufacturing
……. Suhas Rane
Partly covered from Ref Book : World-Class manufacturing
- A Strategic Perspective by B S Sahay, K B C Saxena & Ashish Kumar
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Learning Objective
• To understand the views of different Management Thinkers on – World Class Manufacturing
viz. Alvin Toffler, Thomas Friedman, Kaplan & Norton, Ohno, Shigeo
• Info. Age Business & Challenges thereof
• WCM : Definitions
• 7 Keys to WCM
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Global competition
Regulatory policies
Rising Customer
Expectations
Increasing input costs
What do these things mean to you?
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Epoch making events
• Fire
• Wheel
• Industrial revolution
• Internet
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The Emergence of the Information Age
According to Alvin Toffler (American futurist)
3 Periods of Economic Evolution:
Agricultural Age : from 8000 BC till mid 18th Century
Industrial Age : lasted until late 20th Century
Information Age : that began in the 1960s
and will last for many decades to
come.
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Eras of Manufacturing Process Control
• The craft system (circa 1500)
• English system of manufacture (circa 1800)
• American system of manufacture (circa 1830)
• Scientific Management (circa 1930)
• Statistical process control (circa 1950)
• Numerical control (circa 1965)
• CIM / flexible manufacturing (circa 1985)
(From filling and fitting to flexible manufacturing by R. Jaikumar)
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Changing Business Goals in a Changing Environment
Growth
Turnover
Productivity
Market Diversification,Flexibility
1960 1970 1980 1990 2000Year
EVA
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Business Challenges of the Information Age
• Managing Uncertainty
Uncertainty in business becomes a way of life.
Difficult to predict changes, Customers becoming competitors and competitors becoming partners
• “Understanding customers” is important The companies capturing (and applying) info. at each point of
customer contact will be better off
• Understanding globalization of business
Cutting across national boundaries, barriers of time and locations.
IT has helped small cos. to compete with the Industry giants
( from “ The world is flat” – Thomas Friedman )
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Operating Environment of Information Age Business
Info Age organizations are being structured on* –
– Business process orientation
– Links to customers and suppliers
– Customer segmentation
– Global scale
– Managing innovation
– Knowledge workers
* ( Kaplan & Norton, 1996)
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Emerging Business Trends in the Info. Age
Area Industrial Age Business Information Age Business
Economic • Assy line production• Stable markets and suppliers • Domestic competition
• Customization of products• Fluid markets and suppliers• International competition
Organizational • Inside out • Intra-organizational Communication • Domestic reach / ambition
• Outside in• Inter-organizational communication• Global reach and ambitions
Technical • Mechanical technology • Proprietary standards • Predictable innovation
• Electronic technology• Open, inter-operable standards• Rapid unpredictable innovation
Socio-cultural • Authoritarian, hierarchical • Business task focus (MBO)• Individual responsibility
• Horizontal, team consensus• Business process focus• Team responsibility
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Exporters World-class Manufacturers
Domestic MNC Players
Global
Markets
Local
Local Global
Mfrs./Competitors
Different business scenarios
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To compete successfully in a global business, key strategic issues to be addressed effectively :
• Cost-quality improvement through coordinated manufacturing and
through concurrent engineering
( e.g. JIT, SCM, Over-all Quality Improvement)
• Shortening “Operating Cycle” (i e. Cash –to-cash)
• After-sales customer support (spares, service, add-on products)
• Shortening design cycle – to match shortened PLC
• Global sourcing, flexible mfg. at multiple plants
& efficient distribution
• Globally coordinated R&D ( e.g. Toyota )
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Manufacturing Excellence through combination of several approaches (Hall 1987):
• Value-added manufacturing,
(means - do nothing that does not add value
to the product or to the customer)
• Continuous improvement manufacturing,
which suggests that every aspect of manufacturing is
dedicated to making it better - in ways, great and small.
• Just-in-time (JIT) / Total quality control.
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Hall’s framework of Value-added Manufacturing
JIT Manufacturing
Total Quality
Total PeopleInvolvement
• Take a broad view of operation
• Make problems visible to everyone.
• Improve operations before spending on new plant and equipment.
• Keep it simple.
• Flexibility.
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Hall’s Framework of “Value-added manufacturing”
1. Total Quality Control
– Begin with the customer
– Measure and track quality
– Take a broad view of quality
– Set targets for improvement
– Responsibility at the source
– Standardization
– maintains good practice and
prevents problems from recurring
– Fail-safe operations.
2. JIT Manufacturing
- Only the right materials, parts
and products, in the right place
at the right time
3. Total People Involvement
- Broad perspective
- Problem-solving atmosphere
- Employment security
- Performance measurement
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Prabhala, 1994 : 5 Goals to achieve Mfg. Excellence
1. Throughput should go up.
2. Inventory should come down.
3. Operating expenses should come down.
4. Cycle time should come down.
5. Yield should go up.
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Creators of WCM
World-Class manufacturing was developed largely by –
Taiichi Ohno - who rose from foreman to VP at Toyota,
and Shigeo Shingo - an Industrial Engineering consultant.
Goal of WCM :
To bring manufacturing closer to the market.
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Ohno’s View of the Essence of WCM
Order CashTime Line
Ohno’s simple definition of WCM –
All we are doing is - looking at the time line from the moment the customer gives us an order to the point when we collect the cash. And we are reducing that time line by removing the non-value added wastes.
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Shigeo (1981)7 Wastes & their elimination methods
Waste Type Elimination Method
1. Overproduction Reducing set-up time, Synchronizing quantities and timing between processes, etc
2. Waiting Synchronizing workflow as much as possible, balancing uneven loads, etc.
3. Transportation Redesigning layouts to make transport and handling unnecessary.
4. Waste of processing itself
Need assessment of product and process.
5. Waste of stocks Reduce set-up times, and lead times by synchronizing workflows.
6. Waste of motion Study motion for economy and consistency.
7. Making defective parts
Prevent defects to eliminate inspection
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Required Attitude Changes for WCM
From ToLittle boxes (fragmented view) The big facture (holistic view)
Complacency Competitiveness
Manufacturing as a Cost Centre Manufacturing as a Strategic Resource
Top management as a roadblock Top management as a leader
Inventory as an asset Inventory as a liability
‘It is not my job’ ‘ It is everyone’s job’.
Vertical communication in organization Open, Horz. and Vertical communication
Just meet the goal, balance for next time Improve day by day
‘I am not allowed to….. ‘I am encouraged to….
Not invented here Use if it works; learn from others
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Required Attitude Changes for WCM ( contd.)
From
Do it ourselves
To
Core Competency
Planning is no good and not needed here Planning is useful; we must plan.
Number games True & accurate info. visibility
We know what is best for the customer The customer is always right.
Computers are an expense Computers are a competitive asset.
Data control and definitions are not important
Data is a corporate resource, to be defined and controlled effectively.
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Definitions
World Class Manufacturing is a different set of concepts, principles,
policies and techniques for managing and operating a manufacturing
company.
It is driven by the results achieved by the Japanese manufacturing
resurgence following World War II, and adapts many of the ideas used
by the Japanese in automotive, electronics and steel companies to
gain a competitive edge.
It primarily focuses on continual improvement in quality, cost, lead
time, flexibility and customer service.
http://rockfordconsulting.com/wcm.htm
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Definitions
http://dictionary.bnet.com/definition/world+class+manufacturing.html
A position of international manufacturing excellence, achieved by
developing a culture based on factors such as continuous
improvement, problem prevention, zero defect tolerance, customer-
driven just-in-time production, and total quality management
The capability of a manufacturer to compete with any other
manufacturing organization in a chosen market, with the aspiration of
achieving world-beating standards in all organizational aspects.
World class manufacturing encompasses the practices of total quality
management, continuous improvement, international
benchmarking, and flexible working.
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A World Class Mfg. firm..
Anand Sharma, author, The perfect engine
Achieve growth in top and bottom lines and reduce trade working
capital. It has to be a multiple of industry average.
The top line (sales) should be growing at two to three times industry
average.
The bottom line (profit) should be growing at four to six times industry
average.
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How do you do this? - 7 Keys
Reduce lead times
Cut operations cost
Improve business performance visibility
Speed time to market
Exceed customer expectations
Streamline out-sourcing processes
Manage global operations
The seven keys to World class manufacturing, Mapics
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Reduce lead times
Cut operations cost
Improve business performance
visibility
Speed time to market
Exceed customer expectations
Streamline outsourcing processes
Manage global operations
Lower cash to cash cycle
Customer preference
SMED
Single piece flow
Low inventory
Greater flexibility
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Reduce lead times
Cut operations cost
Improve business performance
visibility
Speed time to market
Exceed customer expectations
Streamline outsourcing processes
Manage global operations
Case 1
Case 2
Sales 100 117
Material Costs 50% 50 58
Other variable costs 20% 20 23
Fixed costs 20 20 20
Profits 10 15
Case 3
Sales 100
Material Costs 47% 47
Other variable costs 18% 18
Fixed costs 20 20
Profits 15
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Reduce lead times
Cut operations cost
Improve business
performance visibility
Speed time to market
Exceed customer expectations
Streamline outsourcing processes
Manage global operations
Know performance against objectives
- strategic
- tactical
Problem identification
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Reduce lead times
Cut operations cost
Improve business performance
visibility
Speed time to market
Exceed customer expectations
Streamline outsourcing processes
Manage global operations
Collaborative design
Design for manufacture and assembly
Design for logistics
Quick response
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Reduce lead times
Cut operations cost
Improve business performance
visibility
Speed time to market
Exceed customer
expectations
Streamline outsourcing processes
Manage global operations
Kano’s model
Delighters
Satisfiers
Dissatisfiers
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Reduce lead times
Cut operations cost
Improve business performance
visibility
Speed time to market
Exceed customer expectations
Streamline out-sourcing
processes
Manage global operations
Focus on core competence
Collaborate with best in class
Minimize capital investments
Preserve agility / flexibility
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Reduce lead times
Cut operations cost
Improve business performance
visibility
Speed time to market
Exceed customer expectations
Streamline outsourcing processes
Manage global operations
International products
Local tastes / currency/ time/ language
Global procurement /
manufacturing and sale
e-Commerce
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Attributes of WCM
WCM report 2005 (SAP)
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Theory of holistic management for world class performance
Quality planning
Quality Management System – ISO 9000
Supply chain management
Continuous improvement
Strategic quality planning
Customer focus
Quality control
Quality Improvement
Total organization involvement
ResultsDelighted customers
Empowered Employees
Maximisation of R.O.I.
All round performance of excellence
T.Q.M .Process
Infrastructure
Foundation
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Theory of holistic management for world class performance
• Foundation: Attitude, Commitment, Culture- Customer Focus : Meets, Training, Warrant claims, - Continuous improvements: P.D.C.A. cycle, Kaizen, Q. Circles, - Strategic Quality Planning: Mission, Vision, S.W.O.T., Plan,
• Infrastructure: Good leadership, Responsiveness to market changes - Total organisational involvement: Structure, Decision making, Employees involvement, Problem solving techniques, Suggestion scheme- Supply Chain Management: M.R.P.I , M.R.P.II, Capacity
planning, Make v/s buy, Distribution channels- Quality management : ISO 9000, QS9000, ISO14000,
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Tools of Holistic Management for world class performance
• Total Quality Management: - Quality Planning: Mission, Vision, Strategic planning,
Quality planning- function wise- well defined- expected output
- Quality Control: Measure the performance, controlling the critical operations,
Adherence to the quality plan- Quality Improvement: Cost of quality, JQIP, Q.C.,
T.O.C.,K.R.A., P.D.C.A.
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Holistic management : The results• The delighted customers – Latent needs
• Maximization of R.O.I.- Profit*No of Working capital cycles /annum
• Empowered employees
• All round Performance: Wastage reduction, loss of orders, employees’ moral, quality products and services
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Thank You