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Certification for IATF 16949	We can help you prepare for your certification to IATF 16949 by conducting IATF 16949 Assessments, Mock Audits and Gap Analysis exercises.	Awareness IATF 16949 EssentialsManagement AwarenessAuditor Training Internal Auditor TrainingUpgrade Training (for 1st and 2nd party auditors)Lead Auditor Training	We can help you with “process owners” and documentation writing in preparation for your certification to IATF 16949
Core Tools for IATF 16949		Core Tools Certification Core Tools Certification TrainingCore Tools Individual Courses Advanced Product Quality Planning (APQP)Failure Mode and Effects Analysis (FMEA)Measurement Systems Analysis (MSA) Production Part Approval Process (PPAP)Statistical Process Control (SPC)	Enquire for more information about how we can help you implement and embed Core Tools into your manufacturing process
TPM for IATF 16949Clause – 8.5.1.5	TPM Assessment…	Our TPM for IATF workshop is designed for operations, quality and maintenance leaders who need to introduce TPM to improve their equipment management system and satisfy the revised requirements of the IATF 16949 standard.	JIPM TPM Consultancy… 8 pillars… help you go for your TPM Award
Risk Management for IATF 16949 / ISO 9001	Audit & Assessment	Training	Consultancy
Supply Chain for IATF 16949	We can help and support you with your preparation for MMOG-LE self-assessments	MMOG-LE Training MMOG-LE AwarenessSupply Chain Training Principles of Supply Chain ManagementAPICS Supply Chain Certifications CPIM CSCP CLTD	Ask us how we can assist you with you MMOG-LE implementation and help drive improvements in the areas identified within the assessment

The UK is not alone amongst advanced countries in facing a productivity challenge currently. The sixteen most developed countries in the world economy are reporting a sharp drop in total factor productivity (TFP) in the current decade compared with the rate of increase achieved in the noughties up to the crash in 2008. TFP relates to how capital and labour used and covers issues such as knowledge and skills. But beyond that common theme, despite a lot of analysis, researchers are struggling to explain why productivity problems are so widespread. This may mean that each advanced country has to work out its own solution to its productivity puzzle. The UK, for example, also achieves a lower overall level of productivity than many competitor nations.

Although the UK is behind Europe in the percentage of GDP that is spent on research and development, the quality of UK science and technology stands out. In FP7, the seven year EC R&D programme which finished in 2013, the UK tied with Germany, the largest EC economy, in securing the top share of funds -7bn euros – in the face of very strong competition to get projects funded. This is an important indicator of the UK’s potential for high value growth as is the thriving digital start-up scene here, the largest in Europe. Currently the average value added per person in the UK digital sector is £92k per annum, well above the national average.

The UKCES 2015 skills survey finds that skills shortages vacancies are on the increase in the UK having jumped by over forty percent between 2013 and 2015 to 206,000. Machine operatives are particularly in short supply and the specific skills which are hard to find include workload management, teamwork, complex analytical skills, time management, customer service and management and leadership. This is a familiar portfolio in terms of the skills needed to drive operational excellence and boost added value. Employers who report skill shortage vacancies often see the consequence as delay in the introduction of new products and difficulties in embedding innovative work practices.

UKCES suggest that digitisation is rapidly changing the skills needs of employers across the economy. Job roles are becoming more complex and staff are expected to work more flexibly. Against this background employers’ concern over the lack of high level analytical skills available to them is an important and worrying finding.

The volume of training delivered in 2015, 118m staff days, was over 4 per cent higher than in 2013 and in excess of the 2011 volume suggesting that the downward trend in training volumes of recent years may have come to an end. The growth in the workforce plus the increased level of recruitment activity are thought to have been factors in this growth. UKCES report that employers who have adopted high performance working and ambitious product/market strategies are more likely to train their staff. These employers are actively exploring more innovative ways of delivering training using digital tools.

About two thirds of UK employers provide some training for their staff in any one year currently and around the same proportion of employees are trained annually. It is widely accepted that an important factor in the UK’s economic performance is the long tail of badly managed mostly smaller firms compared with more productive competitors such ad the U.S. On top of that, it is estimated that around two million employees in UK firms are in jobs that do not make full use of their skills and qualifications.

In its UK Futures Programme, UKCES is working with business to pilot innovative solutions to major workforce development issues including raising productivity in small firms by increasing management and leadership. Issues being addressed include the skills base for innovating in manufacturing and better management and leadership in supply chains.

Within the EC workplace innovation has been taken up as a priority for increasing competitiveness with the specific goal of increasing its adoption in small and medium sized enterprises. A Europe-wide learning network (EUWIN) has been launched to improve the performance of organisations and the quality of jobs in a sustainable way. The network distributes evidence on the benefits of modernising the workplace and working condition and raises awareness via regional workshops and social media.

In January the Department of Culture, Media and Sport and the Department of Business published a study of the UK’s future digital skills needs. In line with the recent UKCES research, this study found that shortages of digital skills already persist and this threatens the UK’s growth potential. This applies right the way across the economy, not just to the digital sector. For example, the CBI ‘Gateway to Growth 2014’ study found that approximately two thirds of businesses reported that their employees had weaknesses in IT skills competencies, a 4% increase from the last survey which in 2009.

The concept of Industry 4.0 refers to the anticipated development in manufacturing operational excellence through the widespread Integration of digital techniques. The basic principle of Industry 4.0 is that by connecting machines, work pieces and systems, businesses are creating intelligent networks along the entire value chain that can control each other autonomously. Industry 4.0 is closely linked to the Internet of Things.

Although the concept started with a German study it has been taken up in Horizon 2020, the successor to FP7 in the CREMA project  Cloud Based Rapid Elastic Manufacturing which started in January 2015 .The European automotive supply chain is heavily involved in CREMA with UK representation coming from Tenneco UK and DotNet IT .

Work has started on updating the UK skills regime in the light of the burgeoning digital skills agenda. In February of this year the Skills Funding Agenits published its Review of Publicly Funded Digital Skills Qualifications. It finds that in many cases the occupational standards on which many existing qualifications are based are more than five years old. This study compliments the Shadbolt Review of Computer Science Degree Accreditation and Graduate Employability which is currently under way.

Most of the UK workforce in 2020 is already in employment and so updating vocational courses of new entrants including apprentices must work hand in hand with workforce skills development for existing job-holders.

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5,000 jobs vacant in UK automotive due to skills shortage

New Automotive Council report reveals depth of skills shortage facing the sector.

• Up to 5,000 current vacancies in the automotive industry causing significant impact on business operations.¹
• Groundbreaking new Automotive Council report sets out skills requirements for UK automotive sector, with engineers most difficult to recruit.
• UK automotive industry workforce now the most productive in Europe – but growth potential could be undermined by lack of new talent.

9 February, 2016 Up to 5,000 job vacancies in the UK automotive industry could be vacant due to a skills shortage affecting the sector, according to a new report published today by the Automotive Council.

The report¹, which was developed by automotive industry consultants SMMT Industry Forum on behalf of the Automotive Industrial Partnership, surveys a range of British-based automotive firms, from vehicle manufacturers to component suppliers, to identify the areas of employment most difficult to recruit, and provide an important means for industry and government to tackle the skills issue. Around 19% of the unfilled vacancies cited in the report are identified as ‘critical’ and having a significant impact on company operations.

Of the top 10 job types for which recruitment is most difficult, the majority are in engineering – with the top two in-demand roles being design and production engineers. The knock-on effect, according to the report, is that companies are hiring temporary contractors and increasingly recruiting from abroad.

The renaissance of the UK automotive industry since the recession has brought significant success to the sector and helped to sustain just under 800,000 jobs across Britain. 2015 was the best year in a decade for car production with 1.59 million vehicles built², and volumes are forecast to reach an all-time record two million by 2020.³ The UK also achieved notable success in productivity levels, which have increased 40% since 2010 to make UK labour productivity the highest in Europe.⁴ But this success could be undermined by the lack of skilled engineers to fill new jobs, despite efforts made by companies to increase training and apprenticeships.⁵

Jo Lopes, Chair of the Automotive Industrial Partnership and Head of Technical Excellence, Jaguar Land Rover, said, “These are very significant findings which present a valuable basis for government and industry to jointly tackle this issue head-on and ensure that the growth potential of the industry in the coming

years is fulfilled. The Automotive Industrial Partnership has already made some important steps since its inception – including the introduction of a range of training programmes – and it will have a crucial role to play in addressing the skills challenge.”

Skills Minister Nick Boles said, “Our automotive workforce is the most productive in Europe and this goes a long way to explaining why production hit record levels last year.

“But this report shows we cannot be complacent. The sector needs to maintain its high productivity and international competitiveness and address the required demand of skilled workforce, engineers and designers. That’s why our apprenticeship reforms are putting employers in the driving seat, to deliver the high-tech, long-term skills our economy needs.

“The Automotive Industrial Partnership is a good example of government and industry working together, and I welcome this report.”

Mike Hawes, SMMT Chief Executive, said, “The automotive industry has already invested heavily in apprenticeships and training for existing staff to grow and develop a new generation of skilled workers. However, even more support is needed. The struggle to fill vacancies is holding back growth and opportunities for business, and it is essential that both government and industry work together quickly to identify ways to plug this gap. Future schemes must focus on quality not just quantity – and more support is needed to promote STEM subjects in schools.”

The Automotive Industrial Partnership was initiated in early 2015 by the Automotive Council to bring together major automotive businesses in order to help ensure future skills needs are met for UK vehicle manufacturers and supply chain companies. Since its inception, the Partnership has developed a ‘jobs framework’ – an industry standard hierarchy of roles – to make it easier for companies to structure positions and for employees to follow clear career development paths. It has also implemented a number of new training programmes, and is developing the Automotive Apprenticeship Matching Service to retain more high calibre apprentices in the industry.⁶

In addition to the new personnel needed, there are also many new training requirements due to the adoption of new automotive technologies in the industry. According to the report, 71 different types of learning are required for more than 20,000 people working in the industry – 15% of whom have an immediate need for new training. The most critical training requirements are in lean manufacturing (minimising waste), advanced problem solving and tool making.

The report sets out a range of recommendations to tackle the skills shortage. These include the implementation of a co-ordinated approach to STEM (science, technology, engineering and mathematics) subjects in schools, as well businesses ensuring that apprenticeship opportunities on offer from government are maximised.

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Notes for editors

¹ About the report: Employers’ views of the jobs and skills required for the UK automotive industry

Devised by the Automotive Industrial Partnership, the report features a survey of 61 UK automotive companies, including eight vehicle manufacturers and 23 suppliers, collectively employing around 83,200 people in the UK. It identifies where the main gaps lie in skills availability, as well as how critical these gaps are

2,500 vacancies from the companies surveyed were found to be ‘difficult to fill’ or ‘challenging’, which when extrapolated to the whole industry (around 160,000 people employed), puts the potential number of these jobs at almost 5,000.

The full report can be downloaded at www.automotivecouncil.co.uk, www.automotiveip.co.uk and www.smmt.co.uk (after 00:01 on Tuesday 9 February).

² SMMT Production International Exchange (PIE) data

³ SMMT/AutoAnalysis 2015 report: The future of UK automotive manufacturing in 2025 and beyond (http://bit.ly/1PaNEQG)

⁴ Automotive Council 2015 report: The international competitiveness of the UK automotive industry (http://bit.ly/2089pHc)

⁵ SMMT: 2015 Automotive Sustainability Report (http://bit.ly/1P09Cla). Training provided by automotive firms rose from 2.5 days per employee to 3.3 days in 2014.

⁶ For more information, visit http://www.automotiveapprenticeships.co.uk

About the Automotive Council

The United Kingdom Automotive Council was established in December 2009. It is a joint UK government-industry organisation tasked with establishing the UK automotive sector as a world leader.

The Automotive Council aims to:

• Create a transformed business environment for the automotive industry in the UK to provide a more compelling investment proposition for related industries;
• Develop further the technology roadmaps for low carbon vehicles and fuels, and exploit opportunities to promote the UK as a strong candidate to develop these and other technologies;
• Develop a stronger and more competitive automotive supply chain;
• Provide a stronger public voice for the industry to support the value of the industry to the UK and to global partners;
• Ensure a strategic, continuous conversation between government and the automotive industry in the UK.

www.automotivecouncil.co.uk

Media contacts

Ben Foulds (SMMT)  020 7344 9222  bfoulds@smmt.co.uk

Jason Raj (BIS)  020 7215 5946  jason.raj@bis.gsi.gov.uk

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Malcolm Jones,

Principle Engineer at Industry Forum, 

has over 20 years experience in lean. 

 

One of the less well known groups I studied with while undertaking my education in Japanese manufacturing practices was the TP Management Group at the Japan Management Association. TP Management, Total Productivity Management (not to be confused with TPM, Total Productive Maintenance), is an overarching policy deployment practice which incorporates Lean, TQM, TPM et al as required. In TP Management terms, these processes are means to actualise business strategy, not the strategy itself.

Like the Deming Prize for Quality and the JIPM TPM Prize, there is a TP Prize,but with far less prescriptive criteria.
TP Management is based on a foundation of principles and in awarding the TP Prize the assessors are looking for innovative examples of the application of those principles. The winners of the TP Prize, inaugurated in 1985, include plants from Toshiba, NEC,Canon, Toyota Auto Body, Matsushita Electrical, Hitachi, Mitsubishi, Nissan Motor and Sekisui Chemical. In my
own visits to TP prize-winning plants I saw examples of implementation at Matsushita Refrigeration, NEC Satellite Communications, Sony, Snow Brand Dairy products and Shiseido cosmetics. One research paper, presented at a
TP Prize conference in the 1990’s has greatly influenced my thinking about manufacturing strategy. As TP is a nonprescriptive
approach, the researchers were interested in how companies chose to actualise the policy deployment process in their operations, and came up with 11 approaches, split into 2 categories. The two basic categories were ‘programmes for actualising the business strategy’ and ‘programmes for strengthening the internal environment’. This mirrors Western thinking about strategy which distinguishes between market based approaches and competency based approaches.

In TP terms, Total Productivity is a function of both Product Power (the attractiveness of the product to the market – product innovation) and Resource Utilisation (the effectiveness of the processes to deliver the product –process innovation). Both are necessary and neither is sufficient, although the company’s position in the supply chain may have an influence on where a
company focuses its resources.

Figure 1: Upgrading through TPM

 

 

The competency (resource utilisation) based strategies identified were:

Programmes for Strengthening the
Internal Environment:
1. Use TPM as the Base
2. Develop through JIT
3. Move from DC (Direct Costs) and FC (Factory Costs) to TC (Total Costs)
4. Build Integrated Partnerships with Customers and Supplier
5. Restructure to maximise the use of systems and human resources
6. Practise True Policy Management

The first three of these have a focus on the trilogy of Quality, Delivery and Cost. TPM is seen as the application of TQC
type process to automated manufacturing based on equipment efficiency. In their interpretation TPM expands a TQM approach focused initially on improving quality by reducing variation to a focus on reducing costs and leadtime based on eliminating equipment losses (zero targeting). In its final TP led development, policy deployment is used to expand the focus to include customer, employee and social satisfaction indicators, improving product competitiveness through early management processes, expanding employee autonomy and incorporating environmental concerns though the Safety,Health and Environmental Pillar activity.

Figure 2: JIT Construction System

 

 

In Western industry we see this approach being used most prominently in FMCG (fast moving consumer goods) and process
industries. Used by consumer giants such as Unilever and Proctor and Gamble this approach has been combined with
the supply chain approach, numbered 4 above, with Supply Chain being added as an explicit TPM Pillar activity.

Again, if we think in Western strategy terms of those factors which are merely qualifiers, rather than differentiators which
give competitive advantage, then this makes sense in industries under intense cost pressure from retailers and consumers
and required to produce at low cost with 100% effective availability. As the ability to produce the right quality at the right
time is a mere qualifier in FMCG, quality and leadtime focused approaches in the factory have never gained too much
traction in industries which are inherently lean in their flow production processes.

The way the extended supply chain is managed does give competitive advantage in consumer industries, together with a reliable low cost manufacturing base. The TPM concept of ‘vertical startup’, the problem free introduction of new products and equipment and rapid ramp up to production rate is also key in these industries where product innovation is also a key driver of competitive advantage and growth.

Figure 3: Supply Chain Optimisation

 

 

Although we can point to Western precursors, the JIT approach was developed in Japan, beginning at Toyota in the 1930s. Lean is best thought of as a Western description of this approach and the term ‘lean’ itself has struggled to gain currency in Japan itself. Those companies in Japan taking a JIT approach to leadtime reduction tend to focus on flexibility as the competitive feature of their Lean systems. One example is in Japanese modular house building. It is common for a Japanese family to move in with relatives while an existing house is demolished and a new one put up on the same site. This has led to demand for modular housebuilding where major structures are pre-fabricated in the factory and then assembled on site, reducing the time the family is without their own home. Although design is modular, each house is unique and the demand for short leadtimes has led to the development of Lean systems which reduce the total leadtime from sales to construction.

Lean is ubiquitous in Western engineering industries, particularly in automotive and aerospace, but here it is a qualifier,
not a differentiator. This has led to the development of alternative forms of lean – Agile Manufacturing and Quick
Response Manufacturing for example, but these are fundamentally lean approaches with the emphasis on flexibility which
we see in the Japanese development of JIT. One area where Lean has proved to provide competitive advantage is in the
US healthcare industry and this is being mirrored in the socialised healthcare systems of Europe.

As a result of the lack of intrinsic differentiation to be derived from Lean production systems, suppliers to OEMs tend towards a value adding strategy where modules rather than components or materials are supplied and the ability to add value to a module is used to differentiate.

Figure 4: TP Portflio

 

This focus on the product power, not just resource effectiveness, is used to secure ongoing business, as this form of differentiation also increases the barriers to entry for lower cost suppliers.

Although Lean and TPM can both be seen as cost reduction strategies, Lean in the elimination of waste and TPM in the reduction of losses, the cost reduction approach identified by the JMA researchers is based on reviewing management accounting processes. Japanese management accounting in advanced manufacturing companies has tended to focus on driving the behaviour required by the company’s chosen strategy. One example I have seen is the allocation of indirect costs to products based on set-up times in a company where the strategy is based on small batch flexibility.

The cost reduction strategy identified here however is based on what Western accountants have called Value Stream Costing, a switch from trying to optimise costs in specific areas to optimising overall cost, even if that means sub-optimal costs in some area – insufficient recovery of some equipment asset costs for example.

Figure 5: TP Deployment

 

This is an example of the link between Lean and Systems Thinking as developed by Jay Forrester and his colleagues at MIT.
The fundamental principle of systems thinking is that you cannot optimise a system by individually optimising its parts. It is probably fair to say that the accounting principles derived from the mass production management strategy of GM in the 1950s have hung on longer than the mass production system principles themselves and accounting is in some sense playing catch up with operations. Value Stream Costing and other activity based accounting approaches which aim to directly apportion costs and reduce misleading allocations are central to these efforts.

After considering these three approaches to Quality, Delivery and Cost Improvement the researchers went on to identify three further extensions of these, the first of which is extended supply chain management. The approach here is an extension of the overall optimisation approach to include the upstream and downstream supply chain, forming a true partnership from supplier to customer. Using the logic of systems thinking described above, where optimising individual operations leads to a suboptimal
system, this requires the sharing of data between all parties, following a gain sharing philosophy. This necessitates
an unusual level of transparency between the various parties in the supply chain, but this has the added benefit of reducing demand amplification, the phenomenon whereby variations in the actual end customer demand are amplified by the supply chain transactions, creating far greater variability in the final production schedule.

The fifth approach is termed restructuring, but this is deceptive in Western terms. The approach outlined here is based on aligning company systems with business objectives and emphasising the development of human resources. The closest parallel in Western business literature might be the concept of the Learning Organisation and indeed one compelling characterisation of the development of Toyota in the 20th century was its ability to function as a learning organisation.

The development of the learning organisation, and in particular formal lessons learned systems, is only one part of this approach, the other being the alignment piece which is based on monitoring the links between the attainment of business objectives and the development of the company’s constitution. The most sophisticated versions of this system see companies tracking both their constitutional strengths through assessments such as The 20 Keys or even ISO 9001, 18001, 55001 etc,
actual performance in meeting their business targets and the constitution building activities. The TP Portfolio is a diagram which links activity and performance and illustrates if a company is in a performance ‘bubble’ where the results are not the result of activity controlled by the organisation, but rather by external factors out of their control, or indeed in the ‘engine racing’ zone where there is intense activity but poor results due to misalignment with the strategy.

The final competency based strategy is based on a full blown Policy Deployment system using TP Management concepts and the ‘catchball’ process of agreeing objectives at various levels in the organisation. This is most often seen in Western manufacturers in the form of the X-Type Policy Deployment matrix, originally developed by Ryuji Fukuda. These however tend to be based solely on performance objectives and omit the alignment with constitutional objectives which is characteristic of TP Management.

These are six generic manufacturing strategy approaches and each company needs to modify and combine as required by the overall business objectives of the company. One way of looking at how to develop your own strategy is to compare your own situation with the general development of manufacturing over the last 60 years.

The graph below illustrates how in aggregate terms the world has changed from one in which there was more demand than supply and where Quality and Delivery could be seen as differentiators to one where supply exceeds demand and Cost and Innovation are now seen as differentiators and Quality and Delivery merely qualifiers.

Figure 6: Supply and Demand Trends

 

 

 

 

 

 

In markets where quality is still a differentiator, an approach such as Six Sigma, improving quality through reducing variation may be appropriate. This is not considered in our Japanese examples except as a precursor to TPM as the companies surveyed were no longer active in markets where Quality is an important differentiator. If delivery performance, particularly in

terms of the extended supply chain is a differentiator in your marketplace then an extended Lean/Supply Chain approach could be valuable. In markets where price is still a differentiator, then a well developed TPM approach can give significant benefits,
especially when including Supply Chain development in an FMCG environment.

Advanced TPM approaches can also be beneficial when product and process innovation are key differentiators in over supplied markets. Where overall costs are an important consideration, new accounting approaches aimed at optimising total costs are especially useful. Mature Lean organisations may also wish to reflect on the opportunity for developing advanced policy deployment system to ensure that their systems are aligned with changes in the market place.

The strategy development process is based on first deciding what markets to be in and then what capabilities are required to deliver value to that market. This is sometimes described as ‘where to play and how to win’. The approaches outlined above are ‘ways to win’ and which combination is developed will depend on where you decide to play.

I have not detailed any of the market led approaches based on product innovation, but one alternative is to recognise your current capabilities (how you win) and then investigate new markets where these winning characteristics enable you to join the game. This can be as one of three types of innovation led companies – need seekers, who actively engage with the customer; market readers, who closely watch markets and competitors; and technology drivers, who launch innovative products in new markets based on their strength in R&D.

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