Category: Industry Forum Blog

For almost any manufacturer, accelerating the time to market of new product introduction is a key strategic imperative within the constantly changing nature of today’s market environments. Aspirational growth targets are fundamental to future business strategy and a large part of achieving this growth will involve the introduction of new opportunities and new products into the business. Accomplishing a seamless new product launch is therefore critical in an organisation’s ability to meet both the constantly evolving market demands and internal growth targets identified within the business strategy. Executing a seamless new product launch however, is a challenging endeavour when taking into consideration the complexity of collaborating with multiple business functions such as engineering, planning, manufacturing, quality assurance and supply chain.

Challenge

There are various ways in which projects can be approached and a host of ‘methodologies’, ‘frameworks’ and ‘processes’ have been developed over the years. Choosing the right project management approach for your organisation can be a challenge. On the other hand if we think about some of the reasons for NPI project failures the usual suspects come to mind –

• Failure to set expectations and manage them
  • Lack of communication at any level
  • Inefficient documentation and tracking of progress
  • Competing priorities
  • Disregard of project warning signs / risks
• Poor planning and/or inadequate structure of process
• Poor project leadership or implementation – inadequately trained project managers or project teams
• Inaccurate cost estimates

The good news is while every project is unique, there are a number of core Project Management principles which underpin success.

Solution

As part of a robust NPI approach, organisations must have a Project Management structure that establishes the key stakeholder activities, communication, risk management, lessons learned, change management and customer management. Without good project management embedded many organisations find themselves ‘firefighting’ NPI projects to launch. For a successful product launch project management needs to be a specialist skill on a par with other technical and business skills

What to do?

A good starting point would be to have a definition for project in your organisation and separate it from business as usual. Following this define a structured project management approach. Something to remember is that following a structured project management approach will help us not only to produce successful result for projects today but over a period of time consolidate on the business as usual activities too.

Here are some simple questions to ask within your teams and define your improvement areas related to project management –

1. Do we all have a common understanding and awareness of project management principles?
2. Do we have a project management approach established with a structured project planning process?
3. Do we have effective communication in project teams from start to end of projects – consider planning, assigning, monitoring, controlling and close out of projects?
4. Do we effectively manage project risk and changes in the team?
5. Do we continuously improve our project management methodologies with a lessons learned feedback loop?

If you can consistently answer yes to all of the above questions than you are not far from having a strong project management pillar in the NPI model. Consider this is as another successful step taken on the journey to achieve product launch excellence.

If you are not quite there, Industry Forum offers both in-house and open courses, as well as one-two-one support to help you on your way to product launch excellence. Contact us today for a no obligation discussion about your requirements. 

As we welcome in the new financial year for many companies, it’s time to spring clean your stores and refresh your inventory policy.

“The holy grail of Supply Chain is having the right stock of the right product is ever elusive…you’ll never get it right 100% of the time – but you can get close if you stage agile, adapt and review your inventory policies. “

Getting this right will improve a whole host of things throughout your entire supply chain; warehousing and logistics costs, procurement saving opportunities, write down savings and availability improvements, ultimately leading to increased sales revenue and a healthier bottom line.

With experience in reducing inventory by 25% and generating a 2% uplift in sales as a result of better management of inventory policy, our Supply Chain experts can support you through this change.

Identify your core range.

Before we can do anything, we have to define our Core. Whatever your business, industry or market – defining your core will give focus to your business.

Defining your Core product can be done in various ways. This could be determined by sales volume, overall revenue, profit, key customers, strategy…it’s really up to you.

How to determine your Core

As a general guide, best practice is to use a Pareto classification method. Remember, reviewing your core on regular basis is advisable (annually is most common).

This approach is popular because:

It’s based on rules and logic that everyone can understand

It’s easy to ‘tweak’ the boundaries and rules for modelling

It focuses attention on the part of your business that delivers the most revenue – focus where it matters!

Regular reviews and reclassification of products with revised Pareto Core identification reduces the risk of outdated stocking policies, overstock and stock outs

Explaining the Pareto Principle

The Pareto principle (also known as the 80/20 rule, the law of the vital few, or the principle of factor sparsity) states that, for many events, roughly 80% of the effects come from 20% of the causes. The principle was first suggested by management consultant Joseph M. Juran.

Richard Koch authored the book, The 80/20 Principle, which illustrated some practical applications of the Pareto principle in business management and life – “80% of sales come from 20% of clients”.

Mathematically, the 80/20 rule is roughly followed by a power law distribution (also known as a Pareto distribution) for a particular set of parameters, and many natural phenomena have been shown empirically to exhibit such a distribution.

Popular Pareto Classifications

A basic Pareto class groups products into 3 categories – A, B and C. The Best practice method assigns the top 80% to category A, the next 15% to category B and the final 5% to category C.

If we consider this graphically in the below example we can see the boundaries of our categories:

This basic Pareto classification will give you a solid starting point.

Once you’ve assigned your categories, you can begin managing the groups with different rules and urgency.

Inventory Management

Identifying your core is merely a tool. Management of the different categories is crucial to get the benefits you desire.

Below are my guidelines for inventory management of the three ABC categories.

Category A – These are your key revenue generators. They are typically consistent, high volume, low variation sellers. Service should be high, stock should be turned frequently, availability is key here. You should not go out of stock of these products. Forecasts should have a high accuracy.

Good service from your suppliers is vital here. If managed correctly, orders should be frequent and at fairly regular volumes so physical stock holding can be managed as lean as possible. Many may think that these products should have a tonne of stock – they’re crucial after all. In reality – this is your most consistent, easy to plan and most predictable product area. You should be aiming for the minimal stock cover that gives you protection for expected variability. Dependent on your supply chain, you could be ordering this product on a daily basis – using a Just-In-Time approach.

Category C – These products are your tail – the hardest and most costly to manage. Sales are erratic, sporadic and vary enormously in quantity. Efforts here should be focused on managing your way AWAY from stocking and selling these products at all!!

A ‘bin-level’ stocking policy is a great strategy for these items. Maintaining maximum and minimum inventory levels allows you to determine the level of stock you want to hold (and the cost of that) whilst minimising the amount of time that you need to spend managing these products.

Time spent here does not yield a return. These products should be passed to category managers, marketing and R&D to search for ways to relaunch, phase out, or transfer sales on these items to your category A and B products.

If possible, you should seek to outsource the supply of these products and act simply as a vendor to your customers.

Category B – These are typically where you will spend most of your time. This is where the importance of a flexible supply chain is key. These items sell fairly regularly, in perhaps a ‘spike-y’ fashion. They could be seasonal items that sell only in certain periods of the year. They could be low volume sellers. You should plan to stock the most cover on these items. They contribute significantly to your revenue, but it’s not possible to have these available at all times without extremely high levels of stock holding (which would be financially crippling).

Consignment stocks, vendor owned inventory and a good stock return policy with your suppliers can alleviate some of the challenges with category B items.

It’s also important to watch the fringes of category B – which items could become category A’s or category C’s in future?

The next level of Inventory Optimisation

Once you’ve got to grips with the ABC classification, you can add another dimension to give a wider range of categories. This should be defined in line with your business strategy – giving you information to make changes towards your goal.

A common advanced Pareto classification is ABC (based on Sales Volume), XYZ (based on cost of stock – unit price). This dual approach gives us 9 different classification groups:

AX – biggest sales volume, lowest cost, through to CZ – lowest sales volume, highest cost

AX are your lowest risk products – high volume, stable sales with low cost of product. These are the products you should aim to always have available.

CZ are your highest risk products – low volumes, often volatile of sporadic sales patterns, with a high cost of stock. These items could be managed with vendor owned inventory if you purchase your goods for sale, or with consignment stocks and minimum order quantities if you manufacture your goods. Looking at ways to reduce your liability on these items should be a priority.

Tailor your strategy for each category

Remember – the classification is simply an indication of how the group of products should be managed.

Your inventory policy, rules and strategy from a supply chain point of view should be tailored to the specific demands of each category to deliver the best possible results.

I hope this has given some useful insight into the different approaches for managing your own product range.

I promise it’s easy once you get started. Just be clear on your strategy, and strict on your policies… The benefits won’t be realized overnight, but with a sound inventory policy they will come in time.

It is important to validate all processes and controls to ensure that they are fit for purpose and in full operation.

As an example IATF 16949 requires us to conduct Internal Audits at system, Manufacturing process and Product levels covered in the following clauses:-.

• 9.2.2.2 Quality System Audits
• 9.2.2.3 Manufacturing Process Audits
• 9.2.2.4 Product Audits.

In addition IATF Annex B: Bibliography – supplemental automotive then breaks the audit process down into different approaches including Layered Process Audits.

Layered Process Audits (LPA)

LPAs are not just confined to the Quality Department, but also involve employees at all levels in the auditing process. Supervisors conduct frequent process audits in their own area, while higher-level of management can conduct the same audits less frequently and over a broader range of areas. These audits also would also typically include integrated corrective and preventative actions taken either during, or, immediately after the audit.

A well deployed LPA system drives a culture of accountability, process control and continuous improvement. The result can be this minimises effort and tighter alignment towards organisational goals, these can be the key success in the highly competitive automotive market.

Layered process audits program includes critical things:

• Top management support:- a single individual from top management should be assigned overall responsibility for the Layered Process Audits.

• Communication of the value to employees:- auditors  are pulled from across the organization, including all levels of management
• Impactful Audits;- a set of simple audits, which do not require specialized knowledge to conduct, and have focus on high-risk processes.
• A system of reporting:- follow-up that exposes problem areas and ensures containment and corrections are put – and held – in place

How Will LPA Benefit the Organisation

When applied effectively LPA audit can provided benefits including some of the following:-

• Reduce Waste
• Improve cash flow
• Improve product quality and customer satisfaction
• Increase right first time
• Reduce quality incidents (scrap, rework)
• Increase the interaction between managers and the operators
• Reduce the overall cost of poor quality

Metrics for LPA Effectiveness

LPA audits are more effective when there output is monitored and when non conformance’s are detected the corrective actions are effectively implemented. This will help establish ownership and accountability for all those assigned to conduct the audits.

Industry Forum can support in training and developing Layered Process Audits for your business.

If you are interested and would like to find out more then please contact us at enquiries@if.wearecoal.work  

Further information

• enquiries@if.wearecoal.work
• +44 (0)121 717 6600

• Competitive Strategy and Management Systems
• New Product Introduction
• Manufacturing Operations
• Supply Chain Management

Daily Management is concerned with completing ‘a day’s work in a day’.  To be successful managing day to day we need to manage the following;

1. work demand must be clearly understood which generates the plan.
2. The plan has to be appropriately resourced with people, equipment, materials and information.
3. Performance against the plan must be clear in real time.
4. Finally the reason for any performance gap must be known.

Daily management is about meeting ‘budgeted’ performance.  It is not about meeting ‘stretch’, we use Policy Deployment for stretch.

Effective leaders develop behaviours that support the people that carry out day to day work, in a way that helps them understand more about their process, performance and problem solving.

For many this could be considered as common sense, however this is not always common so a process is required for effective Daily Management.

How do we implement it?

Activities and features that combine to form a Daily Management process would include the following;

• Activities that teams carry out to set standards
• Activities that managers undertake and are linked to the standards
• An escalation process
• Simple identification of problems

Supporting Activities for teams

Effective Daily Management requires clear standards to be in place, so that deviation from the ‘norm’ is obvious.  Techniques that help here include:

• 5S
• Standardised Work
• Visual Management
• Daily stand up review of performance using a PDCA approach
• Problem Solving and countermeasure thinking / continuous improvement

Supporting activities for managers

The managers should also demonstrate certain activities in support of good daily management.

• Leaders walking the floor
• Teaching the Socratic way – with questions. Coaching
• Layered audits, (sometimes referred to as kamishibai)
• Lead by example

These are the essential skills and behaviours for leaders to display. N.B. The top 3 are skills the bottom one is behaviour.

The escalation process

A key part of the daily management routine is having a clearly defined escalation process so everyone knows what to do when abnormal conditions are identified. The infinity loop provides us with the fundamentals of this process.

Normal working is made up of a combination of two cycles; sustaining and improving; together called the infinity loop or the ‘figure of 8’ model.

The hand-off from Loop 1, to Loop 2 is the first opportunity to consider escalation.  This could be at a daily team meeting.  It would be handed over at the plant level daily meeting.

Decisions will be made based on severity, skills, capacity, and shown at the plant Obeya.

Simple questions to identify problems

Is normal condition defined? Checks 5C/S, visuals, standards etc.

Are there gaps between target and actual?

Do we know where we are in real time?

Was current standard work followed? Do we have it, is it current, do we use it? Why the gaps?

How well do we understand the process?

How will we close the gaps fully (P-D-C-A)? No ‘sticking plaster’ solutions, although containment may be required before root cause etc.?

When can we review success and learning?

Set expectations, if time scales are long this may also lead to escalation. Actions should also be on the visual management as ‘Rapid PDCA cycles’

What are the benefits?

Daily Management is used to achieve all three of the goals of TPM:

1. Zero accidents
2. Zero defects
3. Zero breakdowns

It achieves this over time by bringing the best out of people, to pull together and meet the daily demands on the business. Daily Management will give:

• Control
• Structure
• Clear processes
• Defined roles and responsibilities.

These all simplify the work routine. 

Industry Forum’s Team Leader Essentials training covers daily management in detail. 

Find out more

Best practices for New Product Introduction process have been in existence for nearly 30 years. In this blog, Industry Forum’s principal consultant for New Product Introduction and Life Cycle Management, Robin Talwar, will present a view on the most common challenge with adopting best practices, an approach to trial as a solution and some tips on what to do next in making NPI best practice work for you;

Since inception a number of organisations have adopted NPI best practices in pursuit of achieving launch excellence. In the same period requirements for quality management standards have developed in line with customer demands on supply chain to deliver quality products on time and at a competitive cost. Preventative thinking and risk based approach to New Product Introduction has increasingly been adopted by organisations to satisfy both the requirements from management systems and meeting customer requirements.

Challenge

On your NPI improvement journey and in pursuit of launch excellence, learning from best practice is admirable. Gaining cross functional stakeholder commitment  is one of the common challenges in implementing a chosen NPI best practice. This is likely to be underpinned by missing a solid business case for using a particular best practice approach. Another challenge is an assumption made for best practice approach that it can be applied universally and equally across all situations – Really?

Solution

It is my view that organisations do not need to apply the whole structure of a NPI best practice approach model page by page, but instead ask themselves what problems are we trying to solve, what improvements do we want to achieve and how a best practice framework would help us to achieve that. With this approach it is more likely that best practice will more become a “best fit” and if done correctly will reflect an organisations strategy and values, responsiveness to customer needs and above all improve the competitiveness.

What to do?

Current state process mapping approach following Lean principles is a good starting point. Where required seek help to complete a technical assessment considering the best practice criteria. Following this build consensus in the team on how far the best practice needs to be implemented considering the needs of business and define a clear action plan to implement.

Over the years Industry Forum has worked with clients to map the current state process and complete a technical assessment related to New Product Introduction best practice criteria. Following this a facilitated discussion with the team has resulted in an agreed work to plan for achieving the required maturity of New Product Introduction (NPI) process based on needs of the business.

You can also start the journey right here by completing a free NPI self-assessment. This NPI self-assessment is based on process pillars in our NPI model for launch excellence (see Fig. 1)

Fig. 1: Industry forum NPI model for Launch excellence

UPDATED 12th June 2019: Failure Mode and Effects Analysis (FMEA) is a cross functional systematic and analytic process to identify, analyse and mitigate risk related to product design and manufacturing.

When used correctly it fully supports Advanced Product Quality Planning (APQP), and improves customer satisfaction through emphasising defect prevention.

In addition IATF 16949 requires that organisations assess the risk within Product and Process Design and development stages.

This is detailed in the following specific clauses

3.2.1 Design and development planning:-

1. c) Development and review of product design risk analysis (FMEA’s) include action to reduce potential risk.

3.5.1 Design and development output:-

1. a) design risk analysis (FMEA)

3.5.2 Manufacturing process design output:-

1. g) Manufacturing process FMEA.

Suppliers who are currently supplying products to both the German and North American (N.A) OEMs have to evaluate their product using the VDA or AIAG approach to FMEA. Due to the differences in the scoring tables for severity, occurrence and detection, this sometime results in confusion and duplication of effort to satisfy the OEM’s requirements.

To improve the FMEA development process and in an attempt to remove this possible confusion AIAG and VDA completed its work to harmonise their individual publications into one single handbook.

This joint handbook, which is is now released and available via our web shop, will replace the existing AIAG and VDA publications. It will combine the best practices from the current AIAG and VDA manuals and provide an approach which will meet the requirements of both the German and North American OEMs.

Probably the most noticeable change in this joint methodology is the use of a 7 step approach.

This approach is seen to be more structured and so assists cross functional teams to be more effective and efficient in the use of FMEA.

The first step of planning & preparation contains enhanced directions and has increased focus to improve clarity and understanding of the FMEA activity across cross functional teams. This reduces time wasted later due to lack of full team understanding.

Other changes in the joint AIAG/VDA handbook include increased criteria specificity, increased focus on incorporating past lessons learned and improved linkages to The Cost of Quality (COQ).

Next Steps

If you are currently using AIAG FMEA 4^th Edition or VDA 4, read and understand the new AIAG & VDA handbook as soon as possible. Some things have stayed the same but many things have changed. The publication is now available via our web shop.

If you identify gaps in your current FMEA process ensure adequate training is provided to your cross functional teams employed in developing FMEAs.

Confirm your customer specific requirements and incorporate these into all of your actions.

Pilot, implement and then standardise the new business process.

Industry Forum is running both awareness and practitioner training so if you would like to find out more please view the relevant course pages. You can also sign up for FMEA updates direct to your inbox. 

Relevant courses

AIAG/VDA Combined FMEA Awareness Training (1 Day)

AIAG & VDA Process FMEA: Transitioning for Practitioners (2 Day)

Failure Mode and Effects Analysis (FMEA) Training (1 Day) – AIAG 4th edition

Useful resource

VDA and AIAG FMEA Alignment – FAQs

The overwhelming feeling when we talk about Brexit is that of confusion and an overall lack of clarity. The question on everyone’s lips – “What do we need to do?”

At Industry Forum we are committed to providing a valuable service so when you asked us for advice and clarity, we listened.

Join us for a breakfast meeting held 26th February 2019 8am-10am hosted at our Birmingham head office, where Robert Hardy, Operations Director, BREXIT Advisor and Registered Expert with EU Commission, will give practical advice and instructions on what you can and should be doing to ensure minimal disruption from imports and exports.

Robert has over 35 years of achievement in European shipping, freight and Customs clearance and will be ready to answer your questions. Since the referendum vote he has worked closely with leaders in Westminster, talked on national radio and TV about Brexit preparations and impacts.

• Worried about the impact of potential delays and costs but not sure what you can do to manage it?
• Concerned about processes or changes that may be needed but not clear on what you may be required to do?
• Not sure how changes in customs transactions may impact you financially?
• Can’t decipher what’s best for you: AEO, CFSP, CW and ETSF Approval?
• Don’t know what to believe or what to do for the best?

Robert will discuss all things Brexit planning for import and export – giving you tips and advice on the best course of action that you can take right now to prepare for any Brexit situation.

Join us on the 26^th February for breakfast and answers. 

Agenda

• 07:45am Registration 
• 08:00am Presentation from Robert Hardy, Operations Director, BREXIT Advisor and Registered Expert with EU Commission 
• 09:00am Q&A and breakfast served 
• 10:00am Depart

Course booking details   

In the typical launch phase of product life cycle the problems faced by most manufacturing companies lies not only in accelerating and maintaining sales after the launch but in reducing the costly development time before the launch. In an effort to improve timelines and effectiveness, a number of organisations are experimenting with different best practices in their NPI processes. Adopting best practices in product launch within supply chain provides confidence for the customer to partner on new programme developments and in turn provides growth opportunities for an organisation.

Success of most product launches today is dependent on key resources within an organisation. These people come from cross functional team (sales, design and development engineering, manufacturing engineering, quality assurance and so on). To get the fundamentals right companies need to work on a standard approach for launch excellence and successful implementation would depend on the required skills existing in cross functional team 

Fig. 1: Industry forum NPI model for Launch excellence

Industry Forum has developed a NPI model for Launch Excellence (Fig. 1) which can help organisations to achieve this desired performance.

Product and technology roadmap element will help us to align our development efforts in organisation and efficiently manage product lifecycles while meeting customer needs. This element will play a key role in business strategy with definition of what new products or technology will contribute towards business growth targets

Product costing and Portfolio analysis will help us match profitable solutions existing within our business with focussed Product Market Groups. This in turn will work as a good input for business development and help them to align bid opportunities with our commercial strengths in the business

S&OP link with NPI will help us to manage resource and capacity balance while introducing new products in the business

Key elements of stable foundation have a very close link to the business strategy

NPI Process pillar will define a structure and a route map with cross functional roles and responsibilities to successfully complete a product introduction

Project management pillar will help the governance of each individual product introduction going through an organisation

Design Excellence pillar will help us in managing product risks and driving value throughout the product design and development process

Manufacturing Process Design pillar will help us to pick the right and most efficient manufacturing solution driving right first time approach

Product and Process Validation pillar will help us to validate customer requirements related to product and internal organisation requirements of a repeatable manufacturing process

Supply chain readiness pillar will help us to support the supply chain during NPI and ensure their readiness to launch products right first time and On Time In Full to our organisation.

Industry standards are valuable to keep each of the Process pillars elements intact and aligned

As an output, implementation of this model has already proven to deliver Product Launch Excellence which can be measured by Product Launch Right First time, On Time in Full and at Target cost

Industry Forum has launched a new course in 2019 which will help to build further understanding of launch excellence model in product lifecycle. For more details please click here or get in touch at enquiries@if.wearecoal.work