November 25, 2015 Industry Forum Blog If you’re like me, a non-digital native, then you may well have been trying to make sense of the terminology being used today which is shaping tomorrow’s world. A non-digital native is anyone born or brought up before the widespread use of digital technology. That’s most of us over 30 – sorry! In this blog I offer a simple explanation of the cloud, the Internet of Things (IoT) and big data, all without using the word paradigm! This is the first in a series of blogs that look at how these new technologies will influence our daily lives, the way we manufacture and the impact they will have on lean, NPI and TPM programmes. Before we start, bear in mind this is a fast changing field and today’s descriptions are quickly changed. The use of these terms as marketing buzzwords also confuses the picture! The Cloud Cloud computing is where you access the computer services you want to use, by using an internet connection. This is instead of you owning them and having them located on your own equipment and premises. The provider charges you for what you use, rather than you buying, running and maintaining these systems for yourself. You need a portal (like a PC, laptop, tablet or smart phone) and an internet connection to access them. The main service categories are: Infrastructure as a Service (IaaS) – the servers and data storage devices. Platform as a Service (PaaS) – the operating systems. Software as a Service (SaaS) – applications and programmes. Cloud providers offer these services in all sorts of combinations. Read this great article about the biggest providers. I wondered how cloud computing was different to the internet as they both use the same technologies. The difference is where it is housed, who owns it and how we pay for it. It may surprise you to know you are probably already using cloud services (even if you are not paying for them at point of use). Facebook and Twitter use cloud technologies as do WebEx and GoToMeeting. Internet of Things This is the network created when physical objects connect with other equipment by using the internet. Machines talk to machines (M2M) and computing systems make use of the data sent between them. The physical objects, embedded with electronics, sensors or software, are known as smart devices. Already terms like smart phones, smart wear, smart products, smart factories and smart cities are appearing. Nest is a good example of IoT in action. It allows us to remotely switch on our heating, using our smart phone to connect with our thermostat. Big Data This is where large Volumes of data from a Variety of sources stream in for collection at high Velocity. (The 3 V’s are important). Because so many different sources are analysed, the outputs are used at a more strategic decision making level than the information generated by the IoT. This article explains what big data can and can’t do. Do they work together? Yes! The three are closely interlinked, for example. Big data analytics uses cloud computing for the volume and speed needed to produce meaningful linkages at an affordable cost. One of the sources of data it analyses is from the IoT. The IoT also uses cloud technologies and can incorporate big data analytics to enhance the level of information generated and used. The Nest uses big data analytics to teach the system to “set” itself. Still with me? Great! Our next blog will look at how these three enabling technologies are shaping future manufacturing.
November 19, 2015 Insights Introduction “Lean” has been applied to a wide variety of manufacturing processes for many years. It began to be defined in the automotive sector, but has since expanded into a wide variety of manufacturing environments. Increasingly, the approach and tools are being applied in service industries such as retail, finance and healthcare. The application of Lean into New Product Introduction (NPI) seems to have been strangely neglected. Can Lean be applied to NPI? After all, it is just a different type of process. This insight document aims to discuss how Lean and its underlying tools can be applied to NPI. Back to Basics Although some of the tools and techniques of Lean can be traced back through the decades and even centuries to Adam Smith and beyond, the philosophy was defined in the late 1980s and early 1990s. This was primarily from the experiences of the automotive sector. Since then, the approach has been applied to varying degrees of success in a wide range of transformational processes from manufacturing, pharmaceutical, finance, healthcare and elsewhere. In comparison, little seems to have been done in applying the approach to the design and development phase of the process as opposed to the delivery. At best, various tools, such as Quality Function Deployment (QFD), Design Failure Modes & Effects Analysis (DFMEA), p-diagrams and Design to Target Cost (DTC), have been developed. However, these appear to have been applied without a clear overall strategy. Similar issues were encountered with the early application of Lean when tools such as Kanban, Single Minute Exchange of Dies (SMED), Statistical Process Control (SPC) etc were implemented without a clear understanding of how they fit together. In some cases, what could and could not be achieved by applying the tool was also poorly understood. So, what is Lean? Many attempts have been made to define Lean. It is useful at this point to refer to the 5 Principles developed by Womack and Jones in their book Lean Thinking. 1. Define value; 2. Map value streams; 3. Create flow; 4. Establish pull; 5. Pursue perfection. Although perhaps not a concise definition, this provides a structure to developing Lean. We will now look at each of these principles in turn. Define Value Understanding value is at the heart of Lean. Does there need to be a different definition of value added and non-value added activities in NPI when compared to the production process? A standard definition is that to be value added, an activity needs satisfy the following: 1. Change the fit, form, or function of a manufactured product, or service, or progress a design to meet the customer’s requirements; 2. It must be done right first time; 3. The customer must be willing to pay for it. However, some activities may progress a design even though, or even because they are not right first time. Examples include prototypes that do not work as anticipated, or simulations that demonstrate areas for further development of the design. An overzealous definition of Non-Value Adding (NVA) may discourage the very creativity that is inherent in the design process. Also, activities are completed early in order to save a greater amount of NVA later in the process. An answer may be to more clearly define what is of value to internal as well as external customers. With care and thought, each of the seven wastes of Transport, Inventory, Motion, Waiting, Overproduction, Over-processing and Defects can be applied to NPI. In manufacturing, various other wastes have been suggested including Talent and Energy. An 8th waste in NPI could be wasted Knowledge. It could be used to capture issues where the design is not right first time and the information gained from this is not identified, or used appropriately. Map Value Streams A difficulty with the early application of Lean in manufacturing was the effective identification and analysis of the value streams. Rother and Shook came to the rescue with the publication of Learning to See. However, it is still a challenge to apply the tool in NPI. When developing a Value Stream Map (VSM) of a NPI process, there is often confusion between material and information flow as the material is not always in a physical form. The addition of “Knowledge Flow” to the three flows of Material, Information and Time defined in Learning to See can help to resolve this confusion. It can also help with mapping the flip flop between knowledge and material flows in prototyping and simulation activities. Create Flow Many companies have attempted to define their NPI activities through a gated process. However, even then NPI can be a catalogue of delays and problems as effort is spent to negotiate the blocks and bottlenecks along the way. Too frequently, this results in new products failing to meet the customer requirements, being late to market, exceeding their target costs, overspend on the project budget, or a combination of these problems. Where a company does not have a defined and documented gated process, the first step in creating flow is to define and document the gated process. Other tools and techniques that have been tried and tested in the production process can then be, with a little imagination, applied to NPI. In Lean, a key method of reducing the variability in a process and improving flow is the application of standard work. NPI is often defined as a variable even random process reliant on inspiration to succeed. However, when it is broken down into its constituent step,s it becomes “90% perspiration and 10% inspiration”. How many new products are completely new and how many are developments of existing designs? If modular designs and effective product data management are developed, the process can become even more predictable. The use of multi-disciplined, co-located teams, e.g. skunkworks is highly effective at unblocking the flow of NPI. Teams involved in developing sub-systems can be grouped in clusters around a central location used for system integration. This can present challenges to large programmes and where teams are spread around the world. Set-based concurrent, or simultaneous engineering can be applied to reduce changeover and handover losses, as well as ensuring the impact of decisions on other parts of the design are considered early in the design process. The key to these techniques is effective team work and the management of knowledge. A major issue with creating flow in NPI is the tendency to launch development projects without any consideration of the availability of sufficient resources. Projects launched are often under resourced at the crucial early phases of the project when critical decisions are made sometimes by the least experienced people, or by people with little time available to fully consider the decision. As a consequence, problems are stored up and need to be solved by the most experienced people when time pressures are at their greatest. This creates a viscous cycle that is difficult to break. If models are developed to estimate the resources required on projects, a view of load and capacity can be taken. Decisions can then be taken to adjust the timing of projects in order to level schedules, or at least efforts made to flex resources to meet the demand. Take time can be calculated and used to aid the management of resources, monitor flow and highlight bottlenecks. Establish Pull In NPI, projects can be launched almost on the basis of infinite capacity. This leads to waste as insufficient time is allocated to do activities properly due to the volume of work that is expected to be completed. If pull is introduced, projects won’t be launched until capacity is available and there is demand from the customer. A tool that is synonymous with Lean is Kanban. Indeed, it is often mistaken for Lean. Nevertheless, it is highly effective at managing flow by preventing production without demand from the customer, or to stop upstream production when there is an interruption to flow downstream. Can Kanban be applied to pull NPI through the process? In manufacturing, Kanban is used to provide signals between the areas of continuous flow. Co-located development teams can be considered as areas of continuous flow in NPI. However, where there is still a functional element to the organisation of NPI, Kanban can be used to indicate demand from downstream. Upstream areas can then begin the next scheduled project in order to meet that demand. The use of kamishibai boards can also be used to make the workflow more visible. They can either be used to illustrate the volume and flow of work through the process, or T-cards used to highlight individual tasks and workload. Pursue Perfection As with any process, structured problem solving, e.g. PDCA, DMAIC, 8D, etc. can be used in NPI to drive continuous improvement, especially if it is perceived to be any other process. However, it is extremely difficult to complete problem solving effectively without KPIs to measure the process. Development project budgets are usually tracked, but other measures of NPI are often missing. How closely the product is to its target unit cost is often measured at the end of the project, but may not be tracked through the project. Useful measures that could be introduced include lead time through the different stages of the development process. The amount of work backlog could also be measured. As with Work in Progress (WIP), this Design in Process (DIP) could be used to identify bottlenecks and target improvement activities. In Lean manufacturing, Overall Equipment Effectiveness (OEE) is used as a key metric. Can OEE be used in NPI? How about Overall Engineer Effectiveness? Availability, performance and quality losses could then be used to identify opportunities for improvement. Conclusions In reality, Lean has been applied to NPI for many years. Specific tools for the elimination of waste in NPI have been developed including QFD, FMEA, DTC, Design for Manufacture/Assembly (DFM/A), etc. However, much as with the early application of Lean in manufacturing, the underlying principles and reasons for the use of these tools is often overlooked, e.g. Kanban does not reduce inventory, it manages it. As a result, the effectiveness of the tools is diluted, or lost completely. In order to gain real benefit from Lean in NPI, it must be applied strategically as well as tactically and in its entirety, rather than cherry picked. enquiries@if.wearecoal.work +44 (0)121 717 6600 How can we help you with your NPI?
November 18, 2015 Industry Forum Blog Although the title is a well known saying and a popular song lyric, it is an excellent analogy for all of us who strive to improve our businesses, by deploying lean techniques. I read two articles this week that mentioned the importance of certain lean techniques. However they stood out for very different reasons. The first, “How manufacturing employers are getting lean”, revealed that in a survey of 25000 manufacturers and distributors in the US, the use of various lean tools is on the rise. In particular 5S is now used by more than 71% of the respondents, compared to 66% in 2014. Initially I thought this was an encouraging trend. However as I read further, it concerned me that 5S seemed to be considered as a stand alone improvement programme, with Kanban, Takt Time Analysis and Value Stream Mapping named as alternatives. The second article, “Solving the Productivity Puzzle”, highlighted the views of the Manufacturing Advisory Group on what the UK needs to do to raise national productivity. On the subject of calculating product costs they point out that: “The lean capability of learning to see waste is the foundation of driving productivity up.” The key words that stand out to me are waste and foundation. 5S and 7 Waste are two of the tools that we use to create a foundation for improvement and prevent our “castle sinking into the quicksand”. Getting the foundation right for improving your business I learned that at the heart of the business philosophies of companies like Toyota, Nissan and Honda, lies a foundation block of improvement tools. These are 5S, 7 Waste, Visual Management and Standardised Work. They are called the foundation tools because they are used to stabilise the performance of the workplace. Correctly deployed they enable you to repeatedly achieve customer satisfaction, in terms of quality, cost and delivery (QCD), and at the same time make a profit. When you are in a stable position you have a known performance level and you will have got rid of many of the daily problems that consumed your time. In other words these tools stabilize the quicksand and provide the time and a solid base upon which you can carry out true improvement. True improvement in this context is the ongoing: elimination of waste elimination of variation reduction of cost These actions will improve the competitive position of your business – build your castle! Successful deployment of tools like kanban and Value Stream Mapping, and techniques used to achieve working to takt time, rely on having stable performance to start with. They don’t work if you can’t repeatedly perform at the same level. The secret to stability Use all four of the foundation tools together. Used individually, each tool will result in some cost reductions and performance improvement. And the continual identification and elimination of waste is at the heart of continuous improvement. However waste has a way of creeping back, standards slip and the gains are slowly eroded. I found that the key is to use 5S, Visual Management and Standardised Work together to lock into place the improved processes and prevent waste creeping back in. Top tip: If it is proving very difficult to achieve that stability try some structured Problem Solving. If you want to see some examples of these tools in action look at the Lean Awareness and Process Improvement Activity MasterClass case studies or contact Industry Forum.
November 11, 2015 Industry Forum Blog There are big benefits to be had whether you are redesigning an existing work area or planning a new site. Toyota’s new generation factories are planned to be 25% smaller, require 40% less investment and use 40% less energy to run than their current plants. On an environmental note, this means 55% less CO2 emissions! At the other end of the scale, when redesigning existing manufacturing areas, we would expect to achieve productivity increases of between 15% – 40%, as well as 50% reduction in lead time and work in progress. Further improvement to the bottom line is made by either selling off or making more goods in the space you free up. This level of improvement is typically achieved by teams of operators and engineers from the area, in a Kaizen style event. So how do we go about a redesign? Below are 4 steps learned from a Nissan Master Engineer. Note that their order is all important – any deviation will result in a line with wastes. Learning the painful way meant that when a shortcut was attempted, the team were commanded to return to step 1 and start again! Start with a blank piece of paper Always! Don’t even look at a floor plan of the existing area. Although it’s tempting to start by fitting equipment into the available space, don’t do it. You inevitably start working around existing pillars and walls and placing items near utility connection points. This rarely results in a waste free layout. Define the process List the operations in the order they take place, to build the product. You may already have this if you have done a line balance activity. Make sure you understand which products can be made using the same pieces of equipment. A process matrix is one way of doing this. Flow the operations This is where you design the ultimate lean layout. Use scale cut outs, or models, and lay them out on a blank surface. Don’t use a scale layout of the area yet! Aim to minimise the movement of parts, movement of people and movement of information. Again, the order is important. Tip: Improve flow by introducing chutes, ejectors, channels or roller tracking between equipment load and unload points. 4. Fit your ideal layout into the building plan Now that you have created the ideal, waste free layout, you can start to fit it into the space you have. Transfer your scale pieces on to a same scale layout of the building, maintaining your ideal layout as far as possible. Tip: Make sure you consider: Space for the flow of materials in and out of the cell. Easy access and storage for frequently used tooling. Space for standard in process stock and any WIP required. Access for maintenance. This is the point where compromises may have to be made and some waste may creep back in. However, play with your layout plan to minimise the waste as much as possible. Once you have used the four steps to plan your lean layout, it is recommended to simulate a trial before making expensive physical changes. A favourable way is to make full scale card cut outs of equipment footprints. Although, one time an overenthusiastic team also chalked out a body outline in the cell, just before we presented it to the senior team! Finally, ensure you document the improved process and layout using Standardised Work documents. Good luck creating your ultimate lean layouts! – November 2015 authored by a Senior Consultant at Industry Forum Update A great reflection on the process to design cells, in particular, the advice not to constrain your thinking when beginning the design process. Design what the ideal layout would be first – regardless of physical constraints such as walls, pillars etc. then work back from this. The layout should be driven by the line balance, as indicated in point 2. The line balance ensures the cell is designed to meet customer demand, and that the cell manning is correct. The distribution of workload across cell team members is essential to know when designing each workstation. This should take into consideration the position of the work piece and tools required, and also the line side logistics. By logistics, this is not just how the work piece moves into and out of the work station, but also what components need to be available, and how the pick face should be designed to enable the work station to operate efficiently. This can become quite complex, particularly if the cell is producing mixed model. Getting this right is essential for highly repetitive assembly cycles. If you want to understand more about lean techniques, visit our Lean Transformation page or Line Balance blog or click here to get in touch with Principal Lean Consultant , Mike Scull. You can also give us a call on +44 (0)121 717 6600.
November 9, 2015 Articles The Indian online newsletter, ETAuto.com, has just run an article on the progress of Mercedes in India. In 2007 the company acquired a 100 acre site in Pune. Currently, 80% of the Mercedes cars sold in India are produced locally. Capacity has been doubled in the course of 2015. Sales in 2015 are 34% up on the same period a year ago and they are planning for significant growth in 2016. The company are looking for more local suppliers but they want partners who can also operate globally. Besides Germany, Japan has a beneficial history of economic collaboration with India. India’s largest automaker is currently Maruti Suzuki India which is wholly owned by Suzuki Motor Corporation. In the last fifteen years, royalty payments from the Indian subsidiary to its parent have increased by a factor of 6.6. It has just been announced that Japan is offering to finance 80% of India’s first high-speed rail project, the 505km route between Mumbai and Ahmedabad, at an interest rate below 1% provided India buys 30% of the equipment from Japanese firms. The cost of the project which is subject to a competitive bidding process has been estimated at $15bn. In August 2014 the national government lifted the ban on FDI in Indian railways and now 100% finance is allowed. The limit in the defence sector has been raised from 26% to 49%. These three examples illustrate the record level of success of the Indian economy currently in attracting Foreign Direct Investment (FDI). The latest global results for 2015 show India as leading the global economy in inward FDI having moved up four places since 2014 to the top position in the global FDI rankings overtaking China and the U.S. The share of manufacturing within the FDI total has been increasing and currently stands at 47% with a further increase likely. The traditional view had been that Indian strengths were in services rather manufacturing. In 2014, 18,600 jobs were created in the automotive sector by FDI with Germany and Italy providing nearly half the capital. Aerospace is also emerging as a strong sector for FDI. This success is down to the confluence of several different factors but part of the credit must go to the effectiveness of the Indian government in making potential investors aware of its future national plan for manufacturing which was launched in September 2014 by the Prime Minister. The Made in India programme has the major objective of job creation and skill enhancement in twenty-five sectors of the economy. These sectors include: automobiles, chemicals, IT, pharmaceuticals, textiles, ports, aviation, leather, tourism and hospitality, wellness, railways, design manufacturing, renewable energy, mining, bio-technology, and electronics. A recent survey of investors found that India’s attractiveness included labour costs, market growth prospects with 18 per cent of the population in the 16 to 25 age group, R&D capability and the stability of the social, economic and political environment. Infrastructure investment is seen as a priority for further FDI. The first high-speed rail project ties in neatly with this. Comparisons between China and India are inevitable especially as they are the two largest economies in the BRICS group of emerging economies. Infrastructure is recognized as an issue where China is ahead. On the other hand, India has the advantage of a long familiarity with English, the language of international business. A useful way of understanding how India’s auto sector has developed is provided by Gautam Sen’s book, A Million Cars for a Billion People. He sees 1980 as a benchmark year when vehicle production in China was negligible and in India it was well under 100,000. In contrast Japan produced 11 million vehicles in that year. By the turn of the century, the Indian automotive scene had been transformed, initially through collaboration with Suzuki in the firm Maruti Udyog. Indira Gandhi gave the keys to the first vehicle from the firm to a lottery winner at the end of 1983. The millionth vehicle was produced after eleven years but the next million only took four years overtaking the total volume of the Ambassador. But in terms of overall sector development, the important next step came from truck manufacturer, Tata. In 1994 Tata produced its first non-truck success in the form of a multi-utility vehicle. The vehicle side of the Tata group is TELCO and when Rajan Tata took over in TELCO he set some very ambitious development goals. Many observers thought they were unrealistic but by the end of 1997 TELCO had over 400 engineers working on their car for India. An abandoned Nissan factory from Australia had been transferred to India for the project. The car was launched at the start of 1998 and had taken 31 months to develop. As the first all-India car it was developed into a family of four vehicles which had sold a million units in total by 2009. Sen’s book also covers a number of fascinating topics such as the response of Maruti and Korean automakers to Tata’s success and how Tata went on to start the low-cost Nano programme. The lesson of this brief review of the development of the Indian automotive sector is that the goals set for the sector for 2020 should be taken very seriously especially in the context of India’s current success in attracting international investment. The Make in India campaign for automotive explains the sector of the sector in the following terms Tractor sales in the country are expected to grow at CAGR of 8-9% in the next five years, Two-wheeler production has grown from 8.5 Million units annually to 15.9 Million units in the last seven years. India’s car market has the potential to grow to 6+ Millions units annually by 2020. Large automotive clusters in the country have emerged: Delhi-Gurgaon-Faridabad in the north, Mumbai-Pune-Nashik- Aurangabad in the west, Chennai-Bengaluru-Hosur in the south and Jamshedpur-Kolkata in the east. Electric cars are likely to become a sizeable market segment in the coming decade. It will be fascinating to watch the relative progress of Make in India and Made in China: 2025 in coming years. Further information: enquires@if.wearecoal.work +44 (0)121 717 6600 Download Article (pdf)
November 4, 2015 Industry Forum Blog Lauded as a “Mandatory read for entrepreneurs” I wanted to see if the book by Eric Ries had anything to do with lean or was it just a name to grab attention. What I discovered were some “light bulb moments” for adapting lean in an environment that is uncertain and chaotic. And then I realised just how much this book had to offer a much wider audience than entrepreneurs running startups, including: Anyone who sets and uses KPIs. Anybody deploying lean. Anybody who runs projects using stage gate and waterfall processes. Here are my top four. To explore and understand the difference between actionable and vanity metrics Ries gives excellent examples of the need to clearly understand the cause and effect of any changes you make to your product or system. This can be done if you use actionable metrics that allow you to learn from your actions. Vanity metrics make it easy to assume you are doing the right things, but they provide no reasons to back that up. Worse is when results go the wrong way and there are no reasons to explain why. Armed with this distinction I am currently reviewing all metrics I use! To get a different angle on value adding and waste In manufacturing we define value adding as work which changes the nature, shape or characteristics of the product in line with customer requirements. In the environment of a startup, where it isn’t always clear who the customer is or what they want, a different definition is required. Reis defines value adding tasks as those that help us learn what the customer actually wants, as opposed to what the designer thinks they want. Activities that involve working on flawed assumptions and building products or features that the customer doesn’t require, result in a waste of time, energy, money, resources, passion and skills. This is a clever interpretation that should challenge us to adapt our lean definitions for different environments. To reinforce the value of working in small batches and using pull systems Traditionally designers build and internally test the complete product before release. Unfortunately many new products fail as they have been designed using flawed assumptions. Result – the customer just doesn’t want them. Ries encourages designers to conduct their “build” in small batches – i.e. test one hypothesis or feature at a time to avoid waste. Just like in manufacturing we know that producing in large batches results in waste and hides quality problems. By testing one hypothesis at a time and using the results to guide the next piece of development you introduce a pull system from design. We should now be asking ourselves what other functions and processes can benefit from working in small batches. To strengthen your existing NPI system While Ries’s Lean Startup methodology is largely focussed on organisations doing disruptive innovation, I can see many elements that will strengthen established systems. This includes companies that have partial design responsibility or are build to print. A few examples: Introducing frequent testing cycles involving the customer to test each assumption or development before moving through the stages. Adjusting the options at the gate review to include a Pivot option instead of Re-do. Including a measure on “learning about customer requirements”. Launching a successful product isn’t all about adherence to project plan and budget. I read my borrowed copy twice and then bought one. Now I am lending it to everyone I know! I hope you find it valuable as well. For more information about NPI please see our web site or contact us.
October 28, 2015 Industry Forum Blog One of the more common barriers to change we meet when introducing Autonomous Maintenance and Planned Maintenance is the belief that maintenance engineers will become deskilled and jobs cut, and that production operators will be expected to just take on more tasks. It’s important to tackle this misconception right at the beginning of your TPM programme. Although it will take time to gain trust, I have found starting with a straightforward explanation helps to set the scene. After that, your actions will speak louder than words! Make sure you give the same message to AM and PM team members, as they must work in tandem to achieve the change. You can draw up the two sketches shown here to support your message, but do tailor them to suit your audience. Yes – the activities you do will change and so will the skills you need! Use this diagram to show how the mix of skills and activities undertaken by the teams changes over a period of time. On the left you have a representation of the start point. Draw these to show what you think they are in your company at that point. We usually expect changes to occur over a 3 year period. On the right finish the lines at a point to reflect where you plan to be. This will align with your policies. Don’t get hung up about actual numbers. You are trying to show that over a period of years there should be a change in the mix of tasks carried out. Some companies find this phrase helps. “Everybody takes care of something different.” How can we do any more than we do now? It’s not realistic to expect people to just keep doing more. Draw this diagram, block by block from the left, to show how some current, and unrewarding, tasks are got rid of, so that new ones can be introduced. The first block represents the current skills and tasks carried out by operators and the maintenance department. The first thing we have to do is eliminate what we call the difficult, dangerous and dirty tasks, which operators should not have to do. This is achieved using the AM pillar. We are now at position 1. This allows more time for the operators to take on new tasks. In the AM journey these tasks are cleaning, inspection and lubrication. These are transferred from the maintenance team. We are now at position 2. Of course these CIL tasks also prevent the difficult, dangerous and dirty tasks from coming back. So we prevent a return to the start point. Now the maintenance team have time to expand their role and take on new tasks, such as preventative maintenance and developing new maintenance techniques. Position 3 is reached. The benefits Operators spend less time doing repetitive and pointless cleaning up. They can learn and deploy basic maintenance skills, reducing the frustration of running equipment till it breaks and then waiting for it to be fixed. Maintenance engineers move away from a repair based culture and learn how to deploy more sophisticated techniques and technologies. This allows them to spend more time concentrating on maintenance activities that will give improvements. For both teams there is a shift towards a greater proportion of proactive tasks. Hopefully this message will help you to dispel any fears expressed at the start of your TPM journey. Nobody is being deskilled. Time generated is used to make further improvements. For more information about TPM training see our web site or contact us.
October 22, 2015 Industry Forum Blog I think it’s fair to say that accountants love cash and hate risk. Running out of cash is still one of the biggest reasons why companies collapse. Cash is not only needed to start a business but to keep it running. For an accountant, risk starts as soon as cash is turned into something else and lasts until that something else is turned back into cash. So if you want your accountant to support your improvement initiative then you need to demonstrate how it will release cash in the business and manage the risk. For those of us from operations backgrounds this may sound daunting. However if you can show how the techniques you are using link to improving the cash flow cycle, then you have the key. The Cash Flow Cycle For a simple explanation of the cash flow cycle click here. We are going to focus on the steps between paying for employees, facilities and materials to receiving cash back. All the steps in between those two points represent risk; buying materials, holding stock, producing too many parts (overproduction), producing scrap, shipping parts incorrectly, customers cancelling orders or going out of business. Improve the cash flow in two ways Reduce the length of time it takes from paying out to receiving the cash. Minimise the size of the risks along the cycle. Some examples Activities that match production to customer demand; like using Value Stream Mapping to plan and deploy pull systems. This reduces the size of risks incurred by buying and storing inventory and cash tied up in excess WIP and finished goods. Using Set Up Improvement (SMED) to produce smaller batch sizes. This reduces the amount of stock held and releases cash. Using techniques such as Structured Problem Solving, PM Analysis, Quality Maintenance and Six Sigma tools reduces the cash tied up in scrap and the time to complete the cycle. Eliminating the 16 losses using TPM methodology also reduces the time to complete the cycle and amount of cash tied up producing scrap. Activities that create product flow through your value stream reduce the size of the risk associated with WIP, inventory and finished goods. Eliminating waste and minimising non value adding steps Using SMED to level demand and improve flow in areas of fixed capacity. Minimising the amount of information processing. This also reduces the risk of order corruption. Eliminating delays between ordering and manufacture and at load time and despatch time. Reducing the time taken for value adding steps using basic tools such as 5S, 7 Waste, Standardised Work and Visual Management. In summary Taiichi Ohno said, “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 by reducing the non-value adding wastes.” I hope these examples help you to realise how the activities you deploy to improve operations also improve the health of your finances. This understanding will also help you communicate with your accountants in a language they understand. If you want to read more about how lean makes financial sense I recommend Lean Means Beans by Anne Hawkins.
October 14, 2015 Insights Introduction The UK productivity puzzle continues to be in the news, partly because the bald facts are so startling. The UK economy’s long term productivity growth trend (around 2 percent per year) has deviated from a standard growth curve from 2008 since and has flatlined. The UK in competitive terms is now apparently weaker than Italy and Spain, never mind Germany and the US. This puzzle remains even after due allowance is made for the unusual reliance of the UK economy on financial services – which have suffered various obvious troubles – and the extractive energy sector where resource depletion has combined with other turbulent factors. Job Growth The economic debate surrounding the 2015 election made us all aware that the UK has nonetheless been very successful at creating jobs (although the latest numbers raise the question of whether this trend is now waning.) How these jobs have been created and filled has fed into the debate about immigration which remains high profile because of this Government’s commitment to renegotiate the terms of UK participation in the European Community and the refugee crisis. The think tank, IPPR, has just pushed a detailed productivity analysis and has found that between 2012 and 2014 around half of the weakness in productivity growth can be attributed to an unfavourable shift in the structure of the economy. Jobs growth may have been strong over these years, but it was disproportionately in low value-added and low-paid sectors of the economy, and a larger proportion of the labour force now works in these relatively Manufacturing Advisory Group (MAG) While the Manufacturing Sector adds significant value to the UK economy, the Industry Forum Manufacturing Advisory Group (MAG) is strongly of the view that the country needs more volume manufacturers to raise national productivity. It considered this issue in depth when it met in September 2015. The Manufacturing Advisory Group, or MAG for short, is a programme of meetings aimed at providing senior executives the opportunity to share, hear and debate topical issues and challenges with leading experts and thought leaders. The Group led by Industry Forum’s Chairman, Mike Baunton, aims to provide a focus for those responsible for manufacturing in their organisations to enable open discussion on best practice, identify the critical influences on sustainable success, as well as shaping the future of Industry Forum. MAG – Productivity MAG considers that productivity must be a hugely important driver for those responsible for manufacturing, whether in large multi-national corporations or single site SMEs. MAG points to the example of South Korea where labour rates are not so different from the west and yet productivity is highly competitive. It is impossible for a high wage economy such as UK to compete with lower cost countries on cost reduction – even China is discovering that a low wage strategy is a vulnerability for its manufacturing sector. MAG – Skills Dimension MAG believes that the skills dimension is critical to making progress on productivity. UK PLC needs to incentivise manufacturers to develop people skills appropriate for manufacturing. MAG is well aware that many manufacturing firms are experiencing a difficulty recruiting qualified engineers. Engineers must possess a portfolio of skills that is widely applicable in today’s economy such as teamwork, project management, numeracy and familiarity with the digital domain and digital tools. Part of the solution to the engineer shortage felt by manufacturers is to make sure the offer is truly competitive in today’s labour market. Top candidates seek work in firms that match a broad set of personal requirements. MAG thinks that Corporate Social Responsibility is becoming a fundamental requirement for manufacturing organisations as gifted employees want to work for companies that are socially responsible MAG – Added Value MAG stresses that added value rather than, say, cost reduction must be the focus. Producing high customer added value at high levels of productivity is the way forward and the right organisational culture and leadership are vital. Management needs to retain responsibility for quality plus a number of key HR operations. MAG observes that currently in the UK workforce a significant proportion of university graduates are in roles that do not require a degree. This must raise questions about the quality of management and leadership in many UK firms . Some analysts believe the decline in workplace training in the UK comes from employers relying on graduates to pick things up as they go. MAG is aware that too many people are still doing jobs that generate more low added value. Employee Engagement MAG knows from practical experience that employee engagement is a crucial aspect of the organizational culture that is a major driver of high and rising productivity. For example, a member of the MAG was able to achieve a 45% increase in productivity (measured by OEE) by allowing employees to implement changes without their manager’s permission, as long as they met safety standards. In the experience of one MAG member, if a competent employee makes a mistake care is needed in the feedback given so that it does not come across as blaming. Good employees will blame themselves anyway and you risk demotivating them. Sustaining high motivation is essential in achieving workplace change. The basic requirement of people to feel secure is a major cause of resistance to change so make sure any change development is worth the effort. Understanding Costs MAG points out that a degree of sophistication is needed to develop an appropriate productivity strategy in a specific firm. While various measures can be used to monitor productivity there is no one methodology that is applicable in every situation.From ‘OEE’ to ‘Added Value per £ of Payroll’ , the choice of which one to use depends on the maturity of the company and situation. It can be misleading to work just with averages when the study of specific extreme cases can be very valuable. MAG also recommends a careful approach to calculating individual product costs. The allocation of development and marketing costs for example has to be done in a way that makes sense in the context of how a firm operates. Improvements can be made by clearly understanding costs, but this is easier said than done. In particular, most costs will be incurred on operations that add value. The lean capability of learning to see waste is the foundation of driving productivity up. Where the cost arises from outsourcing an operation it is important to establish that the value added is commensurate. Where the outsourcing involves foreign currency transactions extra complexity comes into the assessment. To make manufacturing processes more productive some areas should be de-skilled by using automation but at the same the workforce should be given extra value adding skills such as problem solving. Even though autonomous systems capability is progressing all the time it is important to realise that currently problem solving has to be a workforce capability. What are the implications for UK Productivity? So what are the implications for UK productivity? The transport equipment manufacturing sector which includes automotive, aerospace and rail has been forging ahead on productivity and is set to maintain this progress. UK aerospace has linked its growth ambitions to a strong focus on national supply chain development through Sharing in Growth, SC21 and related programmes. This work confirms the importance of pushing higher aspirations all the way down the supply chain. The quality of the supply chain is also vital for automotive and has been a major priority for the UK Automotive Council. Major improvements have been secured in the last four years. Tesla in the US, the innovative and potentially disruptive maker of electric powered high performance cars, shows just how challenging it can be sustaining the growth mindset within a fast moving hi-tec supply chain. Tesla are revising downward their current year projections even as they strive to ramp up production volumes because of difficulties in their supply chain. Here in the UK the new Hitatchi manufacturing investment in Darlington will almost certainly lead to performance improvements in that part of the railway equipment supply chain in the UK. The North East engineering sector has already benefited a great deal from Nissan’s long term commitment to developing its supply chain and so supply chain development is firmly embedded in the regional manufacturing culture. This is another good example of how the UK transport equipment manufacturing cluster has in depth experience of raising manufacturing productivity. These approaches can be transferred to other sectors within the UK economy as part of the national drive to raise productivity. Further information: enquiries@if.wearecoal.work +44 (0)121 717 6600 Download Insight (pdf)
October 14, 2015 Industry Forum Blog When is structured problem solving the right method to use? Most of us probably still remember the pain of tackling our first fearsome quality issue. And if you were a supplier into Ford you will have been using the 8D method.I hope you had more success than I first did! Since then I have also used Practical Problem Solving (preferred by Toyota), PM Analysis and the TPM Quality Maintenance steps. Each method has its pros and cons, and my success rate has improved with practise. However, the most useful thing I learned along the way is that you don’t always have to jump into to root cause analysis! Welcome to the infinity loop. May it save you many hours of painstaking work! The infinity loop In this model normal working is shown as a combination of two cycles; the sustain cycle and the improve cycle. The Sustain Cycle If there are no problems we continue working to the set standards. A problem can be described as the difference between what is happening and what should be happening – a gap to target. If a problem does occur then we need to take action. Step 1 Measure the current situation. We need to check if the problem is a result of the deterioration of standard working conditions and practices. If basic conditions have deteriorated they will have adversely affected the inputs to the process (man, material, machine, method). Therefore the outputs will also have been affected. Step 2 Restore basic conditions. Ensure the 5S conditions of the work place are as required, everyone is working to the Standard Operations and the equipment maintained at the correct standard. We then ask “Has the problem been resolved?” Typically 8/10 problems are resolved by restoring basic conditions. If the answer is yes then we continue round to step 3 in the sustain cycle. Step 3 Return to normal working standards to sustain basic conditions. In these cases we do not need to deploy a structured problem solving technique. Step 4 We complete the cycle by making it easier to maintain the basic conditions so they don’t slip again. However, if the answer is no, the problem isn’t resolved by restoring basic conditions, we follow the cycle on the right hand side. The Improve Cycle is where we deploy our preferred method of structured problem solving.In this diagram the steps of your chosen structure are summarised in steps 3, 4 and 5; carry out root cause analysis, countermeasure the root cause and define improved standards to work to. Again we ask the question “Has the problem been resolved?” If the answer is no, we must go round the improvement cycle again. If the answer is yes, then we return to the sustain cycle and complete Step 6, the original step 3, maintain basic conditions. Step 7, the original step 4, make it easier to maintain the basic conditions. Finally Remember structured Problem Solving can be used proactively to improve a process, as well as to prevent the re-occurrence of a problem. And don’t just stick to quality problems. I have had success using it to solve a range of issues from accident levels to manning problems. If you want to know more about any of the structured Problem Solving techniques mentioned please contact us.
