The last couple of months have seen important developments in the UK Industrial Strategy. A number of sector strategies have been published which now fall into three groups; Advanced Manufacturing, Enabling Sectors and Knowledge Services. Under Advanced Manufacturing there is Automotive Manufacturing, Aerospace, Life Sciences and Agricultural Technologies. The so-called ‘enabling sectors’ cover three energy sectors, Offshore Wind, Civil Nuclear plus Oil and Gas and Construction. In addition there are three sectors grouped under Knowledge Services, International Education, Information Economy plus Professional and Business Services. Each sector has been selected on account of its future growth potential.

The Government’s overall economic objective is to achieve ‘strong, sustainable and balanced growth that is more evenly shared across the country and between industries’. The suite of sectoral strategies are an important step forward in achieving this goal. However this will require a high standard of implementation and continuity of purpose in the medium and long term. Project and programme management capability and skills in both the public and private sectors will also be a major success factor. Indeed skills have emerged as a strategic issue in every sector strategy.

As far as the Civil Service involvement in Industrial Strategy Is concerned, the CS Reform Plan prioritises the Coalition’s commitment to improving project capability and skills. There is a new Major Projects Authority and within that a Major Projects Leadership Academy set up at Said Business School in Oxford to address the issues of development and retention of the skills of senior project leaders across the civil service with a focus on leadership. In the future, no one will be able to lead a major government project without completing the Academy. The aim is to have had all major project leaders started on the Academy’s programme by 2015. However it is not clear whether these initiatives will be in time to support the implementation of the sector strategies.

The reaction of larger firms to the strategy has been positive. Toby Peyton-Jones, the HR Director for Siemens in the UK and North West Europe, has commented on the Offshore Wind Strategy in a UKCES blog,

‘Offshore wind may occupy a small share of the wider energy sector, but recently it has seen a surge in employment, rising four times to what it was from 2007 to 2010. This growth is set to continue, as wind power offers a clean way of generating energy and reducing harmful greenhouse emissions. This week the Department for Business, Innovation and Skills published its industrial strategy for offshore wind. Its focus is on building up a capable and skilled workforce to capitalise on this growth and encourage innovation in the sector. In particular, maximising opportunities for offshore wind generation requires high-level STEM skills for areas such as electricity generation and working with turbines. Similarly it requires attracting more talented individuals into the sector.’

Peyton-Jones refers to ‘crippling skills shortages limiting growth in the sector.’ This is partly a matter of a lack of specialist skills, but there is also problem of the image of the sector.

The availability of STEM skills is relevant to a number of the Sector Strategies, the Advanced Manufacturing sectors, the energy sectors , Information Economy and Professional and Business Services. All these sectors will be competing in a global economy for talent where the skills the UK needs are similar to those sought by other major players in the global economy.

According to Deloittes the availability of skills and talent is rising up the agenda of boards of major international companies. They point out that in a recent Public Company Governance Survey conducted by the National Association of Corporate Directors in the US, executive talent management and leadership development were ranked as one of the board’s top five priorities, ahead of CEO succession.

Deloittes suggest that talent is being seen as a core component of a company’s risk profile, including reputational risk, operational risk, regulatory risk, and financial risk. As the board’s oversight responsibilities for risk-management increase, boards are working proactively with the heads of HR to ensure organizations have the infrastructure and programs in place to minimize talent-related risks. High-performing boards are asking HR heads whether their organizations have the talent in place to deliver sustainable performance and execute the business strategy. Attracting, developing and retaining talent has become a major factor in all capital investment decisions, business strategic planning and organisational growth initiatives.

The supply of STEM talent is also emerging globally as a major factor in national competitiveness. McKinsey have just published an analysis of the 5 key factors that can boost the US economy in the medium and longer term. One of these is a more effective US system of talent development. At the postsecondary level, McKinsey recommend expanding industry-specific training and increasing the number of graduates in the fields of science, technology, engineering and math to build a more competitive workforce. There is also a need to enhance classroom instruction in the US, turning around under performing high schools and introducing digital learning tools which can boost student achievement. McKinsey estimate that these initiatives could raise GDP by as much as $265 billion by 2020—and achieve a dramatic “liftoff” effect by 2030, adding as much as $1.7 trillion to annual GDP.

Against this background, the UK debate on the strategic role of STEM knowledge and skills formation in economic growth is continuing even as the sector strategies start to be implemented. At the end of July the CBI published Tomorrow’s Growth , a report which argues that the UK will fail to close its chronic skills gaps without urgent action to boost advanced ‘learn as you earn’ training and more business-designed degrees. The CBI suggest that relying alone on traditional university courses will not meet the growing demand for degree-level, technical skills in key sectors like manufacturing, construction, IT and engineering. The CBI warns businesses need to tackle the perception that A-levels followed by a three-year residential course is the only route to a good career. Universities need to boost the number of employer-backed “sandwich” courses and compressed or part-time degrees, which give students practical work experience or allow them to support their studies. Businesses need to expand their commitment to high-quality training schemes such as higher & advanced apprenticeships, work-based training, and fast-track schemes aimed at school leavers, alongside traditional degrees.

Industry Forum has a comprehensive skills development offering which is described in our recent article ‘Equipping Executive Leaders and Their Teams to Meet Today’s Challenges.’

Further information:

• enquires@if.wearecoal.work
• +44 (0)121 717 6600
• Download Document (pdf)

 

We all recall the financial crisis and indeed it is now long enough ago to be falling into popular history, but its effects rumble on around the world. Pundits variously predict a further five years of austerity, but many business leaders worked out early on that business as usual was probably never going to occur again and they had better prepare for a different future.

What would that future be like? Who would be the winners and who would be the losers? What could any leader hope to do in the face of such a new, varying and confusing business environment?

An interesting insight into this situation was contained in a report from the Conference Board published in late 2010 ‘Go Where There be Dragons. Leadership Essentials for 2020 and Beyond by Mitchell and Learmond’.

Based upon the contribution of many leaders and CEO’s across a wide range of sectors and geography the consensus was that the ‘CEO as Rock Star is dead’ and that the business world needed a ‘leadership correction’. Gone would be the ‘excess of arrogance and scandal, a dearth of flexibility, trust, worldliness and diversity of thought. The next generation of leaders, and those charged with their development, would face a significant challenge-keeping pace with evolving economic, social and technical norms, would require additional competencies, an understanding of a diverse and fragmented world, and a keen sense of self-awareness and humility’.

There is much in the report and you can read more at www.conferenceboard.org

From an Executive Leadership perspective there is therefore much to address. Business as usual will not be sufficient and leaders will need to be better equipped to know themselves, know their teams and colleagues, know their business and its environment, and know and participate in the society in which their business operates. How to prepare Executive Leaders for such challenges?

Preparing Executive Leaders for Today’s Challenges

Self-Awareness

Executive Leaders are dealing with more uncertainty, change and risk than the generation before. They will need a keener self-awareness in order to be robust about decision making and be well ‘grounded’ in their decision making.

It is evident that you cannot lead others until you can lead yourself. Understanding yourself and how you prefer to behave in certain circumstances and what you might do to modify those behaviours are critical competencies to be a successful leader.

One to One Executive Coaching assignments provide a useful route to addressing understanding of self-awareness and the behaviours that go with that, together with managing to deliver outcomes in different scenarios. Assignments can be supported with the use of approaches and tools such as the Myers Briggs Type Indicator® and there are well defined matrices of leadership styles e.g. Hay Group Inventory of Leadership Styles. The goal is to understand your preferences and then be able to flex to meet different circumstances.

Teams

Most teams underperform versus their potential. As most Executive Leaders operate through teams and indeed are part of a team themselves the importance of operating in and with teams becomes a critical leadership skill. The more networked world in which we are operating, the deployment of enabling technology, and the development of more virtual teams across value chains all increases focus on team working. Given the rate of change in the external environment members of teams will need to be operating at peak performance and focused on team goals to better achieve business success.

Becoming a High Performing Team is underpinned by research that shows that the best teams have

• Clear purpose
• Aligned goals
• Consistent behaviours
• Effective processes
• On-going development

Executive Coaching and Development interventions can be transformational to team performance. Many leaders will be familiar with the Belbin tool concerning team roles. Using the Myers Briggs Type Indicator® or the Margerison McCann Team Management Tool can provide further insights into team roles and how to optimise team interactions. Importantly the evolution of a team through various distinct stages can also guide actions as the team matures. Patrick Lencioni’s ‘Overcoming the Five Dysfunctions of a Team’ provides an insight as to how to drive up team performance. At the base of all good team performance is Trust and for a good reference here is ‘The Extra Mile. How to Engage your People and Win’ by David Macleod and Chris Brady.

Blending the above approaches to meet the specific requirements of a team can help transform an ordinary team into a high performing team.

Groups

Members of a group do not necessarily share all of the same goals and objectives. However groups in a business are guided by the over-arching objective of that business and at the same time will address goals closer to their respective team base. Within the diversity of the group there are common leadership and team skills that need to be mastered by Executive Leaders.

Executive Group Leadership Development programmes and initiatives are designed to address these challenges and deliver clear outcomes. For example following significant growth of a business, or after a restructuring plan has been initiated, it becomes clear that a wider group of leaders other than a specific team will need to ‘step-up’ and take on new responsibilities that they have not assume beforehand. Interventions used in Executive Team Coaching and Development can be helpful in energising the development of a wider cohort of leaders in a business. Many of the techniques deployed for teams can be useful for groups allowing for the diversity of interests present.

Deployment

Many great initiatives founder on the rock of ‘non-alignment’ with the rest of the organisation either before or after completion. It is therefore important that initiatives are aligned with business strategy, goals are defined, target audiences identified, and budgets and resources etc. secured.

Learning and Development can be varied, flexible and fun according to the needs of the client and as learning occurs in different ways for individuals a variety of approaches can be useful. Traditional classroom based learning can still be useful, but additionally one can consider:

1. Coaching either of individuals, teams or groups. Coaching classically delivered will leave the content with the person, team or group whilst the coach looks after the process. Coaching works because ownership by the client is high and learning and retention is then much enhanced.
2. Action based learning programmes based upon receiving information and then acting on that information to embed the learning. There is a significant improvement in learning and retention over traditional classroom based learning.
3. Experiential learning. We all recall ‘mother’s cooking’ and if one can link learning to an evocative situation or memory then learning and retention can be very high indeed. In the business context think of the benefits of linking team performance with what flying Apache attack helicopters?
4. Distance learning tools and approaches which become more ‘realistic’ as technology develops

Industry Forum has extensive experience of improving workplaces using coaching team working and problem solving as a foundation. This approach improves the quality of output and the total output relative to the size of the team is also significantly enhanced. The success of the automotive sector in the last decade reflects significant investment in this approach.

Further information:

• enquires@if.wearecoal.work
• +44 (0)121 717 6600
• Download Information (pdf)

 

The US manufacturing sector benefits from their nation’s global strategic goal to remain the most powerful country in the world militarily. This requires a large innovative manufacturing sector and the Department of Defence is a major spender on industrial and technical R&D.  Federal decisions need to be based on good analysis and the Institute for Defence Analysis operates three federally funded research centres to examine the scientific and technical aspects of national security issues.  Just over a year ago the Institute published a major investigation into Emerging Global Trends in Advanced Manufacturing. The report identified 5 overarching trends supporting the development of advanced manufacturing globally:

1) the ubiquitous role of information technology
2) the reliance on modelling and simulation in the manufacturing process
3) the acceleration of innovation in global supply-chain management
4) the move toward rapid changeability of manufacturing in response to customer needs and external  impediments
5) the acceptance and support of sustainable manufacturing

The report concluded that in particular countries, the development of advanced manufacturing depends on some factors that a country’s government can influence, such as infrastructure quality, labour skills and a stable business environment. On the other hand, the size of the market and growth potential are the primary reasons why companies choose to locate in a particular country or countries.

Just over eighteen months ago, another US think-tank, the Third Way, published a report entitled Manufacturing Growth: Advanced Manufacturing and the Future of the American Economy. The authors, Devon Swezey and Ryan McGonachy, concluded:

Advanced manufacturing is critical for the future prosperity of the U.S.economy. Not only does it have the potential to generate and sustain many jobs throughout the economy, but it is a key source of innovation, productivity gains, and exports. A robust advanced manufacturing sector is also a prerequisite for developing new technologies that will form the basis for tomorrow’s innovative growth industries.

An important context to this conclusion is the fact that at the start of this decade China became the country with the largest manufacturing sector in the world, in terms of value added, overtaking the US. Inevitably this has focused the US policy discussion and think-tanks like McKinsey have been investigating the likely future manufacturing trajectory of China.

Earlier this year McKinsey published a study that concluded as value chains become more complex, and consumers grow more sophisticated and demanding, China’s manufacturing must adapt significantly. Currently manufacturing growth in China is slowing more quickly than aggregate economic growth. The June 2013 manufacturers’ purchase managers’ index fell to 50.1 (in the UK it rose to 52.5). McKinsey have identified 4 factors which challenge China’s manufacturing growth.

1. Rising factor costs particularly labour costs.

2. Rising consumer sophistication:  McKinsey research suggests that by 2020, the income of more than half of China’s urban households will have moved  into the upper middle class. The members of this group already demand innovative products that require engineering and manufacturing capabilities many local producers do not yet adequately possess. This challenge confronts many sectors – appliances, chemical, electrical and office machinery, pharmaceuticals, telecommunications gear, and transportation equipment – sectors which compete on the strength of their R&D, technology, and ability to bring customers a steady stream of new products and services.

3. Rising value-chain complexity:  Greater affluence and rapid urbanization requires product makers to manage, make, and deliver an array of increasingly diverse and customized products to increasingly remote locations. Between now and 2015 almost two-thirds of the growth in demand for fast-moving consumer goods in China will come from smaller cities, which outnumber their major counterparts, such as Beijing or Shanghai, by a factor of 20.  Product proliferation and booming e-commerce also contribute to value-chain complexity.

4. Heightened volatility:  The uncertain global economic environment since 2008 has complicated Chinese manufacturers’ environment substantially.  Volatility makes planning difficult for China’s manufacturers especially those that routinely make large, long-lived capital expenditures whose returns are crucial determinants of performance.

McKinsey suggest that the best response to these challenges for Chinese manufacturers is development across their organisations. For example, significant potential remains in the application of Lean and Six Sigma. Plant managers in China often focus on “hard” technical tools at the expense of “softer” ones involving mind-sets and behaviour.  For example, a recent lean-manufacturing transformation at one state-owned enterprise fell far short of its efficiency targets when managers and supervisors failed to complement the otherwise excellent technical changes with the necessary softer skills – including leadership.

Product-development roadblocks need to be overcome. Accelerated product development with time compression and concurrent engineering have long been the desired norm in advanced countries and Chinese manufacturers must acquire these demanding capabilities to service the fastest growing segments of their consumer and related markets.

Most Chinese consumers are changing faster than supply chains are adapting. As companies look to move their footprints closer to customers in Tier-three and Tier-four cities in China’s interior, a likely change will be the long-term development of logistics hubs and assets so that they are better positioned to serve booming demand for online purchases . However, these investments are risky.  Chinese companies with global plans must get also closer to customers in the West. There are reports that a few of the largest white-goods makers are thinking about expanding their assembly and test activities in the developed world, because they recognise that they can no longer adequately serve it from existing Chinese manufacturing hubs.

We noted in an earlier article that the National Advanced Manufacturing Competency Framework developed by the US proposed very high levels of skill for employees throughout manufacturing organisations including high levels of soft skills achievement. Indeed, the US vision of advanced manufacturing is soft-skills intensive. This approach makes clear strategic sense in view of the difficulties that Chinese manufacturers have encountered working with simpler models of operational excellence.

It is sometimes forgotten that Japan remains the third largest manufacturing country in the world after China and the US and ahead of Germany.  In terms of manufacturing value added per capita, Japan is second only to Switzerland, ahead of the US, Germany and Singapore.  Japanese manufacturing has maintained this position despite the rapid growth of nearby Chinese manufacturing.  Understandably, manufacturing in Japan today has developed to focus primarily on high-tech and precision goods. Part of the Japanese model is extensive global FDI illustrated by the recent Hitatchi decisions to establish railway engineering in the UK and to bid for a new nuclear power generation contract at two sites in the UK.

Japan is taking action at national level to maintain its global manufacturing  position and accelerate growth in new advanced manufacturing sectors.  In 2010, the government approved an economic growth strategy
re-released in July 2012, called the “Rebirth Strategy for Japan”, which lays out social and economic goals for 2020. This strategy seeks to leverage Japan’s strengths in manufacturing and technology, to deliver US$ 1.3 trillion in new industries and 4.7 million jobs by 2020.

It is important to tease out the implications of the vision of advanced manufacturing that is under consideration here.  The value dynamic starts with the consumer and her or his appetite for complex new goods and services which are customised to their particular tastes and quite possibly investigated and ordered while he or she is on the move. In the UK part of this dynamic has been explored by the Institute of Manufacturing in Cambridge for several years and latterly by Aston University in Birmingham. Aston have just issued  a new report which finds manufacturers that incorporate useful services with their existing products are realising business growth of 5 to 10 per cent a year.  The study explains ‘servitization’, the concept of adding technology-led services to manufacturing, and its potential to represent 50 per cent of a company’s revenues.

Aston’s ‘Servitization Impact Study’ finds that servitization also reduces costs of up to 30 per cent for manufacturing customers by helping them to simplify business operations and streamline labour-intensive processes. Manufacturing and service are still largely thought of as separate, self-contained sectors. Aston sees that a huge opportunity exists to promote more manufacturers to compete through services. Professor Tim Baines, Operations Strategy, at Aston University said; “The distinctions drawn between manufacturing and services are artificial and unhelpful, when in truth the two are already coming together in a way that is re-shaping the future of U.K. manufacturing.”

“Our work with Aston University and Professor Baines in recent years has revealed huge potential for our economy but it will take a shift in mind-set, organisational structures and operations before the promise of servitization can be truly realised,” said Alan Charnley, Managing Director of Xerox U.K. and Ireland, a co-sponsor of the study. He added; “Industrial operation is becoming increasingly sophisticated and services are a huge way to make that innovation count.”

The study was launched at the UK Servitization Summit for Industry, hosted by Aston University in May. The value dynamic we have been exploring aligns very well with the benefits of servitization. Within this perspective innovation is driven by better meeting the customer’s needs and wants in a manner which suits their lifestyle choices. Manufacturers who develop through servitization are engaging with the opportunity to make better connection with these drivers. This engagement requires a rich skills portfolio – one which combines technical skills with a high level of soft skills.

Throughout the value chain the best standards of operational excellence must be adopted. Industry Forum has experience in depth in working in both manufacturing and services and, particularly in the food sector, in working across the manufacturing/services boundary.

Further Information:

• enquires@if.wearecoal.work
• +44 (0)121 717 6600
• Download Article (pdf)

 

Last month we suggested, following the Workplace Employee Relations Survey, that across the economy at the moment too many workers are simply working harder, rather than increasing the output of their work groups. Training in team working and problem solving occurs in too few workplaces and the percentage of workplaces offering training in these skills has fallen. The number of firms training in quality control has increased slightly but there must be concern about the quality methods used. The competitiveness implications of these trends do not look promising.

Anticipating this conclusion, LLAKES, the Centre for Learning and Life Chances in Knowledge Economies and Society, published a study, Adult Training: The Implications for Competitiveness undertaken by Geoff Mason and Kate Bishop at NIESR. Drawing on the Labour Force Survey data between 1993 and 2009, they found that as far as younger graduates and employees holding NVQ4 qualifications are concerned, training levels were lower in 2009 than in the mid-1990s and that across the workforce, as a whole, training levels had fallen back to 1993 levels.

These trends have affected different groups in different ways. Training for low qualified individuals has remained level throughout the 2000s but they are still below those for more qualified employees.  The fall in training in the 2000s has been concentrated in the more qualified segment of the workforce. One hypothesis is that when graduates take on non-graduate jobs, employers do not see the need to train them.

Mason and Bishop contrast these trends with evidence that employers are increasingly aware of developments in the global economy leading to new training needs. Skills gaps do not emerge from previous patterns of training, they suggest, but stem from the need to introduce new processes  to keep up with global competition.

The Skills and Employment Survey 2012 has just published its first findings, which confirm that the volume of training has fallen. The proportion of workers engaged in more than 10 hours training annually has dropped from 38% in 2006 to 34% in 2012, although amongst workers at all levels of education there is a rising demand for training. Reviewing this trend, the authors (Francis Green, Alan Felstead, Duncan Gallie and Hande Inanc) suggest that the trend in training volumes is an indicator of changes in business strategies. Training volume is influenced by employers’ plans for work organisation and new technologies including their commitment to high value added strategies with complex and more dynamic product specifications.

The combined effect of this evidence from a variety of sources must be a concern about how much the continued flat-lining of the economy is the result of too few firms with ambitious strategies based on the pursuit of a globally leading competitive position.

The Office of National Statistics (ONS) has started to measure the volume of investments in intangible assets – training, software, reputation & branding, R&D, design and business process improvement. So far ONS have only published data for two years – 2008 and 2010. Intangible investment dropped 15% to £33bn between these two years.  Only in design did the percentage of firms investing remain the same between the two surveys. In every other category the percentage of firms investing fell.  In training the percentage investing fell from 35% to 30%.

The average spend of firms investing in business process improvement fell from £45k to £32k between 2008 and 2010. The fall for training investment was less sharp – from £90k to £78k.

This survey also looked at the average expenditure in different kinds of intangible investment made by firms in the production and the service sectors. Production sector firms tend to invest more heavily in training, R&D and design. Service firms invest more heavily in software and branding. The two sectors are about equal in their tendency to invest in business process improvement.

As was the case in the previous survey, software is the largest category of intangible investment at £10 billion. Reputation and branding is the next largest (£8.3bn) followed by training (£7.3bn) and R&D (£5.7bn). Expenditures on the categories of design and business process improvement are both estimated at around £1 billion. As a comparison, conventional business investment in 2010 was £114.5bn – compared with £33bn on intangibles.

The forecasts published at the time of the 2013 budget foresaw that in the UK economy conventional business investment would increase by 8% per annum in each of the last two years of the five year forecast period but remain relatively static in the first three years. This suggests that investment in intangible assets, not least training and business process improvement, might follow the same slow trajectory out of the 2008 recession.

At Industry Forum we know that investment in business process improvement supported by appropriate training can have a rapid payback, partly by a reduction in working capital associated with more effective production organisation. These gains can be deployed in more ambitious investment, both tangible and intangible. If more firms were to adopt this approach in the next two years, the recovery might well be brought forward.

Further Information:

• enquires@if.wearecoal.work
• +44 (0)121 717 6600
• Download Article (pdf)

 

The following article reports on how Total Productive Maintenance (known to some as Total Productive Management) became a winning improvement tool for organisations worldwide and explains how you can put the TPM theory into practice where you work:

In an increasingly competitive global market, the only way that companies in the manufacturing and process sectors can survive is by becoming more efficient. For many years, tools such as Lean, 5S, Value Stream Mapping and Six Sigma have been used to reduce waste. But while these tools may eliminate waste around machines, a recurring problem that many companies in the manufacturing and process industries face is equipment breakdown. So why are maintenance processes not that effective?

When asked, many companies will say: “We’ve done TPM”. TPM means many things to many people. To some, it means maintenance personnel developing instructions and giving them to production operators to perform basic equipment maintenance. While this approach may have some short term benefits, it is often unsustainable, as operators are not given the appropriate skills and it’s seen as an initiative rather than a long-term, strategic culture change programme.

If we want to find out more about the true meaning of TPM, let’s look at how it’s evolved.

TPM was developed from the original preventive maintenance or productive maintenance (PM) concept and methodology introduced from the USA back in 1971. It’s been further developed and implemented in many Japanese companies, including the Toyota Group, and is now rapidly becoming a method that is applied worldwide.

Global success

In 1971, Nippon Denso Co first introduced and successfully implemented TPM in Japan. They won the Japan Institute of Plant Maintenance (JIPM) PM Excellent Plant Award for their activities. And this was the beginning of TPM in Japan. Since then, TPM has spread throughout Japan, especially in the Toyota group. The first example of TPM used in Europe to deliver world class performance was by Volvo in Ghent, Belgium. Volvo won the PM prize for their work in the paint shop, demonstrating evidence of reducing breakdowns and improving productivity. This was quickly followed in the early 1990s by other European automotive companies trying to close the productivity and quality gap to their Japanese competitors.

“TPM has been implemented in many Japanese companies, including the Toyota Group, and is now rapidly becoming a method that is applied worldwide”

Since the JIPM TPM awards were founded, over 3,000 organisations have won awards, including Unilever, Wrigley, Tetra Pak, Heineken and Arcelor Mittal. The first level excellence award typically takes three years of TPM implementation and up to 15 years to achieve. To win an award, an organisation has to demonstrate, through a two-stage assessment process, effective application of TPM and achievement of less reduction.

For the 2012 TPM ceremony, 12 Tetra Pak sites won awards, bringing their total to 70 awards over 12 years. The company’s La Rioja plant in Argentina received the prestigious Advanced Special Award for TPM Achievement at the 2012 award ceremony, reflecting the success it has seen since they began implementing TPM methodology in 2000. During his keynote presentation at the awards ceremony, Marcelo Loiacono, Production Manager at the La Rioja factory, said: “We started adopting the TPM methodology 12 years ago. Since then, we have turned one of Tetra Pak’s smallest converting plants into a facility which offers the shortest market lead time for customers. This achievement wouldn’t have been possible without a team-wide commitment to continuously driving operational performance improvement, supplying products of the highest quality, in the fastest lead-time, at the lowest possible cost.”

Defining moment

The JIPM definition of TPM is:

Total – must involve all employees at all levels of the organisation

Productive – effective use of all resources

Maintenance – keeping the man-machine-material system in optimum condition.

JIPM developed an eight pillar approach to TPM focused on achieving:

• Zero accidents
• Zero breakdown
• Zero defects

The structure of JIPM’s TPM model is based on eight pillars as shown below. Each pillar has a well-defined step-by-step approach to implementation.

 

 

Putting Theory Into Practice

The mission of each pillar is to reduce loss with the ultimate aim of elimination of all losses. So how does an organisation start a TPM programme using this JIPM model? Firstly, top management need to understand that TPM is part of a long-term culture change programme, not just an initiative for the maintenance department. A TPM champion needs to be appointed and pillar leaders defined.

Next, a pilot area needs to be identified. Typically, this is selected based on reviewing data on breakdowns and quality issues. The operators involved in the area, along with other functions such as maintenance and quality, are then trained in the principles of TPM and what role they will play in the implementation of autonomous maintenance. In simple terms, autonomous maintenance is giving more responsibility to the operators to care for their own machines.

The machine operation is discussed within the team and any safety risks are identified in preparation for the first inspection and cleaning activity. This is more than just a machine clean up: the team inspects the machine in minute detail, often identifying problems that have built up over years. Each problem is tagged and logged. Responsibility to address each issue needs to be decided. In the early days of TPM implementation, most issues will need to be fixed by maintenance as the operators will have insufficient skills.

The team then needs to define cleaning and inspection standards to maintain the improvements made (step one of autonomous maintenance). After a period of stability – typically three to six months – the team starts work on trying to reduce cleaning and inspection time by eliminating sources of contamination and making inspections easier to perform (step two of autonomous maintenance).

At this stage, although operators typically feel more engaged and there is improved teamwork with other functions such as maintenance, new skills have not been learnt. However, a reduction in breakdowns and minor stops should already be visible.

Steps three and four of autonomous maintenance address the training issue. In step three, operators are trained to undertake some basic maintenance tasks, such as lubrication, while in step four training continues in other tasks subjects such as hydraulics, drive systems, pumps and valves. Completing autonomous maintenance to step four can often take up to three years. Once management is convinced that this approach delivers results, they develop a master plan to roll out across the whole company.

In parallel with this autonomous maintenance activity, work is ongoing with the other pillars, and losses are reduced using the same structured step-by-step approach. While this may take a massive investment of time and resource, the step-by-step approach has been proven to deliver results.

Proven Results

In September 2005, Sheffield-based Outokumpu Stainless Steel, manufacturer of stainless steel and high performance alloys, began implementing a TPM programme, called OK>1. Ian Wallace, Continuous Improvement Manager, told QW: “Before introducing TPM, our principles for working were that the equipment was owned by the operations department; maintenance activities were carried out by engineers working within the production teams; improvements were mainly initiated by engineers; simple checks, easy lubrication tasks and small repairs were performed by operators; there were no structural root cause analyses or countermeasures for breakdowns; and we did not have a business cost and loss deployment.”

“Rushing implementation has been proven not to work”

Since the introduction of TPM, Outokumpu has seen some real improvements: the equipment is owned by the operators, who get support from a small number of process improvers. Improvements are initiated by operators and process improvers, based on contribution to company KPIs. Both autonomous maintenance and planned maintenance activities are undertaken by operators. Operators also undertake simple and complex repairs of their machines and equipment, while mechanical technical advice is available from a small team of engineering managers.

The benefits are clear, according to Ian. “We haven’t had a lost time accident (no work days lost through accidents) in the last four years. This has been achieved by a concerted effort to change our culture. TPM plays a major part in the culture change. We need to beat our competitors in customer satisfaction, and to ensure customer satisfaction we have to deliver low cost good quality product on time and in full.

“From a manufacturing point of view, our vision is to have a safe, clean and well-organised plant where cost and losses are understood and which is easy to maintain. Our people are fundamental to that process. We have a flexible and well-motivated workforce, which responds positively when asked to work above and beyond expected norms. Continuous improvement is ‘business as usual’ at our plant. It’s the only way to work and it delivers results.”

Organisations should think long and hard before embarking on a TPM journey, because it needs to be part of strategic culture change programme if it is to deliver long-term sustainable results. It also needs to be driven by top management and involve everyone. Selection of a pilot area is a key to success. Once the benefits are seen, TPM can be rolled out across an organisation to a defined master plan, but don’t rush implementation – this has been proven not to work.

Case Study

Heineken finds the right approach to safety with TPM

In 2012, 10 people lost their lives working within the Heineken company, and, while this was a decline in comparison to the 27 fatalities of 2011, it was felt – understandably – to be completely unacceptable. Of the ten people who lost their lives, three were direct Heineken employees and seven were employed by contractors or suppliers. Six fatal accidents occurred in Mexico, two in Nigeria and one each in the Democratic Republic of Congo and Ethiopia.

In order to combat such statistics, Heineken took on the TPM approach to drive improved continuous performance within the areas of safety, quality, customer service and leadership. TPM is fully embedded in Heineken breweries and is being further expanded across the entire supply chain and newly acquired businesses.

Christopher Kerr, Director Global, Total Productive Management, explains: “We are able to leverage the tools, methods and systems of TPM to drive and support our Safety First Culture. In addition, the Heineken TPM Safety Pillar adopts a holistic approach and is regularly reviewed via benchmarking with best-in-class companies.

“In recent years, we’ve re-defined our Pillar to establish a management system incorporating the five core elements of the safety compass principles: educative, proactive, reactive, managerial and directive. The Pillar is made up of a cross-functional group of people from line management mobilised to progress safety performance, with the vision and target always being zero accidents. Awareness, engagement and communication programmes are key Pillar activities, as well as setting yearly key activity indicators on the leading indicators, comprising of the number and execution of behavioural-based audits, machine risk assessments, identification of hazards and operational risk reduction as well the implementation of the Pillar tools, methods and systems.”

These activities are managed via focused teams involving all layers of the organisation and the Safety Pillar is audited twice a year by a member of a global audit team. Performance is measured against the combined criteria of results and the effective use of the standards and tools.

Heineken has also developed a contractor safety toolbox to help reduce the number of accidents among contractors. The toolbox consists of safety cards for each contractor activity showing what has to be checked before starting a job, as well as the dos and don’ts of the job itself. As Christopher Kerr says: “Our safety performance is steadily improving, and it remains our first priority; every accident is one accident too many.”

Industry Forum’s TPM Courses

 To enquire about Total Productive Maintenance:

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

 

How the UK economy is developing in terms of jobs, skills, training and management is much clearer with the recent publication of two major surveys. The 2011 Workplace Employee Relations Survey (WERS) looks at the experience of managers and employees and is part of a series stretching back periodically more than 20 years so that trends can be determined.

The 2011 WERS returned to those workplaces that participated in the previous wave in 2004 to establish which were no longer in existence. Some 17% had closed down – the rate was 19% among private sector workplaces and 7% in the public sector. The overall closure rate during this time was in fact no higher than that observed between the two previous WERS surveys (1998 and 2004).

Employees were asked to what extent their workplaces had been affected by the current recession. 47% responded ‘a great deal ‘ or ‘quite a lot’ – the figure  for manufacturing was the same as the national average but other sectors were different. Construction (72%) and public administration (65%) recorded high figures in line with other evidence of the impact of the recession. At the other extreme the figure for Energy, Gas and Water was only 18% and in this sector 70% of employees said the recession had impacted on them ‘just a little’ or  with ‘no adverse effect’.  Surprisingly in the Wholesale and Retail sector 37% of employees reported ‘just a little’ or ‘no adverse effect’ of recession.

The most common impact of the recession reported was the freezing or cutting of wages (42%) and not filling vacant posts (28%). 16% of respondents said that training spend had been reduced. Overall about 30% of employees thought their workload had been increased. The percentage of employees feeling that their job was secure had fallen from 67% in 2004 to 60% in 2011 – not as much as might have been expected.

Nearly half (47%) of employees are located in a workplace with at least one on-site (employee or union) representative. The amount of time spent on representation revealed by the 2011 survey is the same as 2004 but the range of issues involved has expanded and includes recruitment and selection, performance appraisal, staffing levels, pension entitlements, discipline and grievances.

Generally there is evidence of more effort to engage employees in 2011 than in 2004. All employee meetings are the most popular method and in 2011 they were used  by 80% of workplaces compared with 75% in 2004. It is a matter of concern that problem solving groups are only used by 14% of workplaces in 2011; this is a fall from 17% in 2004.

The WERS found that training has been extended to more employees in the workplace since 2004 but the duration of training is shorter. Employee satisfaction with training has nonetheless increased over this period. Some managers have cut training in response to the recession, and as a result  satisfaction levels in these workplaces are lower. The proportion of workplaces offering training to 80% of their workforce or more (i.e. the most intensive trainers) increased to 41% in 2011 from 35% in 2004. The proportion of workplaces offering training in quality control increased slightly from 35% to 37%. Unfortunately the proportion of workplaces training in team working fell from  40% to 36% between 2004 and 2011.

It is also a matter of concern that only 31% of manufacturing workplaces offer training to more than 80% of their workforce – 10 points behind the all sectors average and three points worse than Wholesale and Retail.  Sectors who are above the national average on this measure include Electricity, Gas and Water, Public Administration, Education, Health and Social Work.

In 2011 more employees reported that they are required to work very hard in 2011 compared to 2004. Even so job satisfaction increased during this period. It has been suggested that this partly reflects increases in the autonomy given to employees over key aspects of their jobs.

The other major survey to report is The 2012 Skills and Employment Survey . The final section of this project is being launched later this month and we hope to cover these results in a later article. Nonetheless the WERS suggests an alarming picture as far as the aim to rebalance the economy is concerned. Across the economy too many workers are required to work harder rather than increasing the output of work groups. Training in team working and problem solving is present in too few workplaces and the percentage has fallen. The number of firms training in quality control has increased slightly but there must be concern about the quality methods used.

Industry Forum has extensive experience of improving workplaces using team working and problem solving as a foundation. This approach improves the quality of output and the total output relative to the size of the team is also significantly enhanced. It is a matter of concern that on the evidence of the WERS too few firms are following this approach.  The success of the automotive sector in the last decade reflects significant investment in this approach.

Further Information:

• enquires@if.wearecoal.work
• +44 (0)121 717 6600
• Download Article (pdf)