sme toronto - sme-tbm.org · employment, and so forth. we have a lot of work to do to change this...
TRANSCRIPT
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SME Toronto WWW.SMETORONTO.CA
Nigel SouthwaySME Chair 2012/2013
About SME:
The Society of Manufacturing Engineers
Premier source for manufacturing knowledge, education and networking.
Connecting manufacturing practitioners together.
Provide Tradeshow , Expo and network events.
Reviews latest manufacturing technologies/processes/techniques/practices.
SME world-wide supported network of Chapters and technical communities.
Many programs, events, magazines, publications, huge technical database and online training ….
SME leader in manufacturing workforce Education/training/skill development.
SME is a LEAN Business Certification Authority.
www.sme.org.
MEET KNOW GROW
WWW.SMETORONTO.CA $125 per Year
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TBMTake Back Manufacturing
www.SME-TBM.org
A Forum Dedicated to Restoring
our Manufacturing Sectors.
TBMTake Back Manufacturing
A Forum Dedicated to Restoring
our Manufacturing Sectors.
A HUGE CHALLENGE!!!
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TBM…Our Ultimate Goal
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Work together ….
Government, Education organizations Industry leaders
ROADMAP……..Recover our future industrial capability …… and therefore our future prosperity.
CANADA MANUFACTURING
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The future of manufacturing
in
Ontario’s economy.
Nigel Southway SME Chair 2012
PEO? TBM
A NORTH AMERICAN PROBLEM
Moved Off-shore…..
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Textiles
Furniture
Footwear
ElectronicsAUTO PARTS
Appliances
Plastic goods
Equipment metalworkFittings Foods
Un-controlled trade….. “herd behavior”
For low cost labor rates
15% Reduction in Manufacturing Intensity in the last decade
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Yet ….we have a skill shortage!!! (NOT a labor shortage)9
2009 2010 2011
CANADA
More than 500,000 jobs lost in last 6 years
25% Reduction(Both in Quantity and Quality)
We have created an Over-educated / Under-trained /Redundant Workforce!!!
1,000,000 Young Canadians
Now out of work!!
Redeployed to part time
and lower paying service jobsOnly 25000 jobs added in Resource Sector
CMTS Toronto Canada October 2011 FABTEC Toronto Canada March 2012 MMTS Montreal Canada May 2012SME Annual Conference Cleveland USA June 2012Many other Society and Association events in 2012/2013
Presentations.... TAKE BACK MANUFACTURING
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Raising the Awareness
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CIM: What factors are driving manufacturers'
decisions to bring production back to Canada?
Southway: It's a North American-wide realization that
off shoring is getting more expensive with increased
transportation expense due to oil costs, as well as
labor price escalation in emerging economies. Many
corporations and large consulting groups also recognize
that there are many hidden costs and issues in supporting
a remote supply chain. In general, local manufacturing is
now considered to be no more expensive than offshore
production. The landed cost tipping point in some sectors
and commodities is projected to be reached by 2015.
Local manufacturing also offers more stability and the
ability to innovate at home more effectively. And, being
closer to the customer has added inventory and flexibility
advantages.
CIM: How can industry members communicate the
importance and value of manufacturing to the
general population?
Southway: We have had three decades of people thinking
manufacturing is bad news. Manufacturing has been
viewed as dirty and dangerous, risky and unstable
employment, and so forth. We have a lot of work to do to
change this negative image. Just talking about TBM, telling
the real story, and showing what we do will help.
If we look at the long term, today's 12- to 15-year-olds will
lead the way. When they reach 22 years old, we will have a
thriving localized manufacturing economy. It certainly won't
be based on cheap oil or energy, but it will be very lean
and very green. Things will be made in local manufacturing
hubs or clusters. Factories will be very high-tech and their
operation will demand high levels of skill and education.
All this needs vision and a can-do attitude. Not having both
of these is our biggest risk.Take Back Manufacturing
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Take Back Manufacturing on TVO The Agenda
Marie Laird … Past Chair SME Toronto
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Take Back Manufacturingwww.SME-TBM.org
FOR OUR KIDS!!!
Let’s Re-engineer Our Economy to Work Again!
TBM
TBM
North-American Manufacturing
Prosperity for all.
Industry
TBM – The 3 Parallel Imperatives
Educators
Government
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TBM
North-American Manufacturing
Prosperity for all.
Industry
TBM – The 3 Parallel Imperatives
Educators
Government
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TBM
Government
TBM – The 3 Parallel Imperatives
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• Provide MORE support for Manufacturing• Embrace Waste-Free Forms of Globalization• Focused POLICY and PLANS to better balance trade• Avoid duplicated policy and support organizations
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TBM
North-American Manufacturing
Prosperity for all.
TBM – The 3 Parallel Imperatives
Educators
We have created an Over-educated / Under-trained /Redundant Workforce!!!
• Education must better serve its citizens• Ensure it is value adding to the economy• Re-Balance Education versus Training• Integrated Industrial Apprenticeship System
• Integrated Career Pathway
ApprenticeJourneyperson
TechnicianTechnologist
Engineer
• Industry Recognized Skills and Education Development Progression
• Apprenticeship Pool From The Best, the Brightest And The Most Talented
• Become The Learning/Occupation Destination Of Choice for High School Students
• Apprenticeship Courses Transferrable And Articulated To Other Post Secondary Colleges And Universities, Supporting Lifelong Progression In Learning As Shown In Career Pathway Above
• Industry must lead on driving and installing this system. ( So..can’t complain about skill shortage!!)
• The Integrated education and training must provide a highly flexible workforce.
• DO IT!...... Before we loose the Industrial Experience of the Baby Boomers!!
Trade
Technician
Technologist
Engineer Eng Degree
Eng Diploma
Tech Certificate
Trade Certified
High school
Manufacturing
needs YOU !
VISION ..Re-focus on New Apprenticeship System
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TBM
TBM – The 3 Parallel Imperatives
Educators
Industry • Reinstall a “MINDSET” for Continuous Improvement
• Gain a Vision & Aptitude for all forms of “INNOVATION”
• Use BALANCED SOURCING…. Run the numbers!!
• Install New Technology and Capital Re-investment
• Re-build Strong LOCALIZED Manufacturing Communities
(Incubators/clusters)
North-American Manufacturing
Prosperity for all.
Manufacturing has an IMAGE problem!!
Most manufacturing-based businesses are beyond dispirited….
Our Politicians/Government/Population have little understanding of business
and manufacturing…We must EDUCATE them!!
Manufacturing is deemed:
Dark, Dirty, Dangerous, Deafening and Difficult….
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….. And Smelly!
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And….
Highly unstable as a career!?
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TBM
EXCITE the NEXT GENERATION
Change ….
The Image of Manufacturing
Let’s Make Manufacturing
www.SME-TBM.org
TBM SURVEY
THEN PUSH HERE
Do You Care
About Manufacturing
in CANADA??
TBM Self Positioning Survey
GET THE FREE TBM ROADMAP TOOLKIT
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TBM Self Positioning Survey
Help us to Help you!
PO
LIC
Y
ED
UC
AT
ION
Ind
ustr
y
Excell
en
ce
TBM
TBM
TBM Survey Results
Presented at the SME TORONTO Monthly Meeting 22nd Nov 2012
From an ongoing online survey on the www.sme-tbm.org website
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TBM Survey Summary (Ontario)72% Are small businesses (with less than 100 people)
45% Are in facilities less than 20,000 sq. ft.
50 % Are in Automotive/Equipment/Furniture/Electronics/Plastics sectors
50% Have 80% of sales in Canada
87% Are concerned about being competitive
82% Are very concerned about the health of their manufacturing sector
73% Are very concerned about the high Canadian dollar
68% Need help with productivity improvement
65% Suggest we need to focus on workforce training and development
60% Identified LEAN as an improvement strategy to follow
47% Are interested in improving their system for Innovation and product launch
TBM Survey Summary (Ontario)72% Are small businesses (with less than 100 people)
45% Are in facilities less than 20,000 sq. ft.
50 % Are in Automotive/Equipment/Furniture/Electronics/Plastics sectors
50% Have 80% of sales in Canada
87% Are concerned about being competitive
82% Are very concerned about the health of their manufacturing sector
73% Are very concerned about the high Canadian dollar
68% Need help with productivity improvement
65% Suggest we need to focus on workforce training and development
60% Identified LEAN as an improvement strategy to follow
47% Are interested in improving their system for Innovation and product launch
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SME Positional Survey
Business Process Improvement / LEAN
Strategic planning / Innovation
New Product Introduction & Rapid Prototyping
Balanced Sourcing
Production Process Excellence / Supply Partnering
Distribution and Inventory management
Manufacturing Technology Toolkits
Business Systems & Computer Integrated Manufacturing
Management technique upgrades
Organizational learning systems / Apprenticeship program
The TBM Evolution Plan
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Lets get organized…..
SME Positional Survey
Business Process Improvement / LEAN
Strategic planning / Innovation
New Product Introduction & Rapid Prototyping
Balanced Sourcing
Production Process Excellence / Supply Partnering
Distribution and Inventory management
Manufacturing Technology Toolkits
Business Systems & Computer Integrated Manufacturing
Management technique upgrades
Organizational learning systems / Apprenticeship program
The TBM Evolution Plan
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Lets get organized…..
LEAN & Continuous Improvement
Improved Agility to customersReduce cost of poor qualitySuperior customer service
Reduce dependency on inventoryMaintain the competitive edge
Improve employee and shareholder commitment
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SME Positional Survey
Business Process Improvement / LEAN
Strategic planning / Innovation
New Product Introduction & Rapid Prototyping
Balanced Sourcing
Production Process Excellence / Supply Partnering
Distribution and Inventory management
Manufacturing Technology Toolkits
Business Systems & Computer Integrated Manufacturing
Management technique upgrades
Organizational learning systems / Apprenticeship program
The TBM Evolution Plan
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Lets get organized…..LEAN & Continuous Improvement
Join SME!... Participate!!Tradeshows/Chapters/Technical communities
Participate in the Lean certification journey across the whole business (SME/AME/ASQ)
Implement and certify your organization in LEAN
Benchmark yourself against the best in class.
Ensure you have a strong Continuous Improvement Evolution plan
LEAN-ing Toward Success
A Take Back Manufacturing Imperative
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NIGEL SOUTHWAY
• 40 years Broad Business and Manufacturing Experience
• Rough post-war Sea-Port (Bristol ….South-West England)
• Posh name/Specs…Stress/had to grow up tough
• Product of the British Swinging 60’s !!!!!
• British Engineering Apprentice…Aerospace/Electronics (1966-1972)
• BSc EEE C-Eng. in Engineering/MSc Management … Manufacturing Eng (1972)
• MOTOROLA Director MFG Eng / Cycle-Time/Six-Sigma Implementation (1980’s)
• Change Agent/Educator/Coach/Advisor for LEAN business improvement (1990)
• Consulted many organizations in different industry sectors worldwide.
• Have assisted many Global Sourcing programs and Joint Ventures
• Society of Manufacturing Engineers …2012/2013 Chair Toronto Chapter
• Co-Leader of the Canadian wide Take Back Manufacturing (TBM) initiative
(Globalized Manufacturing will remain a significant challenge!!)
• Strong Coach to Vision and Plan a LEAN and Balanced Source Evolution !www.nigelsouthway
Owner of NEXUS CONSULTING SERVICE
AUTHOR : CYCLE TIME MANAGEMENT
…… Fast Track to Productivity Improvement
1992
Oakville Ontario Canada
NEXUS
INDUSTRY WEEK
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Business Productivity Consulting Since 1989
Automotive, Aerospace, Avionics,
High-tech and consumer Electronics,
Pharmaceuticals, Food, Beverage.
Consumer Products and Appliances
Steel, Fabrication and Mining
Service and Financial Industries.
Ever-Ready Battery,
J.M. Schneider Inc,
Procter and Gamble,
Inland Steel,
Morton Metal-craft,
Inter-City Products,
FABCO,
Thompson Pipe & Steel.
ECCO,
A 0 Smith,
Grote Industries,
NBS,
Royal Canadian Mint,
• Business Excellence Visioning / Coaching.
• Business Productivity Improvement Programs.
• Changing the Operating Practices for Success.
• Global Sourcing and Joint Venturing.
• Project Management of New Products and Processes.
BFL,
British Airways,
BTR,
Tectrol,
Tiercon,
ACS,
Imperial Rubber,
GTD,
VERTIGO,
Canadian Pools,
Telephoto
SXA
Clients in Canada, USA, Asia and Europe.
www.nigelsouthway NEXUS
GlaxoSmithKline.
Baxter,
Ciba Corning,
Citibank,
Royal Ford,
GE MARCONI,
Clubcar
Toro
John Deere
NOMA,
McCoy
Polaris
Clients where I have applied CYCLE TIME Reduction (LEAN THINKING)
• Electronic assembly• Meat processing plant..• Metal fabrications• HVAC Manufacturing• Toothpaste manufacturing• Steel mill processes• Bank check clearing house• US army medical Corp• Whiskey distilling• Dry-cell battery production• Credit card emboss house• Electrical products• Custom Power-Supplies• Computer design/manufacture• Sheet-metal fabricators• Plastic injection molding• Truck Components supplier• Construction equipment
• Oil industry equipment providers• Aerospace equipment providers• Soap factory• Bubblegum and candy factory• Food additive producer• Data-com system provider• Computer software developer• Mint (Coins and Medals) • Security equipment• Off-road equipment• Water pipeline manufacturer• Exhaust System Manufacturing• Commercial swimming pool manufacturing• Auto dealerships• Medical equipment Design/Manufacturer• Oil extraction equipment manufactures• Nano-tech Battery Manufacturing• Automotive parts supplier
NEXUS
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Continuous Improvement
Evolution planning
&
Lean/Cycle-time Concepts
The Past and the Future …. Any Business
?NEXUS
The Challenge ???……………..
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The Future …. Any Business
• Margin Pressure
• Shorter lead-times
• Need for agility
• More global competition
The Problem The Solution
Continuous Improvement
Continuous Improvement
Continuous Improvement
Continuous Improvement
The leaders and survivors will have a strong integrated CI Culture
5S
One Evolution Plan
NEXUS
Continuous
Improvement
THE GOAL
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The Threat/Change Pressure Curve
Electronics, (Motorola/HP etc)
High-tech,
Automotive,
Consumer Products and Appliances, (GE)
Steel,
Aerospace, Avionics,
Service and Food,
Beverage.
Fabrication,
Mining / Extraction,
Pharmaceuticals,
Financial Industries.
1980 20201990 2000 2010
NEXUS
Question For You (Every-one)?
• Are you ready?
• Do you have enough knowledge of concepts?
• Do you understand the process/tools being used?
• Do you have enough Vision?
• Do you understand your role?
• Do you have an Implemantatyion plan
?
NEXUS
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Are you satisfied with your profitability? Yes No
Do you have a detailed plan to increase your profit margin? Yes No
Do you know (in detail) where the bottlenecks and waste factors are in your business that effect productivity and profit? Yes No
Do you have a clear vision of what to do to get those improvements? Yes No
Do you have an Evolution plan and detailed project activities for your business improvements? Yes No
Do you have a system to measure the improvements? Yes No
Does a clear vision for improvement and toolkits to make them happen exist at all levels in your organization? Yes No
Do you have a key person dedicated and assigned to make such improvements happen? Yes No
Is your organization physically arranged and culturally positioned to eliminate waste? Yes No
Have you fully assessed the effectiveness of your operating practices to support/sustain the changes needed? Yes No
Do you have a formal global sourcing strategy and plan? Yes No
Do you have effective project management of all new products and associated processes? Yes No
Continuous Improvement Quiz?
NEXUS
Need to improve ??? Which
Improvement
Technology ?
?Lets get
organized!!!!
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NEXUS
“ It’s become a bit denatured”
Still the best choice
The 1980s was a Renaissance period for Manufacturing and Engineering
Many believe this was created by the Space Race!!!
Others believe it was due to the next generation of younger management
NEXUS
The Birth Of LEAN
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BUSINESS SYSTEMS
MRP (Materials Resource planning)
CIM
Pull systems
MRP 2 (Manufacturing Resource Planning)
ERP (Enterprise Requirements Planning
MANUFACTURING
JIT
QDC
SPC
Theory of constraints(The GOAL)
Cycle Time Management
Kaizan
TPM
Problem Solving/8D/5Y
DOE (Design Of Experiments)
LEAN THINKING
NEW PRODUCT INTRODUCTION
Product teams
Simultaneous engineering
Phase Review process
DFM
Six Sigma
(Motorola) QS9000/APQP
Problem solving 8D /5Y /4 phase etc
CULTURE CHANGE
TOYOTA PRODUCTION SYSTEM Visual factory /5S
Participative management style
Teamwork power
People Empowerment
Pay for skills/Gain sharing
SUPPLY
Supplier management/partnering
MEASUREMENTS
Value Engineering ABC
(Activity based Costing)
Pyramid/Balanced Scorecard
1970 19951980 1985 1990
W E Deming
NEXUS
The father of Quality Management
The Birth Of LEAN• The JIT threat… “Made in Japan” Early 80s… TPS etc
• The GOAL… 1984 Goldratt
• TOTAL CYCLE TIME 1985 Phil Thomas
• World Class Manufacturing 1986 Schonberger
• Time.. A Competitive Advantage 1990 George Stalk BCG
• Measure-Up (Performance Measurement Score-carding) 1990 Lynch and Cross
• Cycle Time Management 1993 Northey/Southway
• Lean thinking 1996 Womak/Jones
Now!!!
• Many LEAN Educational packages…….
• LEAN/Six Sigma Certification programs……
• SME LEAN Benchmarking Workshop series…….
Reading list
• NEXUS Information Package www.nigelsouthway.com/positionalpapers
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NEXUS
Clear visioning and self awareness at all times!!
Make improvements happen from within the organization!
CYCLE-TIME MANAGEMENT
LEAN- THINKING NEXUS
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NEXUS
Cycle-Time
Finding that lever for change and improvement!
A LEAN MEASUREMENT
Start thinking in the 4th Dimension!!
What is Total Business
Cycle Time?
“Total Cycle Time” is the actual time elapsed from when a
customer expresses a need for that product or service until the
time the customer's need is satisfied and payment is received.
NEXUS
Cycle-Time
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A CYCLETIME REDUCTION EXAMPLE!!!
• How long does it take you to change a wheel on your Car????
• 15 minutes?? or even longer??..to do the following essential activities….
Stop car…..raise car…..remove nuts….replace new wheel…..tighten nuts…..lower car…..Go…
NEXUS
•AN INDY PIT CREW DOES THE SAME PROCESS IN …..…….LESS THAN 10 SECONDS!!!!!!
NEXUS
The things in daily life that are LEAN….
Eyeglasses…. 1 hour!!!...Paint colors…. Mixed in storePizza delivery…. 1 hour and sometimes freeVideo conferencing…. NOT business travelNon coin tolls on highwayBritish Round- A-BoutsPay for gas at pumpCell phonesInternet bankingSelf serve/checkout storesInternet moviesCar Rental (some)Internet shopping?www information
Fast
service
is
good
service!!!!
NEXUS
NOT Lean
Global Supply Chains
Legal system
Government policy making
Voting system
Heath care systems
Educational system
HEALTH System
Business commute time
Airport check in/baggage handling
Security at airports
Hotel check-in
ALL CAN TAKE TOO LONG!!
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NEXUS
NEXUS
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WaitingInventoryExcess TransportationOver-productionDefectsOver-processingExcess MotionUnder-utilized Talent
8 Types of Waste
NEXUS
NEXUS
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Discovery
Invention
Research
Development
Launch
Commercialization
INNOVATION
NEW PRODUCT INTRODUCTION
$$$$
Marketers Researchers Product Teams Production/Distribution
Happy
Customer
Academia
A Typical business process???
Inventors
NEXUS
Discovery
Invention
Research
Development
Launch
Commercialization
INNOVATION
NEW PRODUCT INTRODUCTION
$$$$
MarketersResearchers
Product TeamsProduction/Distribution
Happy
Customer
Academia
A Typical business process???
Inventors
White Spaces
The time delay between major functions,
where less than effective communication
linkage can occur, which affects the
interaction required between these functions
or departments to complete the essential tasks
of the business.
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WASTE
DEFECTS
SETUPS
Short ships
Labor VarianceShortages
Overtime
Scrap
DelaysBatch failures
NEXUS
• “In any business big or small and whatever the type of products or services as much as 90% waste or non value adding cost can exist in some of the activities within the business”
• Waste effects the 3 big success factors:
– Quality – Delivery – Cost.
• Remove waste, put cash on the bottom line.
NEXUS
Attack WASTE
WILL REQUIRE STRONG VISIONING AND PARADIGM SHIFTING
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Continuous Improvement Environment
ENTITLEMENT BASELINE
Cycle Time
Improvement
Quality Improvement
Cost Reduction
NEXUS
Vision/Commitment
CTM
LEAN
Waste reduction
6 Sigma
TPM
Change-over
Reduction
5S
Point Meetings
COPQ
NEXUS
CYCLE TIME REDUCTION TOOLS
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BASELINE
NEXUS
NEXUS
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NEXUS
The LEAN Version (Entitlement)
NEXUS
With LEAN but low capital
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The LEAN Version (Entitlement)
NEXUS
With LEAN but low capital
THEN….
The LEAN Version (Entitlement)
The LEAN Version (Benchmark)
NEXUS
With LEAN but low capital
Add Capital and Technology
THEN….
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The LEAN Version (Entitlement)
The LEAN Version (Benchmark)
Note:Baseline..Where you are now!
Entitlement… with Lean but low capitalBenchmark… Capital and Technology NEXUS
With LEAN but low capital
Add Capital and Technology
THEN….
Measurement of Performance
Entitlement
Baseline
Benchmark
Baseline: Current performance
Entitlement: Level of performance achieved with present resources & capital
Benchmark: Best competitive performance with added resources and technology
NEXUS
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Benchmarking
• Review with Measurements who is “best in class”
– In your industry
– In any industry with similar process or conditions.
• Study why they are better and try to apply to your own business.
NEXUS
Copy/Steal/Cheat/Beat the Competition!!
NEXUS
The Cost Time Profile
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NEXUS
COST TIME PROFILE
COST
$$$ CASH $$$
WORKING CAPITAL
TIME
NEXUS
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NEXUS
Reduced
Cost
Improved Agility
Imagine the Vision
• Cycle time inside customer expectations
• Faster time to market capability
• Minimal Inventory and carry costs and waste in all forms
• Perfect or Improved quality (Product /Process/Services)
• Total Cost performance excellence
• Greater productivity and increased gross margins
• Reduced working capital
• Increased cash-flow cycle & reduced need for credit
• Employee Participative and Empowerment culture
• A distinct competitive edge.
NEXUS
The Perfect Business Process
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NEXUS
INSANITY
“Doing the same things…. and expecting better results!”
Definition:
Comments that can make you go insane!!!!
60. We have always done it this way!NEXUS
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81
VISION/Commitment
Formal Continuous Improvement System
Concepts for Improvement
Change Structure/Process/Culture
Facilitation Education
EVOLUTION PLAN
5 loop Scope of change
3 TIERS of change
SCORECARDPerformance Measures
Programs/Projects/Change teams
Mobilization of whole workforce
Six Sigma?
CTM?/LEAN?
TPM/TPS/5S?
?????
BenchmarkingResults/savings
EmpowermentEngagement
NEXUS
“Total Cycle Time” …The actual time elapsed from when a customer
expresses a need for that product or service, until the time the
customer's need is satisfied, and payment is received.
Strategic Business Development Loop
New Product Introduction (NPI) Loop
Supply Management loop
Make/Ship Loop
Distribution Loop
The 5 Cycle Time Loops in any Business
Customer Expectation (Existing Products)
Customer Expectation (New Products)
www.nigelsouthway.com/positionalpapers
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NEXUS
The 5 Cycle Time Loops in any Business
Strategic Business Development Loop
New Product Introduction (NPI) Loop
Supply Management loop
Make/Ship Loop
Distribution Loop
Customer Expectation (Existing Products)
Customer Expectation (New Products)
5 Business Loops
• Who is the customer?
• Must think holistically !
• From Vertical to Horizontal thinking
• Use the 5 Loops to provide focus
“Total Cycle Time” …The actual time elapsed from when a customer
expresses a need for that product or service, until the time the
customer's need is satisfied, and payment is received.
(The internal customer concept)
BUT……..THIS IS A MUCH MORE EXACTING & STRESSFULCONCEPT THAN JUST MEETING OUR OWN GOALS
Supplier/Customer Relationship We are all suppliers and customers.
The relationship must be based on mutual trust and respect.
NEXUS
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NEXUS
“Total Cycle Time” …The actual time elapsed from when a customer
expresses a need for that product or service, until the time the
customer's need is satisfied, and payment is received.
The 5 Cycle Time Loops in any Business
Strategic Business Development Loop
New Product Introduction (NPI) Loop
Supply Management loop
Make/Ship Loop
Distribution Loop
Customer Expectation (Existing Products)
Customer Expectation (New Products)
• Who is the customer?
• Must think holistically !
• From Vertical to Horizontal thinking
• The 5 Loops in the business
• Use the 5 Loops to provide focus
5 Business Loops
NEXUS
“Total Cycle Time” …The actual time elapsed from when a customer
expresses a need for that product or service, until the time the
customer's need is satisfied, and payment is received.
The 5 Cycle Time Loops in any Business
Strategic Business Development Loop
New Product Introduction (NPI) Loop
Supply Management loop
Make/Ship Loop
Distribution Loop
Customer Expectation (Existing Products)
Customer Expectation (New Products)
5 Business Loops
3TIERS
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NEXUS
“Total Cycle Time” …The actual time elapsed from when a customer
expresses a need for that product or service, until the time the
customer's need is satisfied, and payment is received.
The 5 Cycle Time Loops in any Business
Strategic Business Development Loop
New Product Introduction (NPI) Loop
Supply Management loop
Make/Ship Loop
Distribution Loop
Customer Expectation (Existing Products)
Customer Expectation (New Products)
5 Business Loops
3TIERSSTRATEGY
IMPROVEMENT
PRACTICES
1
2
3
3 TIER APPROACH TO CHANGE
TIER 1 Strategic process change
TIER 2 Change/Improvements
TIER 3 Operating Practice Changes
NEXUSwww.nigelsouthway.com/positionalpapers
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OPERATING PRACTICE CHANGESPoint Meetings/Communication Problem solve/project identification Cross-train/morale.
PROCESS IMPROVEMENTSReliability (TPM, SPC, etc,)Flexibility (Changeover, multi-skill, etc. Capability (waste reduction)
Strategic Process ChangesPull system design (LINEAR PROCESS)Capacity/Demand planning (DEMAND)Physical layout (ORGANIZATION)
TIER 1
TIER 3
TIER 2 STRATEGY
IMPROVEMENT
PRACTICES
1
2
3
LEAN BUSINESS ENVIRONMENT
NEXUSCAN BE APPLIED TO ANY DEPARTMENT OR PROCESS
OPERATING PRACTICE CHANGESPoint Meetings/Communication Problem solve/project identification Cross-train/morale.
PROCESS IMPROVEMENTSReliability (TPM, SPC, etc,)Flexibility (Changeover, multi-skill, etc. Capability (waste reduction)
Strategic Process ChangesPull system design (LINEAR PROCESS)Capacity/demand planning (DEMAND)Physical layout (ORGANIZATION)
TIER 1
TIER 3
TIER 2 STRATEGY
IMPROVEMENT
PRACTICES
1
2
3
LEAN BUSINESS ENVIRONMENT
NEXUS
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NEXUS
TIER 1 ……Thinking/Visioning
• DEMAND Planning/Forecasting Capacity– Effectiveness and functionality
• LINEAR Operational PROCESS– Process simplification and automation toward linear flow
– Business systems Integration and sustainability
• Physical layout / ORGANIZATION….. – Physical Layout and facility planning…..
– Ongoing restructuring/Resource and skill planning
Improvements in 3 connected areas ….
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Linear Flow• Utilize a perfect business process (as much as possible)
• Adopt an appropriate business process strategy
• Linking all parts of the business process
• Reduce Business cycle-time FAR inside customer demand
• Only produce to “real” customer demand (sell true capacity)
NEXUS
VALUE ADDED
VALUE ADDED
VALUE ADDED
VALUE ADDED
Customer
Real Demand Lead time
Process Cycle time
Example
Inv InvInv Inv
No Agility!
Linearity below 1
Linear Flow• Utilize a perfect business process (as much as possible)
• Adopt an appropriate business process strategy
• Linking all parts of the business process
• Reduce Business cycle-time FAR inside customer demand
• Only produce to “real” customer demand (sell true capacity)
NEXUS
VALUE ADDED
VALUE ADDED
VALUE ADDED
VALUE ADDED
Customer
Real Demand Lead time
Process Cycle time
Example
Build to order
(Sell Capacity)
Total Agility!
Linearity 1 or better
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BUSINESS/FACILITY LAYOUT & ORGANIZATION
Product Travel Distance: 2500 feet to 1000 feet
# Transactions: 80 to 35
Total Process Steps: 60 to 30
BEFORE AFTER
OPERATING PRACTICE CHANGESPoint Meetings/Communication Problem solve/project identification Cross-train/morale.
PROCESS IMPROVEMENTSReliability (TPM, SPC, etc,)Flexibility (Changeover, multi-skill, etc. Capability (waste reduction)
Strategic Process ChangesPull system design (LINEAR PROCESS)Capacity/demand planning (DEMAND)Physical layout (ORGANIZATION)
TIER 1
TIER 3
TIER 2 STRATEGY
IMPROVEMENT
PRACTICES
1
2
3
LEAN BUSINESS ENVIRONMENT
NEXUS
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Typical Process Step
(Performance Model)
Repair Rework
Non-Utilization (Wait) Time
Changeover/Time
Preventative Maintenance PM
Breakdown (Equipment/Process)
Flexibility
Reliability
Capability
Internal
Customer/s
Cycle Time
100%
Capacity
Internal
Supplier/s
Capacity
0%
Scrap Rejects
NEXUS
Value-Added Process TimeCan be only 10% of Total Capacity!!!
OPERATING PRACTICE CHANGESPoint Meetings/Communication Problem solve/project identification Cross-train/morale.
PROCESS IMPROVEMENTSReliability (TPM, SPC, etc,)Flexibility (Changeover, multi-skill, etc. Capability (waste reduction)
Strategic Process ChangesPull system design (LINEAR PROCESS)Capacity/demand planning (DEMAND)Physical layout (ORGANIZATION)
TIER 1
TIER 3
TIER 2 STRATEGY
IMPROVEMENT
PRACTICES
1
2
3
LEAN BUSINESS ENVIRONMENT
NEXUS
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POINT MEETINGS…….. TIER 3 core tool
NEXUS
NEXUS
POINTCOMMUNICATION TIER 3
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NEXUSA book by Michel Greif
Boss
NEXUS
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OPERATING PRACTICE CHANGESPoint Meetings/Communication Problem solve/project identification Cross-train/morale.
PROCESS IMPROVEMENTSReliability (TPM, SPC, etc,)Flexibility (Changeover, multi-skill, etc. Capability (waste reduction)
Strategic Process ChangesPull system design (LINEAR PROCESS)Capacity/Demand planning (DEMAND)Physical layout (ORGANIZATION)
TIER 1
TIER 3
TIER 2 STRATEGY
IMPROVEMENT
PRACTICES
1
2
3
LEAN BUSINESS ENVIRONMENT
NEXUSCAN BE APPLIED TO ANY DEPARTMENT OR PROCESS
NEXUS
“Total Cycle Time” …The actual time elapsed from when a customer
expresses a need for that product or service, until the time the
customer's need is satisfied, and payment is received.
The 5 Cycle Time Loops in any Business
Strategic Business Development Loop
New Product Introduction (NPI) Loop
Supply Management loop
Make/Ship Loop
Distribution Loop
Customer Expectation (Existing Products)
Customer Expectation (New Products)
5 Business Loops
3TIERSSTRATEGY
IMPROVEMENT
PRACTICES
1
2
3
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NEXUS
“Total Cycle Time” …The actual time elapsed from when a customer
expresses a need for that product or service, until the time the
customer's need is satisfied, and payment is received.
The 5 Cycle Time Loops in any Business
Strategic Business Development Loop
New Product Introduction (NPI) Loop
Supply Management loop
Make/Ship Loop
Distribution Loop
Customer Expectation (Existing Products)
Customer Expectation (New Products)
• Who is the customer?
• Must think holistically !
• From Vertical to Horizontal thinking
• The 5 Loops in the business
• Use the 5 Loops to provide focus
5 Business Loops
SUPPLY
STRATEGY
NEXUS
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Ongoing…..
NEXUS
Supplier Certification
Supplier Partnering
(single source)
Supply base Rationalization
??????
GLOBALIZED
MANUFACTURING
? ?TBM Positional Paper on the Waste in a Global Supply Chain
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109
Waste of VERY Expensive Bunker Fuel
Much Non-Value-Adding Inventory
PURE WASTE
110
Waste of VERY Expensive Bunker Fuel
This low grade bunker fuel is used by the worlds 90,000 cargo ships
A single large container ship emits pollutants equivalent to 50 million cars.
Total container ship pollution is 6 times that of the TOTAL cars in world
2,000 times the amount of sulfur compared to diesel automobiles.
Container ships account for 90% of global trade by volume.
Our Economies will be jeopardized by this global warming enabler
VERY LARGE CARBON FOOTPRINT
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111
Numeric data is available, click here for information.
Crude Oil Prices in USDs
Start of Globalization
Globalization breakeven point
Note: localized supply of energy will not change this outlook
We will not run out of Oil…
but ….
We will run out of Oil
we can afford to burn!!
The end of cheap China
What do soaring Chinese wages mean for global manufacturing?Mar 10th 2012 | HONG KONG AND SHENZHEN | from the print edition
CHINA … Low Cost Country?
WEALTH TRANSFER???
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GLOBALIZED
MANUFACTURING
? ?START THINKING LEAN & GREEN
?We built Cost Trade-off Models … LOCAL versus Off-shore
LO
CA
L
BE
ST
OF
F-S
HO
RE
WO
RS
T O
FF
-SH
OR
E
?
Boston Consulting Group (BCG)……
Predict BALANCED LANDED COST parity by 2015 in most sectors
Due to exchange, tariffs, Transportation, wage inflation, other hidden drivers….
The REAL Costs to Manufacture OFF-SHORE will continue to rise.
OFFSHORE LOCAL
BALANCED SOURCING
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What is happening in the USA?
• Resurgence of Manufacturing in USA … Now at “tipping point”
via
lower US exchange rate ……………………………...
Rethinking of globalized supply
Balanced Sourcing Cost trade-off modeling
Re-shoring !!!
BOSTON CONSULTING GROUP STUDY ..April 20, 2012
More Than a Third of Large Manufacturers Are Considering Reshoring from China to the U.S.
BCG Survey Confirms That Rising Chinese Wages, Logistics, and Other Factors Are Prompting
Companies to Rethink Where They Manufacture……
What is happening in the USA?
• Resurgence of Manufacturing in USA … Now at “tipping point”
via
lower US exchange rate ……………………………...
Rethinking of globalized supply
Balanced Sourcing Cost trade-off modeling
Re-shoring !!!
Reasons..
Transportation costs
Labor costs
Product quality
Customer location
Ease of doing business
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Ongoing…..
NEXUS
Supplier Certification
Supplier Partnering
(single source)
Supply base Rationalization
Close to point of Use / Customer
NEXUS
“Total Cycle Time” …The actual time elapsed from when a customer
expresses a need for that product or service, until the time the
customer's need is satisfied, and payment is received.
The 5 Cycle Time Loops in any Business
Strategic Business Development Loop
New Product Introduction (NPI) Loop
Supply Management loop
Make/Ship Loop
Distribution Loop
Customer Expectation (Existing Products)
Customer Expectation (New Products)
• Who is the customer?
• Must think holistically !
• From Vertical to Horizontal thinking
• The 5 Loops in the business
• Use the 5 Loops to provide focus
5 Business Loops
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NPINEXUS
Ideas to Launch process…
N…P….INew
Product
Introduction
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Discovery
Invention
Research
Development
Launch
Commercialization
INNOVATION
NEW PRODUCT INTRODUCTION
$$$$
Academia
A Typical business process???
NPIAny Change in:
Fit
Form
Function
Process
Procedure
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NEXUS
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DFMDESIGN FOR MANUFACTURABILITY
NEXUS
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IMPLEMENTATION
NEXUS
128
VISION/Commitment
Formal Continuous Improvement System
Concepts for Improvement
Change Structure/Process/Culture
Facilitation Education
EVOLUTION PLAN
5 loop Scope of change
3 TIERS of change
SCORECARDPerformance Measures
Programs/Projects/Change teams
Mobilization of whole workforce
Six Sigma?
CTM?/LEAN?
TPM/TPS/5S?
?????
BenchmarkingResults/savings
EmpowermentEngagement
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PlanningForum
Management Team
(Approval Team)
Evolution Review Teams
Evolution Plan
Communication Evolution Plan
Planning Execution
Proj
Ldr
Prog
Ldr
Prog
Ldr
Prog
Ldr
Proj
Ldr
Proj
LdrProj
LdrProj
Ldr
Proj
LdrProj
Ldr
Proj
Ldr
12 Step Implementation Process
Step 2
Step 3/4/5
Step 1
Step 7
Step 12+
Plan Approval
Step 6
Team members
Tasks
Step 10/11
Step 9
Team Structure
NEXUS
Step 1 Approval Team kick-off
Step 2 Planning Forum
Step 3 Review team Kick-off
Step 4 Review team planning
Step 5 Formalize Evolution Plan
Step 6 Management Approval
Step 7 Communicate Evolution Plan
Step 8 Program kick-offs
Step 9 Project kick-offs
Step 10 Project Approval
Step 11 Monthly Review
Step 12 Quarterly Communication
12 Step Implementation Process
Planning Execution
To Support an Evolution Plan for Continuous Improvement
NEXUS
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Management Team
(Approval Team)
Evolution Plan
Execution
Proj
Ldr
Prog
Ldr
Proj
Ldr
Proj
Ldr
12 Step Implementation Process
Step12Ongoing
Communication
Program
Kick-off
Project Activated
Project
Kick-offSet project
goals
Project
Organiza
tion
Feasibility
PhasePlanning
Phase
Implement
PhaseFollow-up
Phase
Audit
Report
Audit
Audit
Team
Evolution Review
(Monthly)
Project ApprovaIMeeting
Step 10
Step 11
INACTIVE COMPLETEACTIVE
Step 8 Step 9
Projects status can be INACTIVE / ACTIVE / ON HOLD / COMPLETE
Steps 8 to 12
NEXUS