Transcript ERIM Presentatie

Business process outsourcing ,
operational excellence and valueinnovation
The missing link defined for European
office-furniture manufacturers
Dr.ir. Marcel van Assen
[email protected]
[email protected]
Facts and figures Berenschot
– Largest, independent Dutch management
consulting firm
– Providing solutions for complex issues in the areas
of strategy, management, policy and human
resources
– 2004: 66 years of experience
– 425 employees
– € 60 million turnover
Dr.ir. Marcel van Assen
[email protected]
[email protected]
Agenda
• Situation of (global) manufacturing
– and its impact on outsourcing from a Dutch
perspective
• What to do with European
manufacturing activities: Outsourcing?
•Know exactly why:
– What is the impact of contemporary business
models to enable value-innovation?
– What is the possible performance improvement of
operational excellence here?
– How to become a world-class manufacturer there?
• Managerial implications
World production
2005
Europe
Asia
USA
Latin America
Expectation
Stagnation
Growth
Stagnation
Small growth
Other parts
The competitive position of Western manufacturers (in general) is determined by:
 Labor cost
 Design, branding, marketing and alignment of demand changes
 Economic climate
 Position as the value-chain’s orchestrator
 Differences in national and law and regulations (and maintenance thereof)
Little growth of consumption
Effects of depression/recession
Displacement to low wage countries
Magnitude and growth of displacement
(outsourcing & off-shoring)
Furniture
High growth of
displacement
A
ICT-/ engineering
firms
B
Wood /
paper
Oil/
Chemical
Basic metals
Average growth of
displacement
Machine /
Electric
& Transportation
equipment
C
Transportation
Publishers /
printing
low growth of
displacement
D
Food
Banks
Insurance
Post /
telecom
Small magnitude of
the displacements
Textile
Source: Industriebrief/Berenschot ©
Average magnitude of the
displacements
High magnitude of
the displacements
Present magnitude of employment in f.t.e
> 150.000
> 75.000
< 150.000
< 50.000
84% of the Dutch firms have not been displacing
primary activities, but increasingly more firms
intent to do so.
Cumulative displacement
(in % van aantal bedrijven)
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Yes, we
Yes, we
off-shored
off-shored
in the past
in the past
10 years
3 years
Source: Industriebrief/Berenschot ©
Yes, we
off-shored
recently (i.e.
in the
previous
year)
Yes, we
No, we do
have
no have any
intentions
intentions
to off-shore
activities
Companies that have been off-shoring are
generally satisfied with the results (although,
so they say)
Level of satisfaction (in % of the number of
respondents)
0,5
0,4
0,3
0,2
0,1
0
Not dissatisfied
helemaal niet niet tevreden niet
Nortevreden
satisfies
Very dissatisfied
tevreden
Source: Industriebrief/Berenschot ©
Dissatisfied
en niet
ontevreden
Satisfied
tevreden
Very satisfied
zeer tevreden
0%
Source: Industriebrief/Berenschot ©
Productie
laaggeschoold
Andere activiteiten
Verkoop/Marketing
Productie
hooggeschoold
Inkoop/Administratie/
Shared services
Research en
Development
Geen antwoord
Alle
bedrijfsactiviteiten
ICT laaggeschoold
Klantenservice/
Callcenter
ICT hooggeschoold
However, in particular low-skilled labor
is off-shored
Welke activiteiten
verplaatst
naarshored?
het buitenland?
What type ofzijn
activities
are outsourced/off
50%
40%
30%
20%
10%
Worldwide trends into
World Class Competitive
Requirements
The Right Products
or Services
VALUE
Timeliness
Quality and
Customer Satisfaction
Operations Strategy
Customer Needs
Corporate Strategy
Alignment
Operations Strategy
Decisions
Core
Competencies
OUTSOURCING?
Processes, Infrastructure, and Capabilities
3
Sustainable competitive advantage from Western-Europe is (only) possible in value
chains in which:
1.
Innovation determines the value of ownership
2.
Technology clusters flourish because of sufficient scale and quality
3.
Process performance out-balance labor costs
R&D
Embryonic
Growing
Mature
Aging
Key value driver: cost down
transfer of manufact. possible
Standards set, higher volume
Outsourcing, global supply networks
Key value driver: performance
Engineering, integrating, testing
Low volume, much diversity
Sustainable competitive advantage from Western-Europe is (only) possible in value
chains in which:
1.
Innovation determines the value of ownership
2.
Technology clusters flourish because of sufficient scale and quality
3.
Process performance out-balance labor costs
R&D
Embryonic
Growing
Mature
Aging
Alliance with a low cost
contract manufacturer abroad
Key value driver: performance
Engineering, integrating, testing
Low volume, much diversity
Sustainable competitive advantage from Western-Europe is (only) possible in value
chains in which:
1.
Innovation determines the value of ownership
2.
Technology clusters flourish because of sufficient scale and quality
3.
Process performance out-balance labor costs
R&D
Embryonic
Growing
Mature
Aging
Alliance with a low cost
contract manufacturer abroad
Alliance
withdriver:
knowledge
institutes and
Key
value
performance
high-tech
partners testing
Engineering,
integrating,
Low volume, much diversity
The relation between Value-innovation
and Operational excellence
Industrial management:
Value-innovation (strategic renewal)
OUTSOURCING
Operational Excellence (operational
improvements)
III
IV
I
II
effectiveness
FUTURE
To be profitable
NOW
Operational Excellence in Western
Europe can only be achieved by
realistic companies (NOT by
complacent companies:)
The realistic versus the complacent
company
Schroeder & Flynn, 2001: High-performance manufacturing
The realistic company
• understands own strengths
and weaknesses
• looks outside for new
knowledge and benchmarks
performance
• Knows content of industry
practice
• Has improvement strategy
tailored to strengths and
weaknesses
• Sets stretch goals based on
world’s best
The complacent company
• has no view of key strengths
and weaknesses
• Is Inward looking
• Is unaware of best practice
• has random improvement
programs -- no coherent
improvement strategy
• has goals based on historical
performance
The five starting points for
improvement
High
IV
III
World Class
II
I
Laggards
Low
Low
Practice
High
Improvement agendas for different starting
points
High
Staying in front:
value-innovation and
developing
tomorrow’s practice
Starting point:
Choosing from a wide range of
things that must be done
OUTSOURCING
Low
Low
Practice
High
Analysis of the value chain: develop
and use industry- and firm specific
roadmaps
•
Trends and SWOT in the value chain
–
–
–
•
•
•
•
Social developments
Market- en economic developments
SWOT-analysis of the players in the chain: Strengths,
Weaknesses, Opportunities and Threats
Porter-analysis of the value chain from a
manufacturing perspective
Management dilemma’s in the value chain
Demands on the value chain
Distribution/relocation of tasks and roles in
the value chain
Analysis of the value chain
(an example from the CBM roadmap)
•Markt- / klantgerichtheid
WEAKNESS
•Ketendenken / samenwerking
Weinig specialisatie / focus kernactiviteiten
Marktaandeel thuismarkt
Weinig winstgevend
Productontwikkeling (materialen / technologie / ontwerp)
Leverbetrouwbaarheid / levertijd
Assortimentsbreedte
automatisering (administratie / productie)
Meubelopleidingen
Rendementsdenken
Lage productiviteit
Exportgerichtheid
Niet aankunnen grote volumes
STRENGTH
Variëteit van producten
Dicht op thuismarkt
Kleine series
Klantspecifieke producten
Opleidingsinfrastructuur
Ontwerpers (goed internat. imago)
Kennisinstituut
Mail order
Purchase
combinatation
Manufacturing
SWOT-analysis
Interior designers
Site abroad
Dutch
manufacturing
site
Wholesaler
ConsuOwn shop / out;et
agent
mers
Internet / Showroom
Macht detailhandel/ inkoopcombinatie groeit
Macht consument groeit
Kortere PLC
Arbo- en milieuwetgeving
Toenemend belang van en aantal merken / concepten
Hoge investeringen apparatuur
Kwaliteit personeel
Concurrentie (buitenland)
Import uit lage lonen landen
Uitbreiding EU
Internet (prijsvergelijkingen)
Industrieklimaat
Elektronisch bestellen
Internet
 Verandering consumenten-vraag / -profiel
 Kop-staart filosofie
 Export markten
 Robotisering / productieautomatisering
 Nieuwe materialen
 Sterk imago Ned. Ontwerpers
 Nieuwe technologieën
 Uitbreiding EU
 Productie buitenland / import
OPPORTUNITIES
Head quarters
THREATS
Retail chains
•
Potentiële toetreders
•
•
•
•
•
•
A f name/ opleveren 2010
26
A f name/ opleveren 2005
12
23
4
M ont eren op locat ie 2010
M ont eren op locat ie 2005
0
3
0
A anmaak onderdelen 2010
6
3
6
2
Inkopen 2010
3
6
8
42
7
18
33
2
19
B ouw(advies)bureau
A rchit ect
A annemer
30%
40%
7
2
Int erierbouw
2
14
2
2
14
1
Toeleverancier
6
2 2
3
7
6
18
3
50%
2
39
68
20%
7
3
39
10
64
10%
2 1
9
40
6
0%
11
8
32
46
9
Concept ueel ont werp 2005
9
7
27
18
Concept ueel ont werp 2010
3
69
22
Funct ioneel specif iceren 2010
Funct ioneel specif iceren 2005
28
15
17
11
3
12
10
10
18
Technisch specif iceren 2010
Technisch specif iceren 2005
3
2
58
26
Product ieproces specif iceren 2010
14
3
32
8
11
3
40
10
13
3
6
8
24
12
6
13
7
60%
70%
Project ont wikkelaar
4
01
11
6
12
1 4
18
80%
•
•
•
•
0
20
17
19
Project regie/ management 2005
8
44
•
flexibeler leveren
De meeste fabrikanten zijn te
klein en te weinig winstgevend
om te blijven innoveren
Kiezen voor productiegericht of
merkgericht
Gaan meer uitbesteden
Gaan de detaillist steeds meer
helpen of eigen kanaal
opbouwen
0
2
28
15
17
Project regie/ management 2010
10
19
67
17
Leveranciersselect ie 2005
15
04
56
1
10
Leveranciersselect ie 2010
03
27
78
14
Product ieproces specif iceren 2005
26
17
64
11
A anmaak onderdelen 2005
Inkopen 2005
18
20
12
Po
rte
ra
na
lys
is
•
Markt vraagt om kortere
Toeleveranciers worden steeds Concurrentie
Leveranciers
levensyclus, kleinere series, en
meer internationaal
Specialiseren zich steeds meer
om meer TW te leveren en
kunnen steeds kleinere series
bedrijfeconomisch aan
Blijven innoveren in
technologie
Arbeidsintensief werk
verdwijnt naar lage lonen
landen
8
13
90%
Eigenaar/ gebruiker
5
100%
Innovatietempo
Leverbetrouwbaarheid
Afleverkwaliteit
TW per medewerker
Omzet per detaillist
Omzet per medewerker
Volumeflexibiliteit
Marge detaillist
Omzet per productiebedrijf
Marktprijs
Kostprijs
Levertijd
Time-to-market
+25%
Substituten
+20% / +25%
+15% / +20%
+15% / +20%
+10% / +15%
+10% / +15%
± 10%
+10% / +15%
+10% / +15%
+0% / +5%
-0% / -5%
-5% / -10%
-30%
•
Consument
Buitenlandse bedrijven treden
toe, NL heeft een makkelijk toe
te treden markt met relatief
aantrekkelijke marges
Retailers die zelf gaan (laten)
maken
Maatwerkproducten door
interieurbouwer
Sterke toename van tweede
handsgebruik meubilair (zowel
trendy als goedkoop) beperkte
impact
Consument kiest op een “hoger
niveau” een mooie reis of een
nieuwe bank?
•
•
•
•
•
•
•
Vraag naar lifestyle en gevoel (topsegment)
Bezoek- en koopmoment gaan uit elkaar
Wil steeds meer kiezen en prijsvergelijken
De Aldi-sering van de consument
Minder (merk)trouw maar in voor nieuw
Meer/nieuwe soorten consumenten o.a. 50+
Single-huishoudens, …
Afzetkanalen
•
•
•
•
•
•
•
Schaalvergroting van bedrijven, met kansen
voor service gerichte kleintjes
Branchevreemde nieuwe afzetkanalen
(tuincentra, bouwmarkten)
Te veel aanbod in m
Service en leverbetrouwbaarheid belangrijker
Toenemende behoefte aan samenwerking in
de keten (o.a. automatisering)
“Te veel van hetzelfde” en steeds meer
discount aanbod
Internet is een marketingkanaal en geen
saleskanaal
Position (role) of various players in the
value chain
market
Retail chain
/ chain stores
Innovator
Organization Technology andDesigners &
Capacity and Application knowledge
engineers
Project management(OEM)
Manufacturers
Process specialist Product specialist
Specialization in
Process
production
technology
Supplier
Product- and
Component
application
knowledgeSupplier
market
markt
market
Purchasing Integrator
comb
Growth scenarios
marketFull service/concept manufacturer by
Manufacturers
Process specialist Product specialist
Specialization in
production
technology
Product- and
application
knowledge
market
markt
market
means of value-innovation and
contemporary business models
Integrator Innovator
Value-chain orchestrator by means of
Specialized application manufacturer
outsourcing and insourcing
Organization Technology and
by advanced product innovation
Capacity and Application knowledge
(product design and engineering)
Project management(OEM)
The office of the future
The office of the future
The office of the future
• Full integration of systems, equipment and
furniture
– 3D-video conferencing
– Wireless workplaces
– Digitalization & miniaturization (and related advanced
technologies)
– Light-projection & the creation of atmosphere and ambience
• The office becomes more and more a meeting
place
• Furnishings and interiors
– are adapted to create inspiring working
environments
– are reduced to the only necessity instead of fully
tuned to office activities
– are made ultimately flexible for time- and task
Growth scenarios
Threats by the entrance of high-tech
market
Innovator
Organization Technology and
Designers &
Capacity and Application knowledge
engineers
Project management(OEM)
markt
market
Integrator
electronics companies (possibly in
joint ventures with direct
competitors)
Contemporary business model –
high-tech product design and
contract manufacturing in a strategic
Process specialist Product specialist
alliance
Manufacturers
Specialization in
Process
production
technology
Supplier
Product- and
Component
application
knowledgeSupplier
market
Outsourcing (backwards innovation) versus
Automation & value-innovation (product and
process innovation)
market
Innovator
Organization Technology and
Capacity and Application knowledge
Project management(OEM)
Manufacturers
Process specialist Product specialist
Specialization in
production
technology
Automation
Specialized technology
(productivity)
Outsourcing
Product- and
application
knowledge
market
markt
market
Integrator
Automation
Process and product innovation
Value-innovation
Collaboration and alliances
Digitization and miniaturization
Analyze en adopt alliance and
collaboration scenarios in the value
chain
1. One for all manufacturing site
•
Cooperation with other home office manufacturers
2. Innovation scenario
•
Close cooperation between manufacturer, designer,
knowledge institute (partners from the same industry)
3. Brand & lifestyle alliance
•
Cooperation with brands from outside the industry (e.g.
Heineken)
4. Domotics scenario
•
Cooperation with high-tech manufacturers (Steelcase &
IBM)
5. SUV (common platforms & modularity)
–
Joint development of platforms, modules and
standardization
6. Collaborated low cost scenario
The costs in the value chain
High risk factor when
supply chains are
complex
(network design)
Overhead
costs
Forgotten profit potential?
Purchasin
g costs
Enormous cost
savings potential
by outsourcing
Optimalization by
Labor costs
Knowledg
e and
process
costs
(entering) new markets
Redesign of the value chain
1. streamlining: (OE, value innovation and orchestration in Western
Europe
2. Start-up in low wage countries like China
Excellence abroad – controlled start-up
of purchasing, production and/or sales




Value chain concept
Value chain model
Vision about product and supply in the long run
Orientation on possible scenarios
Finance and subsidy planning
• Process
Choice of the region: Location study, market stud
•
•
•
•
•
Choice of specific region
Sales and/or production and/or …
List possible partners
Protect know-how and other rights
Realistic business case
•
•
•
•
•
Choose contract partner
Choose location and facilities
Recruit management
Pilot: Can and will it work?
Verification of the supply chain
Upscaling
•
•
•
•
Installation of equipment
Recruit and train personnel
Increase production and sales
Ramp-up supply chain
Evaluation, next fase
•
•
•
•
•
Working system
Experiences workforce
Performance in process
Profitable operations
New plans
Verkenning en shortlist
control
• Sales and/or production: Purchasing search
• Shortlist of partners: partnersearch
Contracting
Pilot project
• Protection of know-how en rights
• Realistic business case
World class excellence (Here and Abroad)
Strategisc dialogue over value chains
Use of opportunities abroad
Value-innovation in Western Europe
Process
I
II
III
Activities
Klant
Conclusion and managerial
implications
• Value-innovation can outweigh specific
arguments to offshore/outsource
• The same holds for Operational
Excellence here
• Outsourcing suits risk avoiding
behavior
For hands-on consultancy on outsourcing, value-innovation, and strategic roadmaps please
contact me at ([email protected])::
Tailor-made Experience
For action-research and knowledge-based mirroring and as a ‘sparring-partner’, please feel
free to contact me at ([email protected]):
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solutions together with the client
Impact
Professional
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• Total solution
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• Made to measure
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Side by
side
• Internally & externally
• Inspiring
• Involved
• Takes responsibility
Tailor-made solutions through
combining expertise and sector
knowledge in multidisciplinary teams
Expertise
Knowledge of sector
• E-business
• Leadership & MD
• Supply Chain Mgt.
• Concern Mgt.
• Corporate Strategy
• Communication
• Marketing
• Purchasing
• Performance Imp.
• Financial Mgt.
• Change Mgt.
• Corporate Finance
• Quality Mgt.
• Mergers & Acquisitions
• Reorganisations
• Project Mgt.
• Production Org.
For example:
Expertise
• Logistics Mgt.
Telecom
CPG
….
Berenschot Turnover
Private sector
42%
Abroad
20%
Hybrid organisation
(social security,
utilities, telecom, etc.)
18%
Public sector
20%
E-I Consulting Group
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BSI & Partners
Impact Plus
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Human
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•
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•
Provides recommendations
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works on solutions together
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•
Binds employees through
team spirit, professionalism
and highly demanding
assignments
Business
Sector
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Public
Sector
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Consulting
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Research
Employees
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Documentation
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ERICSSON
l
Reference case: Restructuring of a
high-tech manufacturer
Assignment
Client
• High-tech business in defence industry
• Dutch subsidiary of French multinational
“Develop a suitable process for restructuring and
change, which focuses on improving market position
and operational excellence”
Result
Approach
• Side-by-side design of a new organisation
(business units and process-oriented
operational units), followed by
implementation
•
New organisational structure
•
Successful cultural change
•
Improved operational performance
• Increased involvement of the organisation
with regard to both business and cultural
aspects
•
Cost reduction
•
Improved customer orientation of staff
•
Implementation of performance
measurement system
•
Implementation of governance structure
•
Improved relations with French parent
company
•
Integration into process of functional
areas
• Team of 15 people:
• Corporate Strategy
• Change Mgt.
• Operations Mgt.
• Service Mgt.
• Supply Chain Mgt.
Defence industry
Reference case: Restructuring of
logistical activities for a publisher
Client
• Large Dutch publishing house
Approach
• Development of main organisational
structure together with the Board of
Directors,
and detailed organisational structure together
with upper level management
• Made an inventory of current activities
together with subsidiaries
• Team of 15 people:
•
Change Mgt.
•
Logistics
•
Strategy
•
Reward Mgt.
Publishers
Assignment
“Unravel the logistical activities of the various
subsidiaries and establish a new distribution-logistics
unit within two years”
Result
• Establishment of the main organisational
structure of the new distribution logistics
unit
• Naming of the top tier of management
• Business plan for the new unit
• Implementation plan for further realisation
• Operational new unit
Reference case: Streamlining the
organisation of logistics service
provider
Client
Assignment
• Provider of logistical services
• Medium-sized Dutch organisation
Approach
• Develop and implement a blueprint for the
new structure, together with the client, on the
basis of a BPR study:
- Define the standardised service package
- Determine which activities should be
carried out in-house and which should be
outsourced
- Standardise procedures
• Team:
• Reorganisation
• Supply Chain Mgt.
• Communications
• E-business
“Develop and put into place a new organisational
structure that will streamline not only the
organisation, but also the service we provide”
Results
• Clear process descriptions
• Essential improvements by bringing forward
the merger of physical and information flows
• Successful streamlining of process through
an
improved co-operation with customers
(automatic data exchange)
• Rapid development and implementation of
requisite ICT systems, enabling above
improvements and making them visible
Logistical Services
Reference case: Establishment of a new
unit within a large brewery
Client
• Large Dutch brewery
Approach
• Develop a central purchasing unit, in close
co-operation with client::
- Determine mission and aims
- Define Performance Indicators by means of
customer interviews
- Develop structure
- Assess financial consequences
- Formulate a business plan
• Implement the plan together with the client
• Team of 11:
• Strategy
• Purchasing Mgt.
• Communications
• Logistics
• IT
Breweries
Assignment
“Develop and put into place a central unit to handle
the purchasing and logistics of promotional materials”
Results
• An independently operating supply chain
unit, firmly embedded within the
organisation, in the space of nine months
• Transparent processes, management,
organisation and information flows that are
understood by all (including the client)
• Successful SAP implementation
• Employees, customers and suppliers who
know what they can expect as well as what
is
expected of them