Transcript Competing With Advanced Manufacturing Techniques

Insourcing and Competing With Advanced
Manufacturing Techniques
Sharon Ward May 14,2011
QAD Planning and Scheduling Workbenches
Safe Harbor Statement
The following is intended to outline QAD’s general
product direction. It is intended for information
purposes only, and may not be incorporated into
any contract. It is not a commitment to deliver
any material, code, functional capabilities, and
should not be relied upon in making purchasing
decisions. The development, release, and timing
of any features or functional capabilities
described for QAD’s products remains at the sole
discretion of QAD.
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Competing With Advanced Manufacturing Techniques
You All Know This
Manufacturing is essential to America’s
economic well-being. It accounts for the
bulk of United States exports, is key for
innovation, and provides many high-wage
jobs……
Brookings Institute: Strengthening American Manufacturing: A New federal Approach by Susan Helper and Howard Wial
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Competing With Advanced Manufacturing Techniques
A Government Study Proves It.
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Competing With Advanced Manufacturing Techniques
Asleep At The Wheel
• Between 2000 and 2009, The US lost 31% of
its manufacturing jobs
• Along with the jobs, the ability to innovate
was compromised – manufacturing employs
36% of engineers
• By exporting manufacturing expertise, the
ability to compete in emerging industries like
solar panels was jeopardized
Brookings Institute: Strengthening American Manufacturing: A New federal Approach by Susan Helper and Howard Wial
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Competing With Advanced Manufacturing Techniques
The Manufacturing Exodus
• A focus on “core competencies” was
perceived as the way to become world
class
• Some companies decided their core
competency was idea creation or
marketing, not manufacturing
• The assumption that outsourcing
manufacturing always results in lower costs,
making companies more competitive,
became widely accepted
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Competing With Advanced Manufacturing Techniques
How Did We Get Here?
• Companies have ALWAYS outsourced some
work
• Lower wage regions start to develop
manufacturing based economies
• Some companies begin to off-shore
• Competition and cost pressures increase
• Rush to off-shoring in late 20th and early 21st
century as a result of increased competition
from emerging regions
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Competing With Advanced Manufacturing Techniques
Flies In The Ointment
• Difficult to evaluate all costs – additional
inventories, communications, tracking, loss
of control, longer lead times, quality, IP
protection, customer satisfaction
• Meanwhile, our outsourcers took what they
learned and used it to launch their own
products/companies
• Companies found that it’s easy to copy
ideas and marketing but harder to develop
process skills
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Competing With Advanced Manufacturing Techniques
Understanding The Basis Of Wealth
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Competing With Advanced Manufacturing Techniques
Ideas and Services Don’t Lead To Wealth
• It’s easy to copy ideas – even product
features
• Engineering talent is no longer co-located
with manufacturing
• Real innovation requires immersion in
processes, products, and customers
• It’s the manufacturing process that delivers
real value and irreplaceable expertise
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Competing With Advanced Manufacturing Techniques
Services Don’t Grow Wealth
Activity
Your Wealth
My Wealth
Starting wealth
$20
$20
I buy a shirt from you
$30
$10
We both buy groceries $20
$0
You buy a haircut from $10
me
$10
I buy another shirt from $20
you
$0
We both buy groceries $10
I’m using plastic and
hoping your hair grows
really fast
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Competing With Advanced Manufacturing Techniques
Manufacturing Grows Wealth
Activity
Your Wealth
My wealth
Starting wealth
(includes finished
goods)
$20
$20
We each manufacture $21
and buy high quality
goods and have a
10% margin
$21
We each manufacture $22
and buy high quality
goods and have a
10% margin
$22
We each manufacture $23
and buy high quality
goods and have a
10% margin
$23
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Competing With Advanced Manufacturing Techniques
Manufacturing Keeps the Economy Balanced
Economic
Balance
Manufacturing
Other
Economics
Factors
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Competing With Advanced Manufacturing Techniques
Without Manufacturing There Is No Balance
Economic Balance
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Competing With Advanced Manufacturing Techniques
A Rock and A Hard Place
The United States is caught in
the middle in international
competition: Stuck between
high-wage countries
competing on the basis of
new products and
processes, and developing
countries competing on the
basis of low wages.
Brookings Institute: Strengthening American Manufacturing: A New federal
Approach by Susan Helper and Howard Wial
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Competing With Advanced Manufacturing Techniques
Why Manufacturing Will Come Back
• The recent political/economic situation has
led to a more fervent patriotism
• The realization that marketing skill or service
skills alone are not a sound basis for
competition finally sank in
• Companies increasingly turn to lean/six
sigma and similar programs to compete
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Competing With Advanced Manufacturing Techniques
Established Companies Need To Compete
• Emerging areas have started with a “clean
slate” so they could set up production in the
most efficient ways
• More developed nations had aging
infrastructures with inherent inefficiencies
• How can we level the playing field?
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Competing With Advanced Manufacturing Techniques
It’s Not Easy In The Middle
• Significantly less than half of small U.S.
manufacturers (those with less than $10
million revenues) rate themselves at or near
world-class status in each of the NGM
strategies, with the highest percentage for
superior process improvement (38% of small
firms.)
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Competing With Advanced Manufacturing Techniques
Advanced Manufacturing
• World class companies achieve better
results than their competitors
• World class companies invariably utilize one
or more advanced manufacturing
techniques (Lean, six sigma, TQM, etc.)
• Surprise….It doesn’t matter which technique
they use
• What matters is that the company is
committed to an improvement
methodology
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Competing With Advanced Manufacturing Techniques
Lean Gets Results
When whole-heartedly embraced, these
programs allow companies to compete on
COST and quality, gave more flexibility,
lower inventory, shorter lead times
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Competing With Advanced Manufacturing Techniques
A Simple View Of Lean
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Competing With Advanced Manufacturing Techniques
A More Complex House of Lean
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Competing With Advanced Manufacturing Techniques
Layers Of Complexity
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Competing With Advanced Manufacturing Techniques
Embracing Lean
Seven out of 10 U.S. manufacturers report
that their facilities follow a lean
manufacturing methodology and/or the
Toyota Production System (TPS).
Source: George Taninecz, VP of Research, The MPI Group 2010 MPI Manufacturing Study
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Competing With Advanced Manufacturing Techniques
However….. Not Really
• Only about half have a majority of their employees
involved in lean initiatives
• Only about 70% had applied lean to the majority of
their production processes
• Only ¾ had an initiative to eliminate waste from
processes
• Only 34% use PDCA (plan, do, check, act)
• Fewer than half include strategy deployment in their
lean initiatives
• Only 10% practice value-stream mapping
• Only 8% use Kaizen events and blitzes
Source: George Taninecz, VP of Research, The MPI Group 2010 MPI Manufacturing Study
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Competing With Advanced Manufacturing Techniques
So Who’s REALLY Using Lean?
Source: George Taninecz, VP of Research, The MPI Group 2010 MPI Manufacturing Study
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Competing With Advanced Manufacturing Techniques
The Effective Enterprise Is…
constantly striving to align all business
processes, to work at peak efficiency, and to
deliver the strategic goals of the organization
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Competing With Advanced Manufacturing Techniques
Manufacturing Pride Re-Emerges
• Companies began rebuilding
manufacturing facilities and expertise
• Began as a trickle, but now reaching a
stream, will soon become a torrent
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Competing With Advanced Manufacturing Techniques
Embracing Lean To Compete
•
•
•
•
Management support
Start slow
Persevere
Examine ALL costs, including hidden costs
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Achieving Management Support
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Competing With Advanced Manufacturing Techniques
Do Your Research
• Research the results similar companies have
achieved with Lean/six sigma
•
•
•
•
MPI
Industry Week, Managing Automation
Industry Analysts
APICS
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Competing With Advanced Manufacturing Techniques
Lean Gets Results
Metric
Lean
Companies
Not Lean
Companies
Sales per
employee
$176,000
$37,000 to
$54,000
On time
delivery
Inventory
turns
95.6%
85% - 90%
66%
increased
36%
increase
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Competing With Advanced Manufacturing Techniques
How Can QAD Help?
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Competing With Advanced Manufacturing Techniques
Lean Manufacturing
Kanban
Every Part Every Item calculations
Bar code and RFID support
Average demand and safety stock
calculations
• New MSW/PSW workbenches
•
•
•
•
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Competing With Advanced Manufacturing Techniques
Simplify Business Processes
• Supply Chain Portal
- Speeds communication
• Process maps
- Simplify and eliminate steps
- Search for non-value add
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Competing With Advanced Manufacturing Techniques
QAD Partners Contribute
• Bar code and RFID support
• PLM support
• Quality management support
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Competing With Advanced Manufacturing Techniques
Enlist Your Accounting Team
• Capture true total costs
- Extra inventory to cover transit times
• (beyond standard safety stock)
- Extra inventory to meet short term demand
fluctuations
- Business loss due to longer lead times/ lack of
schedule flexibility
- Communications and travel costs
- Increased shrinkage and errors
- Quality issues and rework
- Training
- Translation delays/costs
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Competing With Advanced Manufacturing Techniques
Accounting Support
•
•
•
•
Landed costs
Logistics cost
Multiple cost sets
Cost simulations
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Competing With Advanced Manufacturing Techniques
Unbiased Analysis
• Project typical industry results on in-house
numbers
• Be conservative – the numbers can look too
good to be true
• Cover all your bases – include inventory,
quality, on-time delivery
• Be equally rigorous for both alternatives
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Competing With Advanced Manufacturing Techniques
Take Baby Steps
• Be prepared for initial resistance or disbelief
if management strongly embraced off
shoring
• Petition for a pilot parallel production trial
• Start with one line, one product, one step
• Make sure it works flawlessly
• Suggest using similar techniques in
non―manufacturing processes to
demonstrate benefits
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Competing With Advanced Manufacturing Techniques
Lean Can Get Results Everywhere
•
•
•
•
23 % use lean in finance and accounting
26 % in customer relations
29 % in administration.
Only 60% of overall processes have been
addressed with lean
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And Now..A Little Good News
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Competing With Advanced Manufacturing Techniques
From Managing Automation
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Competing With Advanced Manufacturing Techniques
ISM Agrees
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Competing With Advanced Manufacturing Techniques
More Manufacturing Good News
May 11, 2011: GM Chairman Dan Akerson said in
addition to the investment in the Toledo plant, the
automaker in the coming months will invest $2
SUGAR LAND--January 13, 2011-billion for upgrades at 17 factories that will create or
Researched by Industrial Info
preserve 4,000 U.S. jobs.
Resources (Sugar Land, Texas)-As many as 2,000 jobs reportedly could be added
Cold storage specialist Preferred
at the Detroit-Hamtramck plant, where the Chevy
Freezer Services (Elizabeth, New
Volt is built.
Jersey) has begun site work for a
Intel plans new US factory,
new cold storage facility. The
upgrading others to 22nm
building will be adjacent to the
tech
company's headquarters and
Ford Motor Co. will increase factory
existing facilities, which were
production 13 percent in the first quarter opened in 2008 in Elizabeth,
because of higher demand for Ford and New Jersey.
Lincoln brand cars and trucks, and further
increases are likely through the year,
company executives said Sunday.
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Competing With Advanced Manufacturing Techniques
Metrics Affected
Process
Benefit
Value
Supermarket management with
multiple methods for calculating
and setting supermarket
quantities using a variety of
flexible, user-defined parameters
•Inventory reduction
•30% - 50%
•Improve data integrity
•99%
•Reduce operating costs
•10% to 20%
Kanban workbench for
recalculating EPEI, safety stock,
buffer, Kanban & Kanban loop
sizes using historical and
projected supermarket
performance with simulations.
•Reduce inventory
•30% to 50%
•Improve demand accuracy
•10% to 20%
Single ‘click’ transactions to
record purchase receipts, item
movement and production
receipts of Kanban-controlled
items
•Reduce admin burden
•40% – 70%
Transact Kanban cards via
barcode scanners or direct
entry
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Questions?
• Sharon Ward
[email protected]
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www.qad.com
© 2010 QAD Inc
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