“Audit” and “Enjoyment” are two words you don’t often see together but that’s how it’s been this week as Sheffield Forgemasters http://www.sheffieldforgemasters.com/ undertook a rigorous three-day SC21 Manufacturing Excellence Assessment with six auditors, overseen by four observers / mentors from BAE and Rolls-Royce. Great example of Supply Chain collaboration and delighted to see recognition for all of the hard work by everyone at Forgemasters. Thanks also for some great input, advice and coaching by the folk from BAE and Rolls-Royce. Everyone now looking forward to the next one! https://www.adsgroup.org.uk/pages/91430300.asp
Congratulations to Sony UK Technology Centre, Best Factory 2013. Great day at the BFA Awards, presented by the superb “Smoggy Steph’ McGovern
Great day today at the Cranfield / Works Management Best Factory Awards. Delighted that North East based Tharsus are SME Manufacturer of the Year. Well done to Brian and the team!
The UK’s manufacturing sector has had cause for celebration recently after the revelation that UK MANUFACTURING output has increased at the fastest pace in almost two decades. While the country still has a way to go to reach pre-recession levels, the surge in output is a welcome surprise that shows the sector is finally heading in the right direction.
Continued growth is closely tied with the success of the rest of the UK’s economy, and the current boom comes at the same time as the fastest growth in retail sales for several years, as well as an encouraging lift in car sales.
That said, there is much manufacturers can be doing to make sure they are able to sustain this growth over the next few years. Among the most important factors is ensuring a steady stream of fresh talent, especially as the sector itself continues to evolve and demand a more diverse range of skills and talents.
There is much talk of a skills gap hitting the UK’s manufacturing sector in the next few years, but in fact it seems we may already be there. According to the Higher Education Statistics Agency (HESA), more than a quarter of engineering and technology graduates are not currently employed in the sector. With around 50,000 higher education qualifications awarded in the sector per year, this represents a startlingly large amount of potential new manufacturing recruits that either can’t find work in the sector, or have decided to take their qualifications elsewhere. Eight per cent are unemployed.
At the same time, a report by the Social Market Foundation found that due to the UK’s aging workforce, around 100,000 jobs will arise every year that require degrees in science, technology, engineering and maths (STEM). If this remains unchanged, the think-tank believes the UK will require 40,000 more graduates every year until the year 2020 – almost half as much again of the amount the country is currently producing.
This lack of STEM graduates is set to have an impact on a wide variety of sectors, but the manufacturing industry will be especially hard hit as it continues to evolve and technology plays an ever greater role. Within the factory a growing focus on automation presents a clear need for more skilled IT workers, and globalisation is also bringing greater demands as technology plays a vital role in keeping everything connected.
While STEM graduates are clearly fundamental for the future of manufacturing, the industry must not overlook the need for entry level workers. One of the sector’s greatest strengths is that it has always been possible for an entry level employee to gain new skills and work their way up the chain to an experienced, senior position. Likewise, with non-traditional skills like communication becoming more important, there are even more opportunities for people outside of traditional engineering and technology backgrounds. Around a million young people in the UK are still classified as NEET (not in education, employment or training). The manufacturing industry should be doing everything possible to engage this major potential workforce, particularly at such a crucial time of economic instability and severe domestic unemployment.
With so many engineering and technology graduates not finding work in their field, more needs to be done to promote just what an exciting and fast-paced opportunity a career in manufacturing represents. By making it clear that the industry fosters innovation and offers a great deal of opportunity for advancement, manufacturers can not only attract newly qualified graduates, but inspire a whole new generation of young people to study STEM topics, provide the workforce boost that the UK will so desperately needs, and secure the next generation of UK manufacturing’s future leaders.
This is such a great question – posted recently by Grant Eldred in the AME LinkedIn Group http://www.linkedin.com/groupAnswers?viewQuestionAndAnswers=&discussionID=246005920&gid=730737- that I just had to respond! I’ve re-posted my reply here since it’s a common issue for many Lean practitioners…
Great question Grant!
How times change! When I first started out many manufacturers employed highly trained full-time Work Study / Industrial Engineers and developed actual or synthetic Standard Times down to the decimal minute. And let’s not forget that Taichi Ohno and many of his Toyota colleagues were also highly trained Industrial Engineers!
Very few organisations take that approach these days, and in my view have often gone too far away from facts, data and measures when it comes to labour times and costs. One of the (sensible) reasons for this is of course the fact that fewer and fewer manufacturers in developed economies actually manufacture high volumes of standard products where labour costs are critical and need to be measured very accurately. There are obvious exceptions of course, like automotive (Nissan’s UK plant here used to work to Takt times of around 1 minute).
BUT – and it’s a big BUT… Lean focuses mainly on all of that non-value-added time (often more than 90% of total lead-time) eaten up the Seven Wastes, rather than on the Value-Added activities that you’d be timing.
In practice I always involve the team, train them in basic Lean Awareness (20-30 mins on Lean and the Seven Wastes is OK), and help them come up with estimated times. I don’t aim to train them in Work Study techniques as well but I do always emphasise one of the basic points about arriving at a Standard Time – it’s the time that a competent trained operator can be expected to maintain over a full shift, day in, day out. So any observed times have to include a “rating” of the operator’s performance, and the observed times adjusted accordingly.
Before getting into the detal it’s usually possible to make a start by collecting some “gross / total” data on output rates and number of operators to arrive at some overall averages of labour content. Observing the work flow, looking for imbalances and estimating operator performances can then lead to some useful work with the team on line balancing, standard work, waste reduction, mistake-proofing, One Best Way and all of the other good Lean stuff (we’ve a blog post on the “people side of improvement” athttp://manufacturingtimes.co.uk/2011/07/09/increase-factory-output-part-3-targets-feedback-recognition-and-reward/ ).
Generally, this will lead to massive improvements in output and productivity, without any increase in worker effort, and for most instances that is all that the organisation wants / needs.
Occasionally though – and in my experience this is fairly rare – you can reach a point where you have developed a fairly “Lean” operation but it’s obvious that operator performance levels are pretty low (I’ve seen 20-50% levels). If at that point you’re in an environment where labour costs are highly significant then that’s when I do actually bring in the highly trained Work Study Engineers and develop more accurate Standard Times. This is an expensive exercise so often the objective will be to create a database of “synthetic” / parametric (“formula-based”) times that the client team can then manage themselves.
For what it’s worth – I’ve always employed (Industrial) Engineers and trained them in Lean, rather than the other way round. But as an Engineer myself maybe I’m a little biased!
Hope this helps!
As always, your own comments and feedback are greatly appreciated…
“I’m great at kicking off new projects and improvements but then I quickly lose interest and move on to the next thing”
That’s what one of my long-standing clients said to me yesterday. And you know what – I’m exactly the same. And you know what – if you’re an owner-manager, an entrepreneur or an experienced manufacturing professional, you’re probably exactly the same too.
We’re driven by the excitement of new and interesting challenges and we quickly become bored by repetition and monotony. That’s just how we are. And we’re unlikely to change.
And that’s the real reason that so many organisations fail to sustain Lean and Continuous Improvement. In fact, it’s the real reason that so many organisations fail to sustain major change programmes: “The people who can kick-start change are not the people who can keep it going”.
If you can face up to that fact then maybe you can do something about it.
You need kick-starters and you need care-takers. And you need the kick-starters to hand over to the care-takers before they get bored.
“This is Lean Heineken – it refreshes the parts of the business that other Lean doesn’t reach!”
You probably use Lean to cut costs and increase productivity, but are you using it to Drive Sales Growth?
A few weeks ago I ran a half-day Value-Add Workshop with the owners and directors of a medium-sized manufacturing group. I revisited them last week to follow up, and found that they’ve identified 203 new business opportunities, of which 46 are high potential.
OK, they’re more diversified than most companies of their size but just take a moment to reflect on that. Forty-six high potential opportunities to generate new business.
If you could generate just a fraction of those opportunities in your business, how much more sales could you generate?
It’s another wake-up call for all maufacturers out there: get on board with Value-Driven Manufacturing now, and discover the real benefits of Lean – before your competitors do! www.ValueDrivenBusiness.co.uk
Works Management magazine hosted a superb best-practice factory visit last week to our award-winning client James Heal, based in Halifax, West Yorkshire, UK: The visit presented an excellent opportunity for delegates to see first-hand exactly how Value-Driven Manufacturing can transform a company, despite the economic down-turn.
James Heal is a highly successful UK precision testing instruments manufacturer delivering outstanding growth, employment and export. Sales have increased by over 50% in the last two years with a significant increase in revenues from new product development and innovation, whilst product costs have been reduced by up to 25%. This success is a direct result of the lean manufacturing programme, innovative product design and a can-do culture.
Visitors took part in an interactive workshop – Value-Driven Manufacturing – facilitated by Manufacturing Consultant Andrew Nicholson, where they learned how to apply the principles of Value-Driven Manufacturing “back at the ranch”.
Watch this space for the forthcoming Visit Report, Case Study and Learning Points!
Better still, sign up below to this blog and never miss any future posts!
For more information about Value-Driven Manufacturing, have a look at the blog posts here or visit the website ImproveMyFactory.com - Value-Driven Manufacturing - where you can download a free guide to Value-Driven Business.
A business can thrive forever if it has happy customers, happy employees and happy investors (all at the same time!). Here are three ways to measure how you’re doing:
- Happy Customers: ask the single most important question – “On a scale of 0 to 10, how likely are you to recommend us to a friend or colleague?” See Net Promoter Score - http://www.netpromoter.com/why-net-promoter/know/
- Happy Employees: ask “which of the following 12 statements applies to you?” See “The Top 12 Motivators (Q12)” and “Engagement Ratio” at Gallup.com http://www.gallup.com/consulting/52/employee-engagement.aspx/ or read “First, Break all the Rules” http://en.wikipedia.org/wiki/First,_Break_All_the_Rules
- Happy Investors: Return on Capital Employed (ROCE) or Return on Net Assets (RONA)
If you think this is too simple and you’re determined to have lots of Key Performance Indicators (KPI’s), you might want to add some of the following:
- Operations: Value-Added Ratio or Throughput Efficiency (ratio of Value-Added Time to Total Lead-Time (Dock-to-Dock))
- Operations: Overall Equipment Effectiveness (OEE)
- Finance: Return on Sales (ROS) or Net Margin
- Innovation: Percentage of sales turnover generated by products or services developed in the last x years (x=2 is common)
The Balanced Scorecard approach has a lot to commend it – a balance of measures including Financial, Operational, Marketing/Sales, and Learning and Growth / Innovation. See http://www.balancedscorecard.org/BSCResources/AbouttheBalancedScorecard/tabid/55/Default.aspx
Whatever stage you’ve reached on your Lean journey, you need to know how and what you should be improving. We’ve all encountered (been guilty of?) the “Too busy to improve” syndrome, but what exactly should you be doing when business is flat-out, and what should you be concentrating on when things are quiet? Well, now that we’re talking strategy you won’t be suprised to hear that there’s a two-by-two grid for that! I’ve attached a PDF copy here: Improvement – How, What and When, [opens in a new window] so let’s run through what it means – the How, What and When of Lean.
As you can see the two sides to the grid are (a) “Busy” (lots of orders) -vs- “Quiet (few orders), and (b) “Inefficient” – vs- Lean. So we have four combinations or boxes to look at:
1. Inefficent and Quiet. You definitely don’t want to be starting from here! If you are then you might simply have left it too late. If you can rescue the business then you need to take massive turnaround action. From a Lean perspective you’ll probably want to focus first on quick cost-reduction, and cash-generation. Areas to consider include: Easy, High Impact ideas to reduce cost, ways to reduce stock and work-in-process (lead-time reduction, SMED to reduce batch sizes), 5S sort-out’s to convert unused assets into cash.
2. Inefficent and Busy. As we’ve said the biggest danger here is falling into the “Too busy to improve” trap. “Busy Fools” is the common description – you’re putting in lots of time, effort and energy but you have very little to show for it and you’re often making little or no profit, or even running at a loss. The most important thing is to tackle the worst areas of inefficiency as quickly as possible, and to do it in a way that takes up as little time and resource as possible. Look for rapid employee engagement to generate Quick Wins: Easy, High Impact ideas to reduce all forms of waste, with a particular focus on tackling those that waste the most time and money.
3. Lean but Quiet. You’ll already have addressed those areas that actively lose you business – customer complaints and non-conformances – so the key focus of Lean here should be on increasing Value-Add. In other words, finding ways of providing more and more value for your customers, and actively selling the value of what you offer, rather than the cost. Areas to focus on include: cross-functional teams to visit customers and spot value-add opportunities, Voice of the Customer exercises, and use of the Kano Model.
4. Lean and Busy. This is where it gets really good – you’re working flat-out and throwing off cash as you go! The main focus here (apart from sustaining Lean) is to ensure that you re-invest, you innovate (to ensure you continue to succeed) and you look for opportunities to inspire excellent performance. Success generates success so it’s time to think about some of those “what would you do if you knew you couldn’t possibly fail” ideas! It’s time to think about larger investments to achieve a step-change in performance – increasing your capability not just your capacity. You probably also need to check that you’re up to date with current technology – unless you’re a technology-led business you probably don’t need to be at the cutting-edge but you do need to make sure that you’re making best use of proven, up-to-date appplications.