Category Archives: Best Practice

Manufacturers must invest now to earn their place in “Industry 4.0”

Posted on by
Reply

As we enter 2014, the manufacturing sector looks set for the first strong year-end since the recession.

The sector reached a two year high for growth in August, and following the news from data firm Markit and the CIPS that manufacturing was a major boost to the UK’s economy in October, the outlook for 2014 is very optimistic. However, that optimism should be tempered with caution.

Competing with the Far East on cost and volume remains impossible, so for last quarter’s new shoots of growth to turn into something truly sustainable, it is vital for UK manufacturers to invest in new technology and embrace new ways of working. Agile, flexible business processes and a focus on customisable, bespoke manufacturing have emerged as important elements of a new approach that has been dubbed Industry 4.0.

The phrase was first coined two years ago at the Hanover Fair, the world’s biggest industrial fair, and defines this new phase in manufacturing as the fourth major industrial revolution, following steam, electricity and the more recent entry into the digital age. While this might seem like a grand comparison, it is certainly justified.  Successfully embracing Industry 4.0 will enable the UK to regain its spot as a major manufacturing power.

However, achieving this new model is not without its challenges, starting with the level of investment required by companies. This is about much more than simply buying and installing the latest equipment, instead requiring a deep investment into integrating new business processes that affect the entire organisation.

The good news here is that we have seen significant proof of manufacturers rising to the challenge. Earlier this year for example we saw £1bn invested into technology and skills for the UK automotive industry, co-funded by the government and manufacturing companies. Likewise, the manufacturers’ association EEF and accountancy firm BDO LLP recently revealed a surge in investment from UK companies, with 24 per cent stating an intention to increase their investment levels – up from just seven per cent from the same poll in May. The result was the highest surge in investment since 2007 and the second highest since the survey began in the 1990s.

A more difficult challenge to address is ensuring that companies have the skilled workers and leadership capable of taking on these new ways of working. As part of a recent round of talks with spokespeople from around the industry, Epicor asked whether the increasing level of automation and ‘intelligence’ in production and business processes in manufacturing would result in IT skills becoming more important.

The response was an unanimous yes, but when we asked if this meant traditional technical skills would become less important, we received a firm no, with many respondents wary of becoming over-reliant on automation and losing the skills to understand and fix problems.

The manufacturing sector has an unfortunate reputation for being slow to embrace change and eager to cling on to traditional methods. If the industry is to remain relevant on the global stage against increasingly sophisticated operations in the Far East, UK manufacturers must prepare themselves for the new strategies required to earn the Industry 4.0 standard.

Steve Winder, Vice President, UK & Eire, Epicor

The Future of Manufacturing – Sheffield Forgemasters’ Apprentices

Posted on by
Reply

Despite tough economic conditions our client Sheffield Forgemasters continues to invest in developing young talent for the future, with a strong Apprenticeship programme. I’ve had the pleasure of training and working with some of these young people and their colleagues across the business over the last few years and it’s great to see them making a difference – and having some fun along the way! Well done folks!

http://www.youtube.com/watch?v=VDpmH9fif38#!

Sheffield Forgemasters win Leadership and Strategy Award

Posted on by
Reply

Delighted to report that our client Sheffield Forgemasters won the Leadership and Strategy category at last night’s Manufacturer of the Year Awards ceremony at the ICC Birmingham. Congratulations and well done to Graham and the team!

Congratulations also to overall Award winner GE Aviation Wales.

http://www.themanufacturer.com/articles/ge-aviation-wales-reigns-supreme-at-record-awards-ceremony/

Fighting conflict minerals mining with the supply chain

Posted on by
Reply

The manufacturing industry has to contend with an enormous amount of different corporate social responsibility (CSR) requirements, but those responsible for the supply chain are increasingly facing the problem of how to ensure that all of their suppliers adhere to numerous, wide ranging compliance regulations. One of the most significant compliance issues about to take effect across the manufacturing industry is conflict minerals reporting.

Raw materials used in the manufacture of electronic components are typically sourced from many different locations around the world. One country that is considered mineral rich is the Democratic Republic of the Congo (DRC). Mining is crucial to the DRC economy, but some mines are controlled by militant groups that cause serious social and environmental issues in the region. These issues include serious human rights abuse, theft, extortion, forced child labour, deforestation and high taxation of mineral resources. Subsequently mining in the region contributes to a conflict that has claimed more than 5.4 million lives since it began in the late 1990’s. Increasingly, the manufacturing industry is seeking to only source “DRC Conflict Free” minerals, defined as products that do not contain minerals or their derivatives determined to be directly or indirectly financing or benefiting armed groups.

The DRC Conflict Free ban mainly affects four minerals: Cassiterite (tin ore), Wolframite (tungsten ore), Coltan (tantalum ore) and Gold. Collectively these are known as 3TG (Tin, Tantalum, Tungsten and Gold), and are used in the following supply chains:

  • Tantalum is often regarded as the first conflict mineral and became popular following the growth of the mobile phone industry. Today it is used in electronic components inside mobile phones, computers, video game consoles, digital cameras and as alloy for making carbide tools and jet engine components.
  • Tin is widely regarded as the primary funding source of rebel groups and used in alloys, tin plating, and solders for joining pipes and electronic circuits.
  • Tungsten is used in metal wires, electrodes and contacts which are used in a multitude of electrical and electronic devices, and the DRC is the world’s 5th largest producer of the mineral.
  • Gold is most often used in the manufacturing sector in electronic, communications and aerospace equipment due to its superior electric conductivity and corrosion resistance.

Over the past couple of years a number of organisations have been formed to help define processes on the clamping down of conflict minerals sourcing. The International ‘Organisation for Economic Co-Operation and Development’ (OECD) has designed a 5 step framework for identifying and removing conflict minerals from the supply chain. Additionally two bodies have been established to help high tech companies implement the OECD framework, the Electronic Industry Citizenship Coalition (EICC) and the Global eSustainability Initiative (GeSi).

To try and remove conflict minerals from global supply chains, the U.S congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act. . Section 1502 of the act is a provision related to the sourcing of conflict minerals. This means that all companies submitting filings to the SEC must now complete forms to confirm that they are not using conflict minerals across their supply chain. The first submission is due for 31st May 2014 and then annually by 31st May each year. Any company, there are estimated to be around 6000 of them, that file Forms 10-K, 20-F or 40-F with the SEC each year will be affected by this new law. In particular those that operate in the aerospace, automotive, high tech, defence and medical devices sectors will be impacted. According to Deloitte, “the complexity of today’s supply chains combined with lack of visibility into sourcing practices will be one of the key challenges of ensuring that Dodd-Frank can be adhered to.”

One tool that has been developed by EICC to help companies adhere to the Dodd-Frank law is the conflict minerals reporting template, which complies with the SEC’s due diligence requirements. This Microsoft Excel based reporting template embraces the OECD’s 5 step framework and asks specific questions to ensure that conflict minerals are not used across a supply chain. Given that conflict minerals reporting is now law for North American based SEC filings, it is in a company’s interests to find an efficient way to conduct the reporting process with minimal effort and without disrupting the day to day operation of the companies being asked to complete the survey.

There are two key challenges to ensure successful reporting of conflict minerals. Firstly the company must ensure that it has up-to-date contact information for every company across the supply chain. Secondly all companies must complete the survey questions in a timely manner so as not to delay an SEC filing. Efficient contact management is therefore critical to the success of this reporting process, and to help ensure that a company remains within the law on conflict mineral reporting.

Establishing a community management strategy is never easy, especially given the global nature and diversity of today’s suppliers. One of the simplest ways to engage with a global community of trading partners is through a common platform that is accessible through nothing more than a web browser. One such platform is  GXS Active Community, a cloud based community management tool that has been designed to support people to people interactions across a supply chain. The platform uses a combination of centralised contact management and mass communication tools to allow a company to reach out to their trading partners anywhere across a supply chain. When using this platform, the EICC reporting tool could either be distributed as an email attachment or it could be replicated within the platform’s built in survey module. Therefore any company that has to comply with the new conflict minerals reporting process will be able to ensure that all its supply chain contacts are up to date but more importantly that it also has full traceability over which suppliers have actually completed their submission. Any trading partner that fails to complete the report for any reason will automatically be sent a reminder email, significantly improving response rates and helping to ensure that a SEC filing is completed on time.

Supply chain directors need to recognise the role that they can play in the fight against mining of conflict minerals by ridding them from their supply chains. Using an effective community management tool they’ll not only gain greater visibility of their supply chains and ensure they adhere to government legislation like the Dodd-Frank law, but they’ll also be helping to rally the fight against the mining of conflict minerals in suffering regions.

Mark Morley

Director of Industry Marketing for Manufacturing

GXS

Sheffield Forgemasters SC21 Manufacturing Excellence Assessment

Posted on by
Reply

“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

Sheffield Forgemasters video (HR Media)

What good is Time Study Data anyway?

Posted on by
Reply

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” athttps://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…

 

The Secret to Sustaining Lean: Kick-starters and Care-takers

Posted on by
Reply

“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.

Using Lean to Drive Sales Growth: Value-Driven Manufacturing

Posted on by
Reply

“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