Building Operational Excellence
Adoption of Innovative Manufacturing
Tools and Technologies
Dr Marek Szwejczewski
Andy Marsh
Building Operational Excellence Adoption of Innovative Manufacturing tools and Technologies
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Building Operational Excellence Adoption of Innovative Manufacturing tools and Technologies
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Index
Survey Background
4
Introduction and Executive Summary
5
Section One – Competitive Priorities
Section Two – Strategy
6-7
8 - 11
Section Three - Tools, Techniques and Practices
12 - 16
Section Four – Skills and People
17
Information about Cranfield and Suiko
18
Building Operational Excellence Adoption of Innovative Manufacturing tools and Technologies
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Survey Background
This report is based on the results of a survey of 86
UK manufacturing organisations carried out in 200910. The focus of the questionnaire was the adoption
of best-practice tools and techniques by
manufacturing plants.
The adjacent figure shows the plants’ industrialsector profile: a large number (51%) of the plants
were in engineering; the second largest group
(19.8%), comprised electronics and electrical
engineering plants.
The sample contained a high proportion of small
plants in terms of numbers employed in the factory.
Most of the plants (58.5%) employed fewer than 200,
and 31.7% of the plants surveyed had fewer than 100
employees. However, although small plants are well
represented there are also a significant number of
large plants in the sample; 20.7% employed 400 or
more.
Building Operational Excellence Adoption of Innovative Manufacturing tools and Technologies
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Introduction and
Executive Summary
Key findings
The survey suggests that there has been a
slowdown in the movement of production abroad
The adoption of new management practices is
not as extensive as we may think. For example,
techniques such as continuous improvement and
total productive maintenance have only been taken up by 41% of the factories surveyed. Along
with the low adoption we see those that have
implemented the techniques are not using them
to their full potential – so there is the possibility
of major performance gains still to be had
We have seen an improvement in the level of
skills in factories – a reduction by nearly half in
the proportion of employees who are low- or semi
-skilled and an increase in the proportion of
apprentices – an investment for the future.
Synopsis – why you should read this
report /what this report will tell you
In today’s climate the quality, price and delivery of
manufactured products alone do not offer the
differentiation that allows manufacturing companies
to compete successfully. For many years now, since
well before the current western-world recession, the
evidence has been overwhelming that manufacturers
will fail unless they develop and deploy outstanding
knowledge and superlative service – however the
customer defines them. Manufacturers must not just
make the product, but run an operation dynamic
enough to truly fulfil the promise that the business is
offering – whether this be around technology,
innovation and/or service.
Despite all this evidence, and despite the numbinglyrepeated mantra of recent years to ‘innovate or die’,
the survey suggests that, though UK manufacturing
companies pay lip service to service and innovation,
their implementation remains too far down the list of
priorities. This report identifies and details both
the gap between current and competitive
performance and the means to close it.
This strategic report is aimed at Board level decision
makers with an interest in manufacturing, whether
owned or sub contracted. In highlighting key findings
from an in-depth survey across a broad range of
manufacturers, it sets out how to generate a
competitive advantage through manufacturing,
deals with whether you can gain competitive
advantage from where your facilities are based, and
goes on to describe how to deliver these techniques
consistently, by optimising your operations. How, in
other words, to win that optimisation, and the
associated continual uplift in performance it implies,
through best-practice techniques and the
development of your people and skills.
It does not offer easy solutions, and much of what it
contains may even be familiar. What it does offer is
clarity. It describes where the average, not the best,
manufacturers are now and describes the steps they
need to take to be among the world's best.
Building Operational Excellence Adoption of Innovative Manufacturing tools and Technologies
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Section 1
Competitive Priorities
Competitive priorities
Bulgari, Rolls-Royce Motors and Hermes need not
worry about prices. Few of the rest have such luxury.
But there is all the difference between competing on
price and being competitive. A systematic, strategydriven
determination
to
eliminate
from
manufacturing, or its supply chain, any element that
weakens the relationship with the customer – no
matter how indirectly – will deliver the cost savings
that make you competitive without the misleading,
dead-end focus implied by 'competing on price'.
Despite the tough economic climate, this message is
now widely accepted. Over 60% of the companies
surveyed (Figure 1) listed quality as their top priority.
Second was the need for customisation to satisfy
customers’ demands. Price came third. But
competing successfully goes beyond making quality
a number one competitive priority. It requires a deep
understanding that quality, like cost, is a given in like
-for-like competition, not a differentiator.
Figure 1: Competitive priorities (top 3 ranking)
Building Operational Excellence Adoption of Innovative Manufacturing tools and Technologies
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Joanna Stephenson, Vice President of Marketing &
Innovation at LINPAC Packaging, for example, says
that, “At LINPAC Packaging we’ve recognised the
importance of service in our offering and have
branded our business service package as ‘LINcare’ to
drive recognition of what we do, as well as
differentiate us from our competitors.
"LINcare is a set of European business service
standards that our customers can expect from us as
the norm. For ‘A’ customers – those buying large
volumes or value of products from LINPAC – we
provide a ‘LINcare Platinum’ programme with lots of
additional services to complement the core product
offering. They can include provision of market trends
data, exclusive workshops, joint productdevelopment programmes or technical audits.
"The programmes are tailored to the style of the
customer and truly drive differentiation and
customer loyalty in the long term for LINPAC.
Service differentiation is the key to competing in the
future as high product quality is, today, a minimum
customer expectation. Service is now what gets you
the business….and keeps it coming!”
World leading UK pharmaceuticals company GSK
has an equally clear vision about the importance of
non-price competition. John Hardwick, GSK's
Director Of Business Improvement, Emerging
Markets, notes that pharmaceuticals, and to an
extent GSK, are in some ways a special case: "In most
of the developed world ‘price’ is set by governments
and regulators so ‘cost’ impacts our profits but is not
a differentiator for the payer. The consumer is often
not the payer and the payer is not the decision maker
– the doctor is.
Ultimately our guiding principle is benefit to the
patient. By ensuring our products improve patient
quality of life, in a way that minimises total lifetime
treatment costs, we fully align to the needs of all
stakeholders.”
How do you deliver competitiveness in manufacturing? How do you make your organisation
determined to drive for innovation and enhanced service? How do you galvanise your teams around
developing the right operations in the right locations, with best-practice techniques and
appropriately developed people?
Step one – Ensure complete top-level buy-in and alignment to the strategy. This means
understanding both value (innovation, service, cost) from the customer’s perspective and the key
drivers for growth. To create a sense of urgency, collect and review data from all angles to build
an assessment of where the business is now versus where it needs to go, and review all of this
against financial targets to ensure that the right levers are being pulled
Step two – Once there is a clear vision at a senior level, this should be cascaded throughout the
organisation with clearly aligned objectives, measures and accountabilities for each department,
making sure the organisational structure focuses on customer value and growth
Step three – Provide the support needed to implement the strategy. Teams need a clear roadmap
with measurable steps and milestones of what needs to be achieved and when. The milestones
should focus on both performance and practice, and progress should be assessed against defined
improvement plans.
Building Operational Excellence Adoption of Innovative Manufacturing tools and Technologies
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Section 2
Strategy
Location
Factory location is a strong indicator of corporate
values. For a generation, western manufacturers
have staked all on outsourcing physical production to
low labour-cost economies in China and elsewhere in
the Far East, and in Eastern Europe. Cost is at the
core of the offshoring logic that lower labour costs
outweigh inevitably-higher transport, quality and
other costs.
Offshoring often turns out to be costlier than
alternative strategies. Within six months of
Wedgwood's decision to move its Johnson Brothers
line to China, for example, production costs had
doubled those in the UK. But by then the firm had
shut two factories so had to continue. [http://bit.ly/
zbZ63s]
Wedgwood's managers, like others, were following a
trend without knowing all the facts. Too often,
manufacturing's march offshore has been led more
by cost-driven instinct than by careful analysis of
what offshoring involves.
By the time Wedgwood went into administration
three years ago, the offshore tide was already
beginning to recede, despite huge tax, grant,
infrastructure and other incentives from Far East
governments. By the end of 2009 the EEF reported
that 14 per cent of companies had moved production
back to the UK: the cost savings had not appeared,
the product quality was poor, or it took too long to
get products to market. Since then, high and
unpredictable oil prices and currency fluctuations
have elevated international transport costs and wage
inflation in China has begun to erode the far-east
price advantage. Table 1 shows that the proportion
of production moving abroad fell significantly
between 2006 and 2009.
Sector
Production
relocated
2006
Production
relocated
2009
Food and drink
0%
0%
Process
20 %
0%
Engineering
41.4 %
15.9 %
Electronic and
electrical
58.3 %
17.6 %
Other
42.9 %
8.3 %
Sample average
40.3 %
12.8 %
Table 1: Proportion of production moved abroad
(by sector) between 2006 and 2009
Moving
production
overseas
is
not
an
inconsequential matter – there are several issues to
consider:
1. Think end to end costs not just factory cost
Lower labour costs are a small influence of the
journey from factory to consumer – quality,
reliability, delivery, innovation, flexibility and
currency fluctuations – on overall profit. How big is
the opportunity to manage and improve all of the
costs and processes of the business, across the whole
supply chain, from manufacturing through
innovation to office functions? Thinking ‘Lean’ across
the whole business opens up a much bigger
opportunity than just cutting labour costs, and could
deliver value to the business and the customer on an
undreamt-of scale.
Building Operational Excellence Adoption of Innovative Manufacturing tools and Technologies
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2. What are the marketing and reputational costs?
Other factors – ’externalities’ – are vital to any
decision about whether to move production abroad.
Consumers are becoming ever more insistent on
buying from accountable and responsible
companies. Corporate Social Responsibility (CSR)
enables companies to create a positive marketing
impact by demonstrating benign influences on the
environment, customers and the community by their
employees and others, right down the supply chain.
Apple and Mattel are just two high-profile brand
names called on in recent press reports to defend
their operations abroad.
3. Exploit our strengths
One potential growth area in the UK, to combat flow
of production overseas is in high-tech and specialised
manufacturing. In this sector we should look to
harness our strong R&D base, the highly educated
workforce that we have and the influence we have in
the international business community to support and
fund UK development and production. We should
combine this with replacing the level of resource,
energy and costs required to relocate, investing it
instead in staying put and focusing on improving
local operations. This level of investment could
potentially unlock significant improvements in costs,
additional profits and cash.
least 'good' in all the competitive areas: even if you
excel in your strategic measures you cannot afford to
fall back on the others while your competitors'
average performance is improving. A well-driven
balanced scorecard can achieve the performance
required both by the operation and the whole
business, driving customer value by building on
stable performance, quality and delivery.
Challenging targets stretch teams to succeed and
grow together. Staged targets break down what at
first seem unachievable goals, energising teams to
push further than they thought possible as they
achieve their milestones.
The measures must not be inward looking. Setting
them is an opportunity to benchmark other
companies within and outside our own sector and
share those methods and ideas with our own teams.
Look elsewhere for what good looks like, learning
from others and sharing the knowledge in house.
So if relocation is not the answer, let’s look deeper at
the other sources of competitiveness, techniques
and people.
Building a Performance Strategy
Offshoring or not, manufacturers must focus anew
on operational excellence. Operational excellence
implies strong discipline to stay on track and
contribute to delivering business objectives. The
means to it is the balanced scorecard.
A balanced scorecard combats the greatest risk in
performance improvement – that of focusing on one
area and letting others slip. Businesses have to be at
Building Operational Excellence Adoption of Innovative Manufacturing tools and Technologies
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Suiko's Why™ methodology/approach sets out a framework for using operations to achieve this
balance between controlling costs, generating extra profits and maximising cash.
Control costs
Generate extra profits
Maximise cash
To ensure predictable, appropriate
and consistent direct costs to
make the product and overheads
to run the operation.
Increase revenue and margin by cutting waste while providing product
and services that delight customers.
Challenge anything that ties up cash; use
your cash as effectively as possible, maximising return on capital employed without
putting customers at risk.
Direct costs – directly attributable
to make a product or provide a
service.
Direct labour. Employees or workers directly involved in producing
goods or services
Direct materials. All raw materials
or subassemblies needed to assemble or make a product
Packaging. Any materials used to
contain, handle, protect, and/or
transport an article
Utilities. Energy consumed in manufacture
Distribution. Cost of moving goods
from production to consumption.
Overheads – Resource used to run
a process but does not contribute
directly to the end product.
Indirect labour. Employees or workers not directly producing goods or
services
Product and service – Satisfying all
the customer’s current and future
needs as the customer defines them.
Brand/quality. Unique design creating
an image that identifies a product and
differentiates it from its competitors
Lead time. Time from receipt of order to
delivery of finished product at customer
site
Time to market. Time in product development from product idea to production
of the finished product
Innovation. Process of translating an
idea or invention into a good or service
for which people will pay
Service experience. Listening to, truly
understanding and appropriately responding to customers’ needs and
values.
Corporate social responsibility –
Taking responsibility for the societal
impact of all activities on all stakeholders.
Central costs. Costs typically incurred by head office functions
Health and safety. Making the working
environment hazard and accident free
Indirect expenses. Any other costs
not accounted for in indirect labour
or central costs.
Staff well being. Making sure people are
valued, engaged, motivated and encouraged to achieve their full potential
Environment. Clear understanding and
management of your impact on the
environment.
Current assets – Flow through a business
in its daily operation, as cash is converted
into goods and back into cash.
Material/packaging stock. Basic raw materials held as stock for input to a production
process
Work in progress. Partly completed goods
not yet part of finished-goods inventory
Finished goods. Materials after processing
and held in inventory
Spares (engineering/maintenance). Spares
held for less than 1 year to enable immediate
repair
Debtors and creditors. Debtors- sales made
but not yet paid for. Creditors - money owed
to suppliers.
Fixed assets – Assets not consumed or
sold in daily business and used to carry on
its operations.
Production equipment. Tangible property
(not land or buildings) used to carry on the
operations of a business
Land and buildings. Land: land owned for
productive use; Buildings: structure enclosed
within exterior walls with a roof
Warehousing/ vehicles. External facilities for
temporary goods storage. Book value of
vehicles.
Warning
There is no shortage of information about the best practices. What separates the winners and losers is how well
businesses succeed in, first, making them work at all and, second, in sustaining them.
Operational excellence is not about learning techniques and implementing them. It is about making the routine use
of the techniques integral to your business processes. Be in no doubt, the resistance to their operation will not come
from 'below'. In any profitable business, the biggest challenge is not to persuade directors and vice-presidents of the
need for the changes that will ensure the business is profitable in three or five years' time, but to instil the
determination to drive them through. Many of the businesses that have succeeded have only done so by changing
the faces at the top.
Building Operational Excellence Adoption of Innovative Manufacturing tools and Technologies
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Every component of the business
contributes to success
Success in a growth-led business requires every
internal operation to work with other functions
across the business towards a common business
agenda. Manufacturing’s priorities must be linked
back to adding value that results in the success of the
overall business. There must be a strong external
perspective and a deep understanding of what the
customer really values. This requires detailed
knowledge of the end-to-end supply chain – not
enhancing efficiencies or quality in one particular
process. This explains why many factories have
focused on operational efficiencies and driving
internal standards, yet gone on to close. This holistic
approach must be applied to whatever is established
as being critical to success, whether it be the
innovation value stream or order-fulfilment value
stream.
Delivering your strategies
Strategies are only of use if actioned.
To ensure that plans turn into actions,
we must engage with our staff, cascade
our strategy and ensure its thorough
deployment. In explaining the “mustwin battles” and galvanising people into
action to tackle these in a coordinated
way, a well executed approach is vital.
This is fundamentally about change
management and we must take people
with us in these ever more demanding
times. We need to ensure we have:
A strategic framework for change
that articulates simply the priorities
and how these will be measured
A toolbox (or group-wide operating
system) that provides the right tools
and expertise for people to tackle
the fights ahead
A sense of proportion
Operational Excellence only helps us
compete today – it does not embed the
innovation that alone promises any
manufacturing business a route to the
future. In that respect the survey
unearthed some surprises.
Quality, price and delivery are givens:
most businesses now have to
differentiate on knowledge and service,
not
the
product
alone.
So
manufacturing must not just make the
product, but run the dynamic operation
that will truly delight the customer,
whether this be around technology,
innovation and/or service.
Yet despite the mantra of recent years
‘innovate or die’, the survey suggests
that service and innovation are not high
on the list of priorities. If UK
manufacturing is to survive, then
innovation must be ranked higher.
Being able to compete on the various
competitive criteria requires the
adoption and effective utilisation of
various techniques. We will look at their
adoption in the next section.
Enabling behaviours in all our staff
to do the right things and approach
any situation in an empowered,
educated, disciplined and curious
way
Programme management with
governance and steering of the
changes combined with the right
checks and balances to ensure we
do actually deliver.
Strategic
Framework
Group
Operating
System
Enabling
Behaviours
Compelling
vision
Common
language
Leadership
at all levels
Strategic
alignment
Lean
application
Living the
values
Operational
excellence
Learning
and
sharing
Maximise
engagement
Programme
Management
Programme
infrastructure
Commissioned plan
Sustainable
changes
Building Operational Excellence Adoption of Innovative Manufacturing tools and Technologies
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Section 3
Tools, Techniques and Practices
No business can improve without the closest possible
alignment between operations and the board of
directors about its competitive priorities. Only with
this agreement – to deliver customer value through
the optimisation of systems, people and processes –
solidly in place can operations move to developing
processes and practices that reduce the gap between
measured and target performance.
The concepts the survey identified (Table 2) include
both the practices operations needs to put in place
and the enablers to ensure the practices are
embedded. Most of these techniques have been
around for at least a decade. Readers of this
document may have tried them before, either on
their own or under the umbrella of a different
organisational concept. Yet successful adoption –
even of some of the more universally adaptable
techniques such as 5S, TPM and continuous
improvement – has been low.
The table below shows the practices most frequently
used by each of the four main industrial sectors,
ranked by an overall adoption total. Though many
concepts and practices are relevant to all sectors,
some are more frequently applied in specific sectors.
Table 2: Practices – adoption by industry sector”.
Why teamwork is top
The first thing to note is the near-universal
recognition (97% of those surveyed) that teamwork
in production is a key enabler. That's because it
encourages engagement, and that in turn supports
the embedding of any of the other appropriate
practices into any business.
Second, regular individual appraisals were used in
almost 80% of the organisations surveyed. This too is
encouraging – provided that ‘regular’ means regular,
and that they were effective. But it's worth noting
that neither of these enablers provides any
competitive advantage unless it is used as the basis,
a platform, for the further determined deployment
of the tools and techniques that will deliver more
Building Operational Excellence Adoption of Innovative Manufacturing tools and Technologies
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competitive performance. Teamwork and appraisals
are necessary but not sufficient tools – the wheels,
not the engine of improvement.
Similar caution needs to be applied to the
widespread adoption of IS14001 certification. Most
companies appear to adopt IS14001 to comply with
regulations or tick one more box in bidding for
contracts. The mere need to demonstrate ‘green
credentials’ or regulatory conformity is a very long
way from making the huge energy and other savings
seen in factories which have chosen to make
environmental performance a unique selling
proposition. The bigger the customer, the more
certain it is that they will know when their
manufacturers are only paying lip service to the need
to reduce waste gas, material and water emissions.
Establishing a foundation for the right practices
There are two critical steps to identifying and adopting the right tools and techniques. First,
understand the relevance of the various available organisational concepts (practices) to the
organisation. Then, identify the carefully-selected tools and techniques that will deliver the business
goals for your organisation. This journey must start with “Why?” – understanding the compelling
reasons to start doing something different in terms of the results you want to achieve and the
practices that will deliver that improvement. The key is to choose the right tools for the job; applying
a few things well (whether 5S, CI, TPM, Kanban, or 6 Sigma) is likely to have more impact than one
'magic bullet' or too many techniques, badly implemented.
Behind many of the concepts there is a recurring theme: the need for foundations. The most
successful organisations tend to be those that invest in developing a deep understanding of the
concepts, internalise them and build on them to make them work in their own businesses.
This demands a consistent approach, and the starting point is to ensure that the basics of operations
management are in place. As people and processes become more predictable, capable and reliable,
the basics provide the platform that enables people to operate at the right level.
But it's not easy. In Suiko's experience many businesses continue to grapple with getting the
‘fundamental’ tools and techniques right. Lasting change requires a stepped approach: doing things
at the right time and in the right order. The Suiko Levels ™ describe the phases an organisation
Figure 2: Suiko Levels™ 1-5
Building Operational Excellence Adoption of Innovative Manufacturing tools and Technologies
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The full array of techniques can be overwhelming. Too many organisations try to run before they can
walk, discrediting the very techniques they hope to exploit. The best organisations recognise levels
of maturity, the time needed for each of the five steps to bed down, and employ the right tools and
behaviours at the right time.
One good example is a global FMCG manufacturing organisation. It had already tried to implement a
Total Productive Maintenance (TPM) programme but had struggled to get a good return on the
investment in time and money. Closer inspection showed that the reason was lack of depth in the
foundation of the operations. As with any change methodology, TPM requires experience among its
implementers and engagement by the organisation to gain long-term traction. This operation was
employing high quality people but
These people were failing to keep to their own standards, and not aware that they were falling
short
The measurements were not cascaded effectively to people at the lower levels of the
organisation
The performance-review and problem-solving systems were driven by just a few, rather than
adopted by the many as part of what they did.
The medicine the organisation adopted was simple but hugely effective. First they defined a clear
roadmap with milestones to assess progress along the route. Next they pulled together a standard
methodology for TPM adoption and trained people against it. Finally they provided the resources, to
measure and review the progress of the programme against the roadmap.
Perhaps the most impressive point about this implementation is the pace, scale and rigour of the
methodology's deployment: not only did it touch the whole organisation; it even led to the
methodology becoming part of their competitive advantage.
Why adopt these tools?
It's important to understand why you are adopting
the tools. The survey asked interviewees how the
tools they'd adopted helped them meet four key
performance criteria: quality, cost, flexibility and
innovation. The results for the five most-used tools
are shown in Figure 3.
In almost every case the primary aim of adopting
tools and techniques was to reduce costs. Even
where the aim of introducing annualised hours (not
shown) was to improve flexibility, the benefit was
seen as its likely impact on overall costs.
In only three cases (not shown) were the effects of
organisational concepts consistent with the original
reasons for adopting them. These were where
organisations had:
Established a customer or product structure (cells/
lines)
Adopted simultaneous engineering, or
Were applying a 6 Sigma approach.
Experience shows that, when these concepts are
working well, operations have the operational basics
in place and are actively looking for broader business
opportunities for improvement.
Building Operational Excellence Adoption of Innovative Manufacturing tools and Technologies
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This focus on improving costs and raising
productivity is understandable against a backdrop of
recession, the continuing erosion of margins and a
relentlessly competitive market place. All the same,
it contradicts the assertion that focussing on the
customer is the key to competitive success. Even if a
regular customer is bearing down hard on product
price, lower cost does not offer a competitive unique
selling proposition. Low cost has to be accompanied
by other compelling reasons for the customer to
choose our product, and the service that goes with it,
in preference to an equally cheap offer from the
competition.
That's why the low importance given to innovation
was perhaps most concerning. It's particularly
striking, given the overwhelming evidence from best
practice of the impact that effective team working
and a developed problem-solving mind-set can have
on successfully promoting innovation.
Figure 3: Principal aim of utilisation
Maximising the potential
The cost focus gives rise to the further concern that it
may distract organisations from deploying the tools
to their full potential. In other words, if the tools
don't show a quick cost saving they will be
abandoned, or they will be applied in parts of the
business when they could also benefit others.
The survey finding showed that the length of time
that organisations had been applying these
organisational concepts varied between 10 and 15
years. In most cases this is more than long enough to
establish any concept across a business. Yet the
results indicate that embedding the practices fully
into the organisation continues to be a challenge.
Building Operational Excellence Adoption of Innovative Manufacturing tools and Technologies
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Figure 4: Used potential
Figure 4 shows that, even for the top five concepts,
businesses are not embedding those practices – such
as teamwork and continuous improvement – that
can be applied to every process and all employees.
Only 55% of those surveyed identified team working
in production as a practice that was extensively
utilised. Appraisals were at 48% and ISO14001 at
17%, particularly surprising given the focus on the
green agenda.
Countless studies show that around 70% of large
change programmes fail to deliver. The survey data
reinforces the suggestion that organisations struggle
to fully embed new practices. There are multiple
reasons. Some managers try to adopt a new fad
without understanding why a performance gap
exists, or the root causes of the failure of previous
initiatives.
Too often employees have been trained and the
toolbox has piloted successfully, but the practices
have failed to become a habit across the operation.
Such ‘simple’ tools as, measures, 5S, or SMED are
visible, but there is a lack of deep understanding of
the tools, so the benefits fail to emerge. While such
cases pose a challenge, they have the potential for
the greatest reward.
Once the appropriate tools and necessary practices
have been proven and established in the pilot, it is
then important to lock them into work standards,
creating repeatable processes which eliminate
variation. Standard methods provide the platform on
which to drive sustainable improvements and help
develop and maintain the desired problem-solving
mindset.
Holding on to the gains from these collective
practices has to be a strategic priority. Managers
need to be held to account to encourage individuals’
aspirations to exceed expectations across every
function.
The goal, remember, is to deliver customer value
through the optimisation of systems, people and
processes.
Building Operational Excellence Adoption of Innovative Manufacturing tools and Technologies
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Section 4
Skills and People
Although techniques are key, they are only as good
as the people adopting and using them. It is 80%
behaviours and 20% tools, so techniques typically
require a combination of systems, process and
people. This is why so many organisations only
actually use these tools in a superficial way and do
not get the maximum leverage.
The survey findings suggest that the situation in UK
manufacturing has improved. Table 3 indicates that
between 2006 and 2009 there has been a decline in
the proportion of low skilled employees. In addition
the proportion of apprentices employed has
increased.
Accountability for making it happen
There must be an appropriate balance
between developing tools and the associated
behaviours. Process improvement without
paying attention to the people and
organisational culture issues will lead to a
robotic adoption of proposed changes;
compliance
rather
than
a
personal
commitment and ownership to the way of
working. To embed exceptional practices, it is
more about changing mind-set than tools
(80% behaviours: 20% tools), developing a
culture
which
encourages
enabling
behaviours. Self discipline and ownership are
key attributes for everyone, for it is this that
maintains the processes’ sustainability.
So as well as engaging all employees and enabling
the right behaviours to support Operational
Excellence, consideration must also be made to their
technical competence. Multi skilling and flexibility
are certainly the order of the day, with many
‘production’ staff now quite capable of carrying out
maintenance tasks and quality assurance as well as
continuous improvement. Engineering staff are
shifting from reactive, breakdown activities and
planned maintenance to condition-based monitoring
and highly proactive, design-out engineering. Best
practice would suggest that ownership for processes
is still critical and so it is not complete flexibility
Skill
2006
2009
High
10.7 %
15.2 %
Intermediate
32.4 %
49.8 %
Low
52.3 %
28.2 %
Apprentices
5.2 %
6.8 %
Table 3: Skill levels - in 2006 and 2009
You have to engage people and excite them
about performance improvement, through
practice and application; if you do, they will
reach the conclusion themselves.
across an operation, but typically within a value
stream or product family.
Although there has been pressure on training
budgets, most organisations are still trying to
encourage strong people development, knowledge
transfer and development of best practice. There is a
general shift from pure ‘chalk and talk’ training to a
broader blend of learning and development activities
which are often more cost effective. So driving both
the technical skills agenda and ‘soft’ leadership,
teamwork and improvement capability are both vital
enablers for the majority of manufacturers.
Building Operational Excellence Adoption of Innovative Manufacturing tools and Technologies
17
Information about Cranfield and Suiko
Suiko's mission is to help major companies achieve
sustainable competitive advantage through
operational excellence. This is defined by
exceptional results sustained by exceptional
practices. Suiko is a dynamic, flexible and client
focussed company who have a very strong track
record of helping companies to significantly improve
their profit through self financing projects. Suiko's
methodology combines a cycle of Why™ What™
How™: Suiko Why™ establishes the compelling
business reason to change and maps out the journey
for sustainable profitable growth. Suiko What™
For more than 40 years, Cranfield School of
Management, a world leader in management
education and research, has been helping individuals
and businesses learn and succeed by transforming
knowledge into action.
The School brings together a range of management
disciplines through a significant portfolio of activities
that includes research and consultancy,
postgraduate masters and doctoral programmes,
executive development courses, customised
programmes and conferences. Cranfield School of
Management is one of an elite group of business
schools worldwide to hold triple EQUIS, AACSB and
AMBA accreditation and our MBA, executive
education and doctoral programmes are all highly
ranked in the major league tables.
embodies the practices (tools and behaviours) that
will be developed in a structured way through 5
levels. Suiko How™ provides the enablers that
accelerate and sustain the change. Established over
15 years ago, Suiko has built a team of pragmatic and
highly experienced consultants of the highest
pedigree with a proven track record of delivering
effective client solutions; increasing profit,
controlling costs & maximising cash."
Europe. Leaders in their chosen fields, they are
actively engaged in consultancy and business
relevant research and are closely in touch with the
needs of business and government. They are
committed to practicality, which means they are
consistently current and topical in their teaching.
A combination of rigorous research and inspirational
teaching is at the heart of everything we do. We are
dedicated to creating responsible management
thinking, improving business performance and
inspiring the next generation of business leaders. We
work to change the lives of our students and
executives by encouraging innovation and creative
thinking, as well as the drive to succeed and make a
real impact on their organisations.
A key strength is our faculty, which is amongst the
largest and most diverse of any business school in
Building Operational Excellence Adoption of Innovative Manufacturing tools and Technologies
18
Contacts
Dr Marek Szwejczewski
Andy Marsh
Reader in Operations Management
Cranfield School of Management
Cranfield University
Cranfield
Bedford MK43 0AL
United Kingdom
Managing Director
Suiko Ltd
Bath Brewery
Toll Bridge Road
Bath BA1 7DE
United Kingdom
www.som.cranfield.ac.uk
Email: m.g.szwejczewski@cranfield.ac.uk
Tel: 01234 751122
www.suiko.co.uk
Email: info@suiko.co.uk
Tel: 01225 852400
March 2012
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Building Operational Excellence Adoption of Innovative Manufacturing tools and Technologies
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Building Operational Excellence Adoption of Innovative Manufacturing tools and Technologies
20