World Class Operations’ programs
Cost
• Integrated Cost Reduction (ICR)
• Business Excellence (BE)
Footprint
• Fast growing markets
• Restructuring
Capital
•
•
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Regional supplier base
Manufacturing flexibility
CMD 2014
Luc Graux
Director,
Manufacturing
& Demand
Chain
Direct material
Cost
© SKF Group
Value added
Direct material
Cost reduction direct material
Continue implementation of
Integrated Cost Reduction (ICR)
program
2
Review
technical
solutions
• Supplier workshops
• Cost improvement activities
3
Optimize
sourcing
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CMD 2014
3 ICR levels
1
Review
product
specifications
Direct material
ICR direct material savings
800
600
400
200
0
2007
2008
2009
Status
• Program started in 2007
• Replication to all product
lines completed
• Savings in line with plan
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CMD 2014
2010
2011
2012
2013
Next steps
1) Implementation of current
saving ideas
2) Focus more on specification
and design
3) ICR in all new customer offers
Direct material
Achievements – main projects
• Optimizing forging design to reduce weight
Before
After
-20% on component cost
• Launch new ABS sensors concept with new supplier
-25% on component cost
© SKF Group
CMD 2014
Value added
Business Excellence (BE)
Business Excellence for manufacturing
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CMD 2014
Value added
Driving Business Excellence
Intro BE
Building
BE culture
Spreading
BE culture
Harvesting
•
Business
Excellence for
Transactional
processes
•
Factory Manager
Seminars
2008
2009
2010
2011
2012
Deployment process
and focus areas
Tools, methods and
manufacturing standards
2014…
2013
•
KPI
Core team and
Boot camps
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CMD 2014
Benefit tracking,
contribution to results
and improvements
Value added
Excellence contributs to result (first 22 units)
Waste reduction (SEKm)
Waste reduction
2013
YTD July 2014
Target 2014
•
•
•
•
Labour costs
Shop supplies
Maintenance and repairs
Non-quality costs
YTD savings doubled vs 2013
Inventory coverage –
% of sales
2013
YTD July 2014
Target 2014
Reduction of inventory to sales ratio by 15%
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CMD 2014
Delivery performance
2013
YTD July 2014
Target 2014
Improvement of on time delivery by 22%
Value added
Strengthen maintenance excellence and training
Maintenance excellence:
Learning center:
a program to reduce unplanned
stops and improve
machine uptime
a factory dedicated area for
hands-on training
Operational
Learning centers
started in fast
growing markets
2013:
2014 :
2015:
Operational
Target 2015
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CMD 2014
8
14
21
Footprint
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Expanding manufacturing in fast growing markets
Kalofer (Bulgaria)
Factory extension (2014)
Seals
Mysore (India)
Green field (2012)
Seals
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CMD 2014
Jinan (China)
Green field (2012)
Truck bearings
Shanghai ATCII (China)
Green field (2014)
Car wheel bearings
On-going manufacturing restructuring
• Seals West-Europe: Transferring selected products from Italy to Bulgaria
• France: Consolidate several manufacturing units into St Cyr site
• USA: Consolidation of Franklin into Seneca, and closing Franklin
• Brazil: Down-sizing operations and head office in line with market
Bulgaria
Brazil
Italy
France
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CMD 2014
USA
Automotive footprint synchronization
2013
Sales
Production
Europe
India
45 factories in 39 locations
1) Localization of supply in fast growing
markets + 50% since 2008
2) Current alignment between local
demand and local supply: 90%
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CMD 2014
China
North America Latin America
Further benefits of footprint adjustments
Flexibility - Faster response to customer
demands
Currency - Risk exposure reduction
Capital - Inventory reduction
Transport - Risk and CO2 reduction
Capital
© SKF Group
Flexible manufacturing
Overview
• New standardized manufacturing concept
• Modular technology
• Pilot project installations
Benefits
• Increased manufacturing flexibility to
follow customer demand
• Reduced operating cost and capital
expenditure
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CMD 2014
Flexi process technology
Right technology for each manufacturing set-up!
Super flexi model
Flexi model
Cost
High volume model
Volume
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CMD 2014
Super flexible technology
• Alternative to conventional machining
• Resetting time: 1/10
• Tooling cost: 1/10
Achievements
• > 1 million bearings produced
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CMD 2014
Capital efficiency
Factory model standardization
Machine standardization
Inventory reduction model
• Supplier program
• Manufacturing flexibility
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CMD 2014
Robust supplier base
Build strategic supplier relationships and
Strategic
a high performing supplier base
suppliers
© SKF Group
CMD 2014
Optimizing cost with a robust supplier base
Europe
Global
• Build East Europe supply base
• Supply base consolidation
• Dual sourcing policy
• Strategic partnership with key
suppliers
• Supplier localization
• Lead-time and delivery
improvement
Asia
• Strengthen supply base in Asia
(India, China)
North and Latin America
• Develop local supply in Mexico
and Latin America
© SKF Group
CMD 2014
Key directions
Safety first
• A safe working environment in our factories
Quality and Business Excellence
• Quality Management System
• Business Excellence for Manufacturing
One SKF in Purchasing
• Robust supplier base and regional supply
• Continuous cost reductions through ICR
Technology Strategy
• Focus on standardization and flexibility
• Strong link from innovation to factory
Supply Chain
• Supplier localization program
• Manufacturing flexibility
© SKF Group
CMD 2014