UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION Reducing poverty through sustainable industrial...

UNITED NATIONSINDUSTRIAL DEVELOPMENT ORGANIZATION

Reducing poverty through sustainable industrial growth 1

SPX SME Upgrading Building Capacity, Capability & Sustainability

Dar Es Salaam, Tanzania21st June 2011

Reducing poverty through sustainable industrial growth

Who am I?▶ Enterprise Ireland, Competitiveness & Lean

Business Department Manager▶ EU Japan Centre for Industrial Co-Operation▶ European Benchmarking Network▶ Advisor Internationally on Benchmarking and Best

Practice▶ Trinity College Dublin, Dept of Statistics(retired)▶ Author

Agenda

▶ What is Lean

▶ Case Study examples

Level 1

Level 3Process Benchmarking

The Five S’s Total Productive

Maintenance

Overall Equipment Efficiency

Six Sigma

Business Excellence

Value Analysis &Management

Lean Production

Target Cost Management

Facilitated Assessment

Benchmarking

Physical&Process Flow in the Office

Physical&Process

Development

Production Control Systems

Saving Time in the Workplace

Maintenance Practical Quality Tools

Team Building & Culture

Sales and Growing them

Financial Management

Supply Chain & Logistics

Innovation&

Design

Business Strategy Implementation

Self Assessment Benchmarking

Physical Flow Process Flow Set Up Time

Reduction

Check Sheets Run Chart People & Teams Basic

Maintenance

Level 1

Level 2

What do we mean by Lean?

▶ Lean is shorthand for Best Practice within a sector

▶ Helps People identify and deliver improvements in their businesses

▶ Provides a framework for competitiveness improvement by building the capability and competences of people to

What is Lean?

Focused on Effectiveness and Efficiency

Doing the right things well!A War on Waste!!!What is the alternative?

What is Lean?

▶ Based on the Toyota Production System▶ “Understood” by American consultants▶ Six Sigma – Developed by Motorolla Corp,

statistically based approach▶ Similar tools but:

Lean focuses on continuous business processes Six Sigma focuses on discrete projects for improvement

▶ Driving and integrated into company strategy

Some Lean Principles….

▶ Time

▶ Money

▶ Effort

Must want to compete…..

1. Fairness2. Firmness3. Consistency

4. Look 5. See6. Understand7. Do

Dealing with People

Dealing with Processes

Five Fundamental Lean tools…..

▶ Process Mapping

▶ Physical Flow mapping

▶ Check Sheets – What is going wrong?

▶ Run Charts – Is it getting better or worse?

▶ Teams – People working together to improve their business

Key Lean Questions…..

▶ What are you doing?

▶ How are you doing it?

▶ Why are you doing it?

▶ Who is going to improve it?

▶ When?

Capture the FACTS!

Make things better…..

War on Waste- Absolutely Focused & Relentless

▶ Motion▶ Transportation▶ Processing▶ Defects▶ Waiting▶ Over-production▶ Inventory▶ People

Lean - Action based on FACTS

▶ Benchmarking = Diagnosis

▶ Best Practice = Medicine

Why Benchmarking?

▶ Benchmarking allows us to : Analyse & Improve Key Business Processes-

Qualitative and Quantitative Eliminate Waste Improve Performance Improve Profitability & Market Share

▶ Based on FACTS…..

Benchmarking is a continuous systematic process for comparing business processes for improvement...

Benchmarking for SuccessTool Use vs Company Development

Evolutionof Company

DiagnosticHolistic

Process B/mark

Best in Class

Acceptable Standards are

constantly changing......

RESULTSSupplier PartnershipsWorld Class ManufacturingCompetitive Products and ServicesBusiness Process ManagementCustomer Partnerships

World Class

Employee Involvement

The Medicine

Layout / FlowsSet Up Time ReductionManufacturing Systems“Productive” ManagementJIT Supplies

JIT Manufacturing

Process CapabilityWaste EliminationTools of QualityCustomer FocusQuality Function Deployment

Total Quality Management

Employee Involvement =Expectation

EmpowermentPeople EffectivenessQuality AwarenessGroup problem SolvingImprovement Teams

Products and Services

Design for ManufactureDesign for OperationRegulatory ApprovalProduct Evaluation

Management

Effective Information TechnologyStructures and StrategiesPlans + Projectscts

Office Processes

World Class ProcessesLean Administrative SystemsContinuous ImprovementValue Added Process Identification

▶ Packaging: 16% reduction of packaging line cycle time

▶ Pet-food products: 14% cost reduction per unit

▶ Recycling: Sort line throughput up by 600%

▶ Insulation products: Reduction of the build time from 5 days to 0.8 of a day

▶ Packaging: Net margin increased from 5% to 15%

▶ Engineering: Labour productivity on fabrication line increased by 35%

▶ Food additives: 17.5% reduction in Labour costs

▶ Engineering: 20% Gross profit from current average of 9%

Lean - Sample Results

Case Study- Pet Food Ltd

▶ Sector: Food- Pet treats/dental chews

▶ Project Description: Cost reduction programme in packing. Value streams/problem areas defined.

▶ Measurable Success: 4% increase in output per direct employee

2.5% reduction in direct labour costs.

Labour costs as % of sales went from 23.5%-20%

Lead time reduced from 8-6 wks

Case Study- Analytical Systems Ltd

▶ Sector: Water treatment

▶ Project Description: Re-organisation of production area/ 5S/Value Streams/Planning schedules

▶ Measurable Success: Capacity increase 150% (2 -5 per wk) New layout allowed for 15% more

capacity 4 week lead time for all products

achievable

Lean - Sample Results

▶ Flat Food – Over €10million savings made

▶ County Foods - “Game Changing” result

▶ Medical – 38% improvement on EBITDA

What can you see?

▶ How can you help?▶ How can you add value to your clients, your

business, without conflicting on confidentiality?▶ What about suggesting benchmarking?

▶ On the Floor.... What is current state? Visuals for feedback Detailed use of tools

• Process• Physical• Check Sheets• Run charts• Teams

▶ In the Office.... What is current state? Visuals for feedback Detailed use of tools

• Process• Physical• Check Sheets• Run charts• Teams

▶ For the Management.....

Next Steps Absorption of tools and techniques Focus for the Business

Q and A

Together Everyone Achieves MoreTEAM

UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION Reducing poverty through sustainable industrial...

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