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DIGITAL LEAN Power for Operational Excellence!

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Digital lean significantly increases process efficiency, productivity, quality and transparency

MAXIMIZE PROCESS THROUGHPUT

15 – 20% lower

quality costs

ENSURE COST TRANSPARENCY

MAXIMIZE PROCESS

EFFICIENCY

OPTIMIZE OUTPUT QUALITY

Less complexity, faster and

25% output increase

Overhead costs

reduction 20% Time to market

reduction 40%

Return on investment in digital

Immediate measure- ability

Digital + Lean

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Digital lean – Power for operational excellence

DIGITAL LEAN ELEVATES THE TRADITIONAL LEAN APPROACH TO EXPLOIT PREVIOUSLY UNTAPPED OPTIMIZATION POTENTIAL.

ARE YOU…

…used to the LATEST DIGITAL INNOVATIONS in service and manufacturing processes, such as embedded systems or remote device control?

…able to describe yourself as DIGITAL LEADER?

…successfully combining DIGITAL ANALYTICS with DIGITAL LEAN TOOLS to drive your COMPETITIVE EDGE?

…enjoying clear TRANSPARENCY on your return on investment in digital (ROID)?

In case you cannot clearly answer all questions above with “yes”, please give us a call for a DIGITAL LEAN POTENTIAL ANALYSIS.

1 4 DIGITAL ANALYTICS simplify the identification of process errors and lead to a REDUCTION IN QUALITY COSTS BY 15-20%. Broad datasets can be analyzed in real-time, quality issues are recognized at early stage, and mitigation measures can be realized immediately.

2 5 DIGITAL LEAN TOOLS (e.g. eCare, embedded systems, predictive maintenance) provide high optimization potential along the entire value chain of service and manufacturing companies. TIME TO MARKET can be REDUCED BY UP TO 40%. Even within lean processes, PRODUCTIVITY can be INCREASED BY UP TO 25%.

3 6 The GOETZPARTNERS APPROACH leverages the optimization potential of digital lean. Transparency on cost and investments is gained through detailed analysis and the implementation of activity-based costing, ensuring immediate measurability of the return on investment in digital (ROID).

EXECUTIVE SUMMARY QUICK CHECK FOR YOUR COMPANY

The increasing complexity of business processes as well as current trends in digitization require a new way of thinking in traditional lean management. Concepts like 6sigma and Kaizen can no longer unfold their full potential.

By digitally enhancing processes, traditional lean concepts get pushed to the next level in terms of efficiency, productivity, transparency and quality. Digital leaders are able to EXPONENTIALLY GROW THEIR PROFITABILITY and LEVERAGE COMPETITIVE ADVANTAGE compared with digital laggards.

Innovative digital lean concepts comprise the use of digital analytics in lean projects as well as the utilization of digital innovations through digital tools. Both aspects are part of an integrated approach to CONTINUOUSLY IMPROVE COMPANIES’ PERFORMANCE.

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DIGITAL LEAN describes the application of information and communication technology to continuously improve manufacturing and service processes. It comprises TWO DIMENSIONS:

1. Digital as an ADVANCED ANALYSIS INSTRUMENT enabling the collection, analysis and pro-cessing of large datasets in real-time. Error rates can be improved significantly, leading to a REDUCTION IN QUALITY COSTS.

2. Digital as a SELF-CONTAINED SET OF LEAN TOOLS providing automation instruments to INCREASE PRODUCTIVITY and REDUCE TIME TO MARKET.

The STREAMLINING OF ORGANIZATIONAL STRUCTURES through digital lean REDUCES OVERHEAD COSTS BY 20%.

Digital lean is the analytics and tool perspective to leverage optimization potential

PERSPECTIVES ON DIGITAL LEAN AT A GLANCE

USE DIGITAL LEAN TOOLS TO… § Automate processes § Improve interfaces § Reduce process complexity § Streamline disproportional process steps § Eliminate manual process steps § Reduce non-value-adding activities § Shorten process duration § Eliminate process errors and improve quality § Enhance customer value and experience

USE DIGITAL ANALYTICS TO… § Automate data collection § Gain data richness: more information of higher detail

and significance § Analyze and process large datasets in real-time § Determine data trends and patterns in early stage § Recognize outliers § Speed up detailed data benchmarking internally

and externally § Automate scenario analysis

DIGITAL ANALYTICS DIGITAL LEAN TOOLS

&

à MAXIMIZE PROCESS EFFICIENCY AND THROUGHPUT à SHORTEN THE PROCESS ANALYSIS PHASE AND OPTIMIZE OUTPUT QUALITY

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Digitization provides the levers to accelerate and enhance the analysis workflow substantially.

TRADITIONAL LEAN ANALYSIS requires a manual, TIME-CONSUMING data collection process to evaluate the status quo, often has a limited scope, and holds the risk of focusing on the wrong problem areas.

By using digital analytics, large datasets can be CONTINUOUSLY ANALYZED and compared with historical data and/or benchmarks from the cloud to DETECT PATTERNS and relationships among different process steps.

The resulting intelligence is used to derive the MOST EFFICIENT PROCESS DESIGN.

Digital analytics exploit broad process datasets with high efficiency and effectiveness

AT A GLANCE DATA KNOWLEDGE INTELLIGENCE INFORMATION

INTELLIGENCE TO MAKE PROCESS LEANER

Date and time data Sensor data Employee data ERP/job data

MANUFACTURING/ SERVICE DELIVERY PROCESS

DIGITAL LEVERS

PROCESSING n Use cloud technology

to automate data collection

n Access data in real- time and from anywhere via remote device monitoring

EXPLOITATION n Consolidate large

datasets in real-time through highly capable systems

n Determine data trends and patterns at an early stage

ANALYSIS n Accelerate detailed

data benchmarking (internally and exter-nally) with sophisti-cated analysis tools

n Automate multi-scenario analyses

UTILIZATION n Utilize analyses to

streamline processes n Transfer generated

intelligence to com-parable processes

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PROBLEM: 5% of car doors show clearly visible asperity after coating

ANALYSIS:

n Irregular frequency of clearly visible surface asperities in doors

n Door becomes uneven in pre-cleaning or basecoating phase

INTERPRETATION:

n Real-time, based on big data

n Delivers root causes for process errors: - Bulge is caused by remaining

dust/dirt particles = error in pre-cleaning phase

- Pitting is caused by defective clearcoat = error in basecoating phase

TAKE COUNTERMEASURES

SOLUTION: 100% intact doors

Use case: digital analytics reduce error rates in the automotive industry

CAR MANUFACTURING – REDUCTION OF QUALITY ISSUES WITH CAR DOORS IN PAINT PROCESS

AT A GLANCE

Date and time data Sensor data Employee data ERP/job data

QUALITY CONTROL CLEARCOAT

SPECIFICA-TIONS FROM ERP SYSTEM

JIT SUPPLY OF BLANK

DOORS

PRIMER & BASECOAT

PRE- CLEANING

OUTPUT WITHOUT DATA ANALYSIS

OUTPUT WITH DATA ANALYSIS

OUTPUT

x 1,000

x 0

PROCESS DATA OUTPUT

x 950

x 50

ü û

ü ü Statistical

analysis tool Counter- steering

Central data cube

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DIGITAL LEAN TOOLS are instruments that can be applied to both the manufacturing and service value chains to MAXIMIZE process PRODUCTIVITY and EFFICIENCY. For example:

n EMBEDDED SYSTEMS and M2M COMMUNICATION to streamline interfaces and information flows between systems/machines and use intelligent warehousing

n ADVANCED ROBOTICS to increase productivity as well as efficiency and ensure continuously high product/service quality

n RTPM to identify and eliminate errors immediately and prevent further disruption

n REMOTE DEVICE CONTROL and CUSTOMER SELF-SERVICE to automate service and support

AT A GLANCE

Digitization leans business processes through automation and reduction of process errors

APPLICATION OF DIGITAL LEAN TOOLS TO THE MANUFACTURING/ SERVICE VALUE CHAIN

Machine-to-machine (m2m) communication

REDUCTION IN PROCESS DURATION BY ELIMINATING

MANUAL PROCESS STEPS AND INCREASING EFFICIENCY

Real-time process

monitoring (rtpm)

Advanced robotics

Embedded systems

Customer self-service app à for use case see next page

Remote device control

PRODUCT/ SERVICE

DEVELOPMENT

OPERATIONS/ SERVICE DELIVERY LOGISTICS MKT. & SALES SERVICE & SUPPORT

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The PROBLEM-SOLVING PROCESS of telecommunication providers can be digitally leaned by introducing a CUSTOMER SELF-SERVICE app:

n The time-to-problem solution is reduced through ELIMINATION OF MANUAL PROCESS STEPS – customer service acts as escalation instance only

n Interfaces are reduced through ELIMINATION OF MULTIPLE INTERACTIONS between customer service and engineers

n Transparency is increased through REAL-TIME STATUS INFORMATION, e.g. on appointment dispatching

n Complexity is reduced, e.g. through AUTOMATED TICKET CLOSURE after engineer feedback

Use case: digital customer self-service enhances customer experience in telco industry

TELCO INDUSTRY – PROBLEM-SOLVING WITH SELF-SERVICE AT A GLANCE

ENGINEER (ENGR)

SELF-SERVICE SYSTEM (ST)

CUSTOMER CARE STAFF (CS)

DIGITAL LEAN PROCESS Self-service PROCESS

CUST. PROBL.

DISPATCH APPOINT.

PROVIDE FEEDBACK

TO ST

LOCAL SUPPORT

TEST & FIX LINE

If no solution

STANDARD PROCESS Customer service

ASSESS CUSTOMER PROBLEM

PROPOSE & SCHEDULE APPOINT.

LOCAL SUPPORT

REQUEST ENGR

APPOINT.

PROVIDE APPOINT.

TO CS

REQUEST ENGR

FEEDBACK

PROVIDE FEEDBACK

TO CS

TEST & FIX LINE

REMOTELY

If no solution

CUSTOMER SERVICE ONLY FOR ESCALATION

PROCESS TIME - 40%

After digital lean Before digital lean

PROCESS COSTS

Before digital lean - 25%

After digital lean

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AT A GLANCE

Digital lean allows immediate measurability of the return on investment in digital (ROID)

TRANSPARENCY ON RETURN ON INVESTMENT IN DIGITAL – EXEMPLARY

CLEAR TRANSPA-RENCY ON INVEST FOR DIGITAL

IMMEDIATE ROID MEASURABILITY

IMPLEMENTATION OF ACTIVITY-BASED COSTING

DIGITAL LEAN PROCESS

USD 3.1 m

USD 1.7 m

USD 2.1 m

USD 6.9 m

STANDARD PROCESS

USD 3.7 m

USD 2.5 m

USD 5.1 m

USD 2.3 m

USD 13.6 m

ROID

- 49% (6.7 m) Cost decrease

USD 6.7 m

USD 1.5 m = 4.5

Payback period

USD 1.5 m

USD 6.7 m = 2.7 months

The goetzpartners digital lean approach offers SEVERAL ADVANTAGES:

n INCREASED EFFICIENCY, QUALITY and process THROUGHPUT based on the integration of lean and digitization.

n HIGH TRANSPARENCY on return on investment in digital (ROID) due to immediate availability of investment costs and – based on an activity-based costing – savings from process optimization.

n CLEAR MEASURABILITY of the project payback period.

n EFFICIENT UTILIZATION of consultant support through digitization of analysis phase and a shortened overall project duration.

Digital investments USD 1.0 m

Consulting support USD 0.5 m

Investments total USD 1.5 m

ü ü ü

ü ü

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ADVISERS FOR STRATEGY, M&A AND TRANSFORMATION goetzpartners is an independent advisory firm for all key issues of entrepreneurial activity: strategy, M&A and transformation. This unique approach makes clients measurably more successful. The combination of corporate finance and management consulting creates sustainable added value when determining valid courses of action, reaching decisions and implementing them. Boasting a vast wealth of business experience, goetzpartners advises clients in all key industries world-wide: Business Services, Energy, Financial Institutions, Healthcare, Industrials & Automotive, Retail & FMCG and TMT.

CHALLENGERS WITH PERSONALITY For the key business issues of strategy, M&A and transformation, standard solutions are rarely the right answer. On every project, goetzpartners ensures that there is always sufficient scope for proven methods to be combined with individual and client-specific approaches. Our consultants lay the foundations for excellent results by trusting their own opinions and experience and taking a strong stance on the entrepreneurial challenges to be resolved.

NETWORKERS AT THE HIGHEST LEVEL Our far-reaching network of contacts, grown over decades, involves top decision makers in business and politics, and produces extraordinary advisory outcomes. Our close working relationship with prominent members of society opens up wide-ranging new perspectives. goetzpartners thinks beyond borders and connects the right people with the right ideas. That way, goetzpartners creates valuable synergies for all involved.

EXPERTS ON COURSE FOR SUCCESS Founded in 1991 by Dr. Stephan Goetz and Stefan Sanktjohanser, goetzpartners today ranks among the 10 best-performing advisory firms in Germany (Lünendonk®). goetzpartners has received awards three years in a row as part of the “Best of Consulting” contest by the renowned German magazine “WirtschaftsWoche”, most recently in the in the “Project Excellence” category (2016). Internationally, the company operates in 11 countries out of 14 offices with more than 350 professionals.

About goetzpartners

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Disclaimer

September 2017

This document is copyright-protected. Its reproduction, rental or any other form of distribution or publication – including in extract form – is subject to the consent of goetzpartners. The analyses and assumptions on which this publication is based were undertaken by the authors to the best of their knowledge and judgment. goetzpartners accept no liability whatsoever for the accurateness of these analyses or assumptions. Where information was taken from public sources its accuracy and completeness was assumed without any further checking. By its very nature, this publication does not take into account the specific circumstances of individual cases. This document can therefore not replace individual expert advice or extensive research which should be undertaken by the third party.

CONTACT PUBLISHER Dr. Alexander Henschel Managing Director alexander.henschel@goetzpartners.com T +49-89-290725-115

AUTHOR Dr. Johannes Krämer Manager johannes.kraemer@goetzpartners.com T +49-89-290725-115

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