Mining, Automotive and Defence sectorsmanufacturship.com/.../2013/02/...QLD-20-02-2013-Brisbane-MWMcL… · Tonight's presentation agenda: 3 Parts Strategic; Tactical, Operation and

1 © McLean Management Consultants Pty Ltd

: www.mclean-mc.com.au

Michael W McLean FAICD, CMC, JM, BBus (UTS)

Mining, Automotive and Defence sectors Engaging Organisations in developing their Solutions since 1988

http://www.austcoalconsulting.com

http://www.mclean-mc.com.au/



http://www.austcoalconsulting.com/

http://www.iir.com.au/


Tonight's presentation agenda:

3 Parts Strategic; Tactical, Operation and Lean

Deployment Plans

Like “SIPOC” with “Six Honest Serving Men”:

•Strategy and various plans need data and information

inputs to produce outputs

•Rudyard Kipling’s six honest serving men are most

useful – “Who, What, When, Where, Why and How” to

develop:

•Access to an Executive Briefing from ‘Fundamental

Cost Reduction” by Manufacturship http://manufacturship.com/fcr/

http://manufacturship.com/fcr/


Part 1: Strategic:

•What disturbs your thinking - External environment -

PESTEL [Prof M Wheatley]

•Industry Competitiveness - [Prof M Porter '6 Forces'

update]

•IBIS World Industry Statistical data, trend and analysis

[Source: Enterprise Connect]

•Dept IISRTE Enterprise Connect - SCIP Business and

Manufacturing Excellence Assessments and funding

rebates [other BE Models and Benchmarks]

•‘Blue/Red Oceans’ and '3 Horizons' Strategies


Part 2: Tactical:

•Differentiation Strategies - Lowest Cost, Best

Process and Customer Intimacy

•Organisation Core Strength assessments –

SW [Internal] OT [External] Analysis

•Strategic Intents in a Business 'Plans on a

Page'

•Metrics, measures and KPIs in scorecards;

dashboards and 'Beach balls'


Part 3: Operational:

•Mapping Stakeholders needs and

expectations

•Lean Deployment Matrices and Plans

•Lean Visual Management Systems and

Metrics with PDCA, PDSA, DMAIC, 8D

•People Development and Engagement in

Change OD interventions

© McLean Management Consultants Pty Ltd

6

“The must have Management Strategies that really

produce the results for the top 40 Companies

over the last 10 years are:

Strategy, Execution, Culture and Structure.

Plus any two of the Secondary Management Practices

exhibited by these are:

Talent, Leadership, Innovation and / or

Mergers & Partnerships.”

“What Really Works” Nohira, Joyce and Roberson July 2003.


7

Why organisations fail to execute strategy

Source: Adapted

Robert S Kaplan &

Renaissance

Worldwide Inc.

60% of organisations don’t

link budgets to strategy

Budgeting Gap

Only 25% of managers have

incentives linked to strategy

Personal Objectives Gap 9 out of 10

organisations

fail to execute

strategy

85% of exec teams spend

under 1hour month discussing

strategy

Management Focus Gap

Only 5% of employees

understand strategy

Vision Gap

In 1999, the Australian Financial Review reported: “Only 57% of executives are fully attuned to the

company’s strategic direction.” And from AICD Directors' pay up 3.8 per cent in 2012 The median change in

total remuneration for all non-executive directors (NEDs) and chairmen was 3.8 per cent in 2012, according to

research by Guerdon Associates. February 2013

http://cl.exct.net/?qs=b0115950f5323b0bcf7c41bc9d853d8e24ad8e377b0456d44f7bbb72104adb546e08ca0927b8fb23


Part 1: Strategic:

•What disturbs your thinking - External environment -

PESTEL [Prof M Wheatley]

•Industry Competitiveness - [Prof M Porter '6 Forces'

update]

•IBIS World Industry Statistical data, trend and analysis

[Source: Enterprise Connect]

•Dept IISRTE Enterprise Connect - SCIP Business and

Manufacturing Excellence Assessments and funding

rebates [other BE Models and Benchmarks]

•‘Blue/Red Oceans’ and '3 Horizons' Strategies


9

World Economic Forum Davos 2011


10

Climate Change here in Australia Quiz: Who said this?

"If you want to put a price on carbon why not just do it

with a simple tax." – YouTube

http://www.youtube.com/watch?v=ckcH0Wrmy74

… and one must keep up with International changes

and developments that could impact your organisation

strategy! UK loses its AAA Credit Rating

http://www.bbc.co.uk/news/business-21554311

Australian economics: AAA Credit Rating; low inflation

and interest rates; unemployment in RBA range; 3%

Growth; Debt 9% of GDP (one of lowest) but the UK for

example…….








11

Strategy has three main components

• Identifying an appropriate set of objectives

• Identifying where the organisation will and will not compete - selecting

the battlefields

• Aligning internal capabilities to ensure successful competition and

achievement of objectives

Appropriate

Objectives

Selecting

Battlefields

Internal

Capabilities


12

Prof Michael Porter’s 5 Competing Forces is

now 6 for Complementors


13

What keeps executives awake

IBM 2010 CEO Survey - Capitalizing on Complexity

•79% of CEOs anticipate significant complexity ahead

•49% of CEOs feel prepared to handle it.

79

49

0

10

20

30

40

50

60

70

80

90

anticipate

significant

complexity

ahead

feel prepared

to handle

complexity


14


15

DIISRTE Enterprise Connect – EFQM based SCI

Program worth having done for organisations with sales

from $1m to $100m and provide a free diagnostic for

Business (Euro BEM) and Manufacturing Excellence (UK

SC21) and up to $20,000 Rebate for TAS Consultancy

and if improvement s made, another $20,000 rebate

“Organisational excellence is the overall way of

working that best satisfies the customer resulting

in balanced stakeholder satisfaction (customers,

employees, partners, society, shareholder) so

increasing the probability of long term success

as an organisation”. http://www.enterpriseconnect.gov.au

http://www.enterpriseconnect.gov.au/


16

Business Excellence

Manufacturing Excellence

Supplier Continuous Improvement Program

Overview


17

Award metrics Continuous Sustainable

Improvement Plan

Quality certification Business group formation

Step 4

RECOGNITION

Step 3

SCIP + TAS

CONSULTANCY

Step 2

DIAGNOSTIC

Step 1

ENGAGEMENT

Metrics alignment

Relationships

Business Excellence

Manufacturing

Excellence

Industry recognition

Code

of practice

3 Months

Enterprise Connect (EC) Supplier

Continuous Improvement Program

8-10 Months +12 Months

Endeavour Awards


18

•BusEx encompasses all activities and processes in the business and is focussed on:

• Assessing the overall health of the business

• Prioritising the issues that need to be addressed to deliver long term sustainable performance

• Aligning all the processes to deliver the vision and mission and identifying what they should be seeking out to achieve against the excellence benchmark defined in the BusEx model

•ManEx defines how the key processes should be designed/deployed and is focussed on:

• Improving the key processes in terms of cost time and quality by identifying and removing waste and sustaining improvement

• Involving the employees in identifying championing and leading those improvements

Enterprise Connect (EC) Business

Excellence & Manufacturing Excellence


19

Enterprise Connect (EC) Business

Excellence fundamental concepts


20

EC Determining Business Excellence The structure of the model emphasises not only what a business is

achieving (RESULTS) but also how the results are being achieved

(ENABLERS).

The maximum points have been allocated to each criterion

based on benchmarks from a range of Blue Chip companies

Leadership Processes,

Products &

Services

Key ResultsPeople

Partnerships

& Resources

Strategy

People

Results

Society

Results

Customer

Results

Enablers Results

Learning, Creativity & Innovation

®


21

ISO9004:2011 Process Q + E + S + R Mgt System

EC Manufacturing Excellence • Operational Excellence has been developed from JIT/Lean manufacturing

tools & philosophies.

• The SCIP objective is to embed lean ‘wider and deeper’ than before.

• Operational Excellence covers both operational and strategic activities via:

– A diagnostic (20 questions score 0-4 - 35% of total score) and

– A management commitment review (65% of score).

Enablers:

Approach

Deployment

Results

Assessment &

review

Results:

trends

targets

comparisons

causes

scope

Improvement*

Materials People

Job / Design

Standardisation

-

5S

Improvement* - Organisations can use their ISO9001 CA; PDCA; ISO TS16949 PDSA or 8D; Six Sigma™ DMAIC

Transform

KANBAN

Solve

Problems Flow / Value

Visual Metrics /

Boards

SPC / Quality Tools – Process FMEA + [P] Control Plans

Information

Processes

8 Wastes ,

MUDA, MURI

Set-up/SMED

ToC / TPM /

OEE


22

Other benchmarking sources -

www.globalbenchmarking.org

• Global survey on business improvement and

benchmarking

• Mission and Vision Statements and Customer

(Client) Surveys are the most used (by 77% of

organizations) of 20 improvement tools, followed

by Strengths, Weaknesses, Opportunities, and

Threats (72%), and Informal Benchmarking

(68%). Performance Benchmarking was used by

(49%) and Best Practice Benchmarking by

(39%).

The tools that are likely to increase in

popularity the most over the next three years

are:

• Performance Benchmarking, Informal

Benchmarking, Strengths, Weaknesses,

Opportunities, and Threats, and Best Practice

Benchmarking. Over 60% of organizations that

were not currently using these tools indicated

they were likely to use them in the next three

years.

• All 20 improvement tools were considered to

be effective with between 59-80% of

respondents indicating they had moderate to

major beneficial effects. The tools with the

highest rating were

• Quality Management System (80%

indicating a moderate or high effect),

followed by

• Improvement Teams and Customer (Client)

Surveys (both 77%).

• Between 65-67% of respondents identified the

different types of benchmarking as having a

moderate to high effect.


23

Other benchmarking sources -

www.globalbenchmarking.org


24

The ‘three horizons’ is useful to move from

‘Now’ to ‘Where’ – the ‘How’ is within the each

Horizons’ Business and Deployment Plan

Horizon 1 - Extend & defend core business

Horizon 2 - Build emerging businesses

Horizon 3 - Create viable options

Time (years) The Alchemy of Growth: Baghai, Coley & White, 1999


25

Strategy into Action of a 3 Horizon: Changi Airport

Singapore 1988. The Seoul Olympics Strategy

“This is the 19th consecutive win Changi

Airport won since 1988. As the first award

Changi Airport ever received, this win is

important to us and a confirmation of

passengers’ faith in us. 11/9/2006”

A Customer Service Management Program delivered to strategic intent by

processes supported by an Adult Learning processes. MWMcLean Project Consultant

with C&L Singapore + Kheng Seng Tan, S Chang, R Tien and Sydney C&L Partner J Brooks

Strategy analysis and planning session set

a vision to be ranked #1 in Customer

service by 1989: it was achieved during

engagement in 1988 as Seoul Olympics

was to start


DMO Web Site – all Defence Suppliers to

provide an A3 ‘QUAD Chart’


27

The APQC has Process Frameworks which was integrated and now

has Frameworks for other industries (NB: It uses Verb & Noun)

• www.apqc.org

http://www.apqc.org/


28

The Shingo Prize for Operational Excellence – from Principles,

Systems and then last, Tools – http://shingoprize.org/ - Toyota’s

Levels 4 and 5 not used

http://shingoprize.org/


29

Which is a ‘program’: Cost Reduction or

Productivity? Do you know your industry’s

and your organisations segmented costs?


30

Black Coal Industry Costs: IBIS World


31

AFR Boss

Magazine

September

2012


32

Telstra Productivity Report 2012: Over the next 12

months, productivity improvement is rated as the highest priority by organisations

in the agriculture, mining, resources and utilities sectors (93%).


33

Where’s the Productivity Problem? IBIS


34

Where’s the Productivity Problem? IBIS


35

Vodafone CEO has an interesting perspective

on the NBN and its importance for Australia’s

step-change in Productivity

http://www.abc.net.au/news/2012-10-14/chief-admits-

smart-phone-delay-cost-vodaphone/4311980

Chief admits smart phone delay cost Vodafone

Inside Business Posted Sun Oct 14, 2012 11:56am

AEDT

http://www.abc.net.au/news/2012-10-14/chief-admits-smart-phone-delay-cost-vodaphone/4311980

















http://www.abc.net.au/insidebusiness/


Part 2: Tactical:

•Differentiation Strategies - Lowest Cost,

Best Process and Customer Intimacy

•Organisation Core Strength assessments –

SW [Internal] OT [External] Analysis

•Strategic Intents in a Business 'Plans on a

Page'

•Metrics, measures and KPIs in scorecards;

dashboards and 'Beach balls'


37

Westfarmers Differentiation Strategy: 2008 •Target fires campaign for

Wesfarmers

•Simon Canning | February 18, 2008

The Australian

•"We are a product leadership

strategy," Mr. Chenery said. "There

is only three actual leadership

strategies I know:

• one is customer intimacy

• the other is operational

excellence, and

• the third is product leadership.


38

Differentiation Strategy – what are best at?

Best

Processes

Customer

Intimacy

Best

Product

• Global processes

• Zero Defects

• Process efficiency

• Production focus

• Local responsiveness

• Product proliferation

• Mass customization

• Customer service focus

• Production consistency

• Formal controls

• Centrally driven

• R&D focus

Corporate

Strategy


39

A strategic approach – Rolls Royce 13 10 2012


40

Once the External PESTEL and Stakeholder analysis is done

with supporting data, benchmarks etc, the SWOT is done to

produce the Tactical and Operational Plans, Resources, Goals,

Objectives, Targets, KPIs and Projects etc


Strategic Planning – it has consequences

“GE orders turbine part

inspection after GEnx

engine failure”. Thu Oct 4,

2012 (Reuters) - GE second

directive this week for an inspection

of its new GEnx engine on Boeing

Co 747-8 jets

http://www.reuters.com/finance/stocks/overview?symbol=BA.N&lc=int_mb_1001

http://www.reuters.com/finance/stocks/overview?symbol=BA.N&lc=int_mb_1001

http://www.toyota.co.jp/en/index.html


42

The Causes of problems can be traced to

upstream processes and decisions

•American Society for Quality - Cost of

Quality (COQ is from British Productivity

Council, Dr A Feigenbaum 1954 and an

Australian Standard

http://asq.org/audit/109163/web.html?shl=109163





43

Toyota on Ford visit 1968

Mr Tooka: Senior MD Toyota Automatic Loom Company and Dr Kusaba JUSE (1968):

“In some US Supplier Companies, top management

continues to believe they can improve quality by solving

problems – this is truly a critical situation and a terminal

illness in some companies – a ‘reactionary approach’.

Quality will not improve in companies that follow the

defect correction idea. Japanese managers audit the

process not the product”.

(‘Company-wide Quality Control for Automotive Suppliers’. LP Sullivan Ford Dearborn. Mi.

USA. June 1968)


44

Copying Toyota’s Production System without understanding some of their other systems is bound to fail

[email protected]

mailto:[email protected]


45

3 of Toyota’s Systems without Strategy, Principles and Cultural systems centred around TQM and Science of Statistical QC

“Applying New JIT—Toyota’s global production strategy: Epoch-making innovation of the work environment”. Kakuro

Amasaka. Japan “Robotics and Computer-Integrated Manufacturing 23 (2007) 285–293


AusAID ASEAN Automotive Supplier Development Program researched

the best practices and business model to ascertain their performance –

QCD = TQM + Six Sigma + Lean + Quality Circles (yes still alive and

well in Asia, ASEAN and Toyota)


International Journal of Quality and Reliability Management

academic peer reviewed and published from the AusAID

ASEAN Automotive Supplier Development Program

Abstract –The purpose of this study is to demonstrate the appropriateness of “Japanese Manufacturing Management” (JMM)

strategies in the Asian, ASEAN and Australasian automotive sectors. Secondly, the study assessed JMM as a prompt, effective and efficient global manufacturing management practice for automotive manufacturing companies to learn; benchmark for best

practice; acquire product and process innovation, and enhance their capabilities and capacities. In this study, the philosophies,

systems and tools that have been adopted in various automotive manufacturing assembly plants and their tier 1 suppliers in the three Regions were examined. A number of top to middle managers in these companies were located in Thailand, Indonesia,

Malaysia, Singapore, Philippines, Viet Nam, and Australia and were interviewed by using a qualitative methodology. The results

confirmed that the six pillars of JMM

Technology Strategy: Findings from Adoption and Adaptation of Japanese

Manufacturing Management (JMM) to ASEAN and Australasian Automotive

Manufacturers

Tritos Laosirihongthong1 Michael W McLean

2 Panadda Leabsuetrakool

3 Thirinpa Chongjareonjai

4

Supatsinee Leedhirakul4

1Industrial Engineering Department, Faculty of Engineering, Thammasat University, Bangkok, Thailand

2Queensland University of Technology, Queensland, Australia

3Honda Automobile (Thailand), Thailand

4Thammasat Business School, Thammasat University, Bangkok, Thailand


Part 3: Operational:

•Mapping Stakeholders needs and

expectations

•Lean Deployment Matrices and Plans

•Lean Visual Management Systems and

Metrics with PDCA, PDSA, DMAIC, 8D

•People Development and Engagement in

Change OD interventions


AQF Competitive Manufacturing qualification was changed top Competitive

Systems an Practices in 2012 – a typical Unit ‘Process / People’ Unit flow

over 10 to 12 months integrates Adult Learning ion Work Team Projects

and Individual Assessments


50

Worldwide Six Sigma™ Survey of most used tools


51

Continual Improvement / Lean / Six Sigma™

status

•Six Sigma™ (Motorola Trade and Service Mark

– US Patents Office)

•Bain & Co 2007 Tools - Survey executives have

a declining perception of Six Sigma ™.

•For Lean, there is defection too but < Six

Sigma™

•Source: Bain Management and Tools 2007 Survey

http://www.shmula.com/wp-content/uploads/2007/05/Management_Tools_and_Trends_2007.pdf


52

Selecting CI / Lean / SS Teams and Projects

Maintenance:___________________________________________________________________________

Engineering:___________________________________________________________________________

Quality :______________________________________________________________________________

Support

Processes

Core

Processes

or Product

Realisation

(ISO9004:2011)

Delivery DIFOT

Turns

Storage

Cost Cost/SQ Metre

OPEX

CAPEX ROI

Quality VGAS Process

Right 1st Time

ISO9001 Audits

Production Trucks/day

OEE 80%

Inventory

Safety LTIFR

Risk

Loss control

Process Owner

Preventive

Action and

PFMEA

Control Charts,

Histograms

Process Re-design

VA/VE

& Lean

Supply Chain

Quality

Circle

Process

Control Plan

Breakthrough (Dr Juran / Six Sigma™)

TPM

/ 5S

MRPII &

TAKT

DFMEA and

PFMEA 1 2

A3 Team Report form University of Michigan follows….


53


54

Toyota’s infamous ‘A3 Process’

In summary, the purpose of the A3 process is to:

• structure effective and efficient dialogue to

• foster understanding followed by agreement.

“The length of this

document defends it well

against the risk of it being

read.” Sir Winston

Churchill


55

ISO 9001:2008 “Determine processes, sequence and

interaction, criteria and methods to ensure operation and

control of processes” . Your QMS & IMS structured should be

as per the right NOT the left

ISO9001 ISO14001 ISO18001

Each Standard sample clauses

Business Process

Description 4 7 4 6 4 8

2. Design &

Engineer

Product

8. Plan, provide

& maintain

People

14. Review and

improve

performance

ISO9001 ISO14001 ISO18001

IS9001 Clause

Description

All

Clauses All Clauses All Clauses

7.1 Planning of

Product

Realization

8.1

Measurement,

analysis and

improvement

8.3 Control of

non-conforming

product


56

The APQC has Process Frameworks which was integrated and now has

Frameworks for other industries (NB: It uses Verb & Noun) that you can

reengineer your Clause-Based Quality and other Management System

documentation to be compliant to the ISO9001:2008 and now

ISO9004:2011 “Process-approach”. Makes system and ERP integration

easier and is the basis for BPM and Lean value stream maps • www.apqc.org

http://www.apqc.org/


57

A coal Receival , dump, convey and stack Dr Ishikawa Process cause

and effect (his 3rd type – most people use his ‘4M’s and 1P’ and

Classification C&E – refer his ‘Guide to QC 1968 page 21 to 29.

Applying these to Service Sector is very powerful and important in Six

Sigma™ variation reduction/stability and Lean Value Stream Mapping

and Waste minimization

[Case study causes not shown]


58

MIT USA Motor Vehicle Industry Study by Prof

Krafnick and PhD Researches coined ‘Lean’ to

describe Toyota to others in the study.

In “Lean Manufacturing” book by Womack, Jones and Roos, page

19 states “Value Stream Mapping” requires three 'tasks’

URL: http://web.mit.edu/ctpid/www/imvp/

http://web.mit.edu/ctpid/www/imvp/


59

Toyota’s Production System


A Lean Deployment Plan fits within the tactical

and strategic plans


61

Deploying Strategic measures: Mining

EBIT >8% Group / Corporate

Production

to Target Quality Coal General Manager

Deploy crew and

equipment to Daily Plan

Truck and

Shovel availability Shift Foremen

Shovel Cycle

time <30 secs

Truck haulage

cycle time <15mins Operator

Daily Shift

Production Plan

Review to Plan

and Pit Location Mine Monthly

plan to survey OCE’s

Yearly Mine Plan

production target

Competent Crew

available Department

Managers

Strategic Measure :

Coal contract allocations

on-time, in full, to customer

quality specifications”

Coal Quality

Specification

PWCS /APBT/DBCT

shipping and

haulage timings

Bench, face,

seam to be mined

Specified Quality

Coal to ROM

Mine coal

from seam to

meet specification


62

Auto Sector Business Plan deployed through PDCA . Courtesy “Lean

Manufacturing” USA 2007 and J Liker ‘Obeya’ - “The Toyota Way”


63

Sometimes it can go wrong !

British Prisons Slammed

“Any organisation that possesses One Vision

Statement, Five Strategic Goals, Six Values and

Seven Guiding Principles, with no obvious link

between any of them, is bound to fail”

Her Majesty’s Special Commission


64

Managing Complex Change (Adapted from T Knoster 1991)

Documents

Mining, Automotive and Defence sectorsmanufacturship.com/.../2013/02/...QLD-20-02-2013-Brisbane-MWMcL… · Tonight's presentation agenda: 3 Parts Strategic; Tactical, Operation and