Ss. Cyril and Methodius University in SkopjeFaculty of Mechanical Engineering - Division of IE&M -
Enterprise Restructuring/Improvement
- Introduction -
XXXIII AIM Conference: Skopje (22-25 September, 2011)
Prof. Delcho Jovanoski
Ss. Cyril and Methodius University in SkopjeFaculty of Mechanical Engineering - Division of IE&M -
FOCUS of the conference: Discussions/ideas from Grenoble
• Prof. Jensen: education• Prof. Kochar: sustainability of the changes• Prof. Fahrni: continuous restructuring• Prof. Meier: production – not financial issues• Prof. Deuse: research• . . .
(of course: the colleagues have not thought that a single focus excludes the others!)
Ss. Cyril and Methodius University in SkopjeFaculty of Mechanical Engineering - Division of IE&M -
Continuous restructuring
… there is at least one point in the history of a company when dramatic changes should be made in order to achieve a next level of performance. … (former Intel manager)
(not one point; there are many!)
Ss. Cyril and Methodius University in SkopjeFaculty of Mechanical Engineering - Division of IE&M -
Division of Industrial Engineering and Management:Activities
Research Applied Projects
• Enterprise Restructuring• Factory Planning• Implementation of
New Technologies• Continuous Improvement• Investment Planning• Business Start-Up• Quality Management• Logistics and SCM• Process optimization• . . .
• Methodology for Enterprise
Restructuring• CAPP• IS• Technical Investment Planning• Organizational Design• Capacity Planning• HRM• PPC• . . .
Education
• Manufacturing systems• Operations research• Management• Project Management• Product Development• Work Study• Management of
Technology• Entrepreneurship and
Small Business• Modeling and
Simulation• . . .
Ss. Cyril and Methodius University in SkopjeFaculty of Mechanical Engineering - Division of IE&M -
GAP ANALYSIS -I/P MATRIXES
consistency of the strategy goalsand the performance measures
Insight in the enterprise doing
Goals of the strategy
Top management
Perfor-mance
Measure-ment
Bench-marking
Ana-lysis
Actions for improvement of thesituation
PERFORMANCE MEASUREMENT SISTEM
Strategy
Customer demands
Enterprise Restructuring: COMPASS(COmpany’s Management Purpose ASSistance) Partner institution: Fraunhofer Institute für Produktionstechnik und Automatisierung (IPA)
Ss. Cyril and Methodius University in SkopjeFaculty of Mechanical Engineering - Division of IE&M -
Enterprise Restructuring – COMPASS:from a single organizational/functional unit to the whole enterprise and from a single KE to the bunch of KE
TIME Structural-
functional area Sub-area Duration Reliability /
Dependability Flexibility
W Value W Value W Value MARKETING Market analysis Defining the product spectrum Advertising
R&D R&D of new technologies 0,1 0,6 R&D of new products 0,2 0,2 Analysis of new investments
CONSTRUCTION Technical documentation - new products
0,2 1,2
Technical documentation - adaptations
PURCHASING Making purchasing orders 0,3 0,9 Vendor management SALES AND DISTRIBUTION
Packing
Distribution 0,1 0,8 Making order for production 0,1 1,1 Customer management Servicing and technical support to the
customer
Making an offer TOTAL 1 3,8 1 1
VALUE of the subKEi 0,2 0,8 0,35 0,5 0,45 1,2
VALUE of the KE 0,875
Ss. Cyril and Methodius University in SkopjeFaculty of Mechanical Engineering - Division of IE&M -
I-P matrix: portfolio(for only two key elements for success)
7
PER
FO
RM
AN
CE
IMPORTANCE
0 0,5 1
5
10
Productivity - Labor
Costs – Labor Productivity -
Equipment
Productivity -
Energy
Costs -
Overheads
Costs - Equipment
Productivity - Facilities
Productivity - Material
Costs - Material
Legend: - False alarm - OK - OK - Gap
Ss. Cyril and Methodius University in SkopjeFaculty of Mechanical Engineering - Division of IE&M -
Scenarios …
8
13
9
5
1 2
6
10
14
Costs
15
11
7
3 4
8
12
16
H
I
G
C
DE
F
J
A
B
improvement less
than 10%
improvement less
than 10%
improvement
more than 10%
improvement less
than 10%
improvement
more than 10%
CriticalFactor 1
CriticalFactor 1
improvement more
than 10%
improvement less
than 10%
improvement more
than 10%
Critical Factor 3 Critical Factor 3
Critical Factor 4
improvement less
than 10%
improvement more
than 10%
improvement less
than 10%
improvement
more than 10%
CriticalFactor 2
Ss. Cyril and Methodius University in SkopjeFaculty of Mechanical Engineering - Division of IE&M -
RESTRUCTURING OF A COUNTRY:National strategy for sustainable development of R. Macedonia (Partner institution: SIDA, Sweden)
Strategic Objective
Sustainable Development in the Republic of Macedonia, encompassing the economy, social and
environmental dimensions
Project Objective
To lead a participatory process of developing a National Strategy for Sustainable development
meeting the requirements of EU – accession for the Republic of Macedonia.
Specific Project Objective Area 2
NSSD Prepared
Specific Project Objective Area 1
Awareness Increased
Specific Project Objective Area 3
Capacity Increased
1. Awareness of sustainable development
among the stakeholders and the people of the
Republic of Macedonia increased
4. National Strategy for Sustainable Development in compliance with EU-
requirements elaborated
3. Strengths of the Republic of Macedonia to
fully participate in the process of globalisation
identified
5. Capacity for planning and management of
sustainable development among key
stakeholders strengthened
6. Institutional setup and coordinating
mechanisms for implementation and
maintenance of the process of sustainable
development established
2. Framework for sustainable development in
the Republic of Macedonia, as ground for
acceleration of domestic and foreign
investments, defined
Chart No. 1: Project Strategic Objective, Specific Objectives and Outputs
9
Hundreds of projects for sustainable
improvement of the whole
economy
Ss. Cyril and Methodius University in SkopjeFaculty of Mechanical Engineering - Division of IE&M -
Production – not Finance: actually all functions!
Cooperations (in development, sales, purchasing, …) Strategies (followed and planned) SWOT of the company Measures from Controlling Benchmarking of economic performance measures Personnel Product spectrum and development Manufacturing organization (manufacturing, assembly,
maintenance, quality management, sales, PPC, transport, warehouses, ...)
Purchasing Know-how . . .
Ss. Cyril and Methodius University in SkopjeFaculty of Mechanical Engineering - Division of IE&M -
Strategic PlanningPartner institution: Fraunhofer Institute für Produktionstechnik und Automatisierung (IPA)
Followed strategies Goals Strategies Approaching new markets Development of new products Production organization analysis
Planned strategies
Development of marketing and other activities
Quality management, certificate
Organizational forms (e.g. profit centers)
Product standardization
Hig
h pr
iori
ty
CIM Product standardization Reduction of the manufacturing
depth Reduction of the hierarchical level s Quality management, certificate Organizational forms (e.g. profit
centers)
Derived demands/measures
Lead times reduction Development of cooperation Cleaning of the product mix Improvement of the Employee qualifications KAIZEN/CIM
Mid
dle
prio
rity
Derived demands/measures versus the competition, management deficit, know how
Self -assessment of the weaknesses in lead times, costs
Product mix Lack of personnel in sales
Lower Costs
High delivery readiness
Big number of products
High quality
Reduction of the hierarchical levels
Reduction of the manufacturing depth
Automation Computer integration, CIM
Low
pri
orit
y
Ss. Cyril and Methodius University in SkopjeFaculty of Mechanical Engineering - Division of IE&M -
Product development
Development and Design
Share of revenue and costs
0
5
10
15
20
25
30
35
40
45
50
Rev
enue
in %
0
5
10
15
20
25
30
35
40
50
Costs share
Revenue share
1. groupof products
2. groupof products
3. groupof products
4. groupof products
Ss. Cyril and Methodius University in SkopjeFaculty of Mechanical Engineering - Division of IE&M -
Actions for different product groups
Income shares
%
40
30
20
10
0,35 0,7 1,05 1,4 Cost shares / Income shares
Product group 2
Product group 1
Product group 3
Product group 4
Cleaning of the product mix
(new products which makeIncome are needed)
Increasing Income shares
Marketing activities !
Ss. Cyril and Methodius University in SkopjeFaculty of Mechanical Engineering - Division of IE&M -
Restructuring strategy for company Y
Partner institution: SINTEF, Norway
Project tasks
Find capital/I ncrease volume
I mprovements
Search f or partner
I ncrease market presens and awareness
Short term Mid/ long term
- Identify potential partners - Clarify interest of potential partners and what RK can offer- Identify type of partnership(s) - Develop prospect(s)
- Establish marketing department- Joint participation in tenders with foreign companies- Investigate lost tenders- Investigate competitors and their advantages- Identify markets/ tenders that are suitable with regards to Rade Koncar's current capabilities and capacities- Political influence on markets of the new government- Establish continuos investigations of available donors, donations, creditlines, tenders, funds, etc. - Alternative use of competencies
- Financial restructuring- Identify bottlenecks- Organisational adjustments-Re-establish brand name-Maintenance of machines
-Financial aspects-Marketing development-Training of staff-Standardisation and modularisation-Continous improvement-Quality management-Maintenance of machines-Modernisation of equipment-Production planning and control
Ss. Cyril and Methodius University in SkopjeFaculty of Mechanical Engineering - Division of IE&M -
Fractal Company Approach
Nr.
PRODUCTION PHASE
CONCEPTS OF THE FRACTALS
I II III IV V
123
Entrance controlWarehousingMaterial preparation(sheet metal, plastic isolation)
4 Forming of package(cutting through, packaging, isolation)
5 Casting of the plastic parts
6 Casting of the non-ferrous metal parts
78
Metal cutting and formingPre-assembling
91011
Final-assemblingInspectionPacking
12 Warehousing and delivery
13 Quality management
1 1 1 + cutting through
1 1 10
10 10 8 8 8
11 11 9 9 9
2 2 9 10
3 3
4 4
5 5
7 8 9 6 7 8
2 2
3 3
4 4
5 6 7 5 6 7 5 6 7
2
3
46
Ss. Cyril and Methodius University in SkopjeFaculty of Mechanical Engineering - Division of IE&M -
Layout Optimization Partner institution: SINTEF, Norway
StoreSheet store
Cutting
Pres6
Bending
Saw SawLathe
Bending
Bending tool
Cutter Bending
tubes
Manual br.
WELDING
Kiln
Electrostaticpainting
AssemblyStore for finished products
Drill Press
Product I
Product II
Sh
eet
meta
l
WeldingArea
(as a separate fractal)
PaintingAssembly Final
product store
PROPOSAL 5A
Bend.
store
STORE
Pai
nt
sho
pAss
em
blySto
re
OFF
ICE A
REA
SDPPSAW
MILL
BB
ng
Be
nd .
L
WELDING
ASSEMBLY
SAW
Cut
Ss. Cyril and Methodius University in SkopjeFaculty of Mechanical Engineering - Division of IE&M -
TEMPUS-Project: Quality Management at Universities in Macedonia
Partner institution: Vienna University of Technology and Fraunhofer Institut für Produktionstechnik und Automatisierung (IPA)
1.2 Kick-Off-Meeting: QM Philosophy and Mgt Tool
1.4 Analysis and Synthesis of the collected Data
1.6 Presentation and Analysis of the QMS-Manual
1.8 Presentation and Analysis of the detailed, general QMS-Documentation
2.1 Training for Working groups at the Rectorates before the work on QMS
2.2 Analysis of the differences between the general and specific QMS
2.3 Creation of specific QMS-Manuals - Q-Plan (Processes+PR) - Q-Policy, Q-Goals - Presentation of QMS
2.4 Creation of specific QMS-Documentations - Procedures, - Work Instruct. - Forms
Dissemination and sustainability
Quality control and monitoring
Management of the project
Project Structure
1. Creation of a general QM Model and QM-
System for the Rectorates
2. Development of the specific QM Systems and
Implementation in the Rectorates of four Universities
3. Testing the QM-Documentation, Audit,
Improvements, Dissemination
4. Overall Project Outcomes
1.5 Creation of a general QMS-Manual
1.3 Preparation and scanning of the current situation - Organization - Products/Services - Processes + Documentation
1.1 Development of a specific project time table for all activities
1.7 Creation of detailed, general QMS-Documentation - Procedures, - Work Instruct. - Forms
2.5 Harmonization of the developed QMS-Documentation
3.1 Preparation and Releasing of the QMS-Documentation
3.3 Monitoring of the implementation of the QMS-Documentation
3.4 Training of the personnel for Internal Audits
3.5 Testing of the personnel for Internal Audits
3.6 Preparation of the Int. Audits
3.7 Carrying out Internal Audits
3.8 Analysis of Internal Audits and Preventive/Corrective Meas.
3.9 Choosing of Certif. Inst.
3.10 Carrying out of the External Audits
3.11 Promotive Conference and Closing of the Project
3.2 Training of the further employee in the Rectorates
Ss. Cyril and Methodius University in SkopjeFaculty of Mechanical Engineering - Division of IE&M -
Pre- and Post-calculationPartner institution: SINTEF, Norway
Components of the cost calculation REFA approach Our
approach
CE1 = M1 + tn,1 *(Ct,1 + ka + ksap + kot,1)
Material unit cost
Material general cost
Material cost
Direct labor cost
General cost for manufacturing
Manufacturing cost
Separate manufacturing cost
Production cost
Cost for development and design
General management cost
General cost for sale
General cost for management and sale
Separate unit cost for sale
Total cost
MET
MOT
MT
DTI
PETI
OTI
TI
PT
TK
OTU
OTPr
OTUP
TE
PETP
VT
OT
Aop
Aod
M
TI
CE
Asap
Ss. Cyril and Methodius University in SkopjeFaculty of Mechanical Engineering - Division of IE&M -
University Ss Cyril and Methodius Business Start-up CentrePartner institution: ADA, Austria
•Dissemination of the entrepreneurial spirit among the students
•Entrepreneurial training•Development of business plans•Support of the established companies
Ss. Cyril and Methodius University in SkopjeFaculty of Mechanical Engineering - Division of IE&M -
Project proposal for Sustainable development of SMEs
I. PROMOTION II. APPLIED PROJECT ACTIVITIES
- public appearance - public awareness - face-to-face
promotion - initial workshop
(general info on all problem areas)
Problem area 1
Problem area 2
Problem area 8
…
Implementation
of the applied projects
Follow-up
of the applied projects
3. Preparatory phase for the applied projects (for 40 companies)
On-job training
(focused on the strategy)
Solution of the
identified problem
Selection Selection
Scanning,
analysis and determination of strategies
1. General promotion of the project
2. Specific promotion of
problem areas
4. Detailed elaboration, implementation and follow up of the applied projects
(for 20 companies)
Selection Selection
Ss. Cyril and Methodius University in SkopjeFaculty of Mechanical Engineering - Division of IE&M -
Some of the Problem areas
PROBLEM AREA POSSIBLE OUTPUTS
Development of new, competitive products
- New, competitive product (in case of simpler products)- Concept of new, competitive product (in case of more complex products)
Costs reduction - Reduced costs in the enterprise througho Optimized inventoryo Transport minimizationo Elimination of non-value added activities, etc.
- Developed and implemented system for pre- and post-calculation (of product costs)
Quality improvement
- Implemented QMS in accordance to ISO 9001:2000 in the company - Certified QMS in accordance to ISO 9001:2000 in the company - Implemented SPC - Reduced scrap
Ss. Cyril and Methodius University in SkopjeFaculty of Mechanical Engineering - Division of IE&M -
Expert forums – dedicated to the restructuring/improvement
officials from the Government
experts from the university community (from many countries)
experts from the industry and services (domestic but also foreign ones)
experts from the Macedonian Academy of Science and Art
experts from national agencies experts from international institutions chambers of commerce labour unions donors for projects (SIDA, GTZ, ADA, JICA,
USAID, , Embassies, . . .) association of the municipalities some companies ”Champions” students
Ss. Cyril and Methodius University in SkopjeFaculty of Mechanical Engineering - Division of IE&M -
Presentations today: Examples from projects
Prof. Fahrni:
Prof. Santarek:
Prof. Veža:
Ss. Cyril and Methodius University in SkopjeFaculty of Mechanical Engineering - Division of IE&M -
Thank you for your attention