Annual General Meeting 2019

9 May 2018

AGENDA

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Welcome 10 min Alderman James Vos (MMC, City of CT)

Chairperson’s address 10 min Marthie Raphael (Chairperson)

2018 financials + highlights 15 min Jake Morris (Lead Facilitator)

Member firm success stories

Pep Clothing 15 min John-Paul Heyns (Production Manager)

Keedo 15 min Craig van der Poll (Factory Manager)

Linen Drawer 15 min Camilla Swart (Owner)

Break 15 min

Awards 10 min Elaine Smith (Director C&T, DTI)

2019 budget and highlights 15 min Jake Morris (Lead Facilitator)

Launch of QR handbook (2nd edition) 15 min Jake Morris (Lead Facilitator)

Thanks and closure 5 min Jake Morris (Lead Facilitator)

CHAIRPERSON’S ADDRESS

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Marthie Raphael

CEO of Pep Clothing

REMINDER OF WHAT WE’RE ABOUT

1. Thought leadership / knowledge advancement

– Technology, management methodologies, value chain models, etc.

– Provides direction to industry and drives innovation

2. Shared learnings

– Spirit of clustering – absent this we become subsidisation scheme

– Wider impact justifies public sector support

3. Collective efficiency

– Advantageous to do as a collective (i.e. not otherwise possible or

quicker, cheaper and/or more effective)

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2018 FINANCIAL RESULTS

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2018 2017

Brought forward from previous year 491 695 60 979

Revenue 7 241 847 8 828 871

Public Sector 5 165 584 6 587 408

Private Sector 2 058 007 2 232 273

Interest 18 256 9 190

Expenses 7 243 146 8 398 156

World Class Manufacturing 4 854 550 6 127 422

Quick Response 120 383 165 065

Export Promotion 563 221 261 842

Executive 1 681 659 1 843 827

Other 23 334

Surplus/(Deficit) (1 299) 491 695

2018 HIGHLIGHTS – ROBUST WCM PROGRAMME

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20

308

>150 People trained/coached

Days of expert Lean support

Workshops/factory tours

25 Performance assessments

10 Strategy sessions

1112

New jobs(across 10 CIP firms over 2 years)

Does this make a difference?

2018 HIGHLIGHTS – LEAN BOOT CAMP

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240

• 10-week practical Lean training course

• 5 training days in live factory environment

• 1 best practice site visit

• Assignment + presentation to management

• First one - Pep Clothing, 13 participants from 8 firms

2018 HIGHLIGHTS – Operational Performance Measurement System

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240

• Capture and store key performance data

• Convert data into intelligent, visual dashboard

• Drive proactive and informed decision-making

2018 HIGHLIGHTS – QR HANDBOOK (2nd EDITION)

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240

• Speed + flexibility = major growth opportunity for local design centres and manufacturers (+ retailers!)

• Easier said than done

• QR handbook is a practical guide to building this capability across the value chain

More about this later…

MEMBER FIRM PRESENTATIONS

• Pep Clothing – John-Paul Heyns (Production Manager)

• Keedo – Craig van der Poll (Factory Manager)

• Linen Drawer – Camilla Swart (Owner)

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CCTC AGM LEAN BOOTCAMP

FEEDBACK

28 May 2019

Introduction

• Period of 6 non-consecutive days.• Hosted at PepClo.• Multiple CCTC members attended the camp.• The Boot camp covered multiple topics such as:

• Introduction to Lean• A3 Problem solving• Value stream mapping• PDCA• Developing a Lean culture• Visual Management

• Site visit to Nibbly Bits (In2Foods) in Paarl.• Finalised for 2018 with a A3 presentation regarding the projects we covered

within PepClo.

Background• Improve certain aspects within our business.• 3 Projects were run parallel to another:

• Pack on Holds• Reducing internal repair rate (IRR)• Visual management systems

• Projects were championed by 3 senior leaders:• Jason Hallet - Senior Production manager• Mercia Patience - Senior Production manager• JP Heyns – Production Manager

• Conduct a standard A3 problem solving project and focus on how our project couldimprove our current state.

The start of our journey

• 3 projects run by 3 different groups.• Group had a random selection of representatives from different CCTC

members.• Beneficial as the “fresh” input saw things differently.

• Assumptions carried minimal value.• Going to the source (Gemba) is the only true way of getting an answer.• Lean concept is simple yet difficult.• Similar findings by each team that contributed to similar problems.• Focusing on Visual management systems implementation.

Visual management systems

• Implementation of basic visual management practices.• Basic and inexpensive materials used.• Target condition:

• To create a form of communication that is comprehensible andunderstood by all.

• KPIs expressed visually far more effective.• Complex reports minimal impact (factory floor level).

• VM boards created a foundation for alternative actions.• Created accountability.• Significant mind shift in our operators and leaders.• The project was run in a A3 Problem solving format.

A3 Problem solving

Visual KPI monitoring

Team Huddles

Other tools and techniques

During the duration of the boot camp we were exposed tomultiple problem solving techniques and tools that wouldassist us in our LEAN journey:• PDCA cycles• Lean Principles• Value stream mapping• Change management• 5S

PDCA cycles

Lean Principles• 8 Forms of waste (six sigma).• Long term focus on improving quality.

Automationmag.co

5S and Change Management• Boot camp has provided a blueprint to initiate a 5S action plan as well

as change management principles that will contribute to our LeanJourney.

Future State

• VM to be a focus point in our Lean Journey.• Key aspect of our CI roadmap.• VM as a tool to create and stimulate the desired culture of Continuous

Improvement.• Combine all Lean learnings and together focus on continuously improving PepClo.• VM to be the key driver when pursuing KPI objectives.

Thank you!

Why Pull?

Work flow was our greatest challenge!

The Wins…

• Quality built into the process

• Structured auditing process

The Wins…

• Reduction in WIP

The Wins…

• Reduced Manufacturing lead time

The Wins…

• Improved Plan vs Actual performance

88%

89%

90%

91%

92%

93%

94%

95%

2 3 4

Plan vs Actual

The Wins…

• Working into the box

Next steps…

• Integrating new line into the existing model for production.

• Improving quality processes.

• Improving problem solving capabilities at all levels.

• Enable and equip our maintenance department to improve on their service

delivery.

No, not the end…

…the journey has only just begun!

LINEN DRAWER

THE LONG RUN

28 MAY 2019

IN THE BLOCKS

• BUSINESS ESTABLISHED IN 2005.

• DESIGN HOUSE; OUTSOURCING

MANUFACTURING.

• STARTED OWN IN-HOUSE

MANUFACTURING IN 2013.

• PARTICIPATED IN BENCHMARKING EXERCISE WITH B&M.

• TRAINED SUPERVISOR IN WCM.

• SPACE CONSTRAINTS AND PHYSICAL LAYOUT PRECLUDED

IMPLEMENTATION OF LEAN MANUFACTURING.

RUN UP

• MARCH 2018: RELOCATED INTO LARGER

MANUFACTURING PREMISES.

• APRIL 2018: MANUFACTURING OPERATIONS IN PLACE

AND BEGAN CONTINUOUS IMPROVEMENT PROGRAMME.

FIRST HURDLE

OPTIMAL FACTORY LOADING

– IDENTIFY SLOW/DIFFICULT PRODUCTION

– SPEC SHEETS FOR EACH PRODUCT

– OPERATION SEQUENCE FOR EACH PRODUCT

– STANDARD TIMES ESTABLISHED FOR EACH OPERATION

– RESULTED IN PRODUCT THROUGHPUT TIMES:

• INTEGRATED ONTO MANUFACTURING ORDERS – ALLOCATED HOURS

• INCORPORATED ONTO PRODUCTION SCHEDULE = FACTORY LOADING

– ENABLED US TO PLAN LEAD TIMES/THROUGHPUT AND FACTORY

MANNING

SECOND HURDLE

PRODUCTION FLOW AT MACHINING

– ALL OPERATIONAL SEQUENCES WERE EXAMINED.

– OPERATIONS WERE GROUPED AND SIMPLIFIED.

– SIMPLE WORK AIDS WERE DEVISED AND INSTALLED.

– RESULTING IN IMPROVED PRODUCTION FLOW AND

REDUCED HANDLING.

– ON-GOING SCOPE FOR IMPROVEMENT.

THIRD HURDLE

UPSKILLING OF OPERATORS

– SKILLS MATRIX COMPLETED.

– TRAINING PROGRAMME FOR UPSKILLING

OPERATORS DEVELOPED TARGETING

CONSTRAINT AREAS.

– RESULTING IN THE ABILITY TO MANAGE OUR

CONSTRAINTS MORE EFFECTIVELY.

– STAFF ARE MOTIVATED FOR UPSKILLING.

THE BEND

VISUAL PERFORMANCE BOARD

– IDENTIFIED KEY PERFORMANCE MEASUREMENTS RELEVANT TO FACTORY.

– WEEKLY AND MONTHLY TRENDS ARE DISPLAYED ON A SCREEN AND

BOARDS IN FACTORY.

– RESULTING IN BUY-IN FROM MANUFACTURING STAFF.

THE LONG STRAIGHT

FUTURE PLANS

– 7 MINUTE MEETING RUN BY

SUPERVISOR USING VPN SCREEN

AND BOARDS.

– OPTIMISATION OF THE CUTTING

PROCESSES.

– OPTIMISATION OF THE FINISHING

AND PACKING PROCESSES.

– COORDINATING RECORDED

BUSINESS INFORMATION INTO A

VISUAL FORMAT FOR EASY

MANAGEMENT.

15 MINUTE BREAK

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AWARDS

• Special thank you to our key funders:

• Best Participation Award 2018

• Lean Improvement Award 2018

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2019 BUDGET

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2019 2018

Brought forward from previous year 1 370 349 491 695

Revenue 11 336 018 7 241 847

Public Sector 8 868 008 5 165 584

Private Sector 2 468 010 2 058 007

Interest 18 256

Expenses 12 706 367 7 243 146

World Class Manufacturing 10 150 704 4 854 550

Quick Response 120 000 120 383

Export Promotion 286 077 563 221

Executive 2 149 586 1 681 659

Other 23 334

Surplus/(Deficit) 0 (1 299)

2019 HIGHLIGHTS

• Retailer engagements

• Industry 4.0 research project

• More peer learning opportunities

• QR workshops

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QUICK RESPONSE HANDBOOK (2nd EDITION)

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240

• Acknowledgements

• 9 years of research, study tours, model simulations, pilots and tests, and at-scale implementation

• The bad news… it’s hard

• The good news… it works

WHAT IS QUICK RESPONSE?

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HANDBOOK IS INTENDED TO HELP GET YOU THERE

1. Why QR

2. Mechanics of the model

(retail, design, manufacturing)

3. How to effect change

– Leadership + strategic planning

– Change management

– Culture changes

• Trading mentality

• Performance measurement

• Supply relationships and development

• Lean Thinking

– Organisational structure

– Technology

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THERE IS DETAIL…

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THERE IS DETAIL…

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THERE IS DETAIL…

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THERE IS DETAIL…

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THERE IS DETAIL…

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BUT IT’S NOT A ONE-SIZE-FITS-ALL RECIPE

• Some core elements are non-negotiable

• The rest is there to spark reflection, ideas, discussions, experiments

• Perhaps even take QR out of it… and use it as a guide to innovation

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Thank you