UNITED NATIONSINDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth 1
SPX SME Upgrading Building Capacity, Capability & Sustainability
Dar Es Salaam, Tanzania21st June 2011
UNITED NATIONSINDUSTRIAL DEVELOPMENT ORGANIZATION
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
UNITED NATIONSINDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth
Agenda
▶ What is Lean
▶ Case Study examples
UNITED NATIONSINDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth
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
UNITED NATIONSINDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth
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
UNITED NATIONSINDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth
What is Lean?
Focused on Effectiveness and Efficiency
Doing the right things well!A War on Waste!!!What is the alternative?
UNITED NATIONSINDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth
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
UNITED NATIONSINDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth
Some Lean Principles….
▶ Time
▶ Money
▶ Effort
Must want to compete…..
UNITED NATIONSINDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth
Rules
1. Fairness2. Firmness3. Consistency
4. Look 5. See6. Understand7. Do
Dealing with People
Dealing with Processes
UNITED NATIONSINDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth
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
UNITED NATIONSINDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth
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…..
UNITED NATIONSINDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth
War on Waste- Absolutely Focused & Relentless
▶ Motion▶ Transportation▶ Processing▶ Defects▶ Waiting▶ Over-production▶ Inventory▶ People
UNITED NATIONSINDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth
Lean - Action based on FACTS
▶ Benchmarking = Diagnosis
▶ Best Practice = Medicine
UNITED NATIONSINDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth
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…..
UNITED NATIONSINDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth
Benchmarking is a continuous systematic process for comparing business processes for improvement...
UNITED NATIONSINDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth
Benchmarking for SuccessTool Use vs Company Development
Stage
Evolutionof Company
1 2 3
DiagnosticHolistic
Process B/mark
Best in Class
UNITED NATIONSINDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth
Acceptable Standards are
constantly changing......
UNITED NATIONSINDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth
UNITED NATIONSINDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth
UNITED NATIONSINDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth
RESULTSSupplier PartnershipsWorld Class ManufacturingCompetitive Products and ServicesBusiness Process ManagementCustomer Partnerships
World Class
JIT
Employee Involvement
TQM
The Medicine
UNITED NATIONSINDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth
UNITED NATIONSINDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth
UNITED NATIONSINDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth
Layout / FlowsSet Up Time ReductionManufacturing Systems“Productive” ManagementJIT Supplies
JIT Manufacturing
UNITED NATIONSINDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth
Process CapabilityWaste EliminationTools of QualityCustomer FocusQuality Function Deployment
Total Quality Management
UNITED NATIONSINDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth
Employee Involvement =Expectation
EmpowermentPeople EffectivenessQuality AwarenessGroup problem SolvingImprovement Teams
UNITED NATIONSINDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth
Products and Services
Design for ManufactureDesign for OperationRegulatory ApprovalProduct Evaluation
UNITED NATIONSINDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth
Management
Effective Information TechnologyStructures and StrategiesPlans + Projectscts
UNITED NATIONSINDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth
Office Processes
World Class ProcessesLean Administrative SystemsContinuous ImprovementValue Added Process Identification
UNITED NATIONSINDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth
▶ 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
UNITED NATIONSINDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth
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
UNITED NATIONSINDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth
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
UNITED NATIONSINDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth
Lean - Sample Results
▶ Flat Food – Over €10million savings made
▶ County Foods - “Game Changing” result
▶ Medical – 38% improvement on EBITDA
UNITED NATIONSINDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth
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?
UNITED NATIONSINDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth
▶ On the Floor.... What is current state? Visuals for feedback Detailed use of tools
• Process• Physical• Check Sheets• Run charts• Teams
UNITED NATIONSINDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth
▶ In the Office.... What is current state? Visuals for feedback Detailed use of tools
• Process• Physical• Check Sheets• Run charts• Teams
UNITED NATIONSINDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth
▶ For the Management.....
Next Steps Absorption of tools and techniques Focus for the Business
UNITED NATIONSINDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth
Q and A
UNITED NATIONSINDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth
Together Everyone Achieves MoreTEAM