site visit to imi brno
TRANSCRIPT
Site visit to IMI Brno
Site visit to IMI Brno IMI Precision Engineering Mark Selway, IMI Group CEO 9 June 2015
Site visit to IMI Brno
Fix and focus strategy
Addressable Market = £14bn
Our goal for the division is to improve our competitiveness and build a strong platform for future growth
Industrial Automation Commercial Vehicles Oil & Gas
Capitalise on significant potential for accelerated growth
Food & Beverage
Site visit to IMI Brno
UK Customer IMI Factory European Distribution Centre
IMI Marketing Company
Step 1
Step 2
Step 3
Step 4
Step 5
Step 6
UK customer sends order to EDC via UK marketing company
EDC places same order to UK factory
UK factory makes product and ships to EDC
EDC ships product to UK customer
EDC invoices UK company at transfer price
UK company invoices UK customer at external selling price
Supply chain complexity
Site visit to IMI Brno
Standard costing
▸ Standard costing is most suited to organisations with repetitive assembly work
Standard costs are calculated for each product based on material, labour and overhead costs
Commercial
Vehicle
Life
Sciences
Industrial
Automation
Labour Costs
Material Costs
▸ Precision Engineering is introducing standard costing to understand which sectors and products incur what overhead recoveries and returns.
How are factory overheads allocated ?
Direct Costs
Indirect Costs
Labour Costs
Material Costs
Labour Costs
Material Costs
? ? ?
Site visit to IMI Brno
“TOGETHER, we will improve
our competitiveness and
build a strong platform for
future growth.” Mark Selway Group CEO and Precision Divisional Managing Director
Target Introduce business-specific growth plans for every IMI Precision business Optimise Establish accurate and reliable sales and financial forecast planning Generate Introduce more new products and a responsive Application Engineering function Evolve Build a more dynamic and Lean organisation to better compete and respond to market potential Transform Implement Quality process and Lean best practise to improve customer responsiveness Highlight Realign IMI Norgren position in its regional markets to reflect new dynamism and focus Enhance Develop a new IT strategy to build competitive advantage and support future growth Rationalise Reduce and standardise our product portfolio from 450,000 to 50,000 SKUs
FIX8 “Fix & Focus Strategy” Fix the basics in two years
Site visit to IMI Brno
Norgren Industrial Automation
= Industrial Automation Product Plans
Norgren Americas Industrial Automation
Norgren Asia Industrial Automation
Norgren Europe Industrial Automation
“Introduce business-specific growth plans
for every IMI Precision business”
FIX8 “Fix & Focus Strategy” Fix the basics in two years
Site visit to IMI Brno
“Reduce and standardise our product
portfolio from 450,000 to 50,000 SKUs”
FIX8 “Fix & Focus Strategy” Fix the basics in two years
Site visit to IMI Brno
“Implement Quality process and Lean best
practise to improve customer responsiveness”
FIX8 “Fix & Focus Strategy” Fix the basics in two years
Site visit to IMI Brno
‣ New ‘out of the box’ JD Edwards system was successfully installed in Brazil and will be added to five sites in the United States in 2015.
“Develop a new IT strategy to build competitive
advantage and support future growth”
FIX8 “Fix & Focus Strategy” Fix the basics in two years
Site visit to IMI Brno
“Establish accurate and reliable sales and financial
forecast planning”
”Introduce more new products and a responsive
Application Engineering function”
”Build a more dynamic and Lean organisation to better
compete and respond to market potential”
“Realign IMI Norgren position in its regional markets to
reflect new dynamism and focus”
FIX8 “Fix & Focus Strategy” Fix the basics in two years
Site visit to IMI Brno
Lean Assessments
0
10
20
30
40
50
60
70
80
% S
core
1st improvement target % 62 58 52 52 54 52 48 44 44 42 43 52 46 46 48 46 48 51 47 40 42 43 40 37 36 44 50 23
2nd assessment score % 62 61 52 52 53 53 52 49 50 48 44 50 42 50 45 50 40 33 34 50 39 44 39 33 36 39 38 24
‣ All major sites 2nd assessments complete
‣ First assessment average score 32%
‣ Second assessment average score 46%
‣ 6 month improvement target score 54%
‣ World-class by 2018
1st assessment score 1st improvement target 2nd assessment score Next improvement target
Site visit to IMI Brno
Increase plant utilisation
New simplified organisational structure implemented in Europe Analysis of industrial automation market progressing well New system of standard costing implemented worldwide Early phases of ERP implementation progressing to plan in Americas
Average lean score increased to 46% New Divisional Managing Director appointed (due to take up role in June 2015)
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Strategic Checklist