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