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Striving for excellence in Supply Trend Control Systems Journey Tom Pickering, Head of Supply 18 September 2003.

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Presentation on theme: "Striving for excellence in Supply Trend Control Systems Journey Tom Pickering, Head of Supply 18 September 2003."— Presentation transcript:

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2 Striving for excellence in Supply Trend Control Systems Journey Tom Pickering, Head of Supply 18 September 2003

3 N O V A R I N T E L L I G E N T B U I L D I N G S Y S T E M S Getting to great Trend Controls were a good business in 2000, and in 2002 became outstanding There were lots of mistakes made, but the purpose is to share how we did this along the journey getting to great, and some of the key points for me Its interesting to note that the success has continued and Trend Controls won another award in 2007, and has enjoyed outstanding profits and growth for many years Tom Pickering 2012

4 On Nov 1 2002 Trend Controls were awarded Best Electronics and Electrical Plant Awarded by Management Today Magazine in association with the DTI and Cranfield School of Management THE INFOCUS CORPORATION AWARD

5 N O V A R I N T E L L I G E N T B U I L D I N G S Y S T E M S Security Systems Electrical Accessories Connectivity Systems Control Systems * Includes acquisitions during 2002 The Novar Organisation

6 N O V A R I N T E L L I G E N T B U I L D I N G S Y S T E M S Control Systems Building management systems and custom controls

7 Installation Non-Domestic Buildings Particularly: Industrial - Including Pharmaceutical! Health Retail Public Telecomms

8 N O V A R I N T E L L I G E N T B U I L D I N G S Y S T E M S Trend Controllers Analogue Input Digital Input Temp Pressure Humidity Run Fault Trip Analogue Output Digital Output On/Off math's logic control Pulse Meter On Positioning Digital Input

9 N O V A R I N T E L L I G E N T B U I L D I N G S Y S T E M S Examples of Products Building ControllersSupervisors & DisplaysSensors Actuators & Soft Starters Network Management

10 N O V A R I N T E L L I G E N T B U I L D I N G S Y S T E M S System Elements Local Area Network (LAN)

11 N O V A R I N T E L L I G E N T B U I L D I N G S Y S T E M S Aftermarket Service & Support Field Services Applications Group Bureau Services MATT Taking good care of the customers investment! 2 year warranty on all products 10 year backward compatibility and obsolescence support

12 N O V A R I N T E L L I G E N T B U I L D I N G S Y S T E M S Competitive Position* Controls UK#1 Controls US - Retail segment#1 Fire Detection Germany#1 Fire Detection Europe#2 Intrusion Germany#2 Structured Cabling Europe#2 Electrical Accessories UK#1 Nurse call Germany and France#1 Access Control and Time Attendance Spain#2 Competitive position

13 N O V A R I N T E L L I G E N T B U I L D I N G S Y S T E M S Control Systems - Competitive advantage Customer Service differentiation by Reliable order fulfillment 98-100% in 1-2 days Products support wide range of flexible solutions Champion of new technology 220 prototypes in 2002 Manufacturing lead time 4 days Focus on highly competitive bespoke solutions to suit the route to market Closely integrated product management, warranty management technical and commercial links with customers Source of Competitive advantage

14 N O V A R I N T E L L I G E N T B U I L D I N G S Y S T E M S Product Options and customer configuration Current products2974 Current accessory lines 286 Controllers with configured I/O 725 Obsolete lines built on demand 82 Total manufactured lines4067

15 N O V A R I N T E L L I G E N T B U I L D I N G S Y S T E M S Higher the service… the higher Customer Expectations Full Order Acknowledgement2 hours Internal cycle time3.5 hrs Customer lead time1-2 days Complete & On-Time98 - 100% Passed on to customers increase tie in / should we charge?

16 N O V A R I N T E L L I G E N T B U I L D I N G S Y S T E M S Typical Manufacturing Strategy Timeline TimeStrategy / methodologyCOTD % FTEsOutput % Lead time 1980sMRP, make to stock (survival)LOW !40504-5 wks 1998MTO, cellular layout, product focus, COTD KPIs, Automation, 9075703-7 days 2001Pull from point of proliferation, process focus, self managing teams 91-97751003 days 2002Balanced scorecard development98641101 day 2003MCRS, six sigma, supply chain review, focus on intangible assets 99581301 day

17 N O V A R I N T E L L I G E N T B U I L D I N G S Y S T E M S Supply Chain Proliferation and strategy Proliferation Point 0 500 1000 1500 2000 2500 3000 Variants Current AssembliesIQ3 AssembliesCurrent Affected By IQ3 Current Affected By New 222780 Outsourced Assemblies 1861966 Current Assemblies 1041281511556 Surface MountAuto-insertionManual Insertion Final Assy inc Firmware & Pack 124136172 2402 Analyse the implication of outsourcing the activities up to the point of customer configuration

18 N O V A R I N T E L L I G E N T B U I L D I N G S Y S T E M S Original Factory Layout …Diluted process focus, long travel and quality feedback loops

19 N O V A R I N T E L L I G E N T B U I L D I N G S Y S T E M S 2001 Factory Layout -Pull from the point of proliferation, load daily, local process focus with local quality feedback Velocity 3.5 hrs

20 N O V A R I N T E L L I G E N T B U I L D I N G S Y S T E M S MONTUEWEDTHURSFRIMONTUEWED 100% Factory Capacity Example shows a 1 day lead time ORDER 1 Pull from Kanban, configure assembly Customer Delivery Pull from the point of proliferation

21 N O V A R I N T E L L I G E N T B U I L D I N G S Y S T E M S Process layout – process improvement - Summary Metric200020012003 Internal quality %889396 Output £111123132 FTEs756358 Improvements implemented / month 01560 COTD %93-969899-100 Lead Time2-62-42

22 N O V A R I N T E L L I G E N T B U I L D I N G S Y S T E M S Benefits for the Team Opportunity to get very directly involved Daily fulfillment cycle is fast and lively Simple system means all can see their impact Continuous customer feedback and opportunity to improve performance Have fun!

23 N O V A R I N T E L L I G E N T B U I L D I N G S Y S T E M S Typical High Technology Manufactured Cost Breakdown Typical product mix Direct Labour 10% Material 62% 20% 8% Volume med complexity 10% Material 55% 12% High Volume low variety low complexity 19% Material 39% 26% 16% Material cost down – local Value Engineering is the greatest opportunity no core competence - outsource design capability to Far East very little overhead associated with the established product DFM

24 N O V A R I N T E L L I G E N T B U I L D I N G S Y S T E M S Where can we differentiate our customer service? …where are we going to focus resources? Increasing Value Add Decreasing differentiation Cost Sensitivity On-Site Services Off-Site Services Information Services High volume low complexity And Stable Responsiveness to high variety on time… customer configuration High volume medium complexity 300020001000 0 Stable designs & make to buy… buy Stability & Direct Cost is key make

25 N O V A R I N T E L L I G E N T B U I L D I N G S Y S T E M S Increasing Value Add Decreasing differentiation Cost Sensitivity Strategy Fit Strategy Misfit Make to Buy? Remaining Sensors What are our choices? Which products fit the current manufacturing strategy?

26 N O V A R I N T E L L I G E N T B U I L D I N G S Y S T E M S Collaborative Supplier Strategy Supply Vision We will will remain a centre of excellence in: The manufacture of customer customised products The delivery of unrivalled customer facing supply solutions On time NPI Making everything happen on time We will grow its business and relentlessly reduce the cost …What can our strategic suppliers do to support our vision Fragmented Category Spend Leveraging strategic suppliers Establishing new strategic relationships Consolidate spend Step change in cost reduction Tactical suppliers<$100Kpa Operationally managed ID Key strategic suppliers >$100K coach and develop capability Establish contract KPI review Value Engineering Cost reduction Material liability Supply chain development Quality stretch savings target Reduction of 14 suppliers

27 N O V A R I N T E L L I G E N T B U I L D I N G S Y S T E M S Supplier Collaboration: Where are we now, what is our opportunity to add more value and win with us…? m h m h Supply performance Collaborative Supplier value Maximum supply value Maximum collaborative value

28 N O V A R I N T E L L I G E N T B U I L D I N G S Y S T E M S Plastics Strategy Key Collaborative Ops Dimensions, World Class Supplier Performance Collaborative Importance 10 0 World Class 10 KEY: Far East Operations Related CURRENT 0 Ops Mgmt. Cost Unit Cost (2% total) TBC St. Asaph? Fin goods & matl Liability Secondary Process (Eg No plastics Print in Lugoj) Clout/Response VMI (UK?) SChain Risk Quality VMI/L.T. Bus. Stability Design instability Material leverage Current: 5 Far East: 3 Current: 1 Far East: 3 Current: 2 Far East: 0

29 N O V A R I N T E L L I G E N T B U I L D I N G S Y S T E M S Focus and organise processes based around customer LEANHEDGE AND DEPLOY AGILE CONTINUOUS REPLENISHMENT Demanding Opportunistic customers High customer configuration Low price sensitivity Unpredictable demand Need to manage yield Unplanned and unforeseen Demand but tight customer Relationship with high Service expectations and agile response Predictable demand, easily managed Via tight collaboration and visibility of demand. Require a high service level Offer predictable demand Loose relationship with customer Does not require high service level. To succeed focus must be on lean and efficient Predictability of demand high low Relationship with customer tight loose There are 4 basic customer buying behaviours, driven by individuals or corporate culture that change very little Source John Gattorna, Cranfield University

30 N O V A R I N T E L L I G E N T B U I L D I N G S Y S T E M S Customer facing Supply business processes Manage processes not functions Hedge and deployagile Continuous replenishment lean Suitable response Organisation & skills review Typical Business process Market requirement Economies of scale & low cost Process and capacity Dedication. Capacity booking based On forecast Reliable efficient delivery Team and customer relationship focus Visibility of demand Via Integrated IT Focussed support Low variety Reliable processes Tight customer supplier collaboration Short lead time Low variety Trusty and reliable service Selective Fast, innovative multi Faceted product and Supply requirements, Very low cost sensitivity Project based with access to a X functional range of Skills Focus on fast product and service configuration X functional challenging innovation Project and Delivery focussed Flexible supply skills Internal cust-supplier metrics Customer focussed supply Clear Commitment and acknowledgement Make to order Responsive supply and Rapid delivery with generic Product design capability Facilitating late Customer configuration Tight customer Communication Short lead time delivery To high variety demand Low customer loyalty Low cost And efficient low Contact with customer Price sensitive Process efficiency Focus with limited Variation, productivity, cost & reliability are key Source John Gattorna, Cranfield University

31 N O V A R I N T E L L I G E N T B U I L D I N G S Y S T E M S Intangible assets: your people and business process are the key to realising value from business assets Most value comes from from intangible assets Business assets: 1.The People 2.The Facility,(anyone can buy) 3.The Business processes 4.Strategy Develop business processes Systems to fully involve all to deliver the strategy Customers Shareholders Improvement and Development tools e.g. Six Sigma

32 N O V A R I N T E L L I G E N T B U I L D I N G S Y S T E M S What is a team? How go we get there? A small number of people, with complimentary skills who are committed to a common purpose, performance goals, and approach for which they hold themselves mutually accountable The key is to be committed to a COMMON PURPOSE AND GOALS

33 N O V A R I N T E L L I G E N T B U I L D I N G S Y S T E M S Focus on Employee Satisfaction Work relationships Leadership and strategy Personal development Employee Satisfaction

34 N O V A R I N T E L L I G E N T B U I L D I N G S Y S T E M S Team development key: the difference between challenge and threatening environment is a very fine line No support High challenge Full support Low challenge or not involved Fully functional Team with clear Objectives … Good relationships Dis-functional team and or misunderstandings Unclear Objectives … Volatile relationships Missed opportunity Motivating Threatening Clarity, involvement how can you make a Difference?, Self managing Systems Balanced scorecard And MCRS Get to know each Other, & understand Differences, fun, open with Feedback, development & relationship focussed Dont know how they fit … no feedback Alienated No challenge Wasted value

35 N O V A R I N T E L L I G E N T B U I L D I N G S Y S T E M S Team development & feedback on relationships Feedback What is working / What less of Coaching feedback Identify potential Review & Show dont do Feel good Success & recognition Learn more From all Better team work Clarify objectives Get to know eachother Make informal time Encourage fun Show weaknesses

36 N O V A R I N T E L L I G E N T B U I L D I N G S Y S T E M S Balanced Scorecard – clear leadership financialcustomerInternal processes Employee Learning And growth Created by a team committed to the common goal of excellence

37 N O V A R I N T E L L I G E N T B U I L D I N G S Y S T E M S How do we create focus and keep the strategy alive? Vision strategy Objectives measures Benchmark external data Desired future state Differentiating activities What must we do well To implement the Strategy? How are we going To measure success? Values Openness Integrity, Passion Commitment to get things done Principles Customer first Delivery Focus Clarity Mission, why we exist?

38 N O V A R I N T E L L I G E N T B U I L D I N G S Y S T E M S X Novar businesses - Where should we leverage best practice? Site leadership Teams Shop Floor KPIs Site leadership Teams Shop Floor Site leadership Teams Shop Floor KPIs Visioprime Trend Gent suppliers KPIs CFBUs and customers Best practice

39 N O V A R I N T E L L I G E N T B U I L D I N G S Y S T E M S Why are we a team? how do individual objectives tie into the strategy? Cost Reduction Cost / owner Deviation reports Matls savings ID strat suppliers Collab reviews £1M target Inbound logistics Non strat supplier Obsolescence pl. Danfoss Euro DD Repairs data Scrap report Comp failures Direct lab red. -outsourcing -C5 layout -operation times C5 relayout Waste reduction Investment plan Test time reduct. Investment plan Define org struct. Establish metrics Business focus Cost saving analy Process Audits Direct lab in ABC Measure targetsReview contract SLAs Savings Targets ANC-Amtrak Team Development Team accounty champions. Embed metrics Devolve Data coll -to teams -audit systems Clear metrics/cell dev s/card - t/ls Dev day-day –tls Champions Training plans Review C1 t/l Vision Ops suppt -NPI / improv. -cap ex etc Training plans Vision Ops suppt. -NPI / improv. -Cap ex etc redefine own role -repairs etc Training matrix Implement t/l Define acctability Implement BSC Develop vision Devolve -BOM -ABC -Part no.s Establish MRS -day-day MC -weekly MC Strategy Cap ex applns Cost owners rept Key projects ABC review Support o/s Est. MRCS w strat. Suppliers Review Ansen EDI review VMI devt -Danfoss -Ansen etc Data structure Customer service checks Productivity Direct labour adj. MCRS embed 6sigma review Capacity plans -cap ex -strat fit -product -productivity Capacity plans -cap ex -strat fit -product -productivity Develop vision -w Bal scorecard -business svce ABC review Change mgmt Component database Contract devt -strategic suppls -KPIs MCRS embed NPI Obsol. planningP Change mgmt NPI acc. Criteria RFT response NPI acc. Criteria RFT response NPI acc. Criteria RFT response NPI skills Planned mix v actual Customer service Customer Visits v SLA Int System audits ISO 9001:2000 Define metricsCOTDvcust RDD MCRS embed Outsourcing process MK best practice ID group proj mgr Supplier selection Define sourcing requirements BOMs transfer Obsolecence plan Est. storage space Quality systems review Sample sign off Labour ajustmentProcess quality standards acc criteria Test reqmts.Phase in / out Monitor plan v actual Plan space Layout - comms Cost savings by o/s project

40 N O V A R I N T E L L I G E N T B U I L D I N G S Y S T E M S Having defined the strategy via KPIs how are we going to review progress? ReportControl Manufacturin g Operations Meeting Weekly Production Meeting Daily Production Meeting Shift Handover Operator /Shift Logs (SICs) MWOR DWOR Forecast / Plan Customer Satisfactio n COTCD (Cell 5) COTCD (Final Assy) Overall COTCD – Int. & Ext. Red Alert Days (Cell 1) Red Alert Days (Cell 5) Red Alert Days (PCB) Overall Red Alert Summar y Lead- time (Cell 1) Lead- time (Cell 5) Lead- time (PCB) Lead- time Summar y Training Plan Attainm ent Overall COTCD – Int. & Ext Overall Red Alert Summar y Lead- time Summar y Training Plan Attainm ent Director Manager Team Leader Training Pan Attainm ent (Cell 1) Training Pan Attainm ent (Cell 5) Training Pan Attainm ent (PCB) C.I Actions Closed OTIF C.I Actions Closed OTIF by Cell Morale (Monthly) Absenteeis m By Cell (Weekly) Staff Turnover By Cell (Weekly) Morale (Monthly)

41 N O V A R I N T E L L I G E N T B U I L D I N G S Y S T E M S Issues Very good performance 8 th April packing lists pulled incorrectly meant 88% OTCD carrier continue to affect customer perception Actions to Resolve See Red alert As of 12 th May UK will be delivered by new carrier. Waiting on date to install terminal on site and train. Issues No issues bang on target Actions to Resolve Manufacturing Lead Time With: FTEs 01:75, 02:64, 03: target 58 Management Control Reporting System Internal and external COTD

42 On Nov 1 2002 Trend Controls were awarded Best Electronics and Electrical Plant Awarded by Management Today Magazine in association with the DTI and Cranfield School of Management THE INFOCUS CORPORATION AWARD

43 N O V A R I N T E L L I G E N T B U I L D I N G S Y S T E M S Summary of learning points Develop a process to get everyone involved and self motivated by results Process facilitate realisation of intangible assets Clearly define and keep the strategy and accountability alive at all levels Develop and value the team as the main asset and establish team feedback Use best practice team development tools Motivate by success, recognise and reward the team for their contribution


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