Insourcing and Competing With Advanced
Description: Insourcing and Competing With Advanced Manufacturing Techniques Sharon Ward May 14,2011 2 The following is intended to outline QADs general product direction. It is intended for information purposes only, and may not be incorporated into
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slide1. Insourcing and Competing With Advanced Manufacturing Techniques Sharon Ward May 14,2011<br>
slide2. 2 The following is intended to outline QAD’s general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, functional capabilities, and should not be relied upon in making purchasing decisions. The development, release, and timing of any features or functional capabilities described for QAD’s products remains at the sole discretion of QAD. Safe Harbor Statement QAD Planning and Scheduling Workbenches<br>
slide3. 3 Manufacturing is essential to America’s economic well-being. It accounts for the bulk of United States exports, is key for innovation, and provides many high-wage jobs…… You All Know This Competing With Advanced Manufacturing Techniques Brookings Institute: Strengthening American Manufacturing: A New federal Approach by Susan Helper and Howard Wial<br>
slide4. 4 A Government Study Proves It. Competing With Advanced Manufacturing Techniques<br>
slide5. 5 Between 2000 and 2009, The US lost 31% of its manufacturing jobs
Along with the jobs, the ability to innovate was compromised – manufacturing employs 36% of engineers
By exporting manufacturing expertise, the ability to compete in emerging industries like solar panels was jeopardized Asleep At The Wheel Competing With Advanced Manufacturing Techniques Brookings Institute: Strengthening American Manufacturing: A New federal Approach by Susan Helper and Howard Wial<br>
slide6. 6 A focus on “core competencies” was perceived as the way to become world class
Some companies decided their core competency was idea creation or marketing, not manufacturing
The assumption that outsourcing manufacturing always results in lower costs, making companies more competitive, became widely accepted The Manufacturing Exodus Competing With Advanced Manufacturing Techniques<br>
slide7. 7 Companies have ALWAYS outsourced some work
Lower wage regions start to develop manufacturing based economies
Some companies begin to off-shore
Competition and cost pressures increase
Rush to off-shoring in late 20th and early 21st century as a result of increased competition from emerging regions How Did We Get Here? Competing With Advanced Manufacturing Techniques<br>
slide8. 8 Difficult to evaluate all costs – additional inventories, communications, tracking, loss of control, longer lead times, quality, IP protection, customer satisfaction
Meanwhile, our outsourcers took what they learned and used it to launch their own products/companies
Companies found that it’s easy to copy ideas and marketing but harder to develop process skills Flies In The Ointment Competing With Advanced Manufacturing Techniques<br>
slide9. 9 Understanding The Basis Of Wealth Competing With Advanced Manufacturing Techniques<br>
slide10. 10 It’s easy to copy ideas – even product features
Engineering talent is no longer co-located with manufacturing
Real innovation requires immersion in processes, products, and customers
It’s the manufacturing process that delivers real value and irreplaceable expertise Ideas and Services Don’t Lead To Wealth Competing With Advanced Manufacturing Techniques<br>
slide11. 11 Services Don’t Grow Wealth Competing With Advanced Manufacturing Techniques<br>
slide12. 12 Manufacturing Grows Wealth Competing With Advanced Manufacturing Techniques<br>
slide13. 13 Manufacturing Keeps the Economy Balanced Competing With Advanced Manufacturing Techniques<br>
slide14. 14 Without Manufacturing There Is No Balance Competing With Advanced Manufacturing Techniques<br>
slide15. 15 The United States is caught in the middle in international competition: Stuck between high-wage countries competing on the basis of new products and processes, and developing countries competing on the basis of low wages. A Rock and A Hard Place Competing With Advanced Manufacturing Techniques Brookings Institute: Strengthening American Manufacturing: A New federal Approach by Susan Helper and Howard Wial<br>
slide16. 16 The recent political/economic situation has led to a more fervent patriotism
The realization that marketing skill or service skills alone are not a sound basis for competition finally sank in
Companies increasingly turn to lean/six sigma and similar programs to compete Why Manufacturing Will Come Back Competing With Advanced Manufacturing Techniques<br>
slide17. 17 Emerging areas have started with a “clean slate” so they could set up production in the most efficient ways
More developed nations had aging infrastructures with inherent inefficiencies
How can we level the playing field? Established Companies Need To Compete Competing With Advanced Manufacturing Techniques<br>
slide18. 18 Significantly less than half of small U.S. manufacturers (those with less than $10 million revenues) rate themselves at or near world-class status in each of the NGM strategies, with the highest percentage for superior process improvement (38% of small firms.) It’s Not Easy In The Middle Competing With Advanced Manufacturing Techniques<br>
slide19. 19 World class companies achieve better results than their competitors
World class companies invariably utilize one or more advanced manufacturing techniques (Lean, six sigma, TQM, etc.)
Surprise….It doesn’t matter which technique they use
What matters is that the company is committed to an improvement methodology Advanced Manufacturing Competing With Advanced Manufacturing Techniques<br>
slide20. 20 When whole-heartedly embraced, these programs allow companies to compete on COST and quality, gave more flexibility, lower inventory, shorter lead times Lean Gets Results Competing With Advanced Manufacturing Techniques<br>
slide21. 21 A Simple View Of Lean Competing With Advanced Manufacturing Techniques<br>
slide22. 22 A More Complex House of Lean Competing With Advanced Manufacturing Techniques<br>
slide23. 23 Layers Of Complexity Competing With Advanced Manufacturing Techniques<br>
slide24. 24 Seven out of 10 U.S. manufacturers report that their facilities follow a lean manufacturing methodology and/or the Toyota Production System (TPS). Embracing Lean Competing With Advanced Manufacturing Techniques Source: George Taninecz, VP of Research, The MPI Group 2010 MPI Manufacturing Study<br>
slide25. 25 Only about half have a majority of their employees involved in lean initiatives
Only about 70% had applied lean to the majority of their production processes
Only ¾ had an initiative to eliminate waste from processes
Only 34% use PDCA (plan, do, check, act)
Fewer than half include strategy deployment in their lean initiatives
Only 10% practice value-stream mapping
Only 8% use Kaizen events and blitzes However….. Not Really Competing With Advanced Manufacturing Techniques Source: George Taninecz, VP of Research, The MPI Group 2010 MPI Manufacturing Study<br>
slide26. 26 So Who’s REALLY Using Lean? Competing With Advanced Manufacturing Techniques >16% Source: George Taninecz, VP of Research, The MPI Group 2010 MPI Manufacturing Study<br>
slide27. 27 constantly striving to align all business processes, to work at peak efficiency, and to deliver the strategic goals of the organization The Effective Enterprise Is… Competing With Advanced Manufacturing Techniques<br>
slide28. 28 Companies began rebuilding manufacturing facilities and expertise
Began as a trickle, but now reaching a stream, will soon become a torrent Manufacturing Pride Re-Emerges Competing With Advanced Manufacturing Techniques<br>
slide29. 29 Management support
Start slow
Persevere
Examine ALL costs, including hidden costs Embracing Lean To Compete Competing With Advanced Manufacturing Techniques<br>
slide30. 30 Achieving Management Support<br>
slide31. 31 Research the results similar companies have achieved with Lean/six sigma
MPI
Industry Week, Managing Automation
Industry Analysts
APICS Do Your Research Competing With Advanced Manufacturing Techniques<br>
slide32. 32 Lean Gets Results Competing With Advanced Manufacturing Techniques<br>
slide33. 33 How Can QAD Help? Competing With Advanced Manufacturing Techniques<br>
slide34. 34 Kanban
Every Part Every Item calculations
Bar code and RFID support
Average demand and safety stock calculations
New MSW/PSW workbenches Lean Manufacturing Competing With Advanced Manufacturing Techniques<br>
slide35. 35 Supply Chain Portal
Speeds communication
Process maps
Simplify and eliminate steps
Search for non-value add Simplify Business Processes Competing With Advanced Manufacturing Techniques<br>
slide36. 36 Bar code and RFID support
PLM support
Quality management support QAD Partners Contribute Competing With Advanced Manufacturing Techniques<br>
slide37. 37 Capture true total costs
Extra inventory to cover transit times
(beyond standard safety stock)
Extra inventory to meet short term demand fluctuations
Business loss due to longer lead times/ lack of schedule flexibility
Communications and travel costs
Increased shrinkage and errors
Quality issues and rework
Training
Translation delays/costs Enlist Your Accounting Team Competing With Advanced Manufacturing Techniques<br>
slide38. 38 Landed costs
Logistics cost
Multiple cost sets
Cost simulations Accounting Support Competing With Advanced Manufacturing Techniques<br>
slide39. 39 Project typical industry results on in-house numbers
Be conservative – the numbers can look too good to be true
Cover all your bases – include inventory, quality, on-time delivery
Be equally rigorous for both alternatives Unbiased Analysis Competing With Advanced Manufacturing Techniques<br>
slide40. 40 Be prepared for initial resistance or disbelief if management strongly embraced off shoring
Petition for a pilot parallel production trial
Start with one line, one product, one step
Make sure it works flawlessly
Suggest using similar techniques in non―manufacturing processes to demonstrate benefits Take Baby Steps Competing With Advanced Manufacturing Techniques<br>
slide41. 41 23 % use lean in finance and accounting
26 % in customer relations
29 % in administration.
Only 60% of overall processes have been addressed with lean Lean Can Get Results Everywhere Competing With Advanced Manufacturing Techniques<br>
slide42. 42 And Now..A Little Good News<br>
slide43. 43 From Managing Automation Competing With Advanced Manufacturing Techniques<br>
slide44. 44 ISM Agrees Competing With Advanced Manufacturing Techniques 6 Months and Counting!<br>
slide45. SUGAR LAND--January 13, 2011--Researched by Industrial Info Resources (Sugar Land, Texas)--Cold storage specialist Preferred Freezer Services (Elizabeth, New Jersey) has begun site work for a new cold storage facility. The building will be adjacent to the company's headquarters and existing facilities, which were opened in 2008 in Elizabeth, New Jersey. 45 More Manufacturing Good News Competing With Advanced Manufacturing Techniques May 11, 2011: GM Chairman Dan Akerson said in addition to the investment in the Toledo plant, the automaker in the coming months will invest $2 billion for upgrades at 17 factories that will create or preserve 4,000 U.S. jobs.
As many as 2,000 jobs reportedly could be added at the Detroit-Hamtramck plant, where the Chevy Volt is built. Ford Motor Co. will increase factory production 13 percent in the first quarter because of higher demand for Ford and Lincoln brand cars and trucks, and further increases are likely through the year, company executives said Sunday. Intel plans new US factory, upgrading others to 22nm tech<br>
slide46. 46 Metrics Affected Competing With Advanced Manufacturing Techniques<br>
slide47. 47 Sharon Ward sw7@qad.com Questions?<br>
slide48. 48 www.qad.com
© 2010 QAD Inc<br>
slide2. 2 The following is intended to outline QAD’s general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, functional capabilities, and should not be relied upon in making purchasing decisions. The development, release, and timing of any features or functional capabilities described for QAD’s products remains at the sole discretion of QAD. Safe Harbor Statement QAD Planning and Scheduling Workbenches<br>
slide3. 3 Manufacturing is essential to America’s economic well-being. It accounts for the bulk of United States exports, is key for innovation, and provides many high-wage jobs…… You All Know This Competing With Advanced Manufacturing Techniques Brookings Institute: Strengthening American Manufacturing: A New federal Approach by Susan Helper and Howard Wial<br>
slide4. 4 A Government Study Proves It. Competing With Advanced Manufacturing Techniques<br>
slide5. 5 Between 2000 and 2009, The US lost 31% of its manufacturing jobs
Along with the jobs, the ability to innovate was compromised – manufacturing employs 36% of engineers
By exporting manufacturing expertise, the ability to compete in emerging industries like solar panels was jeopardized Asleep At The Wheel Competing With Advanced Manufacturing Techniques Brookings Institute: Strengthening American Manufacturing: A New federal Approach by Susan Helper and Howard Wial<br>
slide6. 6 A focus on “core competencies” was perceived as the way to become world class
Some companies decided their core competency was idea creation or marketing, not manufacturing
The assumption that outsourcing manufacturing always results in lower costs, making companies more competitive, became widely accepted The Manufacturing Exodus Competing With Advanced Manufacturing Techniques<br>
slide7. 7 Companies have ALWAYS outsourced some work
Lower wage regions start to develop manufacturing based economies
Some companies begin to off-shore
Competition and cost pressures increase
Rush to off-shoring in late 20th and early 21st century as a result of increased competition from emerging regions How Did We Get Here? Competing With Advanced Manufacturing Techniques<br>
slide8. 8 Difficult to evaluate all costs – additional inventories, communications, tracking, loss of control, longer lead times, quality, IP protection, customer satisfaction
Meanwhile, our outsourcers took what they learned and used it to launch their own products/companies
Companies found that it’s easy to copy ideas and marketing but harder to develop process skills Flies In The Ointment Competing With Advanced Manufacturing Techniques<br>
slide9. 9 Understanding The Basis Of Wealth Competing With Advanced Manufacturing Techniques<br>
slide10. 10 It’s easy to copy ideas – even product features
Engineering talent is no longer co-located with manufacturing
Real innovation requires immersion in processes, products, and customers
It’s the manufacturing process that delivers real value and irreplaceable expertise Ideas and Services Don’t Lead To Wealth Competing With Advanced Manufacturing Techniques<br>
slide11. 11 Services Don’t Grow Wealth Competing With Advanced Manufacturing Techniques<br>
slide12. 12 Manufacturing Grows Wealth Competing With Advanced Manufacturing Techniques<br>
slide13. 13 Manufacturing Keeps the Economy Balanced Competing With Advanced Manufacturing Techniques<br>
slide14. 14 Without Manufacturing There Is No Balance Competing With Advanced Manufacturing Techniques<br>
slide15. 15 The United States is caught in the middle in international competition: Stuck between high-wage countries competing on the basis of new products and processes, and developing countries competing on the basis of low wages. A Rock and A Hard Place Competing With Advanced Manufacturing Techniques Brookings Institute: Strengthening American Manufacturing: A New federal Approach by Susan Helper and Howard Wial<br>
slide16. 16 The recent political/economic situation has led to a more fervent patriotism
The realization that marketing skill or service skills alone are not a sound basis for competition finally sank in
Companies increasingly turn to lean/six sigma and similar programs to compete Why Manufacturing Will Come Back Competing With Advanced Manufacturing Techniques<br>
slide17. 17 Emerging areas have started with a “clean slate” so they could set up production in the most efficient ways
More developed nations had aging infrastructures with inherent inefficiencies
How can we level the playing field? Established Companies Need To Compete Competing With Advanced Manufacturing Techniques<br>
slide18. 18 Significantly less than half of small U.S. manufacturers (those with less than $10 million revenues) rate themselves at or near world-class status in each of the NGM strategies, with the highest percentage for superior process improvement (38% of small firms.) It’s Not Easy In The Middle Competing With Advanced Manufacturing Techniques<br>
slide19. 19 World class companies achieve better results than their competitors
World class companies invariably utilize one or more advanced manufacturing techniques (Lean, six sigma, TQM, etc.)
Surprise….It doesn’t matter which technique they use
What matters is that the company is committed to an improvement methodology Advanced Manufacturing Competing With Advanced Manufacturing Techniques<br>
slide20. 20 When whole-heartedly embraced, these programs allow companies to compete on COST and quality, gave more flexibility, lower inventory, shorter lead times Lean Gets Results Competing With Advanced Manufacturing Techniques<br>
slide21. 21 A Simple View Of Lean Competing With Advanced Manufacturing Techniques<br>
slide22. 22 A More Complex House of Lean Competing With Advanced Manufacturing Techniques<br>
slide23. 23 Layers Of Complexity Competing With Advanced Manufacturing Techniques<br>
slide24. 24 Seven out of 10 U.S. manufacturers report that their facilities follow a lean manufacturing methodology and/or the Toyota Production System (TPS). Embracing Lean Competing With Advanced Manufacturing Techniques Source: George Taninecz, VP of Research, The MPI Group 2010 MPI Manufacturing Study<br>
slide25. 25 Only about half have a majority of their employees involved in lean initiatives
Only about 70% had applied lean to the majority of their production processes
Only ¾ had an initiative to eliminate waste from processes
Only 34% use PDCA (plan, do, check, act)
Fewer than half include strategy deployment in their lean initiatives
Only 10% practice value-stream mapping
Only 8% use Kaizen events and blitzes However….. Not Really Competing With Advanced Manufacturing Techniques Source: George Taninecz, VP of Research, The MPI Group 2010 MPI Manufacturing Study<br>
slide26. 26 So Who’s REALLY Using Lean? Competing With Advanced Manufacturing Techniques >16% Source: George Taninecz, VP of Research, The MPI Group 2010 MPI Manufacturing Study<br>
slide27. 27 constantly striving to align all business processes, to work at peak efficiency, and to deliver the strategic goals of the organization The Effective Enterprise Is… Competing With Advanced Manufacturing Techniques<br>
slide28. 28 Companies began rebuilding manufacturing facilities and expertise
Began as a trickle, but now reaching a stream, will soon become a torrent Manufacturing Pride Re-Emerges Competing With Advanced Manufacturing Techniques<br>
slide29. 29 Management support
Start slow
Persevere
Examine ALL costs, including hidden costs Embracing Lean To Compete Competing With Advanced Manufacturing Techniques<br>
slide30. 30 Achieving Management Support<br>
slide31. 31 Research the results similar companies have achieved with Lean/six sigma
MPI
Industry Week, Managing Automation
Industry Analysts
APICS Do Your Research Competing With Advanced Manufacturing Techniques<br>
slide32. 32 Lean Gets Results Competing With Advanced Manufacturing Techniques<br>
slide33. 33 How Can QAD Help? Competing With Advanced Manufacturing Techniques<br>
slide34. 34 Kanban
Every Part Every Item calculations
Bar code and RFID support
Average demand and safety stock calculations
New MSW/PSW workbenches Lean Manufacturing Competing With Advanced Manufacturing Techniques<br>
slide35. 35 Supply Chain Portal
Speeds communication
Process maps
Simplify and eliminate steps
Search for non-value add Simplify Business Processes Competing With Advanced Manufacturing Techniques<br>
slide36. 36 Bar code and RFID support
PLM support
Quality management support QAD Partners Contribute Competing With Advanced Manufacturing Techniques<br>
slide37. 37 Capture true total costs
Extra inventory to cover transit times
(beyond standard safety stock)
Extra inventory to meet short term demand fluctuations
Business loss due to longer lead times/ lack of schedule flexibility
Communications and travel costs
Increased shrinkage and errors
Quality issues and rework
Training
Translation delays/costs Enlist Your Accounting Team Competing With Advanced Manufacturing Techniques<br>
slide38. 38 Landed costs
Logistics cost
Multiple cost sets
Cost simulations Accounting Support Competing With Advanced Manufacturing Techniques<br>
slide39. 39 Project typical industry results on in-house numbers
Be conservative – the numbers can look too good to be true
Cover all your bases – include inventory, quality, on-time delivery
Be equally rigorous for both alternatives Unbiased Analysis Competing With Advanced Manufacturing Techniques<br>
slide40. 40 Be prepared for initial resistance or disbelief if management strongly embraced off shoring
Petition for a pilot parallel production trial
Start with one line, one product, one step
Make sure it works flawlessly
Suggest using similar techniques in non―manufacturing processes to demonstrate benefits Take Baby Steps Competing With Advanced Manufacturing Techniques<br>
slide41. 41 23 % use lean in finance and accounting
26 % in customer relations
29 % in administration.
Only 60% of overall processes have been addressed with lean Lean Can Get Results Everywhere Competing With Advanced Manufacturing Techniques<br>
slide42. 42 And Now..A Little Good News<br>
slide43. 43 From Managing Automation Competing With Advanced Manufacturing Techniques<br>
slide44. 44 ISM Agrees Competing With Advanced Manufacturing Techniques 6 Months and Counting!<br>
slide45. SUGAR LAND--January 13, 2011--Researched by Industrial Info Resources (Sugar Land, Texas)--Cold storage specialist Preferred Freezer Services (Elizabeth, New Jersey) has begun site work for a new cold storage facility. The building will be adjacent to the company's headquarters and existing facilities, which were opened in 2008 in Elizabeth, New Jersey. 45 More Manufacturing Good News Competing With Advanced Manufacturing Techniques May 11, 2011: GM Chairman Dan Akerson said in addition to the investment in the Toledo plant, the automaker in the coming months will invest $2 billion for upgrades at 17 factories that will create or preserve 4,000 U.S. jobs.
As many as 2,000 jobs reportedly could be added at the Detroit-Hamtramck plant, where the Chevy Volt is built. Ford Motor Co. will increase factory production 13 percent in the first quarter because of higher demand for Ford and Lincoln brand cars and trucks, and further increases are likely through the year, company executives said Sunday. Intel plans new US factory, upgrading others to 22nm tech<br>
slide46. 46 Metrics Affected Competing With Advanced Manufacturing Techniques<br>
slide47. 47 Sharon Ward sw7@qad.com Questions?<br>
slide48. 48 www.qad.com
© 2010 QAD Inc<br>