Il Production System come fonte di vantaggio competitivo e...

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GLM Summit 2015Il Production System come fonte di vantaggio competitivo e i fattorichiave per un’implementazioneefficace

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Ivan Lavatelli

18 November 2015

1 PwC Overview – Focus on Advisory Operations Services 1

2 The “Production System” concept 6

3 The Production System implementation: a transformational journey 16

4 Example of an Operating Model framework 21

5 A good starting point: Audit Bellafactory - assessment on operating model 24

6 Contacts 28

Contents

PaginaSezione Titolo

PwC

18 November 2015

PwC Overview – Focus on Advisory Operations Services

Section 1

1

GLM Summit 2015 • Il Production System come fonte di vantaggio competitivo e i

fattori chiave per un’implementazione efficace

PwC

18 November 2015

Ivan Lavatelli

Ivan Lavatelli – Executive Director PwC Advisory - Operations

2



Section 1 – PwC Overview – Focus on Advisory Operations Services

https://it.linkedin.com/pub/ivan-lavatelli/10/abb/b68

Direct: +39 02 66720309 | Mobile: +39 348 2298332Email: [email protected] Advisory SpAVia Monte Rosa, 91, 20149 Milano, Italy

Main Projects

100+ mfg sites

with projects (& 200+ sites visited)

15+ years of

consulting experience

OPEX & SCM expertise

AUTO & IP Automotive & Industrial Products

Sub Industry ClientCountry (and number of sites

with projects) 20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

VOLKSWAGEN - AUDI Belgium (1)

FCA (Fiat, Chrysler) Ita (7), Pol (1), Bra (1)

CNHI (Case, New Holland, Iveco) Ita (6), Pol (1), Ger (3), Fra (1), Spa (2)

LAMBORGHINI Ita (1)

OLSA S.p.a Ita (2), Pol (1)

JOHNSON CONTROLS Fra (1)

JOHNSON ELECTRIC Ita (1)

BOSCH Diesel Technologies Ita (1)

FPT Technologies / FPT Industrial Ita (5), Pol (2), Fra (1), Bra (2)

Magneti Marelli Ita (4), Slo (2), Pol (2), Fra (2), Bra (2)

DENSO T-S (Toyota Group) Ita (1), Por (1)

Linde Refrigeration Ita (2)

Whirlpool-Indesit Ita (6)

BSH - Bosch Siemens Hausgeraete Spa (3), Ger (1)

Alstom Transport Ita (2)

Kion Group (OM - Linde - Still) Ita (2)

Pietro Beretta Fabbrica d'armi Ita (2)

Alenia Aermacchi Ita (3)

Tesmec Ita (2)

Gardner Denver Ita (2)

Tetra Pak Ita (4), Austria (1)

INDUSTRIAL

MANU-

FACTURING

AUTOMOTIVE

OEMs

AUTOMOTIVE

TIER 1




mailto:[email protected]

PwC

18 November 2015

Ivan Lavatelli

PwC at a glance

3

GLM Summit 2015 • Il Production System come fonte di vantaggio competitivo e i fattori chiave per un’implementazione efficace


157countries

US$35,4 billion revenues for the fiscal year ended 30 June 2015 (Global)

776locations

208,000 people

US$11,2 billion revenues for the fiscal year ended 30 June 2015 (Advisory)

PwC

18 November 2015

Ivan Lavatelli

PwC leverages unparalleled operational capabilities to help clients rapidly close the gap between ideas and results

Operations Strategy & Transformation

Service Operations

Product Innovation & Development

AssetLifecycle Management

Production &Supply Chain Operations

Procurement & Sourcing

Global Reach,Local Delivery

TechnologyEnablement

SeamlessCapabilities

TransformationalChange

Operational breath and depth…

Tax Optimized Leveraged in Valuations & Due Diligence

Delivering Deal Value (PMI)

Business Restructuring (Turnarounds)

… in all sectors

• Aerospace & defence

• Asset management

• Automotive

• Banking & capital markets

• Capital projects & infrastructure

• Chemicals

• Communications

• Energy, utilities & mining

• Engineering & construction

• Entertainment & media

• Financial services

• Forest, paper & packaging

• Government/public service

• Healthcare

• Hospitality & leisure

• Industrial manufacturing

• Insurance

• Metals

• Pharmaceuticals & life sciences

• Retail & consumer

• Technology

• Transportation & logistics

4



PwC

18 November 2015

Ivan Lavatelli

We have built the premier Operations consultancy providing a powerful mix of strategy and execution

5GLM Summit 2015 • Il Production System come fonte di vantaggio competitivo e i fattori chiave per un’implementazione efficace

Mar 2012Strategy, Customer, Digital

Analytics

Sep 2013Digital Strategy, Analytics,

Creative and Technology

Aug 2011Operational Strategy,

Product & Service

Innovation, Supply Chain

Innovation, Customer

Experience

Mar 2014Strategy, Operations,

Supply Chain,

Jun 2009Technology Consulting

Dec 2009Supply Chain

,Strategic Sourcing,

Sustainable Cost

Reduction

Dec 2010Capital Projects &

Infrastructure

Aug 2011Supply Chain Strategy,

Performance Analytics

Dec 2011Supply Chain Management,

Multi-Technology Solution

Sep 2012Social Media, Digital

Marketing

Nov 2010Strategy, Operations,

Customer , Analytics,

Technology Consulting

Aug 2011Supply Chain, Finance,

Human Capital,

Technology Consulting


PwC

18 November 2015

The “Production System” conceptSection 2

6



The Production System is an integrated socio-technical system, that comprises management philosophy and practices. It organizes manufacturing and logistics, including interaction with suppliers and customers.The TPS (Toyota Production System), first organic arrangement of company-specific improvement approaches, is a major precursor of the more generic “Lean Manufacturing” implementations.In recent years, several companies developed customized approaches to their own Operations Management, creating different customized Production Systems (XPS*).

(*) Note XPS: company-specific production system. The ‘X’ stands for the company’s name, and ‘PS’ stands for production system or equivalent. Examples are the Bosch Production System, Caterpillar Production System, Whirlpool Production System.

PwC

18 November 2015

Ivan Lavatelli

Structural elements of a Production System

7



Section 2 – The “Production System” concept

• Specific instrument to perform a well defined task (i.e. 5S, 5Whys, Heijunka board, Pareto, Poka-Yoke, QA-Matrix, VSM, etc.)

Tools

• Step-by-step paths to address a particular problem resolution (i.e. Method Design Concept, SMED, Assembly Line Design)

Improvement routes/Approaches

• Cross functional team of people. The pillar is the owner of specific KPIs

• Pillar development follows a step-by-step path (route)

Pillars/Elements

• The typical tool/route implementation has 3 phases: pilot (model area), extension (increased scope), expansion (plant-wide diffusion)

Implementation Mode

• Are periodically checked (typically at pillar level).

• They are assigned comparing the audited state against standard Maturity Statements

Audit scores

• Personal score cards and variable compensation are based upon achievement of specific targets (Audit scores)

Reward System

• Real company-specific (or industry-specific) cases of excellence, serving as a reference for continuous improvement

Best Practices

• Know-How is made available on shared platforms (i.e. intranet)

• Multi-level learning routes to sustain the culture of continuous improvement

Learning System and Knowledge Bank

From a review of 30 different XPSs from global industrial players, we can summarize the typical structural elements of any production system:

PwC

18 November 2015

Ivan Lavatelli

XPS principles are not rocket science but every Production System requires customization to be effective

8




In our survey we observed that XPS graphical representation may vary: temples, arrows, pyramids,…

…but the following common conclusions can be drawn:• Companies look for standardization in their XPSs• All the principles and tools are originated from TPS

(Toyota Production System) and are easily accessible• The long lasting XPSs have a direct and

measurable impact on the company profitability

• The buy-in of a XPS increases with its fit with specific industry peculiarities

47%

50%

50%

57%

60%

63%

67%

67%

70%

77%

83%

93%

0% 20% 40% 60% 80% 100%

Just-in-Time

Stability and robustness

Workplace management

Customer focus

Visualisation

Employee involvement

Flow orientation

Value stream

Pull System

Quality programs

Kaizen /Cl

Standardized work

Percentage of XPSs with tool/principle in use

Source: Netland, T.H. Exploring the phenomenon of company-specific production

systems: One-best-way or own-best-way? XPS principles in use among 30

multinational firms

APS EMS IME VPS

WCM WPS TPS

PwC

18 November 2015

Ivan Lavatelli

Why a Corporate Production System?

9




XPS Content Qualification (Concepts used)

Inimitable Rare Valuable

Organisational

capabilities

(Enabler - Must Have)

Sustained

Competitive

Advantage

Temporary

Competitive

Advantage

Competitive

Parity

+ Superior Speed

Sustained

Competitive

Advantage

Temporary

Competitive

Advantage

Temporary

Competitive

Advantage

+ Superior Speed

+ Superior Fit

Sustained

Competitive

Advantage

Sustained

Competitive

Advantage

Sustained

Competitive

Advantage

None of the typical contents/tools of any Production System can be considered per se anymore "Inimitable" nor "Rare" a Sustained Competitive Advantage can be reached in the Current playground only when the implementation and roll-out of the XPS is done:

• With Superior Speed• With Superior Fit with specific

industry key success factors

Competitive Advantage Evaluation Framework

Early Adopters(e.g. Toyota)

CurrentPlayground

(*) Note XPS: company-specific production system. The ‘X’ stands for the company’s name, and ‘PS’ stands for production system or equivalent. Examples are the Bosch Production System, Caterpillar Production System, Whirlpool Production System.

When does a XPS(*) provide a competitive advantage?

Develop Company potential, leveraging a standardized body of knowledge, tools and approaches in order to sustain continuous improvement

PwC

18 November 2015

Ivan Lavatelli

Many companies tried to implement their Production System but failed

10




• Results tomorrow, Lean used as a restructuring approach• No patience, no resources• No vision, no targets

It is seen as short-term program

• Management doesn’t walk the talk• Management not willing to manage/solve roadblocks

Missing leadership

• No clear target defined• Consequences not thought through• No clear answer on how to handle over-staff tomorrow

Lean introduced out of a management hype

• “We did a 5S workshop – we are lean!”• No dedicated team, insufficient team qualification• Targeting for 6 Sigma quality (99.99966%) without SPC

Focus on tools only

• Solve problems with “more people”• Resistance against transparency• Lack of focus on the soft / human factors

Fight symptoms instead of root-causes

Main Reasons of failures:

PwC

18 November 2015

Ivan Lavatelli

Which are the roadblocks preventing Production System adoption?

11




Implementation Depth

Shallow Deep

Fit of the concept

with Plants

situation

High (Global Standards)

ACT(as in a Comedy)

ADOPT

Low (Local Contingencies)

AVOID ADAPT

Note: the response-behaviour from the plant can be different for each concept/pillar

Concepts tailoring

Sound Standards

"Close the Loop" with Financials

The "4As" Model describes the plant response-behaviour vs. the implementation of any Company-Specific Production System concept.Possible responses are:

•Since the concept fit to the plant situation is limited, adaptation is needed in order to cope with required global conformity

•Concept is plain rejected

•This is the ideal response model for most concepts

• "Pink Factory syndrome": the plant follows a ceremonial adoption of XPS principles

ACT ADOPT

ADAPTAVOID

“4As” Model: Plant response mode to specific concept/pillar

Pressure from HQ

PwC

18 November 2015

Ivan Lavatelli

The "Act" response mode and the Pink Factories SyndromeSymptoms, Effects & Countermeasures

12




Symptoms1. XPS-related activities are performed intensively only the weeks before the HQ Audit, and

not as a regular routine2. Makes superficial use of standards in evaluating improvements, neglecting to fully

represent the end-to-end effect of the project activities (fundamentalist approach – e.g. no forklift within the plant; 100% kitting; material sequencing)

3. Emphasises visual effects in the factory more than actual improvements4. Engages into trainings that does not really transfer into real improvements in the shop

floor

Effects:• Boosting managers' internal careers• Creating the perception of a quality product/process when

seen from outsideThis tends to happen because of:• The objective difficulty of measuring with an end-to-end

perspective the real effects of the improvements • The conflicting status of the plant people vs the HQ can derive a

short-term benefit from promoting the "Pink Factory Comedy“

From the Company perspective, such ceremonial adoption must be regarded as undesirable, because it does not realise the sought-after operational improvement and no (or limited) economic return is originated

Countermeasures:1. Cost & Benefit Deployment (see

next slides), linking systematically operational with financial effects of the improvement initiatives (Saving Monitoring System)

2. Sound standards (accuracy and coverage) to set the base for performance measurements

3. Active Learning Program, structured with classroom and on-the-field applications, making trainees accountable for resultsgenerated by their improvement project-works

PwC

18 November 2015

Ivan Lavatelli

Case 1: Pretending applying “Lean” but not closing the loop on the bottom line

13




100

104 101

97

102

80

85

90

95

100

105

110

115

2008 2009 2010 2011 2012E

RATIO STOCK/COSTO VENDUTO

100 99 101

97 99

80

85

90

95

100

105

110

115

2008 2009 2010 2011 2012E

DIM. LOTTO MEDIO PRODUZIONE

100 101

106 108 108

80

85

90

95

100

105

110

115

2008 2009 2010 2011 2012E

COD. DIVERSI DOMANDATI / SETT.

100 98

88 89 86

80

85

90

95

100

105

110

115

2008 2009 2010 2011 2012E

COD. DIVERSI PRODOTTI / SETT.

Inventory Investment Batch Size

Demand-Side required flexibility Supply-Side demonstrated flexibility

Cit: …we’re applying “lean” but we’re losing market share because of poor service level…

PwC

18 November 2015

Ivan Lavatelli

Case 2: Multi-plant OPEX program and effects by plantA success case, but we can read a lot of interesting patterns in improvement trends

14




Improvement opportunities are greater when starting point is bad

Pay attention to lack of delivery consistency

With same effort level, results may be different (external factors are also

contributing to distortion)

5 plants /4 countries

“Fast Lane” projects anticipating formal Production System introduction

“Lean Flow Redesign” projects,

focusing on S&OP + RCCP + mat mgmt + cell design

PwC

18 November 2015

Ivan Lavatelli

Effort vs. Benefit ratio depends on the starting point

15




Starting “Maturity Level”Area X

Starting “Maturity Level”Area Y

Starting “Maturity Level”Area Z

Be

ne

fit

Effort / Maturity Level

Gold-plating zoneQuick wins

… by the way, pay attention that a certain Maturity Level could be mandatory to stay in the business in some areas!

PwC

18 November 2015

The Production System implementation: a transformational journey

Section 3

16



PwC

18 November 2015

Ivan Lavatelli

Needed attitudes for successful implementation

17



Section 3 – The Production System implementation: a transformational journey

Rooting out waste is integral part of every

worker’s job

Specify the work -explicit the implicit

Use data to get buy-in

Resolve disagreements with facts, not opinions

Look for repeatable/reusable

approaches, and code them

Address problems quickly and directly –

and fix it (who created the problem

should fix it)

Solve problems as soon as they emerge

Plan for incremental journey

Engage your managers

Main message: “the Program is here to stay”… and remember, Persistence, not Genius, is the key!

Problem-facing

attitude

Structuring attitude

Management attitude

PwC

18 November 2015

Ivan Lavatelli

Distinctive Elements in a successful Production System implementation

18



Reward system linked with XPS scores (Audit system)

Engineered and solid cost and benefit deployment based on sound standards

Independent audit procedure

Strong organization with clear roles and responsibilities (functions-pillars-project teams)

1

2

3

4


PwC

18 November 2015

Ivan Lavatelli

Key factors for a successful improvement program

A balanced improvement program must take into account several key aspects in order to be effective:

Robustness:

• Consistently follow the standard implementation paths and organizational measures contained in the Production System framework in order to systematically leverage existing industry best practices and body of knowledge

• Contribute to evolve the maturity of the organization

• Be aligned with the global targets of the company/group

Agility:

• Give priority to attack evident weak areas in a short-term timeframe through “fast lane” projects

• Gain consensus around implementation activities producing tangible improvements

• Remove primary roadblocks that could prevent the effectiveness of the overall improvement program

Self-sustainability:

• The company resources must develop ownership with respect to the implementation routes and the improvement tools

• At the end of the program, the company must be self-sufficient in the carry out of the continuous improvement process and in the integration of new tools / new resources

19




PwC

18 November 2015

Ivan Lavatelli

Improvement RoadMap: Knowledge Transfer and “Quick-Wins” take place in parallel to Production System implementation

20




Management Leadership Training

Start

Design Construct Implement Operate & ReviewStrategy & Assess

Check-up(OMA - Operations

Maturity Assessment)

Production System (*) Blue-print

Pilot Stabilization

Plant pillars introduction

Expansion

Check-up Report

Start + 3M

Foundation

Work-Shop

Expa-nsionWork-Shop

Stabili-zationWork-Shop

PilotTeams

PillarTeams

Pillar Leaders

Fast Lane (Quick-win) activities

2 weeks

Managerial training + coaching

Technical training + coaching

Start + 6/9M Start + 18/24M

Production System stream

Robustness

Fast Lane stream

Agility

Knowledge Transfer stream

Self-sustainability

(*) See later-on for details

PwC

18 November 2015

Example of an Operating Model framework

Section 4

21



PwC

18 November 2015

Ivan Lavatelli

Manufacturing Operating Model (*)

22


Section 4 – Example of an Operating Model framework

Manufacturing Pillars

IMPROVEMENT ROUTES

FO

CU

SE

D I

MP

RO

VE

ME

NT

COST & BENEFIT DEPLOYMENT

STRATEGY AND PRINCIPLES

TOOLS

STANDARDS AND BEST PRACTICES

CHANGE MANAGEMENT, LEADERSHIP AND EDUCATION

AU

TO

NO

MO

US

M

AN

AG

EM

EN

T

PR

OF

ES

SIO

NA

L

MA

INT

EN

AN

CE

PR

OG

RE

SS

IVE

QU

AL

ITY

WO

RK

PL

AC

E

OR

GA

NIZ

AT

ION

LE

AN

FL

OW

PR

OD

UC

T-P

RO

CE

SS

IN

TE

GR

AT

ION

SA

FE

TY

AN

D

EN

VIR

ON

ME

NT

TR

AIN

ING

AN

D

ED

UC

AT

ION

COO

(*)Note: The Operating Model is the result of a benchmark done on 30 production systems; it has no specific reference to any existing structure. It is just the common framework that, under different shapes and implementations, can be found in World Class Companies.

PwC

18 November 2015

Ivan Lavatelli

Pillar Implementation: 7 Steps Approach

23



Section 4 – Example of an Operating Model framework

A pillar is a cross functional team of people. The pillar is the owner of specific KPIs and guides the improvement teams in the application of the pillar specific improvement routes. The pillar evolution has 3 main phases (reactive – preventive – proactive) following a specific and structured 7-step path:

Step 1 Step 2 Step 3 Step 4 Step 5 Step 6

1 2 3 4 5 6

Step 7

7

Reactive Preventive Proactive

Assess & Restore Set and Apply countermeasures

Manage & AuditTraining & active Monitoring

Improve & Cross-check

Standardize Consolidate & Optimize

Pillar evolution steps (examples):

PwC

18 November 2015

A good starting point: Audit Bellafactory -assessment on operating model

Section 5

24



Cost & Benefit Deployment

Lean Flow

Workplace Organization

Health & Safety

Focused Improvement

Autonomous Management

Professional Maintenance

Product-Process Integration

Progressive Quality

Passi specifici di pilastro

Visual Management

Pianificazione

Attività & Responsabilità

Meeting

Competenze

Metodologie

Consuntivazione Risultati

1

2

3

4

5

6

7

0 - 4

0 - 4

0 - 4

0 - 4

0 - 4

0 - 4

0 - 4

Step 1

Step 2

Step 3

Step 4

Step 5

Step 6

Step 7

1

2

3

4

5

6

7

0 - 4

0 - 4

0 - 4

0 - 4

0 - 4

0 - 4

0 - 4

Punteggio finale*

0 - 4

* Media pesata del punteggio di ciascunadomanda

Domande organizzative di carattere generale

Modello Operativo - Procedura di Valutazione

Training &

Education

Valutazione Organizzazione del Pilastro Valutazione stato evolutivo del Pilastro

Struttura Audit Bellafactory

Punteggio finale *

0 - 4

• Media pesata del punteggio di ciascun pilastro(parte organizzativa + parte evolutiva)

Modello Operativo - Procedura di Valutazione

0 – 4

0 – 4

0 – 4

0 – 4

0 – 4

0 – 4

0 – 4

0 – 4

0 – 4

0 – 4

Cost & Benefit Deployment

Lean Flow

Workplace Organization

Health & Safety

Focused Improvement

Professional Maintenance

Progressive Quality

Training &

Education

Autonomous Management

Product-Process Integration

Struttura Audit Bellafactory

BellaFactory award

La certificazione BellaFactory inizia dal punteggio minimo di 2,0 punti (1 Bollino Blu). 4 Bollini Blusignificano un livello di sostenibilità World Class Productivity. L’Award sarà assegnato alle fabbrichemigliori nella propria categoria (BLU FACTORY)

Il sistema di rating

Qualche domanda?

© PwC. All rights reserved. Not for further distribution without the permission of PwC. "PwC"

refers to the network of member firms of PricewaterhouseCoopers International Limited

(PwCIL), or, as the context requires, individual member firms of the PwC network. Each

member firm is a separate legal entity and does not act as agent of PwCIL or any other

member firm. PwCIL does not provide any services to clients. PwCIL is not responsible or

liable for the acts or omissions of any of its member firms nor can it control the exercise of

their professional judgment or bind them in any way. No member firm is responsible or liable

for the acts or omissions of any other member firm nor can it control the exercise of another

member firm's professional judgment or bind another member firm or PwCIL in any way.

Ivan Lavatelli

Executive DirectorOperations

PwC AdvisoryMobile: +39 [email protected]

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