Rail Supply Group (RSG) Best Practice Workshop
Driving Competitive Advantage for bottom line
benefit
19th November 2016
Andy Spence, General Manager - Aerospace, SMMT Industry Forum
www.rsgbestpractice.org
Industry Forum – our origins
Organisational purpose
Increase the competitiveness of
the automotive industry in the UK
www.rsgbestpractice.org
20 years on
Strategy
VISION: Recognised as leading
providers of expertise to improve
industrial competitiveness
MISSION: To deliver results through
our depth of industrial expertise, from
transformational strategy to sustained
implementation
Industries
National
programmes
30 countries
globally
150+ people
With the worlds
leading
manufacturers
www.rsgbestpractice.org
Brexit Implications for Manufacturing
Impact & implication
Key uncertainties
1
Trade tariffs
2
Access to skilled labour
3
•
Loss of confidence by manufacturers [1]
•
Forecasted manufacturing investments
on the decline [2] [3]
•
Supply chain costs - Transparency
•
Concern over export competitiveness
•
Skilled workforce capabilities, now and
future – Particularly STEM
•
Labour capability and cost
FOREX shifts
Ref. 1 EEF Business Confidence Rankings 29th July 16, Ref 2. Institute of Chartered Accountants 7 th September, Ref. 3 British Chambers of Commerce 12 th September
www.rsgbestpractice.org
The opportunity ahead
Automotive
Aerospace
Rail
•
The outlook remains strong
>2m vehicles assembled in UK
p.a. in 2020.
•
33,070 new aircraft required in
next 20 years. Doubling of fleet
2016 to 2035 [3]
•
NTFL – 250 trains c. 2,500
carriages carriages c. £2.5bn.
First delivery 2022
•
£71.6bn industry turnover and
£19bn GVA [1]
•
£31.1bn industry turnover and
£10bn GVA
•
JNAT - 27 trains, 170 cars,
Contract award Q3 2017
•
Increase in UK domestic
sourcing 36% to 41% [2]
•
UK order backlog 9 years
worth £195bn [4]
•
NTFD – c. 45 Trains, contract
award Q1 2018
•
Willingness to source from UK
suppliers if competitive
•
56% of companies expect
growth > 10% [4]
•
HS2 – First phase 60 trains
(total 165) £7.5bn, contract
award end 2019
Ref. 1 SMMT Industry facts , Ref 2. The upstream supply chain – Auto Council, Ref. 3 Airbus Global Outlook , Ref. 4 ADS Aerospace Industry Report 2016
www.rsgbestpractice.org
Why competitiveness – uncertainty and
opportunity
Dealing with uncertainty,
minimising risk/threat
Capitalising on
opportunity
Competitive
Performance
Dimensions
Superior
Help me to become order winning
Advantage
Parity
Order Losing
Stop me from becoming order losing
Quality
Cost
Delivery
Flexibility
Technology & Product
Customer Experience
www.rsgbestpractice.org
Developing the capability to compete
www.rsgbestpractice.org
20 years experience – why companies “do”
Lean
Why companies “do” lean
Common approaches
• We must achieve world class
manufacturing (?)
• Lean foundations
• Tools deployment
• It has worked for everyone else
so we should develop our
approach and “have a go”
• Lean system
• Lean tools
• It will transform our business……
• Stability first
• If we can’t say we have done
lean it reflects badly on us
• Deploy the basics everywhere
• We need to tell people we have
fully implemented lean and they
will think we are good
• Standardisation
• Waste elimination
www.rsgbestpractice.org
How do companies deploy Lean?
1. Decide to launch a lean initiative to “improve results” (?)
2. Develop company approach, books, communication materials, tools, language….
3. Blanket communicate to everyone to launch the initiative
4. CI Managers, Lean Masters, Change managers etc. put in place to lead the change
5. Deployment begins with everyone doing mapping or basic tools deployment everywhere
6. Employees undertake some form of “sheep-dip” training
7. Some results achieved in pockets
8. Corporate or company level results never realised
9. Some successful bits of the initiative stick, dependent on individual leader, the rest fades over time
www.rsgbestpractice.org
A better approach….
Q6. How to
attack?
Tools deployment, visible
easy to try and copy
Not here
Q5. Where to attack?
Q4. What is our process
capability?
Q3. What is our process performance?
Q2. What performance do we need to achieve –
Quality, Cost, Delivery…….
Q1. How do we choose to compete, How do we win orders?
www.rsgbestpractice.org
Please start
here
How should this be done?
1. Current Situation
Why do your
customers buy
from you?
2. Realisation
How will you choose
to compete in the
future?
What business
capabilities do
you have?
3. Plan
How competitive are you
vs. your peer group? Where
do you need to be?
Action planning
and supporting
business case for
improvement
What capabilities must be
developed to become more
competitive?
4. Implement
5. Validate
Programme management & governance
1
Prepare
Implement
improvement
activities
Check
What business
capabilities do
you have?
2
How competitive
are you vs. your
peer group?
On-going coaching & mentoring
www.rsgbestpractice.org
3
Are you
winning more
business?
Raising the
finance to
invest in
growth
In practice – current situation
Manufacturer’s current perspective
1. Current Situation
Why do your
customers buy
from you?
How will you
compete in the
future?
What business
capabilities do
you have?
www.rsgbestpractice.org
Manufacturer’s future perspective
In practice – realisation
Customer competitiveness
Manufacturer’s
current perspective
benchmarking
Customer A
Translating competitive performance
into business capabilities
2. Realisation
Customer B
Customer C
How competitive are
you vs. your peer
group? Where do you
need to be?
What capabilities
must be developed to
become more
competitive?
www.rsgbestpractice.org
In practice – planning
Business Case
•
Competitive
differentiation –
Order winning
•
Project plans
•
KPI impact
assessment
•
ROI, payback
period, IRR or
NPV as required
1
Company
investment
3. Planning
Action
planning and
supporting
business case
for
improvement
Raising
the
finance
to invest
in
growth
2
Bank
discussion
3
Public money
grant
www.rsgbestpractice.org
In practice – implementation
www.rsgbestpractice.org
In practice – current situation
5. Validate
1
2
What business
capabilities do
you have?
x points
+
Evidence based assessment of capability
How competitive
are you vs. your
peer group?
y points
3
+
Are you
winning more
business?
z points
Customer competitiveness benchmarking
Customer A
Customer
B
Customer
C
www.rsgbestpractice.org
=
Competitiveness
Revenue profiling – Growth & export
Key Points
Focus on order winning competitiveness (above productivity)
1. Help respond to Brexit risks/challenges
2. Capitalise on opportunities
Understanding competitive performance is the fundamental basis for
success
Tools centric or methodology focussed “initiatives” are not an effective
way to adopt lean practice
We must understand performance and capability and use tools to
address gaps
www.rsgbestpractice.org
Thank you for listening
Questions?
www.rsgbestpractice.org