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What does it mean to be a world-class competitor? It means being successful in your chosen market against any competition - regardless of size, country of origin or resources. It means matching or exceeding any competitor on quality, lead time, flexibility, cost/price, customer service and innovation. It means picking your battles - competing where and when you choose and on terms that you dictate. It means you are in control and your competitors struggle to emulate your success.
What does it take to be world class? Richard Schonberger, a leading manufacturing consultant, created the term "world-class manufacturing." According to Schonberger, "manufacturing is gained by marshalling the resources for continual rapid improvement." To achieve world-class status, companies must change procedures and concepts, which in turn leads to transforming relations among suppliers, purchasers, producers and customers. Enterprise automation is indispensable to manufacturing innovators who aim to gain market share, operate at peak efficiency and exceed customer expectations so they can be world class in their industry.
How can your company become and remain world class? There are seven keys to becoming a world-class manufacturer that distill the broad concepts above into specific actions that can be addressed and accomplished in your company. Each is presented with a brief discussion and examples of its impact on a manufacturing organization and its competitiveness. A more detailed discussion of each of the seven keys is available from Infor.
The keys to success, in no particular order, are:
1 Reduce lead times
2 Speed time-to-market
3 Cut operations costs
4 Exceed customer expectations
5 Manage the global enterprise
6 Streamline outsourcing processes
7 Improve business performance visibility
Each of these objectives is important in and of itself; however, taken together, they describe the focus of the activities and attitudes that define world class.
Reduce Lead Times
Shorter lead times are always a good thing. In many markets, the ability to deliver sooner will win business away from competitors with similar product features, quality and price. In other markets, quick delivery can justify a premium price and will certainly enhance customer satisfaction. In all cases, shorter lead times increase flexibility and agility, reduce the need for inventory buffers and lowers obsolescence risk. Lead times are cumulative and bi-directional - that is, order handling, planning, procurement, inspection, manufacturing, handling, picking, packing, and delivery all contribute to the lead time; and the time it takes to get signals down the supply chain to initiate each activity adds to the overall time it takes to get the job done.
Inflexible business rules and policies can drive undesired effects. Purchasing rules too focused on unit cost lead to large quantity buys that result in high inventory and long lead times. Ironically, this type of buying can also lead to shortages, since longer lead times mean you will be making and buying to a less accurate forecast. The best combination of price and lead time often comes from a stable buyer-supplier collaborative relationship based on long-term contracts with deliveries according to a forecast that is shared with the supplier and updated frequently. The same is true on the customer side. Instead of focusing on securing large, one-time, single orders that clog up the supply chain, companies must focus on creating long-term contracts with customers and sharing forecast information with customers to reduce lead times.
The same issues concerning large lot sizes also apply to internally produced parts and products. Large lots, driven by a focus on lowest unit cost, raise inventory and lengthen lead times while reducing flexibility and responsiveness, increasing eventual cost through premium expediting instead of using large fixed lots, companies must dynamically adjust the lot size based on market demand, product mix and capacity. Ongoing continuous improvement efforts focused on reducing setup times can help companies reduce lot sizes, which provides flexibility in responding to market demand.
Appropriate measurements contribute to high performance on the plant floor. On-time shipment and inventory turns are good examples of high-level measures that tie to company objectives. Focusing on isolated measurements like equipment utilization on non-constraining resources encourages "busy work" that creates excess inventory and longer lead-times. Shop floor measurements must encourage overall performance - shipping orders on time at minimal total cost and minimal total cycle times.
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