Resource Library

 

 

Guides to best practice 

The guides to best practice relate to key aspects from the MakeIt-Right  assessment.  They have been written by Dr John Garside and Judy Walton to provide greater understanding of best practice and complement the feedback provided in the MakeIt-Right report. Each guide outlines the key issues, factors for success, factors to avoid and the realisable benefits. 

 

Click on the links below to find the appropriate guides:

 

Customer Focus

Business Development & Change Management

Product Innovation 

Logistics and Resource Efficiency 

Process Innovation

People Effectiveness

Financial Management 

Information and Communications Technology

 
 
Overview
 
The route to Manufacturing Excellence takes considerable management effort and resolve, applied over several years. Every business has its own unique set of issues to be addressed, but, based on discussions with people responsible for achieving manufacturing excellence, they share some common experiences. These common experiences are discussed below. The general feeling is that Managers and their teams need to get the basics of their business correct by:
 
1.     Understanding customers
2.     Knowing the possible generic technologies that could offer viable commercial solutions.
3.     Establishing a robust business development process.
4.     Developing a robust business process for new product introduction
5.     Organisation of manufacturing
6.     Improvement of material flow
7.     Good quality
8.     People
 
These issues are discussed in the following sections.
   1. Understanding Customers
This includes a detailed knowledge of your competitor’s products and ambitions and a clear understanding of the key characteristics that give your products a competitive advantage. It is normally a combination of features that make your products, for example:
o    pleasurable to use,
o    more technically advanced
o    more attractive in appearance
o    more environmentally acceptable,
o    more reliable,
o    deliver enhanced performance
o    offer better overall value. 
 
These criteria are usually not difficult to identify, but may be hard to achieve. 
   2. Knowing the possible generic technologies that could offer viable commercial solutions.
One useful technique is to construct technology route maps. These start with defining the market requirements, and then use market pull to identify possible generic technologies that could offer you viable commercial solutions. The challenge is to recognise those new technologies which have the potential to ‘change the game’ and then to make the necessary investments needed to create products that surpass those of your competitors. 
 
Governments in the UK, Europe and the USA invest considerable funds into university scientific research, but little money has been made available to develop routes to market. Industry and universities should introduce new ways of working together to exploit this valuable knowledge base. 
 
UK industry cannot compete globally without access to new technologies and research, without commercial application, remains solely of academic interest.
   3. Establishing a robust business development process.
Senior managers need to devote time to identifying the products needed to satisfy future markets. 
 
Many companies assume that people within their business know what their customers want, and use past experience to predict future requirements. Better results are usually achieved by using a more analytical approach, investing resources into qualifying and quantifying the actual situation. 
 
This involves identifying possible opportunities by gaining a full appreciation of the market, the potential customers, their actual requirements and the business benefits your products could provide. These evaluations should examine:
·         Expected demand in both the medium and long term
·         Revenue streams using estimated product cost structures, volumes and manufacturing routes
·         Time scales for launching the product and expected product life cycles
·         Impact on existing products and rates of substitution
·         Review of new technologies that could provide significant competitive advantage in functionality or product costs
·         Cost predictions and unit production costs that must be achieved to generate the projected sales volumes in chosen territories
·         Estimated non-recurring expenditure needed for developing the product and associated manufacturing processes
·         Economies of scale, and levels of investment in production facilities
·         Competitive situation, possible new entrants and competitor reactions
·         Economic climate, national and international policies / legislation
·         Investment requirements for product development, capital equipment, test equipment and production facilities
·         Profitability, cash flow and predicted rates of return
·         Levels of commercial and technical risk
 
The results of these initial studies should be reviewed by marketing, the new product introduction programme manager and the senior management team to assess the attractiveness of specific opportunities. If an opportunity meets the necessary financial criteria, aligns with the business strategic direction and is an attractive financial proposition then a business case should be developed. This involves producing / completing:
·         A voice of customer appraisal to determine what they actually want and value in your proposed new product
·         Product specification, giving key performance parameters, overall dimensions, mass, expected service life, and conformance to international standards.
·         Outline concept design including working tolerances and materials.
·         Strategic make versus buy analysis, confirming the business’s core competencies and items to be manufactured in-house.
·         A study of viable manufacturing routes and identification of key suppliers.
·         Target product costs for different production volumes.
·         Quantified marketing information giving potential customer projected selling prices, volumes and expected margins in chosen territories.
·         Technical and commercial risk analysis including a business level cost benefit analysis.
·         Detailed project plan with time scales and key milestones, non-recurring costs, product costs, and resource requirements.
·         Financial summary that confirms the opportunity meets the financial criteria expected by your company, presents acceptable levels of risk and will make a significant contribution to the future prosperity of the business.
 
Once the relevant information has been collated, approval must be obtained from the senior management team. If the levels of investments are high, with an element of risk which could impact the company’s overall performance, then special focus must be given. Once approved, the project proceeds to the new product introduction phase. In many companies this process is better-defined than the business development process.
   4. Developing a robust business process for new product introduction
The product introduction process is relatively straightforward, once the business case has been approved and product specification agreed with your key customers. The basic stages of product introduction process are to:
·         Design the product and the associated manufacturing process, confirming that that product cost will align with figures used to justify the business case
·         Evaluate the technologies embedded within the product to ensure they meet the specification requirements and the components can be made consistently to design tolerances using preferred manufacturing routes
·         Install the appropriate manufacturing facilities, selecting and training people in the most effective ways of working
·         Ramp up to higher volumes of production to meet market demand
 
The most difficult thing at this stage is to maintain the discipline needed to follow the product introduction process, verifying that deliverables are sufficiently robust before committing significant resources to the next phase. Also, if the product cost targets are to be met then manufacturing issues need to be given the necessary attention and resources, ensuring that the bills of materials and associated manufacturing instructions are accurate and the latest release is readily available to everyone involved in the project.
   5. Organisation of manufacturing
In companies that are in a weak financial position, the starting point for making changes must lie with the manufacturing operations, as they are usually responsible for the highest proportion of business expenditure. You will need first to establish the profitability for each product line, together with its position on a product life cycle curve. 
You can then look for ways to improve gross margins by understanding the costs incurred in manufacturing and in procuring the bought-in components for each product line. 
 
An effective way of simplifying many manufacturing operations is to re-organise into product-focused modules, or cells, where people undertake a wide variety of tasks, taking ownership of quality and delivery commitments. Not only will this simplify management, it will also allow costs to be identified and charged directly to a specific product line. This will make it easier to calculate the actual costs of production and the margin the product contributes to the business.
   6. Improvement of material flow
The uninterrupted flow of materials through the supply chain, into manufacturing and onward to customers is a key success factor for manufacturing operations. Many companies could use the cash they currently have tied up in work-in-progress and other stock to fund new product development, re-equipping the factory and investments in ICT. If you can improve the flow of materials through your supply chain you will also reduce your work in progress.
 
A route map for improving the flow of materials may require many factors in manufacturing to be addressed, from the management of master production schedules to changeover times on bottle-neck machines. The business benefits will, however, be considerable.
   7. Good quality
Good quality has become a mandatory requirement for all companies. Customers remember the quality performance long after forgetting the price.   For manufacturing businesses it is crucial to ensure that processes (equipment, methods, materials, measuring systems and operators) are capable of producing items consistently within the design tolerances. Statistical methods must be used to prove that processes are able to produce over 99.99% of items to within the design tolerance. If this cannot be achieved then the machine must be refurbished, the tolerances changed, or the item produced by another method. 
   8. People
The people within your business are the real key to success. For this reason, everyone must be trained to attain their full potential. Training is an ongoing process that takes considerable time, resources and management commitment. 
 
The range of training you provide for your people should cover the full spectrum of technical, interpersonal and managerial skills, so that jobs can be made more interesting and can have improved potential to provide employees with greater job satisfaction. This can lead to improved teamwork and an environment where people are proud of their work.
   In Conclusion
Manufacturing excellence is a never-ending journey that requires you to make progress in several areas of your business:
·         The clarity and focus of your strategy
·         The structure of your organisation
·         The technologies embedded in your products
·         The technologies used in your manufacturing process
·         Your use of information communications technology
·         The abilities of the management team
·         The skills of the workforce
·         The way that everyone in your company works together
 
It is the combination of these attributes that can result in a superior financial performance providing people with security of employment. Manufacturing industry is vital to the future prosperity of the UK because it is one of the fundamental ways of generating wealth, together with mining, fishing and farming. The financial service industries that were regarded as an alternative way of generating wealth have spectacularly failed. This means the regeneration of our manufacturing industries are the primary way to start earning the funds needed to balance our current account and trade with the rest of the world. This will have a significant impact on our economy and can prevent the UK from sliding into long-term poverty.