World Class Manufacturing

Chapter 1
Re-Engineering: Rethinking Business Processes
 Topics to be Covered
 Understanding Operations Management.
 Introduction: WCM and Its Objectives
 4 Essential Concepts of World Class Manufacturing
 Principles and Philosophy of WCM
 Characteristics of WCM
 10 Pillars of WCM
 7 Keys & 7 tools to achieve WCM
 5 S of WCM
 Three determinants of WCM
 Case of FIAT Group
 Re-Engineering: Rethinking of Business Process
 Essence of Re-Engineering
 Principles of Re-Engineering
 Re-Engineering: Rethinking of Business Process
 Information Age and Global Competitiveness
 Cutting Edge Technology
 The C’s Related to Re-Engineering
 Methods to Help Reengineer for Improved Agility
 Tools and Techniques of BPR
 BPR – A Case Study
 Productivity Improving Technology
 Information Age and Competing Into It
 Business Challenges Of The Information Age
 Operating Environment Of Information Age Business
 Cutting Edge Technology and Manufacturing
Excellence
 System And Tools For World Class Manufacturing
 Labor and HRD Practices
 Generic Manufacturing Strategies For Information Age
 Need for Performance Measurement
 Key take away
 Understanding of Operations Management
 Administration of business practices to create the highest level of efficiency possible within an organization.
 Balance costs with revenue to achieve the highest net operating profit possible.
 Involves utilizing resources from staff, materials, equipment, and technology and acquire, develop, and deliver goods to
clients based on client needs and the abilities of the company.
 Understanding of local and global trends, customer demand and the available resources for production.
 Managing inventory of the company through Supply Chain
 Customer and Vendor management
 Operations is one of the three strategic functions of any organization.
 Operations decisions include decisions that are strategic in nature, meaning that they have long-term consequences and
often involve a great deal of expense and resource commitments.

Commercial Operations Management Areas

Brand Brand Management

Metrics & performance

Management
Product Product Management
Customer Interaction Innovation Channel & Sales
Management Management Management
Marketing Operations
Marketing
Management

People Talent & Skills Management

Understanding Of Operations Management
Environment
• Customer • Economy
• Regulation • Competitors
• • Technology
Supplier Data

Inputs
• Capital
• Material Transformation System Outputs
• Equipment • Alteration • Facilitatin
• Facilities • Transportation
• Labor • Storage
g Goods
• Suppliers • Inspection • Services
• Knowledge
• Time

Data Action

Action Data Data

Monitoring and Control
 Introduction: WCM and Its Objectives
 World Class Manufacturing is a set of concepts, policies, techniques, and principles for operating and managing a
manufacturing company.
 Based on the positive results achieved by Japanese manufacturing companies after World War II.
 World Class Manufacturing is a process-driven approach where various techniques and philosophy are used in one combination
or other.
 Set standard for production and manufacturing for another organization to follow.
 Tend to implement best practices and also invent new practices as to stay above the rest in the manufacturing sector.
 Parameters which determine world-class manufacturers are quality, cost effective, flexibility and innovation.
 Two important Criteria's’ of WCM are as below:
 How does the company compare with its best competition?
 Has the company scored increased since last year?
 3 Aspects of Manufacturing
 Cost
 Quantity
 Quality
 Grades of WCM
 W – World Class
 X – Very Good but not
World Class
 Y – Better than many
 Z- Poor Class
4 Essential Concepts of World Class Manufacturing

TOTAL QUALITY MANAGEMENT

Total Total Total

industrial Quality Productivity Just in Time
Engineering Control Maintenance
Cost of Deployment

Improvement
Productivity

Efficiency
of Quality

Technical

Level Of
Service
Zero Zero
Zero Waste Zero Defect
Breakdown Inventory
Involvement of People, Creation of Value, Customer Satisfaction
 World Class Manufacturing Principles
 It was ford production system that laid out the basic principle of manufacturing and management during
period 1910-1930.
 The significant contributors were Frederic Taylor(scientific management ), Gilbreth (motion and Time
Study), Schewart (SQC), Henry ford (Flow line, automation, mass production etc.).
 There are 10 WCM Principles
 World class Safety is the Foundation of World Class Performance
 WCM leader have a passion for Standards
 In a world class company Voice of Customer can be heard in the plant
 WCM does not accept losses of any kind.
 A rigorous application of WCM method guarantees the elimination of losses
 In a world class plant all abnormalities are immediately visible
 WCM takes place in the workplace, not in the office
 WCM is most effectively learnt by practicing the techniques with the plant teams
 The power of WCM comes from the involvement of people
 World class companies create the energy of a Crisis in the face of continued Success
Characteristics of WCM
 Customer Service
 Quality Control and Assurance
 Research and Development/ New Product Development
 Acquiring New Technologies
 Innovation
 Team-based approach (Adopting and using effectively)
 Understanding or development Best Practice
 Manpower Planning
 Environmentally sound practice
 Business Partnerships and Alliances
 Reengineering of Process
 Mergers and Acquisitions
 Outsourcing and Contracting
 Reliance on Consulting Services
 Political Lobbying
 Safety

Cost Deployment

Focused Improvement

Autonomous Maintenance/
Workplace Organization
10 Pillars of WCM

Professional Maintenance
Strategy

Quality
Information

ORGANIZATION
Logistics and Supply Chain
Customer Orientation

Early Equipment Management

People development

Environment
World Class Manufacturing is a process-driven approach that
generally involves implementing the following philosophies and
techniques:

 Make-to-order  Total preventive  Employee involvement

maintenance
 Streamlined flow  Cross-functional teams
 Quick changeover (quality control circles)
 Small lot sizes
 Zero Defects  Multi-skilled employees
 Families of parts
 Just-in-time production  Visual signals
 Doing it right the first time
 Variability reduction  Statistical process control
 Cellular manufacturing
7 Keys to Achieve WCM
 Reduce lead times
 Speed time-to-market
 Streamline outsourcing processes
 Cut operations costs
 Exceed customer expectations
 Manage the global enterprise
 Improve business performance visibility

7 Tools of WCM
 Prioritization of Tasks.
 Systematic, logics and detailed deployment of Objectives into right means, and right solutions and measurement
of the results against the objectives and targets.
 Problem description with sketches
 5S
 Root Cause Analysis
 Phenomena description with Sketches
 TWTTP – Find hidden issues behind the problem
5 S of WCM
 5S, abbreviated from the Japanese words Seiri, Seiton, Seison, Seuketse, and Shitsuke
 The 5S translated into English and are defined as below:
 Housekeeping – keep only what is immediately necessary item on the shop floor.
 Workplace Organization – Organize workplace, so that needed items can be easily
and quickly accessed.
 Clean Up – Sweeping, washing, and cleaning everything around working area
immediately.
 Cleanliness – Keep everything clean for a constant state of Readiness
 Discipline –Everyone understands, obeys, and practices the rules when in the plant.
There are three main determinants regarding the progress of
WCM system implementation in a company:
 Bronze medal:
 Creation of basic conditions for competitive production;
 achieving a considerable cost reduction (10–20%);
 Creation of “know-how” to attack main losses of energy;
 Any quality problems reduced three times (divided by 3);
 Twice reduced time of delivery (divided by 2);

 Silver medal:
 Achieving a considerable improvement in such areas as: Quality, Costs, Production Efficiency;
 Continuous development of “know-how” for the whole plant;
 Continuous search for energy losses and creation of “know-how” in order to systematically attack the defined losses;
 Cost reduction reaching a level of 20–40%;
 Any quality problems reduced seven times (divided by 7);
 Time of delivery reduced three times (divided by 3);

 Gold medal:
 Achieving the level of a leader in the class of products and services sold;
 Effective “know-how” philosophy in the area of loss attack;
 Carrying out “know-how” research;
 Achieving the world class in the field of products and services sold;
 Quality problems reduced ten times (divided by 10);
 Cost reduction reaching a level of 40–60%;
 Time of delivery reduced four times (divided by 4).
Why Implement WCM? Case of FIAT Group
Why Implement WCM? Case of FIAT Group
 Focus of WCM in FIAT was on three areas as below:
 All Employees
 Waste and Losses
 Standards and Methods
 Actual Best Results/WCM Audit are shown in the figure
Why Implement WCM? Case of FIAT Group
 Results of people involvement are shown in below fig.
Proposals/ Employee/ Year
Why Implement WCM? Case of FIAT Group
Why Implement WCM? Case of FIAT Group
Why Implement WCM? Case of FIAT Group
Why Implement WCM? Case of FIAT Group
Why Implement WCM? Case of FIAT Group
Why Implement WCM? Case of Chrysler Group LLC
Why Implement WCM? Case of Chrysler Group LLC

Introduction of WCM
Lost Work Day Incident Rate

17%

15%

7%

35% Improvement

2005 2006 2007 2008

NAFTA Manufacturing 2009E ytd 2010E
Re-Engineering: Rethinking of Business Process
 Globalization has created a new landscape for industry, one of fierce competition, short windows of
market opportunity, and frequent changes in product demand.
 With this changing dynamics Re-engineering of business process is required.
 Focusing on the analysis and design of workflows and business processes within an organization.
 Rethinking business through reengineering to meet:
 Contemporary demands of quality
 Service
 Flexibility
 Low Cost
 Simple process
 Traditional inspection and control procedures are often eliminated or deferred until the process is
complete, providing further cost savings.
 A reconfigurable manufacturing system (RMS) is one designed at the outset for rapid change in its
structure, as well as its hardware and software components, in order to quickly adjust its production
capacity and functionality within a part family in response to sudden market changes or intrinsic system
change.
 IT can often be a catalyst in this process [of change] and IT opportunities for new or enhanced
products and services should certainly not be overlooked.(Galliers, 1998, p. 226)
Process Re-Engineering: Business Cycle
Essence of Re-Engineering
 At the heart of reengineering is the notion of discontinuous thinking—of recognizing and
breaking away from the outdated rules and fundamental assumptions that underlie operations.
 Challenge old assumptions and shed the old rules that made the business underperform in the
first place.
 Businesses disaggregated work into narrowly defined tasks, reaggregated the people performing
those tasks into departments, and installed managers to administer them.
 Focused on cost, growth, and control.
 Reengineering requires looking at the fundamental processes of the business from a cross-
functional perspective.
 The team must analyze and scrutinize the existing process until it really understands what the
process is trying to accomplish.
 The reengineering team must keep asking Why? and What if? Why do we need to get a
manager’s signature on a requisition? Is it a control mechanism or a decision point?
 Information technology not to automate an existing process but to enable a new one.
Principles of Re-Engineering
 Organize around outcomes, not tasks.
 Identify all the processes in an organization and prioritize them in order of redesign urgency.
 Integrate information processing work into the real work that produces the information.
 Treat geographically dispersed resources as though they were centralized.
 Link parallel activities in the workflow instead of just integrating their results.
 Put the decision point where the work is performed and build control into the process.
 Capture information once and at the source.

When you get the baseline business logic of the service/process flow/structure AND you
have your business objectives of what the final outcome you have to provide, it will be
much easier to find which elements of the existing structure may be simplified (and how).
Business Process Re-Engineering Team
 Team Leader - a senior executive who has envisioned and authorized the overall reengineering effort.
The team leader is responsible for appointing the process owner.
 Process Owner - a senior-level manager in charge of a specific business process. The process owner
is responsible for assembling a team to reengineer the process he or she oversees.
 Reengineering Team - a group that is composed of insiders whose work involves the process being
reengineered and outsiders whose jobs will not be affected by changes in process. The reengineering
team is responsible for analyzing the existing process and overseeing its redesign.
 Steering Committee – a group of senior managers who have championed the concept of
reengineering within the organization and set specific goals for improving performance. The steering
committee, which is led by the Team Leader, is responsible for arbitrating disputes and helping
process owners make decisions about competing priorities.
 Reengineering Czar – an individual who is responsible for the day-to-day coordination of all ongoing
reengineering activities. The czar’s responsibility is to be a facilitator and develop the techniques and
tools the organization will use to reengineer workflow.
Re-Engineering: Rethinking of Business Process
 The traditional definition of business process focuses on modeling, analyzing and improving
the end-to-end sequence of activities. But the emerging definition of business process
emphasizes optimizing individual tasks for convenience and rapid completion (that is, faster
decision-making).
 Business Process Management to drive Customer experience:
 Prioritize key processes that can benefit from optimized experiences.
 Connect customer journey to process maps to surface critical touch points.
 Redesign business processes to skip or accelerate tasks.

Fig: The Meta Model for a Business Process Reengineering

Methodology
The C’s Related to Re-Engineering
 C’s of Organization Re-Engineering
 Customer
 Competition
 Change

 C’s of Effective Re-Engineering

 Commitment
 Cooperation
 Communication
 Contribution
Methods to Help Reengineer for Improved Agility
 Reduce the physical distance between supply points, production, assembly and the customer for the
core products.
 Integrate processes and reduce setups using a zero based goal. Streamline the physical flow within the
factory. Physically couple successive operations in the chain of work, remove nonvalue-adding
functions, and induce velocity.
 Implement physical changes to place facilities close to sources of supply.
 Form partnerships with fewer suppliers such that components can be delivered to satisfy real demand.
 Create short, direct lines of distribution to make it very easy for customers to place an order and receive
fast delivery.
 Streamline and electronically link the information chain so that flow is direct-without interruptions and
delays. Reduce business cycle times to the time it actually takes to efficiently process information.
 Induce fast communications and decisions throughout the organization by physically clustering
functions needed to complete business cycles quickly. Tear down physical walls that stand in the way of
communications.
 Recompose operational organizations with cells that address logical separations of business cycles,
containing multi skilled members, trained to do everything in the cell. Allow cell leaders to be
periodically chosen by cell members; give the members the responsibility for making 90 percent of the
decisions. Employ effective use of automation, technology and techniques.
Tools and Techniques of BPR
 Purpose analysis - To identify the objectives.
 Competitive comparison (Competitive criteria plus SWOT analyses)
 Process Quality Management (PQM)
 Strategic Capacity Analysis:
 Resource capability (CARAP Analysis)
 Core competence
• Make vs. Buy Analysis
 Critical Success Factors (CSF's) vs. Performance Drivers Analysis
 Change management (Force field Analysis & Relationship Mapping) - To identify cultural constraints
 Brown paper flowcharting
 Process Activity Analysis is our own brand of what is sometimes called "Value Stream Mapping" or "Flowcharting" -
To identify current or future information, material, or document flows.
 Waste analysis - To identify waste in the current process.
 Ownership Analysis - To identify changes of ownership of material, information or documents, during their life cycle.
 Benchmarking - To identify alternative strategies, organization, processes, procedures and methods.
 Resource Domination Analysis, which aims to identify what products or services consume what resources as an aid to
reorganizing resources within a process, has been developed by us from what was originally called "Runner Repeater
Stranger" analysis to produce more self contained processes.
 Product life cycle analysis - To identify whether investment in particular products and processes are worthwhile.
Tools and Techniques of BPR (Cont.….)
 Pareto Analysis - To sort the wheat from the chaff, in products, processes, value, space utilisation etc.
 Segmentation - A method of virtually, or actually segmenting the business or processes.
 Input / Process / Output diagrams - A method of defining a process.
 Control Systems Design - A method of identifying appropriate control systems techniques for the new
situation.
 Measures of Performance Design - A method of identifying how the new process will be measured.
 Culture Development - A method of identifying cultural development needs.
 Postponement and Mass Customization Commonality Trees Analysis - A method of improving flexibility,
and reducing lead times.
 Impact / Ease Analysis - A method of identifying the appropriate things to develop and how to control
their development.
 Risk analysis, SWOT, and FMEA - Methods of identifying which aspects of the process or development
are risky and which need close monitoring or preventative measures to avoid problems.
 Simulation - One of the methods of testing the new design prior to implementation.
BPR – A Case Study
Honeywell Inc. in Phoenix, Arizona, USA
 The Honeywell industrial automation and control (IAC) business unit designs, manufactures, and configures the sophisticated TDC
3000X family of systems. These systems enable its customers (refineries, chemical plants, and paper mills around the world) to achieve
world-class process-control capability.
 In late 1989, the management team began a three-year world-class- manufacturing (WCM) program to examine lagging performance
results with goals for defect reduction, short-cycle production, and materials management
 WCM was created to provide resources and take a system-wide view of the plant.
 Instead of workers being assigned to a specific area on the factory floor, teams of multi-skilled workers were charged with building entire
products or modules from start to finish.
 Training took on a system-wide view.
 During the session, the need for radical change was articulated. In addition, management explained what the broad changes would be and
how the changes would impact the workers.
 To support the factory-focused paradigm, the ``all-salaried’’ workforce was evaluated on a “pay for performance’’ basis. Factory-focused
teams were rewarded for their performance.
 In a little over three years, teams helped reduce defect rates by 70 percent, customer rejects by 57 percent, cycle time on parts by 72
percent, inventory investment by 46 percent, and customer lead times by over 70 percent.
 Honeywell calls their factory-focused program the TotalPlantTM . The mission of TotalPlantTM is to unify business and control
information to enable global customer satisfaction.
 To accomplish this mission, the plant is migrating to fully integrated hardware, software, and services that support plant management,
process management, and field management.
 The TotalPlantTM paradigm is not limited to the IAC site. It is intended to support global delivery of its manufactured products, serve the
needs of over 40 regional TotalPlants and delivery centers worldwide, and align with global suppliers.
BPR – A Case Study
Honeywell Inc. in Phoenix, Arizona, USA (Cont.….)
 Methodology
 Process Mapping - Process mapping is a tool that allows one to model the
flow of any business process in a graphical form. The process map allows
one to see how the process actually works across functional boundaries. It
thereby enables all employees to see how the business process actually
works and how it can be changed to be more effective. Process mapping
also creates a common language for dealing with changes to business
processes.
 Fail-Safing: It is a method to identify a defect, analyze it to understand its
root cause, and then develop a solution that will prevent that defect from
occurring again.
 Team-work: Special training is needed to familiarize people (including
managers) with what teams are, how they work, and how they will help the
company. After training, workers need to ``feel’’ that the work environment
is conducive to teams.
 Effective Communication Skills: Honeywell provides conflict resolution
training to teams to help them deal with conflict in a positive way. Basic FAIL SAFING Steps
interpersonal communication skills for enriching relationships with people
and effective means for solving problems are also part of the training.
BPR – A Case Study
Honeywell Inc. in Phoenix, Arizona, USA (Cont.….)
 Lessons Learned
1. People are key enablers of change
2. Question everything
3. People need a systematic approach to map a process
4. Create team ownership and a culture of dissatisfaction
5. Management attitude and approach can squash projects
6. Bottom up or empowered implementation
7. BPR must be business driven and continuous
8. IT is a necessary, but not a sufficient enabler
9. Set stretch goals
10. Execution is the real differentiator between failure and success
Productivity Improving Technology
 Productivity gains were not just the result of inventions, but also of continuous improvements to those inventions which greatly
increased output in relation to both capital and labor compared to the original inventions.
 The technology of building mills and mechanical clocks was important to the development of the machines of the Industrial
Revolution.
 Machine tools–which cut, grind, and shape metal parts–were another important mechanical innovation of the Industrial
Revolution.
 The evolution of hardware has allowed computing to become widespread due to its low cost and effectiveness. Microchips are
now used in everything from greeting cards to missile defense systems.
 Collaborative software, or groupware, puts computers in the center of communications between groups of workers, managers,
and technicians. This way of working has produced major gains in productivity since it was first introduced.
 Examples of collaborative software include document sharing, shared calendars, instant messaging, and web conferencing.
 In agile software development, solutions arise through collaboration between self-organizing, cross-functional teams. It involves
adaptive planning and flexbile responses: tasks are broken into small increments with minimal longer-term planning, and
responses evolve to problems as they arise.
 The values espoused in the Agile Manifesto focus on people and functionality, rather than rigidity, documentation, and planning.
It is thought that better, more useful software can be developed with these values.
 Productivity gains were not just the result of inventions, but also of continuous improvements to those inventions which greatly
increased output in relation to both capital and labor compared to the original inventions.
 The technology of building mills and mechanical clocks was important to the development of the machines of the Industrial
Revolution.
 Machine tools–which cut, grind, and shape metal parts–were another important mechanical innovation of the Industrial
Revolution.
 The evolution of hardware has allowed computing to become widespread due to its low cost and effectiveness. Microchips are
now used in everything from greeting cards to missile defense systems.
Quality and Waste Management
 There are eight primary quality management principles.
 The principles are the basis of the ISO 9001:2008 quality management system standard.
 One of the permanent quality objectives of an organization should be the continual improvement of its overall performance.
 TQM functions on the premise that the quality of products and processes is the responsibility of everyone who is involved with
the creation or consumption of the goods or services offered by an organization.
 Satisfying the customer involves making sure both internal and external customers are happy.
 The internal suppliers are the subordinates who answer to a particular supervisor. Satisfying them involves giving them the
tools and motivation they need to do their jobs.
 It is important to go beyond satisfaction, making the customer – and supplier – feel important and valued, and part of the
process.
 “Lean” focuses on eliminating the wasteful use of time, energy or resources, and instead focusing activities completely on the
creation of value.
 The focus of the Six Sigma management strategy is to reduce defect by minimizing variation in processes.
 Waste minimization is often achieved through more efficient manufacturing processes and the usage of better materials, but
often requires some initial investment.
 Governments often provide incentives to companies for waste minimization, including subsidies and reduced taxes for
companies that take steps to reduce waste.
 A more sustainable supply chain is increasingly seen as leading to a more profitable supply chain, and, thus, managers are
increasingly looking for ways to make their supply chains more sustainable.
 Collaboration is seen as a way of achieving the goal of supply chain sustainability.
 Many companies avoid collaboration due to a fear of a loss of commercial control.
Controlling the Supply Chain
 Purchasing directors and procurement directors guide
and define the organization’s acquisition procedures
and standards.
 Most organizations use a three-way check as the
foundation of their purchasing programs. This involves
three departments in the organization completing
separate parts of the acquisition process.
 The purchasing process usually starts with a demand
for a physical part (inventory) or a service. A
requisition detailing the requirements is generated (and
in some cases provides a requirements speciation) and
passed to the procurement department.
 Purchase orders can be of various types: standard, one-
time buy, planned (agreement with a specific item at an
approximate date), and blanket (an agreement with
non-specific date, quantity, and amount).
 Purchase orders are normally accompanied by terms
and conditions, which form the contractual agreement
of the transaction.
Inventory Management
 Inventory refers to a list compiled for some
formal purpose, such as the details of an estate
or the contents of a rented house.
 Inventory management is required at different
locations within a facility or within many
locations of a supply network in order to plan
for the production and stock of materials.
 Inventory management addresses issues
including: replenishment lead time; carrying
costs of inventory; asset management;
inventory forecasting; inventory valuation;
inventory visibility; and future inventory price
forecasting.
 Supply chain activities can be grouped into
strategic, tactical, and operational categories.
 Supply chain activities can be grouped into
strategic, tactical, and operational levels.
Scheduling
 Production scheduling aims to maximize the efficiency of operations and reduce
costs.
 Benefits of production scheduling include process change-over reduction;
inventory reduction; leveling; reduced scheduling effort; increased production
efficiency; labor load leveling; accurate delivery date quotes; and real time
information.
 Minute-by-minute production scheduling for each manufacturing facility in the
supply chain occurs at the operational level of supply chain activities.
 Benefits of production scheduling include process change-over reduction,
inventory reduction, leveling, reduced scheduling effort, increased production
efficiency, labor load leveling, accurate delivery date quotes and real time
information.
 Production scheduling for each manufacturing facility in the supply chain
(minute by minute) takes place at the operational level of supply chain activities.
Key Terms
 Backward scheduling: Backward scheduling is planning the tasks from the due
date or required-by date to determine the start date and/or any changes in
capacity required.
 Forward scheduling: Forward scheduling is planning the tasks from the date
resources become available to determine the shipping date or the due date.
 maturity date: the time of the final payment of a loan or other financial
instrument, at which point the principal (and all remaining interest) is due to be
paid
Investment in Operations
 Supply chain optimization applies processes and tools that ensure the optimal operation of a
manufacturing and distribution supply chain.
 Supply chain managers try to maximize the profitable operation of their manufacturing and
distribution supply chain.
 Supply chain optimization may include refinements at various stages of the product lifecycle,
and new, ongoing, and obsolete items are optimized in different ways.
 Optimization solutions are typically part of, or linked to, the company’s replenishment systems
distribution requirements planning, so that orders can be automatically generated to maintain
the model stock profile.
 Supply chain optimization may include refinements at various stages of the product lifecycle,
so that new, ongoing and obsolete items are optimized in different ways: and adaptations for
different classes of products, for example seasonal merchandise.
 Process - Lean
 Lean is a philosophy which shortens the time line between the requirement and the delivery by eliminating
waste. Lean Manufacturing is about achieving more with less time, less inventory, less space, less people and
less money.
 Statistically Controls Process
 Benchmarking as the “continuous process measuring our products, services, and practices against
 our toughest competitors or those companies recognized as leaders (Parker, 1996).
 Process - Benchmarking
 Very smooth functioning of the company with minimum intervention from top management.
 WCM principles ensures faster style changeover and efficient production thus the utilisation of resources
(man and machine) increases.
 WCM principles provides more control over the production process thus monitoring and planning for
production becomes effectively easier.
 Middle management (supervisors and in-charges ) are exposed to standard method of manufacturing, this
ensures world class knowledge transfer to the middle management.
Information Age and Competing Into It
 Driven by Information Technology and Knowledge Workers
 Knowledge displaced capital as the scarce production factor and information became a strategic resource.
 Business in the industrial and information age had different characteristics in various areas as shown in Table
below
Area Industrial Age Business
Assembly line production
Economic Stable markets and suppliers
Domestic competition
Inside out (Bottom-up)
Complex business processes
Organization
Intra-organizational communication
Domestic reach\ ambition
Mechanical technology
Technology Proprietary standards
Predictable innovation
Authoritarian, hierarchical
Socio Cultural Business task focus
Individual responsibility
Information Age Business
Customization of products
Fluid markets and suppliers
International competition
Outside in (Top-down)
Reusable, simple processes
Inter-organizational communication
Global reach and ambitions
Electronic technology
Open, inter-operable standards
Rapid unpredictable innovation
Horizontal, team consensus
Business process focus
Team responsibility
Business Challenges Of The Information Age
 Managing Uncertainty
 Customers are becoming competitors, competitors are becoming partners and
unconventional competition is emerging.

 Understanding Customers
 It is increasingly becoming important to understand customers' needs and wants, and to
translate these into a unique value-added business mission.

 Understanding Globalization of Business

 Small, agile Finns are now effectively competing with industry giants because IT can
make a consortium of small firms look, feel and get big, reaching out for customers
once beyond their grasp.
Operating Environment Of Information Age Business
 Business Process Orientation
 Links to Customer and Suppliers
 Customer Segmentation
 Managing Innovation
 Global Scale
 Knowledge Worker
 Tightly linked global financial market;
 Global sourcing of inputs, marketing and distribution of production, and
manufacturing of products and fina1 products;
 Increased pressure for improved product quality and reduced product price;
 Evolution of business toward more comprehensive and continuous global
coordination and integration.

World Class
Global Exporters
Markets Manufacturers
Local Domestic Multinational players
Local Global
Competitors
 Cutting Edge Technology and Manufacturing Excellence
 Manufacturing involves technology that has two aspects-technology of the product and technology of the process.
 To achieve excellence in manufacturing, a manufacturing manager should keep in mind five goals (Prabhala 1994):
 Throughput should go up.
 Inventory should come down.
 Operating expenses should come down.
 Cycle time should come down.
 Yield should go up.
 Halls framework of value added engineering is as below:

Waste Type Elimination Method

Waste of overproduction Reducing set-up time, synchronizing quantities and timing between processes, etc.

Waste of waiting Synchronizing workflow as much as possible, balancing uneven loads, etc.

Waste of transportation Redesigning layouts to make transport and handling unnecessary.

Waste of processing itself Need assessment of product and process.

Waste of stocks Reduce set-up times, and lead times by synchronizing workflows

Waste of motion Study motion for economy and consistency.

Waste of making defective parts Prevent defects to eliminate inspection.

System And Tools For World Class Manufacturing
 Information Management Tool
 Product and process design tools, which are used to create and manipulate data on products and processes.
These include Computer Aided Design (CAD), Computer Aided Engineering (CAE), Computer Aided Process
Planning (CAPP), Product Data Management (PDM) and Group Technology (GT).
 Lean production tools, very often dubbed as Japanese manufacturing techniques or justin-time (JIT) tools, such
as the famous Kanban.
 Statistical Quality Control (SQC) tools.
 Bar coding systems.
 Decision support, execution and business tools, which are today some of the hottest mantras in the market.
These include Manufacturing Resource Planning (MRP II), Enterprise Resource Planning (ERP), Manufacturing
Execution Systems (MES), Supply Chain Management (SCM) solutions and Data Warehousing/Data Mining.
 Material Processing and Handling Tool
 Flexible Manufacturing Systems (FMS), typically consisting of Computer Numerically Controlled (CNC)
machines, industrial robots, Automatically Guided Vehicles (AGVs) and Automated Storage and Retrieval
(AS/RS) systems.
 Lean production tools, Single Minute Exchange of Dies (SMED) and Poka Yoke.
 Rapid Prototyping.
 Business Integration and Decision Support Tools
 Enterprise Resource Planning (ERP) Systems and Supply Chain Management (SCM) Solutions
 E-Business
 Business Intelligence
 Labor and HRD Practices
 Morale and teamwork
 People involvement
 Work environment measures
 Environment and safety
 Employee involvement programs
 Dimensions of employee involvement
 Cross functional teams
 Design and develop new products;
 Choose and implement new technologies throughout
organization;
 To improve the service-profit chain Fig: Human integration management
 To control product costs.
 Human integration management
Generic Manufacturing Strategies For Information Age
 Dynamic Product and Process Change: Innovation Strategy
 Stable Product and Process Change: Mass Production Strategy
 Dynamic Product Change, Stable Process Change: Mass Customization
 Stable Product and Dynamic Process Change

Fig: Manufacturing Strategies for Change

Strategic Planning Methodology For World-class
Manufacturing

 Examining the Strategic Position of the company

 Setting Up the Planning Team
 Assessment of the company’s current manufacturing capabilities
 Assessing the Competition
 Creating the Future Path
 Setting Manufacturing Strategy Objectives
 Developing Objective Achievement Plan and Identifying Necessary Tools
 Gaining Top Management Commitment
 Creating the Implementation Program
 Performance Measurement
Need for Performance Measurement
 Traditional management accounting is no longer relevant or useful to a company
moving towards the World-Class-manufacturing environment.
 Customers are requiring higher standards of quality performance and flexibility.
 Management techniques used in production plants are changing significantly.
 The Performance Measurement systems are as below:
 The PO-P system
 The TOPP System
 The AMBITE System
 Quality Performance
 Cycle Time
 Delivery Performance and Customer Service
 Financial Performance Measures
 The Balanced Score Card
Key Take Away
 World class manufacturing is a process driven approach where various techniques and philosophy are used in one combination
or other.
 Some of the techniques are as follows:
 Make to order
 Streamlined Flow
 Smaller lot sizes
 Collection of parts
 Doing it right first time
 Cellular or group manufacturing
 Total preventive maintenance
 Quick replacement
 Zero Defects
 Just in Time
 Increased consistency
 Higher employee involvement
 Cross Functional Teams
 Multi-Skilled employees
 Visual Signaling
 Statistical process control

 WCM is all about……….

 Data collection
 Deployment / where are the losses ...
 Methodologies and tools / 5S, 4M, 5 Why, ECRS, ......
 Teams
 Increase efficiency / productivity
 Reduction of waste
 Reduction of complaints and claims
 Increase Safety
 Motivation
Thank you