Richard Schonberger, author of the term “World Class Manufacturing” (WCM), “World-Class Manufacturing,” says that manufacturing at this level “is achieved by mobilizing resources for continuous improvement.” To achieve it, companies must change procedures and concepts, which in turn leads to a transformation of relationships with suppliers, buyers, producers, and consumers.
We invite you to familiarize yourself with seven key areas of action to achieve world-class. These 7 keys are a kind of “squeeze” from the experience of leading companies:
Reduce lead times
Reduced lead times increase flexibility and agility, reduce inventory demand and risk of inventory obsolescence. Order acceptance, planning, purchasing, input control, production, moving, packaging, delivery – all this refers to the time of execution of the order. The same can be said for the time it takes to send a signal down the supply chain to start each action, plus the total time it takes to get the job done.
Production and purchase in large batches in order to reduce costs leads to an increase in inventory and lead time, and as a result, to an increase in costs. Companies must be able to quickly change the batch size, product mix, and flow capacity to meet market demand. Continuous improvement in reducing readjustment time is an effective tool in this regard.
In supply chain sourcing, companies should focus on automating order processing processes.
Accelerate time-to-market for new products
The rapid introduction of a high-quality and less expensive product to the market is gaining relevance due to rising customer expectations and competition. A well-organized process of bringing new products to the market brings a significant competitive advantage to the company. Product changes and improvements are best made at the beginning of the process. It is a good practice to interact with all areas of production at the stage of product or process development. The interaction should take place with confidence that:
– the new product meets the needs of consumers;
– it has an acceptable price and it will generate profit;
– the product can be produced efficiently;
— the product can be maintained and maintained.
Reduce operating costs
Focusing only on reducing operating costs without taking into account the necessary changes in other business processes may adversely affect other performance indicators. The company’s implementation of WCM contributes to the improvement of several indicators at the same time, including costs, lead time, inventory and customer service.
Approaches to reducing operating costs depend on the specifics of the company’s activities. In most cases, companies focus on three main cost items: labor costs, materials, and all the rest – “overhead” costs. Efficient use of personnel can reduce unscheduled processing, speed surcharges and outsourcing costs, as well as significantly reduce cycle times. A good opportunity to reduce material costs is the analysis of current costs and the development of an effective strategy for the provision of materials. To reduce overhead costs, procurement, production and customer service processes should be optimized and standardized.
The process of decision-making and reporting on a company scale is associated with a daily huge amount of information. Pieces of this information individually, without context and without relationship to other actions and the overall plan, are of little use. A lot of data, collected together and summarized, forms top-level management information that shows status, achievements, and importance. Such information, the manager should be able to interpret to such a degree of detail as to understand exactly what is happening and how to direct adequate actions in the direction of goals and objectives.
Managing and analyzing information is only as important as the exact date on which it is based. Data should be collected as quickly as possible and with minimal human intervention, which is most often the cause of delays and errors. It’s also important to collect information directly from the supply chain. For all this, the most effective is to automate the process of collecting and processing data.
Stay ahead of consumer expectations
The most successful companies not only meet the expectations of customers, but also anticipate these expectations, setting the bar at a level that is almost unattainable for competitors. Manufacturers must clearly understand the wants and needs of consumers, and how they will develop. To do this, you need to provide customers with access to all the necessary information in the most convenient form for them.
Consumers change their minds so often that flexibility is a must for any company. Effective customer feedback provides the most accurate and complete information that can serve as a warning of upcoming changes.
The best strategy is to make the consumer want to interact with you. Strive to be the most preferred supplier due to competitive products, high quality, the right price and a high level of service.
But the height of perfection, and the hallmark of a leader, is the ability to shape demand and new needs.
Set up outsourcing processes
For a company, the fastest and easiest way to benefit from WCM is to collaborate with organizations that have achieved significant advantages in certain phases of the process – for example, production. Transferring part of your activities under the responsibility of such companies, you can almost immediately use its strengths – a well-organized process, high quality, timely deliveries. And in the meantime, you can direct your resources to the type of activity in which you are the best – innovation, development of new products, marketing, sales.
Striving for globalization
Globalization and the Internet have brought their own changes in the practices and ways of doing business. If you’re not entering new geographic markets, you’re empowering your competitors to expand their customer base and adopt potential consumers. Companies must adapt their products and services to the requirements of potential customers in the global market. Such flexibility of the company and such consumer behavior are possible only if there is an effective management system and well-organized processes.
When developing a resource planning system, supply chain management or CRM, it is necessary to remember about the main selection criterion – providing effective information management tools. Information management is a fundamental supporting factor in all key actions on the way to achieving a world-class level. On the technological side, you need to make sure that the operating platform you choose is able not only to support your current needs, but also to adapt quickly, cheaply and efficiently to possible changes in the future. Of course, no one can accurately predict what changes await us in the future, but the right choice will help you strengthen your advantages in the market.
Are you interested in the concept of the World Class Manufacturing system? Then you have a good opportunity to learn about it from people who have experience of successful implementation of WCM/TMP in production! Our training “World Class Manufacturing. Deployment Planning” will provide an idea of the implementation of the transformation program based on the concept of WCM, based on TPM (Total Productive Maintenance), and the benefits that this program provides. Communicating with the trainers who built the production system of one of the best companies in India, you will get answers to the questions: How does it work? Where to start? What’s important?