Tuesday, November 4, 2008

Keeping Manufacturing in Europe

Offshoring is not all success stories as Jan Snoeij of Logica points out - productivity is lower in lower wage countries; container transport costs are skyrocketing, and competition for labor in countries such as China is fierce, to labor costs are up and re-training costs are very high. Hidden costs for management travel, delivery issues, insufficient quality, cultural differences.
To produce in Europe, executives need to involve the plant floor personnel - get them to understand the new direction and what it means for them. Challenges in resources abound: materials & shortages of skilled people - also equipment, since Europe is competing for the latest & greatest with developing economies. Spend money on training people is a key for hidden champions. An important question is whether IT is flexible enough, integrated with the business. So maybe everyone here at the MESA EU conference can work to keep jobs here.

Volvo uses MES to Add to its Reliability

Did you know Volvo Group no longer includes cars, but is 66% trucks and other heavy vehicles (construction, buses, aerospace) and parts? The Volvo Production System - initiated in 2005 was "proudly stolen" concept from TPS. Created VPS Academy central team to build and promote the framework and maintain the momentum, including regular assessments. VPS is then implemented in MES to achieve real-time and global visibility. To drive instructions to employees and make devices do their job, you need high availability, fast MES. And it needs good infrastructure and maintenance. It's always evolving and paperless instructions are hard to get ergonomic - user acceptance and people are still a big issue.

Effectiveness of People is a Key Theme for MESA EU Conference

The SmartFactory demonstration appears to be nearly free of people. However, much of the discussion here has been about how to ensure that people can work effectively. Jan Baan of Cordys talks about the ability to use human intelligence effectively in business processes. Every employee as a decision-maker - what a great vision. Harks back to Grace's empowering message that everyone can be an entrepreneur or intrapreneur. The ability to change a rule the moment before a transaction happens truly enables people to keep the business dynamic. MESA as an organization is also so much about people connecting with each other, learning from each other.

Monday, November 3, 2008

Factories of the Future

Dr. Detlef Zuehlke talked about the Internet enabled everything - SmartHomes, SmartCars, a SmartHospital, and SmartOffice, and SmartFactory showing how to use newer technologies to become more agile. Complexity is a major challenge - but by making devices abstract and communications and power wireless, some of the complexity and sequential planning goes away. Now 22 partners and 10 sponsors have after a few years led to the SmartFactory. The SmartFactory is now fully tested and working for the past 3 weeks - making colored liquid soap. They also perform R&D projects and offer information panels on viz. RFID, wireless, safety & security. Check out the live webcam at: http://www.smartfactory.de/webcam.de.htm - may sometimes be a still picture due to German law. Over 30 companies are involved - so this could be moving into broader application soon!

Great first Day for MESA EU!

I'm about to retire for the night, but a few last thoughts. MESA brings together such a knowledgeable group of people that once you get to the event, you just want to be part of it. I have had several people offer to pitch in on current projects that we've discussed here. The type of enthusiasm we see is infectious - and I'm just delighted to be part of it. Strategic initiatives, Metrics research, and new topics for the conference are all getting more support by the day. Thanks to everyone for coming and contributing!

Over 1/2M Euro/year Savings!

Thales reports that a 90-user MES yielded savings for under 18 months ROI. This was not without challenges - identifying the right mix of skills for configuration and implementation in a core project team was one. Balancing trade-offs between strategic investments and low-risk implementation allowed the 2-month pilot period to lead to roll-out. People are critical - team skills but also ensuring quick operator training.

Inventory Reduction Opportunities Abound

In these tight economic times, surely everyone wants to reduced excess inventory and increase inventory turns for cash-to-cash improvements. However, Gary Goddard of IQS is showing a way to optimize inventory - eliminate excess with an inventory quality ratio. With tools to set targets and play what if, can change safety stock and cycle replenishment times - might improve 50% or more from today's average of 30-45% excess inventory cost on average. Carrier's conservative approach to gaining this visibility and their ability to write custom reports on this type of inventory issue have lead to doubling sales with the same inventory - and increasing inventory turns. Shortages are down by up to 75%.

Setting Manufacturing Footprint Strategy is Continuous

Why lean and offshoring are not enough is the first topic Paul Christodoulou of Cambridge University's Institute for Manufacturing is addressing. Problem is: manufacturing networks are inherited, not designed - M&A and other issues have created them. Can save 30-45% of landed cost by optimizing the manufacturing footprint - can also access growing markets. However, it's not easy to do - moving manufacturing often does not work (skills, supply chain, risk to IP and macroeconomics). What leaders are doing shows variety: some outsource production, some focus there - with or without offshoring. So single approach to footprint strategy from Cambridge from plant thinking to network thinking - simple 4 questions: Why, what, where and how. Working for companies in many industries. Need to check out the Sealed Air example on the web.

Embrace the Power of the Conference

Keynote speaker Grace Boldewijn encourages us all to use this conference to find the missing link - through networking, sharing and listening. Whether entrepreneur or intrapraneur, the keys to excellence are the same. Investing in people and closing the gap between board and operational personnel is part of that. (Builds trust and confidence.) Learn from the current financial crisis - the fight to survive will leave only those who are creative and innovative - to differentiate and think outside the box. Stay #1 by hiring and developing qualified people - invest in excellence, even if it's more expensive than the price-quality ratio. Must be flexible to react to changes - plant intelligence across the enterprise for B2B optimization.

MESA Europe Kicks Off!

John Dyck, MESA Chairman, has introduced the conference underlining pressures on innovation and the ways that manufacturers can innovate more powerfully - tying it into the MESA Strategic Initiatives and the guidebooks that are almost finished now. Wiki format to keep the guidebooks evolving and to enable new strategic initiatives. MESA Europe's second annual conference is getting off to a good start - some very enthusiastic people from manufacturers and solution providers. Information as the next Industrial Revolution is the main theme for John and MESA.

Sunday, November 2, 2008

MESA Europe P2E Conference Prague

Hello, just arrived in the Top Hotel in Prague. The hotel looks great, the food is great, the weather is grey, cloudy.
It's nice to meet all these enthousiastic MES(A) people. I'm looking forward to the Roundtable session that will start in 20 minutes, and the program for tomorrow and the day after. It is a great program.

I hope you all enjoy this conference!

Reinoud Visser
Co-Chair of MESA P2E Conference Europe 2008