Different needs require different solutions Project based Enterprises: how to reach top class performances Single piece / low volume, customer order driven engineering V.1.2 ©2013 Machine Tools Extrusion plants Bending machines Special UPS Forging Bottling lines Turbines Steel Mill Transport Oil & Gas Calanders Pharmaceutical machinery and many MORE … Contract Furniture 2 JMAC ORIGINAL APPROACH FOR YOUR PERFORMANCE IMPROVEMENT JMAC Group helped to develop the original Toyota Production System and, understanding deeply the principles and tools of Lean Thinking, has been delivering successful consulting projects in make-tostock companies ever since. However we realized that “traditional” Lean methods are not enough in project based environments, often related to engineer-to-order products. This is why JMAC Europe went back to Japan digging for new models and inspirations. After years of studies and projects, we started to transfer these new approaches to Europe. This brochure presents some key-points of our way to help project-based enterprises to become leaders in their market. ARE THESE YOUR NEEDS? Becoming top class in global market Being able to reach every target client with tailored proposal Being able to deliver customized products managing efficiently the product and production process variety Being able to guarantee the same ‘on time delivery’ performance everywhere in the World Leaving a gap between you and your competitors moving continuously forward No surprises between expected project margin at order acquisition and project close-out High share of total revenues coming from extra Service activities besides warranties Every project is a new challenge Working within project based enterprises presents peculiarities compared to the Toyota-like environments famous for Lean or Six Sigma approaches. Some examples of typical issues are: Feasibility analysis during bidding is often weak and contract execution team is the one who has to find a way to realize what was promised Product, process and method standardization is not easy when every project is different from the previous one Organizational matrix may present misaligned targets for permanent functions and project teams 3 INNOVATION How to design competitive products easy to customize? In project-based business, even when the products look very similar, they are not! Each project starts with new customer’s requirements and solutions by Engineering Department may be different especially in large companies or when the latest similar product was realized many years before. Common issues are: unnecessary variety, time loss during customization, production problems, products failures, “re-invented wheel syndrome” etc. BIDDING How to get the “right” projects for your Company? Sales should focus not only in reaching order intake but also in guaranteeing a target mix of projects that can provide the right margin to the companies, the right customers, the right market presence, the right opportunities to wider the gap with following competitors. In Top Class companies bidding starts well before receiving request for quotations with a good business trend analysis, business development actions and offer lines tailored on customer’s real needs. EXECUTION How to hit 100% on time delivery with expected margin? To win in a global market were competitive prices are a given, it is important for projects based Companies to provide an excellent service level after project acquisition. Products should be delivered on time in compliance with contract’s delivery terms, with no surprises during customer acceptance test and guaranteeing the net margin expected at order intake. 4 FLEXIBILITY How to deal with highly variable workload? Working with projects means to be able to react to pick period with factory overloaded, Engineering Department working 24/7 and lumpy cash flow. Being able to improve the flexibility both internally and externally (e.g. using partnership) is essential . SERVICE How to transform the Service Department into a profit center? Key point is to provide the same service level everywhere in the World and without having to send there task forces to solve unforeseen problems. Solve efficiency losses is a necessary step to transform Service from a cost center into a profit center. Top Class project based enterprises have up to 30% of their revenues coming from Service Operations such us Spare Parts, Preventive Maintenance Programs, product efficiency improvement support, Other Services. How we engage these challenges Flexibility Innovation Bidding Execution Service JMAC Europe is able to introduce best practices in every phase of project based enterprises process helping your Company to improve its performances. We can work independently on any phase or we can build a roadmap to change end to end the whole process. Usually, Execution is a great starting point to identify all the issues which may need to be addressed working in other phases. 5 OUR APPROACH We developed a method called Design Based on Archetypes (in Japanese Minamoto Sekkei™). IMPROVING THE INNOVATION PHASE A powerful concept This six step method allows project based enterprises with engineer-to-order products to deliver a new family of products that will be adapted on customer’s specifications. The purpose is to have: • Shorter lead time for adaptation to future customer’s specifications • “Reinvented wheel Syndrome” ‘s prevention. That is avoiding loosing tracks of past DTO customization and reinventing new solutions for the same requirements. -30% Man-hours needed for customization • Zero mistakes in archetype adaptation to new requirements -40% of unnecessary differences from project to project Typical results -50% of cost related to customization mistakes +200% faster learning curves in R&D Department Examples of practical support • Step by step tutoring • Meeting management • Supporting Project Management • Proposing personalized templates for processes, documents and analysis What our customers say “Following the steps, we prevented a lot of mistakes” “It changed the way we think to our products” “I keep asking myself, why we did the other way before” “Following this guideline also even a newly graduated engineer would know what to do”. • Supporting in design reviews and project reviews • Preparing a guideline on how to apply again this approach to other products 6 OUR APPROACH We developed an approach called “Lead Management in complex environment”. It focuses on: • Market information management IMPROVING THE BIDDING PHASE Lead Management Bidding Suspect management Prospect management • Lead identification • Suspect Management: how to reach target customer who haven’t sent a request for quotation • Prospect Management: proposal definition process improvement • Indirect stakeholder relationship management Starting from a Value Stream Mapping to identify “muda” we combine Lean techniques with specific tools for Project Based Enterprises. This in order to address specific issues not related to a classic“ cataloguebased” selling model. Examples of practical support • We do not enter in market choices on where or what to offer but we help our costumers in defining effective sales plan to reach their strategic goals • Support to organizational development of sales departments and local organizations • Proposing personalized templates for processes, documents and analysis • Step by step tutoring of area managers and business developers Contract Sign-off Business development pipeline Sales pipeline Bidding phase improvement for PBEs requires not only actions on the proposal preparation process but also actions on lead identification and business development Typical results Success rate (% n.orders/n. quotations) improvement respecting target margin at acquisition Higher hit rate on target customers Higher number of qualified leads entering the pipeline What our customers say “Before the project, we were moving in a opportunistic way, chasing leads we found along the way, now we target before we shoot”. “We realized that it’s important not to send out as many proposals as you can, but to get orders from target clients with good margin. Now we work on less requests for quotation, selecting the strategic ones and increasing the quality level of the outputs”. 7 OUR APPROACH We standardized a method coming from Kawasaki Shipbuilding Corporation called Setsuban Kanri®: Management System based on synchronized blocks. This method originally born to organize production system for large engineer-to-order ships is based on visual management tools and organizational structures that front-load issues and build a fast reacting attitudes within the organization. It does not include only shop floor management but also specific solution for engineering departments, quality, procurement, shipping and all the other phases involved in engineer to order products. IMPROVING THE EXECUTION PHASE Trains and Stations Project based Enterprises must optimize the overall production system. This is similar to a train scheduling system where contracts are trains and departments are stations. Effective Synchronization of information and material flow is key.” Typical results + 50% of On Time Delivery Zero problems at Factory Acceptance Test Zero Liquidated Damages paid Examples of practical support • Visual Management Tools personalization Strong decrease of projects not reaching expected margin What our customers say • Organization development • Project Manager’s Tutoring • Proposing personalized templates for meeting managements “Before we knew this method at my company every station (department) had its own timetable and half of our trains (projects) were derailing. Now everything is under control” • End-to-end pilot project support 8 OUR APPROACH We developed an approach called “Service Performances Boost Program”. IMPROVING THE SERVICE PHASE Service Activities Improvements Starting from an assessment based on Best Practices Gap Identification and customer expectations analysis we develop an effective and sustainable improvement program. Top Class Performers use their service activities not only as a profit center for Service Related Revenues but also as a valuable asset to: • Increase Customer Retention • Indentify new leads • Obtain information about the market • Define opportunities to improve their products and processes using feedback from the field. Hence, feedback systems are always part of the projects. Examples of practical support • Gap Analysis • Customer satisfaction survey development • Proposing personalized templates for processes, documents and analysis • Coaching to service managers Typical results Reduction of extra cost related to Service activities Faster Service On-Site Team Activation + 50% of Revenues related to after sales services Higher Customer satisfaction index Higher Right First Time Service Activities Better diagnostic capabilities Higher number of on site services with same FTE What our customers say “Before the improvement projects our customers were always complaining about our service level. Now our call center receive often calls from people praising the efficiency of our service teams” • Support on creating a Service KPI Dashboard 9 ABOUT US Established in Italy in 1988 by Eng. Akira Koudate, JMAC Europe is part of the JMAC Group (Japan Management Association Consultants). The headquarters of JMAC Europe are in Italy and we operate directly or through partners in France, Spain, Belgium, Hungary, Greece and Turkey, whilst Sweden, Norway and Finland are served directly by our sister company JMAC Scandinavia. More than 2000 clients served by a network of professionals in 30 years of activity, a center with thousands of case histories formalized and catalogued, tens of methods and techniques, some of which have become fully part of the world managerial culture (Just in Time, Kanban, SMED, Visible Planning) : this is the base of the success of our projects. Our Group JIPM - Solutions Japan Institute of Plant Maintenance Japan Institute for Information Technology Japan Society for Technical Communication Korea Japan Management Association Japan Management Association Consultants Inc. America Japan Management Association Systems Corporation Japan Management Association Research Institute Japan Management Association Management Centre India China Australia Thailand Our Style Fact oriented consulting Hands-on approach Personalized approach Durability of the improvements throughout the development of customer’s internal personnel continuous improvement capabilities Best Practice continuous benchmarking Joint work with the customers In 2006, we established an internal practice to study project based enterprises’ needs and to develop ad-hoc solutions. Contacts JMA Consultants Europe S.p.A. Via Fieno, 1 - 20123 Milano Phone. +39 02 72138326 Fax: +39 02 8053784 Website: www.jmaceurope.com Email: info@jmaceurope.com Realization of change LEAN Experience Team work Success 10