World Class Organisation

Question 1

What is a World Class Organisation?

Answer 1

There is no satisfactory definition of world class, but the company will have the ability to profitably delight the customer with high quality products and services, delivered at the right time and price.
Organisation must continue to improve and innovate to remain world class.

Question 2

World class can be described as being the best in you field in the world for example:

Answer 2

Best in terms of :

• Product design and performance
• Quality and Reliability
• Lowest manufacturing costs (to undercut competitors, or afford more on research and development)
• Ability to keep innovating faster than competition
• Shorter lead times/more reliable delivery performance
• Customer service making company more desirable to buy from than competitors

Question 3

You would recognise companies pursuing world class manufacturing by their aims to:

Answer 3

• Reduce inventory investment by 50% or more
• Reduce manufacturing lead times by 50% or more
• Introduce new products at 2 or 3 times the present rate at 50% of the new product lead times
• Reduce manufacturing costs by 30% or more
• Reduce overheads/support/labour by 50% or more
• Improve quality to “parts per million” defect level

Question 4

Better products

Answer 4

• Make sure companies mission statement gives meaning and direction to R&D staff
• Get designers talking to customers
• Get marketers, designers and manufacturing working together
• Pay attention to initial concept +development phases: increasingly crucial
• Ensure technologies adequately researched
• Encourage creativity, but on select a manageable amount of projects
• Build rapid right-first-time procedures into the way you use computer aided engineering (CAE) systems

Question 5

Better factories

Answer 5

• Concentrate on core component production, outsource non-core items
• Select flexible processes suited to the manufacture of core items: use flexible automation selectively
• Create flexible, low inertia factories, with focused unis that can be reconfigured to cater for short product lifestyles
• Ensure that processes, handling and assembly have high capability and consistency in operation with high reliability and optimum availability
• Minimise waste
• Create factory-working conditions, which are likely to help attract, retain and motivate employees

Question 6

Better Organisation

Answer 6

Create an integrated organisational network - from suppliers through products and distribution to customers
-Optimise the network by evaluating and resolving all the trade-offs involved: cost vs service level vs capacity vs lead time vs inventory vs location
-Integrate logistic factors to maximise flow and minimise lead time
Build in sufficient flexibility and responsiveness to cater for all the uncertainties - mix, volume, short life cycles, supplier changes, customer developments

Question 7

Better management

Answer 7

• Select factory locations to maximise skill and labour availability, and access to suppliers
• Adopt a total and major effort for attracting and retaining staff
• Adopt flat, responsive organisations to share the burden of high uncertainty and complexity
• Change the culture and work practices to achieve excellence, team work and collective responsibility -but start at the top
• Assess and develop all employees
• Train and retrain operations and middle managers or the right-first-time, flexible, low inertia environment.

Question 8

Better Information

Answer 8

• Identify where more integrated information, shared by all those involved, is critical
• Recognise your databases as critical and enduring - hardware and software are merely means to an end
• Train people to work with integrated information to achieve business goals

Question 9

World class performance indicators

Answer 9

Ambitious achievable set of indicators are :

• Customer service >98%
• Stock accuracy >99%
• Inventory turnover >25
• Finished goods stock <7 days
• Manufacturing budget percentage 0.5%
• Reject rate >2% of output
• Equipment breakdowns (percentage of production time) <5%
• Manufacturing schedule compliance >99%
• Bill of Materials record accuracy >98%
• Cost of quality non-conformance <10%
• Equipment set up time >20 minutes
• Percentage of sales devoted to R&D >5-8%
• Reportable accidents per million 1
• Maintenance costs (percentage of replacement value of assets) 1-2%
• Maintenance costs (percentage of sales turnover) 2-3% average

Question 10

Advantages of competing in world class markets?

Answer 10

• Advantage in direct labour productivity of 100% when compared to non world class equivalents
• all suppliers will be forced to make internal and external improvements in productivity, quality and purchasing
• ready availability of imported technology can produce organisations
• Opening up to world competition shifts the balance from making one of the most existing resources to one of cost reduction and product development
• governments across the world are investing heavily to encourage new organisations, particularly small to medium sized businesses
• Organisational improvements are rarely costly but often result in the most significant returns.

Question 11

Obstacles to world class performance

Answer 11

• Lack of leaders seeking continual improvement
• Failing to have a detailed understanding of competitors, markets, supply chains, and best practice in production methods
• Not paying enough attention to innovation as a means to improve products, processes, process quality and the cost base
• Failure to sufficiently differentiate products and services from the competition
• Not realising the full potential of their people by failing to adopt flatter organisation structures, team working and multi-skilling
• Many western organisations suffer from ignorance of what constitutes world class
• Major blocks to investment in world-class development is the requirement to pay high dividends to shareholders.