How to do Well by doing Good!! 6 August, 2010

How to do Well,
Well by doing Good!!
6th August, 2010
Linsey Siede
Director, Automotive Supplier Excellence Australia
Today’s Presentation
Today’s
y Presentation
The Part we See
Agenda
• How do we define what is “good” or being “well”?
• ASEA Process
• Assessment
• Outputs
• Projects
• Improvement Opportunities
• Stage 2
• ASCDP
• Stage 2 Report
How do we know what “good” is?
• Up until ASEA, most reviews were “self-assessments”.
How do we know what “good” is?
• These ratings were completed based only on a Company’s
own internal understanding & definition of what was “good”
good .
• Unless there were other external assessing methods used,
self-assessments resulted in Companies
p
thinking
g they
y were
much better than they really were.
• Companies need external experts to assess their condition
based on “global
global best practice”
practice . (E.g.
(E g Customers
Customers.))
How do we know what “well” is?
• A likely analogy could be:
• It is a known fact that most men find it somewhat difficult to admit
they are unwell, as this is kin to admitting weakness.
• As most Suppliers are run by men, what sort of answers will be
obtained if we do a health check on the business using a self
selfassessment?
• We’re fine!!
• No problems!!
• She’ll be right!!
• An assessment by an external third party, is like sending in a
doctor to do a diagnosis
diagnosis.
• The doctor’s assessment is that actually you’re “not fine” and in
fact you’re quite sick.
• However,
H
as your d
doctor,
t I can recommend
d some thi
things you can
do to help make you “well”.
• In fact if you’ll let me, I can even provide some support to help
you get better
b
more quickly.
i kl
How do we become “Good”?
•
ASEA Assessment Process
– There are 350+ questions that roll into
52 metrics,
metrics in 11 competency areas
areas.
11
52
– The assessment process has a
number
b off kkey elements.
l
t
1. It is an ALL of business review.
2. Uses global metrics developed by local
OEM’ and
OEM’s
dS
Suppliers.
li
3. Uses a best practice model, involving
global benchmarks.
4 Uses
4.
U
experienced
i
d assessors.
5. Provides prioritized improvement plans.
6. Helps suppliers implement plans by
using certified coaches
coaches.
ASEA - Assessment Process & Outputs
2. Improvement
Plans
• Output from the Assessment:
1. Benchmark Report
– Benchmark Report
p
– Improvement Plans
START
START
– Progress Map
Assessment
FINISH
FINISH
3. Progress Map
Output - Benchmark Report
• Examines 11 Competency areas across the entire business
– Compares results to global best practice.
– Compares results to Global average
– Identifies gaps in the competencies
Global Best Practice
Australian Average
Your Organisation
Management and leadership
5
Human Resources
Financial systems and practices
4
3
Technology Investment
2
Cost structures and analysis
tools
1
0
Global sourcing and marketing
strategies
S f ety
Saf
t
Quality and manuf acturing
New model introduction
capability
Supply chain integration
Customer f ocus
Output - Benchmark Report
• Provides comparisons for the
52 metrics, making up the 11
competencies.
– Compares results to global best
practice.
– Compares results to Global average
– Identifies
f
gaps in each metric
• Provides comparisons for key
measures/metrics.
– Compares results to global best
practice.
– Compares results to Global average
– Identifies g
gaps
p in each metric
Output - Improvement Plans
• The improvement plans play a
pivotal role in the program.
– They
ey a
are
ep
prioritized.
o t ed
– They cover the major gaps
identified by
y the Assessors.
– They estimate the cost involved,
and identify
y the resources
required and the potential
benefits.
– They are linked together in the
Progress Map, across a 2 Year
Timeframe.
Timeframe
Initiating Improvement Projects
• The improvement plans play a pivotal role in the program.
– They are prioritized,
prioritized and cover the major gaps identified by the Assessors
Assessors.
– They estimate the cost involved, and identify the resources required and
the potential benefits.
• Following the Report-out meeting at the Supplier, projects
are identified for implementation.
– An ASEA Client Manager works with the Supplier to identify appropriate
resources to help the Supplier with implementation.
– ASEA and the Supplier scope out the project together, and agree on the
deliverables resources
deliverables,
resources, timeline and costs
costs.
– A subsidy of 75% is provided to the Supplier to implement improvement
appropriate plans that:
•
•
•
•
•
Eliminate waste
Reduce costs
Improve efficiencies.
p
Competitiveness
p
Improve
Improve Company sustainability
Where are the improvement opportunities?
•
Stage 2 Results
– Distribution for 250 Improvement Plans from 63 Companies:
Where are the improvement opportunities?
•
ASCDP Results
– Distribution after 19 Companies: (Very similar distribution to Stage 2)
4% 1%1%
4%
MAL
5%
28%
MAQ
SCM
7%
PAP
FSAP
Safetyy
7%
NMIC
GSAMS
CSAAT
9%
CF
21%
13%
TI
Competencies
Management and Leadership
Supply chain integration
Manufacturing and Quality
People and performance
Financial systems and practices
Safety
New model introduction capability
Global sourcing & marketing strategies
Cost structures and analysis tools
Customer focus
Technology investment
TOTAL
MAL
SCM
MAQ
PAP
FSAP
Safety
NMIC
GSAMS
CSAAT
CF
TI
31
26
12
10
8
8
6
5
4
1
1
112
Where are the improvement opportunities?
•
Stage 2 Vs ASCDP - Improvement Projects
– Comparing the distribution of Projects:
Competency
Stage 2
ASCDP
Management & Leadership
36%
28%
Manufacturing & Quality
29%
21%
Supply
Supp
yC
Chain
a Integration
teg at o & Mngt
gt
11%
%
13%
3%
Global Sourcing & Mktg Strategies
8%
4%
Financial Systems & Practices
6%
7%
New Model Introduction Capability
3%
5%
Cost Structures & Analysis Tools
3%
4%
Safetyy
2%
7%
Technology Investment
1%
1%
People & Performance
1%
9%
C t
Customer
Focus
F
0%
1%
Stage 2 – Report
• Results obtained in 2008 have been aggregated and published in a final Stage 2 Report:
Australian Automotive Supplier Performance Strengths, Weaknesses and Opportunities
(
(www.asea.net.au)
)
• Unique and for the first-time, completely independent assessment of a large part of the
Australian automotive supply base.
Stage 2 - Overall Industry Performance
General trends noted:
• Bigger companies perform
better than smaller companies
• Significant gap between the
<$50M
$50M companies
i and
d th
those
with turnovers above $50M
• Has significant
g
supply
pp y chain
implications
• Requires improvement across
all competency areas
Mean industry performance in the ASEA competency areas,
according to turnover
Stage 2 - Industry Strengths by Turnover
• Companies that scored in the top 25% globally – showed strong customer focus
• Top performing areas include NMI, Customer Focus and Safety
• Strong customer focus shows an ability for ‘the customer’ to drive supplier
performance through appropriate assessment processes
• Focus on other disciplines within the company were not as strong
• Less than $50M had low scores across all competency areas
Percentage of companies scoring the top 25% with comparison to global standards, according to turnover
Stage 2 - Industry Strengths
• MNC’s are stronger in all competency areas – in general these companies
leverage off the experience
experience, infrastructure and technologies of their parent
Stage 2 - Industry Strengths
• MNC’s are stronger in all competency areas – in general these companies
leverage off the experience
experience, infrastructure and technologies of their parent
• Suppliers who are actively exporting are exposed to international competitive
pressures which reflects in their stronger performance across a range of
business areas
Stage 2 - Industry Strengths
• MNC’s are stronger in all competency areas – in general these companies
leverage off the experience
experience, infrastructure and technologies of their parent
• Suppliers who are actively exporting are exposed to international competitive
pressures which reflects in their stronger performance across a range of
business areas
• Local suppliers that also export perform better than those that do not
Stage 2 - Industry Weaknesses by Turnover
• Manufacturing and Quality is a substantial area of weakness with over 80% of
companies receiving scores placing them in the bottom half of companies
globally
l b ll
• More than a third of companies are performing poorly in Manufacturing &
Quality, Cost Structures & Analysis Tools, Technology Investment and Supply
Chain Integration & Management
• Weaknesses are predominantly internal, process and performance related
measures
Percentage of companies performing in the bottom 50% with comparison to global standards, according to turnover
Stage 2 - Industry Weaknesses - Quality
•Most suppliers receive
significantly poorer quality
from their suppliers than
they deliver to their
customers
•Good quality results at the
primarilyy due
customer are p
to good inspection
processes rather than
good p
g
production processes
p
•Internal quality levels
particularly poor for the
less than $50M
companies
•Need dramatic
i
improvement
t if we are to
t
remain competitive
Reject rates on parts received from suppliers
suppliers, in
in-plant
plant products
and parts delivered to customers, according to turnover
ASEA & C21 - Industry Weaknesses - Quality
•The
Th d
data
t obtained
bt i d in
i the
th
C21 study (tier 2 & 3
suppliers) has revealed a
similar pattern to that
seen in ASEA.
•The C21 data is
considerably higher than
the ASEA data.
When combined, the
•When
consolidated data shows
the quality trend worsen
p y turnover
as the company
reduces.
Quality (ppm)
50000
45000
40000
35000
30000
25000
20000
Supplier
Internal
15000
Customer
10000
5000
0
<5
5-10
>10
<50
50-100
>100
Turnover ($Million)
How can we get better?
• It starts at the top
• Embrace change & continuous improvement
• Need a strategic plan for the business, which is
cascaded down to all employees
• Need clear goals that are tracked, communicated and
actioned
• Need an understanding
nderstanding of “best practices”
• Operate in an environment of continuous improvement
Automotive Supplier Excellence Australia