Global Best Practices Statistical Yearbook

Transcription

1 Global Best Practices Statistical Yearbook 8 th Edition Compiled by Dr. Justin R. Barnes BENCHMARKING CLUSTERING STRATEGY

2 ii Foreword The global automotive market is slowly recovering from the Global Credit Crisis, although the international automotive components manufacturing industry has not escaped unscathed. First, the nature of the recovery has been highly uneven, with a number of developed economy markets stabilising at low levels of demand, as opposed to experiencing real recovery to pre-crisis demand levels. At the same time, markets in China and India have continued to surge. This has placed substantial pressure on the global footprint of many multinational automotive component manufacturers who have found they have excessive capacity in certain markets and insufficient capacity in others. Second, despite the market recovery, automotive component manufacturers have continued to take a battering as vehicle assemblers, desperate to repair their balance sheets, have squeezed pricing, whilst continuing to demand ever stronger non-financial performance from their suppliers. The net result of these factors has been ongoing and severe pressure on automotive component manufacturers across the various sub-sectors of the industry. Whereas heightened firm-level competitiveness was once a means to secure improved margins for firms, it is now clear that the attainment of world class manufacturing levels is increasingly simply a requirement for firm-level survival as firms desperately seek to eliminate waste from every facet of their operations. Given this rather sobering context, we are extremely pleased to present you with the 8 th fully updated and comprehensive Annual Global Best Practices Statistical Yearbook for automotive component manufacturers, prepared by Benchmarking and Manufacturing Analysts SA (Pty) Ltd (B&M Analysts). Emerging from the Global Best Practices Benchmarking Programme, which is coordinated by B&M Analysts, the Yearbook has been developed over a considerable period of time and with the on-going input of a number of international experts. The operational competitiveness benchmarking tool upon which this Yearbook is based is, we believe, the most advanced and rigorous available globally, with the team at B&M Analysts, led by Dr. Justin R. Barnes, refining and advancing its content since the inception of the Global Best Practices Benchmarking Programme in This refinement continues to occur in a dynamic manner, involving on-going and intensive engagements with automotive component manufacturers across the globe. Building on the success of the first seven additions of the Yearbook we present this 8 th Annual Best Practices Yearbook with a great deal of pride, as well as confidence in its ability to add value to the operations of those automotive component manufacturers with the vision to use its data to drive their competitiveness forward. It is important to emphasise that this Yearbook has been compiled to support firms in their endeavours to achieve World Class Manufacturing performance levels. It is strongly focused on supporting firms to direct changes in those areas where performance is comparatively deficient; whilst also empowering firms with the knowledge that where their performance is strong, this should be recognised with a level of confidence. In reference to the importance of objective measurement and the establishment of clear key performance indicators (KPIs) to the recent success of Ford Motor Company, Alan Mulally, the company s highly successful CEO, is quoted in the December 11 th 2010 edition of

3 The Economist, as saying that the data sets you free and that you can t manage secrets. In essence, the argument is that no business executive can drive enhanced firm-level performance in line with customer requirements without systematically understanding the comparative and absolute performance levels of those elements of the firm that define its success and/or failure. This Yearbook provides firms with the perfect tool to do precisely this. Despite the severe contraction of the automotive component manufacturing industry over the last couple of years, we have maintained the database underpinning the 2011 Yearbook s content to a number of firms similar in size to the 7 th edition, with a total population of 358 firms. These firms are disaggregated into 10 automotive component manufacturing subsectors, as well as three firm-size, three market-focus, two economy-type and two ownershipprofile categories. The major changes made to the 7 th edition of the Yearbook have been retained in this Yearbook edition, although one further major change has been made. Based on input received from Yearbook customers we have substantially revised the manner in which data is presented, thereby ensuring that readers are able to rapidly access the information they are looking for. This represents the most important change made to the Yearbook series since its inception. We sincerely hope that your acquisition of this Yearbook leads to your company s participation in the Global Best Practices Benchmarking Programme for automotive component manufacturers in future years. Participation in the programme can be secured by contacting our London office (London@bmanalysts.com). Benchmarking and Manufacturing Analysts is moreover happy to answer any queries you may have regarding any of the data included in the Yearbook. Queries can be directed to London@bmanalysts.com. Whilst we are confident the Yearbook will be of major benefit to you, we are always looking for ways in which to improve its content and format; as such any comments pertaining to its content and structure (either positive or negative) are welcomed, and can be directed to the above address. iii

4 Disclaimer iv Whilst every care has been taken to ensure the accuracy and integrity of the data presented in this, the 8 th edition of the Global Best Practices Statistical Yearbook, Benchmarking and Manufacturing Analysts SA (Pty) Ltd, as well as its staff members and directors, take no responsibility whatsoever for any company decisions derived from the data. Copyright Please note that copyright exists on this Yearbook and that no company or individual is permitted to reproduce any portion of this publication by any means whatsoever without the prior permission of a representative of Benchmarking and Manufacturing Analysts. Failure to adhere to this copyright will result in legal action. The Team at Benchmarking & Manufacturing Analysts February 2011

5 Yearbook content Foreword... ii Disclaimer..... iv Copyright iv Introducing Benchmarking and Manufacturing Analysts... v About the author vi Background th Edition Yearbook changes Structure of the Yearbook... 3 Yearbook benefits Queries... 5 Section 1 Identifying the value of the Yearbook Contextualising the importance of benchmarking to the global automotive components industry... 7 How did the Western automobile industry catch-up with the Japanese?... 7 How did they make this comparison with Japanese practices?... 7 Who to benchmark against?... 7 What to benchmark?... 8 Who should do this benchmarking?... 8 Relevance of benchmarking to the global auto components industry?... 8 B&M Analysts benchmarking tool The market driver methodology and measurement formulae Cost Control Measures Quality performance Value chain flexibility Value chain reliability Human resource development Product development Financial performance findings Profile of firms in the database Geographical location Firm Size Automotive sub-sector Market focus Ownership Operating profile Summary Calculating the cost of not adhering to WCM standards Reading the statistics presented in Section 2 and

6 Section 2 Industry performance findings Market driver 1: Cost Control Cost control qualitative performance analysis for Total inventory holding Total database spread Performance by sub-sector Performance by firm size Performance by ownership type Performance by market focus Performance by economy type Raw material inventory holding Total database spread Performance by sub-sector Performance by firm size Performance by ownership type Performance by market focus Performance by economy type Work in progress inventory holding Total database spread Performance by sub-sector Performance by firm size Performance by ownership type Performance by market focus Performance by economy type Finished goods inventory holding Total database spread Performance by sub-sector Performance by firm size Performance by ownership type Performance by market focus Performance by economy type Market driver 2: Internal and external quality performance Internal and external quality qualitative performance analysis for Customer return rate performance Total database spread Performance by sub-sector Performance by firm size Performance by ownership type Performance by market focus Performance by economy type Internal reject rate Total database spread Performance by sub-sector Performance by firm size Performance by ownership type Performance by market focus Performance by economy type... 51

7 Internal scrap rate Total database spread Performance by sub-sector Performance by firm size Performance by ownership type Performance by market focus Performance by economy type Internal rework rate Total database spread Performance by sub-sector Performance by firm size Performance by ownership type Performance by market focus Performance by economy type Supplier return rate Total database spread Performance by sub-sector Performance by firm size Performance by ownership type Performance by market focus Performance by economy type Market driver 3:Value chain flexibility Value chain flexibility qualitative performance analysis for Response time to domestic customer orders from finished goods Total database spread Performance by sub-sector Performance by firm size Performance by ownership type Performance by market focus Performance by economy type Response time to international customer orders from finished goods Total database spread Performance by sub-sector Performance by firm size Performance by ownership type Performance by market focus Performance by economy type Response time to domestic customer orders from production Total database spread Performance by sub-sector Performance by firm size Performance by ownership type Performance by market focus Performance by economy type... 71

8 Response time to international customer orders from production Total database spread Performance by sub-sector Performance by firm size Performance by ownership type Performance by market focus Performance by economy type Manufacturing throughput time Total database spread Performance by sub-sector Performance by firm size Performance by ownership type Performance by market focus Performance by economy type Production time lost to machine/tool changeovers Total database spread Performance by sub-sector Performance by firm size Performance by ownership type Performance by market focus Performance by economy type Response time from order placement to domestic supplier delivery Total database spread Performance by sub-sector Performance by firm size Performance by ownership type Performance by market focus Performance by economy type Response time from order placement to international supplier delivery Total database spread Performance by sub-sector Performance by firm size Performance by ownership type Performance by market focus Performance by economy type Market driver 4: Value chain reliability Value chain reliability qualitative performance analysis for Percentage of deliveries to customers not on time and in full Total database spread Performance by sub-sector Performance by firm size Performance by ownership type Performance by market focus Performance by economy type... 91

9 Production time lost to machine breakdowns Total database spread Performance by sub-sector Performance by firm size Performance by ownership type Performance by market focus Performance by economy type Production time lost to tool breakdowns Total database spread Performance by sub-sector Performance by firm size Performance by ownership type Performance by market focus Performance by economy type Production time lost to materials unavailability Total database spread Performance by sub-sector Performance by firm size Performance by ownership type Performance by market focus Performance by economy type Breakdown maintenance time as % of total maintenance time Total database spread Performance by sub-sector Performance by firm size Performance by ownership type Performance by market focus Performance by economy type Percentage of deliveries from suppliers not on time and in full Total database spread Performance by sub-sector Performance by firm size Performance by ownership type Performance by market focus Performance by economy type Market driver 5: Human resource development Human resource development qualitative performance analysis for Training expenditure as a % total remuneration Total database spread Performance by sub-sector Performance by firm size Performance by ownership type Performance by market focus Performance by economy type

10 Formal off-line training days per employee (all) Total database spread Performance by sub-sector Performance by firm size Performance by ownership type Performance by market focus Performance by economy type Suggestion received per employee Total database spread Performance by sub-sector Performance by firm size Performance by ownership type Performance by market focus Performance by economy type Suggestions received and implemented per employee Total database spread Performance by sub-sector Performance by firm size Performance by ownership type Performance by market focus Performance by economy type Management turnover Total database spread Performance by sub-sector Performance by firm size Performance by ownership type Performance by market focus Performance by economy type Staff turnover Total database spread Performance by sub-sector Performance by firm size Performance by ownership type Performance by market focus Performance by economy type Labour turnover rate Total database spread Performance by sub-sector Performance by firm size Performance by ownership type Performance by market focus Performance by economy type Absenteeism rate Total database spread Performance by sub-sector Performance by firm size Performance by ownership type Performance by market focus Performance by economy type

11 Accident frequency rate Total database spread Performance by sub-sector Performance by firm size Performance by ownership type Performance by market focus Performance by economy type Market driver 6: Product development Product development qualitative performance analysis for R&D Expenditure Total database spread Performance by sub-sector Performance by firm size Performance by ownership type Performance by market focus Performance by economy type Proportion of sales from products released in last year Total database spread Performance by sub-sector Performance by firm size Performance by ownership type Performance by market focus Performance by economy type Proportion of products in the growing phase of their cycle Total database spread Performance by sub-sector Performance by firm size Performance by ownership type Performance by market focus Performance by economy type Financial performance Financial performance qualitative performance analysis Turnover growth Total database spread Performance by sub-sector Performance by firm size Performance by ownership type Performance by market focus Performance by economy type Operating profit Total database spread Performance by sub-sector Performance by firm size Performance by ownership type Performance by market focus Performance by economy type

12 Breakdown of new capital equipment expenditure (CAPEX) Total database spread Performance by sub-sector Performance by firm size Performance by ownership type Performance by market focus Performance by economy type Section 3 Industry waste analysis findings Industry profile for Industry waste benchmark performance analysis for Average performance Upper quartile performance Industry average findings for Sub-Sector profile for 2010 Trim Sub-sector waste benchmark performance analysis for Trim Average performance Upper quartile performance Sub-Sector average findings for Trim Sub-Sector profile for 2010 Harnesses/Electronics Sub-sector waste benchmark performance analysis for 2010 Harnesses/Electronics Average performance Upper quartile performance Sub-Sector average findings for 2010 Harnesses/Electronics Sub-Sector profile for 2010 Foundries/Forges Sub-sector waste benchmark performance analysis for 2010 Foundries/Forges Average performance Upper quartile performance Sub-Sector average findings for 2010 Foundries/Forges Sub-Sector profile for 2010 JIT Assembly Sub-sector waste benchmark performance analysis for 2010 JIT Assembly Average performance Upper quartile performance Sub-Sector average findings for 2010 JIT Assembly Sub-Sector profile for 2010 Metal forming/pressing Sub-sector waste benchmark performance analysis for 2010 Metal forming/pressing Average performance Upper quartile performance Sub-Sector average findings for 2010 Metal forming/pressing Sub-Sector profile for 2010 Metal fabrication Sub-sector waste benchmark performance analysis for 2010 Metal fabrication Average performance Upper quartile performance Sub-Sector average findings for 2010 Metal fabrication

13 2.7. Sub-Sector profile for 2010 Components Sub-sector waste benchmark performance analysis for 2010 Components Average performance Upper quartile performance Sub-Sector average findings for 2010 Components Sub-Sector profile for 2010 Precision Machining Sub-sector waste benchmark performance analysis for 2010 Precision Machining Average performance Upper quartile performance Sub-Sector average findings for 2010 Precision Machining Sub-Sector profile for 2010 Plastic Moulding Sub-sector waste benchmark performance analysis for 2010 Plastic Moulding Average performance Upper quartile performance Sub-Sector average findings for 2010 Plastic Moulding Sub-Sector profile for 2010 Other Sub-sector waste benchmark performance analysis for 2010 Other Average performance Upper quartile performance Sub-Sector average findings for 2010 Other Firm Size profile for Firm Size waste benchmark performance analysis for Average performance Upper quartile performance Firm Size average findings for Firm Size profile for Firm Size waste benchmark performance analysis for Average performance Upper quartile performance Firm Size average findings for Firm Size profile for Firm Size waste benchmark performance analysis for Average performance Upper quartile performance Firm Size average findings for Ownership Type profile for 2010 Multinational Ownership Type waste benchmark performance analysis for 2010 Multinational Average performance Upper quartile performance Ownership Type average findings for 2010 Multinational

14 4.2. Ownership Type profile for 2010 Locally Owned Ownership Type waste benchmark performance analysis for 2010 Locally Owned Average performance Upper quartile performance Ownership Type average findings for 2010 Locally Owned Market focus profile for 2010 OEM Market Focus waste benchmark performance analysis for Average performance Upper quartile performance Market Focus average findings for 2010 OEM Market focus profile for 2010 Aftermarket Market Focus waste benchmark performance analysis for 2010 Aftermarket Average performance Upper quartile performance Market Focus average findings for 2010 Aftermarket Market focus profile for 2010 Other Component Market Focus waste benchmark performance analysis for 2010 Other Component Average performance Upper quartile performance Market Focus average findings for 2010 Other Component Economy Type profile for 2010 Developed Economy Type waste benchmark performance analysis for 2010 Developed Average performance Upper quartile performance Economy Type average findings for 2010 Developed Economy Type profile for 2010 Developing Economy Type waste benchmark performance analysis for 2010 Developing Average performance Upper quartile performance Economy Type average findings for 2010 Developing Appendix I Global automotive industry analysis: The need for improved firm-level competitiveness Profile of the global automotive industry Major vehicle assembler performance trends Major automotive component manufacturer performance trends Mergers and acquisitions (M&As) Geographical spread of production: Trends and forecasts Major global market trends Global automotive industry summary Appendix II One page competitiveness self-assessment Appendix III Detailed industry benchmark data Appendix IV Detailed industry benchmark data

15 v Introducing Benchmarking and Manufacturing Analysts Founded in 1997, Benchmarking and Manufacturing Analysts (B&M Analysts) is a leading international benchmarking and manufacturing diagnostics consulting company. In addition to its offices in Durban (South Africa), Cape Town (South Africa) and London (United Kingdom), it has a host of linkages with international benchmarking organisations in the United States of America, the European Union and India. As a result of its world class methodologies and personnel, the company has established an enviable reputation in a number of manufacturing sectors. This is most obvious in the automotive components industry where its client base includes a range of prominent organisations. As a result of its operational excellence and proven track record over the last decade, B&M Analysts has grown substantially, with the resources acquired over this period focused exclusively on servicing the needs of its growing client base. The company's motto captures the essence of this focus: Powering competitiveness through performance analysis The full ambit of services offered by B&M Analysts is clearly reflective of the company s capabilities in its chosen focus areas: 1. Firm-level operational competitiveness benchmarking and diagnostic services in the automotive, light engineering, textiles, clothing, furniture and chemical industries, including, a. Global comparator benchmarking b. Customer and supplier benchmarking assessments c. Manufacturing excellence assessments 2. Publication of global best practice publications, including the Global Best Practices Statistical Yearbook for automotive component manufacturers 3. Cluster and learning network facilitation 4. Manufacturing, as well as broader supply chain, policy and strategy research for private and public sector clients 5. Broader industrial policy and strategy research for national and local governments, as well as international donor organisations 6. Publication of a multimedia-based Manufacturing Excellence Resource Package For further information on the benchmarking services rendered by B&M Analysts, visit our website:

16 vi About the author Based in Durban, South Africa, where he lives with this wife and four children, Dr. Justin R. Barnes is the Executive Chairman of Benchmarking and Manufacturing Analysts. In addition to the roles and responsibilities that this encompasses, he is a member of the Executive Committee running the South African Automotive Benchmarking Club, whilst also sitting on the Management Board of the Durban Automotive Cluster, the Cape Clothing and Textile Cluster, and the KwaZulu-Natal Clothing and Textile Cluster. These are all highly successful industry development programmes in South Africa that are targeted at fostering the competitiveness capabilities of manufacturers in that particular economy. Internationally, Dr. Barnes is responsible for the Global Best Practices Programme for automotive component manufacturers, as well as a growing international benchmarking programme for clothing and textiles manufacturers. Dr. Barnes has been working in the automotive industry since 1995, when he was appointed Automotive Researcher on the Industrial Restructuring Project (IRP) at the School of Development Studies, University of KwaZulu-Natal. In 1997 he was promoted to IRP Project Manager and rapidly helped develop the IRP into the foremost firm-level industry research institution in South Africa. On the consulting side he established Benchmarking and Manufacturing Analysts in 1997 and then facilitated the expansion of its activities. Given the growth of the South African Automotive Benchmarking Club and the Durban Automotive Cluster Dr. Barnes resigned from his position at the University of KwaZulu-Natal at the end of 2002 to focus on the company s growing interests. Despite the rapid growth of Benchmarking and Manufacturing Analysts over the last one and a half decades, Dr. Barnes retains a direct academic link to the University of KwaZulu-Natal, where he is the Chair of Industrial Studies at the School of Development Studies. Academically, Dr. Barnes completed his BA Honours cum laude in 1994, his MSocSci cum laude in 1995 and his PhD, titled World Class Manufacturing as a necessary but insufficient condition for industry success: A case study of the South African automotive components industry, in To date, Dr. Barnes has published more than 20 academic articles/chapters in prominent international journals/books. In recognition of the role played by Dr. Barnes in respect of the development of the South African manufacturing sector he was named as that country s 30 th most important mover and shaker at the beginning of 2007 (Finance Week, 25 th January 2007).

17 Global Best Practices Programme 2011 Yearbook: Section 2 38 Work in progress inventory holding Unit: Operating days (days) 1. Total database spread Work in progress inventory performance for total database Performance Operating days 90 th Percentile 1.06 Upper quartile 2.65 Median 4.80 Mean 6.16 Lower quartile 8.40 Days th Percentile Performance by sub-sector 0 90th percentile Upper quartile Median Mean Lower quartile 10th percentile Work in progress inventory performance by sub-sector Days Trim Harn/Elec Foundry/forge JIT assembly Metal form/press Metal fabrication Components Precision machining Plastic moulding Other 90 th 90th percentile Median Mean Sub-sector Upper Lower 10 th Median Mean Percentile quartile quartile Percentile Trim Harnesses/electronics Foundries/forges JIT assembly Metal forming/pressing Metal fabrication Components Precision machining Plastic moulding Other

18 Global Best Practices Programme 2011 Yearbook: Section 2 3. Performance by firm size 56 5 Internal rework rates performance by firm size 4 3 Percentage th percentile Median Mean th Firm size Upper Lower 10 th Median Mean Percentile quartile quartile Percentile Small (<150) Medium (>150<250) Large (>250) Performance by ownership type 5 Internal rework rates performance by ownership type 4 3 Percentage th percentile Median Mean Multinational Independent/National 90 th Ownership type Upper Lower 10 th Median Mean Percentile quartile quartile Percentile Multinational Locally Owned

19 Global Best Practices Programme 2011 Yearbook: Section 2 5. Performance by market focus Manufacturing throughput times performance by market focus Hours th percentile Median Mean OEM Aftermarket Other component firms 90 th Market focus Upper Lower 10 th Median Mean Percentile quartile quartile Percentile OEM Aftermarket Other component firms Performance by economy type 90 Manufacturing throughput times performance by economy type Hours th percentile Median Mean Developed Developing 90 th Economy type Upper Lower 10 th Median Mean Percentile quartile quartile Percentile Developed Developing

20 2.8. Sub-Sector profile for 2010 Precision Machining 175 Operational profile of firms Economy location Developed: 87.5% Developing: 12.5% Ownership Multinational: 22.5% Independent/National: 77.5% Turnover (US $) 0 10 mil: 51.3% mil: 30.8% mil: 10.3% Employment 1 150: 87.5% : 2.5% 250 +: 10.0% 50 mil +: 7.7% Market focus OEM: 44.0% AM: 20.0% Other: 36.0% Shifts per day 1.92 Hours per shift 8.00 Days per year Hours per year Accreditations ISO 9001/2: 60.0%, QS 9000: 20.0%%, VDA 6.X: 40.0%, ISO 14001: 80.0%, ISO/TS: 100.0% Import levels 7.67% Export levels 5.92% Total cost of sales Materials: 47.05% Labour (direct): 22.24% Overheads: 30.71% Sub-sector waste benchmark performance analysis for 2010 Precision Machining 1. Average performance GBPYB KPI Average Waste as % of Waste MVA breakdown (%) Finished goods inventory holding 6.77 Days Work in progress inventory holding 8.17 Days Raw material inventory holding Days Customer returns 353 PPM Internal rework 2.13% Internal scrap 2.81% Production downtime due to machine/tool changeovers 5.77% Production downtime due to machine breakdowns 4.02% Production downtime due to tooling breakdowns 2.31% Production downtime due to materials unavailability 4.22% Absenteeism 3.05% Total cost as % of MVA: % 2. Upper quartile performance GBPYB KPI Upper quartile Waste as % of Waste MVA breakdown (%) Finished goods inventory holding 2.73 Days Work in progress inventory holding 3.65 Days Raw material inventory holding Days Customer returns 0 PPM Internal rework 0.10% Internal scrap 0.90% Production downtime due to machine/tool changeovers 3.18% Production downtime due to machine breakdowns 2.27% Production downtime due to tooling breakdowns 1.11% Production downtime due to materials unavailability 2.09% Absenteeism 1.25% Total cost as % of MVA: %