Providing a tailor-made training assistance to industries

Transcription

1 Providing a tailor-made training assistance to industries NICHOLAS BILALIS, Associate Professor Department of Production Engineering & Management Technical University of Crete Chania bilalis@dpem.tuc.gr EMMANUEL MARAVELAKIS, Lecturer Department of Natural Resources Engineering Technological Educational Institute of Crete Chania marvel@chania.teicrete.gr LUK VAN WASSENHOVE The Henry Ford Chair in Manufacturing, Professor of Operations Management, INSEAD Fontainebleau Cedex FRANCE luk.van-wassenhove@insead.edu ARISTOMENIS ANTONIADIS, Professor Department of Natural Resources Engineering Technological Educational Institute of Crete Chania antoniadis@chania.teiher.gr Abstract: - Most European industry sectors are characterised by very intense international competition. There is a strong need for innovative, highly applicable training and support mechanisms, which are easy to use and provide techniques and functionalities to support managers in their strategic, tactical and operational challenges. The training provided should not be an off-the-self assistance function, but a Tailor-made assistance in order to meet the current educational needs of an industry sector. This paper presents an approach which utilises the concept of the Industrial Excellence Award Model, in order to assess the current status of Industrial Excellence in various industry sectors. The results of this analysis are used to define the appropriate educational material and training mechanism for optimising strategy, performance and overall success potential. This methodology has been applied to the textile industry sector and the produced results are presented. Key-Words: - Industrial Excellence, tailor-made training, Textile sector 1 Introduction This paper presents an approach for meeting the current educational needs of an industry sector. The methodology is based on the Industrial Excellence model developed by INSEAD. This model is used for the last 10 years in an annual competition award, carried out in France and in Germany. In brief, Industrial Excellence is the basis for the efficient operation of a company in the new global environment and the integration of the information and communication technology within the company. In the approach presented in this paper, the Industrial Excellence Award framework was used not for giving an award, but for assessing and analysing the current status of Industrial Excellence in a sector. The methodology has been applied to the

2 textile sector and the produced results are presented. This application of the methodology has been developed within the framework of the Merit-Tex project [1], funded by the European Commission s Leonardo Da Vinci Programme. 2 The Industrial Excellence Model The quest of industrial excellence has generated enormous activity over the past century, fuelled especially by the changing business landscape arising out of the industrial revolution, which has seen the emergence of explicit ways of producing goods and, especially more recently, services. In brief, Industrial Excellence is the basis for the efficient operation of a company in the new global environment and the integration of the information and communication technology within the company. It answers questions such as [2]: What does an excellent factory look like? How is it managed? What is the experience of people working in it? What are the pillars of excellence? What should the plant manager particularly pay attention to? Is it technology, people, process, or product? Or combinations of them? What is the role of well-known managerial approaches like SPC, JIT, or TQM? What place do they hold in a broader picture of industrial excellence? What is the importance of supply chain and new product development activities, which are receiving increasing attention, especially in the operations management literature? The Industrial Excellence Award (IEA) model tries to describe, what distinguishes excellent managers from low performers. In this the IEA model represents a combined view on processes and on management factors that drive these processes. In order to perform well, a firm needs to concentrate on four basic processes: operative strategy formulation and deployment, new product development, new process development and supply chain management. As a result, strategies and performance measures have to be transparent. New product and process projects have to be market-/ customer-focused and process knowledge has to be available. The entire supply chain has to be integrated and interlinked. Figure 1 shows the framework of the four processes [2]. The IEA model utilizes a questionnaire which follows the basic structure of the management model presented in figure 1. The questionnaire is divided into 7 sections. The first section only covers the company profile (address, contact person etc.). The second section begins with (1) financial performance, followed by performance results on (2) quality, (3) flexibility and (4) productivity/ cost. The last three represent the classical competitive priorities which generally define operational performance (Ferdows and Meyer, 1990). The following three sections represent the processes described in figure 1. Section 3 focuses on operations strategy. Section 4 is concerned with supply chain management and represents the most complex section in the questionnaire. It is subdivided along the flow of the supply chain into supply base management, manufacturing and customer or distribution channel management. New product and new process development are together summarized in section 5. Sections 6 and 7 concentrate on two supporting resources. In contributing to the resource based view [3], the IEA shows that internal resources have to be managed well in order to achieve company success. In consequence, section 6 is concerned with human resource management and section 7 with knowledge resource management. The basic business processes Management quality Operations strategy formulation and deployment New product development Process development Resource technology Knowledge management Supply chain Supplier integr. Manufacturing Customer integr Employee development Communic- - Participatation Measurē ion ment Integration Delegation Direction setting Figure 1: Management Quality and the Four Business Processes

3 3 Utilising the IEA sample In order to assess the competitiveness of a industry sector the results of the IEA sample can be utilised. Only top performance companies with high winning expectations participated in the competition, having as a result relatively high IEA average scores in all four basic processes. In order to apply the methodology to the textile sector a number of textile companies were selected from 3 European countries: Italy, Spain and Greece. The approach methodology utilized national workshops with participants from textile companies. The initial results from these workshops showed that textile managers sometimes are having difficulties in interpreting correctly the IE questionnaire. For this reason an instructions manual for the IEA Questionnaire was developed. One textile institute from each country was used as a liaison for contacting the textile companies and for providing assistance in completing the IEA questionnaire. The result of this approach was to collect a number of 60 textile (Merit-Tex) companies from the three European countries [1,4]. These textile companies were benchmarked against the IAE sample consisting of companies from various industries, which participated in the competition during the last three years. The IEA sample used, consists of 73 companies in total (50 from Germany and 23 from France). The number of participants is at a stable state of 20 participants each year, however, the data used for this comparison excludes companies that have reapplied in these years and data from companies that have not filled out a certain necessary amount of items in the questionnaire.the Methodology uses a detailed analysis of all aspects included in the IEA model. Some of the analysis results are following. Initial the key differences between the IEA and the Merit-Tex sample of companies are recognised (Table 1). The IEA firms are larger in size, with respect to number of employees, and boast extensive sales revenue figures with accordingly sizeable gross margins in absolute values. Merit-Tex companies however are able to promote a notably larger medium gross margin percentage. Table 1: Merit-Tex and IEA sample basic figures Basic Figures Merit-Tex sample IEA sample Number of employees Sales Revenue , ,00 Gross Margin , ,00 Gross Margin (%) 22,71% 10,35% Analysis also indicated different cost drivers in the supply chain. There is a significant difference in the distribution of logistic costs. While the cost of raw materials and components are the dominant cost driver in the IEA sample, cost drivers are split between cost of raw materials and components and cost of manufacturing and assembly in the Merit-Tex sample (figure 2). 43% IEA sample IEA winners Merit-Tex Figure 2 Distribution of cost drivers 7% 11% 8% 31% Cost of Inbound Logistics Cost of raw materials, components Cost of Mfg & Assembly Cost of Stock Cost of Outbound Logistics Focusing to quality benchmarks, figure 3 shows some general results. The on-time delivery rate which is not presented in the graph shows mean values which are clearly above 90% for both samples in fact with slightly higher values for the Merit-Tex sample. Concerning defect and complaint rates, the values presented by the Merit-Tex participants can be considered very good, even though they fall behind the values of the IEA sample. Figure 3 Quality Benchmarks Differences can also be seen in manufacturing. While Merit-Tex firms mostly produce in job shop, and use a little bit batch processing and project based production, the use of 70% 60% 50% 40% 30% 20% 10% Continuous Flow Assembly Line Mfg Cell IEA sample Batch Processing Job Shop Project based Figure 4 Use of production processes Other Merit-Tex sample

4 production processes is rather equally distributed along the first 5 all processes in the IEA. sample with a slight preference towards the manufacturing cell (figure 4).Further Analysis has covered all basic processes of the IE model. 3 Indicating the current needs Week points of the analysed sector indicate the current needs of the specific sector. In the case of the textile sector two main week processes were indicated: Human Resources Management and Knowledge Management. Human resource management can basically be divided in two major managerial aspects: the delegation of competence (through training) and the delegation of responsibility. Delegation (as described as one success driver in the IEA model) is a very strong possibility to leverage the firm s most important resource and it remains unexplored too often. Similar results can be seen in the comparison of the two samples. Merit-Tex companies score lower on all indicators except for the use of informal channels, which is probably better managed due to the smaller average size of the organization (figure 3). In consequence, there is considerable improvement potential ahead through employee empowerment. Figure 3.: Human Resource Management Only a very small fraction of the Merit-Tex companies has established a well functioning knowledge management system. Therefore Merit- Tex companies cannot be expected to score high on knowledge related issues. Figure 4 shows that there is still tremendous potential ahead in this dimension. We know that in larger organizations a well established knowledge management system is a primary need (and that this is the reason why Merit- Tex companies score extremely low on the entire dimension), nevertheless it can already render very valuable benefits in smaller organizations as well. It has to match the needs of the entity. Figure 4: Knowledge Management 4 Defining the appropriate course material. Since the current needs of the industrial sector are recognized, the definition of the appropriate course material is followed. In the case of the textile sector curriculum on Human resource management included issues on: personnel selection personnel orientation, placement and separation job analysis and design job and performance appraisal steps to human resources training career planning security, safety and health union relations wages and salaries guidelines for the effective management of people guidelines for overcoming organizational barriers to innovation guidelines for effective leadership guidelines for effective communication human resource management metrics Training material on Knowledge Management is focused on: Knowledge Management and Technology Corporate Size and Knowledge Management Key Concepts Categories of Knowledge Management Models Knowledge Processes Knowledge Management Strategies. Knowledge Management Practices Knowledge Management Technology and tools

5 Challenges Case Study The tailor-made courses were disseminated through internet and were included in a flexible and user-friendly e-card. 4 Conclusions The objective of our approach is to define expected progress regarding Industrial Excellence training, to give pathways for advancing their current knowledge on the subject, and to define the appropriate course contents, training material and case studies for the analysed sector. The case of the textile sector was used for testing the proposed methodology. Future actions include adaptation of the methodology to the food, pharmaceutical and mechanical sector References: [1] Bilalis, N., (2004), The MERIT-TEX project, A Leonardo da Vinci funded programme, [2] Loch, C.H.; Van Der Heyden, L.; Van Wassenhove, L.N.; Huchzermeier, A., (2003);, Industrial Excellence. Management Quality in Manufacturing, Springer, Berlin. [3] Barney, J.B., (1991), Firm resources and sustained competitive advantage, Journal of Management, Vol. 17, No. 2, pp [4] Maravelakis E., Bilalis N., Wassenhove L., Enders A. (2004), "A pan European Appraisal of Industrial Excellence in the Textiles Sector", in proc. ITC&DC, pp