Factory of the Year. Feedback Report. - Feedback Report with selected examples -

Transcription

1 Factory of the Year Feedback Report - Feedback Report with selected examples -

2 Factory of the Year Disclaimer This document is exclusively intended for your personal use. Distribution, quotations and duplications - even in the form of extracts for third parties is only permitted upon prior written consent of A.T. Kearney. A.T. Kearney Factory of the Year 2

3 Factory of the Year Table of Contents Executive Summary The Winners Customized Assessment for Self-Assessment of Competitive Position Position Relative to Group of Participants The Competition "Factory of the Year/GEO" The GEO-Score "Value Creation" Preview: The Competition "Factory of the Year/GEO 2014" A.T. Kearney Factory of the Year 3

4 Factory of the Year - The Winners The Winners Factory of the Year: German GEO-Award: Location Champion: Excellent Large series Assembly: Excellent Small series Assembly: Excellent Quality Management: Excellent Value stream Management MDC Power GmbH, Kölleda (Engine Production, Daimler AG) ASM Assembly Systems GmbH & Co. KG Munich Brose Fahrzeugteile GmbH & Co. KG, Plant Meerane B. Braun Melsungen AG, Hospital Care Plant Medical, Melsungen Agfa-Gevaert HealthCare GmbH, Plant Peißenberg Volkswagen Motor Polska Sp. z o.o., Plant Polkowice Knorr-Bremse SfS, Budapest (Knorr-Bremse Vasúti Jármű Rendszerek Hungária Kft.) A.T. Kearney Factory of the Year 4

5 Factory of the Year Customized Assessment for Self assessment of Competitive Position Position relative to Group of Participants A.T. Kearney Factory of the Year 5

6 Factory of the Year Self assessment of Competitive Position Self-Assessment of Competitive Position Self-Assessment vs. Performance relative to Group of Participants Success Factors Lowest Price Self-Assessment Relevance Rating relative to Competitiors Performance relative to Group of Participants Relative Performance Economics GEO-Dimension Product Quality Quality Innovation Innovation Delivery Service Agility Remarks No Relevance High Relevance A.T. Kearney Factory of the Year 6

7 Factory of the Year Customized Assessment for Self-Assessment of Competitive Position Position relative to Group of Participants A.T. Kearney Factory of the Year 7

8 Factory of the Year - Position relative to Group of Participants ranked within 2 nd quintile Position within the benchmarking competition 1) 5 1. Quintil 2. Quintil 3. Quintil 4. Quintil 5. Quintil 4 GEO-Score % 40% 60% 80% Number of Participants 1) The given position of the overall result only defines the quintile in which the participant ranks within the group of participant but does not show the exact rank A.T. Kearney Factory of the Year 8

9 Factory of the Year - Position relative to Group of Participants Individual Results in all Six GEO-Dimensions GEO-Dimensions at a Glance GEO-Dimensions Value Creation Customer Satisfaction Economics Quality Agility Innovation Criteria Value creation with respect to capital employed Customer feedback Market share growth Cost management Personnel productivity Asset productivity Resource efficiency Quality of products and service Process quality Quality costs Volume flexibility Customer focus Lead times Speed Innovation success GEO-Score Median score Top Quintile A.T. Kearney Factory of the Year 9

10 Factory of the Year GEO-Dimensions Value Creation & Customer Satisfaction A.T. Kearney Factory of the Year 10

11 Factory of the Year - Position relative to Group of Participants Overview of Criteria and Benchmarks Dimensions Value Creation and Customer Satisfaction Value creation Criteria Benchmarks Economic value created (EVC), achieved EVC improvement, targeted EVC improvement GEO-Score Customer feedback Customer satisfaction surveys, customer awards Market share growth Absolute market share growth, relative market share growth Remarks Median score Top Quintile A.T. Kearney Factory of the Year 11

12 Factory of the Year - Position relative to Group of Participants Selected Benchmarks of the GEO-Dimensions Value Creation and Customer Satisfaction Value Creation and Customer Satisfaction Benchmarks [Participa nt] Median Top Quintile GEO-Score Economic value created (EVC) (NOPAT-(CE*WACC)) / CE 1) (Economic value created / capital employed, in %) 3% 7,0% 40,3% Achieved EVC improvement (Increase in economic value created 2008/ 2011, in %-points) 24% 0,0% 24,1% Targeted EVC improvement (Targeted increase in economic value created 2011/2014, in %-points) 9,4% 2,8% 11,2% Absolute market share growth (Growth of own market share 2008/2011, in %) n/a 10,0% 34,3% Relative market share growth (Growth of revenue increase relative to main competitors 2008/2011, in %) n/a 8,0% 29,6% 1) NOPAT: Net Operating Profit after Tax CE: Capital Employed WACC: Weighted Average Cost of Capital Median score Top Quintile A.T. Kearney Factory of the Year 12

13 Factory of the Year GEO-Dimension Economics A.T. Kearney Factory of the Year 13

14 Factory of the Year - Position relative to Group of Participants Overview of Criteria and Benchmarks GEO-Dimension Economics Criteria Cost management Personnel productivity Asset productivity Resource efficiency Benchmarks Material cost reduction, overall cost reduction, maintenance cost, share LCC sourcing Added value per employee, productive hours, plant overhead, absenteeism workers, absenteeism other employees Plant utilization, raw material turns, WIP turns, finished goods turns, return on assets (ROA) Electricity consumption reduction, gas and oil consumption reduction, water consumption reduction, material usage reduction GEO-Score Remarks Median score Top Quintile A.T. Kearney Factory of the Year 14

15 Factory of the Year - Position relative to Group of Participants Selected Benchmarks of the GEO Criterion Cost Management Cost Management Benchmarks [Participa nt] Median Top Quintile GEO-Score Material cost reduction (Total reduction in material costs 2008/2011 as % of total purchasing volume) 4,1% 4,5% 11,1% Overall cost reduction (Overall cost reduction 2008/2011, in %) 11,0% 3,0% 12,9% Maintenance cost (Total repair and maintenance costs/replacement value of production assets, in %) 1,4% 2,8% 2,2% Share of sourcing in low cost countries (Sourcing volume in low cost countries/total purchasing volume, in %) 25,0% 9,7% 27,0% Overall Median score Top Quintile A.T. Kearney Factory of the Year 15

16 Factory of the Year - Position relative to Group of Participants Selected Benchmarks of the GEO Criterion Personnel Productivity Personnel Productivity Benchmarks [Participa nt] Median Top Quintile GEO-Score Added value per employee (In k ) Improvement - added value per employee (Increase in added value per employee 2008/2011, in %) 2,7% 0,9% 30,6% Improvement - productive hours (Reduction of share of non-productive hours 2008/2011, in %) 17% -0,5% 14,9% Plant overhead (Employees of plant overhead/direct employees, in %) 1) 58% 53% 20% Absenteeism workers (Rate of absenteeism among workers, in %) 4,9% 4,6% 2,9% Overall 1) (Employees in shipping, receiving, material handling, engineering, maintenance, quality, materials and production planning and control, first-line supervisors and salaried in production and assembly) / (direct employees in production and assembly) Median score Top Quintile A.T. Kearney Factory of the Year 16

17 Factory of the Year - Position relative to Group of Participants Selected Benchmarks of the GEO Criterion Asset Productivity Asset Productivity Benchmarks [Participa nt] Median Top Quintile GEO-Score Improvement - utilization (Increase in actual production time/planned production time 2008/2011, in %) 0,0% 0,0% 0,1% Raw material turns (Number of raw material turns per year) 68,0 24,7 58,3 Improvement - raw material turns (2008/2011, in %) 9,2% 9,3% 45,5% Finished goods (FG) turns (Number of finished goods turns per year) 297,0 65,3 257,8 Improvement FG turns (2008/2011, in %) 7,5% 7,8% 47,5% Overall Median score Top Quintile A.T. Kearney Factory of the Year 17

18 Factory of the Year - Position relative to Group of Participants Selected Benchmarks of the GEO Criterion Resource Efficiency Resource Efficiency Benchmarks [Participa nt] Median Top Quintile GEO-Score Electricity consumption reduction (Electricity consumption reduction 2008/2011, in %) 5,6% 6,6% 21,0% Gas/Oil consumption reduction (Gas and/or oil consumption reduction 2008/2011, in %) 2,5% 10,0% 30,0% Water consumption reduction (Water consumption reduction 2008/2011, in %) 2,0% 5,3% 30,0% Change of energy cost ratio (Reduction ratio of energy vs. total cost 2008/2011, in %) -34,5% -23,0% 7,4% Material usage reduction (Material usage reduction in a key process 2008/2011, in %) 17,0% 20,0% 51,3% Overall Median score Top Quintile A.T. Kearney Factory of the Year 18

19 Factory of the Year GEO-Dimension Quality A.T. Kearney Factory of the Year 19

20 Factory of the Year - Position relative to Group of Participants Overview of Criteria and Benchmarks GEO-Dimension Quality Criteria Product and service Benchmarks External cost of failure, customer complaints, perfect deliveries GEO-Score Process quality Supplier delivery quality, preventive quality assurance, internal/external quality costs, unplanned downtime, accidents, Quality costs Total cost of quality, reduction of total cost of quality Remarks Median score Top Quintile A.T. Kearney Factory of the Year 20

21 Factory of the Year - Position relative to Group of Participants Selected Benchmarks of the GEO Criterion Quality of Products and Service Product and Service Quality Benchmarks [Participa nt] Median Top Quintile GEO-Score External failure costs (External failure cost/plant's total operational cost, in %) 0,5% 0,2% 0,1% Reduction of external failure costs (2008/2011, in %) 37,2% 7,0% 56,4% Reduction of customer complaints (2008/2011, in %) 47,0% 20,0% 63,6% Perfect deliveries (in %) 100,0% 99,0% 100,0% Improvement - perfect deliveries (Reduction (100%-delivery reliability), 2008/2011, in %) n/a 28,6% 74,2% Overall Median score Top Quintile A.T. Kearney Factory of the Year 21

22 Factory of the Year - Position relative to Group of Participants Selected Benchmarks of the GEO Criterion Process Quality Process Quality Benchmarks [Participa nt] Median Top Quintile GEO-Score Supplier delivery quality (Defective deliveries/total deliveries, in %) 1,0% 1,2% 0,5% Preventive quality assurance (Cost of prevention/cost of rework, appraisal and scrap, in %) 90,0% 25,5% 62,3% Lost workdays due to accidents (As % of total lost workdays) 0,00% 0,07% 0,01% Unplanned maintenance (As % of time spent on maintenance) 39,0% 35,8% 19,8% Improvement - first pass yield (Reduction in (100% - first pass yield), in %) 59% 19,7% 50,0% Overall Median score Top Quintile A.T. Kearney Factory of the Year 22

23 Factory of the Year - Position relative to Group of Participants Selected Benchmarks of the GEO Criterion Quality Costs Quality Costs Benchmarks [Participa nt] Median Top Quintile GEO-Score Total cost of quality (Total cost of quality/total factory cost, in %) 2,1% 1,9% 0,7% Reduction in quality costs (2008/2011, in %) 14% 4,7% 23,3% Overall Median score Top Quintile A.T. Kearney Factory of the Year 23

24 Factory of the Year GEO-Dimension Agility A.T. Kearney Factory of the Year 24

25 Factory of the Year - Position relative to Group of Participants Overview of Criteria and Benchmarks Dimension Agility Criteria Volume flexibility Benchmarks Upside flexibility, weekly working hours flexibility, flex-time hours, share of multi-skilled employees GEO-Score Customer focus Delivery ability, setup time reduction Lead times Supplier lead time, customer order lead time, production lead time Remarks Median score Top Quintile A.T. Kearney Factory of the Year 25

26 Factory of the Year - Position relative to Group of Participants Selected Benchmarks of the GEO Criterion Volume Flexibility Volume Flexibility Benchmarks [Participa nt] Median Top Quintile GEO-Score Upside flexibility (Number of days required to achieve a sustainable 20% increase in production) Weekly working hours flexibility of line workers (Maximum - minimum number of hours per week) Weekly working hours flexibility of other employees (Maximum - minimum number of hours per week) Flex-time hours of line workers (Maximum - minimum number of hours on working hours account) ,5 399 Flex-time hours of other employees (Maximum - minimum number of hours on working hours account) , Overall Median score Top Quintile A.T. Kearney Factory of the Year 26

27 Factory of the Year - Position relative to Group of Participants Selected Benchmarks of the GEO Criterion Customer Focus Customer Focus Benchmarks [Participa nt] Median Top Quintile GEO-Score Delivery ability (Share of on-time and complete deliveries w.r.t. requested delivery date, in%) 100,0% 92,7% 99,0% Improvement of delivery ability (Reduction (100% - delivery ability), 2008/2011, in %) 39% 26,8% 62,5% Setup time reduction (2008/2011, in %) n/a 26,7% 57,9% Share make-to-order (MTO) (Share of production orders based on customer orders, in %) 93% 17% 89% Overall Median score Top Quintile A.T. Kearney Factory of the Year 27

28 Factory of the Year - Position relative to Group of Participants Selected Benchmarks of the GEO Criterion Lead Times Lead Times Benchmarks [Participa nt] Median Top Quintile GEO-Score Reduction of supplier lead time (2008/2011, in %) 42,0% 17,5% 33,3% Reduction of customer order lead time (2008/2011, in %) 8,2% 14,5% 33,3% Share of waiting time of customer order lead time (in %) 25% 43,9% 18,6% Reduction of production lead time (2008/2011, in %) 7% 20,9% 50,0% Share of waiting time of production lead time (in %) 78% 64,8% 10,0% Overall Median score Top Quintile A.T. Kearney Factory of the Year 28

29 Factory of the Year GEO-Dimension Innovation A.T. Kearney Factory of the Year 29

30 Factory of the Year - Position relative to Group of Participants Overview of Criteria and Benchmarks GEO-Dimension Innovation Criteria Benchmarks GEO-Score Speed Time-to-Market, Time-to-Volume, Time-to-Profit Innovation success Revenue with new products, profit with new products, revenue with innovative products Remarks Median score Top Quintile A.T. Kearney Factory of the Year 30

31 Factory of the Year - Position relative to Group of Participants Selected Benchmarks of the CEO Criterion Speed Speed Benchmarks [Participa nt] Median Top Quintile GEO-Score Time-to-Market (In % of industry s average product life cycle) 12% 19% 8% Reduction Time-to-Market (2008/2011, in %) 62% 17% 33% Time-to-Volume (In % of industry s average product life cycle) 5% 7% 3% Reduction Time-to-Volume (2008/2011, in %) 12% 17% 50% Time-to-Profit (In % of industry s average product life cycle) 16% 29% 12% Overall Median score Top Quintile A.T. Kearney Factory of the Year 31

32 Factory of the Year - Position relative to Group of Participants Selected Benchmarks of the GEO Criterion Innovation Success Innovation Success Benchmarks [Participa nt] Median Top Quintile GEO-Score Revenue from new products (Revenue from products within first quarter of their life cycle/total revenue, in %) 15% 25% 50% Profit from new products (profit from products within first quarter of their life cycle/total profit, in %) 11% 23% 50% Revenue from innovative products (Revenue from products with at least one first-to-market feature/total revenue, in %) 9% 28% 90% Overall Median score Top Quintile A.T. Kearney Factory of the Year 32

33 Factory of the Year Customized Assessment for Self-Assessment of Competitive Position Position relative to Group of Participants A.T. Kearney Factory of the Year 33

34 Factory of the Year The competition "Factory of the Year/GEO" A.T. Kearney Factory of the Year 34

35 The competition "Factory of the Year/GEO" The competition "Factory of the Year" This year, A.T. Kearney and the weekly journal Produktion have nominated Germany's "Factory of the Year" for the twenty first consecutive time. Since 1999, the globally presented "GEO-Award" (Global Excellence in Operations) recognizes outstanding achievements along the entire value chain ranging from product development to supply chain processes and company resources. So far, more than 1000 companies have used this impartial, cross-industry benchmarking contest in order to determine their position relative to the best and to take the appropriate steps towards improvement. This customized assessment is designed to help you identify your competitive position. For a number of selected assessment criteria, this report compares your own performance and the respective best practice and thus provides an insight into the range of improvement opportunities within your nominated unit or plant. A.T. Kearney Factory of the Year 35

36 The competition "Factory of the Year/GEO" GEO rates a company's success based on 15 assessment criteria within 6 dimensions GEO Dimensions and Assessment Criteria at a Glance Value creation with respect to capital employed Value Creation Customer Satisfaction Customer feedback Market share growth Cost management Personnel productivity Asset productivity Resource efficiency Economics Global Excellence in Operations Quality Product and service quality Process quality Quality cost Agility Innovation Flexibility Customer focus Lead times Speed Innovation success A.T. Kearney Factory of the Year 36

37 The competition "Factory of the Year/GEO" More than 100 benchmarks and heuristics are evaluated Overall GEO-Score 6 GEO Dimensions Qualität Quality Gewich- Weighting tungsfactor faktor 15 GEO Criteria Product and service quality Weighting factor Process quality Weighting factor > 100 GEO-Scores Warranty cost Weighting factor Perfect deliveries Weighting factor > 100 Benchmarks, Heuristics Score Value Score Score Score Questionnaires A.T. Kearney Factory of the Year 37

38 The competition "Factory of the Year/GEO" All criteria are classified to account for conditions specific to the various types of production and industry Segmentation Overall GEO-Score 1 Classification of criteria and benchmarks Generally valid (e.g. absenteeism) Industry type specific (e.g. time-to-market) Production type specific (e.g. machine utilization) 2 Adjustment of weighting factors (e.g. machine utilization in case of manual assembly Product and service quality Warranty cost Score Qualität Quality Weighting factor Weighting factor Gewich- Weighting tungsfactor faktor Process quality Perfect deliveries Weighting factor Weighting factor 3 Selection of appropriate benchmarking groups (best-in-class comparison) Value Score Questionnaires Score Score A.T. Kearney Factory of the Year 38

39 The competition "Factory of the Year/GEO" The assessment shows strenghts and weaknesses and allows to determine individual improvement opportunities Overall Result Geo- Score Position within the group of participants 20% 40% 60% 80% 100% Participants GEO-Scores Wirtschaftlichkeit Wirtschaftlichkeit Economics Kostenmanagement Kostenmanagement Cost Personalproduktivität management Personalproduktivität Personnel Kapitalproduktivität productivity Kapitalproduktivität Asset Komplexitätsmanagement productivity Komplexitätsmanagement Resource efficiency Individual strengths and weaknesses Benchmarks Kapitalproduktivität Fabrik X Median Top Quintil Asset Kapitalproduktivität productivity Company Fabrik X Median Median score Top Top Quintile Quintil Auslastung 75% 74% 80% Utilization Auslastung Rohmaterialumschlag 75% 75% 24 74% 74% 12 80% 80% 55 Rohmaterialumschlag Raw-material-turns Fertigwarenumschlag Fertigwarenumschlag Finished-goods-turns Specific improvement opportunities A.T. Kearney Factory of the Year 39

40 The GEO-Score "Value Creation" A.T. Kearney Factory of the Year 40

41 The GEO-Score "Value Creation" The GEO-Score for "Value Creation" is an integrated measure of the company's success GEO-Score for Value Creation NOPAT 2 Operating Profit before Interest and Tax Net Sales Volume Price Innovation Quality Delivery service EVC 1 Interest and Tax Costs Variable Fixed Personnel Productivity Material Costs Plant Overhead Costs Cost of Capital Capital Employed WACC 4 Working Capital Fixed Assets Inventory Receivables Net Plant Equipment Property Flexibility Lead Times Supply Chain Integration Make / Buy Strategy Location Strategy Utilization Investment Management Value Creation = EVC / CE 1) EVC: NOPAT (CE*WACC) 2) NOPAT: Net Operating Profit after Tax 3) Weighted Average Cost of Capital (WACC) A.T. Kearney Factory of the Year 41

42 The GEO-Score "Value Creation" Economics, Quality, Agility, and Innovation are essential drivers of Value Creation EVC/CE (%) 33 Top Quintile 13 Average On average, a difference of 0.5 GEO-Score points in the dimensions economics, quality, agility and innovation accounts for a difference of percentage points in the dimension value creation 3,0 3,5 GEO-Score Economics Quality Agility Innovation A.T. Kearney Factory of the Year 42

43 The competition "Factory of the Year/GEO 2015" A.T. Kearney Factory of the Year 43

44 The competition "Factory of the Year/GEO 2015" Outlook 2014 s winners will be presented at a congress in march A visit of two winning plants will be organized. For further information visit or Questionnaires for the next contest will become available early in The editorial staff of Produktion and A.T. Kearney would very much like to see you compete for the GEO-AWARD again. We are confident that your participation will continue to be of help in strengthening your competitive position. Any advice on how to better tailor this contest to your specific needs would be much appreciated and should be directed to A.T. Kearney GmbH Die Fabrik des Jahres/GEO 2015 Lenbachplatz 5 D München (FAX) A.T. Kearney Factory of the Year 44