Automotive Component Supplier Development Programme … Studies/EDD/REDUCED... · Final Report Project: SE/SAF/09/B03 and SE/SAF/09/B03 Amendment 1 December 2012 the dti ... SMED

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Automotive Component SupplierDevelopment Programme

(ACSDP)

Final Report

Project: SE/SAF/09/B03 andSE/SAF/09/B03 Amendment 1

December 2012

the dtiDepartment:Trade and IndustryREPUBLIC OF SOUTH AFRICA

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1. Foreword

In an increasingly globalised market with excess idle capacity abroad, it is essential that South African component suppliers continually strive to become globally competitive. Companies must seek ways and means to continuously improve in all areas of their business if they are to meet the challenges of global competition which is largely emanating from emerging economies like our own market. The automotive industry is a significant contributor to the gross domestic product (GDP) of the country; it employs in excess of 300 000 people yet remains a highly threatened sector often fighting for its survival.

The Automotive Component Supplier Development Programme (ACSDP) supports the objectives of the South African Automotive Industry’s “Vision 2020”. Initiatives of this calibre are imperative for the industry and we need to encourage government and industry alike to continue working together to support the sector in a manner that we realize our socio-economic growth targets.

This book takes one through a 3 year journey of the ACSDP that was implemented by the AIDC, supported by the United Nations Industrial Development Organisation (UNIDO) and funded by the Department of Trade and Industry (the dti). The purpose of this book is to explain the benefits of the Programme by showcasing company case studies which explains the actual improvements and tangible benefits realized.

Measuring and enhancing quality, cost and delivery for component suppliers is accepted by many sectors and customers, as fundamental factors in the way forward to improved competitiveness.

I appreciate and congratulate the AIDC Supplier Development Team for delivering on their mandate of the ACSDP successfully and diligently. Whilst the outcomes are impressive, we still have a long path in our journey of competitiveness as we are very aware that the rest of the world is also aggressively improving their value chains.

The AIDC sincerely appreciates and values the collaboration and partnership it has enjoyed with UNIDO, the dti and the various industry representative bodies and programme participants. We would like to further strengthen the partnership by engaging on other future value adding programmes of this nature.

Mr Barlow ManilallChief Executive OfficerAIDC


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2. Preface

The ACSDP (Automotive Component Supplier Development Programme) implementation by the AIDC supported by UNIDO and funded by the dti has become the latest sector improvement success story for the Automotive Industry in South Africa.

It is with immense gratitude, great pleasure and fulfilment that I am sharing the objectives and achievements of the ACSDP. This is one of the most objective and wide reaching Supplier Development Programmes that has been conducted within the Automotive Industry.

The AIDC developed a manufacturing competitiveness programme in 2002 in partnership with Confederation of Indian Industry (CII) and UNIDO named “TIRISANO”, for South African Automotive Suppliers. The TIRISANO programme has since been one of the AIDC’s key programmes for supplier development and has been implemented in more than 120 South African automotive suppliers since its inception.

In 2009, due to the success of the programme the dti approved a 3 year contract, project managed through UNIDO whereby the AIDC was contracted to implement competitiveness improvement programmes known as ACSDP, at 65 national automotive suppliers within South Africa over a three year period.

This programme was hugely successful in assisting suppliers to reduce their cost of doing business and global competitiveness. The benefits of the programme included cost savings for the companies, quality improvements, reduction of lead times, introduction of cleaner production techniques, enhancing a culture of continuous improvement within the companies, training of middle management and supervisors on lean principles and effective management of a manufacturing company. The ACSDP introduction to the industry was during the global recession of 2009 and though challenging, proved to be the most appropriate time to implement such a programme.

I would like to acknowledge and thank all the companies that participated on this programme. Due to the focus on programme sustainability; I am certain that they will reap the benefits of the initiative for years to come.

The AIDC is committed to continuously developing a competitive supplier base for the South African Automotive industry in pursuit of becoming and remaining a significant global player.

I would like to thank Mr. Claude Pillay, Industrial Advisor from AIDC for assisting in compiling this report and all AIDC Industrial Advisors and Management who contributed to the success of this programme.

Nkumbuzi Ben-MazwiDepartmental Manager:Supplier Development DepartmentAIDC


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3. Acknowledgements

The AIDC would like to acknowledge the following stakeholders for their participation and input during the Automotive Component Supplier Development Programme:

● 65 Participating Companies on the Programme

● The dti

● UNIDO

● NAACAM

● NAAMSA

● OEM Purchasing Council

● AIDC Management and Advisors

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Table of Contents

1. Foreword............................................................................................................................................ 32. Preface.............................................................................................................................................. 43. Acknowledgements............................................................................................................................ 54. Glossary of Terms.............................................................................................................................. 75. Introduction....................................................................................................................................... 8 5.1. Background................................................................................................................................ 8 5.2. Objectives.................................................................................................................................. 9 5.3. Scope........................................................................................................................................ 166. About the Programme....................................................................................................................... 17 6.1. Lean Manufacturing.................................................................................................................... 17 6.2. Cleaner Production..................................................................................................................... 18 6.3. Supervisor Training..................................................................................................................... 187. Methodology...................................................................................................................................... 21 7.1. Implementation Process............................................................................................................ 21 7.2. ACSDP Programme Type Split for Phase 2................................................................................ 22 7.3. Monthly Review Meetings.......................................................................................................... 23 7.4. Assessment Framework/ Key Performance Indicators (KPI’s)................................................... 248. Resources and Company Identification............................................................................................. 25 8.1. AIDC Programme Support Structure........................................................................................... 25 8.2. Regional Project Teams.............................................................................................................. 26 8.3. Engineering Interns Employed................................................................................................... 27 8.4. Selection of Companies............................................................................................................. 28 8.5. Capacity Building (AIDC Advisors)............................................................................................. 319. Summary of Results........................................................................................................................... 34 9.1. Impact and Achievements........................................................................................................... 34 9.2. Training of Company Personnel................................................................................................ 35 9.3. Case Studies.............................................................................................................................. 36 9.4. Lessons Learnt.......................................................................................................................... 3710. Programme Observations and Recommendations............................................................................ 38 10.1. India Study Tour........................................................................................................................ 38 10.2. UNIDO Interim Evaluation and General Feedback.................................................................. 39 10.3. B&M Analysts Impact Assessment Report............................................................................... 3911. Way Forward..................................................................................................................................... 43 11.1. Total Productive Maintenance (TPM)....................................................................................... 43 11.2. Top Management Buy In.......................................................................................................... 43 11.3. Study Tours............................................................................................................................... 43 11.4. International Experts................................................................................................................. 43 11.5. Review of the AIDC Tirisano Programme................................................................................. 44 11.6. Enhancing Leadership (VLFM and VSME)............................................................................... 4412. Conclusion ....................................................................................................................................... 45 12.1. Reflection of a 3 year programme............................................................................................ 45 12.2. Future Programme Enhancements.......................................................................................... 45 12.3. Results of Contracting Services as per ToR............................................................................. 46 12.4. Deliverables as per ToR........................................................................................................... 4613. Appendices........................................................................................................................................ 4714. Case Studies..................................................................................................................................... 5515. News Clips and Articles..................................................................................................................... 6716. Project Funders and Key Stakeholder............................................................................................... 6917. References........................................................................................................................................ 6918. Contact Details.................................................................................................................................. 69


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4. Glossary of Terms

ACMA Automotive Component Manufacturers AssociationACSDP Automotive Component Supplier Development ProgrammeAIDC Automotive Industry Development CentreCII Confederation of Indian IndustriesCoE Centre of ExcellenceCSFR Customer Satisfaction Feedback ReportEC Eastern CapeGP Gauteng ProvinceJIPM Japan Institute of Plant MaintenanceJIT Just In TimeKPI Key Performance IndicatorKZN Kwa-Zulu NatalMRM Monthly Review MeetingNAACAM National Association of Automotive Component and Allied ManufacturersNAAMSA National Association of Automotive Manufacturers of South AfricaNCPC National Cleaner Production Centre OEE Overall Equipment EffectivenessOEM Original Equipment ManufacturerQCDSM Quality, Cost, Delivery, Safety, MoraleSDD Supplier Development DepartmentSMED Single Minute Exchange of DieSWOT Strengths, Weaknesses, Opportunities, ThreatsTEI Total Employee InvolvementThe dti The Department of Trade and IndustryTirisano In Sotho language it means “Working Together”ToR Terms of ReferenceTPM Total Productive MaintenanceUNIDO United Nations Industrial Development OrganisationVLFM Visionary Leaders for ManufacturingVSM Value Stream MappingVSME Visionary Small and Medium Enterprise


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5. Introduction

5.1. Background

The automotive industry is South Africa’s leading manufacturing sector and the largest attractor of foreign direct investment in manufacturing. Most of the global motor vehicle manufacturers (OEMs) operate in the country, supported by around 280 component producers and 300 lower tier suppliers. The sector accounts for more than 10% of South Africa’s manufacturing exports, making it a crucial gear in the economy. Locally, the automotive sector contributes about 7.5% to the country’s GDP and employs around 36,000 people directly and more than 100,000 indirectly. The component industry contributes around 2% of the country’s GDP, and is looking to strong growth as export potential continues to increase.

In view of this importance, the government has identified the automotive industry as a key growth sector, with the aim of increasing vehicle production to 1.2-million units by 2020 and to significantly increase local content. At the same time, South African components suppliers are under continuous pressure to reduce costs and improve reliability or lose business to competitors in emerging economies like Brazil, China and India.

As the competitive pressures amongst OEMs increase, so they have forced additional competitiveness demands on to their component suppliers as follows:

● The component manufacturer - achieve reductions through value adding/value engineering.

● Integrity and product quality must also improve.

● Enhanced just-in-time (JIT) supply - OEMs increasingly demand more frequent JIT deliveries to reduce their overhead cost structures, improve internal controls, and 100% delivery reliability.

● Improved quality performance - tied to production processes, component firms are now also expected to supply perfect quality products. To ensure they attain these quality performance standards, OEMs also force adherence to certified quality management systems such as ISO/TS 16949.

● Adherence to environmental standards. In line with the environmentally polluting nature of certain aspects of automotive production.

The Tirisano Cluster Programme was developed to support suppliers with the aforementioned and thus addresses all the key issues around quality, cost mitigation, cleaner production and supply stability. The Tirisano Cluster Programme has therefore been one of AIDC’s key programmes for supplier development and has been implemented in more than 120 South African Automotive Suppliers.


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The Automotive Component Supplier Development Program builds on the Tirisano cluster program designed by UNIDO in 2002 and implemented by the South African Automotive Industry Development Centre (AIDC). Between 2003 and 2007, the AIDC worked with around 30 companies in five clusters. UNIDO provided assistance with identifying relevant continuous improvement methodologies and training AIDC staff members in cluster development and cleaner production.

In a follow-up project consisting of a testing and a rollout phase, the AIDC offered the Tirisano program out to a further 15 companies during the testing phase (2009-2010), which underwent rigorous benchmarking at the same time to verify the impact of the Tirisano program on financial and operational performance of the participating companies.

Phase 2 of the programme expanded the program’s reach and provided additional services to a further 50 companies over the rollout phase and in two contract parts. Therein, the South African Department of Trade and Industry (the dti), which is funding the project, had no objection to AIDC’s sole source bidding on this contract.

5.2. Objectives

The ultimate objective of this project was to improve the competitiveness of South African SMEs in the automotive component industry. AIDC contributed by broadening the range of continuous improvement services it provided and by increasing their quality, consistency and reliability. The Project has been divided into two phases – a testing and a rollout phase. The Rollout Phase foresees to increase the number of companies to around 65 suppliers which includes companies covered in the testing phase. At the end of the first phase and based on preliminary benchmarking results, UNIDO and industry stakeholders (in the project’s Steering Committee) recommended the continuation of the program to the rollout phase.

In line with the overall goal of supporting component manufacturers in South Africa, the core target beneficiary group will be at the enterprise level, local Tier 1/2 to Tier 4 suppliers that are linked to Tier 1 suppliers and/or OEMs. Through participation in the Tirisano Program, the project will help those enterprises to accelerate a process becoming integrated into the local market, and to more effectively compete in the global supply chains of domestic and multinational companies.

At the institutional level, collaboration with relevant business support, advisory and training institutions as well as selected national and international experts and advisers will be sought to further strengthen the institutional capacity of the AIDC and to establish relevant partnerships to enhance the service offer and render it more sustainable.


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The scope of contracting services as per the Terms of Reference (ToR) included the following:

Part 1:

1. Receiving and collaborating with external assistance made available to strengthen the capacity of AIDC to support component manufacturers in the implementation of new continuous improvement activities:

During the testing phase, additional modules were incorporated into the Tirisano Program, covering advanced lean principles (SMED), supervisory skills training, project management (sector focus), and cost savings and control through the efficient use of inputs/resources and cleaner production.

Following the conduct of a company satisfaction survey and the receipt of the updated benchmarking report, a number of elements for improvement of the Tirisano Program were considered, which were confirmed through further assessments that were under taken. International experts and/or institutional representatives were selected by UNIDO to assist AIDC in integrating these recommendations into the delivery of services in the context of the Tirisano Program. The emphasis can be on:

● Delivery modalities for company roll-out as well as for training of industrial advisors: standardized roadmap, modular approach, interaction with and amongst companies, frequency thereof, etc.

● Training content: e.g. Quality management, Process efficiency approaches (SMED), Environmental management and energy efficiency, Market access coaching

● Development/updating of a business and marketing plan for service delivery / sustainability.

In conceptualizing and receiving such assistance, the AIDC will have the following responsibilities:

● make programmatic suggestions on the scope and focus of such assistance;

● assist in the organization of training activities for AIDC staff and the alignment of training activities with the rollout of the Tirisano Program;

● fully support the external experts and advisers throughout their interventions and ensure the active participation of relevant AIDC staff (staff time and availability) in the activities suggested;

● Actively engage with the external experts, contribute to the development of action and implementation plans to later on fully implement the developed business and marketing plans and to adjust the Tirisano Program to the extent necessary.


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2. Preparatory Activities for the Rollout of the Tirisano Program

This includes a number of steps considered necessary to generate sufficient interest in the programme from a broad base of automotive component suppliers and to thus select the first batch (possibly also some for the second batch) of participating companies according to agreed criteria:

● Preparation of promotional material on the basis of results obtained during the testing phase (leaflets, brochures, newspaper articles, summary presentations) and including a detailed description of the Tirisano content and process (timelines, duration, expected results, price, etc.).

● Undertaking of promotional activities (initially with a focus on Part 1, but later on for Part 2 as well), including the dissemination of materials prepared, holding of promotional presentations to inform prospective participants and key supply chain actors and representatives of relevant business associations about the Tirisano Program. Meetings with key OEMs/OEM Purchasing Council should also be organized to promote the Program further.

● Launch of a call for applications of industrial advisers/project managers to support selected companies during the rollout phase through relevant media (websites, newspapers, conferences) and selection based on agreed criteria to cover clusters of participating firms (cost effectiveness is a key criterion for assignment of industrial advisers to companies).

● Launch of a public call for applications from suppliers through relevant media (websites, newspapers, conferences), including the use of information materials, stipulation of criteria for eligibility (together with UNIDO and drawing on experiences from the testing phase), and the expected company contribution (cash and in-kind) and motivation.

● Company selection based on agreed selection criteria and their weighting (together with the project steering committee) and notification of selected companies. Those companies that cannot be accommodated in the first batch can, if considered relevant, be short-listed for the second batch to start later in the year.

● Organization of an initial training of industrial advisers/project managers through existing staff (min. 2 weeks) and external experts (as appropriate); provision of required methodological approaches and tools required for the rollout of the Tirisano Program. Action planning for batch 1 and confirmation of responsibilities.


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3. Rollout of the Tirisano Program to 25 companies

● Organization of an initial awareness workshop for all participating firms – presentation of the program and formation of working groups/clusters, presentation and assignment of the industrial advisers.

● Organization of inception visits of companies to profile the companies and undertake initial assessments (data collection on the basis of key performance indicators (KPI) to be agreed upon with UNIDO and in collaboration with external experts, as appropriate) and discuss individual work-plans based on different Tirisano modules.

● Initiation and rollout of the counselling program, including stock-taking/tracking of the activities of the counsellors undertaken and continuous review of progress made with the participating companies.

● Organization of Monthly Review Meetings for different company groups/clusters through industrial advisers and coordinated and facilitated by AIDC to discuss progress achieved at company level and share challenges and achievements among peers.

● Invitation of previously graduated companies to present their experiences as well as key buyers and support institutions to present supplier development or support programmes of relevance at frequent intervals – one actor each per working group or cluster at minimum.

● Supervision of counselling work and feedback to individual advisers on a continuous basis through AIDC project manager and other external experts/support institutions.

4. Study Tour

● Organization of a study tour of min. 8 experts (company advisors, policy makers/government officials, associated experts of AIDC, representatives of relevant business support institutions) to another automotive ‘cluster’ which has been/is supported by UNIDO (UNIDO HQ will make available relevant contact information and facilitate the process).

5. Stock-taking and follow-up activities

● Stock-taking/tracking of counsellor activity, reporting on tasks accomplished and interaction with, and satisfaction of, participating companies.

● Collection of data based on agreed upon KPI at the company level to elaborate a preliminary report (at the latest after 6 months) and detailed company case studies (min. 5, for inclusion in the final report) as well as a final report after 10 months that integrate all gathered experiences and lessons learned throughout the rollout of the Tirisano Program (including explanatory text, company-specific data, figures and pictures). An outline of these case studies is to be approved by UNIDO prior to the elaboration of the actual case studies.


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● Analysis of the results of an externally executed company satisfaction survey after the finalization of the first batch of participating companies.

● Organization of a consultation with all industrial advisers, relevant AIDC staff and institutional representatives to review progress, present results obtained and discuss required changes for the rollout of the Tirisano Program for the second batch.

● Continued promotion of the Tirisano Program to create demand for Parts 1 and 2 of the rollout phase.

Part 2:

1. Preparatory Activities for the Rollout of the Tirisano Program (batch 2)

This includes a number of steps considered necessary to generate sufficient interest in the programme from a broad base of automotive component suppliers and select the second batch of participating companies according to agreed criteria:

● Updating of promotional material on the basis of results obtained during the rollout phase (batch 1 - leaflets, brochures, newspaper articles, summary presentations) and including a detailed description of the Tirisano content and process (timelines, duration, expected results, price, etc.).

● Undertaking of promotional activities (in line with the developed business and marketing plan), including the dissemination of materials prepared, and holding of promotional presentations to inform prospective participants and key supply chain actors and representatives of relevant business associations about the Tirisano Program. Meetings with key OEMs/OEM Purchasing Council should also be organized to promote the Program further.

● Launch of a call for applications of industrial advisers/project managers to support selected companies during the rollout phase through relevant media (websites, newspapers, conferences) and selection based on agreed criteria to cover clusters of participating firms (cost effectiveness is a key criterion).

● Launch of a public call for applications from suppliers through relevant media (websites, newspapers, conferences), including the use of information materials, stipulation of criteria for eligibility (together with UNIDO and drawing on experiences from the testing/rollout phases), and the expected company contribution (cash and in-kind) and motivation.

● Selection of participating companies based on agreed selection criteria and their weighting (together with the project steering committee and in line with the proposed business plan) and notification of selected companies for batch 2.


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● Organization of initial training of additional industrial advisers/project managers through existing staff (min. 2 weeks) and external experts (as appropriate); provision of required methodological approaches and tools required for the rollout of the Tirisano Program. Action and time planning for batch 2 and confirmation of responsibilities. The time plan for the rollout, including all training and counselling activities will have to be adjusted to the current project end-date, which is 31 December 2012.

2. Rollout of the Tirisano Program to companies (batch 2 of 25 companies)

● Organization of an initial awareness workshop for all participating firms – presentation of the program and formation of working groups/clusters, presentation and assignment of the industrial advisers.

● Inception visits of companies to undertake initial assessments (data collection on the basis of key performance indicators (KPI) to be agreed upon with UNIDO and in collaboration with external experts, as appropriate) and discuss individual work-plans based on different Tirisano modules.

● Initiation and rollout of the counselling program (as during Part I)

● Organization of Monthly Review Meetings for different company groups/clusters through industrial advisers and coordinated and facilitated by AIDC to discuss progress achieved at company level and share challenges and achievements among peers.

● Invite previously graduated companies to present their experiences as well as key buyers and support institutions to present supplier development or support programmes of relevance at frequent intervals – one actor each per working group or cluster at minimum.

● Supervision of counselling work and feedback to individual advisers on a continuous basis through AIDC project manager and other external experts/support institutions

● Collaboration with B&M Analysts to undertake the benchmarking exercise: assistance with selection of companies to participate; participation of AIDC Industrial Advisers in capacity building activities undertaken by B&M and facilitation of understanding of the advisers of the assessment approach applied to Tirisano interventions (this will be facilitated by UNIDO and B&M Analysts as well).

3. Organization of a Study Tour and/or additional capacity building events

● A study tour to a relevant automotive cluster abroad for selected experts as well as capacity building events and trainings on selected topics can be organized by the AIDC in order to ensure that the activities planned under this subcontract can be delivered with maximum effectiveness and efficiency. Relevant provisions and proposals should be included in the subcontractor proposal.


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4. Stock-taking and follow-up activities

● Collection of data based on agreed upon KPIs at the end of the counselling cycle and elaboration of detailed company case studies (min. 5) that integrate all gathered experiences and lessons learned throughout the rollout of the Tirisano Program (including explanatory text, company-specific data, figures and pictures).

● Analyse the results of an externally executed company satisfaction survey after the finalization of the second batch of participating companies.

● Organize a final awareness and dissemination event with all participating/graduated companies, government and institutional representatives, supply chain actors, etc. to present the outcomes and company case studies, discuss the lessons learned and set the way forward.

● In cooperation with the national experts, prepare a comprehensive final project report, including not only explanatory text, but also photos, case studies, and short statements or interviews with company owners, network members, local institutions, and government. This report should have publication quality and be professionally edited and designed. The outline should be agreed with UNIDO in advance.

● Provide an assessment regarding the possibilities (and necessity) to continue and further extend project activities (within AIDC and in collaboration with local institutions), as well as concrete inputs to the preparation of new proposals/concept notes (with UNIDO and as appropriate).


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5.3. Scope

The programme aimed to improve the competitiveness of South African SMEs in the automotive component industry and to enable them to participate in international supply chains. The AIDC was required to assess and demonstrate the impact of the Tirisano Program at the enterprise level and to extend and market it among a broader range of Tier 1, 2, 3 and 4 suppliers.

The implementation over a 12 month period at company level included the following:

● Company wide awareness sessions

● Lean Assessment and SWOT Analysis

● Management Strategy Meetings

● Monthly Review Meetings

● Implementation in at least 4 Model Areas within each company

● Case Studies


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6. About the Programme

The AIDC supplier development programmes that assist companies in improving their competitiveness are lean manufacturing, cleaner production and supervisory training.

6.1. Lean Manufacturing

One of the key supplier development programmes known as the Tirisano Cluster Programme focuses on the development and implementation of Lean Manufacturing tools and techniques. Tirisano is a Sotho word meaning “working together” seeing that total employee involvement is crucial for the sustainability of these types of programmes. The programme implements an economically viable and sustainable model for technical assistance with an aim to improve quality, efficiency and international competitiveness of component suppliers in the automotive component industry. This programme is based on the Toyota Production Systems.

The Tirisano Cluster Programme prides itself on many successes within the automotive component sector. Hailed as an urgent initiative by industry leaders, this program aims at using lean manufacturing to create a competitive edge. The program is managed by experts in the field and follows a twelve month intervention specifically tailored to meet the need of the company. The structure of the program has been tested and provides proven results having been successfully implemented in companies around the country.

Companies who subscribe to the program gain access to proven methodologies towards continuous improvement. The program takes on a unique structure by employing the use of an experienced Project Manager with vast industry experience. Additionally, a junior engineer is made available (if requested) to ensure sustainability of the program and onsite support for the full term of the program. All lean manufacturing tools are applied in accordance with the respective industry problem encountered.

Common industry tools applied include: ● Value Stream Mapping ● Determination of optimum plant manning levels ● Inventory Management and Control ● Facilities Layouts and Design ● Feasibility Studies ● Capacity Studies ● Overall Equipment Effectiveness ● Aggregate Demand Planning ● Elimination of waste through “Kaizen” initiatives● Shop Floor Training Programmes● Single Minute Exchange of Die (SMED)


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6.2. Cleaner Production

The AIDC Cleaner Production programme was designed to mitigate the impact of rising utilities costs in South Africa. The programme employs lean tools in conjunction with expert energy consultants to map energy usage and implement practices and procedures to optimise the use of energy within facilities. In addition, the National Cleaner Production Centre (NCPC) also forms part of the programme with particular focus on the environmental aspect (water and waste) utilities. The programme has proven to be very popular amongst suppliers and is fast becoming a business imperative. The duration of the programme is twelve months, however a six month intervention is also possible based on the need defined through an initial energy audit.

Key activities in the programme include:

● Initial energy audit is conducted for participating companies to map and record the energy usage within the facility.

● An additional Energy and Utilities Business Analysis is performed to gauge areas for immediate improvement.

● Energy and Utilities Specialist are employed to formulate methods to improve energy and utilities usage.

● Employing lean tools in unique ways to optimise the use of energy within the facility.

With careful consideration of the costs associated with energy, this programme can be used to position an organisation for long term cost and operational competitiveness.

6.3. Supervisor Training

In today’s changing workplace, many new supervisors are unsure of their roles and responsibilities. They have little experience dealing with the challenges of managing work through others. They haven’t had the opportunity to develop those critical skills of planning work, leading their group, and communicating with their subordinates, their colleagues, or their managers. The supervisor, if carefully selected, trained and motivated, can make more difference to the success of the business, than any other group, except top management, and even here it is the supervisor who actually delivers what top management wants.

Historically in South Africa, the “good” operators were promoted into Supervisory positions and were expected to lead teams in order to achieve the organisation’s goals. They had the necessary job skills to ensure that the products were manufactured but on the other hand they did not have the management skills required to successfully manage a business and lead a team.

It is with this in mind and the huge gaps seen in industry, where shop floor management still rely on their superiors to manage their areas, that the AIDC supplier development department has seen the need to introduce a Supervisor Learnership Programme. This programme aims to equip every supervisor with the essential knowledge and skills necessary to:


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● Help develop their current supervisory skills and competencies in order to improve the management and leadership of their respective areas.

● Develop, lead and inspire productive workplace teams.

● Ensure that all team members are developed to their full potential.

The programme is run over a period of 12 months with the following features:

● Practical training and workplace activities for action learning.

● Benchmarking of first-line leaders using the relevant benchmarking system.

● Ongoing coaching based on manager evaluation and supervisor self-evaluation.

● Implementing a management system of benchmarking and progress, identifying training and coaching needs, implementing and reviewing of training lessons.

Learners are required to apply learnt skills in the workplace through various practical projects and activities. Learners must demonstrate their competence against unit standards to an Assessor so that they can obtain the National Qualification. The impact of these projects and activities will lead to improved performance in the areas of Quality, Cost, Delivery, Safety and Morale.


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Lean Manufacturing

Studies being conducted during shopfloor improvement interventions.

Supervisory Training

Supervisors applying what they have learnt in the classroom to solve problems on the shop-floor.

Cleaner Production

AIDC On-Site Engineer programming the Demand Controller to ensure the maximum demand does not exceed the designated maximum demand.


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7. Methodology

7.1. Implementation Process

The Tirisano Cluster Programme begins with an initial inception visit and pre-proposal phase. Once the prospective company is selected based on selection criteria, a three-day session to raise awareness amongst management and staff, followed by a five week diagnostic session and meetings with management to set expectations for the program and decide on the performance indicators against which the company’s progress will be measured.

This is followed by the core of the Tirisano Cluster Programme: a set of workshops spread over three months that involves employees from all levels of the company and encourages workers to identify and develop their own improvements for each model area. The emphasis is on finding low-cost solutions through the use of the latest methodologies in Lean and World Class Manufacturing. Since any improvement is valid only if sustained, the program also includes monthly review meetings during which companies communicate their results to the AIDC and to each other and a conference for companies to provide feedback to the industry and stakeholders.


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7.2. ACSDP Programme Type Split for Phase 2

The graphics below indicate that while lean manufacturing continued to be strongly demanded during Phase 2, the focus on cleaner production as well as the supervisory programme increased. This can be seen as an indication of the enhanced expertise of the AIDC in terms of cleaner production and supervisory/middle management training. The trends also reflect a greater awareness of the need to reduce energy consumption and the use of raw materials as well as to increase the capacities of middle managers and supervisors in order to maintain and enhance competitiveness in the current global context.


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7.3. Monthly Review Meetings

The ACSDP had many review sessions built into the programme in order to track progress and also enhance the programme delivery.

The different types of reviews were:

● Tirisano Review Meeting (Monthly)

● AIDC Project Review Meeting (Monthly)

● CSFR (Quarterly)

● Programme Steering Committee Meeting

● Lessons Learnt Workshop

Tirisano Review Meeting

The idea sharing and knowledge transfer session facilitated between suppliers at the monthly review

meeting.

Programme Steering Committee Meeting

The steering committee meeting that was held at Fischer South Africa, where the programme

progress was reported on.

AIDC Project Review Meeting

At the project review, presentations are made on the progress of each project by the responsible

industrial advisor.

Monthly Tirisano Best Company Award

Award in recognition of the best presentation and improvements made that was won by SA Die.


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7.4. Assessment Framework/ Key Performance Indicators (KPI’s)

B&M Analysts were contracted as third party assessors to conduct an independent impact assessment of the Tirisano Programme. It was therefore necessary for the AIDC to align the programme KPI’s to that of B&M Analysts. The alignment of KPI’s is cross referenced below between those outlined by the AIDC and those expressed through B&M Analysts’ assessment questionnaire.

KPI Comparison Between AIDC and B&M AnalystsNo KPI AIDC Measure B&M Analysts Measure

1 Productivity Parts per operator hour produced

Not measured

2 Inventory Reduction Work in ProgressRaw Material

Inventory in project area (Rand)

3 Quality RejectsRe-worksWarranty claims

Internal reject rate (%)Internal scrap rate (%)Internal rework rate (%)

4 Floor Space Rand Value & m² Inventory in project area (Rand)5 Capacity % increase in capacity avail-

able– timeTotal production time lost

6 Delivery Number of parts producedDelivery schedule

On Time Delivery

7 Number of People Trained

Number of people trained Average formal off-line training per person (days)

9 5S Audits Audit score of 5S before and after

Not measured

10 Number of Suggestions per Employee

Number of suggestions Not measured

11 Utilisation Efficiency Not measured12 Downtime Machinery Total production time lost13 Number of Red Tags Number of red tags vs. red

tags eliminatedNot measured

14 Number of Changeovers Duration of change over time Machine/tool changeovers (%) linked to production time lost

15 Morale Absenteeism/Attendance Absenteeism (excl. holiday leave) rate (%)

16 Safety Number of incidents Not measured17 Energy Use KWH per part Total annual electricity and water

consumption (Rand)

The purpose of the alignment to B&M Analysts measures was to ensure that the interventions at the companies were tracked according to a standard set of KPIs so that a baseline assessment could be conducted before the intervention and a final assessment could be conducted after the intervention. This was done to ensure that the assessments provided accurate data.


25

8. Resources and Company Identification

8.1. AIDC Programme Support Structure

In order to deliver effectively on the Tirisano programme, project teams were setup in the different provinces. The teams consisted of industrial advisors, junior project managers, trainee project managers and engineering interns. All the provincial teams were managed by a national programme manager with support form the Eastern Cape programme manager and senior industrial advisors.

Personnel and Equipment in the field as per the ToR

Under this contract, AIDC is expected to provide: a National Program Manager in Pretoria, who will spend 70 percent of his/her time on the project, and an appropriate number of industrial advisers to cover 50 companies per contract part, based on an estimate of 10 industrial advisers, with each adviser covering around 5 companies in the most cost-effective manner.

The AIDC will also contribute office space of approximately 100 sq. meters for the project. This will include the necessary ICT (4 laptop computers in the first year and telephone lines) and office equipment (desks, chairs, board rooms, conference facility, stationery, printers, fax, etc). It will also acquire any necessary equipment (digital cameras, laptop computers etc.). The AIDC will retain ownership of any equipment and other assets acquired by the project upon completion.

The organogram shown below illustrates the reporting structure for the programme.

Nkumbuzi Ben-MazwiNational Programme

Manager

Gauteng Region Teamx18

Industrial Advisors

x2

Junior Project Managers

x1

Trainee Project Managers

x1

Engineering Interns

x14

Eastern CapeTeamx29

Industrial Advisors

x2


x1

Trainee Project Managers

x2

Engineering Interns

x24

Kwa-Zulu NatalTeamx17

Industrial Advisors

x4


x1

Engineering Interns

x12

Lance SchultzEC Programme

Manager

Bianca JaggerSenior Industrial

Advisor

● Phase 1 Total Number of Employees = 25 people (including engineering interns)

● Phase 2 Total Number of Employees = 66 people (including engineering interns)


26

8.2. Regional Project Teams

Additional support staff were allocated to the programme and included engineering intern students that were placed at the participating companies.

Kwa-zulu Natal engineering interns with AIDC support team and UNIDO

Eastern Cape engineering interns with AIDC support team.

Gauteng engineering interns with AIDC support team


27

8.3. Engineering Interns Employed

Eastern Cape Gauteng Kwa-Zulu Natal TotalPlanned 24 14 12 50Contracted 28 22 15 65Total Employed 11

17 still completing studies

20


9


40



28

8.4. Selection of Companies

The following selection criteria for companies, was agreed to by all parties. Company selection criteria as per the dti requirements:

● Turnover of automotive products must be >25%

● Company must be an automotive manufacturing concern in South Africa

● Companies selected must be spread nationally

● Companies must preferably be tier 2, tier 3 or lower tier companies

● There should be minimum repetition of previous companies supported

For detailed information of all companies that participated in Phase 2 of the programme refer to Appendices 1, 2, 3 and 4.


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8.4.1. Marketing

Demand for the programme was generated through the activities outlined in section 1.1 of the work plan. These activities were specifically undertaken from April 2011 till the end of December 2011.(Refer to Appendices 5, 6, 7 and 8).

The table below depicts the activities undertaken during the marketing phase:

Activity and Marketing

Engagement

Feedback Summary

Support from the OEM Purchasing Council

Various meetings were held with the OEM purchasing council to determine the needs of suppliers and the programmes required to specifically target supplier inefficiencies. The council provided feedback on areas that would result in increased local content and drive competitiveness throughout the supply base. From these engagements, a letter of support was provided by the council outlining the need for the programme and urging suppliers to participate. Further engagements with the OEM council are scheduled for the duration of the Project in order to review progress and offer recommendations.

Support from the National Association

of Automotive Components and

Allied Manufacturers (NAACAM) Regional

Meetings

NAACAM regional meetings were attended by AIDC representatives to date. In these meetings various presentations were provided to the audience which comprised of suppliers from the respective regions. These engagements provided information to suppliers on programme benefits, the need in the sector and also the application process.

Supplier face-to-face engagements

Various suppliers were engaged on a one on one basis. During these engagements, suppliers were taken through case studies and custom prepared presentations of the programme outline. Suppliers were contacted as advised by NAACAM, OEM Purchasing Council, and Automotive Industry Seminar feedback and supplier workshops.

Automotive Industry Conference (2011)

The Programme was promoted at the AIDC hosted Conference in Gauteng.

Automotive Industry Seminar (May 2011)

The Automotive Industry Seminar was held in the Eastern Cape in May 2011. The opportunity was taken to advise all suppliers of the call to participate in this programme. The suppliers were provided with information packs with contact details. This served as the first step towards a company visit by interested suppliers.

GUD Holdings Supplier Workshops

August 2011&

November 2012

GUD created an excellent opportunity for their suppliers in KZN by allowing the AIDC to present and inviting their suppliers to participate in the ACSDP. GUD’s openness assisted in increasing the number of participating companies in KZN.

Refer to Appendix 8


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8.4.2. Geographical Distribution of 65 Companies

8.4.3. Regional Split of Companies


31

8.4.4. Tier Split of Companies

8.5. Capacity Building (AIDC Advisors)

A key lesson learnt from Phase 1 was that the AIDC advisors required further capacity building. In conjunction with UNIDO, an India Study Tour and an Industrial Technical Advisor were introduced to support the capacity building.

8.5.1. India Study Tour

The AIDC together with industry undertook a successful study tour to India. The working relationship with India and especially the CII (Confederation of Indian Industries) has been further strengthened during this tour.

Objectives of the AIDC India study tour were:

● To expose AIDC and industry members to:- Overview of the Indian Automotive Industry- Indian Automotive Supplier companies- Subject matter experts in continuous improvement techniques

● To expose AIDC, UNIDO and The dti to India supplier development programmes by visiting and interacting with:

- SIAM (Society of Indian Automobile Manufacturers)- ACMA (Automotive Component Manufacturers Association)- CII (Confederation of Indian Industries)- CII TPM Club India- CII Centres of Excellence- Indian government- Automotive Component Global Supplier (Mothersons)

The tour delegation visited 8 manufacturing companies of which 4 had received the TPM (Total Productive Maintenance) International Excellence Award.


32

Shop floor demonstration at Mothersons during the India study tour

The AIDC delegation was hosted by CII during the India study tour

The study tour delegation visited the JCB manufacturing facility


33

During the Automotive Component Manufacturers Association (ACMA) conference that was attended by the delegates, a presentation was made on the “Vision 2020 Indian Auto Component Industry” study that was conducted by Ernst&Young and ACMA.

- The study highlights an integrated and objective approach for the growth of the Indian automotive component sector.

- It further provides recommendations on how the Indian auto component suppliers can achieve their maximum potential.

- Provides various models on how Indian component suppliers can improve their capabilities to become diversified global manufacturers and reference is made to countries like the Korean auto component industry.

8.5.2. Industrial Technical Advisor

- The AIDC consulted with UNIDO to contract an International Technical Advisor after the testing phase.

- An experienced and well respected International Technical Advisor was appointed for Phase 2, spent time with the AIDC and participating companies sharing his in-depth Automotive and technical experience on how to become a competitive industry for the automotive component manufacturers.

- The International Technical Advisor provided technical support and input to the programme to both the participating companies and the AIDC advisors.

Ernst & Young study on “Vision 2020 Indian Auto Component Industry” that was commissioned by ACMA


34

9. Summary of Results

9.1. Impact and Achievements

The following results on various KPIs (Key Performance Indicators) and companies were also achieved on company by company isolated cases. The improvements shown below are not averages but are extracts and specific to individual companies:

Improvement Targeted Change1 Reduce cycle time on VC Cup machining Efficiency improvement of 38%2 Redesign of trolley racks to reduce scrap Scrap reduction of 55%3 Line balancing for product 103 to reduce

lossesLoss reduction of 50%

4 Change over time reduction Time reduction of 58%5 Energy consumption reduction Usage reduced by 10%6 Defects reduction Decrease in rejects by 6%7 Production output improvement Output increased by 27%8 Machine downtime reduction Downtime reduced by 28%9 Travel distance between machines

reducedDistance reduced by 62%

10 Non-value adding time reduction Cycle time reduced by 26%


35

9.2. Training of Company Personnel

It is also very important to look at non qualitative impact that this program had on the companies. Training was conducted on various lean methodologies such as 5S Workplace Organisation, 7 Wastes Elimination, Problem Solving, Line Balancing, Cleaner Production, Visual Management and Supervisory Training.

The total number of people trained in Phase 2 was 3534.

The training and mentoring of operators, supervisors and management also contributed to:

● Benefits to company

- Improved Communication at shopfloor and management level e.g. Supervisory training and development of green areas for daily morning meetings

- Improved management and employee relationship

- New systems / senior management walkabouts / awareness

● Cultural change

- Awareness training as per the Tirisano programme

- Involvement from staff in green area meetings and improvement suggestions

- New way of thinking

- General buy-in for change

- Company perspective on continuous improvement

● Business Improvement

- Implementation of Measures for green area meetings

- Implementation of a sustainable continuous improvement programme

- Adherence to training requirements and quality management system


36

9.3. Case Studies

Case studies were compiled for all companies that participated in the programme and results and achievements were highlighted in the case studies. Content and reporting on case studies was standardised for Phase 2. The journey and achievements of 11 selected companies that participated in the ACSDP are contained in a detailed case study report, which is available as a separate publication. The case studies aim to provide an insight into how the programme is implemented within an organisation from conception through to implementation and final handover to the company. This includes a summary of benefits and savings that each company realised at the end of the programme,

Three case studies from the participating companies were randomly selected and added to this report out of a total of 49 case studies. Refer to Appendices 9, 10 & 11.

Below are some examples from the case studies of the improvements made at shop-floor level:

Before 5S - Work table too big and cluttered

Before –Excessive operator movement

After 5S – Work table cut down to necessary size and storage rack provided for material.

After–Movement and operators reduced


37


9.4. Lessons Learnt

The following are lessons learnt from Phase 2. They are based on feedback from Phase 1 and Phase 2 participating companies, NAACAM regional meetings, OEM’s Procurement Council and Industrial Advisors:

● Support from OEMs and Tier 1 suppliers.

● Commitment and buy-in from senior management at companies.

● Benchmarking process can be improved with regards to setting up of appointments with companies and the timing of conducting the benchmarking study.

● There was a clear demand from companies to reduce water and electricity bills. Important results/costs savings were realized very fast.

38


10. Programme Lessons Learnt

10.1. India Study Tour

● Some of the key observations made during the tour were:

- Structured and co-ordinated support throughout the supply chain by the OEM’s and Tier 1’s to component suppliers

- Commitment from the component supplier CEO’s and drive to lead continuous improvement initiatives in their companies

- Impact of TEI (Total Employee Involvement) to the companies improved KPI’s and business results

- The positive impact of TEI on labour relations issues and unions

- Integrated approach on Supplier Development initiatives by OEM’s, Component Suppliers and Trade Associations in partnership with CII and Government

- JCB manufacturing’s successful Localisation programme journey, with 97% local content.

Picture 3: India lessons learnt strategy workshop led by Dr. Sarita Nagpal from CII

39


10.2. UNIDO Interim report and general feedback by Jay

● An “Independent Terminal Evaluation of the UNIDO Project” was conducted by Jayanthi Aniruth, an Independent Evaluator from UNIDO.

● The programme effectiveness and impact as per the evaluation feedback showed that the ACSDP was:

- Effective in reaching targeted number of companies: 50 in Phase 2, 65 overall

- Able to increase AIDC capacity to service auto sector, as well as AIDC product offering

- Well received by companies who reported positive outcomes from interventions at company level, including improved morale

- Effective in increasing financial sustainability of Tirisano Programme: Company contributions increased from 30% in Phase 1 to +- 45% in Phase 2

- Effective in developing cohort of student industrial engineers (IEs): 65 used in programme

- Effective in securing employment for student IEs: 70-80% retained by companies

- Effective in demonstrating potential contribution of industrial engineers to shop-floor and companies

10.3. B&M Analysts Impact Assessment Report

A Tirisano impact assessment was conducted by B&M Analysts at the participating companies. A baseline assessment was conducted at the beginning of the programme and another assessment was concluded at the end of the programme. The comparative results are highlighted in the following summary of key findings.

10.3.1. Analysis

● Tirisano Projects- Available data suggests that the interventions have yielded positive outcomes at a project

area level

- The findings further highlight that significant cost savings could be achieved if the firms successfully rolled out the project focus areas

● Waste Analysis- Operational waste is significantly higher than the comparative averages

- Reliability and flexibility remain the biggest contributors to waste

- In spite of the above, very positive waste improvements are evident at a firm level

40


● Customer Assessment- The firms are struggling to meet customer needs and are generally perceived as not performing

as well as the comparator group

- However, the customers perceive improvements relative to competitors over the past 12 months

● Comparative Financial Performance- Very low operating profitability levels remain a major concern

- This is in part due to an inability to translate operational improvements into productivity gains

10.3.2. Recommendations

● Secure firm commitment before commencing implementation- The successful rollout and implementation of any improvement intervention will not be possible

without the buy-in of the necessary persons, and the alignment of subsequent activities

- A lack of this was evident at several firms, with this impacting on the progress and effectiveness of interventions, as well as the necessary support where required

- Outcome –optimal number of projects implemented based on available resources

● Intervention identification- The baseline assessment process identified that a number of interventions were not scoped

to have optimal impact on the respective firms

- A more substantive intervention identification process (potentially incorporating the baseline assessment findings and recommendations) would therefore have substantially bolstered outcomes and impact

- Outcome – interventions have potential for greater impact

● Monitoring and evaluation- While the benchmark undertakings suggest that progress has been made with respect to

performance monitoring in many firms a lack of measurement or inaccurate measurement remains a clear challenge at several of the participants

- All future interventions should incorporate an increased focus on determining performance pre, during and post implementation so as to ensure benefit is able to be objectively monitored and assessed.

- Outcome – alignment of expectations and hence buy-in by management, improved transparency with regards implementation, and improved potential for positive outcomes

41


● Sustainability- The projects in place at the firms were noted as on average advancing the competitiveness

profile of the project areas and thus the firms as a whole.

- It is important that firms be able to sustain improvements and roll-out the projects to other areas within the plant, something that has not uniformly been achieved.

- Outcome – greater longer term impact of initiative

Participants at the Final Unido Steering Committee Meeting held at Nissan SA

Back row from left to right: Mr Jonne Bruecher (UNIDO), Mr Roger Pitot (NAACAM), Mr Stefan Haasbroek (Head of OEM Purchasing, Nissan/Renault), Mr Barlow Manilall (AIDC CEO), Mr Lance Schultz (AIDC EC), Mr Arthur David (UNIDO), Mr Garth Strachan (The dti Acting DDG, Industrial Policy Development) and Mr Dineshan Moodley (AIDC)

Front row from left to right: Mr Robert Novak (UNIDO), Mr Zade Sheik (SA Die & Pattern), Mr Mkhululi Mlota (The dti), Ms Joan Fubbs (Chair, Trade and Industry Porfolio Committee), Ms Mpho Mafole (The dti), Mr Mohamed Eisa (UNIDO), Ms Natascha Weisert (UNIDO), Mr Renai Moothilal (The dti) and Mr Nkumbuzi Ben-Mazwi (AIDC)

Missing from the photo: Mr Gareth Fismer (CRH), Ms Jayanthi Aniruth (UNIDO - appointed Evaluator), Ms Bianca Jagger (AIDC), Mr Nico Vermeulen (NAAMSA), Mr Zahier Ebrahim (AIDC EC) and Mr Douglas Comrie (B&M Analysts)

42


Feedback from Participant Companies

“By applying Lean principles and balancing of our assembly line, we have successfully increased our seat production output by 23%. We are grateful to the AIDC for facilitating this improvement “

Raymond Lourens, Plant Manager, CRH Africa

“The AIDC have implemented saving of R13 500 000 at Atlantis Foundries with potential savings of over R3 500 000. Atlantis Foundries are happy with the progress that AIDC has made thus far.”

Pieter du Plessis, Senior Manager, Atlantis Foundry

“We wanted to show our employees that by applying some key principles we can reduce our down time and change over times. Using SMED and 5S we also managed to get morale improvements by brightening up the work place and removing waste “

Lourens de Beer, Factory Manager, Willard Batteries

“A Continuous improvement mindset is vital to the sustainability of any business. To achieve this we have to empower our employees to identify better and easier ways of doing what they normally do every day – we should not think for them all the time. This can only be done with training, ongoing coaching and encouraging them to let the ideas flow – secondly they have to see and experience the benefit of the improvement, otherwise they are not motivated to be innovative in their thinking. I believe that ownership and innovation is the key to continuous improvement – we need to harness the brainpower of every person in the organization, everyone must contribute to this process. “

Brendon Lowe, Managing Director, Quantum Automotive

“Employees on the shop floor need to be engaged in all levels of lean activities, and thereby understand and contribute to the benefits of the company’s lean manufacturing systems. Management must take the lead to successfully deliver such a result.“

Evan Slack, Plant Manager, Federal Mogul

With involvement of the employees we created a much more organized material flow, made ergonomic improvements, implemented the 5S principal and started using a cellular production method. We reduced through put time, WIP, scrap and rework and at thesame time we increased the output. All these changes have brought a big improvement in morale and cleanliness and the employees appreciate the changes.People understand much better now what the company is expecting from them.

Wilfried Christokat,Plant Manager, Fischer SA

“Good results have been achieved thus far and the programme shows promise of exceptional success” Kobus Krog, Energy Manager,Autocast

“Employees on the shop floor need to be motivated and trained on lean manufacturing principles, I want them to be more involved and actually see problem solving taking place on the shop floor, by each workstation, and done by all.“

Chris Wedderburn,General Manager, Magnetto Wheels

“The operations had many constrains, the flow of people and procedures were not standardized from the receiving up to the shipping operation. The focus was on developing the new warehouse layout and standardization of all operations which will remove flow constrains, meet storing and production requirements“

Caiphus Mokotedi, Business Owner, Zig Enterprise

“The AIDC provided precise and impeccable advice and assistance to help Gillet Exhaust Technologies become one of the leaders in energy efficiency in the Eastern Cape.”

James Tarr, Engineering Manager, Gillet Exhaust Technologies

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11. Way Forward

11.1. Total Productive Maintenance (TPM)

Total Productive Maintenance creates systems for preventing the occurrence of all losses on the front line and is focused on the end product. This includes systems for realizing “zero accidents, zero defects and zero failures” in the entire life cycle of the production system.TPM is in fact becoming a global standard amongst firms. OEM’s are becoming increasingly reliant on local suppliers to provide cost advantages to support local content targets.

A recent study tour conducted by the AIDC to India reaffirmed the belief in business excellence models and in particular TPM. The AIDC would therefore envisage the establishment of a TPM Cluster initiative within South Africa, as a supporting mechanism to ensure effective roll out and sustainability of TPM within participating cluster members. The transfer of knowledge through the clustering approach remains the main driver through supplier self –awareness and knowledge transfer based on individuals supplier strengths. The synergistic approach will be coordinated through a series of structured workshops, focused meetings and reviews. In order to achieve this, the AIDC must gain the knowledge and experience of TPM through collaboration with TPM experts such as Japan Institute of Plant Maintenance (JIPM) and TPM Club India.The ultimate goal of the AIDC is to become a JIPM-TPM accredited service provider in South Africa.

11.2. Top Management Buy In

Improvement programmes with a great magnitude of success rely heavily on senior management buy- in and commitment. This was also witnessed both in India and in South African companies that showed huge benefits in organisations where there was a sincere and aggressive management drive.

11.3. Study Tours

Due to the success and the positive feedback received of the study tour to India, the AIDC plans to continue with study tours of this nature with the aim of exposing South African industry delegates to world class companies in other countries.

11.4. International Experts

The participation of international technical experts from countries such as Japan is imperative for future development of suppliers and the industry. This approach was a lesson learnt from the testing phase and will be further explored by the AIDC in the future.

44


11.5. Review of the AIDC Tirisano Programme

Following from the lessons learnt during the rollout of the ACSDP and the study tour to India, the AIDC is currently re-visiting the model of the Tirisano Programme in order to enhance future delivery of the programme.

11.6. Enhancing Leadership (VLFM and VSME)

To lead any significant organizational change there needs to be individuals who are what can be called visionary leaders. In many organisations, the leader is the person that is fire fighting and therefore does not have the time to be a visionary leader that the organisation requires. The reason for this lies in the fact that the majority of shop floor managers do not possess the management skills required to successfully run a business.

There is therefore a need to develop capable managersto lead South African companies to become globally competitive. The AIDC has started piloting a programme called Visionary Leaders for Manufacturingand Visionary Small and Medium Enterprise, from lessons learnt in India, to address this need. This programme has been implemented very successfully in Japan and India and the AIDC is seeking to collaborate with these countries in this regard.

VLFM Programme levels

VSME case study document that was shared with the AIDC during the India study tour

45


12. Conclusion

12.1. Reflection of a 3 year programme

– Strengths of the programme

● Programme was very successful and excellent results were achieved

● Most of the companies showed interest to continue with the programme, this is also indicated by the number of students employed post the programme

● Positive improvement of the programme roll-out from Phase 1 to Phase 2

● Capacitating AIDC to expand on service offerings

– Challenges experienced

● Difficulty to secure participating companies

● Sustainability of the programme in some companies

● Lack of Industry funded model

12.2. Key Learning Points

– Greater international exposure for the industry i.e.

● Study Tours

● Support of International Advisors (Including Bi-lateral Agreements between countries)

– Encourage more customer and supplier driven interventions

– Re-look at the way continuous improvement programmes are packaged to industry i.e.

● Duration and cost structure of programmers

● Additional programmers like TPM and VLFM

● Do not sell programmers but rather provide customized solutions

● Centers of Excellence as seen in India – Companies in SA are interested in shared resources to reduce their own overheads costs

● Significance of Total Employee Involvement

46


No Action Status1 Receive and collaborate with external assistance made available to

strengthen the capacity of AIDC to support component manufacturers in the implementation of new continuous improvement activities

Completed

2 Preparatory Activities for the Rollout of the Tirisano Program Completed3 Rollout of the Tirisano Program to 25 companies Completed4 Study Tour Completed5 Stock-taking and follow-up activities Completed

12.3. Results of Contracting Services as per ToRPart 1 (10 months):

Part 2 (10 months):

Part 1:

Part 2:

12.4. Deliverables as per ToR

No Action Status1 Preparatory Activities for the Rollout of the Tirisano Program (batch 2) Completed2 Rollout of the Tirisano Program to companies (batch 2 of 25

companies)Completed

3 Organization of a Study Tour and/or additional capacity building events Completed4 Stock-taking and follow-up activities Completed

No Action Status1 Inception report, including detailed work-plan (including tasks and sub-

tasks as well as responsibilities of all involved experts and stakeholders and timeline for all activities listed under Part 1

Completed

2 Progress Reports (at the latest after 6 months) explaining the progress made during Part I

Completed

3 Final report (after 10 months; outline/template to be agreed with UNIDO in advance)

Completed

No Action Status1 Inception report, including detailed work-plan (including tasks and sub-

tasks as well as responsibilities of all involved experts and stakeholders and timeline) for all activities listed under Part 2

Completed

2 Progress Report (after 4-5 months) explaining the progress made during Part I

Completed

3 Final report professionally edited and layouted after UNIDO revision (after 10 months)

Completed

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13. Appendices

Appendix 1: Phase 2 Part 1 - Eastern & Western Cape Participant Company Details

48


Appendix 2: Phase 2 Part 2 - Eastern & Western Cape Participant Company Details

49


Appendix 3: Phase 2 Part 1 – Gauteng and Kwa-Zulu Natal Participant Company Details

50


Appendix 4: Phase 2 Part 2 – Gauteng and Kwa-Zulu Natal Participant Company Details

51


Appendix5: Marketing Advertisement

52


Appendix6: Marketing Advertisement

53


Appendix7: Eastern Cape Automotive Conference Supplier Development Awards

54


Company representatives receiving certificates at the Automotive Industry Conference for participation in the Lean Manufacturing programme

GUD Supplier Workshop - August 2012

A successful Supplier workshop was held at GUD Holdings and was well attended by approx 50 suppliers, where the AIDC presented on Supplier Development Initiatives

AIDC presenting progress of GUD suppliers participating in ACSDP

Appendix8: Supplier Development Awards and Workshops

55


14. Case Studies

Appendix 9: Case Study – Atlantis Foundries: Page 1 (Refer to section 9.4 or page 36)

56

Appendix 9: Case Study – Atlantis Foundries: Page 2


57



58



59

Appendix 10: Case Study – CRH Africa: Page 1


60



61



62



63

Appendix 11: Case Study – Federal Mogul: Page 1


64



65



66



67

15. News Clips and Articles

Article on Supervisory Training launch at Pasdec that appeared in the NAACAM Newsletter, September 2012:


68

Article that appeared in The Herald, 11 October 2012


69

16. Project Funders and Key Stakeholders

● The dti● UNIDO● NAACAM● NAAMSA● OEM Purchasing Council

17. References

● ACSDP Progress Report for Project SE/SAF/09/B03 for December 2011● ACSDP Progress Report for Project SE/SAF/09/B03 for Phase 2 Part 2 - September 2012● Indian Automotive Mission Plan 2006 – 2011● India Automotive Vision 2020, compiled by Ernst & Young● ACSDP Impact Assessment Report, compiled by B&M Analysts ● Independent Terminal Evaluation of The ACSDP, compiled by Jayanthi Aniruth● Automotive India Study Tour Report, compiled by Nkumbuzi Ben-Mazwi

18. Contact Details

Nkumbuzi Ben-Mazwi Automotive Industry Development Centre Department Manager: Supplier Development Email: [email protected] Tel: + 27 12 564 5321

Bianca JaggerAutomotive IndustryDevelopment CentreSenior Project Manager:Supplier DevelopmentEmail: [email protected] Tel: + 27 12 564 5283


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Notes


Documents

Automotive Component Supplier Development Programme … Studies/EDD/REDUCED... · Final Report Project: SE/SAF/09/B03 and SE/SAF/09/B03 Amendment 1 December 2012 the dti ... SMED