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1/20/17 1
MAKE AMERICA GREAT AGAIN
MANUFACTURESCAN
ManufacturingCompe66venessIni6a6ve
TAXINCENTIVESALONEWILLNOTCREATESUSTAINABLEU.S.JOBS
• HighU.S.laborwagedisparityistheimpedimenttosustainabledomes6cjobsgrowthandeconomicexpansion
• U.S.PRODUCTIVITYmustdrama6callyincreasetooffsetlaborcostdisparityandlevelthecostofgoodsplayingfield
• Only2%ofU.S.companieshavedoubledtheirproduc6vitywithLEANManufacturing,whichreducedtheirlaborcostby>50%
• Whiletheremaining98%ofU.S.manufacturer’swagesaretoohightocompeteworld-wide
• A\erthetaxcreditwindfallcreatestheincen6vetomaintain,growandreturnmanufacturingjobstotheU.S.;produc6vitymustincreasedrama6callytopermanentlysecurethereturnofjobsandgrowtheU.S.economythroughcompe66vecostofgoods
1/20/17 ManufacturingCompe66venessIni6a6ve 2
BOBCHAPMANCEOOFBARRY-WEHMILLER
BobChapman’spresenta6onattheAmericanAssocia6onofManufacturingExcellenceonPeopleCentricLeadershipwhereheexplainswhyonly2%ofU.S.manufacturershavereducedtheirlaborcostby>50%(8min.of36min.)Barry-Wehmiller’srevenueis$2.4billionwithatrackrecordof15%compoundannualgrowthinrevenueandsharevalueandsofarhasacquired70companiesacrosstheglobe
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TYPICALBENEFITSOFLEANfortheTOP2%
ManufacturingCompe66venessIni6a6ve 4
“WorkingSmarterandNotHarder”• Produc6vity Up100%orGreater• FinishedGoodInventory Down50%to95%• InventoryTurns Doubleto3X+• Work-In-Process(WIP) Down80%• ManufacturingLead-Time Down50%to85%• FloorSpace Down30%-90%• Quality Qualityisbuiltintoprocess i.e.3to6-Sigmaquality
defects<.3%to.0003%
1/20/17
THE2%LEANMANUFACTURERSHAVE• IncreasedtheirNet-Profit~215%• Reducedtheirlaborcost>50%,whichreducedtheirCostof
ManufacturedGoodsby7.5%• Andtheircostis15%-18%lessthantheircompe6torsthat
outsourcedmanufacturingtoChinaorMexico Labor,5%
Overhead,24%
ProductCost,71%
TeamEmpowermentandInternalQAChecks
Savings=7%LeanLaborSavings50%50%x5%=2.5%Savings
LeanReducesInv.67%Saving6%CarryingCost
Shi\QAtoSuppliersandRequiretheyImplementLean&SplitSavings50%
1/20/17 ManufacturingCompe66venessIni6a6ve 5
THEFACTSONOUTSOURCINGTOCHINA?2004LaborCostStudyforOutsourcingMilwaukee’sDrill• Milwaukee’sUSlaborcostis$31.34vs.China’squoteof$17.10.i.e.a
perceivedsavingsof$14.24perunit(45.4%)• “CostAdders”reduceChina’ssavingsby24%to$10.82(34.5%)• IfMilwaukeeimplementedLEANattheirUSplantthesavingsis$15.67(50%)
1/20/17 ManufacturingCompe66venessIni6a6ve 6
WHATISDIFFERENTABOUTTHESE2%LEANMANUFACTURERS?Only2%ofAmericanmanufacturershaveimplementedLEANwith>50%savingsTheyaretotallycommiredtoLEAN;soitispartoftheircompanycultureAndequallyasimportant,theyarecommiredtothesuccessoftheiremployeeswithtraining,advancement,selec6ngthejobstheywant,andcompensa6onforimprovedquality,produc6vityandmee6ngthecustomer’sneed.Theyare‘employeecentric&customeris#1’.Theseemployeesenjoytheirjobs,theyareproudoftheirproductsandservices,turnoveris<1%,andtheyarecommiredtothesuccessoftheircompany1/20/17 7FederalManufacturingCompe66veness
Ini6a6veManufacturingCompe66venessIni6a6ve
MANAGEMENTSTRUCTURES
Typical–98% LEAN–2%
ManufacturingCompe66venessIni6a6ve 8
CUSTOMERIS#1WITHLEANFlatorganiza6onstructureQuickresponse
CEOVPs
Sr.Mgmt.
Supervisors
Employees
Customers
Customers
Employees
Mgm’t
CEO
Nomorethan3layerstostayclosetocustomer
1/20/17
76%OFU.S.EMPLOYEESDISLIKETHEIRJOBS
9ManufacturingCompe66venessIni6a6ve1/20/17
Reasons:1. Co-workers2. Workassignment3. Supervisor4. Lackofapprecia6on
24%
76%
LikeJob
DislikeJob
Whiletheemployeesatthe2%LEANcompaniesliketheirjobs,becausethecompaniesare“employeecentric”andthey“empower”theiremployeeswithoutsupervision
WHYMOSTMANUFACTURERSAREINEFFICIENTWhenyouaskwhytheyhaven’tchanged,theytellyou“becausethisishowwehavealwaysdoneit”ManycompanyleadersaregenerallynotawareofthebenefitsofLEAN,orunwillingtomakethecommitmentimplementLEAN;orlookfortheeasiestwaytoincreaseprofit61%ofU.S.manufacturershavearemptedtoimplementLEANontheirownwithnoassistancewhichresultedinmodestanddisappoin6ngresultsHenryFordandJackWelchofGEwerewereobsessedwithelimina6ngwasteandimprovingtheirproduc6vityandquality
1/20/17 10FederalManufacturingCompe66venessIni6a6veManufacturingCompe66venessIni6a6ve
LEANREQUIRESACERTIFIEDCOACHLeanbythebookdoesnotwork!ThereareexcellentbooksonLean,andyouwilllearnalotfromthemincludingthechallengesofLean.However,casestudiesareonlyexamplestolearnthebasics,i.e.aLeanprimer;buttheydonotprovidetheprocessingengineeringdocumenta6onofhowitwasachieved.AndeverysuccessfulLeanprojectisunique.Youstartwithacleansheetofpaperanddesigntheprocessesfromthegroundupbasedonthelaborcontent,processsequences,inventoryrequirements,dailyproductvolume,andforecastedgrowth.Tosucceedyouhavetohaveacer6fiedcoachwithprovenperformance,thatknowswhatworksandwhatdoesn’t
1/20/17 ManufacturingCompe66venessIni6a6ve 11
LEANPHASESI. “Kaikaku”orradicalLEANofproduc6onprocessisthefirstphase
ofLean.TypicallyKaikakudoublesproduc6vitywith>50%laborsavings.
II. “Kaizen”orcon6nuousimprovementisthe2ndphaseofLEAN.Itshi\stheresponsibilityofelimina6ngwastefrommanagementandprocessengineeringtotheteammembers;thusgenera6ngongoingimprovementsofLEAN
LEANsuccessisdirectlylinkedtoaCEO’slevelofinvolvement,commitment,andup-frontleadershipoftheproject.TheCEOhastobeachonable,accountable,responsible,andinvested.
1/20/17 12ManufacturingCompe66venessIni6a6ve
LEANEXPERIENCE&PERFORMANCECombined Experience: Over 73 years of LEAN training and implementation at 189 manufacturing and service companies with average labor cost savings of 70%
Certifications: Teach and implement Demand Flow Technology “LEAN” by the John Costanza Institute of Technology (Hewlett-Packard legacy, Master Black Belt Lean Six-Sigma, Data Science, ISO Certification, Supply Chain Management, and Overall Equipment Effectiveness
1/20/17 13ManufacturingCompe66venessIni6a6ve
TAXINCENTIVESPLUSLEANWILLINCREASEU.S.JOBS&GROWTHEU.S.ECONOMY
LABORRATEDISPARITYBETWEENU.S.ANDOFFSHOREOPERATIONSREQUIRESPRODUCTIVITYINVESTMENTANDIMPLEMENTATIONTOCREATEALEVELPLAYINGFIELDFORU.S.WORKERSANDU.S.PRODUCTSTAXINCENTIVESMARRIEDTOPRODUCTIVITYINVESTMENTCREATESASUSTAINABLEECONOMICENVIRONMENTFORPRODUCTSAGAINLABELED“MADEINAMERICA”
LEANISTHEINGREDIENTADDEDTOTAXINCENTIVESTHATDELIVERSTHEU.S.JOBSGROWTHOBJECTIVE
1/20/17 ManufacturingCompe66venessIni6a6ve 14
LEANMANUFACTURINGFindingCash&ProfitHiddenontheProduchonFloor
Tom Hildreth (303) 588 – 1447 [email protected]
Hildreth & Associates LLC
Broomfield, CO 80023
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