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B S H E V A L E T L E R I S A N A Y I V E T I C A R E T A.S.
Productivity and competitive power
İSTANBUL CHAMBER OF INDUSTRY - 7th INDUSTRY CONGRESS
4th of December 2008
BSH-TR/FIG, Dr. Jörg Ulrich
Productivity and competitive power; 04.12.2008 I slide: 2
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B S H E V A L E T L E R I S A N A Y I V E T I C A R E T A.S.
Productivity as a holistic approach to be competitive
Need for continuous productivity
Production System as key success factor for productivity increase
Content
Market trend in white good business
BSH TR – Household appliances for Turkey
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B S H E V A L E T L E R I S A N A Y I V E T I C A R E T A.S.
BOSCH AND SIEMENS HOME APPLIANCES GROUP
BSH Bosch und Siemens Hausgeräte– %50 Robert Bosch, Stuttgart– %50 Siemens AG
Info– 43 factories in 14 countries– 70 companies in 44 countries– 14 brands– 39,000 employees– 8.8 billion euro turnover
BSH – NUMBER THREE WORLDWIDE– NUMBER ONE IN EUROPE
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B S H E V A L E T L E R I S A N A Y I V E T I C A R E T A.S.
BSH Ev Aletleri Sanayi ve Ticaret A.Ş.
Shareholders– BSH Bosch und Siemens Hausgeräte (%95.936)– Deutsche Bank (%0.866)– Other (%3.198)
Financials– Turnover 1.076 million Euro (2007)– Employees 3300
Location– Headquarters in Istanbul – Production Facilities in Çerkezköy – Spares Part Warehouse in Silivri
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B S H E V A L E T L E R I S A N A Y I V E T I C A R E T A.S.
BSH Cerkezköy - Biggest Production Location within BSH Group
450.000 m² facility. 3 million units of LDA Production. (2007) Production of cookers, Refrigerators, dishwashers, washing machines
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B S H E V A L E T L E R I S A N A Y I V E T I C A R E T A.S.
0
500
1000
1500
2000
2500
3000
3500
2003 2004 2005 2006 2007 2008
T U
nit
s
0
500
1000
1500
2000
2500
3000
3500
Production quantity
Nr. of Employees
Nr.
of
em
plo
ye
es
Production output vs. Employees in BSH-TR factories
Refrigerator, Washing Machine, Cooking Appliances, Dishwasher
% 125
% 65
Average yearly employee productivity of 6.4 %
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B S H E V A L E T L E R I S A N A Y I V E T I C A R E T A.S.
Price changes of major white good appliances compared to the previous year in %
Market trend in white good business
Increasing competition by internationalisation of worldwide business Price reduction by aggressive Asian competitors End customer are focussing more and more on value price segments High pressure on profit margins by trade partner
Decreasing trend in market price and margins in white good business are challenging production sites for cost reduction and therefore for continuous productivity increase
(Source: GFK Germany)
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B S H E V A L E T L E R I S A N A Y I V E T I C A R E T A.S.
Need for continuous productivity – survive in competition
Cost driver like raw material, energy, logistic costs are clearly increasing in long term trend In production cost Turkey is competing with the new boom region in eastern Europe,
countries like Poland, Bulgaria, Rumania are setting cost trends Constantly increasing labour and energy cost are jeopardizing Turkeys position as low cost
production area
Increasing international competition and decreasing margins require a clear focus on cost position. The market shows a clear consolidation trend, even speeded up by the new worldwide economical situation. Only companies with a clear focus an cost and productivity will be competitive and survive in future business
High productivity and efficiency and smart and lean investment are the key success factors for future successful business
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B S H E V A L E T L E R I S A N A Y I V E T I C A R E T A.S.
Productivity as a holistic approach to be competitive
Direct labour cost reduction is the classic field of productivity increase. But productivity in modern production sites is more. The whole production chain offers areas for sustainable increase of productivity and efficiency
80 %
5 %
5 %
6 %Other OH cost/Fix costs
Invest amortization
Indirect labour cost
Direct labour cost
Material (including logistic cost)
Process improvement Smart and lean investment, machine productivity Processes improvement and increase of efficiency Constant increase of staff productivity
Constant focus on material rationalization Supplier development Improvement of whole logistic chain
4 %
Typical breakdown of production costof a white good appliance in Turkey:
Areas for productivity improvement:
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B S H E V A L E T L E R I S A N A Y I V E T I C A R E T A.S.
Look at it individually Look at it as a whole
A Production System is a holistic approach for the sustained optimization of all production processes. The objective of which is to produce exactly what the customer wants"
The Production System is everyone’s business It is the foundation for the ongoing optimization and further development of all processes
along the value creation chain Processes, methods and tools have to be standardized in all areas A production system has to become a part of the corporate philosophy
Production System as key success factor for productivity increase
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B S H E V A L E T L E R I S A N A Y I V E T I C A R E T A.S.
BSH Production System – A holistic approach for improvement
= principle
Avoiding wasteRobust product
phase-in / phase-outDemand oriented
productionChallenging and
fostering our peopleAvoiding defects
(zero-defects)
BSH Production System
Only producewhen and where demand exists
Product phase-in and phase-out must be of a robust design
Employees need to be challenged and supported. They are a critical success factor for the success of the BSH Production System
Defects are avoided during all phases of the value creationchain
Waste is continually identified and eliminated along the value creationchain
Standardization and Sustainability
Productivity and competitive power; 04.12.2008 I slide: 12
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B S H E V A L E T L E R I S A N A Y I V E T I C A R E T A.S.
BSH Production System – A holistic approach for improvement
= method= principle
Standardized work
Visual management
CIP
Avoiding waste
Variants management and ECO
Project management
Product developmentprocess
Phase-in / phase-out management
Robust product phase-in / phase-out
Pull-principle
Procurementmanagement
Customer takt
Demand oriented production
Team work
Employee qualification and development
Performance orientation
Challenging and fostering our people
Defect prevention
6 - SIGMA
Defect analysis / correction
Defect detection /test planning
Avoiding defects(zero-defects)
Standardization and Sustainability
BSH Production System
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B S H E V A L E T L E R I S A N A Y I V E T I C A R E T A.S.
Avoiding waste as starting point for productivity increase
The seven types of wasteAvoiding waste
• Work place organization (5S)• Standard operating sheet• Total Productive Maintenance
(TPM)
Standardized work
• KPI management• Labeling and markings
• Problem solving techniques• Improvement workshops
Visual management
CIP
Transportation
Waiting time
Rework/ Scrap
Inventory
Overproduction
Unnecessary processing
Movements
Productivity and competitive power; 04.12.2008 I slide: 14
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B S H E V A L E T L E R I S A N A Y I V E T I C A R E T A.S.
Continuous productivity increase as the key for future competitiveness
Global standards in production
…instead of individual solutions!
Increasing competition and decreasing market prices are challenging production costs Only by sustainable productivity increase in all areas future requirements to a competitive
production can be fulfilled A holistic and standardized production system is the key for continuous productivity
increase