72,000+ Machines JCB - Introduction World #3 Fastest Diesel Car on Earth powered by JCB Engine (563 Km/hr) Cost Reduction in Supply JCB: A Multi Product Company in Chain Management g Construction Equipment and Earth moving segment Feb 6, 2009 Subir K. Chowdhury The dictionary definition: JCB n. Trademark. A type of construction machine with a hydraulically operated shovel on the front and an excavator arm on the back (named from the initials of Joseph Cyril Bamford, its English manufacturer). 18 plants, 670+ Dealers, 1500+ Outlets, 8000+ Employees, Presence in 150+ countries Business Environment Building India’s Infrastructure Backhoe Slow Down Triggers Q1’08 Q2’08 Q3/Q4’08 Q1’09 Q2’09 Q3’09 Q4’09 Tighten since Apr’08 Loadall C r ed i t a v a i l a bi l i t y a nd C os t Sucked to neutralize inflation wef Apr 08 inflation wef Apr’08 Building Construction Building Construction Construction Engineering Construction Engineering Agricultural Productivity Agricultural Productivity Li q ui d i t y World N. 1 - 37% Rising since Jan’08 C ommod i t y P r i ce Instability & Speculation Rising since Jan’08 World N. 1 - 25% S t a t e a nd Na t i ona l E l ect i ons Material Handling Waste and Recycling Disaster Management Challenges : Cost Challenges : 2008 & Beyond … Material Cost v/s Selling Price Movement Sudden Decline … Riding on 2007 wave ver January 2008 2500 13.0 Backhoe, Units 2000 Rising Gap 1500 • Steel, 1000 • Rubber, 500 • Fuel Prices 0 8.0 uary April May une July Aug Sep Oct Nov Dec ary rch Janua Februa Marc Ap Jun Ju Au Se O %age Change ov M N D BHL Industry BHL JCB 3.0 • Low Infrastructure Investment • Cost & Availability of Finance -2.0 • Rising Inflation • Low Asset ( Machine Park) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec utilization Selling price 0.0 0.46 0.75 1.91 2.77 2.98 3.78 4.65 4.65 4.65 4.65 4.65 • Commodity Cost Increase • Overall US slowdown impact Material Cost 0.0 0.60 0.80 2.50 4.00 5.00 7.00 8.00 8.50 9.00 9.00 8.00
The Golden Rule Agenda • Objective • Evolution • Scope PACE 2008 Imperatives & Way Forward • Methodology • Conclusion Objective Evolution : PACE 2008 Scope Across all Functions… 10 Key Areas… 50 Potential Elements Areas Elements Mentor Starting with VA / VE….. Challenge Cost, Enhance Value Purchasing Negotiations, Localization, New Sources and Share Of Business SD Great Potential and much more Savings needed to Maintain Profitability Design for Value, Material Specification and Optimization VA / VE SKC and Build Competitiveness • Drive as a Common Initiative Manufacturing Consumables, Power & Fuel, Scrap and Repair & Maintenance SKC Looking at All Functions and Companywide Engagement HR & Facilities Manpower Cost, Vehicle Cost, Legal Expenses, Travel, Communication RK • Develop Structured Implementation Programme and Printing & Stationery Exploring New Potential Areas Participation : All Stakeholders Sales & Cost Of Business, Selling Expenses, Receivables, After Sales Expenses, AM Advertisements, Finished Goods, Zones /Depots Expenses and Operator • Explore Companywide Cost Elimination Opportunities p p y pp Marketing Training School Training School Logistics In & Out bound Freight, Alternate Sources and Packaging GPS • Train & Tool Up Employees Creating a Common Umbrella Finance & IT Bank Charges, Insurance, Tax Planning, Transfer Pricing, Interest Income, SS System Upgrade and IT Hardware Transforming Cost Structure : Challenging Cost, Enhancing Value • Intensify Employee Engagement Parts & Service Realization & Selling Expenses, Procurement Negotiations, C&F RS Expenses, Inventory and Packaging Integrated Initiative Design Productivity, R & D Expenses and Tooling Product SA • Track, Review and Accelerate Projects Engineering Quality T3 , T12 Cost and Cost Of Quality GS • Generate Targeted Savings Driving “Big Hairy Audacious Goals” : Scaling Up Savings ……. INR XX (£ XX) Methodology Methodology - Resources PACE 2008 War Room Mentor Team • Resources EXEC Members PACE Core Team • Commitment & Awareness • Purchasing • Sales & Marketing Methodology • Administration • Product Engineering • Training & Deployment • Logistics • Manufacturing & Quality • Cost Elimination Tools • Finance • Parts Commitment & Awareness • Target Setting & Deployment VA / VE Teams • Structure 1 • Structure 2 • Review Mechanism • Transmissions • Shop Practices • Results • Hydraulics • Linkages • Cab & Electricals • Other parts Current CFT Membership Strength: 80 +
Participation Pledge Visual - 1 Visual - 2 Commitment of all Employees & Stakeholders : Engaged to Deliver Visual - 3 Visual - 4 Visual - 5 Visual - 6 Visual - 7 Visual - 8 Methodology Training & Deployment
PACE Methodology - Training & Deployment 1st VA / VE Workshop ‘Cost Down’ : First Batch of PACE 2008 Core Team Module on • Opportunities Identified : INR XX (GBP XX) • Process Cascaded Down to Team Members Creativity • Road Maps ready Methodology TRIZ ( 40 Principles) ‘War On Waste’ : Sixty Associates trained Full Day Workshop Full Day Workshop Module on • Eye for Waste 50 Cross Functional Cost Elimination Tools Participants How to spot Waste • Best Eight Ideas recognized Context setting by Experts • All associates covered by Dec 08 & How to eliminate Waste Leadership Team 5 Competition machines ‘Operational Excellence’ : 477 Ideas Generated. Summit attended by PACE Core Team Module on • New Cost Paradigm Total Cost Ownership • Case Studies on Logistics, Operation, HR Total Value Management Methodology - Tools Methodology - CTQ Drilldown Methodology - S I P O C Example : Welding Consumables Example : Welding Consumables WAVE – I Initiative piloted in H1 2008 Business Reduce welding consumable S I P O C cost CTQ COST TYPE TOOLS USED POTENTIAL TOOLS Welding consu � Direct Cost : welding welding Welded c � Material cost - TCO / VE eSourcing operation operation � Manufacturing cost - DMAIC / Lean VSM / TOC Pain � Consumables Issue Issue - DMAIC eSourcing Reduce consumption of Store S � Rework & Scrap welding welding ldi ldi components nt shop - 8D / DMAIC TOC welding consumables mable, Fabricated parts � Warranty - Reliability tools consumabl consumabl e � Indirect Cost � Administration cost - Budgeting eSourcing Enter issue Enter issue � Sales & marketing cost - Budgeting eSourcing detail in log book detail in log book � Salary & wages - Budgeting HR Mapping Reduce the Reduce the Reduce the � Financial cost - Budgeting Benchmarking consumption of consumption of consumption of Argon Gas torch spares � Capital Expenditure welding wire - Benchmarking eSourcing WAVE I Projects : Welding , Transmissions Consumable Reduction completed PROJECT CTQ 1 PROJECT CTQ 1 PROJECT CTQ 2 PROJECT CTQ 2 PROJECT CTQ 3 PROJECT CTQ 3 VE – Value Engineering VSM – Value stream Mapping TOC – Theory of Constraints TCO – Total Cost Ownership Target Setting Identified Savings 2008-2009 @ GBP XX (INR XX ) 5 86% Of the Identified Savings A • Purchasing Methodology Methodology • VA / VE B • Manufacturing C Target Setting & Deployment Review Mechanism D E F G I H 0 g E g s s s n V n k t n c e t n t i / i M o i x a r e s A u r t i s t a P m a V t & a i T h c s t r g & p r c a e s o o u u f l n i L T l e P a i I v n S m e , e M a d c D A n a w n e F i N Savings Identified …. GBP XX Savings still to be identified …. GBP XX
Recommend
More recommend
