We believe manufacturing will remain an important sector in the economy, even though employment in the manufacturing sector will continue to shrink because of ongoing productivity improvements. We consider manufacturing to be an important pillar within a healthy society for two main reasons: first, many services are directly linked to manufactured products (e.g. sales, customisation, logistics, maintenance contractors and field services) and, second, manufactured goods can be traded internationally much more easily than most service products.
International competition is fierce, and it is tough to survive as a manufacturer particularly in high-wage countries with rapidly increasing ESG (Environment, Social and Government) expectations and legislation. Manufacturers must move faster, but many of them are still implementing methodologies from the first half of the last century such as Lean (1940s) and Six Sigma (1950s) – now combined into Lean Six Sigma (LSS).
LSS is important, but it is only one part of the equation – quality of management is the other part and the key. Manufacturing excellence requires process excellence, which requires managerial excellence, and the two management levels that matter most are the leaders at the top and the first-line supervisors.
Developing managerial excellence requires:
organisational alignment
getting the manufacturing strategy aligned with the business strategy
getting the structure of the basic business processes right
cascading the strategy down to the shop floor
installing a powerful performance management system for understanding and acting on quality and productivity drivers
a compelling vision on how the plant should look and run – a vision that is co-owned by all
quick wins to establish momentum
Maintenance is a value creator rather than a cost generator. For asset-intensive industries, high uptime and reliability are critical to ensure return on assets; for asset-lighter industries, high uptime and reliability are critical in a just-in-time supply chain.
Current digital possibilities provide ample opportunities for Maintenance to play that all-important value-creator role. However, more often than not we see that the basics are just not in place: cooperation between Maintenance and Production is unproductive, mean time between repairs is too short, there is too much corrective maintenance versus preventive maintenance, maintenance backlog is growing, drawings are out of date as are maintenance plans, data is lacking and contractors are underperforming. The effects are too much downtime, unreliable production, low efficiency, high costs, too much working capital and dissatisfied employees.
Before deploying the various digital aids that are on the market nowadays, you must get the basics right. Key elements are:
organisational alignment
getting the maintenance strategy aligned with the business strategy
getting the structure of the basic maintenance processes right
fostering a deep and productive cooperation between Maintenance and Production
fostering a productive partnership with contractors
a powerful performance management system for understanding and acting on quality and productivity drivers
knowing what the critical equipment is
registering data on equipment behaviour, logging maintenance history and ensuring integrity of data
ensuring technical condition of equipment is at the sufficient level
ensuring quality execution of corrective maintenance: root cause elimination
ensuring timely and quality execution of preventive maintenance routines
using condition monitoring of equipment
getting the skills and behaviours right
If you already have all this is in place, the equipment performance will already be high and costs significantly lower. Gradually, in line with the growing maturity of the organisation, you can integrate digital aids to achieve the next levels of equipment performance, efficiency and even lower costs: IIoT (Industrial Internet of Things), smart equipment, mobile devices, wearables, digital twin, advanced analytics, predictive maintenance, seamless engineering, etc.
Attaining world-class supply chain management and collaboration means developing and managing supply chains and partnerships so that your company is flexible and resilient, with response times and delivery performance that will beat the competition.
Future supply chains need to cope with the long-term trends of mass customisation, ever shorter life cycles and the more recent volatile conditions that are here to stay. In these market conditions, many companies will benefit from a “smart” supply chain, which combines the drive to eliminate waste (i.e. anything that doesn’t add value) with agility and responsiveness (i.e. the ability to handle unpredictability with speed and flexibility).
A smart supply chain enables fast, flexible supply of tailor-made products at competitive cost levels. It excels in having few product and process quality issues, reduced operational costs, increased flexibility, and high internal process speeds. It integrates customers and business partners to create value in both the primary and support processes.
Building a smart supply chain requires a holistic approach that integrates product and process design, organisation design, and digital solutions:
an unambiguous supply chain strategy
product configuration for late postponement
processes that are aligned with strategy and designed for minimal order cycle times
a flat organisation with multidisciplinary teams and no silos
integration with partners throughout the supply chain
an aligned performance management system with real-time information from the end-to-end process
supply chain visibility with the ability for stakeholders throughout the supply chain to access real-time data related to the order process, planning, inventory, delivery and potential supply chain disruptions
Disciplined cash and working capital management drives good operational and financial performance. However, performance in order to cash, inventory management and procure to pay slumped over the 5 years prior to the COVID outbreak. A closer analysis reveals that inventory optimisation poses companies the biggest challenge – both in volatile and non-volatile markets. More Cash – Lower Inventory – Better Service, good inventory management is the key.
DELIVER DOUBLE DIGIT INVENTORY REDUCTIONS AND MAINTAIN OR IMPROVE SERVICE LEVELS
Decades of experience have taught us that going straight for the inventories themselves is both the quickest and the surest way of delivering a high-performing supply chain. Inventory sits right at the heart of your supply chain and is both a symptom and cause of your supply chain performance. Getting inventory right keeps your customers happy, increases flow and reduces cost and waste and frees up cash.
At Axisto, we combine the practical business focus of management consulting with the high-speed analytical capability of advanced information technology. We rapidly distil practical insights from data in Enterprise Resource Planning (ERP) systems. Our people concentrate on the human challenges of implementing and sustaining resilient and lean supply chains.
Our unique approach to supply chain puts inventory optimisation front and centre. This allows us to help deliver double digit reductions in inventory while maintaining or improving service levels – at speed in a low risk manner compared to traditional approaches.
OUR INVENTORY MANAGEMENT PROPOSITIONS
Axisto provides three inventory management propositions: inventory optimisation programmes, inventory analytics and inventory maturity assessments.
Our starting point with most clients is a quick scan. On the basis of just 3 standard reports from your ERP system, we quantify improvement potential item by item as well as overall. The output is both an immediate high-level quantification of improvement potential and the basis of a road map to deliver sustainable improvements quickly.
INVENTORY OPTIMISATION PROGRAMMES
We provide expert analytics and effective change management backed up by a clearly measurable business case. Improvements to inventory positions of 20% or more, sometimes much more, are usually achievable within the first year, at a high return on investment.
INVENTORY ANALYTICS
Do you find it difficult to really understand what your inventory data is telling you, or what you should do about it? Do you have optimisation tools that are difficult to use or which give results you know to be wrong, but you’re not sure why? With the proprietary technology that we use, we provide clients with rapid actionable insights into their inventory data.
In addition, we help clients with a range of targeted analytical exercises, ranging from strategic inventory positioning (where in your supply chain should you hold inventory?) through to setting inventory policies for items that are hard to optimise, such as spare parts, or make to order products.
INVENTORY MATURITY ASSESSMENTS
Inventory is influenced by almost every aspect of your business. Therefore, it can be hard to know at an enterprise level where the biggest opportunities for further improvement are, or how you compare to your competitors.
Axisto can take the temperature of your inventory management. We combine a granular, bottom-up quantitative assessment of your potential for improvement with a qualitative overview of your people, processes and systems, including relevant benchmarks, to give you actionable insights into where to find the next step change in your performance journey.
A CASE
CHALLENGE
A medium-sized industrial manufacturing firm with a strong market position and profitability had little historical focus on inventory. The consequence was that inventory was increasing gradually. It was time to act.
RESULTS
Inventory was reduced by more than 50% from the initial baseline over a period of 3 years, while service levels were maintained or improved. Improvements in the underlying data led to a better understanding of how and why to act – inventory management capability was significantly developed within the client’s teams.
SOME QUOTES
“We finally have full transparency of what we have, so we can make fact-based decisions on a weekly basis.” – Automotive manufacturer
“Since starting a programme, we have reduced our inventories by over 50%.” – Industrial manufacturer
“The results are exceptional and have made a major difference to our cash flow.” – Global manufacturing company
“The inventory programme brought a wide range of process issues into sharp focus, with an impact much broader than just inventory.” – Market-leading manufacturer
Industry 4.0 means the growing together of the digital and manufacturing industries. All physical assets are digitised and integrated into digital ecosystems with partners in the value chain.
Industry 4.0 represents a huge step in performance. You can improve your speed, flexibility and productivity by 40%. You can develop a new business strategy and take the opportunity to innovate your products and services portfolio.
Axisto works with you to map the digital maturity of your business with our AIMA (Axisto Industry 4.0 Maturity Assessment) and choose the elements that will deliver the most value in line with your vision. Well-chosen pilots will help you get on the learning curve and achieve some initial success. You will gain insights into the skills gap, and this can direct your HR strategy. We can help you to properly organise data analytics and develop your organisation more digitally. Axisto’s experience will ensure you avoid any pitfalls on your journey to becoming a digital enterprise.
Importantly, the biggest challenge for a company is not in choosing the right technology, but in having a lack of digital culture and skills in the organisation. Investing in the right technologies is important – but the success or failure does not ultimately depend on specific sensors, algorithms or analysis programs. The crux lies in a wide range of people-oriented factors. Axisto supports you in the development of a robust digital culture and ensures change is developed from within and driven by clear leadership from the top.
An autonomous operating model is not just a digital upgrade of your current operating model. It is a radically different way of conducting your business.
INTEGRATED PERFORMANCE MANAGEMENT
Primary and support business processes are integrated. This allows the financial department to act in a much more agile manner. The cash flow is visible on an ad-hoc basis, which improves planning and analysis abilities. A forecast supported by the IT system replaces manual forecasts. Once determined, KPIs make controlling easier through automated warning messages, thus allowing immediate intervention to take place.
The budget process is changed and no longer runs along the individual business functions (such as Sales, Marketing, Production, IT), but along value drivers (sales quantities linked to market data, prices in combination with customer clusters, etc.). At any time, the balance and P&L for the company as a whole and for each of the departments can be determined. This makes it possible to sail sharply close to the wind.
The entire supply chain uses a single point of truth for real-time information The transparency makes it possible to simulate different scenarios quickly and easily, but ultimately people make the decisions. The effect of decisions is calculated and communicated in real-time throughout the end-to-end supply chain. Margin, order cycle time and cash can be predictively optimised based on a holistic view of supply chain performance, stock levels and trend analyses.
MOBILE
Mobile devices are an essential interaction channel for both customers and employees. As a result, the management and control of the integration of different mobile devices and of the mobile applications are strategic factors. New and existing mobile technologies are easy to integrate.
AGILE COLLABORATION
Collaboration is largely multidisciplinary and without hierarchy. Knowledge and skills are not things that sets you apart from others in the company – they are things you make available to the team.
Collaboration must be able to be set up ad hoc at any time, from anywhere – even across geographic boundaries. Active exchange of ideas, knowledge and expertise requires an appropriate incentive system. This system focuses on the group outcome and allows them to participate in the overall success.
Social media and collaboration technologies are a central element of communication, knowledge transfer and teamwork. This applies to interaction with customers, employees and business partners. The technologies are used for the interactive exchange of information and content, thus making collaboration more effective, and they are increasingly focused on establishing interaction patterns in a digital culture.
The aim of redesigning the office environment is to increase cooperation and creativity in the company. This includes, for example, creating zones of creativity in offices, building open structures where there are no fixed desks and integrating the employee’s own home office.
STRATEGIC WORKFORCE MANAGEMENT
Digitisation requires new skills and abilities on the part of employees. The development of these competencies in the workforce requires strategic planning to address the requirements in the long term. The use of analysis methods not only enables the optimised deployment of employees, but also clarifies the question about which skills are needed now and in the future and how to get them as quickly as possible.
STRATEGIC WORKFORCE DEVELOPMENT
Knowledge and experience are becoming obsolete at an ever-increasing rate, and roles and tasks are constantly changing. The employees are constantly challenged to learn new things, to participate in training for new tasks and to adapt to role changes.
Our More Optimal Platform provides companies with solutions to model, plan and optimise their business operations from end to end. Our platform can handle scenarios that are considered too complex for other software solutions: planning and optimising complex production value networks, optimising intricate logistics operations, and planning and scheduling highly diverse workforces.
Key capabilities include predictive and prescriptive data analytics, forecasting, what-if scenario planning, collaborative decision-making, disruption handling and production scheduling.
The platform is hosted in the cloud and no separate tooling is required. You can model supply chain applications in your browser where end-users use it as well – what you see is what you get!
Supply chain modelling requires no code or specific calculations, and visualisation can be created using a small amount of easily understood code.
Powerful algorithmic building blocks for optimisation come out of the box and are fully integrated in the platform.
Serverless scaling enables multiple algorithms to be run in parallel so that large supply chain conundrums can be tackled.
Maps, 3D visuals, Gantt charts and other charts come out of the box and can easily be configured by the modeler. Custom visuals can be created using low-code and may be shared with other modelers in the More Optimal community.
The calculation engine makes sure you can focus on what needs to be calculated; dependencies between calculated fields are automatically handled by the platform.
Your operating result is determined by the “behaviour” of your business processes. Why is the order cycle time for order A so much shorter than that for B? Where are the bottlenecks in my processes? Where does rework occur and what does it look like? What can I do to speed up my cash conversion cycle? And what about compliance?
Axisto answers these and many other questions with the help of process mining. Process mining is a data-driven analysis technique that shows actual process behaviour. We use this technique as an analysis tool for process and performance improvement. And it can either be applied for internal/external audits or be integrated into day-to-day operations to increase insight and support decision-making. Axisto guides you through the maze of different process mining tools, helps you tailor-make a solution that is right for you, and supports you towards a successful implementation.
Although companies have automated many of their processes, much of the work is still done manually and routinely. For example, employees have to manually enter data and switch between systems, applications and screens in order for the critical business processes to function. Such activities have no added value in themselves. They take time, pose an inherent risk and are expensive.
Axisto replaces these tasks with Robotic Process Automation (RPA), which performs the tasks 24/7, quickly and error-free. In this way, employees can contribute added value by focusing their attention and expertise on those tasks that are important. Freeing up time simplifies the transition from reactive to proactive operational processes. RPA is highly flexible – it can be used in many different areas and can be scaled up and down quickly. RPA adds value by better exploiting and expanding the possibilities of machine learning and artificial intelligence. Axisto provides advice to find your best options and supports you to implement these new ways of working.
Digital transformation programmes, a new strategy, performance improvement programmes are all notoriously difficult to implement successfully. The vast majority change initiatives struggle to achieve and maintain the planned programme goals. In fact, only 30% are successful. Timely and complete delivery of a critical initiative is therefore the true determinant of competitive advantage for any company.
The vast majority of change initiatives stumble over the very thing they are trying to transform: the attitudes and behaviours of people at all levels of the organisation. Our Change Insider® (CI) measures people’s attitudes and behaviours towards the initiative and how they experience it. Based on these insights, the CI facilitates concrete strategic and tactical actions you need to take to make sure your change initiative is delivered successfully: on time, in full and in a sustainable manner.
HOW THE CHANGE INSIDER® ENSURES SUCCESS
The CI measures people’s perception of an initiative and how they experience it. This is done by asking a number of custom-designed questions as part of a short online survey that takes about 6 minutes to complete. The questions are created by collaborating with people from a cross-section of your organisation and cover the context, objectives, content and approach of your specific initiative. Therefore, the questions are tailored to your organisation and your change initiative. These are the crucial questions that live in your organisation about this specific initiative.
Everyone within the scope of the initiative answers these crucial questions. They do this in a confidential manner and can also add further comments. The survey results are then presented in practical, actionable reports for every relevant cross-section of your organisation.
The reports allow you to compare business units, departments, teams and levels in the organisation. You can see how your people are experiencing the initiative and how the chosen approach influences both the adoption of the change and the actual change itself. The feedback also highlights any differences between different levels or parts of the organisation. Therefore, you can carry out differentiated interventions and keep the entire initiative on track. The survey is repeated at fixed intervals. This way, the CI tracks the effect of interventions on the adoption of change, the actual change itself and the perception of the initiative over time. This provides information about what needs to be done when and where in the organisation to achieve the desired progress and sustainability of the change (see Figure 1).
Figure 1. An example from an CI report that demonstrates how people are experiencing the initiative by showing the development of answers to critical questions over two survey cycles.
The goal of the Change Insider® is very different to employee engagement surveys. The CI focuses on bringing about sustainable change with a specific initiative. Employee engagement surveys measure how dedicated employees are to their workplace or their employer.
THE DYNAMICS OF CHANGE
People’s ability to change their attitudes and behaviours is determined mainly by their perceptions and intentions. So we must first change perceptions and intentions before any change in attitudes and behaviours occurs. But how do we do this? The best way to influence people’s perceptions and intentions is to provide information and encourage people to gain new experiences.
Perceptions and intentions record people’s motivations and are indicators of how hard people are willing to try or how much effort they intend to put in to display the required behaviour. During a change process, people are confronted with two forces: first, a change tension (the perceived need and urgency of the initiative) and, second, the power to change (the willingness to support and adopt the change and the ability to contribute). Both forces are needed in a programme to bring about change.
The way people experience these forces is the most important indicator of people’s perceptions and intentions towards an initiative. The rating for these two indicators gives the best prediction about a person’s intention to adopt the attitude and behaviour that is required. In different parts and levels of the organisation, the two forces are likely to develop differently, as shown in Figure 2. This drives the need for specific interventions for different parts of the organisation.
Figure 2. An example from an CI report showing the survey results of three teams (A, B, M) and the development of the effects of interventions over two survey cycles. The teams and their development can easily be compared.
The Change Insider® provides fact-based guidance for precisely these differentiated interventions to enable the timely and complete delivery of your mission-critical initiative.
