Seminar on Operational Excellence from Advance School Instructor and Senior Manager Luc Roesems

1. 28 July - Instilling Operational Excellence

2. Advance is Leader in Management Training and Certifications and provides Solutions in the areas of
Operations and Supply Chain Management.
It is APICS Premier Channel Partner since 2006 and has offices in Switzerland, Basel and in Italy,
Milan and Bologna.
Its Mission is to contribute to the success of its partners, being them enterprises or professionals,
throughout the training of skills based on international recognized Body of Knowledge.
ABOUT US
2

3. 3.000 professionals trained from different functions a all levels
+250 companies from different industries
+40 Certified Instructors worldwide, with significant managerial
experience in multinational companies
ADVANCE SOLUTIONS
ADVANCE SCHOOL
2 Divisions to provide Value to our Customers
3

4. Our Live Webinars – «Officine Operations»
4
www.advanceschool.org
28 Luglio 14:30-16:00
Luc Roesems, VP Manufacturing
Samsonite

5. Global Summit
5
www.alcottglobal.com
16/17/18 July
20 hours Webinars

6. Demand Driven Solutions
6
• Assessment current status - Gaps identification
• Exploring Session DDMRP
• Target Operating model design
• Proof of Value & Simulation
• Proof of Concept
• Demand Driven Transformation
• Capability & Maturity Assessment
• Software Selection
• Training & Education
• "Serious game" DDBRIX
Open Classes
- Basics DDMRP – 14 ottobre Live Webinar
- Certificazione Certified DD Planner – 26 ottobre BO
- Certificazione Certified DD Leader – 5 Novembre MI
- Certificazione Certified DD Planner –19 Novembre MI

7. INSTILLING OPERATIONAL EXCELLENCE
&

8. SHORTLY INTRODUCING MYSELF
• My name is Luc Roesems and I am presently working as
Vice President Manufacturing at Samsonite
• Associated with Advance Operations Management School
as a free-lance teacher
• I have founded my own consultancy company PerfectOps in
2017 (ww.perfectops.be)
• Throughout my career I have held several positions working
for multinational companies; From Demand and Supply
Manager, to Head of Supply Chain and S&OP, Director
Global Operations & PMO, Divisional Plant Operations
Director
• Holding following certifications: APICS CPIM, CSCP and
SCOR-P, Lean and Six Sigma Black Belt

9. WHAT WILL WE TALK ABOUT ?
HOW TO INSTILL OPERATIONAL EXCELLENCE &
CONTINUOUS IMPROVEMENT
OPENINING REMARKS AND VISION
THEORY AND REAL LIFE PRACTICE
HOW TO DRIVE AND SUSTAIN SUCCESS
CASE STUDY
RESULTS AFTER 1 YEAR WITH DETAILED
FIGURES AND EXPLANATION
NEXT STEPS AND SUSTAINED CONTINUATION

10. OPENING REMARKS AND VISON
STEP BY STEP – PRACTICAL AND PRAGMATIC – AVOID OVERCOMPLICATING
Constant mindset to challenge the existing, look for the improved, … how things can be done differently
This is perhaps the most difficult aspect to instill in people – LEAD THEM BY EXAMPLE!
BRING STRUCTURE AND SET EXPECTATIONS, for example through ojectives for the year, create a functional job lead position
or approach per below ….
Ø Choose a set of projects in the area of productivity (identify a number of your biggest opportunities)
Ø Involve for instance your Production Managers and Production Team Leads
Ø List value-add top down, select projects and assign clear owners and expectations
Ø Do regular meeting reviews (weekly or 2 weekly at first, This to help steer and guide the Teams)
Ø Keep the pace going (drive for outcome and results)
Ø At first, there is no harm to be cost driven ! versus later more quality for instance and more process focused
Ø “A 10% product cost improvement contributes more to the bottom line than a 10% sales increase”
Ø And you want to see the success and get the enthusiasm going
Build on the successes and expand …. It works addictively ….
© PerfectOps

11. OPENING REMARKS AND VISION …
Ø Do you really have the competencies in house to put this on the map in your company, to get this structured and up and running ?
Ø Some interesting literature that I would recommend
Ø Theory versus practice:
Ø Don’t overthink organizational structures and the way forward
Ø Avoid to become overwhelming, “analysis is paralysis”
Ø Above all, keep it practical, pragmatic and result driven focused
Ø Weekly project and program follow up is a must !
© PerfectOps

12. OPENING REMARKS AND VISION …
Ø Operational Excellence “culture” and “mindset” are very powerful tools !
Ø I have set this up in more than 1 company now, with astonishing results each time in a few years
Ø >10M € bottom line annualized savings
Ø You grow more pro-active and alert Teams through it
Ø You grow a “Yes we can” mentality
Ø Helps to balance Sales and Marketing driven company culture with value-add of Manufacturing
© PerfectOps

13. ASSESSING THE BUILDING BLOCKS
TO OPERATIONAL EXCELLENCE

14. DEEPER INTO THE BUILDING BLOCKS
Ø What is Operational Expense exactly ?
Ø In short cost of material, labor and indirect and fixed
Ø This on itself works as an eye opener when properly looked at
Ø How much % of your product cost is material, labor etc …. ?
Ø What is the Pareto breakdown of these categories and within each of these categories ?
Ø Work performance variances std hours work vs. target, utilities etc. …
Ø What Operational expense can be scrutinized (monitoring actuals versus budget for example) ?
Ø What is value-add versus non-value add ? in your operations
Ø Increasing MFCT throughput is a matter of …
Ø Process flow and Vale Stream Mapping (VSM) of your production floor; And on a broader scale of your Operations, … Flow opportunities ?
Ø How good is your CSL ? In the eyes of the customer
Ø Cycle time improvement opportunities ?
Ø OEE improvements generally working on mc breakdowns but don’t forget overall stoppages and their reason codes (can be material
shortage or other, a product process issue …) – OEE is Availability – Quality – Performance
© PerfectOps
STABILIZING YOUR CAPACITY AND OUTPUT

15. DEEPER INTO THE BUILDING BLOCKS …
Ø Inventories have a direct impact on cash flow, this is why companies are always looking for improvements
Ø Have you done an ABC product portfolio analysis (50% of items contributes 5% of profit)
Ø What is the best driver to work down inventory is it A or C items ?
Ø What is the safety stock policy you use (same for ABC and whatever item ?)
Ø Manage your SLOB through quarterly meetings with Marketing
Ø Work with your A suppliers on lead times, who carries stock, call offs and JIT deliveries …
© PerfectOps

16. PRODUCTIVITY WORKSTREAMS
Ø There is many formats and methodologies …, The CRUX is to get started and truly make it a focus area and drive for results
Ø Define a formal project list and have regular status updates and steering meetings for each
Ø The difference between Lean and 6 Sigma ?
Ø Lean works on eliminating waste whereas 6 Sigma typically tackles production process variation with statistical analytics
Ø Understand waste as what is value add or this case non value add activities
Ø Do you know the acronym TIM WOOD (defining the 7 forms of waste) ?
Ø Transport – Inventory – Move – Wait – Overproduction – Overprocessing - Defect
Ø What is generally 80% of the throughput time on a production floor ?
Ø 6 Sigma is about how well you manage the process i.e. how close to the mean you can consistently produce
Ø How variable or stable is the process within specification limits ?
Ø The world of Statistical Process Control and capturing online mc data i.e. what you have defined as critical process parameters to
quality (in the eyes of the customer !), efficiency, …. Are my specification limits reprsenting the true needs of the customer
Ø Results: better quality, less defects, more effcient and controlled production, FTR ….
© PerfectOps

17. PRODUCTIVITY WORKSTREAMS …
Ø Pure cost reduction initiatives can be very powerful
Ø Have you considered product cost down exercises ? (supplier benchmark and resourcing, alternative materials, overprocessed ?, …..)
Ø Working on scrap is 1 thing but how about First Time Right (looking into rework needed, second choice production ?, ….)
Ø How good are your daily meetings ?
Ø Is it “planning” meetings or do you actually discuss what yield you have versus target,
what was the causes for shortfalls and how to resolve forward …
Ø How stable is your perfomance and attainment to plan ? How can you stabilize your production capacity
Ø What is the next level step … ?
Ø Better shift hand-over and more engaged, accountable Teams
© PerfectOps

18. COMMUNICATION AND REPORTING
Ø Monthly Plant Performance reviews are a must
Ø Particularly on understanding the financial actuals vs. budget
Ø Consistent reviews point to things out of synch and to improve, to opportunity areas
Ø Format should not take longer than 1 to 1,5 hrs
Ø Finance people need to control the finance data
(material variances, labor variances, performance indirect and fixed costs etc …)
Ø Plant Directors add on
Ø Accomplishments & challenges and opportunities
Ø Customer Service Levels
Ø Key projects
Ø New products
Ø ….
Ref example Samsonite next pages
© PerfectOps

19. PLANT PERFORMANCE REVIEW
OUDENAARDE 2020 02

20. EXECUTIVE SUMMARY
ACCOMPLISHMENTS CHALLENGES & OPPORTUNITIES
ü General output at lower level in line with sales
=> Stock at level 128 660 pcs – 3,5 coverage
when sales remain on 1700 pcs/d ?!?
Production reduced to 20 % = max
unemployment
ü S’CURE 75 TOP second mold:
ü On schedule at SET/AHA T2 16/2/20 –
texturing Cavity
ü INJECTION MOLDING M/C:
ü ENG004 overhaul done
ü Toggle knee worn E1-2-3-4-5-6
=> support for molds, pilot model is in
production & OK
ü CORONA VIRUS
Output to be aligned with sales
Assy & Pressforming Ramp up PROXIS.
ü PRC RM supply: seems to be under control
ü S’Cure Top grip mold: worn – copy mold ?
ECO version is major cause texture polution
ü ENG009&10:
ü Upgrade with additional corepuller for
MAGNUM 55/69 molds:
Hydraulics & Electronics ENGEL: Delay
in delivery
ü INJECTION MOLDING M/C:
Aging => maintenance, major repairs

21. PRODUCTION – SALES – STOCK: MTD 25 March
107
115
131
23 21 26 0 0 0 0 0 0 0 0 0
0
20
40
60
80
100
120
140
160
JAN FEB MRT APR MEI JUN JUL AUG SEP OKT NOV DEC
[k pcs]
2020
T Stock R Stock
Nmb Produced Nmb Shipped

22. RM & WIP INVENTORY AND TURNS
0,0
2,0
4,0
6,0
8,0
10,0
12,0
0
1.000.000
2.000.000
3.000.000
4.000.000
5.000.000
6.000.000
7.000.000
8.000.000
1
/
1
/
2
0
2
0
2
/
1
/
2
0
2
0
3
/
1
/
2
0
2
0
4
/
1
/
2
0
2
0
5
/
1
/
2
0
2
0
6
/
1
/
2
0
2
0
7
/
1
/
2
0
2
0
8
/
1
/
2
0
2
0
9
/
1
/
2
0
2
0
1
0
/
1
/
2
0
2
0
1
1
/
1
/
2
0
2
0
1
2
/
1
/
2
0
2
0
1
/
1
/
2
0
2
1
RM Inventory and turns
Sheet
HG
Shells
HG
WIP
RM
2018
RM+SA
2019
RM+SA
2020
RM+SA
• Turns van 3,9 naar 4,2 door hoge omzetverwachting
• 1/4/2020 : estimate

23. FG INVENTORY AND TURNS
Turns van 6,9 naar 7,5 door hoge omzetverwachting
1/4/2020 : estimate
0,0
2,0
4,0
6,0
8,0
10,0
12,0
14,0
0
500.000
1.000.000
1.500.000
2.000.000
2.500.000
3.000.000
3.500.000
4.000.000
4.500.000
1
/
1
/
2
0
2
0
2
/
1
/
2
0
2
0
3
/
1
/
2
0
2
0
4
/
1
/
2
0
2
0
5
/
1
/
2
0
2
0
6
/
1
/
2
0
2
0
7
/
1
/
2
0
2
0
8
/
1
/
2
0
2
0
9
/
1
/
2
0
2
0
1
0
/
1
/
2
0
2
0
1
1
/
1
/
2
0
2
0
1
2
/
1
/
2
0
2
0
1
/
1
/
2
0
2
1
FG Inventory & turns
Total FG
2018 FG
2019 FG
2020 FG

24. COMMUNICATION AND REPORTING …
Ø A word on digitalization
© PerfectOps

25. PRODUCT DEVELOPMENT
Ø We are back to portfolio ABC
Ø But not only that ….
Ø How about standardization in products and designs (modular build of product series, compatibility of components, ….)
Ø Design for Manufacturing through early involvement of Mfct Team in product development
Ø Realistic product development that is based on current environment
Ø Pitfall: skunkwork vs. product development
Ø What are the product expectations in the eyes of the customer (what is true value to the customer) ?
Ø Over costly ?
Ø Over engineered ?
Ø Right attributes ?
Always involve Mkt in your plans though and stay true to the quality expectations
© PerfectOps

26. INPUT & OUTPUT CONTROL
Ø Volumes are the driving force of factories in relation to the overhead and fixed costs you have
Ø Right sizing or optimizing the overhead and fixed costs to what the business can support is KEY
Ø Right sizing not only fixed cost but also operational capacity and direct labor
Ø Is level loading a better economic solution than just following the seasonality
Ø Additional machinery and crews iso weekend work ?
Ø Track the labor and performance variances
Ø How to avoid over time
Ø Your RM spend is most likely a big chunck of your product cost and operational cost and as such very important to manage
Ø Understand what are your main RM spendings (Pareto !)
Ø Understand who are your A suppliers
Ø Scout and build benchmark leverage for your main RM spendings and suppliers, change source if you have to
Ø Build Operational Excellence @ your key suppliers
Ø Understand from their side how you can help them lower your cost
Ø Automation and technology solutions don’t always have to cost a lot of capex and investment
Ø Look for small automation improvements throughout your manufacturing processes that will increase productivity
Ø For example, auto feeder components, load machine without stopping it
Ø AGV for a particular flow iso the entire factory
Ø ….
© PerfectOps

27. S&OP PROCESSES
Ø The Sales & Operations Planning Process mainly drive your production rate and stability, inventories and CSL
Ø It is a critical input to production
Ø When this process is not mature this can make day and night difference in your company and certainly for Manufacturing
Ø The main key aspects are communication, being data based and having the S&OP meetings in between the Forecasting Team,
Marketing and Production
Ø When S&OP reports into Sales you are in trouble, S&OP should function as an independent catalyst to project forward Sales
Ø Data
Ø Historic Sales Data
Ø Inputs from Sales and Marketing
Ø Forecast Accuracy
Ø Needs a word of caution since it needs to take into account the lag period and lead time of your actual production to
available for Sales
Ø In addition, first thing to ask yourself is what is the definition behind the formula, how is it calculated ? (you see the
strangest things that do not strike with reality of the supply chain, not even to talk about internal forecast accuracy vs.
how customers really experience your delivery performance) © PerfectOps

28. CASE STUDY EXAMPLE SAMSONITE
Ø The below results are after 1,5 years of applying focus to Operational Excellence
All in € Plant FY18 FY19
FY20
projected or
Budget
Net gain
FY20
VOH variance actuals HUN 1.689.889 1.122.069 650.000 1.039.889
Excessive use in absolute value (usage variances, income scrap, obsolescence RM, inventory adjustments) HUN 2.388.997 536.463 1.852.533
Income scrap HUN 732.989 30.463 702.525
Total production scrap HUN 1.524.868 1.129.252 1.080.000 444.868
Excessive use in absolute value (usage variances, income scrap, obsolescence RM, inventory adjustments) OUD 248.786 129.889 319.478 118.897
Salary mass blue collars (Dec month), reduction FTE by 160 HUN 11.839.032 8.761.488 319.478 3.077.544
Std cost reduction Curve across Budget volumes (Eur + Export), excl. Currency effect HUN 986.528 986.528
Std cost reduction PC across Budget volumes (Eur + Export), excl. Currency effect HUN 445.650 445.650
Std cost reduction S'Cure across Budget volumes (Eur + Export) OUD 717.000 717.000
Std cost reduction Magnum across Budget volumes (Eur + Export) OUD 270.000 270.000
Period Manufacturing actuals excl. Depreciation HUN 3.248.799 3.196.099 3.125.195 123.604
Period Manufacturing actuals excl. Depreciation OUD 6.580.157 6.953.752 7.379.944 -799.787
NBB HUF / € Rate 318,89 325,30 325
8.276.513 €
© PerfectOps

29. CASE STUDY EXAMPLE SAMSONITE …
Ø The below results are after 1,5 years of applying focus to Operational Excellence
8.979.038 €
Jan Feb Mrt Apr Mei Juni
CURV FORMING 3,2% 3,7% 2,7% 2,6% 2,7% 2,5%
PC EXTRUDER+ FORMING 29,7% 23,7% 14,2% 10,4% 7,6% 6,0%
CURV ASSY LINES+ CLICKING 0,6% 0,3% 0,4% 0,3% 0,5% 0,3%
PC ASSY LINES 0,4% 1,1% 0,6% 0,3% 0,4% 0,2%
ALL LINES 3,3% 3,6% 2,5% 1,8% 1,9% 1,6%
© PerfectOps

30. CASE STUDY EXAMPLE SAMSONITE …
© PerfectOps

31. CONTACTS
Advance Operations Management School
Switzerland
Basel
Aeschenvorstadt 71 - 4051
Tel. +41 612254332
Fax. +41 612554410
info@advanceschool.ch
www.advanceschool.ch
Italy
Milano
Via Vincenzo Monti, 8 - 20123
Tel. +39 02 46712715
Fax +39 02 48013233
Bologna
Via Massimo D’Azeglio - 40123
Tel. +39 051 19907026
Fax +39 051 0822618
info@advanceschool.org
www.advanceschool.org
31