ICMR/1 © Colin Herron & Chris Hicks University of Newcastle upon Tyne Improving the competitiveness of the North East companies by implementing lean manufacturing.

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Presentation transcript:

ICMR/1 © Colin Herron & Chris Hicks University of Newcastle upon Tyne Improving the competitiveness of the North East companies by implementing lean manufacturing using change agents Colin Herron, One NorthEast Chris Hicks, University of Newcastle upon Tyne Business School

ICMR/2 © Colin Herron & Chris Hicks University of Newcastle upon Tyne Productivity (GVA per job) vs. Participation (jobs per population of working age) Regional policy seeks to increase productivity and participation

ICMR/3 © Colin Herron & Chris Hicks University of Newcastle upon Tyne Lower than average manufacturing sector performance NE sectoral performance, sector growth and regional significance UK manufacturing has relatively low GVA growth NE has high reliance on manufacturing Increasing manufacturing productivity is a regional priority

ICMR/4 © Colin Herron & Chris Hicks University of Newcastle upon Tyne North East Productivity Alliance (NEPA) The aim is to increase productivity by transferring lean manufacturing from the automotive industry to other sectors. Methodology based upon Nissan/Industry Forum supplier development initiatives. This paper reports on 30 interventions at 15 companies.

ICMR/5 © Colin Herron & Chris Hicks University of Newcastle upon Tyne The transfer of management innovations from Japan (Lillrank, 1995) ‘Losses’ occur during technology transfer

ICMR/6 © Colin Herron & Chris Hicks University of Newcastle upon Tyne NMUK /IF Japan NEPA Companies The NEPA framework for transferring lean manufacturing Abstraction of lean practicesApplication of lean practices Losses occur during each stage of technology transfer

ICMR/7 © Colin Herron & Chris Hicks University of Newcastle upon Tyne Status at end of first year Group 1: (5 companies) - no practical knowledge of lean. Quite problematic, required the most support and made the slowest progress. Group 2: (4 companies) - about to embark on, had a change in management and a strategy. These companies made good progress a with capable change agents supported by dynamic management. Group 3: (4 automotive companies) 3 were aware of lean manufacturing. They became the most problematical because they overestimated their capabilities and they were resistant to outside thinking. Group 4: (2 companies) - aware of lean manufacturing, but they did not know how to introduce it. One company was very successful, whereas the other was virtually unchanged.

ICMR/8 © Colin Herron & Chris Hicks University of Newcastle upon Tyne Conclusions Manufacturing productivity particularly important in the North East. Productivity was lower than achieved by Japanese companies due to transmission losses. Total savings to date are £4.36 million with an average saving per intervention of £149,000. With the Industry Forum evaluation method, which ignores the highest an lowest cases the average saving was £106,000 Total returns were eight times the cost. NEPA supported lean manufacturing are an effective way of addressing regional productivity problems.