1. Rail Supply Group (RSG) Best Practice Workshop
Driving Competitive Advantage for bottom line benefit
19th November 2016
Andy Spence, General Manager - Aerospace, SMMT Industry Forum

2. Organisational purpose
Industry Forum – our origins
Organisational purpose
Increase the competitiveness of the automotive industry in the UK

3. With the worlds leading manufacturers
20 years on
Strategy
VISION: Recognised as leading providers of expertise to improve industrial competitiveness
National programmes
MISSION: To deliver results through our depth of industrial expertise, from transformational strategy to sustained implementation
30 countries globally
150+ people
Industries
With the worlds leading manufacturers

4. Access to skilled labour
Brexit Implications for Manufacturing
Loss of confidence by manufacturers [1]
Forecasted manufacturing investments on the decline [2] [3]
Supply chain costs - Transparency
Concern over export competitiveness
Skilled workforce capabilities, now and future – Particularly STEM
Labour capability and cost
Key uncertainties
Impact & implication
Trade tariffs 1
Access to skilled labour 2 3
FOREX shifts
Ref. 1 EEF Business Confidence Rankings 29th July 16, Ref 2. Institute of Chartered Accountants 7th September, Ref. 3 British Chambers of Commerce 12th September

5. The opportunity ahead www.rsgbestpractice.org Automotive Aerospace
The outlook remains strong >2m vehicles assembled in UK p.a. in 2020.
£71.6bn industry turnover and £19bn GVA [1]
Increase in UK domestic sourcing 36% to 41% [2]
Willingness to source from UK suppliers if competitive
Aerospace
33,070 new aircraft required in next 20 years. Doubling of fleet 2016 to 2035 [3]
£31.1bn industry turnover and £10bn GVA
UK order backlog 9 years worth £195bn [4]
56% of companies expect growth > 10% [4]
Rail
NTFL – 250 trains c. 2,500 carriages carriages c. £2.5bn. First delivery 2022
JNAT - 27 trains, 170 cars, Contract award Q3 2017
NTFD – c. 45 Trains, contract award Q1 2018
HS2 – First phase 60 trains (total 165) £7.5bn, contract award end 2019
Ref. 1 SMMT Industry facts , Ref 2. The upstream supply chain – Auto Council, Ref. 3 Airbus Global Outlook , Ref. 4 ADS Aerospace Industry Report 2016

6. Competitive Performance
Why competitiveness – uncertainty and opportunity
Dealing with uncertainty, minimising risk/threat
Capitalising on opportunity
Stop me from becoming order losing
Help me to become order winning
Parity
Superior
Advantage
Order Losing
Quality
Cost
Competitive Performance
Dimensions
Delivery
Flexibility
Technology & Product
Customer Experience

7. Developing the capability to compete

8. Why companies “do” lean
20 years experience – why companies “do” Lean
Why companies “do” lean
We must achieve world class manufacturing (?)
It has worked for everyone else so we should develop our approach and “have a go”
It will transform our business……
If we can’t say we have done lean it reflects badly on us
We need to tell people we have fully implemented lean and they will think we are good
Common approaches
Lean foundations
Tools deployment
Lean system
Lean tools
Stability first
Deploy the basics everywhere
Standardisation
Waste elimination

9. How do companies deploy Lean?
Decide to launch a lean initiative to “improve results” (?)
Develop company approach, books, communication materials, tools, language….
Blanket communicate to everyone to launch the initiative
CI Managers, Lean Masters, Change managers etc. put in place to lead the change
Deployment begins with everyone doing mapping or basic tools deployment everywhere
Employees undertake some form of “sheep-dip” training
Some results achieved in pockets
Corporate or company level results never realised
Some successful bits of the initiative stick, dependent on individual leader, the rest fades over time

10. A better approach…. Not here Tools deployment, visible
Q6. How to
attack?
Not here
Tools deployment, visible
easy to try and copy
Q5. Where to attack?
Q4. What is our process
capability?
Q3. What is our process performance?
Q2. What performance do we need to achieve –
Quality, Cost, Delivery…….
Please start
here
Q1. How do we choose to compete, How do we win orders?

11. How should this be done? 1 2 3 www.rsgbestpractice.org
1. Current Situation
2. Realisation
3. Plan
Why do your customers buy from you?
How will you choose to compete in the future?
How competitive are you vs. your peer group? Where do you need to be?
Action planning and supporting business case for improvement
Raising the finance to invest in growth
What business capabilities do you have?
What capabilities must be developed to become more competitive?
4. Implement
5. Validate
Programme management & governance 1 2 3
What business capabilities do you have?
How competitive are you vs. your peer group?
Are you winning more business?
Implement improvement activities
Prepare
Check
On-going coaching & mentoring

12. In practice – current situation
Manufacturer’s current perspective
Manufacturer’s future perspective
1. Current Situation
Why do your customers buy from you?
How will you compete in the future?
What business capabilities do you have?

13. In practice – realisation
Customer competitiveness
benchmarking
Manufacturer’s current perspective
Customer A
Translating competitive performance
into business capabilities
2. Realisation
Customer B
How competitive are you vs. your peer group? Where do you need to be?
What capabilities must be developed to become more competitive?
Customer C

14. In practice – planning 1 2 3 www.rsgbestpractice.org Business Case
Competitive differentiation – Order winning
Project plans
KPI impact assessment
ROI, payback period, IRR or NPV as required 1
Company investment
3. Planning
Action planning and supporting business case for improvement
Raising the finance to invest in growth 2
Bank
discussion 3
Public money grant

15. In practice – implementation

16. In practice – current situation
5. Validate 1 2 3
What business capabilities do you have?
How competitive are you vs. your peer group?
Are you
winning more business?
x points +
y points +
z points =
Competitiveness
Evidence based assessment of capability
Customer competitiveness benchmarking
Revenue profiling – Growth & export
Customer A
Customer B
Customer C

17. Key Points Focus on order winning competitiveness (above productivity)
Help respond to Brexit risks/challenges
Capitalise on opportunities
Understanding competitive performance is the fundamental basis for success
Tools centric or methodology focussed “initiatives” are not an effective way to adopt lean practice
We must understand performance and capability and use tools to address gaps

18. Thank you for listening Questions?