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High Performance through Manufacturing
Consulting Technology Outsourcing
Introduction A Global Study on Manufacturing Practices Manufacturing Masters: Learning from the Best Insights and Recommendations On the Journey to High Performance 03 05 07 20 22
repeatable manufacturing processes. But its impact on manufacturers and their supply chains has been especially profound. and the complexity of global supply chains increases exponentially. parts and other components of final products) that are sourced from every region with demand that is harder to predict and much more variable by customer segment and geography has made it far more difficult to run effective and efficient supply chains. its cost of direct materials had risen dramatically due to the global proliferation of raw materials and parts.Introduction Globalization has had a dramatic impact on every large company over the past decade. To reduce its cost structure. Shifting supply around the world also increases the complexity of dealing with fluctuating exchange rates. Eastern Europe and other emerging regions creates new customers whose needs are often quite different from those of a manufacturer’s long-standing customers. As a result. The rise of economies in Asia Pacific. Complicating the picture even more is the specter of global capacity constraints. the rising cost of producing goods for a global market has forced manufacturers of 3 . In 2008. which can be contrary to lean principles that call for focused. manufacturing and marketing functions with its various suppliers to agree on material and part standards that would reduce complexity and costs as well as to seek other initiatives they could jointly pursue to generate supply efficiencies. all this forces companies to shift production from one plant to another to load-balance their manufacturing network. unfamiliar tax and customs regulations. Matching supplies (steel. achieving high performance is more important—and more difficult—than ever. These companies now need unprecedented flexibility in their manufacturing strategies and operations—especially in how they source material. For these companies. many manufacturers’ total landed costs have spiked. squeezing profitability and eroding competitiveness. In turn. Some of globalization’s biggest challenges involve managing the complexity of supply chains that extend around the world. The case of a consumer-durables producer illustrates the pressures on manufacturers. Internal manufacturing capacity may not always be available to meet demand. especially when a company’s factories are specialized or its suppliers’ capacities are located far away from the finished product factories. a key cost component. the company brought together representatives of its engineering. Over the past 20 years. procurement. rubber. and special localized environmental laws. Determining the optimal places to manufacture— although never straightforward —has become infinitely more complex. Couple this with the increasing market volatility and the geopolitical situations.
are intimately familiar with market needs. telecommunications equipment. consumer electronics. Finally. But more recently. these emerging markets often present new competitors to global manufacturers—companies that have been operating in these countries for years and. Both companies represent a new breed of flexible. nimble manufacturers. computers. production supervisors. Additionally. Tesla Motors—a producer of a zero-emissions. a number of manufacturers headquartered outside the United States—including Suntech. Labor costs in developing countries have increased steadily (in most cases. Similarly. thus. Without such standard operating models. streamlined ways. In 2008. a number of US-based manufacturers are shifting production from offshore production facilities back to domestic or near-shore plants. these new markets come with the tall challenges of understanding the needs of a whole new set of customers and customer segments. These people are in high demand in such countries as Mexico. They also present the threat of diversifying into developed markets. companies are at the mercy of localized. many companies now are rethinking their production strategies. eroding some of their manufacturing cost advantage. or Chinese telecommunications equipment supplier Huawei Technologies. a Chinese manufacturer of solar panels and related equipment— are building American plants to reduce the high cost of shipping and be more cost competitive in the North American market. next to its headquarters. sequencing on the assembly line. at a higher rate than the corresponding developed economies). In fact. a number of the macroeconomic drivers of the offshoring movement have changed substantially.automobiles. machine tools. These and other factors have begun tipping the scales the other way. This is especially true given that most companies lack standard ways of conducting supply chain operations across their organizations. They are creating severe pricing pressures for Western manufacturers and providing attractive alternatives for customers in developing markets. idiosyncratic ways of planning transportation routes. which enable them to manufacture in new. While offshore manufacturing remains attractive. Many of the most talented middle managers in these countries lack global experience—which is critical as companies in emerging markets look to expand outside their domestic borders. Operations that depend on individual heroics are extremely fragile. many manufacturers have expanded into emerging economies such as China and India. scheduling the workforce and conducting other supply chain activities. it requires them to pursue new markets and compete against new competitors. That puts these manufacturers at the mercy of the few individuals who understand how to run these activities. an automaker in India. warehouse and transportation managers and the like. one of the greatest challenges to global manufacturing companies is the competition for supply chain talent. While attracting and retaining skilled people is difficult at all levels— from hourly laborers to executive management —the biggest shortage is in middle management: supply chain planners. Crude oil prices skyrocketed and then came tumbling down. While presenting vast new opportunities. Globalization not only forces manufacturers to rethink their supply chains. To grow. furniture and many other products to shift much of their production overseas and to other low-cost manufacturing hubs. the US dollar plunged against major Asian currencies to its lowest value in five years. electric-powered sports car—has moved the assembly of battery packs from Thailand to San Carlos. For example. but has recently strengthened again. operating warehouses. They invite expensive bidding wars for their services and consternation when they retire or leave. They typically also operate with much lower cost structures. 4 . Thailand's low labor costs no longer offset the high costs of shipping thousand-pound battery packs across the Pacific. China and India. California. Take Tata Motors.
we found the median percent of overall throughput was just 80 percent. 5 . For the survey respondents as a whole.A Global Study on Manufacturing Practices The aforementioned challenges are substantial. As part of Accenture’s ongoing research on the characteristics of high-performance businesses. Manufacturing lead time clocked in at 10 days. We wanted to better understand the state of their manufacturing operations—how they were performing on key production metrics. at 75 percent. We also found that lackluster performance largely was a function of immature manufacturing practices and capabilities in key areas.ys. Survey participant demographics. For example. Thus. we conducted an extensive survey of more than 600 major companies around the world. it’s not surprising that many companies around the world have struggled to achieve superior performance in their manufacturing operations. and uptime versus scheduled was worse. capabilities and technologies. We gauged manufacturers’ performance on several commonly accepted core measures. we found most companies struggling to produce much betterthan-average performance on key manufacturing metrics. By Geography By Industry By 2007 Revenue 6% 4% 9% 33% 36% 6% 3% 12% 6% 29% 36% 18% 31% 36% 6% 18% 17% Europe Americas Asia Pacific Communications Electronics & High Tech Retail Food & Consumer Goods Automotive & Industrial Equipment Travel & Transportation Biotech & MedDevices Natural Resources Utilities Up to $500 million $500 million to $1 billion $1 billion to $5 billion $5 billion to $10 billion >$10 billion Figure 1. (See Figure 1) Overall. Their asset utilization and overall equipment effectiveness were no better. and they no doubt have made the working lives of manufacturing executives more difficult. high performance on any one metric was rare (see Figure 2). and the extent to which they had adopted advanced manufacturing practices.
its contractors’. We also probed a number of aspects of manufacturing operations and management. most companies have only basic capabilities in key manufacturing areas such as determining where to locate production. Performance across key manufacturing metrics by the overall survey sample is not high. too. highly modular manufacturing processes were not common across companies in our sample. the companies in our survey did not have superior levels of integration and/or collaboration across their supply chain. which we discussed briefly above. Our survey respondents’ overall weakness in these areas goes far to explain the rather mediocre aggregate performance. we found most manufacturers struggling to determine where to locate manufacturing to make certain products—that is. We also found only narrow adoption of proven manufacturing improvement techniques such as Lean and Six Sigma. However.Percent overall throughput: Customer promise kept percentage: Overall equipment effectiveness: Asset utilization: Material efficiency: Manufacturing lead time: Percent production to plan: Delivery to schedule: Capital project index: Uptime versus scheduled Downtime versus scheduled run time Workforce satisfaction (% satisfied) 80 percent 95 percent 80 percent 80 percent 95 percent 10 days 90 percent 90 percent 53 percent 75 percent 10 percent 80 percent Figure 2. cycle times and defects at many manufacturers. Specifically.” or the understanding of how well production is performing at the company’s. Our arguments are not meant to undermine the progress and major strides that many companies have made in linking manufacturing to other core enterprise functions. The biggest barriers to such flexibility typically are twofold: “visibility. Similarly. streamlining manufacturing processes and creating highly flexible operations that can be altered quickly and cost efficiently when the market changes. to incorporate new technologies and to reduce costs. and the ability to conduct “what-if” scenario planning. Such scenario planning methods help manufacturers gain more insight on how to meet customer demand: where to locate the supply base and manufacturing plants. 6 . In general. Such processes are critical to flexible production—to create operations that can be changed rapidly and cost-effectively when customer needs change. In fact. our survey participants did not report having a high degree of visibility in key areas of their manufacturing operations. and its suppliers’ plants. which have helped dramatically to reduce costs. and which products to produce in which manufacturing facilities. we found an inconsistent level of sophistication in practices and capabilities. These three capabilities are core to creating manufacturing operations that support companies’ pursuit of high performance. how to assess costs and benefits—largely because they don’t use modeling techniques and are unable to conduct “what-if” scenarios. Here. on average.
7 .” The masters finished in the top 10 percent in our survey on three core aspects of manufacturing: cost effectiveness. Understanding these differences provides numerous insights into the keys to superior manufacturing performance. customer service. In the process. and several other standard production metrics. We also identified a group of companies on the opposite end of the spectrum: the survey respondents we deemed the “laggards” – those that finished in the bottom 10 percent in the three core areas. Laggards differ demonstrably from masters not only in their performance on the manufacturing metrics covered in our survey. As Figure 3 illustrates. as measured by customer lead times and the percentage of customer promises kept. and operational efficiency. line conversion costs and s crap rates. masters held a substantial edge over laggards across the metrics that Accenture has found to be strong indicators of manufacturing operations performance. as measured by asset utilization. The gap between masters and laggards was especially noticeable when comparing the lead times among continuous and discrete manufacturers (see Figure 4). our research and client work have revealed that a number of companies have overcome the key obstacles we mentioned earlier.Manufacturing Masters: Learning from the Best Despite the fact that globalization has raised the bar of performance for manufacturers around the world. Before exploring the differences between the masters and laggards in manufacturing capabilities and practices. their manufacturing operations have become a major competitive differentiator and a key factor in their superior financial performance. overall equipment effectiveness and throughput. as measured by several metrics including actual versus budgeted manufacturing costs. it is revealing to see just how much better the masters are than the laggards in terms of operational performance. We refer to this group of companies as “manufacturing masters. but also in terms of the level of maturity of important manufacturing capabilities and practices.
Masters Percent overall throughput Customer promise kept percentage Overall equipment effectiveness Asset utilization Material efficiency Scrap rate Manufacturing lead time Percent production to plan Delivery to schedule Capital project index Downtime versus scheduled run time Workforce satisfaction ( percent satisfied) 85 percent 98 percent 92 percent 90 percent 98 percent 1 percent 3 days 97 percent 98 percent 90 percent 6. Masters outperformed laggards on core manufacturing metrics. 8 .5 percent 80 percent Laggards 50percent 86 percent 60 percent 50 percent 80 percent 10 percent 35 days 83 percent 83 percent 30 percent 19 percent 80 percent Figure 3.
Maturity of practices and capabilities in key areas are strongly correlated to superior planning performance. we compared the manufacturing practices and capabilities of these groups. we found that sophistication or maturity of practices and capabilities in the preceding areas are strongly correlated with superior planning performance. while these figures clearly show the masters significantly outperformed the laggards in manufacturing. High Manufacturing Performance Low Low Manufacturing Capability Maturity High Figure 5. health.5 40 Figure 4.Discrete Average Median Masters Laggards Masters Laggards 9. workforce engagement and productivity. We explore each area in the pages that follow. safety and environment. operational flexibility. In other words. we found a number of significant differences—ones that correlate strongly with superior manufacturing performance. Masters are far more likely than laggards to excel in six areas: manufacturing strategy. Manufacturing lead times among discrete and continuous manufacturers.6 63 4. they do not explain why masters were that much better.2 29 5 30 Continuous 7. and information technology. While comparing how masters and laggards manage their manufacturing operations. However. manufacturing excellence (process improvement). 9 . To shed light on this difference. as Figure 5 shows.
The strategy is expected to boost earnings by more than $1 billion over 10 years. It built four new plants in 2007. labor availability. transportation infrastructure and proximity to customers. And masters are about eight times more likely to use sophisticated modeling tools to determine whether to make or buy. A multibillion-dollar oil-field services company shows the value of making shrewd make versus buy decisions. masters are far more likely to rely on a range of factors. Masters appear to be far better at determining whether to insource or outsource and where to set up production (see Figure 6). Masters are twice as likely to analyze past facility location decisions when make new decisions. while only 12 percent of the laggards did so. both quantitative and qualitative. Soaring global demand for oil and gas forced the firm to rethink its manufacturing “footprint” —that is. where and how to increase capacity. countries in which to manufacture. Considering its markets. which provide more than 100 products for the extraction of oil from the ground and seas. The company developed a five-year manufacturing strategy to meet future expected demand. 10 . In addition. government or local tax incentives. and by 2009 had doubled its manufacturing capacity.Manufacturing Strategy Comprehensive business case for make vs buy decisions 32% Analyze past decisions when making Location decisions 55% 43% 21% Sophistication of modeling tools used 4% Use modeling techniques to make location decisions 33% 33% 12% Masters Laggards Figure 6. More than half the masters develop comprehensive business cases for “make versus buy” decisions. The company operates more than a dozen plants around the world. Masters have a more sophisticated approach to “make versus buy” and facility location decision making. As shown in Figure 7. Two of the most consequential decisions for heads of manufacturing are whether to “make or buy” and where to locate plants. the company developed a whole new plan. masters were more likely than laggards to factor in capital cost. one-third of the masters use modeling techniques in location decisions. In making their sourcing and facility location decisions. which was the case with only about one-third of the laggards. supplier locations and other criteria.
11 . Masters are more likely to consider a range of factors when developing their manufacturing strategy.71% 67% 58% 50% 42% 67% 67% 62% 54% 21% Capital cost Government or local tax incentives Labor availability Transportation infrastructure Proximity to customers Masters Laggards Figure 7.
) About three-quarters of masters compared with 59 percent of laggards said their entire company has a clear mandate to implement continuous improvement strategies. audit and report the results of these improvement strategies (see Figure8). (Analytics monitoring. Two-thirds of masters compared with only one-fourth of laggards routinely use kaizen “events” (that is. a short-term project for improving a process). also known as manufacturing performance management. Manufacturing processes that aren’t measured. 12 . The past decade provides numerous examples of manufacturers across industries that took their eyes off their assembly lines and other plant operations and rapidly lost market share.Manufacturing Excellence Use of proven continuous improvement techniques 50% Entire organization has clear mandate 59% Prioritize improvement opportunities based on business. evaluated and improved subject a manufacturer to considerable risk—of defective products. it enables managers to make data-driven decisions and push operational performance metrics and accountability to the people who can improve those operations. is an approach to improving manufacturing operations through metrics and data. inefficient production (and eroding margins) and customer defection. In aligning operational objectives with strategic goals. Masters are more than twice as likely to use analytics monitoring. The masters we studied were much more likely to use proven techniques for continuous manufacturing process improvement such as Lean. And more than three times as many masters than laggards track. but pursue innovation when opportunities arise Masters Laggards 57% 39% 71% 50% 71% 76% 90% Figure 8. Masters implement continuous improvement programs to align with business and product strategies and monitor their effectiveness to ensure sustainable improvements. Six Sigma or other techniques. product strategies Use analytics monitoring to sustain improvements 31% Focus on process improvement.
. said their continuous improvement efforts improved company performance. The company performed root-cause analysis to understand the barriers to production by using the kaizen technique. 13 set key performance metrics and instituted changes. and relations between shopfloor supervisors and plant workers improving significantly. And masters were much more likely to be satisfied with the results of these initiatives. Many manufacturing masters indicated they apply their relentless focus on continuous improvement to their supply chain partners.Positive impact on company performance 54% Satisfied with results 42% Results tracked. Masters monitor and get better return on their continuous improvement efforts. audit and report the results of these initiatives (see Figure 9). set key performance metrics and instituted changes. Furthermore. and relations between shopfloor supervisors and plant workers improving significantly. versus about half of the laggards. internal initiatives are more likely to produce results for masters than for laggards— in large part because masters are more likely to track. with lead times in material inspection falling 75 percent. However. Manufacturing production rebounded. The company performed root-cause analysis to understand the barriers to production by using the kaizen technique. audited and reported 17% Masters Laggards 73% 60% 53% Figure 9. Take the case of a global maritime propulsion system manufacturer in Europe. It built a new plant that shifted the company away from traditional cell-based production set-ups to line manufacturing principles. One-third of the masters compared with one-fourth of the laggards routinely use Lean and Six Sigma principles to improve the operations of third-party and contract manufacturers. A cross-functional team used continuous improvement methods. the switch over caused problems in in-bound material supply and logistics. It built a new plant that shifted the company away from traditional cell-based production set-ups to line manufacturing principles. with lead times in material inspection falling 75 percent. Three-quarters of the masters. A cross-functional team used continuous improvement methods. the switch over caused problems in in-bound material supply and logistics. Manufacturing production rebounded. Take the case of a global maritime propulsion system manufacturer in Europe. However.
work-in-process inventory and supplier/vendor quality performance. This visibility allows masters to understand the risks and trade-offs of moving production from one facility to another to account for changing market conditions. most (57 percent) create modular products and services to reduce costs and enable rapid changes in products and distribution services to meet fastchanging customer needs. Honda predicted the change would save nearly $1 billion a year in manufacturing costs. Monitoring such indicators provides visibility to decision makers. Masters are also much better at gathering and evaluating the supply chain data that is critical to providing upstream and downstream visibility. nearly three times as many masters (76 percent versus 26 percent of the laggards) have historical data on factory machine utilization. as well as common assembly techniques. 1 14 . As a result. For example. most notably raw material inventory. nearly twice as many masters as laggards use dynamic production scheduling tools. And they are much better able to ratchet production up or down to deal with dynamic market conditions and mitigate the risk of market fluctuations (see Figure 10). setup and performance. For example. production time and queue time of critical process steps. labor or other volatile supply chain costs. Masters will routinely use modeling tools to conduct “what-if” scenario analysis and develop contingency plans based on this analysis. But masters realize that such flexibility has a cost. sourcing problems) and customers (including distributors). Honda made its assembly plants flexible enough to build a greater variety of vehicles. In contrast. Japanese juggernaut Honda demonstrates the power of flexible manufacturing. masters are far more likely than laggards to model tradeoffs between redundant costs and risk. And masters are more likely to have such visibility into their partners’ operations—as well as a formal process for escalating supply chain problems quickly (see Figure 12). only the minority of laggards (39 percent) modularize their products and services. who can use these indicators to predict supply chain performance issues and react to potential problems before they become noticed in the supply chain. the majority of masters but the minority of laggards have full visibility and predictive capabilities for their own operations.Operational Flexibility Masters are much more likely to anticipate issues on both ends of the supply chain that could affect production: with suppliers (for example. This required installing common machinery such as robots in each plant. the company was able to introduce a new car model without making a huge investment in new tools and factories. In 2001. Masters also are more likely than laggards to monitor a wide range of vital manufacturing indicators (see Figure 11). As well. Finally. They also use these tools to quickly evaluate alternative production strategies to meet changing customer demand or react to changing transportation. More masters (48 percent) use realtime information on the status of production machines than do laggards (30 percent).
15 . 90% 86% 81% 72% 65% 50% 81% 67% 54% 39% 71% 55% Raw material inventory (stock level and accuracy Work-inprocess inventory (stock level and accuracy) Finished goods inventory (stock level and accuracy) Production time and queue time of critical individual process steps Supplier/ vendor quality performance Set-up time Masters Laggards Figure 11. Masters are more likely to monitor a wide range of key manufacturing performance indicators Full visibility and predictive capabilities (own operations) 67% 42% Formal model for quickly escalating problems 50% Full visibility and predictive capabilities (partner operations) 71% 43% 30% Masters Laggards Figure 12. Masters have greater visibility into their own and partners’ operations. Masters are better prepared to respond to market changes and risk.Use of dynamic scheduling tools 35% Ability to model tradeoffs between redundancy risk 23% 67% Masters 58% Laggards Figure 10.
masters are also more likely than laggards to formally seek process improvement ideas from shop-floor workers. The age old adage of “what gets measured. How do we know? First. gets performed” is certainly true in this case. Masters are more likely to measure employee engagement as well as employee productivity. employee productivity. while the majority of masters and laggards measure worker productivity.Workforce Engagement and Productivity Formally measure employee engagement 46% Formally measure employee productivity 67% Productivity is rising in all areas 24% Complete program to provide training to improve productivity 50% 95% 78% 48% 12% Masters Laggards Masters Laggards Figure 13. nearly half the masters. but only 12 percent of laggards. Masters are more likely to say productivity is rising—a fact that seems to correlate with more prevalent employee training. said productivity is rising in all areas of their workforce (see Figure 14). Furthermore. For example. had complete training programs for boosting worker productivity. 17 . Masters appear to be far more focused than laggards on making their manufacturing workforce more productive and satisfied with their work (see Figure 13). Such training programs are more likely to be formal in nature among masters. the majority of masters monitor employee engagement. Finally. compared with one-fourth of laggards. which also are more likely than laggards to have formal employee coaching. while only a minority of laggards do so. masters are still more likely than laggards to measure this key aspect of the manufacturing workforce. and are more apt to have a regular way for shop-floor workers to report problems and submit improvement ideas. We believe one reason for rising productivity among masters is they measure this more diligently and have programs that boost Figure 14. Half of the masters.
Here again the masters stood out. Masters are more likely to have leading practices in health. Nearly twice as many masters had a formal health. sharing that data is another. In addition. 18 .Health.” our survey data suggest companies that take greater responsibility for workers’ health and safety on the job. masters are more than four times as likely as laggards to measure and report their manufacturing safety statistics weekly. and are much more likely to review and update HSE information quarterly or monthly and hold monthly training to improve HSE. Thus. tracking HSE indicators is one thing. safety and environment While some manufacturers may view this issue as a “nice to have when times are good. as well as for their plants’ larger environmental impacts. safety and environment (HSE) program across all departments. Nearly twice the percentage of masters documented and distributed information on HSE issues and how they were resolving them. it is no surprise that masters also are more likely to reward their employees for identifying and helping the company solve HSE issues. Safety and Environment Externally published HSE vision Formal HSE vision program across all departments Measure and report weekly 10% Issues and resolutions are documented / widely available Monthly / quaterly updates and training Rewards for identifying and resolving HSE issues Masters Laggards 63% 53% 80% 46% 45% 81% 44% 71% 40% 52% 32% Figure 15. Furthermore. outperform those that don’t (see Figure 15).
Simply put. 19 . rather. Such technological prowess is not due to spending much more on IT but. manufacturing masters are better at exploiting IT (see Figure 16). Workers and managers in masters manufacturers also are much more likely to adopt manufacturing technology—71 percent versus 50 percent in the laggards. Our research found masters are nearly four times as likely as laggards to require a detailed business case with quantified return on investment projections (40 percent versus 11 percent). And the majority of masters (65 percent) track their spending on manufacturing IT. while only 40 percent of the laggards do so. They are more likely to embrace IT to improve production processes. Masters do a better job capitalizing on manufacturing technology. integrate systems and data. to the fact that masters take a more rigorous approach to managing their return on that spend.Information Technology Integration of information sources and systems 44% IT support approach 46% Level of user acceptance 52% 76% 71% 50% Programs to increase user acceptance 46% 53% Masters Laggards Figure 16. and track the impact of technology than are laggards.
Insights and Recommendations 20 .
15 percent better equipment effectiveness. planning and scheduling. and service can reduce time to market by up to 20 percent. achieving manufacturing mastery can lead to as much as 13 percent higher throughputs. 21 . • Integrating manufacturing with product design.The findings of our research are consistent with what we have learned through our extensive work with global manufacturers around the world: that sophisticated manufacturing practices and capabilities can mean the difference between average and market-leading performance. S&OP. Specifically: • Developing a dynamic global manufacturing strategy by modeling and achieving the right trade-offs across various key factors can lead to a revenue uplift of 20 percent to 30 percent in three to five years. • Achieving a high degree of employee engagement among manufacturing personnel can boost employee productivity by 5 percent to 10 percent. • Building operational flexibility by using modeling techniques and creating visibility into leading indicators that help anticipate and address supply chain issues before they occur can help substantially reduce fixed cost through better asset utilization. • In addition to the preceding benefits. • Tightly integrating manufacturing IT systems can lead to better return on those IT investments while helping to ensure the ability to meet compliance and regulatory requirements. • Adopting and internalizing bottomline-driven and proven manufacturing excellence principles can lead to a reduction in operational cost by 5 percent to 15 percent. 30 percent more uptime and 75 percent reduction in lead times.
Tata started from scratch—not simply taking existing automobiles and removing expensive features from them. Consider how Tata Motors reinvented the way an automobile is designed and assembled to produce a $2. Or it might be a completely different. Manufacturers could consider using a model such as the one popularized by Sun Microsystems. 22 . “nearsourcing” strategy driven by rising energy and labor costs. in which functions and operations traditionally performed in-house are outsourced to partners given great visibility into the company’s business processes and capacities. achieving high performance will be difficult simply by conducting “business as usual. In a similar way.On the Journey to High Performance The twin vectors of increased global sourcing of products and materials and the increasing global demand for goods and services require manufacturing models to be changed fundamentally. not tweaked incrementally. maintaining the status quo is a bigger risk in a world where new customer demands. manufacturers of every product must conceive of radically new ways to produce and distribute their products. challenges and competitors lurk around every corner.” Increasingly.500 car (the Nano). Whichever model a manufacturer chooses.
Derek Jones. Scott Egler. United States amit. 2001. Spain emilio. January 7.com Special acknowledgement and thanks are due to following people for the effort and time they invested in the preparation of this report: Jonathan Wright. Mike Engoian. 23 .gupta@accenture. Australia zeljko. 1“Quality.com Emilio Mostoles Madrid.m. Fred Hajjar. Varadaraj Shanbhag.com Zeljko Nikolic Sydney. Brooks Bentz. Ruchir Gupta.Notes flexibility give Honda edge. John Calder.mostoles@accenture. Contacts Amit Gupta Chicago. The Detroit News.nikolic@accenture. Rup Banerjee.” Joe Miller.
Combining unparalleled experience. and enhance the skills and capabilities of the supply chain workforce. optimize global operations. 2008. supply chain planning. . fulfillment. About Accenture Supply Chain Management The Accenture Supply Chain Management service line works with clients across a broad range of industries to develop and execute operational strategies that enable profitable growth in new and existing markets.accenture.39 billion for the fiscal year ended Aug. its logo. manufacturing and design. Accenture collaborates with clients to help them become high-performance businesses and governments.000 people serving clients in over 120 countries. and High Performance Delivered are trademarks of Accenture.com. 31. the company generated net revenues of US$23. technology services and outsourcing company.com/supplychain. enable profitable product launches. sourcing and procurement. and extensive research on the world’s most successful companies. With more than 181. visit www. comprehensive capabilities across all industries and business functions.accenture. we combine global industry expertise and skills in supply chain strategy. For more information.About Accenture Accenture is a global management consulting. Accenture. and service management to help organizations transform their supply chain capabilities. Copyright © 2009 Accenture All rights reserved. Committed to helping clients achieve high performance through supply chain mastery. Its home page is www. We collaborate with clients to implement innovative consulting and outsourcing solutions that align operating models to support business strategies.
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