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Cost efficient manufacturing

in the centre of Western Europe

New Future Formula visits Bosch in Bamberg, Germany 

Robert Bosch GmbH is leading in Business Excellence. As we all know, the industrial culture of Germany is among the strongest in the world. The Bosch Bamberg site with 7.500 employees is among the best in Germany. It was very inspirational to look into a world-class organization. Bosch again and again draws processes, sees opportunities and realizes them in every part of the organization. They constantly give highest priority to quality and technical performance and invest the required time and resources.

 

 

On 25 April 2012 New Future Formula got the opportunity for an exciting visit to Bosch Bamberg
The customers are exclusive and demanding. Audi, Mercedes and BMW are among the most well reputed in the automotive industry. The products are sparkplugs, fuel injectors and other small key parts. Bosch Bamberg is the lead factory of the international Bosch production network, counting more than 20 production sites worldwide.

 

150 senior executives from Europa visited Bosch Bamberg

Through our membership of the EFQM organization, we got the opportunity to visit Bosch Bamberg, the 2011 EFQM Prize Winner. On a sunny morning 150 senior executives from other EFQM member organizations in Europe met in picturesque Bamberg, ready to be inspired by Bosch' journey towards world class, to network and to "share what works" - the motto of EFQM.


Bosch has a fascinating story to tell

They have demonstrated that it is possible to develop, produce and sell in Western Europe. Bosch has focused on the combination Continued Process Improvement and Innovation. Continuous Process Improvement has over the past 7 years lead to a 40% cost reduction. Innovation has created technological breakthroughs. These new technologies will reduce the fuel consumption of the next generation of components for the global automotive industry by 30%.


Each activity and project support company strategy in a direct way

On the plant tour we passed by different Information Desks. Managers and employees from the specific area explained their way to Continuous Process Improvement. Boards, graphs and figures showed how they contribute to realization of the overall company strategy and strive for continuous improvement. Questions and answers were exchanged with references to the visitors' own challenges at home.

 

Remarkeble increase of customer satisfaction

Bosch has established seven channels for customer feedback, adjusted to various customer types. One important feedback tool is the "Bier Decke" - the small round layer on the table under the bear glass. Bamberg has 29 breweries and "Bier Decke" - is everywhere, so in this way easy at hand. It is easy to fill out the questions printed on the backside of the "Decke". This feed- back tool has turned out to be one of their most valuable. Cross organizational teams have implemented improvements into the customer related processes. The customer satisfaction index has increased remarkably.

 

Mentors ensure the transfer of theory into practical improvements

Bosh runs two training programs: Continuous Improvement Program and Bosch Production/Business System. Each manager is trained for 6 days. Specialists are trained for 17 days. After the training, people go through a so called "transfer period". During this phase they are supervised by an internal mentor. The aim is to ensure the transfer of knowledge from "theory" to "actual improvements". Bosch has a statement "talking is silver, action is gold".

 

Energy Value Stream Mapping reduces energy consumption and CO2
In one area we were introduced to Energy Value Stream Mapping. 65% of the energy consumption was in operations. For each stage of the production flow, "kw" and "g CO2" was measured and listed. New lower targets were defined for each stage. Today the energy consumption and CO2 has been reduced remarkably, by making minor but innovative adjustments of machines, materials and flow.

 

Reduction of lead time in Order handling and Capacity Planinging 
In the Sample Shop - with 400 employees, mainly white colors, Bosch has reduced lead time from an average of 4-5 days to 2 days. The tools have been standardization, simplification and using the well known techniques for continuous improvement. They had expected to see ERP/SAP change as strong tools in the process - but surprisingly no contributions had come from these areas.

 

Conclusion

After four intensive hours in the factories, we returned to the conference area. It was time to network. Visitors and Bosch executives and managers enjoyed a light meal and engaged in conversations for about an hour. The visitors were very satisfied. Bosch has for sure created an interesting program.


On our way back to Denmark we had time to reflect about Bosch Bamberg. What is it they have done so successfully?


Bosch is able to derive and implement a strong strategy, and to commmunicate it on just one single slide. They ask for references to the strategy from every activity and every project in the company. People everywhere know exactly where they belong on the strategy slide. It is always and again and again about drawing processes together - and then about improving them. Less important is the kind of method. Finally, Bosch creates "Constancy in purpose" for the whole organization. There is a deep and stable believe in change. The worth and value in continuous improvement is critical.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ellen Gerdi Andersen

Managing Director

 

May 2012

 

> View the newsletter here

 

 


 

New Future Formula at EFQM Business Excellence
Award event in Munich

New Future Formula attended this year's EFQM Business Excellence Award event
at BMW Welt in Munich. BMW Welt - show room is the largest tourist attraction in
Bavaria with more than two million annual visitors: high-end cars and an
architectural marvel of a building – an impressive stage for the event.

 

 

"Share what works" - EFQM's motto is lived out among the best

In the last days of October, executives from many European countries met in Munich for two days to recognise and learn from some of the best performing organisations in Europe. EFQM Business Excellence is considered the strictest model for sustainable business development in the world. The model has been used for more than 20 years. More than 30,000 European businesses operate according to the Business Excellence principles. This year, one of the main focal points has been to see whether the model could stand the test through the worst financial crisis in recent history. It did. Despite the economic turmoil and decline, this year's award-winning companies have generated superior and sustainable results - some of the best in the history of EFQM. An EFQM Business Excellence Award is not won on a whim, but rather on many years of hard work and total commitment by the entire organisation. And this evening quite understandably, there are loud celebrations every time the winning CEOs raise the trophies. Live video feeds to the companies in the respective countries enable the employees at home to share the spotlight and be recognised for their efforts. This night is first and foremost dedicated to the Award winners. They serve as role models for the rest of us. They take the spotlight while the rest of us look for signs that we are also heading in the right direction. And the winners are eager to tell about how they succeeded and about all the obstacles, the inertia and moments of despair along the way. However, they always conclude that this is just the beginning.

 

Slovenian businesses want to be among the top European competitors

The award ceremony is not just for the winners. It also reflects and radiates the impressive dedication to working with EFQM Business Excellence which is found everywhere in Europe. We spoke to the head of EFQM in Slovenia who told us how they in Slovenia have created a living local EFQM forum where businesses using EFQM and achieving excellent results are recognised once a year in the presence of the prime minister. More than 400 companies attended this year's award ceremony. Slovenian businesses are dedicated to the Business Excellence principles. They want to be among the best in Europe despite being a small country.


EFQM is part of the curriculum of all Kazakhstan universities

We also spoke to a professor from Kazakhstan, and he told us that EFQM Business Excellence is part of the curriculum at all institutions of higher education. The entire public administration in Kazakhstan works according to the EFQM Business Excellence principles. The professor eagerly told us how citizens from near and far in this enormous country are readily and quickly serviced by the public sector and how many possibilities of corruption have been eliminated as well as how they are willing to further pursue EFQM to improve even more.


EFQM is for all kinds of organisations

At NFF, we are dedicated to disseminating EFQM Business Excellence as much as possible. We often hear CEOs say that EFQM is only for the big companies - previous award winners such as Grundfos, Siemens and Bosch. This is not true. The examples from Slovenia and Kazakhstan clearly show that the model and its tools can be applied to both small and large organisations from both the public and the private sector. Our New Year's wish for 2012 is for more companies to consider how they can benefit from EFQM Business Excellence.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ellen Gerdi Andersen

Managing Director

 

December 2011

 

> View the newsletter here

 

 


 

Warranty costs

 Where people meet

 

 

 

 

 

From high expectations to painful memory

Warranty costs in World Class organizations: All parts of the organization are involved, and the healthy organization is ready to learn - and act to improve. Failure of the past is seldom a life-threatening problem - the challenge is consequent learning for the future. Continuous improvements are part of the DNA . Every part and every function has a plan for reducing the number of warranty cases by 15-25% on an annual basis. The management has a passion for "zero defect", knowing that a continuously falling level of warranty cases is not only a direct source of more profit and satisfied customers - but also a source of a managerial "mental surplus" releasing energy for development of the overall total value chain of the company.


Warranty costs - the place where people meet
In the old days people met at the village pond or the village pub to exchange ideas, develop insights and make agreements about joint ventures. Recently I was asked: Where is the village pub or pond in the modern company? Where is the place where managers and employees meet every day to understand what is outside the "normal routine" of orders and tasks.


My answer is clear: It is the warranty costs of the company. People talk about them at the canteen tables, at the coffee machine and at meetings at all levels. At no other place do so many perspectives of the company meet:

 

  • The problem must be solved now for a specific customer who by the hour loses business or satisfaction.

  • Perhaps, the problem must also be handled now for customers who have not yet encountered the problem - but may or may not encounter it.

  • The cause of the problem must be found and eliminated so that the same mistake does not happen again.

  • The underlying causes of the problem must also be understood -and must also give rise to future preventive actions.

  • The problem and its solution must be registered via an IT set-up satisfying demands according to the accounting law, ISO9000 and customers - and internal and external demands and expectations.

  • The problem has considerable and assessable effects on customer reputation and loss of sales - what happened, what does it cost to have effective processes and what can be done? 

 

All parts of the organization are involved. The service department is in charge of the final fire fighting process. The provoking factor - development, sales, production etc. must necessarily take responsibility for both the corrective and the preventive actions. The economy function is busy understanding the financial consequences and risks. The quality department is focused on responsibility and the fulfillment of internal and external quality management system demands. The sales department is obviously very busy with the question as to whether the customer and the market will regard it as "an isolated incident where the company really took responsibility" - or an example of the "brand and the organization not matching the competitors at all".

It is obvious that the management of the company is busy with the warranty costs. Here the products and the service of the company have met real life - and been a nasty disappointment to customers and employees. Here humility is at its place. Here the healthy organization is ready to learn - and act to improve.


What does it take to become World Class?
Of late we have often been asked: "What is World Class within warranty costs? Below we have condensed the many years' experience into seven questions which, when answered convincingly, reflect World Class level.

 

  1. Are there shared codes and definitions of
    1. all incidents of defects experienced at the customer's "within warranty"
    2. all incidents of defects experienced at the customer's "outside warranty - but within the customer's reasonable expectations"
    3. all "close-to defects experienced" at the customer's of types 1
      or 2

  2. Are all incidents of defects or close-to defects reported and registered in an effective and disciplined fashion?

  3. Are there well coordinated systems for:
    1. immediate remedy of the customer's negative experience - typically run by the service department?
    2. handling according to the accounting law - typically run by the finance function?
    3. correction of defects and learning - typically run by the quality department

  4. How large are the reported annual warranty costs (see A1)? Typically 0.5 - 3% of turnover and clearly better than competitors. How large is the total estimated loss of sales in connection with the customer's negative experiences. Typically factors B - E of the reported annual warranty costs. Are these costs reported as a whole  - and to each department responsible?

  5. Are systems generally available in the different departments facilitating easy analysis of defects, the connection of defects, environments of defects etc., thus facilitating the development and test of hypotheses in the hunt for the causes of defects?

  6. Is there a culture for and are systems available to learn from defects? In each department - and across the organization continuous improvements are part of the DNA. Has every part and every function a plan for reducing the number of warranty cases by 20% on an annual basis through activities carried out within the next six months? When new products and services are introduced - how is it secured that "teething troubles" are completely avoided? How are defects prevented?

  7. The management understands and acts out that there is always time and priority to prevent defects - and when defects still occur, because we are after all only imperfect human beings, it also has the time not only to correct defects, but also to learn from them. The management has a passion for "zero defect" and knows that a stable, low and continuously falling level of warranty cases is not only a direct source of more profit and satisfied customers - but also a source of a managerial "mental surplus" releasing energy and insight for more exciting initiatives such as innovation, sales initiatives and development of the overall total value chain of the company.

 

Closing thoughts
A really large amount of money is to be picked up by a reduction of warranty costs - costs are saved and new customers and new business gained. The key to success lies in perseverance. It is not sufficient to move the company from one level to the next as a once-only phenomenon. It is all about creating cycles reducing warranty costs by 15-20% each year - and raising the company step by step towards world class. We will revert to these issues in coming newsletters. If, however, you cannot wait or just want a further discussion about the great potential of this field, you are welcome to contact us.

 

 

 

 

Niels Gørup Christiansen

Director, Senior Consultant

 

August 2011

 

 

 

 


 

How to achieve success
with your product launch

Include your sales people from the beginning
and achieve success with future launches.

 

 

 

From high expectations to painful memory

Have your company ever had a disappointing experience launching a new product and not understood what went wrong? Everyone from innovation, to purchase and management have waited for the big day when the "baby" was ready to leave the developmen dept., but what happened? Nothing!  Slowly the euphoria about the new product evaporates - except among the R&D people who continue to talk about the fantastic product that never made it, and in this way ensure that the organisation will never let go of the painful memory. For sure something went wrong during the development proces. In my experience that something was that the sales professionals were never involved. Include your sales people from the beginning of the development process and achieve success with future launches.


Include the sales force

Unfortunately most companies never include their sales force when developing new products. It is rear that sales people participate in meetings about new products in the pipeline. R&D is carried away by the technical possibilities. Production is keeping an eye on capabilities and scaling, and management is focusing on budget and timeframe. No one is thinking about sales and marketing. That is fatal. Use your experienced sales professionals to prepare the launch.

 

Prepare the launch in due time

A product launch must be prepared far in advance, as early on in the innovation process as possible. I have throughout my professional career time and time again heard people from innovation talk about really great products that never amounted to anything. When I ask if they involved the sales department, they look at me with surprise, because according to them, sales people do not understand technical issues!  This is a dangerous attitude. You can't just hand over a new product to a sales person the day before it is launched and then expect him or her to go out into the market place and get orders. It is a process that takes a lot of preparation to succeed.The process of bringing a new product to the market has to be well prepared. If not, the sales force feel uncomfortable with the product, and will not present it to the customers. A true sales professional will not face a buyer trying to sell a product, if he is not certain that his organization back home is able to deliver.


Support the credibility of your sales people

The sales representative and the buyer have a strong business relationship, developed over time and based on mutual trust. The biggest asset a sales professional has is his credibility, and a good sales person will never do anything to damage that credibility.Companies need to understand this. That is why the company must understand the importance of including sales people in the development process. The sales force must be given enough time to prepare the launch and they can often contribute positively with market feedback.
There are unfortunately still too many companies out there who don't understand why their innovations never amounted to the success that was expected. Don't be one of them but try one time to include the sales staff in the innovation process. If you do, your company will achieve much higher success rates at the next product launch.

 

 

 

 

Ellen Gerdi Andersen

Managing Director

 

November 2010

 

 

 

About

Ellen has held a number of managerial positions within sales B2B, and knows well what it takes to successfully launch a new product. She has successfully trained local sales staff and build tight and deep relations with global key accounts. She has worked all over both Eastern and Western Europe.  

 

 


 


Video

The Toyota case

by Niels Gørup, June 2010

 

Toyota has recently experienced serious

problems with the brake system. It is only
a symptom of what is really happening within the company.


 

Quality never dies...

Some people say that the importance, relevance and influence of the
concept of Quality in management has diminished is the last decade
– and will disappear in the next decade. They are right, that the concept
have got less attention the last – but they are wrong, when they believe
it will disappear. Quality never dies.

 

 

 

The quality of products, services and performance have never been more important and relevant than it is today.


We experience that professional customers after the financial crisis more than ever carefully assess their purchase in terms of quality? We also experience that organizations now grasp quality form a much more enthusiastic angle.


What has changed? And what is the future of Quality?

 

What has changed: today we much more carefully do the best buy. We have moved from few suppliers with long lead time to many suppliers with short lead time.


In the last decades, the concept of quality in most organizations has become synonymous with "conformance or non-conformance to requirements" - say Black or White. It could be "conform to tolerances", no matter how bad or meaningless they have been specified. Or it could be "conform to external system demands" - typically at leat the SIO 9000-series and some industry specific product quality requirements. Again - no matter how little life they bring to collective quality development of the organization.


After dramatic cutbacks throughout 2009, most organizations have now found a basically healthy platform. The unnecessary has been cut off. Just by doing so, the quality key figures of products and services in many places have improved over the past 6 months.

 

The future of Quality: See the many opportunities and realise the strategic challenges using the concept of quality. The concept of quality has many strengths and opportunities. Quality is not just black and white. It has many colours which can be painted and applied in thousands of stimulating ways for addressing the crucial challenges of organizations. This is the future of Quality.

 

Let me give some small examples of management teams who over the past six months have revived the concept of quality in such focused way:

 

  • "The mistake causing link in the organization is now continuously and systemtically presented together with sometimes dramatic technical, commercial and financial consequences caused by apparently "small" mistakes.

  • The issue is no longer just to "comply with requirements". The important thing is, based on internal and external customers' real need and meaningful expectations to re-assess all relevant requirements on a continuous basis.

  • The cost of quality in most organizations is well over 10%, and can easily be reduced by 20%. This is a good and meaningful way to reduce the case base by 2-4% every year.


"Quality never dies". Quality again has shown its strength by creating a common language and joint framework for a determined development of organizations. Good luck to you and your organisation's quality future.

 

 

 

 

 

Niels Gørup Christiansen

Director, Senior Consultant

 

May 2010


 

Break down of Lean
– and the Toyota Production System

Toyota has for decades been synonymous with Manufacturing Excellence.
The Toyota Production System has been highly influential as a role model

for companiesworld wide, and as a key inspiration for the Lean concept.

In 2009 Toyota lost money and market share. Why?

 

 

 

2009 Toyota lost money for the first time since 1950. Obviously it was not only due to the finance crisis, the market share also declined and the independent quality ratings also dropped. What went wrong - and why?


These important questions now start to appear in the international business press. Latest in the acknowledged magazine "The Economist", which in December cleared the front page announcing "Toyota slips up".

Inside the magazine the situation and the causes are described. The Economist out line the following main reason for the decline: "Toyota's rivals have caught up. They now offer cars that are just as reliable, but far more exiting than the rather dull vehicles Toyota has concentrated on producing in ever larger number".


However it is recommended by the magazine to continue the already de-cided way out of the mess: "Toyota has a good chance of putting things right. It is no GM, which had far deeper struc-tural problems before it used bank-ruptcy to offload some of them. It has a boss, Akio Toyoda, who understands what has gone wrong - namely, that it has jeopardised its formerly stellar reputation for quality by pursuing vol-ume at all costs and by failing to put the needs of the customers first. It has started to sort out some of its problems. Quality and reliability are getting back up to the mark. Now it needs to make more exiting and innovative cars."
I believe that most of us can learn from the Toyota case. As for NFF we have come to the following reflections:

 

  • Do not believe anyone who says that "To be successful we must just do like the very successful company X. And the receipt is Y. And it is described in details in book Z".
    E.g: X = Toyota, Y = Lean, Z = "The Toyota way". The life is fortunately far more unpredictable and complex, and organisations far more dynamic.

 

  • The best organisations strive for "Excellence" - and not only for "Manufacturing Excellence". Ex-cellence can be defined as "achieve and sustain superior levels of performance that meet or exceed the expectations of their stakeholders".

 

  • Consequently, the best organisa-tions build and improve their own Business System - not just Pro-duction system. And they build their own model for Continuous Business Improvement across the whole business system - not just lean, six sigma or another in a half religious and ready-for-use tool package.


My New Year Resolution shall be on a frequent basis to remind myself of Peter Drucker: "The best way to predict the future is to create it yourself".


I hereby wish every one of you a happy new year - full of refreshed thinking, acting and harvesting.

 

 

 

 

 

Niels Gørup Christiansen

Director, Senior Consultant

 

January 2010


 

Is Innovation on the

Quality Manager's agenda?

The Quality Manager is seldom considered to be the key supporter

of innovation. But he can play an important role in bridging gaps

and streamlining the innovation process...

 

 

 

Stage Gate' processes are often perceived as bureaucratic...


Innovation is a lot more than product development...


In the 80's and 90's many companies implemented a so called ‘Stage Gate' process to manage new product development - and sometimes with the main purpose of complying with the ISO9001 standard.


It is often said that those kinds of "regulations" are limiting creativity, create unnecessary bureaucracy and reduce engagement and efficiency. However, most people would agree that at least two important milestones are crucial and must be handled in any project:

 

  1. Is management willing to launch the project, based on the potential business, the cost - and the risk - compared to other opportunities available?

  2. Is the product - or service - ready for release to the market, meeting all external and internal requirements?


The process beyond that must be carefully designed to meet the special needs of your organization and industry - "Off the Shelf" solutions won't work.
And it must recognize that the nature of ambitious innovation means uncertainty and iterative steps - the most important decisions are taken at the early stage where you have the biggest lack of knowledge. Finally it must extend its scope beyond "classic" product development. Successful innovation looks at the total value chain to add value. This is often not addressed in today's ‘Stage Gate' models.


So maybe it's time to review and optimize your innovation process?
If it is done right, the results will derive in terms of more profitable business, less quality cost and more engaged people who work together following a process that is simple, transparent - and makes sense.


The Quality Manager can play an important role by facilitating the improvement process and by raising questions like:

 

Does the current process reflect the way our organisation wants to innovate future solutions?

Are some of the detailed requirements really ISO90001 requirements or are they internal "fads" from the past when the organisation had a different level of maturity?

Does the process provide the necessary guidelines and tools to help people across functions work together and take the best possible decisions in the situation?


No company can grow or even survive without innovation. The vision, the creativity, the competence - and the courage to take a risk - are the prerequisite. An efficient and well deployed innovation process is the enabler.


Don't wait until a formal deviation pops up in the audit report - and sets the wrong stage for a wonderful opportunity for improvement.

 

 

 

 

 

Niels Gørup Christiansen

Director, Senior Consultant

 

October 2009


 

New QMS at LEGO in record time

Had someone claiemd a year ago that the LEGO Group could have a new
global quality mangement system in place in just nine weeks, most would
have doubted them. But had they claimed it would be fun, no one would
have believed them. The reality is that both are true.

 

 

 

 

The following is based on an interview with Senior Director of Global Quality, Cornelis Versluis, from the LEGO Group. The past year the LEGO Group has completed a very challenging quality project. New Future Formula has assisted through the project.


The Challenge

Last year the LEGO group was faced with a multitude of challenges. We had just taken back the ownership and management of three manufacturing plants - with a wide array of suppliers.

 

This left us with several different quality management systems (QMS). At the same time the US legislation on toy safety was about to place major demands on the QMS.

 

Furthermore we needed to get certified in three sites and re-certified in accordance with ISO 9000:2008 at the other sites.

 

We turned to New Future Formula (NFF) for assistance on how to approach the task.

 


New QMS in just 9 weeks
With little time to spare it was important to find a partner who could induce both knowledge and speed into the development of the new global QMS.

 

Just nine weeks after kick-off the first site was certified.

 


Playful learning
Quality management is often perceived as boring and perhaps even worse, irrelevant. We needed a way of breaking the ice and let pople know that quality can be not just fun but also very relevant. Together with NFF we came up with the concept of Playful Learning to address this issue. It is composed to two components:

 

  1. Focused Message
  2. Educational Games

 

Focusing the message is hard for quality professionals in general. We are accustomed to being exact, specific and thorough. The trick to making people listen is to find the core of your message and communicate only this. We came up with one slide showing the QMS as composed of only five components.

 

When using educational games it is normal to use play as a decoration or add-on to the subject itself. In Playful Learning we separate the two and let people just play. Afterwards the experience from the game can be linked to real life through reflection.

 

Since the reflection is a critical part of getting the message through it is important that the games or exercises have been designed to allow this.

 


QMOD
The annual conference for Quality Management and Organisational Development was held in Verona last week , from August 27th to 29th. Quality is at the core of the culture of LEGO. We felt that the message on Quality by Heart and Playful Learning was so important that we would like to share it with the leading authorities.

 

NFF collaborated with us on the paper for the conference.The result speaks for itself. I was invited as the main speaker on the conference.

 

With the assistance of NFF, we gave the participants something to remember.

I believe NFF made ad difference for us in terms of both speed and quality with the added bonus of a lot of fun and energy.

 

 

 

 

 

Cornelis Versluis

Senior Director of Global Quality,
LEGO Group

 

August 2009

 

New Future Formula

Allégade 2
DK–8700 Horsens

 

T: +45 86 14 88 89

E: sales@nff.dk