WORLD-CLASS MANUFACTURING(WCM)

Prepared by Özcan ÇAVUŞOĞLU

AGENDA
1. Meaning & Scope 10. WCM Checklist
2. Criteria 11. Types of Operation Which
3. How a WCM is Achieved ? Creates a WCM Units
4. Characteristics of World-Class 12. Just In Time (JIT)
Organizations Manufacturing
5. How to Make an Organization 13. JIT Improvements to
World-Class? Manufacturing
6. World-Class Manufacturing: What 14. CONWIP Control
it takes? 15. Factors Which Can Make a WCM
7. Implementing WCM 16. Some Other Factors
8. Contrasting Mass Production & 17. Conclusion: Control of Operation
WCM CASE: Fiat
9. The Grades for WCM
WORLD CLASS MANUFACTURING
1. MEANING & SCOPE

 It refers to the practice followed in a

manufacturing organizations, in order to
consistently deliver exceptional performance,
frequently in excess of expectations.

 World Class Manufacturers are those that

demonstrate industry best practice.
2. CRITERIA

There are two overriding

criteria when using this
checklist to judge whether
your company can be
regarded as World Class

1) How does the company

compare with its best
competition?

2) Has the company

increased its score since
last year?
3. HOW A WCM IS ACHIEVED ?

 Develop the awareness of the need to make the

transition to World Class Manufacturing

 Develop the ability to search for relevant tools and to

apply them effectively

 Monitor progress so that an improvement program can

be systematically utilized.
4. CHARACTERISTICS OF WORLD-CLASS ORGANIZATIONS

1. Customer service.
2. Quality control and assurance.
3. Research and development/ new product development
4. Acquiring new technologies
5. Innovation
6. Team-based approach (adopting and using effectively)
7. Best practices (study and use of)
8. Manpower planning
9. Environmentally sound practices
10. Business partnerships and alliances
11. Reengineering of processes
12. Mergers and acquisitions
13. Outsourcing and contracting
14. Reliance on consulting services
15. Political lobbying
5. HOW TO MAKE AN ORGANIZATION WORLD-CLASS?

1. Worker productivity (improvement)

2. Employee training and development
3. Open communication between management and employees
4. Employee benefits and perquisites
5. Codes of workplace conduct
6. Conflict resolution
7. Employee satisfaction
8. Flextime arrangements
9. Management-employee-union relations
10. Child care
6. World-Class Manufacturing: What it takes?

1. Competitive analysis strategies (cost efficiencies in operations,

speed to market, research and development supremacy, zero
defects, real-time order management etc.)
2. Production and supply chain (collaborative planning, forecasting
and replenishment, collaborative manufacturing and product design,
supplier-managed inventory etc.)
3. Customization strategies (building to order, customized mass
production, global sourcing and manufacturing, etc.)
4. Electronic commerce strategies (supply management, Internet
ordering, status and availability tracking by Internet)
5. Compensation systems (product profitability, inventory levels,
manufactured/delivered costs per unit, worker productivity, employee
retention rates, etc.)
7. IMPLEMENTING WCM :
TOOLS TO MEASURE AND RECORD PROGRESS
Success Factors WCM Tools Measurement Indicators
1. Cost control Just-in-time logistics, · Inventory holdings
quality at source and · Absence of defects and rework
supply chain management · Cost of incoming materials
tools
2. Quality Statistical Process Control, · Customer return rates
fool-proofing to prevent · Internal reject, rework & scrap
errors, Pareto analysis of rates
types and causes of · Supplier quality Performance
production defects
3. External Just-in-time logistics, · Time from customer order to
flexibility quality at source and delivery
supply chain management · Delivery frequency & reliability
tools to customers
· Delivery frequency and
7. IMPLEMENTING WCM :
TOOLS TO MEASURE AND RECORD PROGRESS
Success Factors WCM Tools Measurement Indicators
4. Internal Cellular layouts, single unit · Machine changeover times
flexibility flow, production pulling, · Batch and lot sizes
Kanban signaling system, · Inventory levels
single-minute exchange of · Throughput time through factory
dies for rapid machine changeover, · Machine utilization levels
supply chain
management
5. Capacity • Multi-tasking, · Numeracy and literacy levels
to change • Multi skilling, · Labor/management turnover levels
(Human • Quality circles, · Absenteeism rates
resource • Kaizen groups, · Training expenditure and types of
development) • Training, training
• Incentive schemes. · Employee development
· Suggestion schemes/continuous
improvement

6. Innovation Concurrent engineering, · R&D expenditure

capacity new product development · Proportion of sales from
techniques new products
8. Contrasting Mass Production & WCM

Critical Control Mass Production World Class

Points Manufacturing
Logistics · Large batch · Single unit flow production
production · Just-in-time inventories
· Just-in-case · Flexible machinery and
inventories rapid machine changeover
Specialized
machinery
Quality · End of line inspection · Quality-at-source at each
· Reworking of defects part of production process

Work organisation · Division of labor · Multi-tasking and multi

between skilled and skilling
unskilled workers · Continuous improvement in
· Specialized R&D and green areas as well as
product development specialized staff
9. THE GRADES FOR WCM

 "W“ - World class

 "X“ - Very good but not quite
world class – (country class)
 "Y“ - Better than many – (city
class)
 "Z“ - Poor – (village class)
10. WCM CHECKLIST

Q1) Do you have a 99% or better level of customer

service (or product availability)?

Grade Criteria

W 99% or better customer service level (on time in full

or availability).
X 95% up to 99% customer service.

Y 90% up to 95% customer service.

Z Below 90% customer service.

10. WCM Checklist

Q2) Does everyone in the company know who the key

customers are and what differentiates the company’s products
and services from the competition?

Grade Criteria
W Everyone knows key customers through a new
employee induction scheme and regular updates,
meetings, notices etc.
X Most people know key customers.
Y Managers know key customers.
Z Customers known mainly on a "need to know" basis.
10. WCM Checklist
Q3) Do all staff who are in contact with customers have the
authority and empowerment to resolve customer problems?
Grade Criteria
W A person answers telephone calls within 4 rings and takes
responsibility to deal with the call either immediately or by
getting back to the caller within 24 hours. Similar
standards are used for e-mail and written complaints.
X A person answers telephone calls and takes responsibility
to deal with the call either immediately or by getting back
to the caller within 5 days. Similar standards are used for
e-mail and written complaints.
Y Customer problems are dealt with as soon as possible.
Z Many customer problems are outstanding or not
satisfactorily resolved.
10. WCM Checklist

Q4) Do Kanban control your supply chain?

Grade Criteria question

W At least 75% of your shipments to customers controlled

by Kanban or vendor managed inventory (i.e. shipped /
delivered based on customer usage) or you are able
and willing to make Kanban shipments if requested.
X Some but less than 75% of shipments under Kanban
control or you are probably able to make Kanban
shipments if requested.
Y You may be able to make Kanban shipments if
requested.
Z You would not make shipments under Kanban control.
11. Types of Operation Which Creates a WCM Units
The Kanban Control Concept

Kanban control Kanban control. The Kanban

means that the Movement of parts messages can take
authority to make shown in blue, the form of an e-mail,
or move an item is circulation of fax, card, empty
based on that Kanban in red. container or require
item's usage Machines are you to visit their plant
unless there has shown as circles to replenish their
been a properly and buffers as stock of your
approved and triangles. The last products (usually
strictly limited buffer is the referred to as vendor
deviation finished goods (FG) managed inventory)
12. Just In Time (JIT) Manufacturing
Just in Time manufacturing is a systems approach to developing
and operating a manufacturing system. We will take an example
of banking process:

In short, JIT means making what the market wants, when it wants it. JIT has
been found to be so effective that it increases productivity, work
performance and product quality, while saving
costs
13. JIT Improvements to Manufacturing

In Summary, JIT
Systems requires
Changes in:
Improvement

 System Design
 Organization
Attitudes and
Structures
 External
Relationships
 New Management
Time Priorities
14. CONWIP Control

CONWIP stands for Once the parts are released, they

Constant Work-In-Process, are processed as quickly as
and designates a control possible until they wind up in the
strategy that limits the total last buffer as finished goods.
number of parts allowed One way to view this is that the
into the system at the system is enveloped in a single
same time Kanban cell: Once the consumer
removes a part from the finished
CONWIP control. Movement goods inventory, the first
of parts shown in blue, machine in the chain is
circulation of release authorized to load another part.
authorizations in green.
15. Factors Which Can Make a WCM

Flexibility

Leads to
Ownership Discipline

Organization
(Team Work)
Cell
Organizatio Equality
n

De-layering Team
Managemen
t Autonomy
16. Some Other Factors

External Relationships

Supplier Customer
Partnership
Development Development
17. CONCLUSION: CONTROL OF OPERATIONS

Before commencing implementation of control systems

there are always five beneficial things to do which will make
any method of control easier to implement and make the
system work better operationally
(Generally world class manufacturing businesses have
done these things)
 Reduce time wasted in setting and reduce set up
times
 Form Natural Groups (cells)

 Reduce throughput times

 Postpone product mutation

 Remove the trivial many, to focus on the vital few

CASE: FİAT
1. PRODUCTION SITES
 We have started a program designed to achieve the standards of excellence
associated with World Class Manufacturing (WCM) policies: a company
organization methodology that leads to excellence of the entire production
process through the continuous improvement of all performances and the
contribution of all company employees, at every level.

 Our manufacturing facilities use the Fiat Advanced Production System

(FAPS),an integrated model that optimizes production and logistic processes.

 The program was launched two years ago but the plants of Tychy in Poland,
Melfi in Italy and Bursa in Turkey have already attained a competitive rating
according to World Class Manufacturing criteria
2. WORLD CLASS MANUFACTURING

World Class Manufacturing principles apply to all aspects of plant

organization, from the quality system to maintenance, from cost control to
logistics, in a perspective of continuous improvement.

World Class Manufacturing (WCM) in fact was born of the collaboration

between Fiat and the best European and Japanese experts, with the aim to
enhance the production standard to a recognized world standard.

The system is based on a systematic reduction of all types of loss and waste
through the contribution of everyone and the rigorous use of methods and
standards.
2. WORLD CLASS MANUFACTURING
 The system is based on a systematic reduction of all types of loss and waste through
the contribution of everyone and the rigorous use of methods and standards.

 Care for the Environment is one of the pillars of the system, encompassing all the
people, regulations and rules of conduct making up our Environmental Management
System (EMS).

 This is the management tool that will enable us to determine, reduce and control the
environmental impact of our manufacturing facilities, knowing that every activity has
repercussions on the environment.

 The system specifies a number of actions geared to the reduction of the

environmental impact of manufacturing activities, both in order to ensure
compliance with the applicable regulations and in order to prevent the waste of
energy and natural resources
3. TOFAŞ
Tofaş has been the best of the world in manufacturing, now it will set a
model for Chrysler’s world beside Fiat’s. (18.11.2009)

Tofaş who has been producing Fiat branded passenger cars and
commercial vehicles for 41 years in Turkey with the cooperation of Fiat
S.P.A and Koç Holding and who has manufactured its 3 millionth vehicle in
2009 has received the “Silver Level” (World Class Manufacturing) award, it
has achieved in WCM, with a ceremony, organized in Turkey.

Being the first production center that has achieved “Silver” level in “World
Class Manufacturing” in Fiat’s world, Tofaş’s Bursa factory has been
chosen as the factory who has “the highest quality and who makes the
safest manufacturing” after the last audit, carried out by WCM teams last
week.
3. TOFAŞ
Tofaş has been the best of the world in manufacturing, now it will set a model
for Chrysler’s world beside Fiat’s. (18.11.2009)

Fiat Group’s CMO (Chief Manufacturing Officer) who has come to Turkey for
the ceremony on Tofaş’s being chosen as the best factory; Stefan Ketter
explained, “Making R&D and manufacturing of important models like Fiat
Fiorino, Linea and Doblo, Tofaş’s place in the Fiat’s world as is very strong
without any dispute.

Tofaş’s success globally is a true example of discipline, quality and success in

this period when Fiat and Chrysler factories are in common action in terms of
production in world’s class”.
World Class Manufacturing

Stefan Ketter

Lingotto - November 8 & 9, 2006

WCM Focus

All Employees

Waste and Losses

Standards and Methods

Lingotto - November 8 & 9, 2006 2

Structure/Objectives

Workplace Quality Maintenance Logistic

Organization

Total Industrial Total Quality Total Productive

Method Just in Time
Engineering Control Maintenance
& std.

Quality Technical Service

Focus Productivity
Improvement Efficiency Level

zero zero zero zero

Target
waste defects breakdowns inventory

Values People involvement, value creation, customer satisfaction

Lingotto - November 8 & 9, 2006 3

WCM Principles

1. World Class Safety is the foundation of World Class

Performance

2. WCM Leaders have a passion for standards

3. In a World Class Company the voice of the customer can be

heard in the plant

4. WCM does not accept losses of any kind (The goal is

always Zero: accidents, service & quality defects, inventory,
breakdowns)

5. A rigorous application of WCM methods guarantees the

elimination of losses

Lingotto - November 8 & 9, 2006 4

WCM Principles

6. In a World Class plant all abnormalities are immediately

visible (Dust & contamination free, tracking, control charts …)

7. WCM takes place in the workplace, not in the office

8. WCM is most effectively learnt by practicing the techniques

with the plant teams

9. The power of WCM comes from the involvement of people

10. World Class companies create the energy of a crisis in the

face of continued success

Lingotto - November 8 & 9, 2006 5

Main Actual Activities

2005A 2006E 2007E

WCM Basics / Safety

Training / Leadership / Organisation

Cost Deployment

Investments & Fix Plants

Labour efficiency / Capacity Utilization

Environment / Ergonomy

Maintenance Process

Quality Process Improvement

Logistic Process Time

Lingotto - November 8 & 9, 2006 6

Actual Best Results/WCM Audit

Workplace
Organization Quality Maintenance Logistic

Methodologies
1 Safety New approach
2 Cost Deployment 100 % plants
3 Focused Improvement 147 events
4 Work Place Organization 7 model areas
5 A.M.: Autonomous Maintenance 58 model areas
6 P.M.: Professional Maintenance 34 model areas
7 Quality Control 10 model areas
8 Production Logistic System 4 model areas
9 Early Equipment Management First exercises
10 People development/qualification New approach
11 Environment New approach

100%

Lingotto - November 8 & 9, 2006 7

Model Area: Tychy/Poland

People Involvement: Proposals/Employee/Year

4,5
Target = 4
4,0

3,5

3,0

2,5
Implementation
2,0 rate 50%
1,5

1,0

0,5

0,0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Lingotto - November 8 & 9, 2006 8

Model Area: Melfi

Quality: Electric Check Defects - Grande Punto

- 50%

Lingotto - November 8 & 9, 2006 9

Model Area: Melfi

Productivity: Hours per Vehicle - Grande Punto

-12%
in 8 months

Lingotto - November 8 & 9, 2006 10

Average Hours/Vehicle

Vs. Benchmark (Harbour Report)

- 20%*
Segment Ranking

A Leadership

B Leadership

C Top 5

D Top 10

LCV Leadership

2006E 2010E

* As result of new vehicle introduction

Lingotto - November 8 & 9, 2006 11

Labour Productivity Target (Italy/Poland)

100%
Technical efficiency
- 30% Losses
Losses Waste/Rework
Line Balancing Range

- 50%
Non Value Added
• Logistic layout
• Time Optimization

Operation
Operation

Actual 2010E

Lingotto - November 8 & 9, 2006 12

 Towards World Class Manufacturing
100

90

Competitive Consolidation /
80
Level
Autonomous
70 Improvement

60 Horizontal
expansion
50

40

30

Knowledge
Saving: > €500mn
20 creation
Model areas
10
2006E 2007E 2008E 2009E 2010E
0
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67

months form program launch

Lingotto - November 8 & 9, 2006 13

WCM - Extension towards Suppliers

Cost Quality Maintenance Logistic

€
Q M L

SUPPLIER
World Class Manufacturing integration/extension
throughout Supplier Process Engineers

Lingotto - November 8 & 9, 2006 14

WCM - A Corporative Approach

WCM

Implementation,
Auditing and
Best Practice Sharing

Lingotto - November 8 & 9, 2006 15