Applying best practice from Aerospace in to the Oil and Gas supply chain

Andrew Hopcraft

Who am I to talk to you about this?

2

P

• Founded 1922

• £5 million turnover, 56 employees

• Specialise in the engineering design, manufacture and application of the highest quality hydraulic and pneumatic cylinder technology

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What we do

• Engineering design

• Manufacture

• Test and paint

• Servicing and repairs

• Hydraulic Cylinders

• Pneumatic Cylinders

• Systems

• Valves

4

Where our products go

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Quality Cylinders

Quality Test rigs and Systems

Quality Servicing and Repairs

We are technical experts

Core knowledge and experience

Continuously improving the application of hydraulic technology to Oil and Gas is at the heart of our business

End of commercial break

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From tree to … tree

• The industries are similar

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All the key UK aerospace primes agreed on best practice

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The result?

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SC21 is a change programme designed to accelerate the competitiveness of the aerospace & defence industry by raising the performance of its supply chains.

International competition, together with the challenges posed by the defence industrial strategy, necessitates rapid improvement in the effectiveness of our supply chains. At the same time, industry must ensure that it delivers competitive solutions for customers whilst maintaining profitable business growth.

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It’s a change programme toimprove a UK industry

Applied toOil and Gas

SC21 is a change programme designed to accelerate the competitiveness of the oil and gas industry by raising the performance of its supply chains.

International competition, together with the challenges posed by the lower for longer oil price, necessitates rapid improvement in the effectiveness of our supply chains. At the same time, industry must ensure that it delivers competitive solutions for customers whilst maintaining profitable business growth.

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It could be a change programme toimprove another UK industry

Why would you use it?

• Founded in 2006, so over 10 years of experience incorporated

• Uses best of ISO9001:2015 and EFQM

• Over 700 signatories and 150 award winners

• Best practice can be benchmarked and shared

• Vast majority think it is one of the best things they ever did with their business

16Industry generic best practice

Testimonials - Primes

Through the SC21 programme, we are making progress towards achieving a more competitive UK supply chain, but much still needs to be done if companies are to survive. More companies need to sign up and roll it out to the global supply chain

Michael Ryan CBE

Vice President and General Manager – Bombardier, Belfast

One of the key determinants of the Babcock Marines efficiency and effectiveness is the way in which it engages with its extensive and diverse supply network. I am looking to the SC21 programme not only to provide a focus for continued improvement in our key suppliers’ performance but also to highlight how we might be a better customer

Archie Bethel

Managing Director – Babcock Marine

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The primes need their supply chain to continuously improveso that they can win more business with their customers

Testimonials - Suppliers

“SC21 demonstrates to our customers that we can deliver to an exceptional standard on a regular basis. G&O have reduced average lead time from 45 days to 25 days.”

Steve Boyd

Managing Director,

G&O Springs.

“Without question, SC21 has enabled us to be more efficient, productive and it can be a fantastic marketing tool for attracting new customers. We have seen an increase of over 60% in new enquires as potential and existing customers now realise the real benefits of working with an actively engaged, award winning SC21 signatory.”

Steve Ticker

Managing Director,

High-Tech Engineering Ltd

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The suppliers need to continuously improveso that they can win more business with their customers

How do you do it?

1. Set up performance metrics

2. Complete diagnostics

3. Set up and work a CSIP

4. Get recognition

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1. Metrics

• Delivery

• Quality

• (Net Promoter Score)

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2a. Diagnostics

• Manufacturing excellence

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Manufacturing ExcellenceManagement commitment results

Management Commitment score of 243

0

10

20

30

40

50

60

70

Sound

Integrated

Implemented

Structured

Measurement

Learning andCreativity

Improvement andInnovation

Scope and relevance

Integrity

Segmentation

Trends

Targets

Comparisons

Cause & effectrelationships.

Manufacturing Excellence Management Committment Results

ManEx (Management Commitment)

Example

• The value is in the discussions around the questions:

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Question Look for Comments/Notes (For the Assessor to input) E D C B A

AP

PR

OA

CH

1What does 'Lean' mean to

your Company?

Recognition of best practice approaches tailored to the

Company's size, products and processes.

Not currently refered to as 'Lean' in the organisation but

the concept is seen in the business improvement drive

which focuses on operational improvement through

removal of waste, reduction of inventory and reduced

cycle times.

X

2How does 'Lean' link to your

company business plan?

Endorsement of 'Lean' in vision, mission or core values

of the company

Recognised as part of the improvement culture but not

clearly endorsed in mission or values.X

3 Why are you implementing 'Lean'?

To improve operational performance and customer

satisfaction. To create a standard for all employees to

follow.

Clearly recognised as a major driver to improve

operational efficiency and Customer perception.X

4What is your approach/methodology

to 'Lean'?

Lean implementation plan with names and dates. 5

steps to lean. Tasks or objectives in PDR or Appraisal.

The Operation Manager and direct reports are tasked to

reduce scrap, improve cycle time and improve

productivity. The Purchasing Manager is working with

the supply chain to lower lead times. But no formal plan

exists.

X

5How are the senior management

team involved?

MD or Operations Director, steering group must involve

other functions (QA, Procurement, ???

As above plus drive from MD. A Business Improvement

Leader has been appointed (3 months ago) to co-

ordinate improvement projects.

X

6How do you embed 'Lean' in the

company culture?

Need to demonstrate that lean is part of the culture - 5S

is in place and owned by all team members, 7 Wastes

being addressed.

Discussions with the work force indicate that Lean

Operations will be accepted and adopted, there is a will

to improve. 20% of workforce have received 5S

training, sort, simplify and sweep activities already

taking place.

X

Manufacturing Excellence Lean Diagnostic Results

Manufacturing Excellence Score =243 + 201 = 444

0

1

2

3

4

Visual ControlDelivery Schedule Achievement

Visual ControlNon-conformance

Visual ControlImprovement Activities

Visual ControlSkill Matrices

5S Workplace OrganisationEnvironment

5S Workplace OrganisationAddress and Place

Set-Up Reduction

Standardised Job

7 Quality Tools

Statistical Process Control

Overall Equipment Effectiveness (OEE)

Productivity Improvement

7 WastesProcessing

7 WastesMovement

7 WastesTransportation

7 WastesDefects

7 WastesWaiting Time

7 WastesInventory

7 WastesOverproduction

Kanban

Manufacturing Excellence Lean Diagnostic Results and Targets

Criteria

2b. Diagnostics

• Determining excellence

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Not Started (no framework)

Immature (framework established)

Progressing

Consolidating

Best in Class

World Class

0

100

200

300

400

500

600

700

800

Sco

re

1 to 5 Years

0

10

20

30

40

50

60

70

80

90

100

Leadership Policy & Strategy People Partnerships &Resources

Processes Customer People Society Key Performance

Enablers Results

% o

f M

axim

um

Sco

re

Determining Excellenceresults and targets

26

Business Excellence results

0

10

20

30

40

50

60

70

80

90

100Leadership

Strategy

People

Partnerships & Resources

Processes, Products &Services

Customer Results

People Results

Society Results

Business Results

Determining Excellence Results Targets

Assessment Score

2c. Diagnostics

• Relationship excellence

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3. CSIP (Continuous Sustainable Improvement Plan)

• A way to agree, track and demonstrate improvements

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CSIP (Continuous Sustainable Improvement Plan)

Updated Opportunities and actions

Origin Ref No. Reported Opportunity Action Deliverable May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17

Bus Ex

Diagnostic

1. Leadership

CIP-BUS-001

Although there are KPI's supporting the business objectives

these are not always evident to the whole workforce.

Bodycote should consider developing a visual area where all

KPI's and Strategy Objectives are posted and all charts are

standardised.

Clarify and standardise all KPI's to support the

overall business objectives as defined in the

strategic plan and set up review process to

review the KPI's Weekly and Monthly as

appropriate. Set up a "War Room" to display the

KPI's.

Clear deployment of all

aspects of Strategy

throughout the site

Bus Ex

Diagnostic

4. Partnerships

& Resources

CIP-BUS-002

Develop strategic operational partnerships and relationships

with suppliers, customers and other partners further. The

approaches should be based on organisational needs,

complementary strengths and capabilities, develop RMR

approach with key customers and suppliers to develop

capabilities further. This should supplement and enhance the

current methods used. Target GKN, Middlesex, Redmayne etc.

To identify opportunities to develop relationships

further, and to identify and remove potential

barriers that may exist, contact key customers to

determine whether they will conduct RMR. Target

GKN, Middlesex, Redmayne etc.

Understand and develop

relationships with key

customers

Bus Ex

Diagnostic

5. Processes,

Products &

Services

CIP-BUS-003

Consider reviewing the current Turtle Diagrams, as they point

to performance indicators that are not measured. This could be

due to the fact that they are group issued documents.

Some KPI's identified are not being measured locally, these

include:

> On time training reviews

> Identification & traceability

> Validation Results / FAIRs

Only measure performance indicators within Product

Realisation and also consider the benefit of the PEAR, as the

PEAR is an external auditor tool not an in company tool. I.e.,

the only requirement is that you identify:

> The KPI

> Method of Calculation

> Target

> Responsible

> Where the data comes from

> Where it is reviewed

> Determine actions when targets are not being met.

The PEAR is an auditor tool for measuring process performance

and conformance during audit.

Review the Turtle diagrams ans determine

whether they are required.

Develop KPI Matrix for all product realisation

processes (these will be clause 8 in 9100:2016),

and review on a regular basis (Monthly)

identifying the following:

> The KPI - Process its is supporting

> Method of Calculation

> Target

> Responsible

> Where the data comes from

> Where it is reviewed

> Determine actions when targets are not being

met.

Develop internal audit process using the PEAR to

measure effectiveness for operational processes.

Must include Delivery and Quality

Measure process

performance

Bus Ex

Diagnostic

6. Customer

Results

CIP-BUS-004

Although customer data is measured and the performance is on

target the data and actions taken are not visible to all

employees. Therefore consider developing an "Obeya Room"

where all customer data is displayed and actions taken are

displayed.

Segment the customer data and set targets based

on the SC21 targets for delivery and quality,

support with robust monthly/weekly review

process. Also determine full metric set to support

performance improvement.

Manage customer and

other key data effectively

Bus Ex

Diagnostic

8. Society

Results

CIP-BUS-005

There is no real objective in place to address societal issues

therefore, consider developing approaches to address image

and reputation, and societal impact.

Develop a process to gauge the perception of

society with regards to Bodycotes societal

performance, these should include; Societal

impact, Workplace impact and Awards and media

coverage.

Alignment of societal

KPI's to support strategic

and individual goals.

Bus Ex

Diagnostic

9. Business

Results

CIP-BUS-006

As mentioned above data is measured and around 60% of data

is achieving target. However the data is not displayed and

actions taken are not visible to all employees. Therefore

consider developing an "Obeya Room" where all customer data

is displayed and actions taken are displayed. Also consider

trending the data to show improvements over time.

Develop the "War Room" to aid with the display

and review of key data. Review current Key

Indicators and align to strategy. Define the

process framework for Strategy Deployment to

include:

> Process Owners

> Prioritised Action Plans

> KPI Alignment to Processes

> Targets for all KPI's

> Benchmark with ADS and Best in Class

> Meeting & Reporting Structure

Also consider further developing the

benchmarking process as an input into strategy

so that targets set can be set for Key Results and

hence be shown to be comparable/better than

other organisations.

Alignment of Key

indicators to support

strategic and individual

goals.

ManEx

Diagnostic -

7 Wastes -

CIP-MAN-001

Consider developing VSM further to map out the processes and

perhaps use eVSM as the evaluation tool to model scenarios to

develop future state improvements.

Also consider using Flow Process Analysis (FPA) to identify

movement around the process, i.e., double handling and

excessive movement of materials. This could then become a

Kaizen Event.

Select key value streams and conduct flow

process analysis to identify VA/NVA activity.

Develop current state VSM for all key processes.

eVSM to be considered as an evaluation tool to

model scenarios to develop future state

improvements.

Identify and address NVA

and reduce lead times

ManEx

Diagnostic -

Non-

conformance

CIP-MAN-002

Consider displaying 8D corrective actions in the areas to show

what actions are in place to communicate the status of each

action and the impact of such actions, and progress of actions,

i.e., was the action successful and was the cause eliminated.

Display the 8D Corrective actions in the "War

Room" Review status at each monthly meeting

Visual display of status of

actions.

ManEX

Diagnostic -

Improvement

Activity

CIP-MAN-003

Although the programme is delivering benefits, it is not clear

what actual benefits are achieved, therefore consider creating

an improvement board where all the Cross Functional Waste

Identification & Continuous Improvement programme activities

are displayed, include the current activity status and the

programme benefits.

Display and review benefits of Cross Functional

Waste Identification & Continuous Improvement

programme versus plans. Make it part of the

monthly onsite review process.

Develop the structured

approach further so that

the benefits from the

improvement activity is

evident

ManEx

Diagnostic - 5S

Work Place

Organisation

CIP-MAN-004

Continue to drive 5S programmes within the business and

select a pilot area to start:

• Select a 5S Champion (done)

• Select an area for the Pilot

• Conduct a red Tag Exercise

• Remove all clutter

• Conduct regular audits of the area

• When standard is maintained move on to next area

Also consider a visit to the Coventry site to determine how they

have achieved success.

Consolide the 5S approaches within the business,

i.e., standardising the approaches in all areas.

Considering the following:

> Confirming the 5S Champion(s) in each area

> Confirm and consolidate the standard at each

area with photographs of the desired standard.

> Develop the escalation process so that actions

that are overdue are addressed

> Develop further layered auditing process

> Confirm the Red Tag process

Standardised workplace

controls and

sustainability

ManEx

Diagnostic -

Visual Control

Skill Matrices

CIP-MAN-005

Consider displaying the skills matrices in each of the areas and

perhaps look at updating on either a quarterly or 6 monthly

basis. Also consider reviewing competency status to include;

Training not applicable, in training, can work with supervision,

competent, can train others.

Display the skills matrices in the "War Room"

and develop process to update quarterly.

Clear understanding and

visual display of skill sets

within the area

ReleX

Diagnostic - CIP-REL-001

Although objectives are identified for customer relationships

(within Sales Force CRM) it is not clear how objectives are

identified with other partners i.e. universities and suppliers

(test houses) etc. Therefore consider developing an overall

relationship management plan that covers all current projects,

review status at the Chard Monthly Management Meeting held

in the "War Room".

Develop an overall relationship management plan

that covers all current projects, review status at

the Chard Monthly Management Meeting held in

the "War Room".

Clear understanding of

current collaboration

projects

ReleX

DiagnosticCIP-REL-002

Consider formally documenting partnering process so that

current projects are captured and entered onto a relationship

charter in a similar manner to a Kaizen Project charter so that

the potential benefits are clear from the project initiation

stage.

Develop a collaboration project charter for all

collaboration projects related to the Chard Site

and review status at the Chard Monthly

Management Meeting held in the "War Room".

Clear understanding of

current collaboration

projects

JOINT CONTINUOUS IMPROVEMENT TIMELINE

Ongoing

TBA

Ongoing

Ongoing

Ongoing

Ongoing

Ongoing

Ongoing

4. Award

It really is achievable by anyone!

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