麦肯锡：运营绩效（英文版）ppt课件

1、Operational Excellence: Indian vs. International PracticesCONFIDENTIALThis report is solely for the use of client personnel. No part of it may be circulated, quoted, or reproduced for distribution outside the client organization without prior written approval from McKinsey & Company. This material w

2、as used by McKinsey & Company during an oral presentation; it is not a complete record of the discussion.Western Region Annual MeetingApril 11, 2002KEY MESSAGESSuperior operations drives value creationIndian manufacturing companies face significant operations challengesNew tools and mindset required

3、 to build operational excellenceRewards from pursuing operational excellence can be large the journey must begin nowINTERNATIONAL RESEARCH SUGGESTS THAT COMPANIES WITH SUPERIOR OPERATIONS DELIVER SUPERIOR RETURNS*Excellent are US companies (from the Discovery screened target list) which increased th

4、eir moving average ROIC every year during a 5-year period (1995-99), and had a ROIC greater than their industrial average *Companies from the S&P 500 industrials which passed the Excellence filter, full spread data available for only 320 companies*Basis points reflects absolute change in spread (i.e

5、., a spread increase from 5.0% to 7.0% equals 200 basis points)Excellent Superior operational performance (12 companies)*S&P 500 IndustrialsROIC-WACC, basis points*Excellent - Other* companies(32 companies)ApproachShort-listed 44 “excellent companies for analysisROIC WACC (from 95-99)ROIC Industrial

6、 averageShort-listed 12 “excellent companies based on qualitative review of operationsAverage Total returns to shareholdersWilshire Index (market)Excellent - Top 12*Excellent“ Next 32S&P 500 Industrials*Operational excellent companies defined as 12 companies that passed operations excellence filter

7、from the Industry Week Global 1000Source:McKinsey Operations Discovery Project3X TRS performance relative to marketWHICH TRANSLATE INTO SUPERIOR VALUATIONSOPERATIONAL EXCELLENCE DRIVES THESE RETURNSNew product introduction cycle time and cost 50% lower than competitionManufacturing floor space requi

8、red 50% less for comparable productOrder to delivery time less by a factor of fiveP/E 20+ points higher than other major playersMake-to-order supply chainInventory level 60% lower Receivables turns 45% higherRevenue growth 40% faster and ROIC 1.5 times industry average3-year cost savings goal of USD

9、 1 billion achieved through Alcoa Production SystemAdditional USD 1 billion savings targeted for 2003From 1996 to 2000, CAGR of revenues and net income 15% and 30%, respectively, in spite of plunge in aluminum pricesOperational InitiativesOverall financial impactALCOA CASE STUDY CORPORATE-WIDE LEAN

10、TRANSFORMATIONLean operating practices (APS)Transformation foundationPerformance-based measurement systemFacilities modernizationRenegotiated labor contractsVariable compensation (salary and hourly)Quality assurance, SPCReduced set-up timesFlexible job designPay for performance/skillAlcoa Business S

11、ystem*Alcoas quarterly net income adjusted for special itemsSource:Platts Metal Week; Wall Street Journal; McKinsey Metals PracticeAlcoa adjusted net incomeAluminum spot priceAdjusted net income*$ MillionsSpot price of aluminum$/lb.Alcoa performance vs. price of aluminum-1001002003000.400.600.801.00

12、1.200198283848586878889909192930InitiatedAlcoa production systemALCOA CASE STUDY THE RESULTS949596979899Broke out of price cycleEVA- 1995-99(ROIC-WACC)Growth- 2000-05 (5-year projected)AlcoaCompetitorIndustryAlcoaCompetitorIndustryKEY MESSAGESSuperior operations drives value creationIndian manufactu

13、ring companies face significant operations challengesNew tools and mindset required to build operational excellenceRewards from pursuing operational excellence can be large the journey must begin nowINDIAN MANUFACTURING COMPANIES FACE A PROFITABILITY CRISIS199720% decreaseProfit margins*2000PAT, per

14、centage of salesPercentage of companies making lossesPer cent199750% increase200019977% decreaseEVA (ROIC minus cost of capital)2000Per cent*Based on a set of 132 companies in 10 sectors (Industrial Machinery, Ferrous, Non Ferrous, Consumer Durables, Chemicals, Petrochemicals, Pulp & Paper, Power, T

15、yres and Automotive)Source:Prowess; McKinsey team analysisPOOR FINANCIAL PERFORMANCE IS DRIVEN BY POOR LABOUR AND CAPITAL PRODUCTIVITYAutomotiveSteelPower (generation)Labour ProductivityCapital productivityIndex, US = 100ApparelIndex, US = 100Source:McKinsey Global Institute study of the Indian econ

16、omyEXAMPLESNANAManufacturingSupply chainChannelmanagementKey account management/ Sales forceeffectivenessPricingPurchasing/supply managementGAPS EXIST IN ALL AREAS OF OPERATIONAL PERFORMANCEToo many suppliers (250* vs. 100 for best-practice)Unaware of pocket margins80% time on non-value added activi

17、tiesPoor channel capability and returnsNo systematic tracking of top customers and their satisfaction Too much inventory (140 days vs. 35 for best-practice*) *Automotive industry analysisKEY MESSAGESSuperior operations drives value creationIndian manufacturing companies face significant operations c

18、hallengesNew tools and mindset required to build operational excellenceRewards from pursuing operational excellence can be large the journey must begin nowNEW MINDSET REQUIRED TO DRIVE OPERATIONAL EXCELLENCETypical mindsetRequired mindsetLimited top management involvementDriven by CEO agendaIncremen

19、tal targetsStep-change improvementSubjective problem solvingFocus on facts and root causesAd-hoc implementationRelentless focus on change and consequence managementProgramme driven by “sparable executivesLed by the brightest and the bestSource: InterviewsSource: Interviews; SIAM; Harbor ReportEquiva

20、lent cars per equivalent employee; Index, US average in 1998 = 100SEVERAL SOURCES OF GAPS EXIST IN MANUFACTURINGPre-libera-szation plantsExcess workers, OFT*, DFM*, techno-logy, scalePost-libera-lisation plantsSupplierrelationsScale/ Utili-sationOrganisation of functions and tasks and trainingIndia

21、PotentialNon-viable Auto-mation US average632381775841610016Design for manufacturingIndia average = 241Viable Auto-mation1. ManufacturingAUTOMOTIVE EXAMPLE*According to DRI-segmentationSource: Interviews; McKinsey Automotive PracticeDESIGN FOR MANUFACTURE OF SELECT INDIAN SEGMENT A CARS*Productivity

22、 penaltyGlobal best-practiceCar 1Car 2Car 3Global best-practiceCar 1Car 2Car 3Number of body panelsNumber of spot weldsPress shop: 31% (represents 4% of total employment)Body shop : 25% (represents 19% of total employment)IndiaIndiaBOTTOM UP IMPROVEMENT PROGRAMS EVALUATE NUMEROUS IDEAS AND CAN YIELD

23、 LARGE BENEFITSIn a typical program, more than 2,000 ideas are generated, rigorously evaluated and implementedIdeas are not capital-intensiveShould yield payback in not more than one yearShould be implementable in 3-6 months Rigorous evaluation of simple ideascould yield impressive results30-40% red

24、uction in compressible costs (10-20% reduction in total manufacturing costs)Significant reduction in downtimeLarge reduction in defect rateBetter reliability and shorter throughput time in deliveriesSUPPLY CHAIN SIGNIFICANT GAPS EXISTFromTo“Single solution for entire company one size fit all approac

25、h Define what needs to be offeredDifferent customer service levelsProduct variety and configurationMultiple chains within a company“Redesign to meet competitive benchmarksDesign to meet segment-specific customer breakpoints“Push-system is the only way Indian supply chains work Pull (wherever possibl

26、e) based on better forecasting and order management“IT system will solve all supply-chain issues Use IT selectively (not before, but after redesign) for:Information transparencyOrder management and forecasting 2. Supply chainCROSS-FUNCTIONAL COMMODITY SOURCING TEAMS HELP REDUCE PURCHASING COSTS3. Pu

27、rchase cost reductionImperative to reduce purchasing costs to gain overall cost advantageTraditional functional organisationsLimited engineering and operations inputs into purchase decisionsMost cost reduction is negotiation driven, rather than total-cost drivenContextSome elements of strategyPerfor

28、mance specifications- “fit for useIn-house involvement (make vs. buy)Supplier discoverySole source vs. multi-sourceContract type, pricing and durationJoint cost elimination (transportation, inventory etc.) Composition of sourcing teamsCross functional with participation and support from all areas (p

29、urchasing, plant, engineering, marketing etc.) and by commodityTHE TOTAL COST OWNERSHIP (TCO) FRAMEWORK HELPS IDENTIFY COST LEVERS BEYOND PURCHASE PRICEProduction capacity Transportation Inventory carrying costs Warehousing Purchasingadministration Factory yield R&D Damaged productSpecifications War

30、ranty expeditingInternal and joint leversChange specificationsLoad schedules into supplier scheduling system via EDIInvolve suppliers in design/reviewsAnalyze suppliers TCO to identify cost-reduction opportunitiesEvaluate yield improvement potential from alternative specificationsConsolidate part nu

31、mbers to build scalePurchase priceTraditional Purchasing LeversIdentify new suppliers (local and global)Include non-performance penalties (e.g., missed deliveries, non-conforming parts) in contractsIllustrative action areasKEY MESSAGESSuperior operations drives value creationIndian manufacturing com

32、panies face significant operations challengesNew tools and mindset required to build operational excellenceRewards from pursuing operational excellence can be large the journey must begin nowEACH AREA CAN HAVE SIGNIFICANT IMPACT ON PROFITS AND VALUE CREATIONRevenuesPer tax ROICEBITCostsInvested capi

33、talWorking capitalFixed assets:LeversRange of impact possible based on McKinsey experiencePricing management2-6% increase in return on salesKey account management/sales force effectiveness 5-30% revenue increaseChannel management10-20 percentage points increase in market share123Purchasing cost redu

34、ction10-15% reduction in purchase costsManufacturing effectiveness and overheads cost reduction 20% reduction in manufacturing costs20-50% reduction in downtime and defects 80-90% improvement in supply reliability 20% reduction in overhead costs45Supply chain management30-50% reduction in inventoryStock outs nearly eliminated with 1-3% increase in sales6SET AGGRESSIVE ASPIR