Report on:

Cranfield University, 7 July 1999

With about 70 industrial delegates and 40 academics, this seminar was an excellent example of collaboration. All the presentations except one were by industrialists; group discussions were led by academics. Details of the programme and Powerpoint slides are on the web.  Although the title refers to tools, I would say that the main emphasis was on methodology.

Muir Macdonald said that Smart Procurement is now fundamental to the MoD. This involves procurement teams with supplier representation, considering all aspects of the product life cycle: from raw materials to disposal.

This seems to be a significant step forward: providing opportunities for concurrent products development and for design for the environment. An acquisitions management system has been produced and will go live on the web next year. The Acquisition Handbook has been published and this is already on the web.

To give an idea of the purchasing "projects", they are categorised A,B,C,D according to the level of expenditure. D relate to the lowest level of expenditure at less than £20 million.

Ken Foxley of Nissan's European Technology Centre spoke of his experiences in the car industry. Benchmarking with Japan in the early 90s indicated that major changes were needed: 30% reduction in product development time, 40% reduction in development costs, 30% reduction in manufacturing costs, etc. Whilst the manufacturing costs could have been addressed by sourcing in low labour countries, this would not address the product development issues. They had no option but to look for major changes in the way the business was run. In collaboration with Cranfield University, COGENT was launched: a programme to change the culture in the supply chain and to address issues of quality, product development costs, product cost and delivery time. A key element was to introduce a supplier appraisal and improvement measuring scheme. This was not to "beat" the suppliers, but to effectively communicate Nissan's goals in working with them. The mechanism was a series of workshops to educate, to promote meaningful communication and team attitudes, and to set targets for action. Outcomes have been very good. Prior to 1996, capability improvements of 0.6% were recorded. Since then, the figure has averaged 10.3%.

Several people contributed to the next session on teamworking in the aerospace supply chain. A Tier 1 supplier's view was that concurrent engineering (CE) was well developed, but how could it be extended when outsourcing? Several problems have been identified, all carrying significant risk. The AEROEXTN project has sought to address this by focusing on the advantages to the Tier 1 supplier and to the subcontracted organisations. A detailed methodology for implementation has been identified and a pilot project called SESAME completed.

Steve Russell said that previous attempts to manage buyer/supplier relationships had failed because the proposed system did not manage the contribution made by the buyer. The tool JIMS attempts to remedy this, in his view sucessfully. JIMS presupposes that the culture is not adversarial, but proactive and problem sharing. JIMS provides a modular approach to measurement: performance (price, delivery, quality), action reports (improvement action reports and supplier action reports), and prevention activity modules (CE, business assessment, Year 2000 compliance, etc).

Richard Lunn talked about the INDEMAND project. One aim is to provide a web-based tool to facilitate supplier selection (primarily using supplier capability as the search criterion). Another aim is to apply knowledge-based engineering to aircraft manufacture: identifying and capturing engineering and manufacturing rules so that repetitious work can be automated. The example discussed related to the design and manufacture of wing ribs. Additional examples can be found in the recently published "best practice" guide: Achieving competitive advantage through knowledge-based engineering (DTI, 1999)

Derek Dickinson referred to several trends in the aerospace industry: the trend towards prime subcontracting (where the subcontractor designs and makes components or sub-assemblies) and also towards globally distributed consortia (with incompatibile systems and consequent problems of communication). The industry recognises that organisations must shift from having a functional orientation to a project orientation, and from serial to concerrent product development. However, there is a real need to make globally distributed organisations as effective as localised organisations. The MACRO project attempts to identify methods and tools for achieving this. As far as the structure is concerned, the core Team sets the agenda in a number of areas (customer requirement definitions, project planning and management, risk assessment and management, teambuilding and management, systems engineering and design authority). Then, various MACRO task teams work on these projects, addressing issues of coherence and integration. The MACRO toolbox is being developed to provide a portfolio of tools to be used as appropriate. The major challenges are perceived to be human, not technical. The important tools are those which facilitate people management in an environment of contrasting cultures.

Of the three Group discussions, I attended "How can a small supplier team with a customer?" led by Professor David Hamblin (University of Luton). The introduction considered the stereotyped characteristics of small manufacturers and various questions that the group might wish to address. Some of the issues discussed were:

• Risk and its effects (restricting investment and expansion)
• Design work and the contribution of small companies
• Prime Contractor dominance in the bidding process
• The protection of IPR

Attention was drawn to the relevance of the COGENT programme, facilitating communication and collaboration in the supply chain. It was pointed out that this is only a viable approach when the dominant party is committed to the principle of culture change.

Bob Moore (Warwick University) spoke about the ENHANCE programme: a giant EU project involving 14 contractors and 39 associated contractors. The funding is 38 million ecus over 3 years, starting February 1999. ENHANCE stands for ENHanced AeroNautical Concurrent Engineering. Its main objectives are paraphrased as follows:

• To define the new common way of working for joint European aeronautics projects
• To propose a set of operational tools
• To describe the associated engineering methods and organisational guidelines
• To validate the new approach through experiments and case studies

The presentation followed closely the one that is accessible on the web.

The final session was by Mike Gardiner of Lucas Aerospace, also representing the UK Lean Aerospace Initiative (UKLAI). He contrasted the situation in aerospace with automobiles: the vehicle manufacturers have always had a dominant role and they have tended to tell suppliers what to do. They have a choice about the kind of relationships they want in their supply chains. In aerospace, however, this is not the case, as the aircraft manufacturers are not dominant. In the speaker's opinion, the industry has no choice: it must develop teamworking. The evidence from within Lucas, and from 29 case studies carried out as part of the UKLAI programme, is that teamwork yields results, sometimes spectacularly. A recent benchmarking study in the sector showed extraordinary variation.

The averages are mediocre, the best is excellent and the worst is a disaster. Good practice is to be promoted, and 8 case studies to give a lead have been produced by UKLAI. They also have a programme of "Master Classes" - teams show what they can do in one week of intensive effort. A self-help map to lean manufacturing is being produced, recognising that it has to be customised because every company has a different starting point. Further information is on the web site.

This was a stimulating seminar, showing how proactive companies in the aerospace industry can forge constructive links with the academic world and deliver useful outcomes. The industrialists did not regard the academic community as out of step with their world, and they were keen to use expertise and to make good use of universities as external facilitators of change.

The culture of teamworking was accepted as the norm in all the presentations. There was no need for anyone to argue the case. There was a strongly felt conviction that organisations and supply chains have a long way to go to achieving this culture change: the methods and tools discussed were a response to this situation.

The textiles/clothing sector will probably find more empathy with the aerospace sector than the car sector: in the aerospace sector, the customer is dominant and the stakes are high. The MoD is to be commended in the "smart procurement" approach that seems to me to be well thought through and very fair to suppliers. (Since clothing suppliers to the MoD will need to operate within this procedure, there may be some scope for facilitation here). It remains to be seen whether the clothing sector will come to the same view that "we have no choice but to adopt teamworking".

Regarding methods and tools, the E-Co Challenge team is already utilising aspects of the COGENT approach, and this seems the most directly applicable of the projects discussed. However, as the trend towards globalisation continues, the MACRO project is likely to be relevant and there may be scope for cross-sectoral learning here.

David J. Tyler
July 1999