某咨詢：運(yùn)營績效（英文版）

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 materi

2、al was used by McKinsey & Company during an oral presentation; it is not a complete record of the discussion.Western Region Annual MeetingApril 11, 2002KEY MESSAGESI.Superior operations drives value creationII.Indian manufacturing companies face significant operations challengesIII.New tools and

3、 mindset required to build operational excellenceIV. Rewards from pursuing operational excellence can be large the journey must begin nowINTERNATIONAL RESEARCH SUGGESTS THAT COMPANIES WITH SUPERIOR OPERATIONS DELIVER SUPERIOR RETURNS30560990* Excellent are US companies (from the Discovery screened t

4、arget list) which increased their 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 ref

5、lects absolute change in spread (i.e., 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 anal

6、ysis ROIC WACC (from 95-99) ROIC Industrial averageShort-listed 12 “excellent companies” based on qualitative review of operationsAverage Total returns to shareholders1,0003,0005,0007,0009,00011,00013,00015,00017,00019,0001994199519961997199819992000Wilshire Index (market)Excellent - Top 12*Excellen

7、t“ Next 32S&P 500 Industrials* Operational excellent companies defined as 12 companies that passed operations excellence filter from the Industry Week Global 1000Source:McKinsey Operations Discovery Project3X TRS performance relative to marketWHICH TRANSLATE INTO SUPERIOR VALUATIONSOPERATIONAL E

8、XCELLENCE DRIVES THESE RETURNSNew product introduction cycle time and cost 50% lower than competitionManufacturing floor space required 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 leve

9、l 60% lower Receivables turns 45% higherRevenue growth 40% faster and ROIC 1.5 times industry average3-year cost savings goal of USD 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%, res

10、pectively, in spite of plunge in aluminum pricesOperational InitiativesOverall financial impactALCOA CASE STUDY CORPORATE-WIDE LEAN TRANSFORMATIONLean operating practices (APS)Transformation foundationPerformance-based measurement systemFacilities modernizationRenegotiated labor contractsVariable co

11、mpensation (salary and hourly)Quality assurance, SPCReduced set-up timesFlexible job designPay for performance/skillAlcoa Business System* Alcoas quarterly net income adjusted for special itemsSource:Platts Metal Week; Wall Street Journal; McKinsey Metals PracticeAlcoa adjusted net incomeAluminum sp

12、ot priceAdjusted net income*$ MillionsSpot price of aluminum$/lb.Alcoa performance vs. price of aluminum-1001002003000.400.600.801.001.2001982 83 84 85 86 87 88 89 90 91 92 930InitiatedAlcoa production systemALCOA CASE STUDY THE RESULTS94 95 96 97 98 99Broke out of price cycleEVA- 1995-99(ROIC-WACC)

13、Growth- 2000-05 (5-year projected)AlcoaCompetitorIndustryAlcoaCompetitorIndustry1.1-2.8-0.215813KEY MESSAGESI.Superior operations drives value creationII.Indian manufacturing companies face significant operations challengesIII.New tools and mindset required to build operational excellenceIV. Rewards

14、 from pursuing operational excellence can be large the journey must begin nowINDIAN MANUFACTURING COMPANIES FACE A PROFITABILITY CRISIS6.65.2199720% decreaseProfit margins*2000PAT, percentage of salesPercentage of companies making lossesPer cent1523199750% increase2000-4.30-4.6019977% decreaseEVA (R

15、OIC 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, Tyres and Automotive)Source:Prowess; McKinsey team analysisPOOR FINANCIAL PERFORMANCE IS DRIVEN BY

16、 POOR LABOUR AND CAPITAL PRODUCTIVITY24111025AutomotiveSteelPower (generation)Labour ProductivityCapital productivityIndex, US = 100Apparel4065Index, US = 100Source: McKinsey Global Institute study of the Indian economyEXAMPLESNANAManufacturingSupply chainChannelmanagementKey account management/ Sal

17、es 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 activitiesPoor channel capability and returnsNo systematic tracking of top customers and t

18、heir satisfaction Too much inventory (140 days vs. 35 for best-practice*) * Automotive industry analysisKEY MESSAGESI.Superior operations drives value creationII.Indian manufacturing companies face significant operations challengesIII.New tools and mindset required to build operational excellenceIV.

19、 Rewards 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 agendaIncremental targetsStep-change improvementSubjective problem solvingFocus on f

20、acts 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 ReportEquivalent cars per equivalent employee; Index, US average in 1998 = 100SEV

21、ERAL 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 PotentialNon-viable Auto-mation US average632381775841610016Design fo

22、r manufacturingIndia average = 241Viable Auto-mation1. ManufacturingAUTOMOTIVE EXAMPLE2000230023003960150182250254* According to DRI-segmentationSource: Interviews; McKinsey Automotive PracticeDESIGN FOR MANUFACTURE OF SELECT INDIAN SEGMENT A CARS*Productivity penaltyGlobal best-practiceCar 1Car 2Ca

23、r 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 LARGE BENEFITSIn a typical program, mor

24、e 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% reduction in compressible costs (10-20% red

25、uction 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 approach Define what needs to be offered Diffe

26、rent customer service levels Product variety and configurationMultiple chains within a company“Redesign to meet competitive benchmarks”Design to meet segment-specific customer breakpoints“Push-system is the only way Indian supply chains work” Pull (wherever possible) based on better forecasting and

27、order management“IT system will solve all supply-chain issues” Use IT selectively (not before, but after redesign) for: Information transparency Order management and forecasting 2. Supply chainCROSS-FUNCTIONAL COMMODITY SOURCING TEAMS HELP REDUCE PURCHASING COSTS3. Purchase cost reductionImperative

28、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 strategyPerformance specifications- “fit for u

29、se”In-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 (purchasing, plant, engineering,

30、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 Warranty expeditingInternal an

31、d 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 numbers to build scalePurchas

32、e priceTraditional Purchasing LeversIdentify new suppliers (local and global)Include non-performance penalties (e.g., missed deliveries, non-conforming parts) in contractsIllustrative action areasKEY MESSAGESI.Superior operations drives value creationII.Indian manufacturing companies face significan

33、t operations challengesIII.New tools and mindset required to build operational excellenceIV. Rewards from pursuing operational excellence can be large the journey must begin nowEACH AREA CAN HAVE SIGNIFICANT IMPACT ON PROFITS AND VALUE CREATIONRevenuesPer tax ROICEBITCostsInvested capitalWorking cap

34、italFixed 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 reduction10-15% 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 invent