Workshop on Lean Practices

Address by Mr Michael Ahern, T.D., Minister for Trade and Commerce

at the Workshop on Lean Practices, UCC

on 1st April 2004 at 9.30am

For Ireland, as a small island nation with a focus on exporting, we need to both understand and be capable of adopting best practice in business if we are to remain competitive in global and European markets. Governments and policy makers can create the environment for businesses to be competitive, but, individual companies need to constantly improve their operations to be effective and efficient.

If Irish companies are to compete globally they must embrace the principles of best practice. Because of our peripheral location, Irish companies must be better at best practice than companies in more favourable locations.

Lean Practice is another term for World Class, which is the `catch all' phrase of best practice. There are best practices in all aspects of the value chain e.g. in

• Supplier Relationships
• Administration
• Manufacturing and Production
• Customer Relations

Lean is about doing the most with the least; using less time, less stock, less people, less space and less money. Time is money and therefore taking unnecessary or wasteful time out of processes should lead directly to cost reductions. Taking wasteful time out of processes should also result in faster product supply and as a result improve customer service.

Lean businesses use the myriad of best practice tools that have been available for many years including the Japanese Kaizen or continuous improvement approach, which looks for small incremental improvements on a continuous basis. It also seeks to improve quality in all business systems and to improve the people in the business through training and skills improvements. More recently the Lean System has extended the value chain beyond the customer to end of life issues and is looking at best practices in recycling and recovery.

As part of its mission to improve the productivity of Irish industry, Enterprise Ireland provides a focused programme of World Class initiatives such as World Class Manufacturing and World Class Logistics. In addition Enterprise Ireland supports a range of initiatives to improve the environmental performance of industrial processes, products and services e.g. Environmentally Superior Products, Environmental Management Systems and EnviroCentre.

World Class Manufacturing is a key competitive concept used by today's best businesses. It integrates the modern management practices of Just in Time, Total Quality Management and Employee Involvement. Enterprise Ireland has developed a two level approach -Introductory and Advanced WCM - which help build a culture of continuous improvement across all operational functions. Enterprise Ireland client companies can apply for assistance towards the cost of WCM.

An integral part of any "Lean Manufacturing" process is the area of Logistics or Supply Chain Management. Enterprise Ireland, as part of its response to the need to support and to improve logistics management as a key capability of indigenous companies, provides a comprehensive range of initiatives including:

The World Class Logistics Initiative provides a framework and structured approach to improving the logistics capability of Enterprise Ireland client companies. This is delivered through a cluster approach involving a host client (Multinational) with a cluster of sub-suppliers working to upgrade the logistics capability. Grant assistance is provided to assist with the provision of external specialists, a project manager and training.

Enterprise Ireland is also involved in a cross border Supply Change Forum hosted by InterTrade Ireland. This initiative combines the joint resources of, among others, Enterprise Ireland, Invest Northern Ireland and CBI/IBEC. The intent of the forum is to introduce an all island dimension to strategic planning in the area of Supply Change Management.

Enterprise Ireland has a partnership with and funds the National Institute for Transport and Logistics in the area of Research, Education, Training and Awareness.

In an ongoing response to the need to support and improve the Supplier Chain Management (SMC) capability of indigenous companies, Enterprise Ireland and NITL commenced a 5 Year action plan in 2001 to increase awareness of SCM, increase the pool of skilled SCM professionals and develop SCM support tools.

This has brought the key message of SCM excellence to over 3,300 people through:

• Training,
• Learning programmes,
• Seminars,
• Road Shows,
• Logistics Ireland, Annual Conference

The Enterprise Ireland Environmentally Superior Products initiative provides advisory and financial supports (up to €32,000) for projects to improve the environmental performance of industrial products and services.

The Enterprise Ireland Environmental Management Systems initiative provides advisory and financial supports (up to €12,000) to develop environmental management systems in industry.

The Enterprise Ireland EnviroCentre is an online one-stop shop of industry supports (information, best practices guides, case examples, tools, training and networking) aimed at improving the environmental performance of Irish industry. www.envirocentre.ie

Building competitiveness in companies is a national priority. Enterprise Ireland's Competitiveness Fund for SMEs - announced in May 2003 - is speci?cally designed to help achieve this. This new fund covers activities such as:

• Capital investment such as new machinery/automation equipment;
• Operations improvement through, World Class Manufacturing (WCM)/World;
• Class Logistics (WCL)/Supplier Development etc;
• Management and staff training;
• Employment of a key person.

There have been four calls for proposals under the Fund to-date (closing on 25 July, 3 October and 5 December, in 2003 and the fourth and final call closed on Friday, 6 February 2004). From a total Fund €10m, €7,509,528 has been committed to date.

ENDS

TC 86