The global auto industry's love affair with embedded systems appears to be in jeopardy. While embedded software enables 70 to 90 percent of all automotive innovations worldwide, half of all vehicle defects are electronic related – a growing trend. Automotive engineers lack a structured, holistic approach that they can use to tackle the challenge of embedded systems' increasing complexity. Filling this gap was a major driving force behind McKinsey & Company's Global Embedded Systems Initiative. The goals of the initiative were threefold. The first goal was to establish a methodology to measure embedded systems performance in terms of productivity, quality, time-to-market, and life cycle cost. The second was to identify the necessary levers for achieving best practices within the four maturity areas of embedded systems – specification, architecture, processes and tools, and sourcing. And the third goal aimed to construct a decision-making logic that would allow managers to link practices to performance metrics, i.e., an optimization tool.
Lean management is back on the agenda. The management method that steered many major organizations back to the path of growth in the early '90s is now making a comeback. The authors contributed to this development with their book "Journey to Lean", published in 2004, in which they describe how companies can make lean practices stick. A German edition has now appeared under the title "Unternehmen Lean. Schritte zu einer neuen Organisation" ("The Lean Company. Steps Towards a New Organization") and has been joined by a French version ("Objectif Lean: Réussir l'enterprise au plus juste : enjeux techniques et culturels") as well as a Chinese edition.
This brochure summarizes the results of an extensive study on global production networks jointly conducted by McKinsey & Company and the Institute of Production Management, Technology and Machine Tools (PTW) at Darmstadt University of Technology.
Supply chain management (SCM) is currently one of the most credible approaches to the holistic, process-oriented planning and management of large-scale multi- or inter-company networks. As most companies have already optimized their production processes internally, managers who move to the next level and look at a company's logistics networks can open up a new treasure trove of substantial savings.
Logistics has long since been more than transporting something from A to B - it is the central element in a factory whose components are scattered around the world. "The precise management of a global logistical chain – from advance suppliers to manufacturers and carriers, to production warehouses, transshipment points, and sales warehouses, and finally to customers – is a prerequisite for smooth model ramp-ups, high delivery capability, and quick response to customer demands," write McKinsey partners Carl-Stefan Neumann und Martin R. Stuchtey.
Good is not good enough – we have to keep getting better. This is the principle of operational excellence. Optimizing processes saves time and money and increases company value. But this is easier said than done. In "Operations," the fifth issue of McKinsey's award-winning magazine McK Wissen, we show how companies have succeeded in this difficult task – in manufacturing, purchasing, and product development.
Philippe Wits at ASR Nederland talks about his company's lean transformation