Good afternoon and welcome to this webinar run from the studio,Sandvik Coromant studio in Sandvik in Sweden. With me I have, my name is Erik Jansson I should say to start with, I'm the cluster manager for Nordic for Sandvik Coromant. With me in this webinar I have Martin Sjöld,associate professor from Stockholm School of Economics and Niklas Modig,CEO of HOOPS. Before we jump into the topic of today,I'd like to remind about safety. It's a priority from Sandvik Coromant and I hope for everyone else. So I hope that you feel safe in the location that you are. We feel very safe here and we know what to do. I would also like to lift forward the psychological safety. That is very important to be able to raise concerns, raise questions. In this context of a webinar, of course, where we sit virtually and not together, I would like to remind everyone or pinpoint that we can, there is a possibility to ask questions. We have planned and hope that we have some room for questions that you post so we can take them and answer them. And if we don't have the time, we will probably reach out and come back to you on that one. The theme of this webinar is how to implement manufacturing wellness to achieve maximal financial impact. And with the three of us, we will go through different parts here. A little bit of, let's say, academic theory. A little bit of experiences that we from Sandvik Coromant have. And also a little bit of the how we can achieve this together with Niklas from Hoops. But let's start with the academic. What does the research say about financial impact in manufacturing and how to implement that? And the way in history. Yeah. Yeah. Yeah. Yeah. Thank you so much, Eric, for having me here in Sandviken. And thank you, Sandvik Coromant and Hoops. We will have a great afternoon together and it will be great fun. When I had this question talking about manufacturing and we will come to manufacturing wellness, I thought, what is that? What has happened for like 100 years or so? So I grabbed a couple of my books and I looked back in time. So I would like to start with an example. I will go back 120 years. So I selected Ford as an example. When we read the theory, we can see that Henry Ford, he was a person who mistrusted, I would say, almost everyone. So this is an illustration, if I can use your imagination. He had his own steel mills, mines. It was steel production, steel presses and so forth. They even had their own railways and trains. Can you imagine a company nowadays having a situation like that? Of course, they did some component production. They had a car assembly and so forth. And in the basement, they stored $600,000. 1906. Maybe someone can help me to calculate the value of today. So this is an example of what we can call a conglomerated structure. He mistrusted everyone. But that was also typical for time being. This is 1906. If we fast forward 120 years, we can still see the brand name of Ford in the middle of this picture. But there is a difference. If Ford did everything on their own, 1906, they only do 8% of the final value of a car nowadays. So what I'm trying to illustrate here, it's a picture of what we call an industrial network. So manufacturing nowadays is more of manufacturing a lot of different relationships. Just as an example, if we look at the left-hand side, we can see component suppliers, subsystem and system suppliers. On average, a company like Ford, Volvo and so forth, they have more than 1,500 suppliers. And all of them, they contribute in different ways. It's also quite common to have integrators. And that means companies who put together components and subsystems just to make it more easy for the car manufacturer when it comes to assembly. The costs have increased dramatically for the last 120 years because a car is totally different. So all car manufacturers, they have other manufacturers that they team up with and cooperate with. And the main idea is to split cost, of course. Many of them are part of in giant industrial structures. So they have merger partners. Some of them have been acquired and so forth. And they typically also have a big owner on top. So if we see this picture as an illustration of actors, we can see that resources, they are split all over an industrial global network. So we say, OK, the unit of analysis is not only to manage Ford in the middle. The unit of analysis is to manage a giant and a very global industrial network. So what has actually happened? I mean, we still have mines, steel mills, steel presses. People are running the railways and so forth. But the major thing is there has been a fragmentation of the value chain, which means that Henry Ford and the other of the car manufacturers, they're focusing only a fraction of the entire value chain. So, yeah. And Eric, I know that you will come back to this later on, talking about how can we create value in a fragmented value chain. If we put this into a context, and I will touch upon three different points, I will talk a little bit about the T-Ford. Then we have the lean production paradigm that started in Japan within Toyota, actually 1949. So we have lean production. And then nowadays we can have something called smart manufacturing. So what kind of production model did they use in 1906? We have all heard mass production. We have also heard that you can choose whatever color on a car you would like to have, but you can only select amongst the black ones. This is how Henry Ford solved the customer situation. And the reason behind this is that everything was focusing on gaining very, very large volumes, because the product variety was almost zero. They had one model. It was black. As we saw on previous slide, it was a few dominant actors. Then if we fast forward to 1950, Japan was in a specific situation after World War II. They didn't have too much resources. So it's not a surprise that lean production was created with resource efficiency in mind. Toyota became the number one actor to take this mindset and bring it into how should we lead, how should we manage, how should we organize our resources. This was a total opposite against what Henry Ford was doing in the US at 1907. So all of a sudden we could see that the focus on gaining really, really high volumes suddenly decreased because they worked in a smarter way. And we will come back to this when we listen to Niklas in a few minutes. They also brought in suppliers. So instead of just relying on one big conglomerated structure, they worked with suppliers in a very smart and efficient way. So the supplier structure all of a sudden evolved on a global side from 1906 for the 50 years to come. And still we have them as dominant cooperation partners. If we go fast forward to nowadays, we can see that, OK, the companies are only producing 8% of the final value of a car. And this is the reason they have to do so much else. They are connected, data driven, flexible. We talk about digital ecosystems and so forth. So imagine the contrast of what has actually happened in 120 years. It's a dramatic shift. So how can we summarize this? There are a couple of drivers of change. As a customer, we would like to have more tailor-made offerings, tailor-made products. We would like to feel and sense that, OK, this is something only for me. And that drives cost. So the economic, I would say, challenge, that is to handle the costs of variation. Because if the customer would like to have tailor-made offerings, that will typically drive costs in production, in product development. We need to have very advanced technology and so forth. And variation typically eat profitability. So this has to be handled in a technological perspective. So companies need to gain the benefits of both volume and variation. And this is a subject I've been doing lots of research on myself. This is why we talk about modularization. And the best actors in the world, they can provide both. They can create smart variation, but at lower costs. And that is because they gain the volume benefits as a result of handling the variation. So with that, companies need to do a strategic response. Handle the market pressure, cost pressure, technological change and so forth. So we need to dare to adopt new habits. We need to be able to cut costs, mastering technologies and everything. So that is an excellent bridge of talking about manufacturing wellness. How well can we do all those things with this in mind? Eric, please. Thank you very much. It's really interesting to see that what we have been looking into for the last 42, since 1942, when Sandy Coromant was created. We, of course, interact with the market, a lot of customers and so on. So we learn a lot and we see a lot. And it's also interesting to see that we come to very, very similar conclusions here when we look into our customer base. We are also fortunate to be part of our own industry in our own production units. And for us sitting in the Nordic here, we have a big plant in GEMO where we do especially, we'll say, the soft tool side of things. It's very similar to our customer challenges. So we've learned a lot over the years. But we can also see that there is a lot of differences. And what I would like to start a little bit is to introduce some concepts. Because when you try to understand the market, you also need to put a little bit of things in boxes. You need to split the market, to segment the market a little bit and try to understand what's going on to get a kind of theoretical model. So before moving into the concept of manufacturing wellness, I will talk a little bit about some concepts. And the first one I would like to highlight is what we call customer lifecycle. Very often, I mean, different customers have a variety of components. They might be the owner of the component and what we call an OEM or they might be a subcontractor. And they typically will, at different points of time, implement new products in their production. So that is when they come in what we call the active loop. They are actively looking at, OK, now we need to produce this. How do we produce it? What is the process? What is the cost? Maybe they need to bring in quotations from suppliers to be able to handle it and so on. So in one point of time, they take a decision, this is how it will be produced. And it will be produced with these products, with these tools and whatever, and the purchasing comes. And then you go into the installation. In some cases, they will only produce this batch this one time. And they will never come into what we call the habit loop. But a lot of customers are coming into the habit loop, which means that the process is set. They will produce this either, you know, 24-7 for a certain point of time. Or they will produce it a certain number of times per year in the following years. But they set the process. And then whenever a batch is coming and they need more consumables in our world, more inserts or more solid roundtools, they will just reorder what's already on the sheet. And so they are in the habit loop and they don't really look so much into the process. And here is where we see a big challenge for a lot of our customers. We see that a lot of the resources are spent in the active loop to industrialize new products. Once it's in the habit loop, resources are not spent so much. And here is where you can have a big gap. Because you can sit on products that was industrialized with technology that is 20 years old. When I interact a lot with customers, I know that they know that, yes, we could optimize here. There is potential for optimization. But they have a hard time to actually allocate resources and go into the habit loop to make sure that there could be more financial gains. There could be better profit in that area. So that's a concept that we can maybe keep in mind when we look forward. So we really, really see that the active loop is the focus for everyone. The other concept I would like to introduce is what we call production types. Very often we talk about industry segments like automotive or aerospace or oil and gas or pump and valve and different industry segments, which are absolutely relevant for a lot of topics. We can also talk about size of companies and so on and so on. But we have seen in the last years when we try to understand customer needs, what is the focus, the priority. We have landed with what we call production types as a good explanation to understand needs and priorities of customers. And these four types is advanced component manufacturing. We're often talking here about challenging materials, complicated parts. There is a lot of difficult machining. Quality is very often key, the number one priority. Best illustrated, I would say, by aerospace or gas turbines in power generation or something like that. The other area is mass production. We touched upon it when we talked about Ford just now, the typical one, especially from before. Here we're talking about a longer series. You are producing same components 24-7, 52 weeks per year almost and so on. Here key things are really planned production, long production series and the cost per part is really, really, really key to make this happen. And you don't want a stoppage because then every minute is costing money. The third one is what we call the repeat batch production. So you have product families that you have either as an OEM. I mean, typically, if we look into our own production, we are a typical repeat batch production. We have our product families that are produced and milling cutters or drills or whatever that might be. But it could be a subcontractor for different companies and they get batches coming in and being produced over time. So different types of repetitive flexibility is important. And, of course, to deliver on time and the right quality. Very key thing here is really a challenge in this area is really the change from one batch to another all the time. And we come in a little bit about that and about bottlenecks and so on. Then you have the pure single batch production. That is typically the subcontractor quite down the line at the tier two or tier three that gets in a part to do it once and then maybe never does it again. So very short production series, rapid decision making, priority on delivery and orders, a very short timeline here. So those are four types that we try to understand and need. And I'm not going into all the aspects of this, but we have quite a good understanding. What I will lift forward, of course, is another layer here. And that is about component lifecycle. So if we add the lifecycle, which may be in repeat batch production and single batch production is not so relevant, especially in single batch because it will never come back. But in advanced component production, we can see different priorities, different needs, where in the first run it really is to first start producing good quality. You have a very complex part, a lot of different operations and so on, producing good quality so that they can start delivering parts to their customer. And then, of course, there is always room for making better. So improving in different areas, different aspects. Once that is set very, very often and in aerospace is very typical, then it's about locking the processes. And then it can actually be locked for a very, very long time. Some engine producing companies, a lifecycle of an engine can be 20, 30 years. And so you lock in a process for a very long time and you don't want to touch anything because you need to re-qualify a lot of challenges there. In mass production, it's often to get a stable process very quickly. And then look at cost, making cheaper, making cheaper. And then, of course, maybe you are on the production volumes that you have agreed. You know the contracts that you need to produce on and so on. So then you need to see where can I take the cost out? Where can I bring it down all the time? So on and so on. So the focus is changing a little bit depending on that. So now we have talked about the lifecycle. We have talked about the types that varies a little bit. The third concept and we were already touching upon a little bit, the value chain. In our, let's say, world, our customer thing, we are maybe not taking the full value chain that Martin was showing. But we are looking into the manufacturing value chain because that's where we are acting as an actor in this sense here. So we're talking about these different things. We're talking about design. Sometimes it's an OEM. So they sit on the actual design and can make changes there. Sometimes you're a subcontractor, you get the design. But if you have a very good relationship, you can still have a discussion related to the design to bring in the elements of design for manufacturing. Because sometimes there is a cost involved in the design. And maybe not everything is a functional part of the design. Process planning, operations planning. This is a lot about bringing in how to manufacture. Today we talk a lot about cam programming. We talk about simulations. We talk about a lot of the digital part of it. We, of course, have the production logistics, making sure that you have the right tools when you need them on the machine. And working with inventory. And then we come into the machining. And, of course, here is where we have our experience since 1942, where we sell most of our products. And you can make a lot of difference. And, of course, if you, as I said, if you have a process that was designed with the tools and the cutting data and so on, that it was 20 years ago, there is for sure room for improvement. A lot of things have happened on the market, on the tooling side. So there is a room for improvement in the machining area here. Verification, important. And then we have our logistics. So you could, of course, put it a little bit more in this sense here. But it's basically saying the same picture here. I will not go into this, but I just want to show that we, as Alvi Coromant, we are stepping out of being a cutting tool provider to be a provider of solutions along the value chain. So we now have solutions for a lot of areas in all these different steps here. Together with our own company and together with partners in our group. And a lot of things can be said in this area. And, but that is not the deep details we go through today. The next element of, let's say, theory I would like to highlight is what we call the machining economics. We, in the title of the webinar, we talk about, you know, the financial aspects of it. And we know, of course, that there is a lot of challenges that every company is having out there. It's about employee development, about the lead times quality. There's a lot of different aspects. And Niklas will also touch upon these things. But that's kind of the reality that builds up a cost in manufacturing. And if we then zoom in into our world, the world of cutting tools and so on, we talk about transformation in manufacturing, transforming a product through metal cutting. But what I show, what I will show to you is also relevant, of course, in other transforming methods, like maybe welding, additive manufacturing could be one as well. There is a lot of other laser cutting or water cutting. And so as long as you transform your product, then that's what's important. So in our aspect here, in our arena, we're talking about cutting. And so it's only when you make chips that you actually add value to your component. You can see going from the overall possible time, 24, 7, 365 days, there is a theoretical number of hours that you can actually use. But we know that probably 40% of that is not even available for different reasons. And then you come into other things, like I mentioned tool change, if you have changing from one component to another. The workpiece change and you also have breakdowns and so on, so on. So maybe only 50% of the 60% plan time is actually something you can use. And then you come into the machine and there you have the time where you actually make the chip and maybe some other time where the machine is just running in the air and so on, so on. So basically out of the theoretical 100% available, only 24% in this scenario here is available for adding value to your component. That's the thing to keep in mind. And of course, that's just a theoretical number, right? But it means that if you look to the broader picture, you can save a lot of money. You can save a lot of time and focus your time on value creation. The last theoretical part here, I would say, is in machining economics is of course to look at the two aspects of running cutting data. You can say, OK, I run faster. I will be quicker. And what impact does it have on my cost per part? And without going into the details of all the graphs here, just showing that there's a lot of different aspects of cost that is involved in manufacturing. You have a lot of fixed cost. It can be building. It can be people. It can be a lot of stuff. You have the machines, of course, that is costing a lot of money. But of course, and then you have the tools and the tools cost a certain amount. But if you go faster, you will have a shorter tool life and then the cutting tool cost will go up and so on. It always is important to find the balance, to find the point where economically it makes sense. And that, of course, can vary from situation to situation. It can vary from whatever machining type you are in, how your order books look like, and a lot of other aspects. So, of course, you need to nail it down and look at your specific thing. But there could be a lot of parameters to play around with. So, to summarize that part, it's really important to understand how the value is created along the value chain and how prioritization then impacts the cost. That is a base. And having showed that, it's a little bit just to say we have a lot of experience in working with customers, supporting customers in different aspects. We need, of course, to be guided by the customer. What's your priority? Where should we focus our time? And we have a lot of things to offer in that sense. I said that we have been fortunate to work with our customers since 1942. And we also are part of the industry. So, we have learned a lot across all that time. So, we launched something now two, three years ago. Something where we have thought about what are actually good habits to have a well-working manufacturing. And we call it manufacturing wellness. So, it's a series of habits that we think that if you do this, then you are on a good track to have a well-working and where improvements are also being driven from different aspects. I mentioned it right now. We have a self-assessment. You can scan the QR code and check where you are if you want it offline. We will put this one into the chat here so you can do it if you don't have the time to do it right now. So, what is manufacturing wellness then? So, as I said, it's a series of habits that we have put together. And there's a lot of data behind it. And the aim is not to go through all that. It's just to put it out there as a concept. The first one we talk about is taking a holistic perspective. So, what we really mean by that is actually the main theme of today that we want to put forward. It's to take a step back. Not be in the details of a specific tool or a specific thing where, of course, we can try to sub-optimize or optimize or sub -optimize something that we find important. But just take a step back. Understanding how value and how cost is created through the value chain. So, that is really, really important to do that. And, of course, that Niklas will go through a little bit more because it's a very good example and a very good tool and process to do that. The second one is to embrace new technology. I mentioned a little bit. Sometimes we may have processes that are 20, 30 years old. It's habits that we have. We always use this tool for face milling. We're using this process for this and so on and so on. It works well with our materials. Everyone is well acquainted with it. It kind of works, right? But in 10, 15, 20, 25 years, a lot of things happening. There's a lot of modern technology out there. Not just in the tools, in a lot of aspects. So, taking the step back and doing the things and bringing in the new things, it's very important. And especially as technology is moving faster and faster. Sustainability has been, of course, a focus the last couple of years. Now we heard here maybe a little bit less about it on the global scale for different reasons, unfortunately. It's still extremely important for everyone. And we're sitting, of course, in a market here or markets where this is very high priority. And it should be. So, there's both the sustainability path aspect for Mother Earth. But it's also linked to economical situation. Because we then go into the fourth one, eliminate waste. Eliminate waste can be from a purely cost perspective. It can also be from a sustainability perspective. It's very important to work on that aspect. Data. Data. And Martin was onto it a little bit on the last slide here. We live in a far more complex world. But also a world where you have a lot more tools to actually make improvements. Today we talk a lot about, or more and more, about the digital thread. You start from a drawing that is no longer a paper drawing. Okay, that was a long time ago. But a 2D or 3D drawing. Today you can do simulations, programming, optimization, and a lot of things. You can start taking out data from the machines, both from the actual process to understand how is it working. How much is the machine actually available? We talk about OEE as an aspect, for instance, and so on, so on. We take it over to the measuring machine. We can feed back, measure data into the machine, and so on, so on. A modern manufacturing plant is very complex. So if we say we want to have a holistic perspective and understand things, and there is a lot of machines, and it's working 24-7, we have night shifts, and a lot of things. If you don't sit on the data, it's very difficult to get a good overview. Data can point us to where we have issues. It can point us that this machine is not working more than so-and-so. Here is the breakage. How can we look into that? So data helps us to bring the efficiencies in the modern world, in the modern production world. Linking a lot also to what Martin mentioned here about the journey for Ford. We see that it's very difficult to do everything in-house. It's impossible to do everything in-house. Technology is moving very fast. We can't have the competencies for everything. So working with strong partners, when it makes sense and with what it makes sense, it's very important. Because then you can really take in technology that you could never have managed and developed yourself. So really finding strong partners. It could be technological partners in very, very small fields. Or partners that can help you bring that bigger picture. And what we will talk about a bit later here with Niklas. Develop your people. One of the things that we see and everyone else sees. I mean, we all start about customers in the last couple, five, six years. I was in the trade show in Sweden here a couple of weeks ago and talked to different companies and so on and so on. The overall challenge people have is to find competencies, find resources. So both finding new resources, attracting new resources is very important. But develop the people you have. Make them stay. And also make them go on the journey of bringing in the new technologies that comes. It's extremely important. Because things move so fast. I mean, one example that everyone knows about and it's all over the place now, AI. How to implement AI to make things more efficient. You need to develop people to be able to embrace that as a good example. And the last point we talk about here is also automate for success. We are in an area of the world which is a high cost area compared to other parts. We are seeing challenges, as I mentioned, to find people. And so if we want to stay competitive in the Nordic countries, we need to automate. We need to automate so that we can run unmanned shift. So that the manpower or the man cost per hour is not too high. And so we really get more out of our production than just having it manned by people. And you can see the journey that already has been done in a lot of places. We have done it ourselves over the last years in our plant. It's where traditionally, maybe 20 years ago, there was one operator for one machine. Today, typically, one operator operates six or eight machines. And we even go to unmanned shifts, complete unmanned shifts, where you prepare everything. And then it can run for minimum 12 hours and changing from component to component. And then you can really get better benefits out of your production. But all these things, and you probably already seen it when I expressed it a little bit, they are all linked. They're all linked together. Automation can only be done if you have good data, etc. So what we see is that, of course, there is a journey here. And it's about understanding where you are, understanding your specific value creation, mapping your processes, understanding your processes. So you see here is value created, here there is waste, and so on, so on. And then identify activities to reduce it. Bring in the partners or do it in-house. Implement it and measure the performance. And then maybe use the manufacturing wellness as a good way to see where am I now, where am I strong? Well, I'm strong in number one and three and five, but I'm not so strong over here. Now I've done some changes. How can I improve? But that leads me over to the how and why we're standing here also in the webinar. We've seen these challenges with a lot of our customers. We have a lot of things to offer. But we have the difficulties that a lot of our customers don't really know where to start, don't really know where to allocate the resources and so on and so on. So we started dialogues with Hoops like a year ago and now we're standing here. And we really see this as a great opportunity to bring what I just show on the screen right now to reality. So the how. So Niklas, can you take us through a little bit how you have been working and are working? Thanks a lot, Erik. Well, it's a great pleasure to be here at Sandvik Coromant. I told Erik when we arrived a couple of hours ago that you must be proud to work here. I mean, Swedish industry as good as it gets. I brought this bottle here. Why? Not because I need to drink right now. But I'm going to give an example about water purification. It says here, stay sharp, stay hydrated. And that's basically the vision of this company that I'm going to talk about. I call the title of this case developing manufacturing excellence. And this is the case. It's a company and they are within the water purification industry or they develop water purification equipment. Here are a few examples of the two products that they have been producing. However, they are facing declining demand. If you think about it, we live in Sweden. The tap water is very nice in Sweden. So you don't feel, or at least not I, I don't feel that I need an equipment to get clean water. I use the tap water. And that's why they didn't really have nice situations. So they saw a new opportunity heading into this. And this is a much more advanced product. And it's more of a B2B product. But they got a new contract and they said, hey, this is what we need to do. We need to do a little bit of a pivot. So we go into B2B instead of B2C. So they started out. The challenge was that their factory wasn't really made for such volumes. But they said, let's fix it along the way. After six months, however, they realized that there were quite a lot of challenges with this. They got direct feedback from the leadership team. Hey, the lead time is not what we promised our customers. It's declining and declining and not declining. It's getting extended. The quality was declining. So they had both quality issues and very long lead time. So they gather everyone and say, now we really, really need to do something about this. We need to develop a much more efficient manufacturing flow. So how did they do this? Well, what I think is interesting with this case, because this is a real case, is that they gathered a cross-functional team, not only from within ActiveM. They took or created or established a cross -functional team from the whole value chain. And I'm going to talk about six different capabilities that this team developed in order to develop manufacturing wellness. These six capabilities is what did they need in order to make this manufacturing process more efficient. If you take another picture here, you could see on the y-axis, here we have the lead time. Because they said, we need to decrease lead time. And they actually decreased the lead time from 43 days to 17 days. The first four capabilities you see, one, two, three, and four, that's they used in order to understand the situation. Then capability number five, that's basically where they developed some core capabilities in order to get feedback. Like, how are we doing right now? And after that, once they got feedback, how long time does it take to produce this equipment? Then they drove the implementation or the actual improvement process. So going back to this, I'm going to go through these six capabilities one by one. And the first one is the capability to establish a team. Remember, as Martin and Eric talked about, they were in a network. And this was not only a network, but they had a classical functional organizational structure where everyone worked in their function. Sometimes we talk about silos. Everyone, they had their boss, their manager, a king or a queen who said, this is our function. But they also knew that if we are going to improve the production of this product, we need to include parties outside of our company. So they saw that in order to control or improve the flow, these were the different functions that they needed to include in the cross-functional team. Furthermore, they had their internal functions. But as I said, they also included different suppliers and different customers in order to see, well, how can we take a system perspective of the actual flow? So what they did was that they gathered everyone and say, we are facing a challenging situation. We want to tap into your heads and see how can we improve the situation. So what they did was that, first of all, they created a cross-functional team with all these different roles. But within that cross-functional team, each person also created a functional team that could be supported by their cross-functional team. So this is what we can call, they created a digital twin because they used a platform that helped them to drive this transformation. So the cross-functional team, that was the highest level. And then they had functional teams focusing on the different parts of the flow. And as I said, the customers and suppliers, they were also included in the cross-functional team, but they were supporting specific functional teams. So that was the starting point that they really saw who can change the manufacturing flow. Then they said, many people have a lot of experience and knowledge within this team, but we don't have the same knowledge and experience. So the next step was to, how can we train everyone so we have a shared understanding about what is a good manufacturing flow. So they were trained by five different programs. We're each describing what is an operation strategy and what is a flow-oriented operation strategy and how do you implement a flow-oriented operation strategy. So this was e-learning and everyone, they weren't sitting together. They were located at a different location. So after the team meeting, you know that you saw, they got this training and everyone could train and understand like what is this all about? So basically, if we simplify it a little bit, they were trained to understand four core capabilities. And if someone asked me, in order to be able to deliver manufacturing wellness, what do you need? And then I would say, well, it's four core capabilities that a team need to develop. Performance management is basically, how is our flow performing? A capability so everyone can see the big picture. Flow management, that is, can we see the progress of each order? Performance management is a lagging indicator. Here we have a leading indicator. Then we have resource management. And that is, if we want to create an efficient flow, then we have to have a capability to make sure that we have available resources. So we don't need or generate waste, as Eric talked about in manufacturing wellness. And then the last capabilities, can we improve the end-to-end flow together? So four different capabilities. So that's what they were trained. And as you can see here down in the right corner, you could see all the participants. You had the five programs so they could make sure that everyone had completed the training. That means that they gathered the team. Now they've trained the team. Now the team could gather and say, hey, what is the current state of our operations? And that's the next capability. So as Eric also said, Sandvik Orman, they have their own self-assessment when it comes to manufacturing excellence. This company also made a self-assessment, but related to these four capabilities. How well adopted are these capabilities? Or what is the maturity level when it comes to these four? So each individual, before they met the team, they made kind of a survey where they had to answer from one to ten, how well are these four capabilities adopted? And you can see up in the columns, performance, flow, resource and improvement management. And then you have different dimensions. And here was the average of the total team. So you could see here, for instance, they were very low when it came to flow management. Very low level of standardization, low level of visualization. Furthermore, it was fairly low when it comes to resource management. Again, we don't have any common standard to allocate resources within the whole end-to-end flow. Also low level of visualization. And we could see on this row, visualization was low. And that's quite common because they're working within silos. So no one really saw the big picture. So now they knew that, hey, we need to work with flow management, resource management and visualization. They had a good understanding. And the interesting was that this was a self-assessment. So the team owned the current state, which is very important. Because usually when someone else gives you feedback, it's very easy to say, what about you if the feedback is not so good? So this was a self-assessment. After that, then they said that now we need more data. So they picked one of these equipment. And as you remember, it was a network of different actors. So they said, look at the product here. The main part of the product is this mounting plate. That's the core. Everything is connected to that. So let's analyze what is happening in the value -added process connected to this mounting plate. So they said as a metaphor, let's pretend that we put up a GoPro camera on this mounting plate. And from the order to the delivery, we make a recording of the total flow. So they knew, as you can see here in the x-axis, 43 days. That's how long it took to produce one of these products. Here on the y-axis, you have the different teams and the different functions. And then they basically took a pen and started to see what is happening. Imagine a GoPro camera on the product. It's a 43-day-long movie. Then you could actually see where are the handovers, who is responsible, what is happening. And you can see there's a lot of buffers here. So after they've done this, metaphorically, they had a 43-day-long movie. Then they could see what is action in this movie and what is not action. And they said, well, first we need to cut up the video, the 43-day-long video into different phases. And they identified six different phases or scenes, we could say. It was the planning phase, the machining phase, the sub-assembly phase, the final assembly phase, test and inspection phase and shipping phase. So that was the flow. And what was interesting was that this team haven't seen this end-to-end flow. They made this analysis. That means that they could also say this is value-adding. And that's exactly what they could see. Here we have value-adding. This is adding value towards the actual product. But they could also see this is a fairly boring movie. Nothing is happening. So this analysis led to some very interesting insights. Like, hey, here we have different problems. And all these problems, then they could put into a platform where they categorize. If you go back here, you could see the different phases. You remember six phases? Then they categorize the different problems into different phases. They could analyze each problem, identify the root cause of that, and then identify which activities do we need to execute or do in order to eliminate this problem. So they had a discussion talking about what are our challenges within this value chain and what shall we do in order to improve this value chain. Then one could say that they had mobilized. They formed a team. They've educated the team. They did a self-assessment. And they analyzed the actual flow. Now was time to develop these four capabilities. And they started with performance management. Performance management, that's basically after a whole manufacturing. Once the product was finalized, what was the result? And they were focusing on two main KPIs, quality and lead time. So basically they say we need to decrease lead time down to 50%. And we need to really control the quality. And they knew exactly where the quality challenges were. So they started to measure that. And they developed a dashboard where they could measure what is the quality and what is the average lead time each week. And that was the starting point of building a big room or a visual dashboard of how is our manufacturing flow doing. Then they continued with flow management. And that's basically going from lagging indicator to leading indicator. You remember the six phases here. That was the starting point. So they said these six different phases, we want feedback from the manufacturing flow before it's finalized. So they said both quality and lead time, we want to have feedback right away. So that was the next time of dashboard they developed. Then again, you remember resource management. That is how can we secure that we have the right resources available in order to develop an efficient manufacturing flow. So they talked about what resources do we need, where shall they be, in which state, and who are able to access them and how. So they listed all the different resources that they knew. These are critical resources and these are usually the bottlenecks within this manufacturing flow. Because they needed to allocate resources to the bottlenecks. They saw the big picture so they could see this. And that's basically what they did. So now they could see, they could get feedback from the manufacturing flow. And now, last but not the least, they could then get the feedback. So you had the dashboards here to the right. And if you had a deviation, then they could identify activities that handled the deviation. Or if they had larger improvements, as you remember, they had different problems identified here. Then they could identify the root cause, develop an improvement initiative, and then they could implement that. So that was basically the core capabilities. And then they started to drive the implementation. So you remember these six problems here. Or six phases with a variety of problems. Here you can position them. I'm just going to give a few examples. The first problem was basically to work with quality. I'm not going to go into detail here. But if you look into the graph here, here you see a very low level of quality. Basically, it was a lot of variation. So they developed a very close partnership with the supplier to see what can we do in order to stabilize quality. The quality increased. Then they took the next one. Here it was very much about the situation around the machines. They saw that the actual value-adding time was very low, but it was a lot of waste, a lot of buffers around the machines. So they looked into how can we optimize and how can we set the tack time so we eliminate the different buffers. Then a third example was that they could see what does the flow through the whole factory look like. They looked into the layout and said, well, how can we improve the layout? How can we develop much more efficient handovers? Also, with a Kanban strategy, they could develop a much smoother flow. Well, this case is not about talking about all these different improvements. But what I want to come back to here is that by developing these four capabilities, performance management, flow management, resource management, and improvement management, they could drive the transformation themselves. So what was the result? Well, it was quite impressive. They decreased, you already know it, from 43 days to 17 days. And it was not only the lead time. It stabilized the lead time, but also increased the quality. So they said that quality and lead time, that is the two sides of the same coin. So they, as you can see here in the graph, the quality increases. Once you can take control of the quality, then you can also decrease the lead time. So, quite impressive. From 43 days, on average, to 17 days. From 68% yield to 97% yield. And now we come to the last question. What was the main success factor here? This. An amazing team who was gathered. That's capability number one. Gathered everyone who can actually affect this flow. Two. Give them the same knowledge. We build the people. Eric talked about that as well. We build people. Then they did the self-assessment. They took control of the problems. Four. They analyzed the flow and they created the big picture. Five. They developed the four capabilities. Performance, flow, resource and improvement management. So they got feedback. And six. They drove the whole transformation. It's about building quality. And it's about building the capabilities of your employees. That's all from this case. Giving the word back to you, Martin. Thank you so much, Niklas. And thank you, Eric, for two great keynotes. May I start with you, Niklas? Was this a fictive case? Something you just came up with on your way to Sandvik Koromant? What's the background? This is a real case. But of course, we have changed everything. So you can't identify. But this is a real case that we have had opportunity to work with. Akjuel is of course a made up name. It's my colleague Joakim. He could take any name in the world. But he said, let's call it Akjuel. So that's fictive. But the case is real. So you are actually showing real case results based on Akjuel. Absolutely. So is this what the hubs are doing? Yeah. I mean, we believe in developing self-improving teams. So these six capabilities, that's what we help organization to develop. So we have a platform. You saw that there were different displays. We have a platform where we can basically help teams to develop these capabilities. So capability number one, develop this digital twin of a team. So if you have a factory, how can you gather everyone from different functions and different parts of the value chain and then train them, self-assessment, analysis, develop the capabilities and drive implementation. So we call it a transformation management system. So that's basically what we do, taking a holistic perspective of companies. So this means that you basically took an example which could explain and is explaining exactly what hubs are doing. If I understand you correctly. Yeah, I think we tried to build people and this was a case. And I think the best way to understand is to take different cases. You remember capability number two, that's basically to transmit different cases. But this is a real case. Yes. Okay, cool. Eric, do you see any similarities? Niklas has been talking about six capabilities. You talked about eight habits. Could this also be implemented by you within Sandvik Coromant and in the way you are working with your customers? I think there's a huge potential to come closer to our customers. I mean, of course, in this case, you're talking a lot about cases where we use assembly and a bigger thing. As I mentioned in my presentation, we are zooming in a little bit more on the manufacturing process. But it is also a value chain and so on. And I see great potential for doing that. And we are doing that. We are coming in and working with our customers. Of course, obviously, in the machining area. I mean, it's our arena, right? But we are also interacting with customers in other parts. But I really see it as an untapped potential. And I mentioned a little bit before about if we go back to that active loop and that habit loop, I see there is a huge opportunity for customers to optimize and take cost out of their habit loop. So, very often, I think a lot of companies don't have a clear end -to-end process and understanding how this works. And so, it becomes a lot of firefighting. And you look at your biggest cost in your spending, right? And then you may be focused there. But it could be other areas which will have a bigger financial impact. So, I see great potential. And that's also a little bit why we are sitting here today is because I think we can work together, bring in the structure. And we have a lot of things to offer from a competence and an offering. So, it's very relevant. Excellent. We can come back to that. You use this manufacturing wellness kind of word. But then you talk about a lot of really hard stuff. So, when I listened to your presentation, it was excellent, by the way. So, you talk a lot about cutting cost, using data, and all those really, I would say, top management issues. But you also use the manufacturing wellness kind of title all over. Is it possible to combine those two? Is it possible to be really hard, tough, to see all the potentials, but also to do it within eight good habits that explain manufacturing wellness? I think absolutely. I think that what we call it wellness is, of course, everyone thinks, okay, wellness. And I'm thinking, you know, spa, going on a spa, right, or something like that. But it is, and when we go to a spa, it's for our body to feel good, right, so that we can sustain and live longer and so on and so on. And I think that's why it's a good word to talk about wellness. Because we want the manufacturing to be working well over time. And so, and we as people, because companies are run by people in all law levels, we are habit people, right? And we all have different habits when we wake up in the morning or some have habits to go into the gym three times a week or every day or, you know, whatever we do. And I think that's why it's a good way when we talk about habits, because it is about bringing things that you need to do every day or very often and when you get it in. And I think that's also why it's very much connected a bit maybe to the lean thinking, because lean is about habits. It's about bringing those things to do it and bringing it in as a way of working. So it's both that kind of, you know, how do we work on a regular basis, creating habits, but then, of course, pointing to some specific things to also be future-proof. Because things are moving so quick. So I think that's the concept as such. You can look at it from different perspectives. Yeah, I do like the wording of habits. So this is a question to both of you. Is this about to work harder or is it about to work smarter? Can I start with you, Niklas? I think it goes without saying. I mean, if you, I like the word manufacturing wellness as well. Another word would be manufacturing excellence. But I mean, what is manufacturing excellence? I would definitely say it's to have 100% focus on safety or 100% focus on sustainability or 100% focus on psychological safety. I think that is what manufacturing wellness is all about. So, and if you go into the best manufacturers in the world, you don't see any stress. I mean, I was working, I was visiting this car sales or this cars, Upplandsmotor, they sell cars. Yeah, car dealer. Car dealer, exactly. The car dealer. And the founder of that, every day he walked, he left the company. He took off his shoes and walked with white socks through the workshop. And he looked under and said, if it's clean, it's excellence. And I think they are a fantastic company. But they said, why shouldn't a workshop be clean? So, I think definitely it's only about working smart. You can develop win-win-win-win-win situations. There's no trade-off. But you need to take a system perspective. That is the challenge. And it takes time because everyone is dependent on each other. But you can surely create a win-win-win situation with safety, with sustainability, with quality and profitability without sacrificing. Thank you. Your thoughts, Eric? Yeah, I think it is about working smarter because we, as I touched before, there is really a scarce situation when it comes to resources and competencies. So, starting there, we are not going to be able to find more people. And also, let's make the best out of what we have and develop those people and those capabilities. And, I mean, machines cost a lot of money to buy and a lot of other things cost a lot. So, the answer to produce more is not to invest more. It's how can we utilize what we have or when we do invest, that we invest in something that is more efficient. So, a little bit, as I mentioned in the manufacturing or machining economics there. I mean, in our world, I mean, you add value when you make chips. The rest is really a waste. Then, of course, you can't get it to 100% of the time, right? But you can work a lot in different things to make sure that you actually do it in the best way. And there are different possibilities to do that. But it is about working smarter. Yeah. I believe that as well. So, going back to why we are here. Why are we running a webinar like this? Why do you invite both of us? Why are we doing this? Because when I listen to you and I try to do an introduction kind of small, short keynote, I see clear synergies between your messages. And excellent companies, they talk about habits. They talk about capabilities and so forth. So, I'm thinking a little bit from the audience perspective. What could be a next step, for instance? Yeah, I mean, we started the dialogue almost a year ago. It's been really, really a good dialogue. And we kept it going because we really saw that there is something here. There is something that from both companies to connect together. And, of course, we have our experience in the manufacturing and machining part, where we can bring a lot of stuff. And we would like to create, using your platforms with you, some sort of manufacturing kind of platform, and our best practice. And so, we are looking for customers or companies, customers of ours, hopefully, or whatever, companies within this industry and hopefully maybe on this call that would like to do the journey with us. Because it's not something that we have a lot of ideas and things, but it's when you bring experiences like you showed from another part of the industry, we would like to create that kind of same thing, but with examples that we, from our part of the industry, the industry we serve and work with. So that is really what we would like to see. We would like to see some partners here that we can do this together with. So, I mean, that's how I see it. And I don't know, Niklas, your point? No, I definitely think that partnerships is the way that we can increase competitiveness. I mean, we're a small company, a fairly young company, definitely compared with an amazing company like Sandvik Coromant. But, I mean, we take a holistic strategic perspective of the end-to-end flow, and our specialty is to build in that capability. You are a very admirable company with world-class competence in world-class tools and world-class services. And we have just said, let's kroka arm, as we say in Swedish, like make a partnership and see how can we create or increase competitiveness by collaborating with each other. And we soon find out that let's find other parties that really want to define manufacturing wellness. And that's why I said, well, let's just have a webinar. And if anyone here likes to say, I would like to be part of that. I want to drive manufacturing to the next level, reach out, because this is a very genuine, we reach out our hand and say, let's create interesting partnerships and try to define what is manufacturing wellness, what is the next step there. So, that's the purpose. Yeah. As we mentioned, there was a slide up here, and there's some contact, of course. And so, if you feel that you have a lot on your plate right now, but you would like that help to get forward, you see a bright future. And I know that the Nordic, sitting in the Nordic market, I know that it's quite a good pace right now in some industries. So, it's probably also an opportunity to improve things. So, we would gladly see some collaboration here from some companies. Wonderful. May I just add one more question, Niklas? When I saw the results from QN. So, reducing lead time from 43 to 17 days, that must have dramatic effects on profitability, on return on invested capital, for instance. Absolutely. I mean, we start with increasing or improving the quality. The cost of poor quality went down. We decreased the lead time. That in turn decreased the networking capital, which in turn increased the capital turnover, which in turn increased the profitability of the company. So, I mean, driving flow is the very, very strong driver or engine of profitability. So, that's what it's all about. Wonderful. So, if you would like to know more about this, you're more than welcome to reach out to Eric, to Niklas. And I'm much looking forward to see all the future potential synergies from this wonderful webinar. So, thank you so much for your efforts and your time. And thank you who joined behind your screens or behind your cell phones. Thank you very much for joining and hopeful to hear from you. Thanks. Thank you.