Moneyball for Management Optimizing Human Capital through Continuous Improvement 6th Annual Global Supply Chain Excellence Summit

Meet the Panel Panelists Cornelia Coles Jimmy Fitzpatrick VP J&J Operating System at Johnson & Johnson Jimmy Fitzpatrick Group Director, Ryder System Mitchell Rierson General Manager, PCC Robert Uyekawa Principal, Effective Partnerships Moderator Keith Kato Senior Director of Operations, Atara Biotherapeutics

https://youtu.be/yGf6LNWY9AI

-- New England Patriots website “You may not find a bigger believer in data and analytics than New England Patriots Owner Robert Kraft.” -- New England Patriots website “When you do the math you really want to try to be more aggressive than the public would normally anticipate…And you can fail. When you have a 42 percent to 58 and you chose the 58 and . . . you may lose it, [critics say], ‘Oh, how could you make that decision?’ Well, because it gave you the best chance to win.” -- Jeff Lurie

-- Daryl Morey, General Manager “It works. The bottom line is that sports are about decisions-making, and the science shows over and over that if you use objective data and analysis in decision making, you make better decisions.” -- Daryl Morey, General Manager Tell us an example of how you have leveraged analytics to find a better answer or found an opportunity that came from data? Robert ex: When I see an upset condition on a high speed packaging line 80~90% of the responses are, “That doesn’t happen very often.” When we collect data it is typically 10~30% of the line loss. Jimmy / Cornelia?

“Not everything that can be counted counts, and not everything that counts can be counted” -- Albert Einstein Mitch Jimmy How do you balance the cost of acquiring and analyzing data versus the management benefits it can provide?

“Defense wins championships” -- Paul “Bear” Bryant Robert ex: There is a part used in the energy industry that is expensive and has a lead-time greater than 12 weeks. There are about 18 variations of these parts so the conventional wisdom is to hold large amounts of inventory of each type in case of a natural disaster. After analyzing the inventory and usage it showed that 50% of the usage was from 2 models. Using the data to understand the current condition so the appropriate inventory can be available. Robert / Cornelia Give us an example of when conventional wisdom was wrong and the data showed it.

-- Survey Response From Warehouse Worker “The target grows every year. I do not have two more legs yet to make the 100% to pick, where you actually need to run and go to the toilet just during the break. Packing 120 products per hour is terribly heavy.” -- Survey Response From Warehouse Worker Robert ex: I think this is an example of what is “possible” vs. “probable.” In an effort to improve a process we can get too myopic and and miss details that don’t match our agenda. That is the reason all data analysis should be followed up with gemba or a go and see and understand. I have had this problem when we did part handling or assembly work. It may be the missed observation of putting on PPE, GMP gowning requirements or variations in handling tools or parts. (This may be better on the next slide or lead into the next slide.) Mitch / Jimmy Give us an example when someone was so focused on a analytical model or predicted result that a poor decision was made.

“Data is of course important in manufacturing, but I place the greatest emphasis on facts” -- Taiichi Ohno How do you balance data and analytics versus using the “go see” in lean? Robert ex: The data needs to be the starting point of the conversation for continuous improvement. There is no substitution for seeing the process since data is only part of the story. Spending time at the gemba allows for engagement with the people doing the process and understanding their struggles. Automated data collection is an enhancement to CI and is not a substitution for CI. Cornelia would like this topic Mitch

“Yes, excessive automation at Tesla was a mistake “Yes, excessive automation at Tesla was a mistake. To be precise, my mistake. Humans are underrated.” -- Elon Musk Give us an example of when an average or underperformer made a substantial improvement through continuous improvement. Robert ex: I was working with a guy named “Tim” who referred to me as the Little Chines Guy. His co-workers found him to be difficult to work with since he jumped to conclusions and made equipment changes. Using the CI process we created an agreed upon process for him to test out his theories and measure them. It significantly helped him move the ball down field, not in a straight line but with higher agreement. Cornelia would like this Mitch

LIGHTNING ROUND Give us your thoughts in a single sentence What data do you wish you could get real time? Why hasn’t data analytics evolved faster in management? What is the biggest barrier to continuous improvement? What is the most effective tool in continuous improvement? Robert ex: Employee job satisfaction It is logical but not a natural behavior since as humans we are relationship based Clear leadership on why CI needs to be done and what the repercussions will be when it is Great problem solving skills

QUESTIONS?

Give us your parting thoughts on Moneyball for Management CLOSING THOUGHTS Give us your parting thoughts on Moneyball for Management

6th Annual Global Supply Chain Excellence Summit Thank You!