Client Logo 1© The Delos Partnership 2006 January 2006 LEAN ENTERPRISE Implementation Workshop

Client Logo 2© The Delos Partnership 2006 January 2006 How will we proceed ? Day one :Team building and actual physical flow- mapping. Day two :Supports flow-mapping, existing issues identification and documentation, target flow design. Day three :Target flow presentation to sponsor, operational solution design and test. Intersession Day four :Performance measurement, change modelling, project execution structure design. Day five :Project planning, action plans, costs and benefits, return on investment, final presentation to sponsor.

Client Logo 3© The Delos Partnership 2006 January 2006 OBJECTIVE DAY 2 To document the support processes. Learn differences between batches and continuous flow. See a real HEAT team in action. Set SMART objectives. Identify issues in existing flows.

Client Logo 4© The Delos Partnership 2006 January 2006 PROGRAM DAY 2 Support flow mapping. Waste identification and documentation. Continuous flow and batch processes. Lunch Video watching and debriefing. New process performances target. Introduction to problem solving tools. New process rough design.

Client Logo 5© The Delos Partnership 2006 January 2006 I Time OP=4,5h Waiting= 12 h TRS = 38% 3 shifts Tuesday + Wednesday III Shipment 1X/day Bx./mth. Box=200 units 2 shifts Raw Material ABC Provider XYZ Client Mix & Comp. 3 Packaging 3 CQ & AQ R.M. 14 days ½ F.G. F.G. Time OP=0,5 Time Eq=3d Uptime = 85% 3 shifts. Time OP= 12h. Waiting = 5 hr. TRS = 35% Avail Cap. = xx Man Freq.= 2 mth Elapsed time = 1411,2 VA time = 40,5 h 14 d. 12 h. 35 d. 4,5 h 2 d. 24 h 4.5 d Lean Workflow analysis 0,8 d. 2 d. 0,5 d. V = 2,87 % Information Flow Forecast Orders MPS S&OP MRP DCP RCCP Sched. Purch. Sup. Sch. Control Shift Plan

Client Logo 6© The Delos Partnership 2006 January 2006 Information system interactions Weekly Daily Production Qualité Méthodes Maintenance Monthly PIC Perfo UIP PDP Mensuel PDP Hebdo. Perfo Cellule RQP Perfo Qualité UIP AQ Méthodes AQ Ligne Qualité Produit Qualité Process Plan Charge Méthodes Perfo Plan Charge Secteur Perfo SAMAS SAMIS RAP RSA RH P RQM RMP Mensuel GTX

Client Logo 7© The Delos Partnership 2006 January 2006 Information feedback flows Weekly Monthly Production Qualité Méthodes Maintenance Qualité produit SAMIS SAMAS RHP PDP Hebdo PDP Mensuel PIC Perfo cellule Plan charge Méth+Perfo Remonté des indicateurs performance méthodes Perfo qualité UIP Perfo UIP Remonté des indicateurs qualité et plan d ’action associés A.Q. Méthodes Plateau technique indus GPR / GPU Actions correctives A.Q. méthodes Actions correctives A.Q. indus Mensuel GTx A.Q. Ligne Plan charge Sect+Perfo Exemple plan d ’action D.A.C. RMP Définition des plages de maintenance.

Client Logo 8© The Delos Partnership 2006 January 2006 Weekly Monthly Decision flows. Production Qualité Qualité produit SAMIS SAMAS RHP Perfo cellule Mensuel GTx Méthodes Maintenance PIC Plan charge Méth+Perfo Plan de charge méthodes sur les 3 ans à venir. Perfo qualité UIP Perfo UIP Planification plan d ’action proposé. A.Q. Ligne Plan charge Sect+Perfo Prise en compte des DAC avec date de solde. A.Q. Méthodes Plateau technique indus GPR / GPU Prise en compte des Pb remontés avec date de réalisation. PDP Mensuel Revue et prise en compte par la production des plages de maintenance RMP

Client Logo 9© The Delos Partnership 2006 January 2006 Teamwork Describe your process (support flow) 1 h preparation ½ h presentation ½ h sharing

Client Logo 10© The Delos Partnership 2006 January 2006 PROGRAM DAY 2 Support flow mapping. Waste identification and documentation. Continuous flow and batch processes. Lunch Video watching and debriefing. New process performances target. Introduction to problem solving tools. New process rough design.

Client Logo 11© The Delos Partnership 2006 January Type of waste 1.Over production 2.Motion 3.Transportation 4.Waiting 5.Over Processing 6.Storage/Inventory 7.Defects 20 % of batches require a second analysis before approval Suppliers schedule are transferred manually to a spreadsheet

Client Logo 12© The Delos Partnership 2006 January 2006 CALL IT TWENTY? …22 TO BE ON THE SAFE SIDE! TEN PLEASE! CALL IT TWENTY? …22 TO BE ON THE SAFE SIDE! TEN PLEASE! £ £ £ £ £ £ £ £ £ £ £ £

Client Logo 13© The Delos Partnership 2006 January 2006 Lean Workflow analysis Suppliers schedule are transferred manually to a spreadsheet Suppliers schedule stability is under 20% at 2 weeks 20 % of batches require a second analysis before approval 80 % of packaging material issues are under quoted LT Packaging material inventory accuracy = 85% Purchasing process LT = 8 days No visibility on customer’ inventory Transportation time buffer = 8 days Lack of visibility to organise transportation Inventory status not updated on time No visibility on quarantine batches scheduled release

Client Logo 14© The Delos Partnership 2006 January 2006

Client Logo 15© The Delos Partnership 2006 January 2006 Problems, Concerns & Issues

Client Logo 16© The Delos Partnership 2006 January 2006 VA & NVA ANALYSIS: What did you learn during this activity? What are the major waste areas you identified?

Client Logo 17© The Delos Partnership 2006 January 2006 PROGRAM DAY 2 Support flow mapping. Waste identification and documentation. Continuous flow and batch processes. Lunch Video watching and debriefing. New process performances target. Introduction to problem solving tools. New process rough design.

Client Logo 18© The Delos Partnership 2006 January 2006 or CHOICE CRITERIA

Client Logo 19© The Delos Partnership 2006 January 2006 Time is a competitive weapon Why ? “If we are competitors and I am able: To understand the market faster than you, To manufacture a wider variety of product on same line, To jump from one product to next at lower cost, To make as much profit on small batches as on large ones, To present new solutions faster than you, Or to do a majority of the above, then, I shall win!” Source: Thomas A. Stewart, Japan’s Hot New Strategy, Fortune, Sept. 1992

Client Logo 20© The Delos Partnership 2006 January 2006 Quality Cost Time is the key to ‘lean’ Time

Client Logo 21© The Delos Partnership 2006 January 2006 Process design Equipment reliability Quality Valid plans Paperwork Manufacturing changeovers Planning Logistics INVENTORY HIDES WASTE Waste = Non Value Added Activities  Needed today  Not needed INVENTORY

Client Logo 22© The Delos Partnership 2006 January 2006 INVENTORY HIDES WASTE Where do we have inventory? - Why do we have inventory? -

Client Logo 23© The Delos Partnership 2006 January 2006 Flow implementation techniques 1. Focus on existing products. 2. Ignore actual workstations, jobs and assignments borders (generally organised by departments). 3. Re-invent work processes and tools to eliminate backward flows, rejects and stops.

Client Logo 24© The Delos Partnership 2006 January 2006 U shaped line Straight line Waste Monuments The waste of shared equipments

Client Logo 25© The Delos Partnership 2006 January 2006 GrindingFinishing Machining Milling TM Pol MM MA TBN TCC CNC CND CNCCND Inv. TM Tooling TBNMMMA CNC Pol Tooling Inv. Tooling Inv. TCC TM TBNMA MM CNC CNDPol TM TBNMM MA CND MA TM Inv. & Tooling Pol MM Job shops or flow shops

Client Logo 26© The Delos Partnership 2006 January 2006 Typical results Lead Time40-90% Reduction Inventory30-70% Reduction Cost of Quality50-90% Reduction Settings and changeovers70-90% Reduction Surface40-70% Reduction Future results Business excellence is a necessity to survive in the future. Challenge for most business is to improve their key factors by a magnitude of 10!

Client Logo 27© The Delos Partnership 2006 January 2006 Line shapes What are the advantages of U shaped lines? -

Client Logo 28© The Delos Partnership 2006 January 2006 One monthUn mois Planning Production Scheme One month ABCDABCD Daily output One month ABCDABCD Production plan A10 B15 C25 D50 Faster and slimer process with a daily mix output of 100 pieces Fat and slow process with an average output of 100 pieces Flox Batch A B C D A B C D Continuous Flow Vs Batch

Client Logo 29© The Delos Partnership 2006 January 2006 Continuous Flow Vs Batch With a batch organisation what are the wastes we generate? - How is-it possible to avoid it with continuous flow? -

Client Logo 30© The Delos Partnership 2006 January 2006 Production Scheme People Equip- ment Method Flexible workers Standing up In work sequence Multi product lines One piece at a time Flow driven (takt time) Specialised workers Seated Grouped by function Multi task lines Batch size Machine cycle driven Flow Batch Continuous Flow Vs Batch

Client Logo 31© The Delos Partnership 2006 January Equipment set in work sequence 2. Piece flow 3. Synchronised flow 4. One worker works on several operations 5. Flexible operator 6. Stand-up CONDITIONS FOR FLOW MANUFACTURING

Client Logo 32© The Delos Partnership 2006 January 2006 Adequate equipments It is essential each machine be converted from one manufacturing to next almost instantaneously … … and lot size be “adequate” to insert instantaneously in production flow.

Client Logo 33© The Delos Partnership 2006 January 2006 Throughput Efficiency (TE) =Work content x 100% Time in system 5 Weeks 15 hours total work Minimise lead times

Client Logo 34© The Delos Partnership 2006 January 2006 Capable – Right every time Process quality:  Specialist Quality Control (e.g. 6  )  Workplace Management (Genba Kanri)

Client Logo 35© The Delos Partnership 2006 January 2006 What is 6 sigma? Simple:  Eliminate defects  Eliminate the opportunity for defects Complex  Vision  Measurement of performance  Philosophy  Tool for: Customer focus Breakthrough improvement Continuous improvement People involvement

Client Logo 36© The Delos Partnership 2006 January 2006  PPM% Non Defective 2308, % 366, % 46, % % % Effectiveness

Client Logo 37© The Delos Partnership 2006 January 2006 Workplace Management Real Operational Teamwork Standard Operating Procedures Daily/Weekly Team Meetings Team Performance Targets The Role of the Supervisor

Client Logo 38© The Delos Partnership 2006 January 2006 Reliable Always able to run Machine reliability:  5S  TPM

Client Logo 39© The Delos Partnership 2006 January 2006 The 5S’s 1.Sort out 2.Simplify 3.Sweep 4.Standardise 5.Self discipline

Client Logo 40© The Delos Partnership 2006 January 2006 Total Productive Maintenance TOTAL - Business wide PRODUCTIVE - Improve equipment performance MAINTENANCE - Machine systems support

Client Logo 41© The Delos Partnership 2006 January 2006 Pillars of TPM OEE IMPROVEMENT AUTONOMOUS MAINTENANCE PLANNED MAINTENANCE SKILLS DEVELOPMENT MAINTENANCE PREVENTION STANDARDISATION 5S (WORKPLACE ORGANISATION) RELIABILITY AND AVAILABILITY

Client Logo 42© The Delos Partnership 2006 January 2006 Autonomous Maintenance ‘Maintenance is like looking after children. On a day to day basis you don’t require a doctor. In a factory your machines don’t require a technician. Production operators should think of their machines in the same way as a mother thinks of her children.’ Senior Japanese Maintenance Adviser, Nissan (U.K.) 1986.

Client Logo 43© The Delos Partnership 2006 January 2006 Flexible – to change mix and volume on demand  Machine flexibility (SMED)  Manpower flexibility

Client Logo 44© The Delos Partnership 2006 January 2006 SMED Purpose 1.To increase equipment availability and efficiency through less machine downtime 2.To increase process flexibility and responsiveness through smaller batch sizes and reduced lead times 3.To increase capital productivity through reduced stock levels Process 1.Identify internal and external changeover time 2.Transfer internal to external 3.Reduce internal and external Tools 1.VCR 2.HEAT 3.Management support

Client Logo 45© The Delos Partnership 2006 January 2006 V. Jones P. Daniels R. Hope B. Crosby Op. 1Op. 2Op. 3Op. 4 Manpower flexibility - ILUDO

Client Logo 46© The Delos Partnership 2006 January 2006 Adequate – with capacity to avoid bottlenecks Machine Capacity (OEE)

Client Logo 47© The Delos Partnership 2006 January 2006 OEE DEMAND TIME DEFECTS ‘MISSING MINUTES’ & SLOW RUNNING EQUIPMENT STOPPAGES & BREAKDOWNS UTILISATION AVAILABILITY QUALITY 24/7

Client Logo 48© The Delos Partnership 2006 January 2006 Extended capacity mapping Capacity per week in equivalent units raw material supplier first tier supplier Time final ass paint sub ass press blank pickle cold roll hot roll service centre second tier supplier

Client Logo 49© The Delos Partnership 2006 January 2006 PROGRAM DAY 2 Support flow mapping. Waste identification and documentation. Continuous flow and batch processes. Lunch Video watching and debriefing. New process performances target. Introduction to problem solving tools. New process rough design.

Client Logo 50© The Delos Partnership 2006 January 2006 PARADIGME A philosophical and theoretical framework of a scientific school or discipline within which theories, laws, and generalizations and the experiments performed in support of them are formulated; broadly : a philosophical or theoretical framework of any kind A set of rules: 1)Setting borders 2)Dictating what to do to be successful in those borders. Joel Barker.

Client Logo 51© The Delos Partnership 2006 January 2006 VIDÉO Speed race for house building

Client Logo 52© The Delos Partnership 2006 January 2006 House building race What have you seen? Does it relates to your definition of HEAT?

Client Logo 53© The Delos Partnership 2006 January 2006 PROGRAM DAY 2 Support flow mapping. Waste identification and documentation. Continuous flow and batch processes. Lunch Video watching and debriefing. New process performances target. Introduction to problem solving tools. New process rough design.

Client Logo 54© The Delos Partnership 2006 January 2006 SMART OBJECTIVES Specific Measurable Attainable Results-focused Timely Concrete, use action verbs. Numeric or descriptive, quantity, quality, cost. Feasible, appropriately limited in scope, within the committee's control and influence. Measures outputs or results (not activities), includes products, accomplishments. Identifies target date, includes interim steps and a plan to monitor progress. Increase velocity from 2,87% to 5% 98% on time delivery 98% right 1 st time

Client Logo 55© The Delos Partnership 2006 January 2006 Build your SMART objective 1-Brainstorming 2-Affinity diagramming 3-Consensus Time Cost Quality

Client Logo 56© The Delos Partnership 2006 January 2006 Your Objective Time - Cost - Quality -

Client Logo 57© The Delos Partnership 2006 January 2006 PROGRAM DAY 2 Support flow mapping. Waste identification and documentation. Continuous flow and batch processes. Lunch Video watching and debriefing. New process performances target. Introduction to problem solving tools. New process rough design.

Client Logo 58© The Delos Partnership 2006 January 2006 Tools for continuous improvement Flow Chart Check Sheet Pareto Chart Cause & effect diagram Run Chart Histogram Scatter diagram Control chart

Client Logo 59© The Delos Partnership 2006 January 2006 Seven management & planning tools x x x oo Affinity diagram Interrelationship digraph Tree diagram Prioritization matrices Matrix diagram Activity-network diagram Process-decision program chart Known Unknown

Client Logo 60© The Delos Partnership 2006 January 2006 A universal process for improvement p a d c DEMING CIRCLE PDCA P = Plan Define a problem or opportunity Analyse the situation. Study and define the problem; brainstorm for causes and corrective actions; and think creatively to determine the best approach and best possible corrective actions. Develop an implementation plan D = Do Implement corrective action Document the procedures and observations Use data-gathering tools to collect information. C = Check Analyse information. Monitor trends. Compare obtained results against expected result from the plan. A = Act If the results are as expected, do nothing. If the results are not as expected, repeat the PDCA cycle. Document the process and the revised plan. originally conceived by Walter Shewhart in 1930's

Client Logo 61© The Delos Partnership 2006 January 2006 Six Sigma, Lean, TQM, …

Client Logo 62© The Delos Partnership 2006 January 2006 Failure and continuity Deming Circle includes a right to failure. aaa

Client Logo 63© The Delos Partnership 2006 January 2006 Statistical Process Control UCL (calculated) = statistical upper control limit UCL (process) = pre-determined, acceptable process upper control limit UCL (quality) = pre-determined, acceptable quality upper control limit LCL (calculated) = statistical lower control limit LCL (process) = pre-determined, acceptable process lower control limit LCL (quality) = pre-determined, acceptable quality lower control limit

Client Logo 64© The Delos Partnership 2006 January 2006 Statistical Process Control

Client Logo 65© The Delos Partnership 2006 January 2006 Statistical Process Control Also for discrete quality

Client Logo 66© The Delos Partnership 2006 January 2006 PROGRAM DAY 2 Support flow mapping. Waste identification and documentation. Continuous flow and batch processes. Lunch Video watching and debriefing. New process performances target. Introduction to problem solving tools. New process rough design.

METAL SUPPLIER PRODUCTION PLANNING SAP Manugistics Weekly Production Plan Daily Despatch Schedule 500 ft coils 18 days 2 per month WELDINGPRESSING STAMPING Weekly Fax 6 week Forecast day Forecasts EPE = 2 weeks C/O 1-2hrs OEE = 61% C/T 1 second EPE 1 week C/O 0.3-2hrs OEE = 57% C/T 3 seconds EPE 1 week C/O 0.3-1hrs OEE = 76% C/T 10 seconds EPE 1 week C/O N/A Capacity 70% C/T 440 seconds ASSEMBLY TEST EPE 1 week C/O 10 mins Capacity 35% C/T 34 seconds DESPATCH CUSTOMER 1 second 4 days 2 hours 30 days Current State Map Production Lead Time = 60 days Value Added Time = 8 min 8 sec Daily Order 1 x Daily 3 seconds 10 seconds 440 seconds 4 days 34 seconds 5 variants 156 variants

METAL SUPPLIER PRODUCTION PLANNING Daily Despatch Schedule 500 ft coils Vendor Managed Inventory STAMP + PRESS day Forecasts EPE shift C/O 10 mins OEE = 77% C/T 6 seconds EPE shift C/O N/A Capacity 70% C/T 300 seconds WELD + ASSY 1 EPE As required C/O N/A Capacity 55% C/T 164 seconds CUSTOMER 6 hours Future State Map Production Lead Time = 1.3 days Value Added Time = 7 min 50 s Daily Order 1 x Daily 6 seconds 300 seconds 1 day 164 seconds 5 variants156 variants 5 variants ASSY 2 + TEST + DESPATCH

Client Logo 69© The Delos Partnership 2006 January 2006 Steps for a future state map 1.Reassess the Value Position 2.Reassess the Make / Buy position 3.How best to make and stock? 4.How best to schedule? 5.Improve process capability 6.Organisational issues

Client Logo 70© The Delos Partnership 2006 January Reassess the Value Position Customer Intimacy Responsive and reliable deliveries Configurable product / service solutions Customer partnerships Service support Product Leadership Product / service reliability Premium product functionality Operational Excellence Cost effective products Source product from lowest cost area

Client Logo 71© The Delos Partnership 2006 January 2006 Downstream vertical integration Raw materials supplier Component maker Assembly operation Wholesaler Retailer Raw materials supplier Component maker Assembly operation Wholesaler Retailer Upstream vertical integration Stages owned by the organisation 2. Reassess the Make / Buy position

Client Logo 72© The Delos Partnership 2006 January How to make and stock? What is the production lead time compared to the customer required (or desired) lead time? Which planning model (MTS,ATO, MTO etc) is most appropriate? Where can improved collaboration over planning and schedules help reduce uncertainty and improve responsiveness? Should new planning systems (e.g. Vendor Managed Inventory or direct line feed) be used? How can value be increased along the chain at minimum cost? (e.g. pack sizes, technical advice)

Client Logo 73© The Delos Partnership 2006 January Hewlett Packard - deskjet printers: power supply module, power cords & manual mfg D.C. Factory localisation D.C. mfg Distribution Centre localisation Postponed assembly

Client Logo 74© The Delos Partnership 2006 January 2006 Agile Supply Chain Agile Process Material supplier Customer Decoupling point JIT manufacturing JIT finishing Market DemandDownstream capacity Upstream capacity

Client Logo 75© The Delos Partnership 2006 January 2006 Lean Supply Chain Market Demand Upstream capacity Lean Process Material supplier Customer Decoupling point JIT manufacturing Stock finishing Downstream capacity

Client Logo 76© The Delos Partnership 2006 January 2006 Lean & Agile Supply Chain Lean Process Agile Process Material supplier Customer Decoupling point Stock manufacturingOrder finishing Market Demand Upstream capacity Downstream capacity

Client Logo 77© The Delos Partnership 2006 January 2006 Lean / Agile Balance IntensityUncertainty level LeanAgile Importance  Strong -  Medium -  Low LeanAgile Integrated Supply Chain  Lead Time Reduction  Waste elimination  Process flexibility  Smoothed planning   Process reengineering   Importance of continuous improvement techniques

Client Logo 78© The Delos Partnership 2006 January 2006 Decoupling point Where is decoupling point: NoneFinish goods BulkRaw material Supply Chain Name

Client Logo 79© The Delos Partnership 2006 January How to schedule? EPE… Should the process be batch build or build to customer Takt (or vary by process)? Takt time? (How do you understand customer demand?) Where can you flow? Where should you use supermarket-based pull? At what single point in the production chain do you trigger production? How much work do you release and take away? How do you level the production mix?

Client Logo 80© The Delos Partnership 2006 January 2006 Takt Definition: “The stroke in keeping time” (Chambers’s Dictionary) The frequency at which parts should be produced in order to meet the customer’s requirements; the ‘heartbeat’ of the process. Available Working Time Takt Time = Number of pieces required Available Working Time Takt Time = Number of pieces required

Client Logo 81© The Delos Partnership 2006 January 2006 Scheduling systems Make to Forecast (push) Make to Demand (pull) Kanban trigger signals CONWIP trigger signals MRP/Works Orders Supermarkets (and FIFO lanes) control production between points of flow without a written schedule Pacemaker process

Client Logo 82© The Delos Partnership 2006 January Improve process capability Which problems (e.g. bottlenecks, inventory, long changeovers) to focus on improving ? Each step in the process should be:  Valuable – of value to the customer  Capable – right every time  Reliable – always able to run  Flexible – able to change mix and volume in line with demand  Adequate – with capacity to avoid bottlenecks

Client Logo 83© The Delos Partnership 2006 January 2006 Valuable – of value to the customer 1.Waste elimination 2.Lead time reduction (Flow)

Client Logo 84© The Delos Partnership 2006 January 2006 Design your new process to reach your objectives Physical flow. Information (support) flow. People: aptitudes, abilities and attitudes. Technologies & tools.

Client Logo 85© The Delos Partnership 2006 January 2006 Design your new process to reach your objectives 1h30Physical flow mapping. 3/4hInternal presentation. 3/4hSynthesis.

Client Logo 86© The Delos Partnership 2006 January 2006 Conclusion Your opinion on today Program for tomorrow

Client Logo 87© The Delos Partnership 2006 January 2006 How will we proceed ? Day one :Team building and actual physical flow- mapping. Day two :Supports flow-mapping, existing issues identification and documentation, target flow design. Day three :Target flow presentation to sponsor, operational solution design and test. Intersession Day four :Performance measurement, change modelling, project execution structure design. Day five :Project planning, action plans, costs and benefits, return on investment, final presentation to sponsor.

Client Logo 88© The Delos Partnership 2006 January 2006 See you tomorrow!