DD.MM.YYYY Applying knowledge management tools/ concepts to solve a company problem in Schaffner. AB Goh 9 January 2011. Presentation title

Fig. 1.0 - Choke Components Plastic Housing Toroid Copper Wire DD.MM.YYYY Presentation title DD.MM.YYYY Fig. 1.0 - Choke Components Plastic Housing Toroid Copper Wire Steel Wire Separator Resin Presentation title

The Choke products is also one of Schaffners’ revenue generators. Presentation title DD.MM.YYYY Applying knowledge management tools to solve a company problem in Schaffner. Figure 1.0 shows the Choke products which are the traditional strong hold products of Schaffner. At the peak, a few years ago Schaffner produces between 1 million to 1.5 millions a year. The Choke products is also one of Schaffners’ revenue generators. In the year 2008 Schaffner sold slightly above half a million pieces and 2009 , Schaffner sold much less than half a million pieces.

Presentation title DD.MM.YYYY Applying knowledge management tools to solve a company problem in Schaffner. The main problem is ; Schaffner is losing market share and is being threatened that the entire Choke business will be wiped out within two to three years.

Schaffner’s prices are above the competitors Presentation title DD.MM.YYYY Problem; Schaffner is losing market share and is being threatened that the entire Choke business will be wiped out within two to three years. Schaffner’s prices are above the competitors No priority for salesmen to sell Not designing to customers’ requirements 3% >40% >5% Losing market share on Choke products >44% >5% Schaffners’ Chokes have lesser performance features than competitors Unhappy customers >3% Customers shifting to new technology platform Fig. 2.0

Methods Man 40% Machine Materials Fig. 2.1 Presentation title DD.MM.YYYY Problem; Schaffner is losing market share and is being threatened that the entire Choke business will be wiped out within two to three years Too much walking around 1 Methods Man 7 40% Throughput time too long High content of manual operations 2 8 Cycle time too long as compared to standard Schaffner’s prices are above the competitors Workers are not ergonomically positioned 1 1 1 Work sequences not optimised. 3 9 Cost reduction by 25% Related machines are in different floors/ locations causing too much transportation No cost reduction targets with suppliers 4 10 use over specified materials resulting buying expensive materials 5 Machines are not fully automated Still buy materials from Europe ( costly) 6 11 Machine Materials Fig. 2.1

Poor on- time deliveries Presentation title DD.MM.YYYY Problem; Schaffner is losing market share and is being threatened that the entire Choke business will be wiped out within two to three years Quality issues 1 Poor solder joints 3 2 scratches Potting materials not fully hardened 44% Unhappy customers Too long to pick materials at warehouse to fill a work order 4 7 Long set – up times required before Production can start 5 Suppliers not delivering materials on-time Inflexibility of production lines 6 Poor on- time deliveries Fig. 2.2

Presentation title DD.MM.YYYY Reorganise the work flow from traditional production conveyor lines to lean cell concepts. By applying Lean cell concepts , the following causes/ actions will be taken care of; Fig.2.1 Cause #1 Cause #3 Cause #7 Cause #8 Cause #9 Cause #10. Fig.2.2 Cause #4. Cause #5 Cause #6.

Application of LEAN CELL CONCEPTS Presentation title DD.MM.YYYY Application of LEAN CELL CONCEPTS First , the entire process is mapped out as shown in fig.2.3. All the processes are studied by removing the 7 wastes in manufacturing. Figures 3.0 A to 3.0D show the application of lean cell concepts. Fig. E is the final lean cell layout. The lean cell concepts will reorganise all the process stations close together with the objective of a smooth and ergonomic flow. One piece flow is applied. Materials are at the point of use. It is a two bin system .

Fig. 2.3 Choke Process Flow Winding Pin Insertion Presentation title DD.MM.YYYY Winding Pin Insertion Cutting & Wave Dipping Assembly Soldering Fig. 2.3 Choke Process Flow Moulding Baking Hi-Volt test Test Printing Packing

7 Wastes In Manufacturing Presentation title DD.MM.YYYY 7 Wastes In Manufacturing Over Production Unnecessary motion Over Processing Rejects and Defects Seven Wastes Inefficient Transportation Waiting Times Unnecessary Stock Fig.3.0 A

Fig.3.0B 100 meters High inventory hides the problem Presentation title DD.MM.YYYY High inventory hides the problem High water level conceals the rocks UNSTABLE DEMAND LONG SET UPS 100 meters GENERATING DEFECTIVE PRODUCTS REWORK DELAY IN DELIVERIES POOR HOUSEKEEPING HIGH MANPOWER REQUIREMENTS MACHINE BREAKDOWNS MIXED MATERIALS Fig.3.0B

Fig.3.0C 50 meters Low inventory exposes the problem Presentation title DD.MM.YYYY Low inventory exposes the problem Low water level reveals the rocks UNSTABLE DEMAND LONG SET UPS GENERATING DEFECTIVE PRODUCTS 50 meters REWORK DELAY IN DELIVERIES POOR HOUSEKEEPING HIGH MANPOWER REQUIREMENTS MACHINE BREAKDOWNS MIXED MATERIALS Fig.3.0C

Value Adding Processes DD.MM.YYYY Presentation title DD.MM.YYYY Value Adding Processes Smooth cellular flow by connecting the relevant processes together: Operation 1 Customer Raw Material Operation 2 Operation 3 Operation 4 Operation 5 Continued from previous Motion Motion is a waste   Picking up a part is different than going to pick up a part Use natural limited motion Use physics Gravity Ergonomics Product defects Obvious waste of cost of product Opportunity cost of resources spent to make the defect Loss of customer satisfaction/business Internal defect Not using the talent, knowledge and experience of all people is waste Fig.3.0D One Piece Flow Production in a Cellular Layout: Significantly reduces transportation, inventory, and waiting time while improving quality, delivery, and costs. Presentation title

Presentation title DD.MM.YYYY Fig. E Choke Lean Cell

Use Nonaka model for automating the following process operations; Presentation title DD.MM.YYYY Problem; Schaffner is losing market share and is being threatened that the entire Choke business will be wiped out within two to three years By automating the process operations the following causes / actions will be solved. Fig 2.2 Cause # 2 Cause #11 Fig. 2.2 Cause # 2. Use Nonaka model for automating the following process operations; Winding process. Cutting and wave dipping process. Pin- insertion process. Assembly process. Moulding process. This will cut cycle time by at least 35% but most important is the quality improvements ( yield and less scrap).

Fig. D-1 Choke Process Flow Presentation title DD.MM.YYYY Fig. D-1 Choke Process Flow Process Time(sec) Picture Automate the winding process 68.45 Automate Cutting & Wave Dipping 38.34

Fig. D-3 Choke Process Flow Presentation title DD.MM.YYYY Fig. D-3 Choke Process Flow Process Time(sec) Picture Automate Pin Insertion process 1.9 Automate Assembly process 36.84

Fig. D-2 Choke Process Flow Presentation title DD.MM.YYYY Fig. D-2 Choke Process Flow Process Time(sec) Picture Soldering 11.67 Automate Moulding process 2.81

Fig. 1.0 – four modes of knowledge conversion Presentation title DD.MM.YYYY Fig. 1.0 – four modes of knowledge conversion

Yr 1, tacit to tacit = socialization Presentation title DD.MM.YYYY Yr 1, tacit to tacit = socialization Target is to automate winding fully tacit to explicit externalization socialization tacit 3 2 1 from internalization combination explicit Figure 2.0 – 3 years of spiraling knowledge

Knowledge management – Nonaka model Presentation title DD.MM.YYYY Knowledge management – Nonaka model Yr 1 = tacit to tacit SOCIALIZATION( Fig. 2.0) Grand theme; maximachine/minihuman Automate winding Socialization; How- To Get the experts and most experienced winders for a brain storming session. Informal gatherings. Off- site meetings for 3 days. Building samples, experimenting and sharing etc. First 4 months – no formal reviews , just discussion.

Knowledge management – Nonaka model Presentation title DD.MM.YYYY Knowledge management – Nonaka model Yr 2- tacit to explicit – Externalization -automate cutting and dipping tacit to explicit externalization socialization tacit 3 2 1 from internalization combination explicit Figure 3.0 – 3 years of spiraling knowledge

Knowledge management – Nonaka model Presentation title DD.MM.YYYY Knowledge management – Nonaka model Yr 2 = tacit to explicit EXTERNALISATION (Fig. 3.0) Grand theme; maximachine/minihuman Automate cutting and wave dipping How – To Document useful discussion, observations and experiments. Mid – theme ; The cookie concept Aims to produce chokes like cookies. Understand how cookies are fully automated and produced. Consistency of the cookies produced. Low cost production. Easy packing

Knowledge management – Nonaka model Presentation title DD.MM.YYYY Yr 3- explicit to explicit - Combination -Automate the assembly Knowledge management – Nonaka model tacit to explicit externalization socialization tacit 3 2 1 from internalization combination explicit Figure 4.0 – 3 years of spiraling knowledge

Knowledge management – Nonaka model Presentation title DD.MM.YYYY Knowledge management – Nonaka model Yr 3- explicit to explicit COMBINATION (Fig. 4.0) Automate the assembly Grand theme; maximachine/ minihuman Final theme; Everyone loves cookie. How- To. Exchange ideas and experiences. Combine , sort and prioritize concepts of value. Formal and informal communications. Exchange visits with European colleagues.

Knowledge management – Nonaka model Presentation title DD.MM.YYYY >Yr 4 explicit to tacit- Internalization- - Continue automation of other operations Knowledge management – Nonaka model tacit to explicit externalization socialization tacit 6 4 3 2 1 from internalization combination explicit Figure 5.0 – 3 years of spiraling knowledge

Knowledge management – Nonaka model Presentation title DD.MM.YYYY Knowledge management – Nonaka model Beyond 3 Yrs- explicit to tacit Continue automations of other operations INTERNALIZATION (FIG. 5.0) Grand theme; maximachine/ minihuman How- To; Verbalize ,constant interactions and informal groups gatherings. Continue to document success stories and new learnings. Alignment use ROFO MODEL Encourage learning by doing Mindset change and modification of behavior towards learning.

A X- bar , R chart is used to track the dimensions of the housing . Presentation title DD.MM.YYYY Fig. 2.2 Quality issues – solve by implementing Total Quality management TQM Fig. 2.2 Qualty issues Cause # 1 Cause # 2. This is solved by implementing SPC and multivari – charts as shown in Figures 6.0 A and 6.0 B. A X- bar , R chart is used to track the dimensions of the housing . A multi vari chart is used to track the solder defects and the scratches. Cpk – process capability index of 2.0 is set as target. Fig. 6.0 C A TQM approach is also applied throughout the company by incorporating training and development plan

Fig. 6.0 A -1 X- bar chart henry Time hrs Upper control limit 4 3 2 Presentation title DD.MM.YYYY Fig. 6.0 A -1 X- bar chart Upper control limit 4 3 henry 2 Lower control limit 1 2 3 4 1 Time hrs

Fig. 6.0 A – 2 R- chart henry Time hrs Upper control limit 4 3 2 Presentation title DD.MM.YYYY Fig. 6.0 A – 2 R- chart Upper control limit 4 3 henry 2 Lower control limit 1 2 3 4 1 Time hrs

RENAULT – SCHAFFNER’S MODEL OF RENAULT QUALITY SYSTEMS Presentation title DD.MM.YYYY RENAULT – SCHAFFNER’S MODEL OF RENAULT QUALITY SYSTEMS The Multi- Vari chart fig. 6.0B I II III IV 5 defects 4 3 2 1 Time ( hrs or shifts)

Lower Specification Limit, LSL Upper Specification Limit, USL Presentation title DD.MM.YYYY Process Capability Study Lower Specification Limit, LSL Specification mean Upper Specification Limit, USL 61 31 Cpk = 1 Three Sigma (3) process 2700 ppm 32 62 Cpk = 2 Six Sigma (6) process 3 ppm We need suppliers to have the same mindset and practice of Consistency Fig . 6.0C

SUPPLIER MANAGEMENT PLAN( SMP) Presentation title DD.MM.YYYY SUPPLIER MANAGEMENT PLAN( SMP) SMP By localisation of European parts. Manage suppliers by developing merit points ; Quality------------ 50 points. Cost……………..20 points. Delivery…………30 points. On- time delivery targets are jointly set with suppliers. Develop local suppliers that have materials that are less expensive than European materials. This can be achieved by changing the specification of materials with R&D. The above actions will reduce materials costs by 18%.

Figures 7.0 A and 7.0 B show how the target is achieved. Presentation title DD.MM.YYYY The final picture. Figures 7.0 A and 7.0 B show how the target is achieved.

Methods Man 40% Machine Materials Fig. 7.0 A Solve by automation Presentation title DD.MM.YYYY Solve by automation solve by developing a supplier management plan Solve by lean cell Too much walking around 1 Methods Man 7 Throughput time too long High content of manual operations 40% 2 8 Cycle time too long as compared to standard Schaffner’s prices are above the competitors Workers are not ergonomically positioned 1 1 1 3 Work sequences not optimised. 9 Cost reduction by 25% Related machines are in different floors/ locations causing too much transportation No cost reduction targets with suppliers 4 10 use over specified materials resulting buying expensive materials 5 Machines are not fully automated Still buy materials from Europe ( costly) 6 11 Machine Materials Fig. 7.0 A

Poor on- time deliveries Presentation title DD.MM.YYYY Problem; Schaffner is losing market share and is being threatened that the entire Choke business will be wiped out within two to three years Solve by TQM Quality issues 1 Poor solder joints Solve by automation 3 2 scratches Potting materials not fully hardened Solve by supplier Management plan 44% Solve by lean cell Unhappy customers Too long to pick materials at warehouse to fill a work order 4 7 Long set – up times required before Production can start 5 Suppliers not delivering materials on-time 6 Poor on- time deliveries Inflexibility of production lines Fig. 7.0 B

Thank you very much for your attention. Presentation title DD.MM.YYYY Thank you very much for your attention. Any questions?