1. www.principalityconsulting.com An Introduction to the Lean Business Model

2. www.principalityconsulting.com Overview Lean Model What is Lean? Lean Business Journey, Timing & Themes –Standardisation & Reducing Variation –Identifying & Eliminating Waste –Inventory Management –Stuck in First Gear

3. Act Plan Do Check The Lean Business and Operational Excellence Order Fulfilment Lean Business

4. What is lean? A quick reminder…

5. Lean and Flow aren’t new Any colour as long as it’s black! Manufacturing at Highland Park in 1913

6. When did it all become so complex? We want variety!

7. Variety means... Colour changes Body and shape changes Which, in turn, means... Increased skill requirement More parts and part numbers

8. Which, in turn, means … Process islands More complex scheduling Which, in turn, means …

9. Spaghetti World! AssemblyComponentsPiece PartsProcessMaterial Information

10. What is Lean Thinking? InputsYour ProcessOutputs

11. 1st Step - ID your Value Streams and create flow with what resources you have Inputs Your Process Outputs MRP, Shared Resource, unbalanced shifts and long C/O times Value Stream 1 Value Stream 3 Value Stream 2 Value Stream 4

12. 2nd Step eliminate the “knots and remaining tangles” by dedicating resources to value streams - commit yourself to single piece flow! Inputs Your ProcessOutputs Value Stream 1 Value Stream 2 Value Stream 3 Value Stream 4

13. Lean Business Model Focussed on maximising profitability and generating cash Links seamlessly with OE deployment and Sales and operations planning Supports a plant-specific roadmap Drives local involvement and competition Combines all current best practice

14. Lean Business Journey Time Performance Standardisation of new system and methods Understand the waste in the current system Reduce variation Previous performance Month on month performance improvement

15. Lean Business Journey – 5 Phases Time ConsistencyContinuous Improvement Habitual Behaviour Performance Gaining Control Getting Ready

16. 1 Getting Ready Gaining Control Consistency Continuous Improvement Habitual Behaviour Lean Business Journey

17. Lean Business Journey - Timing Time ConsistencyContinuous Improvement Habitual Behaviour Performance Gaining Control Getting Ready 12 – 18 Months18– 24 Months24 – 36 Months3 – 12 Months0 – 3 Months

18. 1 MeasureStandardise Tools Systems Culture & Principles Lean Business - Themes

19. Getting Ready Objective To understand the current state and implement actions to get started Themes Diagnosis Measurement Communication Defining a baseline Basic routines Activities Diagnostic activities Financial Flow Improvement culture KPI system 5S & workplace organisation Standard meetings & handovers

20. Gaining Control Objective To reduce surprises and firefighting in order to focus on future improvement strategy Themes Standardisation Data Variation reduction Planning and control Building stability Identifying and eliminating NVA Targeted improvement Activities Demand analysis Define stocking policy and realign Develop capacity planner Define constraints and exploit Pull systems Value Stream Mapping Process Mapping 7 Wastes Line balance SMED Breakdown maintenance Rapid problem solving

21. Standardisation and Reducing Variation

22. Guaranteeing Output is a Manufacturing Plant’s Number 1 Priority Leaders add value by successfully controlling the inputs – the 4 P ’s If the inputs are right the output is guaranteed

23. Why is there so much firefighting in a typical day? If the inputs aren’t standardised then there could be: 10 People variables x 10 Parts variables x 10 Plant variables x 10 Process variables 10 x 10 x 10 x 10 How can you manage 10,000 possible outcomes? ?

24. Standards: Effect on Variation and Quality 10x10x10x10 = 10,000 Possible Outcomes 5x5x5x5 = 625 Possible Outcomes Current: Variation Errors Little control Reactive Future Control Improved quality Predictability Prevention

25. From control into continuous improvement The systems, people, equipment, product and all need to go from control to habitual improvement Areas from clutter to clean Engineering from breakdown panic to predictive calm Process from fickle to dependable Product from changeable to consistent Shift management from reactive to proactive Continuous improvement from special effort to daily habit Gaining Control Consistency Continuous Improvement Habitual Behaviour

26. The Golden Triangle Creating Standards for Operational Excellence Standard Work Standard description of a task or process, which if followed consistently, ensures the same output Standard Management Standard process to ensure standards are being met Visual Management Make problems visible and bring them to the attention of the user. Status within 10 seconds.

27. The Golden Triangle Basis for daily error avoidance and control Standard Work Visual Management Standard Management 5S Reject Control Daily Maintenance

28. Identifying and Eliminating Waste

29. In Manufacturing there are 7 Traditional Types of NVA or Waste Waste of T ransport Waste of I nventory Waste of M ovement Waste of W aiting Waste of O verprocessing Waste of O verproduction Waste of D efects and Rework

30. 4 weeks HOURS 1000 2000 AVERAGE INVENTORY High Inventory Manufacturing

31. HOURS 1000 1.5 weeks INVENTORY Low Inventory Manufacturing Has a positive impact on; Quality and scrap Engineering change introduction Margin Overtime & resources at month-end Capital investment Due date performance Improved forecast reliability Leadtime- Leadtime is proportional to inventory

32. Consistency Objective To deliver some quick wins, align by value streams, develop the improvement infrastructure and up- skill middle management Themes Tools Consolidation Widespread learning Activities Policy deployment Align support to value streams Visual stock control system Integrate demand cycle into legacy system Theory Of Constraints (TOC) VSM all families Future state deployment On the job coaching (TWI) First line manager development

33. Continuous Improvement Objective To engage the majority in focused improvement, achieve a revolutionary change, extend the scope to the supply chain and develop a growth strategy Themes Systems Widespread improvement Total involvement Activities Lean line design TPM for all assets Value Engineering/Analysis Target Costing In house improvement events Production Mgr improvement projects Living control plans Six Sigma for specific projects

34. Habitual Behaviour Objective To feedback all the positive improvement experience into the re- design of equipment, systems and suppliers Themes Culture shift Widespread improvement Total involvement Activities Lean project management Lean supply chain (use own skills) Design for manufacture Field failure tracking External benchmarking

35. Lean Business Journey - Timing Time ConsistencyContinuous Improvement Habitual Behaviour Performance Gaining Control Getting Ready 12 – 18 Months18– 24 Months24 – 36 Months3 – 12 Months0 – 3 Months

36. Stuck in first gear and can’t get traction! “Lean production has dramatically lifted the competitiveness of many manufacturing companies and the value they deliver to customers. Despite these triumphs, many firms I visit are stuck in first gear on their initial lean efforts. They are trying to create flow but can’t somehow get traction. An overlooked and recurring pitfall that I’m seeing more often is a lack of “basic stability” in operations.” Art Smalley Lean Enterprise Institute

37. A poor business will get stuck in first gear… Time ConsistencyContinuous Improvement Habitual Behaviour Performance Gaining Control Getting Ready Stuck in first gear

38. Lean Business Journey Time Performance

39. www.principalityconsulting.com Journey Summary Get Ready - To understand the current state and implement actions to get started Gain Control – To reduce surprises and firefighting in order to focus on future improvement strategy Consistency - To deliver some quick wins, align by value streams, develop the improvement infrastructure and up-skill middle management Continuous Improvement - To engage the majority in focused improvement, achieve a revolutionary change, extend the scope to the supply chain and develop a growth strategy Habitual Behaviour - To feedback all the positive improvement experience into the re-design of equipment, systems and suppliers –Standardisation & Reducing Variation –Identifying & Eliminating Waste –Inventory Management –Stuck in First Gear

40. www.principalityconsulting.com