2005 Lauras International (USA) Inc.. All rights reserved

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1 2005 Lauras International (USA) Inc.. All rights reserved

2 Agenda: Why Lean Improvement Programmes fail (and how to make sure yours succeeds) Do Lean Programmes Fail? What Does Success Look Like? Key Elements for Successful Programmes Real Examples How to make sure yours succeeds Questions???? 2012 Lauras International. All rights reserved. 1

3 A Short Warm Up Exercise 2012 Lauras International. All rights reserved. 2

4 The evidence says: Do Lean Programmes Fail? US Survey Industry Week / MPI Census of Manufacturing Nov 2007 Nearly 70% of all plants are currently employing Lean Manufacturing as an improvement methodology of which less than a quarter (24%) reported achieving significant results 16.8% of total plants are getting significant results 53.2% of total plants are trying but failing 30.0% are not trying 2012 Lauras International. All rights reserved. 3

5 What Does Success Look Like? Question? What are your companies expectations in terms of return on capital invested? - Mars (Historically) 2 year payback What are you looking for from your Lean programmes? - Reduction in Losses, Improved Quality, Reduction in Costs, Improved Delivery Performance, Improved Safety, Increased Engagement What level of return should you expect? - Some programmes seem happy to break even! - Minimum ROI > 3:1 4 month break even - In some cases ROI 10:1 1.2 month break even So if it was your money where would you invest it? 2012 Lauras International. All rights reserved. 4

6 Key Elements for Successful Programmes Inclination (Leadership) Time (Resources) Ability - (Know What Know How) 2012 Lauras International. All rights reserved. 5

7 Key Elements for Successful Programmes Measurement system - To know where your losses are - OEE system needs to be true, measuring against 100% and not hiding opportunity such as speed - Hiding losses diminishes the drive to improve Ability - (Know What Know How) KPI, metrics (QCDSE) - Balanced Scorecard to identify priorities for further investigation - Stretch targets, to provide the challenge that drives you to succeed - Metric system must demonstrate delivery - Leading / lagging indicators Know the value of your losses Achieving improvement and cost reduction are not always the same things so how do we reconcile? - Need measures like / unit from which accounts can tie back to the bottom line 2012 Lauras International. All rights reserved. 6

8 Key Elements for Successful Programmes Toolkit is vast - Books, videos, courses, online training, degree courses, consultants, gurus, creeds Ability - (Know What Know How) Beware: - Magic bullets - Competing dogma (Lean v TPM v 6σ) - New tools where old ones did not work Key is to match the tools to the losses - Manufacturing / Supply Chain / Office? - Efficiency = 70% - Why are you worrying about 6σ? - Have you matched Speed v Potential - What are the causes of Availability loss? It s Not About Tools A simple toolkit focused on the right problems with the right people will make a difference 2012 Lauras International. All rights reserved. 7

9 Bringing it all together Improvement should be cash generating Key Elements for Successful Programmes Ability - (Know What Know How) Reinvest some of the benefit to accelerate the pace of improvement Pace is a function of: - Level of involvement - Speed you can move around your problem solving cycle (PDCA, DMAIC, EIS) 2012 Lauras International. All rights reserved. 8

10 Get Yourself a Coach Team GB Medals Since 1908 Source The Guardian Key Elements for Successful Programmes Ability - (Know What Know How) All the best teams have a coach The question is which league do you want to play in? 2012 Lauras International. All rights reserved. 9

11 Key Elements for Successful Programmes How many man hours do we need to devote towards improvement? - Impact workshop to engage and up skill them - (5 to 10 people 3 to 5 weeks) - Normally 3 workshops to get started - Thereafter depends on nature of opportunity - Further Impact Workshops - Small group activity - Sometimes a shift a week - Sometimes an hour a day Time (Resources) We can t find extra people they're difficult to release and it would be expensive - Operators have spare thinking time if you can engage them huge free resource Importance of an Improvement Champion See Try Do 2012 Lauras International. All rights reserved. 10

12 The Role of Leadership Must know what you want to achieve? Key Elements for Successful Programmes Inclination (Leadership) Goal Alignment set up to deliver in the right way - Management process to push leadership throughout the organisation Clear Roles and Responsibilities Fact driven - Not being so can lead you down the wrong path Governance for the Lean programme - Defined objectives - Charters (Sponsor, leader, scope, stakeholders, results tracker) - Daily, Weekly, Monthly Review - Aligned with leadership behaviours, actions with agreed date - Daily actions 1 to 2 days timescale - Weekly actions 1 to 2 weeks timescale - Need to track issue and action because issues may need multiple actions until they are resolved 2012 Lauras International. All rights reserved. 11

13 The Role of Leadership Leadership of Lean from the top is essential - Passionate belief in the principle is enough to start - i.e. leaders can afford to learn the detail later (if they re supported) - Commitment to the long haul Key Elements for Successful Programmes - Vision to drive quality of implementation rather than quantity of projects / tools Inclination (Leadership) Confidence to become practically involved (walk the walk) - Auditing - Coaching - Recognising success - Willingness to present / teach methods Above all to be an enabler of People Involvement It s not about leaders solving problems or having the answers 2012 Lauras International. All rights reserved. 12

14 The Role of Leadership Key Elements for Successful Programmes Inclination (Leadership) Most initiatives which fail have done so because the leadership team has failed to understand how to lead the way, and manage the implementation on a robust timescale. It is rarely a lack of ability that holds programmes back rather a lack of aspiration and inclination. Set stretch targets. Hold individuals accountable for results, & reward success. Don t false economise - put the resource in. Laurence Brown True accountability for improvement stems from the top Lauras International. All rights reserved. 13

15 Examples - The Rapid Lean Journey The Lauras International Rapid Lean approach is unique in its ability to deliver very rapid savings early on. Programmes deliver significant net benefit even from year 1, and can be cash positive in 3-6 months. Over 3 years, cash paybacks >10:1 The key to rapid payback is understanding a Rapid Performance Improvement framework is separate to organisational capability First ensure organisational capability foundation exists to support improvement: Health & Safety Compliance Measurement Structure Many businesses overlook rapid improvement, thinking it to be part of Organisational capability 2012 Lauras International. All rights reserved. 14

16 Examples The Rapid Lean Journey The following 6 step process ensures the right levels of engagement. Timeframes are tailored to specific site needs A six step approach that identifies immediate activity at assessment stage, to maximize rate of return. This process will be used to rapidly drive cash and then cash & sustainability. Opportunity Assessment Organisational Capability People Engagement & Pillars Opportunity Assessment Management Workshops Front Line Manager Training Improvement Workshops Meetings, Systems & Behaviour Change Knowledge Based Mentoring 1-4 weeks 1-3 weeks PHASE I Modular over 3-6 months PHASE II 3 x 5 weeks Ongoing mentoring customised by site Behaviours coached 17 times to ensure habits form As required over medium to long term PHASE III 2012 Lauras International. All rights reserved. 15

17 Example Improvement in Action Output increased by 52% year on year Line speed improved +40% Waste reduction of 80% Giveaway improvement from ~12.5% down ~5% Labour cost / case decreased 8% Total savings in excess of 1M 2012 Lauras International. All rights reserved. 16

18 Example Improvement in Action Award Winning Achievement What The Teams Liked About the Workshops Ability to find a fault and following it through to completion Being part of a positive team Investing in people Positive advice and encouragement Sense of achievement and gained knowledge 2012 Lauras International. All rights reserved. 17

19 Example Improvement in Action Heavy Industry Cannot Compete With The Far East! Before After Break downs 6 10 times per day O breakdowns 2012 Lauras International. All rights reserved. 18

20 Example Improvement in Action From Worst Plant, To Best Improver, To The Top Tier 2012 Lauras International. All rights reserved. 19

21 How to make sure yours succeeds Get yourself a good coach Develop a comprehensive approach Provide a full time Improvement Champion Set challenging targets to improve Systematically evaluate and prioritise losses Base decisions on facts and data Have a robust governance process Don t major on the toolkit Get all of the employees involved in addressing losses Make it Fun 2012 Lauras International. All rights reserved. 20

22 How to make sure yours succeeds Questions??? 2012 Lauras International. All rights reserved. 21