Creating a Culture of Daily Kaizen-Bryan Crowell. Copyright: SISU Consulting Group All Rights Reserved

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1 Creating a Culture of Daily Kaizen-Bryan Crowell

2 The Model

3 Testing and Refining the Model: Oil Higher Education Manufacturing Health Care Retail Sales

Alliant Techsystems, Inc. Alliant Techsystems, Inc.

four operating segments, and operations in 24 states, Puerto Rico and internationally.

ammunition and medium caliber gun systems and generates 45% of ATK s total sales.

4 Alliant Techsystems, Inc. Alliant Techsystems, Inc. (ATK) is a premier aerospace and defense company with more than 18,000 employees, four operating segments, and operations in 24 states, Puerto Rico and internationally. ATK s Armament Systems division is the world s largest manufacturer of military ammunition and medium caliber gun systems and generates 45% of ATK s total sales. First 12 months: 31% improvement in throughput 100% on time delivery (first time) $38 million in savings 40,000 ideas implemented

University of Washington Founded in 1861, the University of Washington (UW) is one of the oldest

Six UW faculty members have won Nobel Prizes since 1989.

5 University of Washington Founded in 1861, the University of Washington (UW) is one of the oldest public universities on the West Coast with three campuses, 92,000 students and a presence in more than 50 locations in 10 countries. UW ranks in the top 20 research universities in the world with over $1.4 billion in annual grants. Six UW faculty members have won Nobel Prizes since First 24 months: 104 areas involved 910 team members engaged 24 internal coaches 17,000+ implemented ideas 472% Return on Investment $15 million in hard savings last year (30% of the teams audited)

Christie Clinic Founded in 1929, Christie Clinic

multispecialty group medical practices in

Christie Clinic has 153 providers and more than

First 24 months: 7% increase in gross margin 22.

6 Christie Clinic Founded in 1929, Christie Clinic is one of the largest physician-owned, multispecialty group medical practices in Illinois. Christie Clinic has 153 providers and more than 800 employees over 16 locations. First 24 months: 7% increase in gross margin 22.1% increase in net income per physician 29% increase in shareholder equity 7.6% increase in satisfaction 10,000+ ideas implemented

seats, sleep sofas, modular furniture and leather upholstery.. First 24 months: 34.9% increase in revenue per opportunity 71.

7 La-Z-Boy Furniture Founded in 1927, La-Z-Boy is one of the world s leading residential furniture producers. The company manufactures a full line of products for the living room and family room, including recliners, sofas and love seats, sleep sofas, modular furniture and leather upholstery.. First 24 months: 34.9% increase in revenue per opportunity 71.2% increase in in home as % of sales 41.7% increase in inventory turns 3,700+ ideas implemented 4.4% increase in gross margins 13.4% reduction in traffic

8 Today s Focus +

9 Understanding the Four Key Systems What does it mean to win or lose? Define clear expectations of what it means to win or lose at each level of the organization Are we winning or losing? Install visual management systems to align activities and see problems in real time How can I help you win more often? Engage management through reaction protocol, coaching and standard follow up If we are losing, what are we doing about it? Engage employees through teambased problem solving, daily kaizen and recognition Copyright: SISU Copyright: SISU Consulting Group All Rights All Reserved Rights Reserved

10 There was a time when the lone eagle on the Mountain was a popular symbol for leadership In our fast-moving organization we must have leaders throughout it

11 If you want a better metaphor than the eagle consider the wild and wily Great Northern Geese

12 Everyone is Aligned A flock of Geese will fly thousands of miles in a perfect V formation-and therein lies the secret: As each bird moves its great wings, it creates an uplift for the bird following. Formation flying is 70% more efficient than flying alone.

13 Setting and Aligning Strategy (Defining What it Means to Win)

14 Key Elements of Strategy Deployment Why What How Do

rmt Policy Deployment Goals to Action Quality GOAL Delivery Employee Involvement OBJECTIVES orm Team Prevent Problem Recurrence Cost Engage Mgmt.

15 rmt Policy Deployment Goals to Action Quality GOAL Delivery Employee Involvement OBJECTIVES orm Team Prevent Problem Recurrence Cost Engage Mgmt. At Worksite JDPS Employe MANAGEMENT CREATES e STRATEGIES Engage ment SUPERVISORS CREATE ACTION PLANS GOAL ASSOCIATES CREATE RESULTS The company s needs and opportunities are translated into Goals by the business leaders These Goals let the team know when the Company Wins JD Goals: -Strengthen Business Partners: World Class Supply Chain Partner for our customers and suppliers -Strengthen Stake Holders: Drive EBIT, Increase Profit Sharing over target -Strengthen our Employees: Educate and Train employees to be successful at work and Life Strengthen the Community: We will actively support the community through service and by having a positive impact on the environment

Ac Policy Deployment Goals to action rmt Quality orm Team Prevent Problem Recurrence GOAL Delivery Employee Involvement OBJECTIVES Cost Engage Mgmt.

Objectives. The Metrics for each objective.

16 Ac Policy Deployment Goals to action rmt Quality orm Team Prevent Problem Recurrence GOAL Delivery Employee Involvement OBJECTIVES Cost Engage Mgmt. At Worksite Employe MANAGEMENT CREATES e STRATEGIES Engage ment SUPERVISORS CREATE ACTION PLANS ASSOCIATES CREATE RESULTS Goals are applied to key areas and processes with clearly stated Business Objectives. The Metrics for each objective. Let the team know how we keep score Safety Quality Delivery Employee Involvement OBJECTIVES Labor efficiency >100% Cost JD Operational Objectives: Safety: No Accidents, Injuries, or environmental findings Metric TRR less than 2 Environmental Score above 97 Quality: 100 % first pass yield Reduce COQ by 20 mill Improve FPY reduce LAT failures by 20% Delivery: 100% on time internal and external demand OTD 90%VS over 90% Perfect transition to production Improve OA by 80% Employee Engagement: Engaged employees driving results 5 suggestions implemented per person 2 projects implemented per 10 employees Cost: Eliminate waste through JDPS principles

Strategy Deployment Goals to Action JD Operational Strategies GOAL OBJECTIVES JDPS MANAGEMENT CREATES STRATEGIES PES Employee MANAGEMENT CREATES Engagement STRATEGIES Engage

Engage each person in continuous improvement, through training and recognition SUPERVISORS CREATE ACTION PLANS ASSOCIATES CREATE RESULTS Develop processes to promote stop

17 Strategy Deployment Goals to Action JD Operational Strategies GOAL OBJECTIVES JDPS MANAGEMENT CREATES STRATEGIES PES Employee MANAGEMENT CREATES Engagement STRATEGIES Engage Mgt at the worksite through reaction protocols, daily meetings and standardized work Prevent problem reoccurrence with effective problem solving,yokoten, and process focus Engage each person in continuous improvement, through training and recognition SUPERVISORS CREATE ACTION PLANS ASSOCIATES CREATE RESULTS Develop processes to promote stop and fix culture. Use JDPS to facilitate flow and eliminate waste. Objectives are translated into Strategies for each business area. Strategies are the game plan to score and win.

CREATE ACTION PLANS ASSOCIATES CREATE RESULTS Detailed Actions are planned

18 Strategy Deployment Goals to Action GOAL OBJECTIVES PES Employee MANAGEMENT CREATES Engagement STRATEGIES SUPERVISORS CREATE ACTION PLANS SUPERVISORS CREATE ACTION PLANS ASSOCIATES CREATE RESULTS Detailed Actions are planned and implemented in every work area. These are the Plays to be executed on the field

19 Even the best plans will fail unless supported by rigorous management follow up Actions must be tracked and measured to assure Results meet Goals Managers role to get results Managers get results through people

20 Strategy Deployment Goals to Action How Many Brains in your organization

21 Cascading Organizational Goals and Objectives Plant Scrap Results Organization Group Scrap Results Department Team Scrap Results Team Machine Scrap Results Individual

22 When is it Working? Everyone understands the direction and is focused on the goals Adjustments are made at each level by those closest to the source Autonomy is created and teams are empowered Enables the development of a kaizen culture

23 Installing Visual Management (Seeing Problems in Real Time)

24 Visual Management

25 Strategy Deployment, Process Design, Jidoka

26 Strengthening Community, Partners & Employees

daily kaizen Line Scrap Results Supervisor Scrap Results Manager Scrap Results Plant

27 Creating a Visual Management System Visual management needs to be established at every level of the organization Visual management connects the how, why & what of daily kaizen Line Scrap Results Supervisor Scrap Results Manager Scrap Results Plant Scrap Results Line LMPU Results Supervisor LMPU Results Manager LMPU Results Plant LMPU Results

28 Visual Management Aligns the Goals Scrap Customer Returns Safety Hourly throughput Daily escalation Abnormality Chart Weekly Throughput trend Efficiency and trend Training and Yokoten Suggestion Status Projects Suggestion Process 5S Score

29 Strengthen Business Partners Strengthen Our People Strengthen Business Partners and Stakeholders Visuals Summarize the Goals (Are we winning) Team Standards Date: Weekly Month 8/30 9/6 9/13 9/20 WEEK Week # Goal Goal TTL AVG. % Quality: Number of weeks completed: 4 Operator Id Scrap: $ 150.0% $ 3, $ $1, $ $ $ $ Q.A. Identified Scrap $ $0.00 $0.00 $0.00 $0.00 $ $0.00 $ % and Rework: Cust. Identified Scrap $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $ % and Rework: VS-8 Improvement Team VS-8 Improvement Team September Team Leader: Chad Sorenson P roduct Audit Score: 100% 100% 100% 100% 100% 100% 100% 100.0% CA Response Score: (2 Weeks) 100% 100% 100% 100% 100% 100% 100% 100.0% Rev. NC System Audit Score: 100% 100% 100% 100% 100% 100% 100% 100.0% A verage 110.0% Cost of Production: Overall Productivity 100% 100% 134% 87% 109% 99% 107% 107.3% Scheduled P.M. 100% 100% 100% 100% 100% 100% 100% 100.0% A verage 106.0% Safety, 5S and Training: Housekeeping and 5S Score 100% 100% 96% 96% 96% 96% 96% 96% Reportable Incidents: 100%each 100% 100% 100% 100% 100% 100% 100% 100% Improvement Ideas % Skill Increases % A verage 90.3% Schedule: Weekly Throughput P erformance 100% 100% 119% 70% 90% 96% 94% 93.8% On Time to Shift 100% 100% 100% 100% 100% 100% 100% 100.0% On time to shift will be calculated as a 5% deduction for every occurrence. Average 95.0% Weekly Combined Final Score (%) 115.1% 105.0% 104.0% 104.0% 95.9 Average Points Final Scores for Quarter Percent Possible Quality 110.0% 40 Cost of Production 106.0% 30 Safety 90.3% 6 Schedule 95.0% 24 Combined Final Score/100 Combined Final Score (%) Final Score % % % % 80.00% 60.00% 40.00% 20.00% 0.00% 115.1% 105.0% 104.0% 104.0%

30 Real Time Visual Management Area managers know where to engage Operators if they re winning or losing during the shift Supervisors know if they ll meet weekly targets Supervisors know where members are engaged now Techs know priorities in realtime

31 What Do Visuals Do? Connect everyone to the mission of the organization through aligned action Create an environment where abnormal vs. normal can be seen at a glance Enable team based problem solving at the point of use in real time

32 (Seeing Problems in Real Time) Engaging Teams through Daily Kaizen (Solving Problems in Real Time)

34 See the Problem

35 Respond to the Problem Real Time Reaction Protocol Rules for Reaction 1. Start Collecting Information 2. Dispatch Maintenance 3. Notify Quality 4. Call Hot shot 4. Notify supervisor 1. Work in-between shift 2. Notify Supervisor 1. Schedule Weekend OT 2. Notify Manager

36 Understand to the Problem (Give the team the data, Leverage Knowledge and skill of team) 1st Level Pareto (Escalate the Issue) 2nd Level Pareto (Focus your Search) Align focus real-time (Dynamic Drill-Down)

37 Enable team based problem solving at the point of use in real time Machine Histories & Actions Get what s needed to repair Update Action & Status Real-time access to TWI

38 Understand the Problem Investigate the Cause and Answer the Question Why

39 Solve the Problem

40 Keys to Idea Systems Keep it simple and visual Owned by the team Connect it to a simple and standard follow up process IMPLEMENT IDEAS QUICKLY Dedicate time for problem solving and kaizen

41 Machinist are way Cool

42 Generating Great Ideas (L. Thompson) Focus on quantity over quality Document every idea Individually generate ideas then present to team (Brainwriting) Spend time with other teams

43 Celebrate - Inspire them with Recognition Recognize them and they will inspire everyone to perform Make the results Visual Promote success

44 Keys to Effective Recognition Make it Personal - Put a Name and a Face to the Change Give a Theme to the Change Be Specific about the Behaviors Be Sincere...Does the Behavior Really Matter?

45 Engaging Managers in Standard Follow Up (Going to Gemba and Coaching for Success)

46 Why Standardize Follow Up? To ensure management faces reality by going to gemba The best Management follow up is real time with escalation protocols To coach employees and reinforce importance of standards To assist in problem solving to support daily kaizen To build trust with team members

47 Elements of Standard Follow Up Individual and Team Gap Reviews - Daily, Weekly, Monthly, Quarterly 1 on 1 Coaching Escalation & Reaction Protocols Leader Standard Work Yokoten

JDPS Daily Escalation Process Management Team Huddle 8:30 Team Leader Huddle 8:00 a.m. Team Huddle 3:45 p.

lessons learned Recognize team members All team leaders meet daily Report on current status and

Recognize Team members Work Center Team Meets both shifts Review Abnormalities Escalate issues

48 JDPS Daily Escalation Process Management Team Huddle 8:30 Team Leader Huddle 8:00 a.m. Team Huddle 3:45 p.m. Review shop Status Take Action for escalation Review past due CAR Report on constraints Share lessons learned Recognize team members All team leaders meet daily Report on current status and performance Share corrective actions and lessons learned Escalate issues to management team Recognize Team members Work Center Team Meets both shifts Review Abnormalities Escalate issues Discuss Corrective Actions Ideas for improvement Recognize Team members Escalation Management Action and support

49 Process Standard Work Standardized Work Standardized Work 5s Review Ask employee if they are winning or losing Participate Team Huddle M T W Th All Levels of management have standardized work Safety Quality Delivery Employee Cost PPE adherance, Smock Glasses, Lifting Standards Ask employee if they have any safety concerns Process Sheet being Follow ed Scrap Reporting by Shift/ Red bin- Yellow bin process Validate a product feature/product Audit Productivity Normal or Abnormal Problem Solving: Five Why's for Set up or Run Time Validate following Priority Report/Schedule/Pull System Reaction Protocols being follow ed Validate the Inspect your Neighbot process Reivew kaizen board follow protocol Ask employee if they have any Kaizen idea Review one employee to standard w ork Validate Training Matrix Review throughput Validate Set up times using the timers Standardized work should be focused on the process All levels should have common standard work activities

50 Keys to Standard Follow Up Should support the development and sustainment of the Four Key Systems Make it visual & hold leaders accountable

Everyone Leads At a distance, the flock appears to be guided by a single leader. The lead bird does in fact guide the formation, winging smoothly and confidently through the oncoming elements.

51 Everyone Leads At a distance, the flock appears to be guided by a single leader. The lead bird does in fact guide the formation, winging smoothly and confidently through the oncoming elements. If the lead bird tires, however, it rotates back into formation and another bird moves quickly to the point position. Leadership is willingly shared, and each bird knows exactly where the entire group is headed.

52 Engagement Multipliers

53 Everyone Cares In good times or bad, Great Northern Geese stand by each other. When a member of the flock gets sick or wounded, two geese drop out of formation and follow it down to help and protect it. They stay with it until it is able to fly again. Then they soar off together to catch up with the flock

54 W ECARE

55 WE CARE Monthly Service Activities Quarterly Employee Appreciation activities DOL Certified Apprentice Program Profit Sharing Program

56 We Care Improve employees lives through community involvement development & training fun activities

57 We Care Focus culture towards teams, empowered employees and personal respect.

58 What Does an Engaged Workforce Look Like? Fun but focused environment Shared ownership of the problems Team members generating and implementing lots of ideas Results (5x rate of improvement)

The company employs 140 team members and was awarded the Utah Manufacturer of the Year Award in 2012.

59 JD Machine Founded in 1979 and located in Ogden, Utah, JD Machine is a privately held manufacturer of high value machined parts, sheet metal components and complex assemblies. The company employs 140 team members and was awarded the Utah Manufacturer of the Year Award in And a Modern Machine Shop Top Shop years: 59 increase in sales 99.6% FPY (record) Record Delivery 90% reduction in past due jobs Record Profitability 5,000+ ideas implemented

60 But if you can t empower people

61 If we have as much sense as geese, we too will share the leadership and stand by each other in difficult times as well as when we are strong -Dan Zadia

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