Inspired Lean Thinking and Kaizen through Leadership and Teamwork

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1 Inspired Lean Thinking and Kaizen through Leadership and Teamwork Roadmap: 4 Assignments Illustrating Improvement Thinking Organisational Structures to complement Lean And Kaizen Common denominators related to Generic Learnings Toolbox moving forward Allan Hunt Manufacturing Manager Peninsula Beverages Company

2 Assignment # 1 - Automotive Senior Flexonics Cape Town Manufactures flexible exhaust connectors, decouplers, cross over bellows, and turbo dampers mainly for the European and North American automotive markets.

3 Senior Flexonics Cape Town In order to manage 13 global manufacturing sites objectively, the MD of the organisation (based in Wales) ensured that each business is audited in Operational Excellence by the same consultant, therefore creating a yardstick and benchmarking each site. Regarding Operational Excellence and Manufacturing Business Excellence Models, for many of us as a leadership team it was our first exposure. We soon realised that the implementation successes and failures were a function of the people and their acceptance as well as our leadership. The business, being well led by a MD (Cape Town), and management team. There were two specific changes we brought about which created major spin-offs towards performance of KPIs in the next 6 years:

4 Senior Flexonics Cape Town 1) Organisational Structure: MD Production HR Engineering Maintenance Finance Quality Process Focus

5 Senior Flexonics Cape Town So in terms of the Process Focus Teams created driving a Matrix Organisation (Unit Structure) the Leadership Team were relentlessly focussed on reaching Operational Objectives (Quality, Cost and Delivery). Driving Lean Thinking, and constantly taking costs out of the business from the smallest improvement to major Capex implementations. As a team we focussed on the KPIs of Throughput Increase & Scrap Reduction whilst holding Quality. We did not realise at the time how we were entrenching new cultures in the business eluding to the way we do things around here I will come back to that point later in the presentation. With definite outcomes from Change Management, to Operational Excellence we were rated on a level of 1 to 5, and we soon realised that we need to change culture in the business to implement improvements with longevity. (These days we refer to these as the practices in the plant.)

6 Senior Flexonics Cape Town 2) Worked hard at creating a TEAM: The moment you feel the need to tightly manage someone, you ve made a hiring mistake. The best people don t need to be managed. Guided, taught, led yes. But not tightly managed. Jim Collins (Good to Great) The great Learning about working on this team was that in order to drive sustainable performance, there needed to be a synergy in the leadership team which would spill into the organisation.

7 Assignment # 2 Glass Industry Glass South Africa subsidiary of PG Group The business brought a different mix of problems, but the need was clear to go very deep operationally on the factory floor, as the culture had no exposure to Operational Excellence. As Leadership we introduced Mission Directed Work Teams on the shop floor (after getting basic rigour & discipline in place) after 6 months. With our Team Leaders on the floor we focused on driving the required outcomes as called out by the MDW Measures Hierarchy of implementation: Planning first inside ERP, no exceptions Rigour and discipline on daily operational activities glass cutting, glass processing, glass toughening followed by OTD

8 Glass South Africa subsidiary of PG Group Achievements: On Time Delivery from below 40% to above 95% Lead Time for delivery from 10 working days to 5 working days It was hard work to drive a daily routine of cross-functional team meetings and KPIs again not verbalising it yet but really starting with Kaizen culture ( the way we do things around here) The word Kaizen is the Japanese word literally meaning: Good Change

9 The Etymology of the word Kaizen

10 Leadership inside Visionary Companies Jim Collins speaks inside his book Built to last about the 12 myths on visionary companies Myth Number 5: The only constant is change For the Visionary Companies - Core values remain the same and in tact in some cases more that 100 years. Yet there exists a powerful drive for progress without changing their core values. This might seem a paradox, but Kaizen does NOT intend a change of core values but refers to this drive for progress

11 Assignment # 3 Automotive Industry Faurecia Emissions Control Technologies Leading Automotive Components Supplier in 34 countries with 320 manufacturing sites globally Implementing Faurecia Excellence System (mirror of Toyota Production System) Working as the Ford Business Unit Manager (about 400 people) manufacturing Catalytic Convertors

12 Faurecia Emissions Control Technologies The success of all manufacturing operations can be measured as a combination of the following 5 drivers or Key Performance Areas (KPA s) : 1. Quality 2. Cost 3. Delivery 4. Flexibility 5. Speed Right to Exist Business Value Faurecia was driving this approach, As their Level of depth in terms of Kaizen practices were mature.

13 Faurecia Emissions Control Technologies This assignment was operationally the toughest going through a very high risk period, almost stopping vehicle plants in Europe. Root cause being the late installation of capacity, and the delayed implementation of operational practices to achieve capacity. At a certain stage management started working shifts, and all because installed capacity was not proved early enough with project launches. An example of how not to do it?

14 Faurecia Emissions Control Technologies However, given operational teamwork, and a drive to achieve objectives on the factory floor, daily targets we achieved and exceeded, and after a six month intense period, supply was stabilised. Quality problems decreased in number and severity. One of the most significant Learnings: The function of leadership is to reduce the variability to the process. Variability being caused by man, machine and material. We will come back to this later in the presentation.

15 Assignment # 4 Beverage Industry The Peninsula Beverages Company we also were faced with which model to implement and through which organisation?

16 Excellence in Results The right practices will deliver the right results Excellence in WCM implementation is achieved through delivering improvements in business processes (work practices) that leads to improvements in business relevant KPIs. Delivering results through a process or work practices ensures sustainability, repeatability and transferability of KPIs that are achieved. Unsustainable Progress WCM Excellence Incorrectly Focused It becomes your culture Excellence in Work Practices

17 The Peninsula Beverages Company What have we achieved? Consistent Quality Performance Safety culture developed that is the way we do things around here Line Utilisation improvement 2011 to 2013 of > than 20% Customer OTD improvements of 15% 2011 to 2013 But more importantly, culture which practices Fairness, Accountability, Continuous Improvement and Teamwork

18 KPIs (Safety, Quality, Morale, Productivity, Delivery, Cost) TEAMWORK VISUAL MANAGEMENT 5S TEAMWORK

19 Manufacturing Continue with World Class Practices VISUAL MANAGEMENT TEAMWORK FOCUSED IMPROVEMENT FOCUSED IMPROVEMENT

20 TEAMWORK Daily Metrics Measured & Displayed

21 TEAMWORK Daily Metrics Measured & Displayed

22 Team Names and Record Performances FOCUSSED IMPROVEMENT

23 FOCUSSED IMPROVEMENT Rewards and recognition

24 Celebrate Achievements with History TEAMWORK 24

25 Hourly Throughput measured by operator First Hour Green FOCUSSED IMPROVEMENT

26 Hourly Throughput measured and displayed (Back- End & Front-End of line) - On filler performance TEAMWORK

27 Example of display of hourly throughput TEAMWORK

28 Line KPI board on Line FOCUSSED IMPROVEMENT

29 Blowing unit Code of Conduct on Line TEAMWORK 29

30 5S - Zoning Blowing unit 5S Zoning

31 House keeping and Performance awards FOCUSSED IMPROVEMENT 5S 31

32 Quality Award Monthly Trophy QUALITY: Is never an accident It is always the result of High intention, intelligent Direction, sincere effort And skilful execution NEW Quality Award

33 Quality Demonstrated

34 Process Operator inside the Value Chain Customers Factory A Suppliers A

35 HR Section A-A Production Manager ENGINEERING Supervisor Team Leader QUALITY Process Operator MAINTENANCE LOGISTICS

36 Common Denominators for Generic Application: The customer inside the factory is The Process Operator The people inside the office is there to serve the Process Operator, and not the other way around.

37 Common Denominators for Generic Application: The job of a supervisor is to the Reduce variability caused by man, machine and material. If you were able to reproduce the exact amount of variability today as yesterday, then the performance for today will be the same as yesterday. Therefore if variability was reduced to a high level of consistency, you will be able to predict tomorrow s performance with a great deal of certainty.

38 Common Denominators for Generic Application: A man without information cannot take responsibility. A man with information cannot help, but to take responsibility. If you measure something and make it visually transparent, it will improve without doing anything else. Gather information with facts and data, applying the Pareto Principles.

39 Common Denominators for Generic Application: Go and see with your legs. (Going to the Gemba.) Inspect what you Expect. Don t tell me Show me.

40 Inside Your Toolbox Moving Forward Imagine 2 Organisations: The first is led by a leadership team whose members are open with one another, passionately debate important issues, and commit to clear decisions even if they disagree. They call each other out when their behaviours or performance needs correction, and they focus their attention on the collective good of the organisation.

41 Inside Your Toolbox Moving Forward Imagine 2 Organisations: The second is led by a leadership team whose members are guarded and less than honest with one another. They hold back during difficult conversations, feign commitment, and hesitate to call one another on unproductive behaviours. Often they pursue their own agendas rather than those of the greater organisation. The question is: what kind of advantage would the first organisation have over the second, and how much time and energy would it be worth investing to make this advantage a reality?... Patrick Lencioni The Advantage Before you start: Be sure that your business/department is ready for the Kaizen Journey.