LEAN Processes, Inc. PQC : Our Race Path to Excellence TRAVELLERS HOTEL SUBIC BAY FREEFORT JUNE 11, 2015

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1 LEAN Processes, Inc. PQC : Our Race Path to Excellence TRAVELLERS HOTEL SUBIC BAY FREEFORT JUNE 11, 2015

2 LEAN continues to grow and diversify by acquiring : Cosmetics Manufacturing License Drug Manufacturing License FDA GMP Certification Halal Certification HHS License ABOUT US: A union-free, dynamic, fast growing, Filipino-owned company based in San Pedro, Laguna, Philippines. Established to cater industries in the cosmetics and personal care.

3 Our Vision Be the preferred toll manufacturer/packer for non-core processes of both local and multinational companies in the Philippines and abroad. Our Mission We deliver quality products and provide customized valet services that will delight our customer by utilizing reliable manufacturing techniques Core Values Veracity, Excellence-seeking, Aesthetic Working and Societal Responsibility

4 Business Values Teamwork & Loyalty, Lean Thinking, Operational Fluidity and Organizational Transparency Quality Policy We are an organization of quality-conscious people who are committed to transforming the company core values of Continuous Improvement Total Employee Involvement and Superior Customer Satisfaction into meaningful processes and results that will add value to all products we manufacture and the services we provide.

5 A Dynamic Change Model Where Are We? How Do We Know We Are Getting Closer? Where Are We Going? Be the preferred toll manufacturer / toll packer for non-core processes of both local and multinational companies in the PH and abroad How Do We Get There?

6 Being preferred is relative all in the service of the CUSTOMER! Facilities (Compliance and Upkeep) People (Skilled, Motivated) Time (Productive Use) Equipment (Effective Use) Materials (Efficient Conversion)

7 GOOD, CHEAP and FAST Make it better, cheaper, faster! (Quality, Cost, Delivery) It is not the big that eat the small. It is the fast that eat the slow.

8 WHERE WERE WE? (before PQC)

9 KEY RESULT AREAS Inconsistencies in Performance Efficiency Attendance GMP/GHK/5S Waste Quality Customer Satisfaction Measurement Training & Development Misalignment of trainings versus expected performance result

10 WHAT DID WE DO? LINE PERFORMANCE MANAGEMENT Efficiency Monitoring Attendance Monitoring GMP/GHK/5S Monitoring Waste Monitoring Quality Monitoring TURNING DOWNTIME INTO RUNTIME Improve/reduce set up time (Process Analysis-Prior Preparation) Quick Changeover (Availability of spare)

11 WHAT DID WE DO? Controlling and assuring QUALITY at every PROCESS step. Real time documentation (BMR- Batch Manufacturing Record) Establish Process Reliability Documentation and Standardization of Procedure Root Cause Analysis All out war on Waste and Cost Drivers People involvement on Cost Saving Projects Understanding & embracing tighter standards

12 COST SAVING PROJECTS 1.Utilization of 60% waste water during regenerating of Purified Water for Production Process. Annual saving of P22, Waste reduction projects improved product yield from 86% to 94%. Translated to peso value: an annual increase of PhP 380K equivalent service charge 3. Close monitoring of raw materials nearing expiry. Check life if can be extended for up to 1 year from actual expiry date. Reduce cost by PhP15K annually 4. Simple turning on and off of aircon units: PhP500 saved monthly per area, equivalent to several burgers for the team

13 WHAT DID WE DO? Achieving Excellence in Manufacturing Through Self Directed Teams Small Group Activities Production Qualification & Certification Process Rewards and Recognitions LEAN Promo(Performance to Objective) Efficiency Achievement Award Super Star Award Star Award Quality Award LEAN Champion Team

14 WHERE WE ARE NOW? (after PQC)

15 WHAT DID WE DO? LINE PERFORMANCE MANAGEMENT Efficiency Monitoring EFFICIENCY EFFICIENCY Linear (EFFICIENCY)

16 WHAT DID WE DO? LINE PERFORMANCE MANAGEMENT Attendance Monitoring ATTENDANCE MONITORING ATTENDANCE Linear (ATTENDANCE )

17 WHAT DID WE DO? LINE PERFORMANCE MANAGEMENT Waste Monitoring Average Jan WASTE MONITORING Feb Mar Apr May WASTE Linear (WASTE)

18 WHAT DID WE DO? LINE PERFORMANCE MANAGEMENT GMP/GHK/5S Monitoring GMP/GHK/5S MONITORING GMP/GHK/5S Linear (GMP/GHK/5S )

19 WHAT DID WE DO? LINE PERFORMANCE MANAGEMENT Quality Monitoring QUALITY MONITORING QUALITY Linear (QUALITY)

20 HOW DID PQC HELP US?

21 PQC Criteria Framework A Systems Perspective Company Profile: Environment, Relationships and Challenges 2 Planning 5 Workforce Focus 1 Management 7 Results 3 Customer Focus 6 Operations Focus 4 Measurement and Data Management

22 HOW did PQC help us? Able to identify strength and weaknesses Able to identify areas to address Focus on concerns related to customers, workforce, process operations resulting to harmonious relationships. The need to know more about the industry we are at, who the industry players are and our share of the industry pie. Better approaches and deployment as tasks becomes systematic following the PQC template As a result, we became more confident in what we are doing and became more aggressive in going after new clients.

23 FORCES (4 C S) OF CHANGE Demanding CUSTOMER Increasing COMPETITION 2015 AEC COSTS Rising SURVIVE OR DIE CRISIS Impending

24 PERFORMANCE DASHBOARD LEAN PROCESSES, INC TEAMS January February March April May June July August September October November December TOTAL YTD % RANK Expedition Explorer Mini Cooper Fortuner Benz Ferrari

25 You can ONLY manage what you can measure

26 How Can Data Help You?

27 By Showing What Really Is

28 SELF DIRECTED Teams: Key Ingredients of a Fully Engaged Workers Support Programs Ability Do they know how to do it? Skills training Continuous education Direction Do they know what to do? Goal deployment Business goals shop floor KPIs Authority Motivation Are they allowed to do it? Do they want to do it? Right organizational structure Functional integration Team empowerment Rewards & recognition scheme Pay for performance Communication

29 Customer loyalty Customer Experience High Zone of advocacy Low Below expectations Zone of defection Customer experience Minimum Zone of indifference Desired Exceeds expectations Process performance is a liability High turnover High cost of acquisition of new customers Process performance is neutral High cost to retain customers Process performance gives competitive advantage Low cost of new customer acquisition Profitability driven by loyalty

30 FUTURE PLANS Product Development Build a separate Research and Development Entity which will focus on PRODUCT DEVELOPMENT, making it a profit center instead of being a cost center. Trading Business We will directly purchase raw material ingredients from principal suppliers instead of dealing with traders for our own production use and for our prospective clients.

31 What Are We Doing so far : 2015? 1. We re pushing religiously USE of dashboard to visually pinpoint and control abnormalities. 2. We re making sure that PQC Framework is used as a template. 3. We re educating the organization on the measures and methods needed to improve.... SO WE WILL KNOW WE ARE GETTING CLOSER TO WHERE WE WANT TO BE.

32 Building a culture of Excellence Quality Culture Quality Vision / Mission (AWARE) Quality Leadership (INSPIRED) Quality Policies (GUIDED) Quality Training (ENABLED) Quality Empowerment (TRUSTED) Quality Behavior (OBLIGED) (INVOLVED) Quality Attitude (CONVINCED)

33 STRATEGIC PLANNING

34 EFFECTIVE LEADERSHIP TRAINING CLASS ROOM SERIES VALUE RE-ORIENTATION FOR SERVICE EXCELLENCE GMP & PERSONAL HYGIENE FIRE FIGHTING WORKSHOP

35 TRAINING

36 Sustaining High Performance Celebrate even the small wins Align shop floor KPIs to business goals & provide regular feedback / visual updates Recognize exemplary team performance, much better in public Incentive scheme Pay for performance schemes High performance leadership (entrepreneurial) Team development activities Mentor / TEAM Benchmarking, training Classroom Series

37 AFFILIATIONS and CSR CTFAP Global Walk CCIP Fun Run I will Walk for a SCHOLAR :ANCOP

38 Christmas Parties: More fun at LEAN!

39 SUMMER OUTING & Team Building: MORE FUN AT LEAN!

40 VALENTINE: More fun at LEAN!

41 Finally, our resulting benefits Empowered workforce Higher productivity Reduced waste High morale Flexible workforce Better customer experience Clearer direction Confidence to face the future Significant gains, yet we have a lot of opportunities to do better READY FOR ASEAN!

42 OUTBOUND LINKAGES Myanmar Cambodia Laos Vietnam

43 Take away points: 1. SUCCESS is not a function of.. Employee Size, Plant Size, Annual Sales Industry size, years in the business 2. The small companies can be the new BIG, given the right MIX. 3. Not just VOC: WORKERS & Processes 4. Global mindset that is competitive 5. Collaborate. Collaborate. Collaborate. 6. The VALUE of doing good, often results to good business sense.

44 SO, HOW CAN PQC HELP YOU?

45 Only those who have done something are in a position to say it can t be done.

46 THANK YOU FOR LISTENING AND ENJOY THE JOURNEY.

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