Harvesting Operational Efficiency at AGCO. Michael J. Bradford

Transcription

1 Harvesting Operational Efficiency at AGCO Michael J. Bradford

2 Introductions Industry Challenges & Direction

3 Mike Bradford, Sr. Business Experience Consultant, Delmia-Apriso

4 Industry Challenges Industrial Equipment Shifting market dynamics Pressure from customers Product innovation Faster time-to-market Distributed manufacturing Global supply chains Increasing regulation Cost of compliance New market opportunities New competitors Profitability Shareholder demands

5 Industry Challenges What About You? What s Your Industry? Do These Challenges Apply? What Other Challenges Do You Face?

6 CASE STUDY: Transformation at AGCO

7 Who is AGCO? Worlds 2 nd Largest Farm Equipment Mfg. Largest manufacturer in the world focused solely on Agricultural Equipment Currently #262 on Fortune 500 Established in 1990 Branded heritage reaching back to the mid-1800s Brands include:

8 AGCO Hesston 6 Manufacturing Plants Covering 345 Acres State of the Art Paint Facility Recently Added Vertically integrated 11 Final Assembly Lines Raw Steel Finished Combines, Balers, etc. Over 1,500 Employees, USW Union Products Sold in > 140 Countries Largest AGCO Manufacturing Facility in North America

9 AGCO Hesston

10 AGCO Hesston

11 AGCO Hesston Project Drivers Synchronous Manufacturing Part Management / WIP & Stores Inventory Pull Material to Assembly Process Sequential Manufacturing on Assembly Lines Task Based System What to do When Relieve Inventory at time of Consumption Kitting Reduce Line Side Inventory Flatten BOM Eliminate Paper No More Work Order Packets Time & Labor No More ebay!

12 In Their Own Words To view the complete Video, go to: Note: Name & address are required to view the video

13 AGCO Hesston Project Timeline Infrastructure Upgrade Web-based Application Better Throughput September 2008 Project Kickoff February 2009 Project Start (after blueprint / design) September 2009 Go-Live December 2009 System Shutdown / Reconfiguration January 2010 System Restart Stabilization, Enhancements

14 3 Simultaneous Transformations Business Transformation Re-engineering manufacturing process in place for decades Cultural Transformation Required collective acceptance of change to shop-floor job responsibilities around a disciplined, repeatable, paperless process Technology Transformation Distributed use of technology across entire manufacturing shop floor Replace data entry gathering from small group of clerks located in central dispatch office

15 AGCO Hesston Measurable Areas of Success Inventory High-rise Storage Area reduced by ~40% Line Side Inventory reduced by ~80% Inventory Accuracy increased by ~10% Quality First Time Right increased by 400% for Combines (missing parts originally represented 90% of Defect Rate) Scrap / Rework Cost reduced by ~15% Labor Material Handling FTE Hours reduce by ~20% Overtime reduced by >85% in Mtl. Handling, nearly 20% plant-wide Unplanned Savings Safety Metrics improved by ~10%

16 How Did They Do It? 3 Focus Areas Move from Push to Pull for Materials Move to Paperless Manufacturing Manufacturing Process Changes with Technology as the Catalyst

17 Move From Push to Pull The Primary Focus The Move from Push to Pull Line-side materials limited Re-supply based on material levels and employee call-outs NOT water-spider (even thought it appears so); resupply based on system-driven tasks generated by above activities Shortage report based on real-time inventory also key Kitting implemented Initially 2-4 Assemblies / Kit Now single Assembly / Kit Based partially on locked Sequence and partially on Trigger-points in assembly line

18 Move From Push to Pull. BEFORE AFTER

19 Move From Push to Pull Primary Benefits of the move from Push to Pull: 30-40% Inventory Reductions 20% Lower Material Handling costs Key Component in 400% improvement in First Time Right (combine line) Secondary Benefits of the move from Push to Pull: Key Component in reduction of Overtime (85% in Materials, nearly 20% plant-wide) Increased Value Added (production) space The Biggest Surprise Improved Safety Metrics by 10%

20 Paperless Manufacturing The Problems with Paper: Large, Complex Equipment with Multiple Options As many as 5,000 components Variants for Color, AC, Radio, Interior Result Was Complexity on the Floor Large Shop Packets pages 2 full-time staff to print and organize packets Operators spent significant time looking for information Lost / damaged pages caused issues Wrong / Missing components drove First Time Right and Quality issues Manual reporting of all activities

21 Paperless Manufacturing The Paperless Solution: No More Packets A Single BC Label Serial of Finished Item identifies Components and Variants Scan at each station for required information and for validation All Necessary Details Available On-line Operators have information at their fingertips Information is always current Production Reporting On-line Operators scan in Completion of Tasks drives Automated Production Reporting The ability to clock on to and report multiple jobs saves significant time reporting labor

22 Paperless Manufacturing Primary Benefits of the move to Paperless: Significant impact on Quality improvements First Time Right increased by 400% for Combines Scrap / Rework Cost reduced by ~15% Key Component in reduction of Overtime (85% in Material Handling, nearly 20% plant-wide) Direct reduction in non-value added labor and paper costs

23 Manufacturing Process Change Technology as a Catalyst for SOME Change Forces re-evaluation Enables some new processes Provides better access to data and new views of data Fixed Sequence (Technology Independent) Kitting Flexibility to Support Current & Changing Processes AGCO Processes, not Vendor Processes New Product Lines New, Automated Paint Plant Assembly Process Changes

24 Lessons Learned Develop a Good Plan!!! Understand Your Business Document Current Processes Document Ad-Hoc Processes Drive Deeper Into the Work Force in the Development Stage System Readiness Test, Test, Test,!!! User Acceptance Testing High Volume Stress Testing Test Interfaces Train, Train, Train, Users and IT / Support Establish Support Center Great Flexibility CAN Result in Great Complexity! Understand Your Needs Keep It Simple!

25 What about YOUR company? Goals, Concerns, Challenges

26 Operational Efficiency at Your Company What Projects are you working on? What are your Goals / Targets? Is there Hidden Potential? What Tools / Approaches are you using? What are your Concerns / Potential Challenges?

27 Wrap up / Q&A

28 Harvesting Operational Efficiency at AGCO Thank You!!! Michael J. Bradford