OBEYA OPERATIONS Tearing Down the Walls to See Problems and Achieve Breakthrough Performance Sam MacPherson, Co-Founder, The Lean Leadership Academy (910) 217-LEAN http://www.leanleadershipacademy.com/contact/ http://www.leanleadershipacademy.com My Background with s The Green Beret Way Because of the complexity of Special Operations missions, the need for Situational Awareness, Coordination, and Collaboration, Special Operations Units have been using the approach for years. Our are known as Operations Centers. 1
a Way of Life Chief of Combat Readiness Branch Chief of Exercise Branch Chief of Asymmetric Warfare Planning Director of Future Special Operations Plans Task Force Dagger Acting Chief of Staff, Training Branch US Army Special Forces Command 2
What is an? A Room with a View Toyota Thailand First time visitors to Toyota s Corporate HQ in Japan are surprised at the large open office areas and the lack of cubicles isolationism. The, or The Big Room, dates back to its early days of Toyota, in Japan. 3
The Universe s Most Famous The bridge of the Starship Enterprise is an NASA s Johnson Control Center aka Houston Another Famous 4
The Vonage Generosity Officer on Breaking Down Walls Walls separate people, Jose! No Walls Concept even in Popular Culture Leadership at the Source TPS style improvement depends on the creative efforts of people led by managers and work team leaders with extreme attention to detail in the execution of daily management techniques. Having (a) proper awareness of problems and an extremely low tolerance for the current condition is a proper attitude. Isao Kato: Father of Standardized Work and Toyota s Supervisor Leadership Development Program 5
There is Always Room for Kaizen In Coordination! The Theory behind is based on a simple idea: DedicateSpace and Time to Coordination and Problem Solving, then organizational barriers will be minimized. The ability to maintain Proper Problem Awareness in Real time, listen to Team member concerns, Collaborate to make discoveries, resolve problems together, accelerate leader and team member member development We will reach our full potential, which is critical to a Lean Organization The promotes coordination, strategy and flexibility while leveraging the expertise and support of teammates from diverse areas. The Result: Effective solutions and actions that can be developed and implemented quickly. Must Support Just in Time and Jidoka I think the ideal situation of the should be the full integration of People and Data; it must mimics the flow of the process. The utilizes the latest technology of human interface communication to promote Just in Time in human processed information with Jidoka s Zero Defects Passed considerations. Casey Ng Retired General Manager Toyota Motor Manufacturing Australia Leader 6
Why Establish an? Types of Global When developing a new vehicle, managers responsible for decision making in design, production engineering, and manufacturing gather in one place to shorten lead time through realtime communications & simultaneous engineering Business Process Layout Centralized data collection, prioritizing and action planning Focus Project War Rooms SQDC/PDCA A3 Problem Solving Jishuken rooms for Every Level Business (Executive offices) Business (Sales) Focus TMC Global l Business (Engineering) Focus Business (Mfg.) Focus Toyota University Global Camry Camry Global Launch Toyota TMM Mfg. Australia Australia Toyota University Toyota Jishuken Problem Study Team TIEM 7
What Most Have in Common Only 3 layers for required approval Clear Objectives Targets Metrics Connections Team A Main Board (VP level) Performance Gaps Project Team B Team C Solution COAs Recommendations Issues requiring ii decisions (Only Two per team) Large Complex Toyota Motor Sales and Finance Large Open Office areas Accommodates dozens of team members Manufacturing Operations Sales and Finance Design Engineering Manufacturing Engineering Potential Issues: Risks being too formal and rigid Interoperability of IT between operations Sensory overload 8
in Sales Operations Introduced by TMS VP Hiroaki Sunakawa, Can the concept work in Sales in the United States? Follows a Customer Focused Plan Do Check Act Cycle. The is organized to reflect the ownership lifecycle, beginning with the Voice of the Customer Reflects the Customer s Experience Toyota Motor Sales Thailand Shopping Service Warranty, Maintenance Voice of The Customer Vehicle Delivery Sales and Financing Product Design & Quality Toyota Motor Sales - NA in Lean Product Development and Design Collaboration here is critical Most projects are Front loaded At Toyota, Concurrent Planning does not allow for Delay most IT tools not helpful Room Layout Follows a (CAP DO) flow Check Adjust Plan Do Cycle Visual Process Flow for Information Identify bottle necks and collaborate to implement Countermeasures Uses Post it s with few colors to eliminate i confusion and ensure meaning understood Allow only two issues a week per team potential solution must accompany issues Ambiguity is not allowed in this type of Red or Green; No Amber 9
Product Design/Design Review Process Layout Model Small Focused Focused with a defined purpose Specific Projects Jishuken or Team room Problem analysis away from noisy gemba environment Limits group size by design Economical Closed rooms melt down barriers Encourages idea contribution Gap Card Suggestions Anyone in the Toyota organization can enter the and contribute a suggestion by filling out a red card or red Post it note. The purpose it to accept anyone s input. An obeya or department leader is assigned to address the Gap and only when the gap is closed is the Gap Card taken down from the wall. 10
Focused PDCA & Problem Solving Process Layout What Metrics Should Be in? Only the Most Important Set Targets State what you really need to accomplish without prejudice Prioritize Measures Top Five/Hot Five: If fail these measures will you will be fired? Takashi Tk hitanaka Target How can we? What can we do? Tie in Company Hoshin to Plant Hoshin to Shopfloor Hoshin: Set SQDCPM KPI 11
Establishing an for Operations and Logistics How to Build Your Big Room A Phased Implementation Approach for Your House of Lean Phase 4 Deployment Focus TPS Integration External Connections Full SQDCPM Phase 2 Flow Focus Standardized Work TPM Integration Level Production Phase 5 Full Hoshin Integration Sales Engineering Phase 3 Full SQDCPM Organizational Problem Solving A3 Management Phase 1 Process Stability Work Standards Schedule Attainment Focus Just-In-Time Right part, right amount, right place, right time Takt-time: Produce at the Pace of Sales Continuous Flow Pull System In sequence of demand Small lot sizes, frequent Change-overs Obtain a Profit and Grow by Increasing Customer Value Through the Elimination of Waste, Burden, and Fluctuation Highest Quality - Lowest Cost - Shortest Lead Time Jidoka Intelligent Automation Quality from the Source (In-station Process Control) Make Each Process The Customer Make Problems Visible Stop and notify about Abnormalities Error-Proof Separate Man from Machine Leveled Production (heijunka) Kaizen Standardization Stability and Reliability in Man, Machine, Methods, Materials Start with Visual Management for each level of the House of Lean. As you mature each level of The House, the nature of the Evolves and Transforms. 12
Voice of the Customer Quality Delivery Price Service Innovation Growth Quality Advancement Plan (Do it Right) d Production Planning 10 10 10 Day Master Month Schedule ee day out n Schedule Joint Sales and (JSP) Team ) Countermeasure Progression (PDCA) 30/60/90 Day Master Schedule 10 day thre Breakdown Safety Quality Delivery Cost Productivity Morale Dashboard Hoshin, Kojo, and Baby A3 Plans Gemba Kanri Plans For Zones and Value Streams Operations Center Model Current Operations Production Status Board Yamazumi Board Dispatcher Operations TPM Advancement Pla an Equipment Relia bility (Fix it Right) ANDON Status Management Cadence Kami Shibai Visual Control Board Open Visual meeting space and Office Environment adjacent to senior executives desks No Walls Direct Communications between customer service, production control, lean supplychain/materials management/production engineering PDCA Flow Visual Connection to Hoshin Production Status Board Integrated with Andon System Break Down Maintenance/Quality Dispatcher System Extreme Problem Awareness and Urgency Strong Leader in the Director Cross functional Leadership Engagement Visual 30 60 90 Day JIT Demand Planning The Truth Telling Room 13
Operations Center in Action Maintenance Mgr And Operations Center Director Andon Status Awareness Plant Quality Manger And Scheduler at the Gemba Plant Operations Manger Discussing Hourly Production Status Update by Group Leader with Value Stream Managers at Production Status Board Team conducts PDCA daily to improve Operations Single Minute Breakdown Response Team PDCA s Red Zone response performance Team prepares to Go to the Gemba for Red Zone Condition Example of Operations Layout 14
Castle Metals Aerospace Paramount Operations Los Angeles, CA LEAN LEADERSHIP ACADEMY Logistics Castle Metals Aerospace Los Angeles 15
Background Manufacturer of Aircraft Engine Parts, Various Aero Structure Components, Aircraft Complex Subsystem Components and Distributor of Exotic Alloys / Specialty Metals Castle Metals Aerospace Began Lean Journey in January 2012 Los Angeles was chosenas Pilot Facility Distribution throughout Western U.S., Canada, Mexico, and Asia Compelling Need for Cost Basis and Customer Service Improvement in Key Performance Metrics Castle s Business Need for Implementing in Sales, Warehouse, Traffic, and Manufacturing Critical End Use applications of our products: Commercial & Business Airplanes: 737, 747, 767, 787, A320, A350, G150, G450, G550, G650 Defense: F 35 JSF, F 15, F 18, C 17, C 130, Apache III Space: Delta IV, Atlas V, Falcon, Dragon, SLS, New Shepard Various other DoD applications 0 Defect Tolerance & 100% OTD of Parts and Product is Required by Customer Base High inventory increasing cost and reducing operating profit and response time. Pressure to relocate from Southern California to Mexico to improve responsiveness and customer service 16
Castle s Business Need for Implementing in Sales, Warehouse, Traffic, and Manufacturing 4 6 Hour Yellow Zone Mix products delivered to multiple locations along fixed or flexible route on schedule or on demand multiple times per day. Delivers twice per shift 2 Hour Green Zone Mix products delivered to multiple sites along fixed or flexible route, on schedule or on demand, multiple times per day. Can deliver hourly. Case Study Discussion Mills Batch production Mill batch minimums Weekly/monthly deliveries regardless of demand Forecast Castle Metals Aerospace Sales, Warehouse, and Fabrication operations Batch production 1.7 Inventory turns Low operating capital High conveyance related cost Forecast Large warehouse storing mostly Air Weekly deliveries Pressure to relocate to Mexico to cut cost and be more responsive Customers Sub-assembly Production based in Mexico for lower labor cost Customs, transportation cost Ship to U.S. and Canada for Mill batch minimums Weekly deliveries regardless production use generally 21-30 days material on hand 17
Leading the implementation of Just In Time requires Commitment from Executive and Senior Management Aerospace CU President James Callan. (from front left to right), General Manager Bill Levealle, the Director, Director of Finance, and Director of Strategic Accounts develop their Just in Time Strategy for their largest distribution customers as a pilot for Just in Time Sales, Warehouse and Traffic No Cubicles Walls Environment Information and Material Must Flow, Castle created a No Cubicles or Walls environment which reduced waste in Digital Lead time, Improved Face to Face Communication, Problem Awareness and Team member Engagement in Sales, Administrative, Engineering, Production Planning, Manufacturing and Distribution Operations 18
Management of JIT & Supply Chain Connectivity Signals and Connections Between Castle and Mills Hearty Triangle Kanban Are used to trigger replenishment from the Steel Mills Signals and Connections Between Customers and Castle A Combination of Replenishment Kanban and Lean Material Handling Carts/Devices Trigger the Customers Need for Materials from Castle. When empty carts are returned; full carts are sent JIT Kanban is swapped at Supermarket Shadow box ensure the right part based on fit Lean Material Transport Carts carry enough material to support two hours worth of material Finished Goods Supermarket Designed to eliminate the need for Expensive Lifts, cranes, or retrieval system Lean Material Kitting Carts delivers the absolutely correct materials to Castle s internal processing or external customers while taking up the exact needed footprint Kanban attached to Customizable Extruded Aluminum Carts are right-sized for each part such as these Aircraft Doors, loaded on Milk Run Trucks and travel cross-country from Virginia to California directly line-side to the customers bl Lean Material Transport Carts moves all the way through the supply change and back to Castle Castle Metals Aerospace Management Cadence 6:45 am Hot Start Meeting No Cold Starts! 9:20 am: JSP Meeting 11:30 am: Mid Day Huddle On Track to Target? 3:00 pm: Plan For Every Part Meeting 4:00 pm: End of Day Schedule Attainment and System PDCA Review Briefing 19
Daily Demand Planning Review (Joint Sales and Production Team Meeting) Monthly Demand for 30 60 90 Day Plan Broken Down into 3 10 Day JIT Plan What We Learned Sales Before: After: Salespeople measured on Monthly All Inside Salespeople l have Two & Quarterly Basis Hour Takt Pitch for Order Entry. Sales Pipeline by Sales Person Sales operates like the production reviewed and Submitted Monthly floor with Production Control Plans with Wins & Losses reviewed Andon system brings immediate Monthly Conference Calls with attention and response to any Remote Salespeople only problem in information flow Institutional walls between Outside Top 5 Progress of Pipeline Sales, Inside Sales, and Operations Opportunities to Improve through Team Kaizen Increased customer response Increased Top Line Revenue Growth 12% Improved connection between Sales and Operations 20
Just in Time Operations and Management = Breakthrough Performance Improvement & Sustainability What We Learned Before: After: Previously: Measured Shift Hourly Production Records Production only. by Mfg. Zone increased Did not Monitor the Use of Understanding of Routine Consumables in Production Rates per Shift Production. and Variances Applauded: Over Better Utilization of Production when it Resources infrequently occurred Much better grasp of Internal Costs per shift Capacity, O/A Increased WIP, Defects, and Starving & Waiting decreased 21
Reflections on Implementing JIT In Castle s Distribution System JIT Requires Daily Commitment & Diligence from Management Requires GM, Regional Operations Manager, Area Manager, Group Leader, Team Leader have Deep Job Knowledge Mechanism for Plant Shop Floor Problem Identification and Problem Resolution work just as well in the front and back office. Made Problems Visible Addressed all Problems that may arise Reduced Un Planned Downtime by 71% Reduced Key Value Stream Cycle Time from Order to Cash by 62% initially, with ongoing improvements. Increased existing capacity by 60% Reduced overall footprint by 60% Able to sale forklifts and cranes no longer needed as a result of transportation waste elimination 12% Top Line Growth with New Project related to improved customer service Close to $1 million in cost savings per value stream of 4 Value Streams Increased Operating Capital (60% accts. Rec. before acct. payable) using A B C demand planning logic Suppliers (The Mills) agreed to deliver daily based on demand signals (Kanban) vs. weekly forecast and mill minimums; decreasing expenditures Successfully integrated with customer supply chain through Lean Material Flow Kaizen Event. Delivery of Just in Time Inventory Levels (one two days cycle stock, only, everyday) Builds Teamwork and Improves Associate Relations reflected by Vastly improved Employee Engagement Survey Results Happy Faces on Castles Aerospace Customers!! 22
Timken Aerospace Bearings Shiloh Plant Rutherfordton, NC LEAN LEADERSHIP ACADEMY Why is this Timken Operations Leadership Team Smiling? 23
Timken Shiloh Management Cadence 7:45 am Plant Fast Response Meeting 10 11 am Line PDCA s 11 12 am Critical Point Gemba walks 3:30 pm JSP review 7 8 pm Line PDCA s Bi Monthly Process Reviews Monthly Hoshin/Kojo Kanri reviews Team-membermember Recognizes Problem and Pulls Andon Cord and Response Connecting the Andon System, Dispatcher & Operations Dispatcher located in Line Stop Zone Awareness Andon Board Lights Up Music Plays Notifying Team Leader Dispatcher Data mines Recent performance issues For the equipment & area That initiated Andon and Reports findings to team leaders Single Minute Response Team Single Minute Response Team Uses SMED approach to Return to Operation in less than 10 minutes 24
Proper Problem Awareness & Fast Response to Problems Andon Signal Station Even for Lean Office, Traffic, and Engineering Issues Andon Awareness SMaRT Team Dispatcher Located in Andon Board Workstation Andon and Downtime Clock Located at Cell Pacemaker Line Stop Awareness Clock Andon Light Andon Board Zone Andon Signal Station With Status Lights and M i Andon Light Switch Andon System and Zone Control Timken Shiloh, Rutherfordton, NC 3. Audible Alarm 4. Team Leader Response 5. Op Center Communication 2. Andon System Visual Problem Identification 6. Single Minute Response Team SMED approach to SQDP Breakdown Problems 1. Notification of Problem 7.Structure dproblem Solving Process 10. Problem prevention re-occurrence 9. Data Analysis 8. Data Uses/Collecti on/mining 25
Before >240 Minute Chain of Response After <60 Minute Takt based Chain of Response Team Leader Acknowledgement and Decision, within minutes, on Problems that interrupt the Flow of Quality, Productivity, Ontime Delivery, and Safety Highly Defined Response Timelines to Safety, Quality, Delivery and Productivity Issues 51 Results in 75% Improvement Response time to Problems What We Learned in Operations & Zone Control Before: Hl Help chain hi was 4 hours, loosely followed Rarely produced objective results Did not realize deviations from plan in real time reducing opportunity to drive mitigation and corrective action After: Help chain 1 hour with rigid operator and support compliance Documented processes driving A3 thinking and prevention reoccurrence Hour by hour tracking and reporting driving action at the time and point of occurrence 26
Reflections on Implementing & Zone Control Implementation of Andon system. Required a change in culture, thinking and discipline i at all levels of the organization Absolute support top down Within 60 days, achieved 29% improvement in output 17% improvement in productivity 12% improvement in schedule attainment and on time delivery. Improved associate engagement and morale Continue to build and improve problem solving skills across the organization Tendency to revert back to what we are good at, used to, quick fix versus permanent, robust repair solutions Ex. Timken Production Improvement Increased by 200+% While Standard Labor Value Earned Increased 25% 100% Daily Schedule Example Production Per Day 3500 3000 Pilot 3103 2500 2552 2390 2664 2629 2666 2490 s Per Day Pcs 2000 1500 1688 1808 1504 1745 2103 2131 MT Goal Linear (MT) 1000 500 54 0 2010 Jan Feb March April May June July Aug Sept Oct Nov Dec Month 27
Why Must All Problems be made Visual, Known, and Communicated? If a problem is left unsolved and the supervisor is uninformed, neither Kaizen nor Cost Reduction can be applied. Once the problem is clear, Kaizen becomes possible. Taiichi Ohno, Former Executive Vice President Of Toyota Motor Corporation 28