Improve the Business Performance Continuously

1
Continuous Improvement with Operational Excellence
Create Standard Work for Flow Easily with
Operational Excellence
2
Operational Excellence
Systematic management of all the processes to
achieve world class performance by
? ? ?
Efficient utilization of tools
Optimization of Resources
Elimination of process waste / inefficiencies
www.opexsociety.org
Let Your Organization Be at Competitive World for
Long
3
Lack of operational Excellence
Results in low profitability and cash flow issues
When do you address it?
www.opexsociety.org
4
Operational Excellence Becomes a Concern when

• Cash flow starts to get a little tight
• Trouble meeting payroll
• Suppliers are screaming for payments
• Inventory is out of control
• Expenses are rising faster than revenue
• Backlog starts to shrink
• Opportunities are missed due to cash flow issues

www.opexsociety.org
5

• Improving Profitability Traditional Approach
• CFO/Department Head is responsible to lead
• the cost cutting efforts
• Focus usually is on cutting expenses

? Reduce Employee Perks
???? Workforce Reduction
Scrutinize Purchasing
Extend Payment Terms
www.opexsociety.org
6
Performance Improvement Strategic Approach
Generate Ideas to achieve a better level of
output
measure the current level of performance
identify waste
Performance improvement is all about organizationa
l change
www.opexsociety.org
7

• Ideas Should be
• Effective
• Efficient, and
• Adhere to Market Forces

www.opexsociety.org
8
How to Generate The Ideas Value Stream Mapping
?
? Eliminate Waste
Increase Profits
Visualize Your Processes

• Lean A business system for organizing and
  managing product development, operations,
  suppliers, and customer relations to create
  precise customer valuegoods and services with
  higher quality and fewer defectswith less human
  effort, less space, less capital, and less time
  than the traditional system of mass production.

• Value Stream Mapping is a Lean technique used to
  analyze the flow of materials and information
  currently required to bring a product or service
  to a consumer.

www.opexsociety.org
9
Purpose of Value Stream Mapping

• Identify processes where Lean techniques can be
  applied
• Help reduce / eliminate wait time
• Eliminate process waste
• Reduce production cycle and processing time
• Understand process linkages and dependencies
• Create the basis for Lean implementation plan

www.opexsociety.org
10
Value Stream Mapping Case Study
www.opexsociety.org
11
Business Case
Problem Statement Losing Business to competitors
due to long lead times and late deliveries.
Solution Improve lead time performance by
synchronizing production with customer
demand. Key Requirements

• Ideal State
• On-Demand
• Defect Free
• 1-By-1
• Lowest Cost

1. Reduce flow time to meet customer demand.
2. Reduce RAW, WIP and FGI levels.

Measurements

1. Total flow time
2. Inventory levels
3. EBIT performance.

www.opexsociety.org
12
Value Stream Map Current Process
www.opexsociety.org
13
Team Brain Storming Session

• Can Customer increase the size of the blanket
  order and provide us with a longer term forecast
  visibility?
• Can we flow the demand down to the supplier with
  a longer term visibility?
• How can we reduce wait time?
• How can we reduce change over time?
• Can we reduce lot size?
• Can we merge production processes to reduce
  travel time?

www.opexsociety.org
14
Value Stream Map- Future Process
www.opexsociety.org
15
Strategy Implementation Check List

• People

Do
Plan

• Product

• Systems

Act
Check

• Processes

www.opexsociety.org
16
Next Step

• How would you apply Value Stream Mapping into
  your
• Business?
• Share the business challenge with your key staff.
• Define business case
• Define a high level business process
• Define activities for each business process
  including wait time.
• Randomly pick a minimum of 5 current jobs and
  record all activities and time. From the initial
  customer call to receipt of payment for the
  goods or services.
• Map the process this is your current value
  stream map
• Categorize each activity as value added or non
  value added
• Define a map eliminating as many of the non value
  added
• activities now you have a first draft of the
  future state

www.opexsociety.org
17
Next Step

• Strategic Pricing
• Set the price which is easily accessible to
  mass of buyers
• Use Pricing
• Corridor Tool

• Adoption
• Create a consensus
• Address adoption hurdles in actualizing the
  strategy
• Balance Scorecard

• Identify Initiative
• Does your product offer exceptional Buyer
  utility?
• Use Buyer Utility Map

• Align Operations
• Set Target Profit
• Come up with
• Target Cost
• Streamline Cost Innovation

www.opexsociety.org