BUSINESS EXCELLENCE

1
BUSINESS EXCELLENCE

• WITHLEAN

2

• VALUE to SHAREHOLDERSandVALUE to CUSTOMERS
• WITHLEAN BUSINESSEXCELLENCE

3
BUSINESS EXCELLENCE VISION

• EXCELLENCE is achieved when a company
  continuously IMPROVES and EXCEEDS the Quality,
  Cost, and Delivery Requirements to its
  Customers.
• COMPONENTS for EXCELLENCE are 1. Leadership
  Culture 2. Lean, Flexible Disciplined
  Organization 3. Proper Tools, Methods,
  Techniques

4
BUSINESS EXCELLENCE OBJECTIVE

• To create and implement business solutions with
• Systems thinking
• Customized to the needs of our Clients
• Achieve top and bottom-line results, such as
• Increased Profits, Revenue
• Reduced Cost, Improved Cash Flow
• Improved Quality Productivity
• Improved Equipment Management
• Better Customer Focus

5
DEFINITION OF LEAN

• LEAN means that we continuously REDUCE WASTE
• Waste in Concept To Launch
• Waste In Manufacturing
• Waste in Order to Cash
• LEAN means that we consistently RENEW THE
  BUSINESS
• Flexible to adapt and diffuse new technologies
• Change methods for the better
• Become modular and scalable - right sized
  machines designs
• Launch faster with consistent quality time to
  market
• LEAN means that we are SUSTAINING CONSISTENT
• Working according to the policies and schedules
• Delivering according to schedules

From START to FINISH
6
DEFINITION OF LEAN

• (Contd)
• LEAN means that groups of CAPABLE, ENABLED, and
  Continuously LEARNING PEOPLE are working together
• Motivated and
• Capable and enabled people for independent
  decision making
• LEAN means CONSISTENTLY EXCEEDING CUSTOMER
  EXPECTATIONS
• Exceeding the Known requirements
• Anticipating the Unknown requirements
• Understanding the Latent requirements

7
WHY CANADA NEEDS CHANGE

• Canadian controlled plants are 30 less
  productive than foreign controlled Companies
  operating in Canada
• Canadian firms profit margin is about 75 of US
  counterparts
• Profits need to be generated through cost
  reduction,not only through price increase and
  margin squeezing
• Customers want Solutions on their terms,
  according to their Timeline, Quality Quantity
  Delivery
• Over time, organizations have become unsuspecting
  of their own Waste Hidden Factories
• We cannot depend on the old Success Formulas
• Improving Economies
• Returning Reasonable Customers
• Exchange Rates
• Exit of weak competitors

Source Consortium for Advanced
Manufacturing, Next generation Manufacturing
Systems, Leaders for Manufacturing Program, MIT
8
FOUNDATION
Methods Tools
Goals Targets
People Teams
9
STRATEGY

• From Policy Deployment to Policy Management
• From Top-down Cascade of Tasks to Emergence of
  policies based on cascade of responsibility
• Gets the desired direction without anyone telling
  anyone exactly what to do
• Maximum Flexibility with Maximum Control
• Flexibility with responsibility to think and
  initiate
• Control with need to justify each action

10
STRATEGY (contd)
LEADERSHIP CULTURE Evaluate to define the New Behaviors Required by the Strategy
CREATING VALUE
Customer-focused Understands customer solves customer problems
Innovative Challenges assumptions proposes new ways
Delivers Results Produces results for Customers and Shareholders
EXECUTING STRENGTH
Understands Strategy understands the mission, vision, values, and strategy
Accountable Defines direction, targets, and accountability
Open Communications creates clear communications and feedback
Teamwork works across boundaries, shares knowledge
11
PEOPLE
PEOPLE SYSTEMS FOR BUSINESS RENEWAL LEAN
EXCELLENCE
Empowerment Programs, (Enabling)
QC Circles
Suggestion Programs
Rewards and Recognition
Employee Development
Employees as Citizens
Standardized Work/Kaizen
JIT/Automation with Human Touch Respect for People
Responsibility pushed down
12
ALIGNMENT
TARGETS vs. GOALS
BUSINESS EXCELLENCE
CONVENTIONAL
Plans are things to adhere to
Plans are things that change

• GOAL Oriented
• Responsibility Focus
• Individual Initiative
• System or ProcessLevel Response

• TASK Oriented
• AUTHORITY Focus
• Upper-Level Control
• IndividualLevel Response

13
RENEWAL
TECHNOLOGY BUSINESS RENEWAL
TECHNOLOGY LEVEL
PREFERRED PROCESS
END PRODUCT
TECHNOLOGY ORIENTED INNOVATION
INNOVATIVE PRODUCT
HIGH TECHNOLOGY
With LEAN ORIENTATION
TECHNOLOGY ORIENTED LEAN
PEOPLE ORIENTED LEAN
LEAN ORIENTED PRODUCT
LOW TECHNOLOGY
14
REASONING
DIMINISH AND ELIMINATE YOUR HIDDEN FACTORY
TRADITIONAL THINKING
LEAN BUSINESS EXCELLENCE THINKING
Profit
Profit
Profit
Profit
COST
COST
COST
HIDDEN
COST
Work Capacity Waste
Price Cost Profit
Profit Price Cost
Capacity Work Waste
15
EFFECTS OF WASTE REDUCTION
REVENUES NEEDTODOUBLED
REVENUES
1.0 M
2.0 M
1.0 M
Waste 100,000
To get 200,000 Into Bottom Line _at_ 10
Margin Without Reducing Waste
200,000
100,000
PROFITS
PROFITS
16
EXCELLENCE TARGETS
FOR PROCESSES
Waste Zero Response Time Zero
Ideal State
UPSTREAM DOWNSTREAM LEVELED LOAD ONE PIECE
FLOW (6 Sigma) (TPM) (right-sized tools)
Create PULL Level the Load
ONE PIECE FLOW (6 Sigma) (TPM) (right-sized tools)
Current State
Future State
Identify Value, Eliminate Waste Create Flow
Capable right every time (6 Sigma) Available
always able to run (TPM) Adequate with capacity
to avoid bottlenecks (right-sized
tools)
17
DO YOU ASK THE RIGHT QUESTIONS?

• Does my value-added activity consumeless than 5
  of the total process time?
• What is my competitive advantage gainif I
  deliver in 50 to 80 less time?
• What financial gain would I realize witha 20
  reduction in cost of quality?
• What cash infusion / debt reduction wouldI gain
  with a 50-80 reduction in work-in- process and
  finished good inventory?
• What revenue growth would I realize byreducing
  delivery time and time-to-market?

18
FROM BATCH TO DEMAND DRIVEN
PLANT PLANT PLANT SUPPLY CHAIN
CURRENT STATE FLOW PULL COMPRESSED LEAN (Process Lead Time) BEYOND THE WALLS
A price of admission to the value stream team, requiring little time and practically no capital. (1 to 3 of existing staff) A logical step that requires a lot of knowledge (training-workshops and execution) but not much capital. A logical step that requires a some additional knowledge (training-workshops and execution) and some capital, but not too high. Huge undertaking requiring capital, cost reduction and strong collaboration between Customers and Suppliers but potentially a change in strategic position in the market, and Customer Perception for every company participating in the value stream!
19
INITIAL VISIT - ASSESSMENT

• DAY 1
• Plant Tour (Initial, pre-assessment)
• Team Assessment
• Assessment Compilation
• DAY 2
• Second Plant Tour for Waste
• Waste Recommendations
• Report and Presentation to Management

20
THE ASSESSMENT

• Production
• Equipment
• Engineering

• Customer Focus
• Business Renewal
• Culture of Improvement

• Managing the Renewal
• Employee Supplier Partnering
• Information Architecture

21
THE ASSESSMENT EXPLAINED
22
ASSESSMENT SAMPLE
23
REPORT-CARD ON GAP
GAP
24
THE SCORECARD FOR BUSINESS EXCELLENCE
PLANT PLANT PLANT
CURRENT STATE FLOW PULL COMPRESSED LEAN (Process Lead Time)
A price of admission to the value stream team, requiring little time and practically no capital. (1 to 3 of existing staff) A logical step that requires a lot of knowledge (training-workshops and execution) but not much capital. A logical step that requires a some additional knowledge (training-workshops and execution) and some capital, but not necessarily too high when machinery and equipment modifications are not required.
25 in FGI 50 in WIP 25 in Lead Time 60 in FGI 80 in WIP 50 in Lead Time The entire value stream is now running make-to-order rather than make-to-forecast.
25 in FGI 50 in WIP 25 in Lead Time 60 in FGI 80 in WIP 50 in Lead Time 50 to 75 of wasted steps are eliminated
25 in FGI 50 in WIP 25 in Lead Time 60 in FGI 80 in WIP 50 in Lead Time Throughput time reduced by 80 to 90 of the of initial-state time, Acceptable wait time of the customer
20 increase in productivity 30 increase in Productivity Throughput time reduced by 80 to 90 of the of initial-state time, Acceptable wait time of the customer
High Visibility Low number of Transactions Make LEAN STANDARD LEAN INFRA-STRUCTURE Demand amplification is virtually nil.
High Visibility Low number of Transactions Make LEAN STANDARD LEAN INFRA-STRUCTURE Quality is higher and consistent from start to finish, (Detect and Prevent, 5.5 sigma ).
High Visibility Low number of Transactions Make LEAN STANDARD LEAN INFRA-STRUCTURE Transport links and information needs shrink dramatically (triggers and information).
25
END OF ASSESSMENT DELIVERABLES

• Assessment recommendations on the Gap to
  Excellence
• Report on Observed Waste, including the savings
• Blueprint for Excellence Program, Future State
• Training Plan for Excellence
• Documents Metrics Verification Report

26
CURRENT INDUSTRY PROFILE
PHASES OF LEAN BUSINESS EXCELLENCE
(LEI Survey 2003, 2004)
27
TEAMING UP for EXCELLENCE
CEO and Senior Management
28
BENEFITS OF OUR SERVICES
FINANCE YOUR OWN CONVERSION TO EXCELLENCE WITH
US RESPOND TO CHANGING CUSTOMER VALUES
29
OUR OWN - SCORE CARD

• Some of our Lean, Supplier Development and
  Continual Improvement efforts
• QFD, Design Review 2004 Canada, US
• TPS - Project Management 2003, 2004 Canada
• Controlled Shipping 2003 GM, 3rd Party, USCDN
• 5S-Visual and Blitz 2002, 1996, 1997 US, Canada,
  England
• Corrective Actions 2001 Canada
• New Plant Launch - Engines 2001 Canada
• Constraints Management 1999 US
• Process re-engineering (JIT) 1996 - 97 Canada,
  England
• Process Start Ups (JIT) 1996 97 98 Canada,
  China
• JIT- Kanban Pull 1996 97 98 Canada,
  England, China
• QS 9000 (Q1, Q101) 1996 97 98 Canada, Italy,
  China
• TPM 1996 Canada
• Training 1987 to date US, Canada, China
• Continuous Improvements 1985 to date US, Canada,
  England, China
• Error-Proofing (Prevention) 1995 to date US,
  Canada, England
• Problem Solving 1985 to date US, Canada, England

30
TRAINING - KNOWLEDGE TRANSFER

• Customer Focus
• Reach the Person
• Match the Next Economy
• Train for Business Impact
• Build the Capacity to Learn
• Pre-Post Assessment forKnowledge Inventory
• Post Training Action Plan Evaluations for
  Achievementsbased on knowledge learned
• Technology is central
• For going to scale
• Consistency
• System Preparedness

31
SERVICES FOR BUSINESS EXCELLENCE
SCOPE FOCUS ACTION ITEMS OUR DELIVERABLES
BUSINESS CONSULTING EXECUTIVE AUDITS BUSINESS EXCELLENCE ASSESSMENT
BUSINESS CONSULTING STRATEGIC - POLICY DEPLOYMENT CONTINUOUS IMPROVEMENT (CI) DEPLOYMENT
LEAN BUSINESS SUPPORT HRM SYSTEMS REWARDS RECOGNITION SYSTEMS IMPLEMENTATION PROGRAM
LEAN BUSINESS SUPPORT HRM SYSTEMS SUGGESTION SYSTEMS IMPLEMENTATION PROGRAM
LEAN BUSINESS SUPPORT HRM SYSTEMS PERFORMANCE EVALUATION SYSTEMS IMPLEMENTATION PROGRAM
LEAN LAYOUT DESIGN OFFICE ADMIN LAYOUTS DEPARTMENT LAYOUTS OFFICE CELLS
LEAN LAYOUT DESIGN MANUFACTURING FACILITY PLANNING DESIGN
LEAN LAYOUT DESIGN MANUFACTURING WORKCELLS AND LINES PLANNING DESIGN
LEAN MANUFACTURING EXCELLENCE KAIZEN EVENTS FOCUSED EVENT TO REDUCE WASTE or CI
LEAN MANUFACTURING EXCELLENCE MANAGING THE SHOP FLOOR IMPLEMENTATION PROGRAM
LEAN MANUFACTURING EXCELLENCE VALUE STREAM MAPPING CLASSROOM TRAINING WORKSHOPS
LEAN MANUFACTURING EXCELLENCE REDUCING THE WASTE QUICK CHANGE OVERS, ERROR PROOFING, LEAD TIME REDUCTION WITH CLASSROOM TRAINING -WORKSHOP AND IMPLEMENTATION PROGRAM
LEAN MANUFACTURING EXCELLENCE 5S SYSTEMS CLASSROOM TRAINING -WORKSHOP AND IMPLEMENTATION PROGRAM
LEAN MANUFACTURING EXCELLENCE VISUAL SYSTEMS CLASSROOM TRAINING -WORKSHOP AND IMPLEMENTATION PROGRAM
LEAN MANUFACTURING EXCELLENCE FLOW - PULL LEVEL SYSTEMS KANBAN SUPERMARKET SYSTEMS WITH CLASSROOM TRAINING -WORKSHOP AND IMPLEMENTATION PROGRAM
LEAN QUALITY SYSTEMS DEFECT REDUCTION ERROR PROOFING SPC, PFMEA CLASSROOM TRAINING WORKSHOPS
LEAN ENGINEERING SYSTEMS QFD QUALITY FUNCTION DEPLOYMENT DR DESIGN REVIEW PROCESS APQP, DFMEA CONCURRENT ENGINEERING CLASSROOM TRAINING -WORKSHOP AND IMPLEMENTATION PROGRAM