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Presentation on theme: "Better Lives. Better Planet. SM This presentation is the Confidential work product of Pall Corporation and no portion of this presentation may be copied,"— Presentation transcript:

1 Better Lives. Better Planet. SM This presentation is the Confidential work product of Pall Corporation and no portion of this presentation may be copied, published, performed, or redistributed without the express written authority of a Pall corporate officer © 2013 Pall Corporation Developing Effective Metrics Presenter: Ryan Theodore, Manufacturing Engineer Date: 4/22/2014 Presenter: Ryan Theodore, Manufacturing Engineer Date: 4/22/2014

2 2 Safety  In case of an emergency  Restrooms

3 3 Introductions  VMA  MED  Attendees  Presenter

4 4 Agenda  Voice of the Customer –Who, What, Where, When  Daily Management –Genba –Basic Process Measures –5S+  Lego Exercise –What have you learned  Wrap-up/Questions

5 5 Who are the customers?  The customer is the one being served  A customer is someone looking for something to be provided to them  The customer sets the expectations  Customers can be internal and external

6 6 Voice of the Customer  VOC Must be surveyed, recorded and used as a key input to Quality Function Deployment activities and Continuous Improvement projects.  The VOC has the: –Wants –Needs –Necessities The VOC Defines the Inputs From the Customer Perspective. VALUE CAN ONLY BE DEFINED BY THE CUSTOMER!

7 7 The Voice of the Customer  Let’s define wants, needs and necessities: – Wants: Customers overtly state that they want their product to do or perform. –Needs: These are statements that are more urgent than the wants of the customer. – Necessities: These are statements that are driven by legal or regulatory requirements. Capture VOC Early To Prevent “Scope Creep”

8 8 The Learning Curve CustomerExpectation Cycle Time Customer Demands Capability Learning with Customers faster than the Competition

9 9 4 COMPLAIN When a Customer Complains

10 10 Customer Loyalty

11 11 Introduction to Daily Management Daily Management is the process to Manage Operations at the Genba There are Four Pillars (Components) of Daily Management 5S/SW are part of the “Lean Conversion” and are the minimum foundation to support DM DAILY MANAGEMENT Managing 5 KPI Drivers At the Genba Genba Visual Management Genba Problem Solving Genba Leadership Lean Conversion

12 12 Why Daily Management? Site Leader Operations Leader Value Stream Leader Front Line Performer of Work Policy Deployment Daily Management Kaizen 0% 50% 100% Time How Do You Spend Your Time

13 13 Daily Management Relationship to Policy Deployment Improvement Daily Mgmt Daily KAIZEN Year 0Year 1Year 2Year 3Year 4 Daily KAIZEN Policy Deployment Policy Deployment Once Breakthrough is achieved… process is standardized to Daily Management! Strategic Objective is Achieved! Mgmt Foundation for PD Policy Deployment

14 14 Policy Deployment – Flows from the top Global Regional Site Value Stream

15 15 Daily Management – The “HOW” “Lean Conversion” is critical first step to drive results at Genba Each Plant is at different point in the “Lean Conversion” Basic 5S/SW is the foundation of Lean Conversion Lean Conversion Daily Management VM KPIs Continuous Improvement Lean Conversion Process and Daily Management Process are intertwined. To maximize improvement, you cannot do one without the other.

16 16 Five Key Performance Indicator (KPI) Drivers In Daily Management, we manage these at the Genba (S) Safety (Q) Quality (D) Customer Service (I) Inventory (P) Productivity

17 17 Genba ■ Japanese term ■ “The place where the truth can be found." ■ “The value proposition" ■ “Go and See” ■ ”Learn to See”

18 18 ■ A Genba visit is often simply called a customer visit with unique characteristics. ■ Main purpose is to observe (in silence) ■Many eyes, cross-functional, one thing ■Normal from abnormal conditions ■Abnormalities should be apparent and visible ■Visual management ■ Occasionally question, rarely guide or direct Genba

19 19 ■ Often the client (user or operator) is asked to describe what he/she is doing while he/she is doing it (5 why’s, etc) ■Open ended questions ■Moments of truth ■In the spirit of Continuous Improvement Genba

20 20 ■Genba occurs in the context where the product or service is used. ■This allows direct observation ■Of problems that arise (or have occurred) ■Workarounds that are applied ■Capabilities or services that are never used (waste). Genba

21 21 ■Genba provides insight and deep understanding into the thought processes and problems which often reveal differences between the customer's mental model and the model of the developers or providers of the product or service. Genba Outcomes

22 22 ■ The customer (user, or operator) will often express wishes or needs while working in context that would be forgotten or suppressed in a different context such as a structured interview or sales meeting ■ Common cases for a customer visit include: ■Rapidly Solve Problems ■Enhancing the features or usability of products (especially software) ■Enhancing the features of devices (especially ones aimed at very broad or very niche consumers) Genba (project or service)

23 23 Must Not Must Do Provide the right tools Set goalsCreate smoke screens GrovelBe clueless Give up Cover up Stress out Leaders Visual Guide Set the Strategy Genba the process Think of at least 7 ways to do better Kaizen your standard work Have a vision Observe the process Find the Waste Hide in the office Throw fits Blame the worker Blame the Measure Tamper with the Measure Throw People at Problems Flex Muscles Show Boat

24 24 Managing the Five KPI Drivers DAILY MANAGEMENT Managing 5 KPI Drivers at the Genba Genba Visual Management Genba Problem Solving Genba Leadership Lean Conversion u Safety u Quality u Delivery u Inventory u Productivity

25 25 “Symptoms” Ask Yourself - Is your “Real Place” currently…  Managers rarely visit the shop floor.  Safety Meetings take place in conference rooms.  5S discipline not apparent.  Questions about Safety performance, cell metrics cannot be answered by either managers or Associates.  Safety issues present.  Safety Improvement is stagnant (no target).  Associates not engaged, not participative.  Minimal cross-training is taking place in jobs with repetitive motion.  No Repeatable and Robust process for maintaining equipment. Associates not engaged in this process.  Kaizens do not account for potential Safety concerns.  Employees have no voice or no mechanism of reporting safety hazards.

26 26 Safety  Define Safety KPI for facility and to be managed in each Cell  Define Jump off Point (Audit) for facility and each Cell  Define Target for facility and each Cell  Implement Visual Management for Safety KPI  Communicate and Train

27 27 5S  Train 5S broadly and deeply  Target cells for 5S kaizen  Implement 5S Checklist and 5S Patrols in each Cell  Monitor through 5S Checklist and Patrols and take Corrective Action DEFINITION: 5S: A process to ensure a clean, orderly, safe and productive workplace.

28 28 Associate Involvement  Each associate (operator/front line leader) must understand Safety Concerns and what their responsibility is to prevent and avoid  Must have Safety KPI targets and actual posted  Associates must be actively engaged with preventing accidents and unsafe conditions

29 29 5S Defined  5S relates to the beginning of five terms that begin with the letter S that describe workplace practices conducive to visual control and workplace organization. It is one of the foundations on which lean manufacturing is built. S ort S et in Order S hine S tandardize S ustain

30 30 SORT (Organization) Clearly distinguish needed items from unneeded items and eliminate the later SET IN ORDER (Orderliness) Keep needed items in the correct place to allow for easy and immediate retrieval STANDARDIZE (Standardized Cleanup) This is the condition we support when we maintain the first three 3S’s SHINE (Cleanliness) Keep the work area swept and clean SUSTAIN (Discipline) Make a habit of maintaining established procedures Benefits  Improved Safety  Promotes Teamwork  Improved Quality  Reliable Delivery  Lower Cost  Reduces Breakdowns  Improved Moral 5S

31 31 To survive and grow as a business we must reduce cost. Implementing “preventive controls” can and will stop the generation of defects and poor results before they take place. Benefits  Improved efficiency  Workplace visual controls  Improved quality  Workplace ownership and pride  Improved safety and work environment Why Do 5S Plus? 5S has proven to reduce waste and cost

32 32 8 Wastes 1.Defects 2.Overproduction 3.Motion 4.Material Movement 5.Waiting 6.Inventory 7.Processing 8.Not utilizing Employee Talent

33 33 Seiri - Sort -Housekeeping. Separate needed items from unneeded items. Keep only what is immediately necessary item on the shop floor. Seiton - Set in Order - Workplace Organization. Organize the workplace so that needed items can be easily and quickly accessed. A place for everything and everything in its place. Seison - Shine - Cleanup. Sweeping, washing, and cleaning everything around working area immediately. Seiketsu - Standardize - Consistant. Keep everything clean for a constant state of readiness. Shitsuke - Sustain - Discipline. Everyone understands, obeys, and practices the rules when in the plant. The 5S System

34 34 Before After Machine Shop

35 35 Before After Cell Workstation

36 36 Plus – Safety  All changes made during the implementation of 5S should be done with safety in mind  An area that actively sustains 5S promotes a safe work environment  Perform job safety analysis, set goals and targets, and continually monitor performance Safety Always!

37 37 5S Checklist

38 38 Managing the Five KPI Drivers DAILY MANAGEMENT Managing 5 KPI Drivers at the Genba Genba Visual Management Genba Problem Solving Genba Leadership Lean Conversion u Safety u Quality u Delivery u Inventory u Productivity

39 39 “Symptoms” Is Your “Real Place” Currently…  Large team of inspectors (10%) (Receiving, 1 st piece, Final Part, Finished Goods)  All inspection treated as indirect labor  As material received, detailed receiving inspection performed  Prior to parts being run, the set-up and first piece have to be signed off by an inspector  Before parts go into stockroom, all material must undergo product inspection  As finished goods complete, inspectors test and inspect the product again  Quality Manual and Procedures available but not known to people on shop floor

40 40 Quality  Establish process inspection; identify what to check, when to check, and how to check  Train operators and quality technicians  Establish statistical process control (SPC) charts as appropriate  Where assembly cells are established: Put test and equipment in the cell Identify all points where checks/inspections are needed (Standard Work Sheet) Set up scrap bins as necessary PRODUCTPROCESS Goal is quality at the source

41 41 S : ? P : ? C : ? So, Not Really New, but still efficient… ■Date of birth: 1920’s - Western Electric / Dr. Walter Shewhart ■Used to identify controlled & uncontrolled variation, also known as common & special causes of variations ■Tries to find the process signals in all of the noise ■Uses control charts as main tool S = Statistical techniques used to examine process variation P = Process, ANY Process C = Control: Controlling the process through active management

42 42 SPC Example Assumption Is Not Always A Good Approach 2 3 Scrap Level (%) 1 J F M A Party Time ■The factory scrap level is at a year low of 2%. ■Manager presents an award to the plant. ■Ceremony in the cafeteria: pizza and refreshments for all! ■“Everyone should be proud of what you’ve accomplished”. APRIL…

43 43 A Turn For The Worse….. Summer Vacation Effect? J F M A M J J Manager wants to take back award ■Three consecutive months of scrap increases. ■Manager wishes he could take back the award. ■Recognition has backfired. ■Instead of holding the gains, scrap went right back up. ■Manager decides: “This group just needs tough management!” Scrap Level (%) JUNE…

44 44 Scrap War Christmas Preliminary Effect ? J F M A M J J A S O N D No more “Soft Management” ■Scrap rises to a value of 2.6%. ■Manager decides to take action. ■A “special meeting” is called to solve this problem once and for all. ■After a sound lecture on the importance of scrap, the manager leaves. ■Employees aren’t sure what to do. Besides, they have other metrics which have more importance. So… they do nothing. Scrap Level (%) NOVEMBER…

45 45 Scrap: A Life of It’s Own? No Celebration? ■Manager has seen reduced scrap levels since the end of last year. “Things are looking-up!” (although nothing had been done to change the system). ■His takeaway: “A tough management style gets results!” Manager concludes: “Tough love makes things happen” J F M A M J J A S O N D J F M A M J Scrap Level (%) JUNE… A year later…

46 46 Let’s look at it with SPC eyes… Observe, Analyze, Understand, Then Decide… J F M A M J J A S O N D UCL J F M M J J A S O LCL Scrap Level (%) ■Manager “ Hey, I made my decision based on data - How can I go wrong ?” ■YOU: “Your decisions were made from observing high and low points as signals. When In reality, it was all variation. Look at the data, there was no significant change in the process.”

47 47 Examples of Special Causes Unfortunately, There Are So Many… Process Response Time ■Special causes are assignable and can include:  Weather (season, time of day)  Lighting Conditions  Machine Type  Machine Age  Maintenance  Supplier  Operator  Shift  Supplier  Material Lot  etc… Special causes

48 48 Built in Quality Checks  Have operators/ assemblers doing the inspection  Need to build quality into the cell and process  Watch calibration and sensitivity of equipment in the cells

49 49 Poke-yoke  Where appropriate and needed build mistake- proofing into the process  If you have a toolroom, take advantage of their skill- set and creativity

50 50 Measure Quality Results Every Day  1 st pass inspection by cell (# of defect/total production) normally expressed in PPM. Roll up yields can also be used. Make sure process is kept simple  Review control charts and re-establish control limits as needed.  Returns from customers measured in PPM  Scrap $  Visual Bins normally red labeled “Scrap” Simple means that anyone can understand

51 51 Address Issues with Necessary Tools  Identify issues through KPI performance  Consider volume, customer expectation, and impact when selecting projects  Pareto issues and select Problem Solving tool needed  Push process down. Have cell leaders, value stream leaders, and manufacturing engineers working with operators to improve  If on-going action required, develop corrective action plans or countermeasures. Post in cell.  Document corrective actions with visual aids. Use photos to assist with quality information Keep all associates involved with improvements and expectations

52 52 Managing the Five KPI Drivers DAILY MANAGEMENT Managing 5 KPI Drivers at the Genba Genba Visual Management Genba Problem Solving Genba Leadership Lean Conversion u Safety u Quality u Delivery u Inventory u Productivity

53 53 “Symptoms” Is Your “Real Place” Currently…  Commitments not made  Lead times too long  Past due dollars high  Customer Service Dept. receiving many calls  Customers waiting on phone and hanging up  Hedge orders happening  Operations spending lots of time furnishing Customer Service with promise dates (which don’t happen)  Schedules changing daily and/or hourly Workbook Pg 17

54 54 On Time Delivery (OTD) ■ On-time delivery is measured based on customer requested date with the three following rules –Oldest orders are filled first (where possible) – i.e. once an order is missed it must be a priority to be filled over new “on-time” orders. (Missed orders are only counted against delivery on the day they are missed, not when shipped) –Shipments missed due to Credit Holds “Count” as on-time delivery misses and should be highlighted in the pareto as appropriate –All parts on consignment at the customer are considered to be delivery “hits” if the consignment levels remain between the min and max. If the consignment level falls outside the min/max levels it is considered a delivery “miss.” A Measure of Performance Against Customer Request

55 55 On – Time Delivery Exercise  Plant A ships 77 lines before they are due and 12 on the day they are due out of 121 total lines requested. What is the plant’s OTD?  Plant B ships 10 orders that were on credit hold 2 days after they were to ship, 12 lines early, and 30 on the day they were due out of 65 lines requested. What is the plant’s OTD?  Plant C ships 34 lines to the customer 1 day late, 12 lines two days late, 16 on the day the lines were due and 84 on-time. What is this plant’s OTD?

56 56 On-Time Delivery Solutions  Plant A ships 77 lines before they are due and 12 on the day they are due out of 121 total lines requested. What is the plant’s OTD? –( ) are on-time / 121 total lines = 73.5% OTD  Plant B ships 10 orders that were on credit hold 2 days after they were to ship, 12 orders early, and 30 on the day they were due out of 65 orders requested. What is the plant’s OTD? –( ) are on-time / 65 total lines = 64.6% OTD (remember orders late due to credit hold “count” as an OTD miss)  Plant C ships 34 lines to the customer 1 day late, 12 lines two days late, 16 on the day the lines were due and 84 on-time. What is this plant’s OTD? –You really can’t tell with the data given here. How many total lines were requested? Always seek complete information! How many of you said 57.55%?, How many 68.4%?

57 57 Past Due ■ Past due is defined as the monetary value of all orders with a customer requested due date earlier chronologically than the current date All Sales / Deliveries With A Requested Delivery Date Earlier Than Today!

58 58 Reduce Past Due  Need information indicating Past Due by cell  Establish root cause of Past Due (paretos need to get to root cause)  Need to be able to age past due  Establish goals to reduce based on cell output now achieving  Achieve goals for past due $$$$$$ $$$$$$ $$$$$$ $$$$ © All Rights Reserved

59 59 Establish Credibility by Making Your Commitments  Measure the OTD  Measured against request dates (when the customer wants the product).  Need system for measuring daily  All info and measurements must be down to cell level  Establish goals for OTD based on cell output. Outputs may have to be increased if improvements in OTD not occurring fast enough.  Good daily visual for cell as to how performance going  The OTD measurement must be used in conjunction with past due numbers © All Rights Reserved “Listen to the customer”

60 60 Measurement to CUSTOMER REQUEST  Identify true customer request date  Understand how your organization captures what the customer wants  Monitor progress-establish goals for Customer Request and Lead Times  Monitor continued reduction of lead times  Measure actual lead time for all orders © All Rights Reserved “Understand importance of delivery for each customer type”

61 61 Monitor Performance  Continue to improve OTD against goal  Continue to reduce lead times  Measure at the cell daily  Understand root cause of why you missed each delivery © All Rights Reserved

62 62 Associate Involvement  Each associate (buyer/operator/cell leader) must understand standard work and what their responsibility is  Must be able to see orders as they are entered  Need to have a process so they can work to customer priorities  Commitment to and understanding of goals  Cell team needs to keep up with and have visibility of customer request date  Use this time when lead times are being reduced as an opportunity to cross train operators. © All Rights Reserved “The whole team needs to understand goals”

63 63 Visual Management  End of line output/ scorecards  Past due performance (actual vs goal by date)  OTD performance (actual vs goal by date)  Lead times – continue to reduce lead times (as velocity increases cost decreases) © All Rights Reserved “End of line output – goal should be against customer demand (frequency, planned, actual and why you missed)”

64 64 Managing the Five KPI Drivers DAILY MANAGEMENT Managing 5 KPI Drivers at the Genba Genba Visual Management Genba Problem Solving Genba Leadership Lean Conversion u Safety u Quality u Delivery u Inventory © All Rights Reserved u Productivity

65 65 “Symptoms” Is Your “Real Place” Currently…  Inventory replenishment based on a computerized system such as MRP  System contains several modules such as routings, processing, BOM’s, order launching  Orders that are issued daily/weekly are generated by demand from either firm orders, planned orders,or forecasted requirements  Labor and overhead are tracked by order through each processing department  As parts are completed they are entered into the system and stored in a warehouse  Cycle counters maintain the accuracy of the inventory being stored. Transactions are made each time material comes in or goes out of warehouse  Large staff of materials department required to perform these functions (planners, order launchers, warehouse personnel, material handlers, cycle counters, etc.)  When finished goods are required, components are issued from warehouse to assembly. When complete, finished product is inspected and either goes to shipping or back to the warehouse. Workbook Pg 17 © All Rights Reserved

66 66 Establish JIT Orders with suppliers  Review expectation with supplier  Establish annual requirements (+/-)  Place blanket order with kanban being release method  Negotiate reduced lead time (target is transport time)  Negotiate supplier maintaining 2 kanban quantities on hand  You will need to commit to some raw material and finished goods © All Rights Reserved

67 67 Establish Inventory Goals  Primary Inputs and Outputs Defined:  What is being put into the cell  How much will be shipped out of the cell  What is scheduled to be received  Standard value of incoming material  Other  If based on above, ending inventory exceeds cell planned levels, additional actions needed:  Have customer demands changed?  Do kanban cards reflect latest lead times and safety stocks?  Review all “A” parts  Periodic reviews of Excess and Obsolete items  Purchasing needs to work closely with production group © All Rights Reserved

68 68 Implement Inventory Management System  Develop shipping forecast  Determine inventory reduction based on shipping forecast  Review scrap, E&O, and material to be returned  Establish the total inventory reduction $  Review kanban boards and determine $ volume of inventory to be received  Compare output vs input  Make adjustments  Must have involvement at cell level  Need to review weekly © All Rights Reserved “This is an inventory management system”

69 69 Measure results and take countermeasures  Inventory Measurement –Measure by cell level if possible –Set up measurements so that inventory dollar value is broken out by cell –Establish inventory turns measurements © All Rights Reserved

70 70 Managing the Five KPI Drivers DAILY MANAGEMENT Managing 5 KPI Drivers at the Genba Genba Visual Management Genba Problem Solving Genba Leadership Lean Conversion u Safety u Quality u Delivery u Inventory © All Rights Reserved u Productivity

71 71 “Symptoms” Is Your “Real Place” Currently…  Time gathering systems throughout the plant  May still have a dispatching system with time keeper  Earning labor based on what goes into the warehouse  Labor separated by indirect and direct  Standards include classic definition of direct labor  Indirect labor included in variable overhead  Closed order variance reports issued well after orders completed Workbook Pg 17 © All Rights Reserved

72 72  Understand and be able to determine where takt time comes from  Relate takt time to your process  Understand the difference between takt time and cycle time  Understand the basics of cycle time analysis including the time observation form Takt Time

73 73 The time requirements to make your customer happy Takt Time * The periods of time must be consistent (shift, day, week…) Net time of operation per period* Customer requirements per period* Divided by Proportion of daily production (in seconds per piece) Production is equal to the customer demand

74 74 The periods of time must be consistent Example Calculation 50” For one shift per day: Takt Time = Customer Requirements/Period 540 Net Time of Operations/Period = 450 = 0.83 min Takt Time = 540 Units / day ÷ 20Amount of working days/month 10,800Monthly Requirements (units) Customer requirements Cleaning: 10 minutes Break: 10 minutes Operation per shift 480Shift: 480 minutes Net time Net time of operation * 60 = 50 sec

75 75 Cycle Time is different from Takt Time Cycle Time Machine Cycle Time Operator Cycle Time Machine Automation Time Inspection Pack Delay Unload / Load / Start T/T

76 76 Bar Chart of Takt Time Vs. Cycle Time Time Operation Number Takt Time = 50 sec  Operation Cycle Time = 150 sec Number of Operations =  Operation Cycle Time Takt Time = 150 sec 50 sec 3 Op = Bar graphs visually show balance of operations

77 77 Bar Chart of Takt Time Vs. Cycle Time  Visual reference of operation cycle time and takt time of a specific cell  Determine the suitable number of operators (operations) necessary for a line or cell  Show what is necessary to balance the line Using this tool provides:

78 78 Perform Cycle Time Analysis  Observe tasks and group into small elements  Establish lowest repetitive cycle time by operator  Use to create standard work

79 79 Time Observation Form No Observation Detected Collect real data on the process

80 80 Time Observation Form Omitted Observations Lowest and Repeatable Observation Times Consistency is key!

81 81 Labor Reporting Measure Labor Output  End of cell scorecard –Pieces per time period as a plan –Keep making improvements to attain goals  Overall measurements –Productivity –Excess Labor (difference between actual and standard) –Plant level measurements may/should be different than cell level MEASUREMENTS: PRODUCTIVITY: Sales $ per hour worked in cell Pieces produced per hour Sales $ per employee EXCESS LABOR Needed especially if sales $/ hour is the productivity measurement in cells where the price per unit can show large fluctuations © All Rights Reserved

82 82 OEE: Operational Equipment Effectiveness ■ Operational Equipment Effectiveness helps you see and measure a problem so you can fix it, and provides a standardized method of benchmarking progress. ■ OEE is the framework for measuring the efficiency and effectiveness of a process, by breaking it down into three constituent components: –Availability - takes into account Down Time Loss (events that stop planned production for an appreciable amount of time) –Performance – takes into account Speed Loss (factors that cause the process to operate at less than the maximum possible speed, when running). –Quality - takes into account Quality Loss (parts which do not meet quality requirements).  Often it is more important to focus on the OEE Factors than the metric. Relentlessly Work to Eliminate OEE Losses

83 83 OEE – Calculation Tool 85.0%Overall OEE 99.9%Quality 95.0%Performance 90.0%Availability World ClassOEE Factor 85.0%Overall OEE 99.9%Quality 95.0%Performance 90.0%Availability World ClassOEE Factor data points on each shift Need to collect these 4 A Little Data Collection Can Lead to Big Opportunities for Improvement !

84 84 OEE Example 1 - Solution ■ Availability: Planned Production time: 480 – 30 = 450 minutes Shift 8 hrs X 60 min = 480 minutes 2 breaks X 15 min = 30 minutes, Lunch is unpaid = 0 Downtime = 37 minutes Now it is Obvious Where to Start Improvements! Availability = Planned Production time – Downtime ( 450 – 37) Planned Production Time (450) =.918 X 100 = 91.8% ■Perf Eff:Ideal Cycles per minute = 15 test cycles per hour / 60 minutes = 0.25 test cycles per minute Processed Amount = 68 tests Actual Operating time = Planned Production time- Downtime = = 413 minutes Perf Eff = Processed Amount / Actual Operating Time (68/ 413) Ideal Cycles per minute (0.25) =.659 X 100 = 65.9% RQP = Processed Amount – Defect Amount ( 68-8) Processed Amount 68 =.882 X 100 = 88.2% ■RQP:Processed Amount = 68 units Defects = 8 OEE = Availability X Performance Efficiency X RQP = 53.3%

85 85 Productivity – Calculation Tool

86 86 Standards to Match Revised Labor System  Charge all labor against cell (both direct and indirect)  After a given period of time, compare the total labor to the previous standard labor  Create a new ratio (total labor : standard labor)  Multiply old standard by new ratio © All Rights Reserved

87 87 Measure Productivity and Excess Labor By Cell REPORTPURPOSE Productivity by cellTo measure change at lowest level Excess labor by cellAssist with variation in selling price and planning labor Kaizen funnelTo know where attention needs to be focused VISUAL MGMTPURPOSE End of line output/scorecards To see how cells are performing as it is happening Productivity ($/hour, etc.) vs. goal To see how cell is performing to a goal Excess labor vs goalTo see if labor is on track with plan © All Rights Reserved

88 88 Take Corrective Action at the Lowest Level How to Improve Productivity  Observe areas with issues (ie: quality, output, material flow, down-time, customer service, batching, etc.) –These are areas where gains can be made quickly –Implement root cause corrective actions and document on SQDIP board  Have mfg engineer/Value stream leader/ cell leader address these specific areas. Take corrective actions quickly at the cell. © All Rights Reserved “It is important to take action once problems are found”

89 89 Use Kaizens to Address Major Issues  Schedule Kaizens with documented expectations where issues cannot be resolved quickly  Keep emphasis on continued improvement in all cells  For cells meeting plan, work with operators and cell leaders to set new level of expectation  Use walk-arounds to follow-up and monitor © All Rights Reserved “There is no such thing as status quo… If you’re not getting better, you’re getting worse”

90 90 Use Productivity Information to Assist in Managing Plant How to Use Labor Information  Use $ sales/labor hour to assist with establishing manpower requirements by cell  Determine where manpower needs to be shifted from one area to another  Determine where cross-training needs to occur  Use this information to develop forecasting –Monthly forecast –Annual operation plan  Use to ensure correct head-counts and proper distribution of labor  Use to calculate excess labor requirements © All Rights Reserved

91 91 Genba Visual Management DAILY MANAGEMENT Managing 5 KPI Drivers at the Genba Genba Visual Management Genba Problem Solving Genba Leadership Lean Conversion © All Rights Reserved

92 92 Daily Management Visuals…Standardized Format Mandatory to use before going to next level of DM Visuals “Cell scorecard at the end of the cell indicates how the team is doing versus customer needs” “At a Glance” view of Performance “Everyday Kaizen” Countermeasures taken at Cell Level Pareto of issues

93 93 Daily Management Visuals…Hourly Scorecard

94 94 Daily Management Visuals…Standardized Format

95 95 Visual Management Checklist  Charts & signs must be visible at a distance.  Should be directed toward a group, not individuals where appropriate  Visuals should communicate a Plan and Actual.  Involve all employees in the visual management process.  Do not use visual management as a means to control or punish…Drive to solve problems in a blameless environment.  Should be understandable…consider the audience.  Should be “At-a-glance” (think “three-second” rule).  Should be standardized (over time). Everyone should know what they are looking at as they move from cell- to-cell and plant-to-plant. © All Rights Reserved

96 96 Visual Management Process STAND UP MEETING (5 MINUTES) OPERATOR FILLS OUT CELL SCORECARD at GIVEN TIME INTERVALS TEAM LEADER AUDITS HOURLY Value stream leader AUDITS TWICE DAILY OPERATOR UPDATES SQDIP BOARD PREPARE NEXT DAYS SCORECARD END OF SHIFT WALK THROUGH & REVIEW SQDIP BOARD BY MGMT TEAM ANALYZE RESULTS AND COUNTER- MEASURE © All Rights Reserved

97 97 Genba Leadership DAILY MANAGEMENT Managing 5 KPI Drivers at the Genba Genba Visual Management Genba Problem Solving Genba Leadership Lean Conversion © All Rights Reserved

98 98 Genba Leadership  5 KPI Drivers  Genba Visual Management  Genba Problem Solving  Genba Leadership –Rigorous KPI Leadership –Walk the Floor –Stand up Meetings –Walk-Around Meetings –Auditing What do you need to lead in the Genba? © All Rights Reserved

99 99 Elements of Rigorous KPI Leadership 1. Define the Parameters 2. Set People Up to Win 3. Uphold the Parameters 4. Lean Principles... No other option © All Rights Reserved

100 100 Leadership Element 1: Define the Parameters  Set Expectations  Make it clear what Winning looks like  Make it clear what Losing looks like  Only define expectations that you are serious about © All Rights Reserved

101 101 Leadership Element 2: Set People Up to Win  Are they set up with the right resources, people, time, dollars, capital?  How do you provide feedback to the associates?  How do you communicate to them?  How do you manage with positive expectancy? © All Rights Reserved

102 102 Leadership Element 3: Uphold the Parameters  Inspect what you expect  React to what you find  Consistency is critical across the factory  Apply feedback that is: –Immediate –Specific –Positive and negative –Coach to Win  The walk around process upholds parameters © All Rights Reserved

103 103  High proportion of a Genba Style leader’s time is spent in the Genba (with users) so that supervisors and leaders can be intimately involved in issues as they arise.  Their presence informs their decision making and speeds resolution of problems.  This attitude is driven by the belief that all customer value is created in the Genba and it is therefore the qualities of the Genba (Genbatsu) which will determine the success of the company. Genba – Leadership Style

104 104 Genbatsu ( 現物 )  “The actual product”: –Mindset teaching that when there is a problem somewhere, one should get as close to the problem as possible before proposing a solution. –By observing the actual process or problem at the actual place (Genba) where it is occurring, the problem solver is able to obtain actual data or facts –This will improve the chances for a better solution. –This in in contrast to most Western thinking in which managers make decisions in a remote location (like behind a desk), armed only with second hand information from others.

105 105 Walk the Floor  Walk the Floor EVERYDAY  Schedule time if necessary to ensure that you will walk the floor  Reach ALL areas of the floor regularly – don’t just stay on the main isles  Talk with Associates and Listen  Observe how SQDIP can be improved  Act immediately to implement issues that can be resolved short-term FLOOR DEFINITION: Could be production floor, office or any other place where work is done (Your Genba) © All Rights Reserved

106 106 Stand Up Meeting  Why: Communicate key information to start the shift operations  When: Daily (morning or shortly after shift start for every shift)  Duration: 5 min. max per cell or collection of cells  Where: Standing in the cell or team area  Who: Value stream manager, cell leader, materials and technical support etc. © All Rights Reserved

107 107 Lego Exercise

108 Better Lives. Better Planet. SM This presentation is the Confidential work product of Pall Corporation and no portion of this presentation may be copied, published, performed, or redistributed without the express written authority of a Pall corporate officer © 2013 Pall Corporation


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