FMS Executive Series Kaizen

Continuous Improvement Kaizen Basics Continuous Improvement Kaizen (Ky’zen) “Kai” -- change “zen” -- for the better The 3 M’s are the major focus of Kaizen Muda Waste Mura Abnormality, irregularity, instability Muri Strain, Stress, burden

FMS is About Value and Elimination of Waste FMS is about creating value through the elimination of waste. Waste itself generates other wastes that hide our ability to distinguish it from Value Add work Deficiency Root wastes New Wastes Process Consequences * Excess WIP at random * WIP starvation at constraint * Little to no flexibility to change * 5S difficult to maintain * Excess appears justified * Complexities develop * Unbalanced process * Unmanaged constraint * Overproduction * Inventory * Overprocessing * Wait Time System Consequences * Additional Material demands * New Space requirements * Apparent need for more capacity * Lead Time increases * Build to F’cast instead of Demand KEY NOTE The journey toward JIT drives improvement to all variables that affect value and generate waste

Kaizen Needs… Show me the Muda! Why Kaizen Benefits & Expectations To systematically eliminate root causes of the 9 Wastes To establish a method to continuously improve through everyone’s participation Less Direct Labor Requirements Less Indirect Labor Requirements Less Space Requirements Increased Flexibility Increased Quality Increased Responsiveness Increased Innovation Increased Employee Enthusiasm When to Kaizen When an opportunity for improvement is clearly identified When results are needed immediately To gain momentum and credibility in the early stages of engagement As a change agent when there is client resistance to stimulate change As a project launching tool leading to multi follow-on projects For any problem with known boundaries

3 Types of Kaizen at Flex Quick and Easy Kaizens (1+ days): Executed by operators/CFT from their own suggestions to support VSM Require minor documentation (reason for change, results, benefits) Must have a benefit to the employee Frequent events to keep up/stay ahead of changes Examples: 5S, materials repositioning, personal safety, ergonomics, etc… VSM Kaizens (3 - 5 days): Planned kaizens as determined in the VSM Require kaizen form and metrics follow up (3 to 6 months) Needs cross functional team participation Examples: line balancing, work redistribution, mat’l handling, etc… Kaikaku (5+ days): More radical process changes that require detail planning May require senior management participation Requires cross functional team and will most likely incur costs Examples: New Equipment, Kanban implementation, Layout changes, etc…

How: The Deming Cycle Do it again Lessons learned (what worked best?) Is there further improvement in this or other similar process? Assest scope, goals and plan again Understand the opportunity Walk it /touch it /talk to people Collect data and analyze it Select approach (focus/angle/level) Train/Train/Train… Track the change Determine appropriate metrics Measure performance 3-6 moths Assess achievement of desired and unexpected results Explain all results (bad/good/better) Choose a date and do it “Best” the obstacle to better (just do it) Use pictures and metrics Create momentum Recruit participants

Sample Kaizen Steps Preparation and Organization Training and Process Mapping (Discovery) Materials/Information flow layout Conduct time study operations Determine Non Value Added activities Review waste elimination techniques Brainstorm and Prioritize process improvement Create Future State the action items list Implement process improvements Repeat steps 4 through 9 until objective is achieved Develop Standard Operating Procedures

Current State Kaizen Future Sate Eliminate Conflicting Demand Current State Finished Goods Supermarket Establish Heijunka (Load Leveling) Create Manufacturing Cell Establish FIFO (Imbalance Kanban) Total LT NVA: 29.5 Days VA: 730 Secs Change Shipping Frequency Create Flow Future State Eliminate Multiple WOs Change Scheduling Method Lead Time Reduction is The Goal Changeover Time Improvement Reconfigure Layout (Line Design) Phase 1 Total LT NVA: 10.5 Days VA: 630 Secs

Implementation Plan Think global / systems optimization Maximum impact to process Speed of implementation – create small victories Cost-benefit analysis (not always $) Will new skill sets be required, and how to achieve them? Is the current organization structure sufficient? Are there cultural issues? Is there potential for “push back”? Any implications for suppliers? Implications for customers? Implications for team members? Do current technologies support the new process? Are they available and cost justifiable? Technology is an enabler, not a solution. Does the reward system support the new process?

Check and Sustain Value = Function = Effects of kaizen Cost sum(time/labor/all other) Large improvements take time and can’t be done quickly … this becomes the obstacle to improvement Small kaizens can be done immediately

Roadblocks Too busy to study it A good idea but the timing is premature Not in the budget Theory is different from practice Isn’t there something else for you to do? Doesn’t match corporate policy Not our business – let someone else analyze it It’s not improvement – it’s common sense I know the result even if we don’t do it Fear of accountability Isn’t there an even better way? Don’t procrastinate Don’t find an excuse Don’t wait … now

Do you see opportunities to improve? Can Lean help… Reduce Manufacturing Lead Time? Improve materials management? Increase productive capacity? Increase flexibility? Provide higher value to customers? Reduce overall costs?

Do you see opportunities to improve? List some things we can do today