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LERC ANNUALCONFERENCE
The Royal Mint26th June 2012
LERC ANNUAL CONFERENCE
26TH JUNE 2012
Cash Flow: transforming the UK’s oldest manufacturing company”
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LERC ANNUALCONFERENCE
The Royal Mint26th June 2012
BACKGROUND TO THE ROYAL MINT
• 1100 years old; the oldest manufacturing operation in the U.K. and possibly the third oldest in the world.
• Move from London to Llantrisant completed 1980• 38 acre site, 760 employees (900 with agency)• Exclusivity on UK coinage• Manufactures coins for 60 other countries• Self-financing Trading Fund status 1975• Vested 2009,Royal Mint Ltd, 100% Treasury-owned• 5 billion coins manufactured annually• Prior to vesting, Mint run by Civil Service as a manufacturing
operation
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LERC ANNUALCONFERENCE
The Royal Mint26th June 2012
THE ROYAL MINT
– Two “businesses” • Circulating and Commemorative Coin
– Four Production Departments• Melting, Rolling and Blanking • Annealing and Plating (Blank Processing)• Coin Production (Finishing and Processing)• Commemorative Coin
– Functional support• Business Services, Finance, Procurement
LERC ANNUALCONFERENCE
The Royal Mint26th June 2012
MANUFACTURING SYSTEM
-HISTORICAL CONTEXT
– Manufacturing units run as silos
– Volume mentality (tons and millions)
– Highly variable product quality
– High rectification costs
– Poor inventory management
– Little “through-business” visibility
– Overseas delivery performance historically not a key focus but performance poor
– No fixed plan-high levels of expediting• Lots of “Parachute” orders
LERC ANNUALCONFERENCE
The Royal Mint26th June 2012
MANUFACTURING SYSTEM-HISTORICAL CONTEXT
– New Senior Management Team• New mind-set, new values
– Increased levels of global competition
– We had a smouldering platform…
– We had to win hearts and minds
LERC ANNUALCONFERENCE
The Royal Mint26th June 2012
HOW WE’VE APPROACHED LEAN (1)
– We started doing lean by introducing one-piece flow cells in our manual press operations in Commemorative Coin
– This worked well but..
Before After
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LERC ANNUALCONFERENCE
The Royal Mint26th June 2012
LERC ANNUALCONFERENCE
The Royal Mint26th June 2012
HOW WE’VE APPROACHED
LEAN (2)
– Struggled to see how that could work on our process lines in Circulating Coin
– Lots of different products, routes all going down shared resources
– Went back to the lean principles to design flow system in Circulating: this meant significant changes to how we planas well as produce
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LERC ANNUALCONFERENCE
The Royal Mint26th June 2012
LAYOUT OF THE SITE AND VIRTUAL PIPELINES
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LERC ANNUALCONFERENCE
The Royal Mint26th June 2012
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LERC ANNUALCONFERENCE
The Royal Mint26th June 2012
LERC ANNUALCONFERENCE
The Royal Mint26th June 2012
LERC ANNUALCONFERENCE
The Royal Mint26th June 2012
COPPER PLATED BLANKS/COINS
Cu Plating Striking Packing
Sorting
CP33 day buffer
Copper Pipeline Average 9.63 Total Stillage:230 (184 tonnes)
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LERC ANNUALCONFERENCE
The Royal Mint26th June 2012
LERC ANNUALCONFERENCE
The Royal Mint26th June 2012
NICKEL PLATED BLANKS/COINS
AnnealingNi Plating Finishing Striking Packing
3 day buffer
Sorting
Nickel Pipeline Average 14.17Total Stillage : 600(480 tonnes)
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LERC ANNUALCONFERENCE
The Royal Mint26th June 2012
LERC ANNUALCONFERENCE
The Royal Mint26th June 2012
BRASS PLATED BLANKS/COINS
AnnealingCu Plating Finishing Striking Packing
3 day buffer
Sorting
Zn Plating
Brass Pipeline Average 10.87Total Stillage : 250(200 tonnes)
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LERC ANNUALCONFERENCE
The Royal Mint26th June 2012
LERC ANNUALCONFERENCE
The Royal Mint26th June 2012
NON FERROUS BLANKS/COINS
FinishingAnnealing Ringmaster Striking Packing
3 day buffer
SortingEdge letter
None-Ferrous Pipeline Average 9.98
Total Stillage : 360(288 tonnes)
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LERC ANNUALCONFERENCE
The Royal Mint26th June 2012
THE CHALLENGES
– Mix – synchronisation coin versus blank
– Key equipment availability
– Load swings
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LERC ANNUALCONFERENCE
The Royal Mint26th June 2012
– Realised that we’d missed out the planning part in Commemorative: we’d only tackled the physical flow
– Re-traced our steps and transformed our forecasting, order handling, purchasing and planning
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HOW WE’VE APPROACHED
LEAN (3)
LERC ANNUALCONFERENCE
The Royal Mint26th June 2012
HOW DID WE DIAGNOSE THE TOOLS
AND TECHNIQUES TO USE?
– We didn’t start with tools and techniques!
– We asked: what was causing our capacity and material supply to be out of kilter with customer demand?
– After that, the solutions were straight-forward…
– We’d done that with the Commemorative cells (and with TPM in the past)
– We used mapping to help the cross-functional team visualise the whole system (first time people had understood the whole rather than their part of it)
– Everyone understood why they had to change to make the whole system work better
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LERC ANNUALCONFERENCE
The Royal Mint26th June 2012
HOW WE’VE APPROACHED LEAN (4)
– In both areas, we’ve used the lean principles to improve the whole system – not just the production flow
– It’s created a stable production environment which enables us to engage people in improvement
– Team leaders have time to lead improvement because they’re not fire fighting and expediting
– We can see what needs to be improved and what lean tools to use where
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LERC ANNUALCONFERENCE
The Royal Mint26th June 2012
WHAT HAVE WE LEARNT?
– Tackle the whole system with a cross-functional team: sales, planning, production
– Don’t just look at part of the flow or one product family
– Dedicate resources to an intensive project and give them a coach
– Keep everyone informed about findings not just solutions
– Take difficult decisions and make policy changes clear (e.g. stock write-off)
– Bed in by changing what people do in their everyday job
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LERC ANNUALCONFERENCE
The Royal Mint26th June 2012
IT’S HOW WE WORK, NOT A PROJECT…
– Daily flow meetings• Standard meetings to understand performance of schedule execution
– Day by hour boards• Measure against the standard throughput • daily meeting to resolve issues and escalate problems
– New rules and routines for sales, planning and production. • Sales and operation planning process vital to the success of new way of working
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LERC ANNUALCONFERENCE
The Royal Mint26th June 2012
LERC ANNUALCONFERENCE
The Royal Mint26th June 2012
LERC ANNUALCONFERENCE
The Royal Mint26th June 2012
Supporting Data (Circulation delivery performance - ROTIF)
0
10
20
30
40
50
60
70
80
90
%
Circulation
OTIF %
Target
GO LIVE
- Better Planning
tools
available
- No Back
log
- Overloading due to
swing in mix
- Order back log
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LERC ANNUALCONFERENCE
The Royal Mint26th June 2012
LERC ANNUALCONFERENCE
The Royal Mint26th June 2012
SO, WHAT’S NEXT....?
– MORE SALES?• The planning tools and delivery performance enable us to target markets and
customers
– COST?• The stability of production enables us to use appropriate tools to target cost
savings
– PRODUCTIVITY?• All of the daily/weekly/monthly performance reviews are all focus on
increasing productivity
We have a very long way to go!29
LERC ANNUALCONFERENCE
The Royal Mint26th June 2012
IT’S HOW WE THINK… (REAL QUOTES)
– We used to work in departments with lots of inventory between each one: now everyone has an end-to-end view
and material keeps flowing: we think about delivery to the customer, not just what our department has produced
– We were always “moving orders to the right” because we couldn’t be sure of our capacity or material when we
offered a delivery date: now, all promises are equal ( well, most of the time)
– We spent all day expediting material because priorities were always changing: now the schedule is stable so we
can concentrate on team-leading
– We used to be driven by measures of volume (tonnes and millions): now we aim for delivery performance and
prioritise by schedule adherence and flow rate
– When machines broke down, we used to move material and people which hid the problem: now we can see clearly
where downtime is hurting us
– It was the same with quality: if we had a problem, we would put the job to one side and work on something else.
Now we intervene straight away to stop the flow rate deteriorating.
– We never had time for problem solving: now problems are escalated from production meetings, it’s visual and we
have clear priorities for tackling them.
– In the past, we wanted to get better but we didn’t know how: now there’s a clear view of where we need to
improve and everyone knows where we want to get to
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