Operational excellence

IME Department

IME Department

Learning from the best!

Achieving Operational Excellence In

Automotive Industry

IME Department

IME Department

Learning from the best! Operational Focus

The best of the Car manufacturers..

• Strive to understand the customer needs

• Design Products and Processes that deliver value

• Recognise the need to service external and internal customers

• PUT QUALITY FIRST !

• Recognise that quality is defined by the customer

• Quality is used as the driver for both product & process improvement

• Build in quality at source (in both Product & Process)

• Pass no defects forward

IME Department

IME Department


• Service Level Agreements (SLA) between all internal customers and suppliers for

Expected Quality

Expected Quantity

Expected Delivery Rate

Expected Mix

Expected Location and Presentation

Expected Documentation

etc...….

IME Department

IME Department


• Key Performance Indicators which are cascaded down from corporate level to CX.

These metrics are arranged in the form QCDDMS where

Q = Quality (Dimension, surface finish, hardness, colour, completeness etc....)

C = Cost (e.g..... Man Hours / Car)

D = Delivery (Takt Time or frequency, quantity)

D = Design (of the manufacturing processes)

M = Management Systems (Training plans, Kaizen)

S = Safety

IME Department

IME Department

Learning from the best! Working Practices

The best manufacturers believe in the STANDARD OPERATION

.. always doing the same task in exactly the same way to ensure consistent quality from person-to-person, shift-to-shift, and day-to-day

The Standard Operation is defined as

• the most EFFICIENT

• CURRENT method of

• SAFELY meeting

• QUALITY standards

and achieving QCDDMS

IME Department

IME Department

Learning from the best! Standard Operations

They establish the methods for manual tasks with respect to

• Quality• Quantity• Cost• Timing• Safety• Productivity

Standard Operations are• described in detail using words and

pictures on Standard Operations Sheets• the basis for all continuous improvements

and the elimination of waste in all its guises• reviewed by the Team Leader at regular

intervals• linked closely into workshop management

techniques

IME Department

IME Department

Learning from the best! Workshop Management

The best manufacturers emphasize the need for..

OrganisationNeatnessCleanlinessStandardisationDiscipline

other techniques include..

• “one step” (no action requiring more than one step away from the workplace)

• “ownership” of machines by individuals

sometimes known (from their Japanese origins) as the “5 Ss”

IME Department

IME Department

Learning from the best! Workshop Management

The best manufacturers try to eliminate the “7 Wastes”..

OverproductionWaiting

Conveyance

Over-processing

Excess Inventory

Motion

Correction of Defects

IME Department

IME Department

Learning from the best! Team Working

The best manufacturers organise the workforce into natural teams, called SDT’s .

A team is typically 6-10 individuals under a team leader, who..

•has experience of all of the processes

•acts as a trainer

•promotes welfare/harmony

• reports production progress

•drives improvements through standard operations

IME Department

IME Department

Learning from the best!Supplier

Relationships

The best of the Car manufacturers..

• Have a relatively small number of suppliers (<200)

• Build long-term relationships with suppliers

• Provide training for suppliers

• Give design responsibility to suppliers

• Single source model-specific parts (but will often choose different suppliers for different models to maintain competitiveness)

IME Department

IME Department

Learning from the best! Order Scheduling

The best of the Car assemblers..

•Give a rolling forecast of requirements

•Give a daily delivery schedule 4-10 days ahead of delivery, via EDI links

the car manufacturer’s objective is to ensure that the right quantity of the right parts will be on site; the actual build sequence is defined on a daily basis to even-out the production flow, and the parts are pulled to the production line as required, using KANBANs

IME Department

IME Department

Learning from the best!Supply

Logistics

Deliveries to the best of the Car assemblers..

•are weekly for small high-volume commodity items

•are daily for most items (either by the supplier or by a Logistics Partner who collects the parts from the smaller suppliers on a “milk-round” journey)

•are just-in-time, direct to the line, for large order-specific items such as seats (for e.g., a truck-load every 40 minutes)the objective is to minimise the stock held,

particularly of high-value, large-size and variety-dependent items

IME Department

IME Department

Learning from the best!Just-in-time

supply

The best of the Car assemblers arrange for customer-specific items to be built to order. e.g..... for seats..

• the supplier will receive an order by EDI, two-and-a-half hours before the seats are to be fitted into the car

•after making the seat set, the supplier will consolidate it into a sequenced load which is delivered to the car manufacturer. The seats are unloaded onto a conveyor feeding the production line in the correct order for fitting to the cars coming along the line

IME Department

IME Department

Learning from the best! Human Resource

Management

The best manufacturers..

• recruit people willing to work in a high-commitment, constantly-changing work environment, and with a “can-do” attitude

•provide single-status facilities

•operate reward systems based on appraisals and individualised salary progressions through merit

•organise people into natural teams

•multi-skill all production staff

• focus on the production areas

IME Department

IME Department

Learning from the best!Multi-

skilling

Multi-skilling is regarded as essential..

for maintaining the quality

the line is resilient against absenteeism

many staff can contribute to problem-solving

for flexibility in production (if the output rate of vehicles is changed up or down, each line associate will be doing fewer or more tasks per vehicle)

for maintaining employee enthusiasm and interest

IME Department

IME Department

Learning from the best! Communication

The best manufacturers communicate objectives and performance visually at the workplace..

•output/quality

• individual skills

• team performance

• results of quality improvement activities

IME Department

IME Department


World Class Manufacturing - What is it ?

• Understand, document, measure and target for improvement all their business processes

• Constantly work with the best suppliers to reduce the total cost of doing business and to improve the supply chain responsiveness

• Seek to gain the maximum from the capabilities of their people in delivering the business objectives

As per a study, World class manufacturers across the globe :

IME Department

IME Department


World Class Practices

ProcessesProcessesTightly integratedTightly integratedClosely controlledClosely controlled

• Tight Process Control NOT Tight Process Control NOT Inspection and ReworkInspection and Rework

• Complexity does not Complexity does not preclude Productivitypreclude Productivity

• Flexibility and Adaptability Flexibility and Adaptability

IME Department

IME Department



Supply ChainSupply ChainHigh qualityHigh qualitythroughoutthroughout




• Low Inventories throughoutLow Inventories throughout

• Short time horizonsShort time horizons

• Stable Supplier/Customer Stable Supplier/Customer SchedulesSchedules

• Information exchange and Information exchange and learninglearning


IME Department

IME Department




PeoplePeopleAdvanced Advanced

Management Management PracticesPractices








• Greater Team Leader Greater Team Leader responsibility for quality, responsibility for quality, maintenance and trainingmaintenance and training

• Operators focus on Operators focus on productionproduction

• Suggestion Schemes and Suggestion Schemes and Problem SolvingProblem Solving


IME Department

IME Department

Learning from the best!World Class Practices - Summary



PeoplePeopleAdvanced Advanced

Management Management PracticesPractices








• Greater Team Leader Greater Team Leader responsibility for quality, responsibility for quality, maintenance and trainingmaintenance and training

• Operators focus on Operators focus on productionproduction

• Suggestion Schemes and Suggestion Schemes and Problem SolvingProblem Solving

IME Department

IME Department


THANK YOU

Business

Operational excellence