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DuPont Production System- A Journey in Operations Excellence
TRACC © Conference South Africa
Kathy Wright, Program Director, Operations Center of Competency
April, 2011
2
DuPont Core Values
Safety & Health
Environmental Stewardship
Highest Ethical Standards
Respect for People
“The Goal is Zero”
2
3
DuPont Internal Use OnlyRev. Date: 5/15/10
Dependent -
“ZERO IS DIFFICULT”
• Management commitment
• Governed by rules and regulations
• Management -centered activities
• Selective communication of objectives
• Discipline as a development tool
• Turf -type atmosphere
Reactive -
“ZERO IS UNREALISTIC”
• Goal of compliance
• Safety by natural instinct
• Driven by Safety Manager
• Management -provided resource but lack of management involvement
• Discipline reactive to injuries
Independent
“ZERO IS ATTAINABLE”
• Well understood process and operation
• Personal commitment to safety
•
• Ownership for procedures at team level
• Trust allowing for shared logic and ideas
Supervision/resource comfortableleading or allowing others to lead
Interdependent
Inju
ry R
ates
ZeroIndependentDependentReactive
BradleyBradleyModelModel
Interdependent
“ZERO IS SUSTAINABLE”
• Cooperation within and across teams
• Brother’s Keeper
• Organizational pride
•
• Team fully engaged in goal -setting and improvements
Self-managed teams
Zero injuries & illnesses
44
To be the world’s most dynamic science company, creating sustainable solutions essential to a better, safer, healthier life for people
everywhere.
The Vision of DuPont
55
The DuPont Company - 2010 Sales
DUPONT AGRICULTURE & NUTRITION
$9.7 B
DUPONT PERFORMANCE CHEMICALS
$6.1 B
DUPONT ELECTRONIC & COMMUNICATIONS
$3.0 B
DUPONT PERFORMANCE MATERIALS
$6.5 B
DUPONT PERFORMANCE COATINGS
$4.2 B
DUPONT SAFETY & PROTECTION
$3.1 B
$32.5B*
* Includes “other” sales, excludes inter-segment transfers
6
Aligning Strategic Themes with Growth Trends
Increasing Food
Production
Decreasing Dependence
on Fossil Fuels
Growth Trends
Protecting Lives and the Environment
Emerging Markets
• Innovation & Intense Customer Focus
• Differential Business Management
• Productivity & Continuous Improvement
6
7
Aligning Strategies with Megatrends
Market Opportunities…
More food Better food
Alternative energy solutions Energy efficiency Renewably-sourced materials
Workplace safety Personal protection Environmental sustainability
Infrastructure Energy Materials applications
customized for local markets
Megatrends…
1. Increasing Food Production
2. Decreasing Dependence on Fossil Fuels
3. Protecting People, Assets & the Environment
4. Growth in Emerging Markets
Strategies…• Grow production
agriculture• Photovoltaics & Biofuels• Lightweighting vehicles • Accelerate conversion to
bio-based raw materials
• Accelerate innovation pipeline
• Strategic acquisitions
• Geographic expansion• Increase local application
development• Drive further penetration
The Needs of the World Drive our Science
8
DuPont’s 13 Businesses
• Protection Technologies• Building Innovations
• Safety Resources
• Pioneer Hi-Bred• Crop Protection
• Nutrition & Health
• Performance Polymers• Packaging & Industrial Polymers
• Titanium Technologies• Chemicals & Fluoro
• Performance Coatings
• Applied BioSciences
• Electronics & Communications
8
99
• ~$9B sales from seeds, crop protection products, food and nutrition products, and food packaging materials for extended shelf life
MEGATREND #1:Increase Food Production
DUPONT OFFERING
DUPONT SOLUTIONS
• Constant stream of higher-yielding seeds, grower services• Optimum® AcreMax™, Optimum® GAT™, Y-series soybeans,
Rynaxypyr® and Cyazypyr™ insecticides …• Next generation food packaging• Bio-based Omega-3s
1010
• >$2B sales from PV, components for fuel cells,more energy efficient construction with Tyvek®,lighter weight polymer composites for transportation
MEGATREND #2:Decrease Dependency on Fossil Fuels
• Constant stream of new / improved materials forphotovoltaics; cellulosic ethanol, and biobutanol
• Advanced composites for aerospace
DUPONT OFFERING
DUPONT SOLUTIONS
1111
• ~$2.5B sales from Kevlar®, Nomex®, Tyvek®, SentryGlas®, safety services, environmental protection material solutions
MEGATREND #3:Protect People, Assets, and the Environment
• Next gen Kevlar® and Nomex® fibers and fabrics
• Next gen Tyvek® for construction, worker protection
• New antimicrobial coatings for food processing
• Environmental protection solutions for refineries
DUPONT OFFERING
DUPONT SOLUTIONS
1212
• ~$8B sales across the portfolio
MEGATREND #4:Growth in Emerging Markets
DUPONT OFFERING
DUPONT SOLUTIONS• New applications tailored to
emerging markets
$5.2$6.2
$7.2
$8.8$8
$12
$4.9
2004 2005 2006 2007 2008 2009E 2012E
14% CAGR2009-2012E
Sales$ billions
$5.2$6.2
$7.2
$8.8$8
$12
$4.9
2004 2005 2006 2007 2008 2009E 2012E
14% CAGR2009-2012E
Sales$ billions
Top-line growth > company average
Directives Toward our VisionDirectives Toward our Vision
MARKET-DRIVEN INNOVATION
INDUSTRY-LEADING PRODUCTIVITY
Company Metrics:How:
• Accelerate growth in megatrends• Drive sustainability with science• Aggressively launch new offerings• Drive differential choices in growth investments (POIs)
• >XX% of revenue from new products (commercialized the past 4 years)• XX% new growth vs. replacement products• Meet major growth program milestones• Establish & implement metric for return on R&D
• Strong focus on customers in high growth markets• Expand margin by pricing to value• Drive Marketing & Sales Excellence• Continue to improve connection of supply chain to the
marketplace
• XX% revenue growth (vs. 2010)• X point improvement in Net Promoter Score®• XX% of revenue from developing markets by 2012• X point improvement in variable margin (vs. 2010)• $XXX million of capacity released
• Strengthen competitive benchmarking• Simplify and digitize transactional processes• Advance and embed DPS and DIBM
• Top quartile performance vs. benchmarks• $XXX million of variable cost productivity• $XXX million of fixed cost productivity
• Drive asset reliability while improving asset turns• Rigorously manage working capital and capital
expenditures
• XX% PTOI growth (vs. 2010)• Improve return on net plant, property, & equipment (NPPE) vs.
benchmarks• $XXX million of working capital productivity
Deliver:
In 2011, we will advance our Core Values, deliver world-class innovation with our customers and outpace competition through differential management and industry-leading productivity.
SPEED & AGILITY ACCOUNTABILITY TRANSPARENCY DEVELOP PEOPLE
SUPERIOR REVENUE GROWTH
CASH TO GROW & INCREASE RETURNS
(RONA)
ADVANCING OUR CORE VALUES THE GOAL IS ZERO!
JANUARY 2011
STEP-CHANGE IN SAFETY PERFORMANCE
• Leadership and employee engagement• Action plans by unit• Improve PSM execution
• The goal IS ZERO
14
DuPont Global Operations – At a glance
14
2007 2008 2009 2010
80
90
10
0
110
1
20 Supply Chain Costs
Production Volumes
DuPont Integrated Operations Worldwide
Global Supply Chains 98 Plant sites 185 SitesWarehouses 400+Shipping Major Container userEmployees (approx.) 35,000+Countries 45Contract operations 700+ SitesNew Product Launches 5%-20% annually
BusinessIntegration
Strong supply chainintegration within business teams and business strategies
Operations Center of
CompetencyEnsure organizational capability is in place
Standardize and leverage
Execution
Drive effectiveness and efficiency in
execution in plants and supply chains
across businesses and regions
Production System Deliverables
Integrated strategies and operational plans
Productivity and asset effectiveness along supply chains
Technology ownership & integration along supply chains
Advancing Core Values Capability building - People & organizational development
Mindsets and behaviors that foster engagement and superior execution
Everyday, everyone together driving sustainable competitive advantage so our businesses win
15
How Integrated Operations is Structured for Operations Excellence
16
Production System in Integrated Operations16
Dem
and
Revi
ew
Prod
uct/
proj
ect
Revi
ew
Required Business Outcomes
Current and future requirements forcapability and performance
Production SystemManufacturing Locations,
S&L, Engineering,
Across Supply Chains
Supp
ly R
evie
w
Current Capabilities & PerformanceImprovement
Opportunities/alternatives
DIBMDIBM00--24 months24 months C
onte
xtan
d Pe
rspe
ctiv
eC
onte
xtan
d Pe
rspe
ctiv
e
4/18/2011
17
DuPont Production System VisionEveryone, everyday in pursuit of Operations Excellence enabling DuPont to win in a dynamic world.
Principles
People•Each individual will accept the need for change and respond positively to the challenges it represents.•We will foster an open, honest, and trusting environment.•We will create an engaged, flexible, and capable Work Force at all levels.
Practices•We will operate a lean, integrated end-to-end Supply Chain from suppliers to customers.•We will maintain standard processes and systems. •We will promote enabling technologies, tools, and processes.
4/18/2011
18
DPS builds on our strong foundation of continuous improvement…
DUPONT PRODUCTION SYSTEM (DPS):• Analysis / Tools / Techniques• Engaging and empowering• Leadership development and mindset shifts
REAPPLICATION OF OPERATIONS EXCELLENCE BEST PRACTICE:• Codifying• Deploying• Use of Standard Management Practices
LEAN SIX SIGMA DEPLOYMENT:• Standardized Problem Solving• Lean Management• Continuous Improvement
FOUNDATION:• Unique Technology/Processes• Markets and Customers• Core Values
4/18/2011
19
DuPont Production System Model ….is designed from a multidimensional view of improvement
Required Business
Outcomes AND a
sustainable top-quartile Performance
Business
and Asset Requirements
Mindsets & Behaviors
Capability Building
Technical Model
Managing Process
Keep focus on what really
matters, with the right people
Apply tools and practices
to drive focused
improvement at all levels
Insure the right skills
and coachingAlign cultural
norms with the organization’s vision, mission
4/18/2011
20
TRACC is Integral Part of DPS Sustainability
Required Business
Outcomes
Current and future
requirements for
capability and performance
Mindsets & Behaviors
Capability Building
Technical Model
Managing Process
Keep focus on what really
matters, with the right people
Apply tools and practices
to drive focused
improvement at all levels
Insure the right skills and
coaching
Align cultural norms with the organization’s vision, mission
FoundationalElements
SHEAFocused
improvementBest practice
design
Performance Management
Talent Management
Change Agents(Plant Mgrs Champions,
Experts,)
Training & DevelopmentBest practice performance
Desired Characteristics
Influence
Supported by
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"I'm a big believer in the DuPont Production System (DPS). We have to be very productive in manufacturing in today's dynamic and competitive global marketplace and DPS allows us to do that. With DPS we engage our workforce in its entirety. The collective power is in the group and the team, and getting the most we can out of our operations. DPS allows us to speak with each other using a common language so together we can drive and sustain world-class operations performance."
Ellen Kullman DuPont CEO & Chair of the Board
"I'm a big believer in the DuPont Production System (DPS). We have to be very productive in manufacturing in today's dynamic and competitive global marketplace and DPS allows us to do that. With DPS we engage our workforce in its entirety. The collective power is in the group and the team, and getting the most we can out of our operations. DPS allows us to speak with each other using a common language so together we can drive and sustain world-class operations performance."
Ellen Kullman DuPont CEO & Chair of the Board
….Our Leadership strongly Supports the Journey of DPS to World Class
2222
….And our Entitlement will deliver Superior Supply Chain Capability
MarketNeeds
Supply ChainNetworkDesign
PlantOperation
Supply ChainOptimization
Highest Service with Lowest Total cost of
ownership
Supply Chain Network Design – Sourcing, Operations, Logistics - Potential $>0.XB• Total landed Cost Diagnostics – Optimize existing supply chains utilizing proven best practices
• Drive Shifts in Supplier base from traditional sources to emerging regions. Mexico, C and EE, Brazil and China
• Network Optimization – Establish shifts in Asset base with new investment and in-depth “Make vs Buy” Analysis
Plant Operations – DPS TRACC, CoC, People Engagement - Potential $>XB • Gap to perfect Diagnostics – Optimize existing Plant Operation utilizing proven best practices
• Drive ‘total cost of ownership' Within Plant boundaries connected to Suppliers- supplier
• Employee engagement driving great levels of CI with Managing Process excellence
Supply Chain Optimization – Sourcing, Operations, Logistics - Potential $>XB• E2E Diagnostics – Optimize existing supply chains utilizing proven best practices
• Drive ‘total cost of ownership' across supply chains - supplier, DuPont, customer
• Network Optimization – Reorganize supply chains production scheduling to efficiently serve variable market base
23
Integrated Operations
Key Priorities 2011
•Ensure sufficient trained resources/facilitators
•Deliver Capacity release to ensure production volumes available for growth in sales and improvement of customer service
•Vertically align improvement initiatives (DPS across the Supply Chains)
•Facilitate “Advancing DPS” in post deployment sites
DPS Deployments
Completed 2010 New 2011
Sites 125 40
Non Sites 3 7
Productivity ($MM)2010 2011
Fixed Cost XXX XXX
Variable Cost XXX XXX
Capacity Release XXX XXX
Total XXX XXX
Working Capital XXX XXX
We use an Integrated Standardized Approach to deploymentDuPont Production System
Standardized Repeatable Leverageable
Core Values
OperationalCapability
PeopleEngagement
MassiveImprovement:• Fast• ContinuousD
iagn
ostic
Prio
ritie
s
Proc
ess
Cap
abili
ty
Business &AssetRequirements
• Understand the Stake, and identify cultural barriers to progress.• Gain leadership alignment of where to gain the best Business advantage:• Understand the key drivers to strategic success.• Improves leadership capability to develop and maintain an ever improving level
of performance and trains Operators with new skills for collaborative success• Establish leader standard work at all levels to continue the journey and monitor
progress
24
25
Managing ProcessesAnd Capabilities
Employee and leadershipTalent Management Process
Engaged employeesIncreasing our continuousImprovement performance
Leadership SkillsAnd Mindsets and
Behaviours
KPI’s integratedWith Business strategy
Robust capabilityBuilding engine
Clear external perspectivesAnd benchmarking process
Effective Leading andManaging structures
DuPontIntegratedOperations
Balance of programs all needed to maintain a Sustainable System wide approach
Advancing DPS ........is a Multifaceted approachEveryone, everyday in pursuit of Operations Excellence enabling DuPont to win in a
dynamic world.
4/18/2011
26
Mindsets & Behaviors
3 path Diagnostic Deployment Areas
DPS TRACC
Technical Diagnostic
Primary Focus AreasUnderstanding the site’s culture Defining and implementing needed changes
to improve employee engagement- leadership behaviors- leadership rituals
Answering “Where’s the $$?”- cataloging all existing improvement work- defining additional improvement options- establishing stretch targets
Prioritized improvement plan
Assess where the site is vs. World ClassFocus on Frontline capability building
- teamwork- problem solving skills- visual performance management
Ultimate products: Fully integrated improvement plan developed & owned by site employeesVisible progress on the journey to world class
27
Initial 6-8 month Centrally supported Deployment……….the keys Phases
• Technical Model
• Managing Processes
• Mindsets and Behaviors
• Capability Building
Roll-out
Road mapSynthesis
• Structure area transformation
• Develop implemen-tation organization
“Cultural”diagnosis• Analysis of
strengths and weaknesses (OPP, DSIs, Mirror workshops . . .)
Capability building• Gap analysis
“Technical diagnostics”• Analysis of
improve-ment leavers andpotential
Management infrastructure• Blueprint
Capability building• Design inter-
ventions and tools (LCD, L2, and Visioning)
• Enable implemen-tation organization
Prepare• Rapid
assessment• Team setup• Data collec-
tion• Site Staff
alignment
• Execute area transformation
• Establish new site organization and performance management
Capability building• Support interface
management with other functions
• Support team functioning
• Build skills
Diagnose Design and plan Implement
Required Business
Outcomes AND a
sustainable top-quartile Performance
Business
and Asset Requirements
Mindsets & Behaviors
Capability Building
Technical Model
Managing Process
Prepare
Required Business
Outcomes AND a
sustainable top-quartile Performance
Business
and Asset Requirements
Mindsets & Behaviors
Capability Building
Technical Model
Managing Process
28
PRACTICE RATING
PER
FOR
MA
NC
E
100%
50%
0%
39%
52% - Y1
2.2
60% - Y2
1.4 3.1
OVE
RA
LL E
QU
IPM
ENT
EFFE
CTI
VEN
ESS
Implementation Workshop: Where are the opportunities, and
how big are they?
• Workshops produce CONSENSUS on the state of practice
• Teams examine ALL practice aspects to generate maturity ratings
• Teams agree on the OPPORTUNITYassociated with specific aspects of continuous improvement programs
Skills and Knowledge:What does everyone need to know?
TRACC Progress ChartTeamwork (v3)Area: Soroksar Desc: Assessment
Date: Thursday, November 13, 2003Assessor: Administrator
Licensed to: Competitive Capabilities - Support
Stage 1Individualism
Stage 2Formation
Stage 3Foundations
Stage 4Relations
Stage 5Performance
1. Strategy
2. Team Objectives
3. Team Dynamics
4. Leadership
5. Performance Management
6. Meetings
7. Training and Development
8. Decision-Making
ScorecardWhere are we doing well, and
where should we focus?
Detailed RoadmapWhat are the next three steps we need to manage in a focused way?
• Senior management can manage the implementation process across MANY SITESin many LANGUAGES simultaneously.
• The Performance and Practices axis can be measured on each site and on every line within a site
• In-depth MANUALS tailored to specific groups (senior leadership, operational management, line workers)
• COMPETENCY BASED training with ASSESSMENT CRITERIA applied Just-in-Time for the shop floor and Team Leaders
• Specialist workshops
• Initial and periodic assessments PRIORITIZEnext steps to manage
• STRUCTURED FRAMEWORK that transcends Leadership changes
• Provides DISCIPLINE, INTEGRATES prior initiatives and ensures SUSTAINABILITY.
We use TRACC to provide a framework execution of Standardized Managing Processes
6/25/09 DUPONT CONFIDENTIAL – SPECIAL CONTROL
29
….And this gives an assessment of current practice with Operator engagement
4/18/2011
30
During Deployment we plan and secure resources for Site leadership
DPS Deployment TeamDPS- ALL Site Personnel
Start Initial Deployment Turnover
Upon kick-off, DPS must drive progress… …allowing site personnel to take full ownership at roll-out
DPS deployment team role• Communicate DPS vision
• Set workplan and run learning events, kaizen events, etc.
• Align necessary resources
• Train site personnel to lead initiatives and institute process for continuous improvement
Site personnel responsibility• Participate in problem solving
• Capture opportunity value
• Internalize DPS vision
• Become an agent of continuous improvement
DPS deployment team role• Facilitate problem solving
• Assist leadership in aligning resources and removing obstacles
Site personnel responsibility• Maintain continuous improvement (CI) focus
• Uncover new opportunities
• Prioritize CI initiatives based on business strategy
• Facilitate problem solving teams
• Execute From-To Action Plan
• Communicate. Communicate. Communicate.
DPS Sustainability = LineDPS Sustainability = Line--led Transformationled Transformation
31
The results are always overwhelming ………..
Guarulhos, Brazil
•Improved profitability•38% increase in batches per person
•Business, R&D, Operations working as a team
Maydown, Northern Ireland
•Record quality performance 20% improvement
•Record productivity performance in yield and uptime
•1,000 days without a recordable safety incident
3232
What we need with our DPS Deployments
Alignment in the following Arenas Ensuring a continued standardized approach. Need an effective handle on employee engagement to sustain improvement PMO process must beyond Plant Deployments to ensure maximum Business
Benefit and Execution Excellence Staffing and development plans needed to ensure effective resources An agreed on Site Deployment Plan with Business ensures effective value
capture
Operations Leadership Skills need continued upgrade Role modeling at all levels of leadership. Engage in basics with KPI’s:- Performance Dialogues Effective Coaching Engaging in difficult conversations
We still have limiting Mindsets and Behaviors which we must address Interrogation vs Exploration Scarcity vs Abundance
Under Stress go with what has worked in PAST
THANK YOU………….Questions??
33