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F A R T H I N G W E S T P T Y L I M I T E DM A N A G E M E N T C O N S U L T A N T S
A.C.N. 063 498 886
ACARP Conference – September 2007ACARP Conference – September 2007
Lessons from ManufacturingLessons from Manufacturing
F A R T H I N G W E S T P T Y L I M I T E DM A N A G E M E N T C O N S U L T A N T S
A.C.N. 063 498 886
Within the Australian Coal Mining community today
BHP Billiton - Six Sigma
BMA - Six Sigma
Rio Tinto - Lean Six Sigma
Peabody - Lean Six Sigma
24 April 2007 2
Within Manufacturing there are two dominant philosophies that are driving productivity improvement and quality –
Lean Thinking and Six Sigma
F A R T H I N G W E S T P T Y L I M I T E DM A N A G E M E N T C O N S U L T A N T S
A.C.N. 063 498 886
Six Sigma
The aim of Six Sigma is to systematically improve processes by eliminating defects.
One standard deviation - around 68 percent.
Two standard deviations 95 percent.
Three standard deviations about 99 percent.
Six sigma quality – 6 standard deviations
from the mean represent defect levels below 3.4 defects per one million opportunities
24 April 2007 3
F A R T H I N G W E S T P T Y L I M I T E DM A N A G E M E N T C O N S U L T A N T S
A.C.N. 063 498 886
Productivity Improvement
If the aspirational aim of Six Sigma is to eliminate defects to less than 3.4 per million…
Why are so many Six Sigma projects themselves
defective?
24 April 2007 4
F A R T H I N G W E S T P T Y L I M I T E DM A N A G E M E N T C O N S U L T A N T S
A.C.N. 063 498 886
Motorola has reported over US$17 billion in savings from Six Sigma as of 2006 (20 years
implementation)
2006 results were impressive.
Sales grew 22% to a record $42.9 billion.
Net earnings were $3.7 billion.
24 April 2007 5
F A R T H I N G W E S T P T Y L I M I T E DM A N A G E M E N T C O N S U L T A N T S
A.C.N. 063 498 886
Lean is built around the concepts of the Toyota Product System.
Lean’s focuses on improving the 'flow' or smoothness of work, eliminating waste / variation and the pursuit of perfection.
24 April 2007 6
In 2006 Toyota’s
Sales grew 13.4% to a record $179 billion.
Net income was $11.7 billion.
F A R T H I N G W E S T P T Y L I M I T E DM A N A G E M E N T C O N S U L T A N T S
A.C.N. 063 498 886
What are the lessons that the mining industry should learn from manufacturing?
24 April 2007 7
F A R T H I N G W E S T P T Y L I M I T E DM A N A G E M E N T C O N S U L T A N T S
A.C.N. 063 498 886
Lesson – reduce variability
Both Lean and Six Sigma have different philosophical approaches but share many common tools.
24 April 2007 8
Perhaps the most striking common philosophical feature is the
pursuit of the continual reduction of variability and the elimination of waste.
Why is this important?
F A R T H I N G W E S T P T Y L I M I T E DM A N A G E M E N T C O N S U L T A N T S
A.C.N. 063 498 886
Continually reduce variability
Law 11 of Factory Physics#
(Pay me now or pay me later)
24 April 2007 9
If you have high variability you will pay for it through.
Long Cycle times and high WIP levels
Wasted Capacity (low utilisation of resources)
Lost throughputFactory Physics – Hope & Spearman pg 623.
F A R T H I N G W E S T P T Y L I M I T E DM A N A G E M E N T C O N S U L T A N T S
A.C.N. 063 498 886
24 April 2007 10
Case Study - Utilisation
Support distance
Roof Bolt Pattern6 * 2.1m bolts per m
Rib
Cut and fill 90 90 90 90
Car "A" travel outbye car "B" travel inbye 90 90 90 90
Install rib support 105 205 205 205
Car travel & Bolt - Parallel activities 105 205 205 205
Cut and fill 90 90 90 90
Car "B" travel outbye car "A" travel inbye 90 90 90 90
Install Roof support 150 150 245 245
Car travel & Bolt - Parallel activities 150 150 245 245
Total Cycle time 435 535 630 630
Potential advance m/hr - Ignoring all other activities 8.3 6.7 5.7 5.7
Theoretical m per 8 hr shift 66.2 53.8 45.7 45.7
Cut bolt Efficiency Mine "C" @ 3.75m / op hr 66%
Cut and fill 90 90 90 90
Car travel outbye, unload and travel inbye 135 135 135 135
Install rib support 105 205 205 205
Car travel & Bolt - Parallel activities 135 205 205 205
Cut and fill 90 90 90 90
Car "B" travel outbye car "A" travel inbye 135 135 135 135
Install Roof support 150 150 245 245
Car travel & Bolt - Parallel activities 150 150 245 245
Total Cycle time 465 535 630 630
Potential advance m/hr - Ignoring all other activities 7.7 6.7 5.7 5.7
Theoretical m per 8 hr shift 61.9 53.8 45.7 45.7
Cut bolt Efficiency Mine "N" @ 1 m / hr 15%
One shuttle car operation - times at 70 advance from boot
Technically Attainable Advance Rates based on cut, bolt travel - ExistingAssumes no delays due to supplies, ventilation etc - Travel times for 70m wheeling
8 * 1.8 m bolts to roof in mesh per m
4 * 1.8 m bolts to roof in mesh per m
One 400mm rib bolt in mesh to each rib
Two shuttle car operation - times at 70 advance from boot
1.0 m advance per cycle
Two 400mm rib bolt in mesh to each rib
Focus on reduced variability
66% Utilisation3.75 m / operating hr
Better conditions
15% Utilisation1.0 m / operating hr
X
F A R T H I N G W E S T P T Y L I M I T E DM A N A G E M E N T C O N S U L T A N T S
A.C.N. 063 498 886
Lesson – Implement the Philosophy
Implement the philosophy not just the tools.
24 April 2007 11
F A R T H I N G W E S T P T Y L I M I T E DM A N A G E M E N T C O N S U L T A N T S
A.C.N. 063 498 886
Lesson – Learn by Doing
People Learn by doing!
24 April 2007 12
Teach and practice the use of tools in the context of real work problems.
They don’t teach the tools and then go looking for a problem.
F A R T H I N G W E S T P T Y L I M I T E DM A N A G E M E N T C O N S U L T A N T S
A.C.N. 063 498 886
Lesson – Go and have a look
Go to the place where value is added!
Ohno – who is credited with the development of the Toyota production system said...
“Management should walk the factory floor at the rate of 100m per hour.”
24 April 2007 13
Slow down.
Observe.
Talk to the people adding value.
Involve these people in the improvements.
F A R T H I N G W E S T P T Y L I M I T E DM A N A G E M E N T C O N S U L T A N T S
A.C.N. 063 498 886
Lesson – Learn to See
Learn to see non Value Adding Activities
24 April 2007 14
F A R T H I N G W E S T P T Y L I M I T E DM A N A G E M E N T C O N S U L T A N T S
A.C.N. 063 498 886
24 April 2007 15
Learning to See
Total Available TimeTotal Available Time 24 * 7
Scheduled Production TimeScheduled Production TimeScheduled Down TimeScheduled Down Time Reduced by maintenance shifts
Available Run TimeAvailable Run Time Set -up Time
Set -up Time
Reduced by panel advances
Reported Run TimeReported Run TimeUnplanned RecordedStoppages
Impacted by breakdowns as per Deputies reports
Net Run TimeNet Run TimeMinor
Unrecorded Stoppages
Unrecorded
StoppagesReduced by getting supplies to face / wait on car / ventilation extensions
Efficient Net Run TimeEfficient Net Run Time Slow SpeedSlow
Speed Proficiency (speed) of bolters and miner driver
Value Add TimeValue Add TimeRejects ReworkRejects Rework Repairing roadways, intersections, off-centre or over-wide roadways
The proportion of time spent “Adding Value” (cutting and supporting) can be very smallThe proportion of time spent “Adding Value” (cutting and supporting) can be very small
Equipment Value Adding TimeEquipment Value Adding Time
F A R T H I N G W E S T P T Y L I M I T E DM A N A G E M E N T C O N S U L T A N T S
A.C.N. 063 498 886
24 April 2007 16
Big productivity gains - Its about the peopleBig productivity gains - Its about the people
There are enormous productivity paybacks in eliminating non value adding time.
And
These productivity gain do not require big capital investment
There are enormous productivity paybacks in eliminating non value adding time.
And
These productivity gain do not require big capital investment
Net Run Time
Reported Run Time
Available Run Time
Scheduled Production Time
Total Available Time
Efficient Net Run Time
Net Run Time
Reported Run Time
Available Run Time
Scheduled Production Time
Total Available Time
Value Add Time
Net Run Time
Reported Run Time
Total Available Time
Efficient Net Run Time
Net Run Time
Reported Run Time
Available Run Time
Scheduled Production Time
Total Available Time
Value Add Time
F A R T H I N G W E S T P T Y L I M I T E DM A N A G E M E N T C O N S U L T A N T S
A.C.N. 063 498 886
24 April 2007 17
Big productivity gains - Its about the peopleBig productivity gains - Its about the people
Net Run Time
Reported Run Time
Available Run Time
Scheduled Production Time
Total Available Time
Efficient Net Run Time
Net Run Time
Reported Run Time
Available Run Time
Scheduled Production Time
Total Available Time
Value Add Time
F A R T H I N G W E S T P T Y L I M I T E DM A N A G E M E N T C O N S U L T A N T S
A.C.N. 063 498 886
24 April 2007 18
Big productivity gains - Its about the peopleBig productivity gains - Its about the people
Net Run Time
Reported Run Time
Available Run Time
Scheduled Production Time
Total Available Time
Efficient Net Run Time
Net Run Time
Reported Run Time
Available Run Time
Scheduled Production Time
Total Available Time
Value Add Time
Net Run Time
Reported Run Time
Total Available Time
Efficient Net Run Time
Net Run Time
Reported Run Time
Available Run Time
Scheduled Production Time
Total Available Time
Value Add Time
F A R T H I N G W E S T P T Y L I M I T E DM A N A G E M E N T C O N S U L T A N T S
A.C.N. 063 498 886
Lesson – Think Systemically
Think systemically – not just locally…
Map the Flow of Value
24 April 2007 19
F A R T H I N G W E S T P T Y L I M I T E DM A N A G E M E N T C O N S U L T A N T S
A.C.N. 063 498 886
Lesson – Measure Success
Develop a “dashboard” that measures success – not just failure
24 April 2007 20
F A R T H I N G W E S T P T Y L I M I T E DM A N A G E M E N T C O N S U L T A N T S
A.C.N. 063 498 886
24 April 2007 21
Developing the “Dashboard” - Measurements for Success
DefectsUnnecessary
Inventory TransportingOver
Production
Under-utilisation of employees
Unnecessary or excessive motion
Inappropriate Processing
Waiting
Under performance on Production Rates
The 7 Wastes (plus 1)
Lots of other ways to help develop the dashboard - safety/cost quality/delivery and Can Do metrics
F A R T H I N G W E S T P T Y L I M I T E DM A N A G E M E N T C O N S U L T A N T S
A.C.N. 063 498 886
Lesson – Ask your people to solve problems
Ask your people to help you solve the problems
24 April 2007 22
F A R T H I N G W E S T P T Y L I M I T E DM A N A G E M E N T C O N S U L T A N T S
A.C.N. 063 498 886
24 April 2007 23
Jim Womack, Jan 2006
“A Lean management system involves managers at every level posing the key problems that need to be solved and asking the teams they lead to develop and implement the answers.
This practice of asking the correct questions rather than providing the correct answers… is perhaps the starkest contrast between Lean Thinking and orthodox mass production and the hardest to implement.”
F A R T H I N G W E S T P T Y L I M I T E DM A N A G E M E N T C O N S U L T A N T S
A.C.N. 063 498 886
Lesson – Audit and improve front line management
Build into “Standard Work”…
processes that audit the way work is done…
Develop front line managers into coaches and mentors
24 April 2007 24
F A R T H I N G W E S T P T Y L I M I T E DM A N A G E M E N T C O N S U L T A N T S
A.C.N. 063 498 886
24 April 2007 25
Supervising and auditing improvement
programs
Supervising and auditing improvement
programs
Formal Audits
Undermanager Audit of Development Panel StandardsTo be filled in each time the panel is visited
Date: ________ Shift: _____ Panel: _____ Heading: _____ Miner: _____
Deputy Name: __________________ Miner Driver Name: __________________
Yes No Corrective actionSupervision
Is there adherence to breaks as per the EA? ________________________________________
Is the "Can do" work being performed as per the panel notes and the "Pillar Cycle Check List"?
________________________________________
Is the Deputy managing the panel supplies for this shift and the on coming shift?
________________________________________
Approaching the face
Are the wheeling roads clean and graded rib to rib (especially at face and boot) and cables and hoses appropriately hung?
________________________________________
Is the water management under control? (Down holes installed - pumping out swillies?)
________________________________________
Is casual water being managed? (No leaking hoses, leaking couplings, overflow from Gas drainage drilling)
________________________________________
Is the heading on centre and the roof to the stipulated height? ________________________________________
Is the floor competent? ________________________________________
Is the miner sitting level? (Not on a cross grade?) ________________________________________
Has the breakaway been formed to standard? # ________________________________________
Is stone dusting to standard? ________________________________________
At the face
Is a copy of the OMP on the miner? ________________________________________
Is the miner driver using the measuring stick to check roof height? ________________________________________
Is the cut height and deviation from centre being recorded in the rib line every 3m?
________________________________________
Is the miner drivers check list filled in and has the crew initiated corrective action where appropriate?
________________________________________
Have competencies been matched for maximum productivity? ________________________________________
Have you discussed productivity and safety with the face crew? (Meters cut? Conditions? Problems? Rectification?)
________________________________________
Does the production correspond to the reported down time? ________________________________________
# Answer as appropriate - SOP summary - When forming maintain 2.6m roof height but go up into the roof 200 mm and come out of the floor the equivalent distance, cut corner for wheeling and support, finish off by coming back and brushing for level.
F A R T H I N G W E S T P T Y L I M I T E DM A N A G E M E N T C O N S U L T A N T S
A.C.N. 063 498 886
Lesson – Pick up Good Ideas
Take on board ideas that work and roll them out…
But remember Lean is a philosophy not a series of tools
24 April 2007 26
F A R T H I N G W E S T P T Y L I M I T E DM A N A G E M E N T C O N S U L T A N T S
A.C.N. 063 498 886
Development Panel
Out bye headingPit TopDrift
Pit bottom Lay down area
24 April 2007 27
Pull system for supplies?
Belt
F A R T H I N G W E S T P T Y L I M I T E DM A N A G E M E N T C O N S U L T A N T S
A.C.N. 063 498 886
24 April 2007 28
Panel Lay Down Area
Bolt Oil Mesh Mesh
Bolts Bolts Bolts Oil Oil Mesh Mesh Mesh
Bolt Bolt
F A R T H I N G W E S T P T Y L I M I T E DM A N A G E M E N T C O N S U L T A N T S
A.C.N. 063 498 886
24 April 2007 29
Panel Lay Down Area
Bolt Oil Mesh Mesh
Bolts Bolts Bolts Oil Oil Mesh Mesh Mesh
Bolt Bolt
F A R T H I N G W E S T P T Y L I M I T E DM A N A G E M E N T C O N S U L T A N T S
A.C.N. 063 498 886
Bolt
24 April 2007 30
Panel Lay Down Area
Bolt Bolt Oil Mesh Mesh
Bolts Bolts Bolts Oil Oil Mesh Mesh Mesh
F A R T H I N G W E S T P T Y L I M I T E DM A N A G E M E N T C O N S U L T A N T S
A.C.N. 063 498 886
Bolt
24 April 2007 31
Panel Lay Down Area
Bolt Oil Mesh Mesh
Bolts Bolts Bolts Oil Oil Mesh Mesh Mesh
Bolt
F A R T H I N G W E S T P T Y L I M I T E DM A N A G E M E N T C O N S U L T A N T S
A.C.N. 063 498 886
24 April 2007 32
Panel Lay Down Area
Bolt Bolt Oil Mesh MeshBolt
Bolts Bolts Bolts Oil Oil Mesh Mesh Mesh
F A R T H I N G W E S T P T Y L I M I T E DM A N A G E M E N T C O N S U L T A N T S
A.C.N. 063 498 886
24 April 2007 33
Panel Lay Down Area
Bolt Bolt Oil Mesh Mesh
Bolt
Empty Pit Bottom Lay Down Area
Bolts Bolts Bolts Oil Oil Mesh Mesh Mesh
F A R T H I N G W E S T P T Y L I M I T E DM A N A G E M E N T C O N S U L T A N T S
A.C.N. 063 498 886
24 April 2007 34
Panel Lay Down Area
Bolt Bolt Oil Mesh Mesh
Bolts Bolts Bolts Oil Oil Mesh Mesh
Empty Pit Bottom Lay Down Area
BoltOilOilOil
Kanban Card Box
Mesh
F A R T H I N G W E S T P T Y L I M I T E DM A N A G E M E N T C O N S U L T A N T S
A.C.N. 063 498 886
24 April 2007 35
Panel Lay Down Area
Bolt Bolt Oil Mesh Mesh
Bolts Bolts Bolts Oil Oil Mesh Mesh
Empty Pit Bottom Lay Down Area
Bolt
OilOilOil
Kanban Card Box
Mesh
F A R T H I N G W E S T P T Y L I M I T E DM A N A G E M E N T C O N S U L T A N T S
A.C.N. 063 498 886
24 April 2007 36
Panel Lay Down Area
Bolt Bolt Oil Mesh Mesh
Bolts Bolts Bolts Oil Oil Mesh Mesh
BoltOilMesh
Kanban Card Box Pit Bottom Full Supplies for Panel
Oil
Oil
Mesh
F A R T H I N G W E S T P T Y L I M I T E DM A N A G E M E N T C O N S U L T A N T S
A.C.N. 063 498 886
24 April 2007 37
Panel Lay Down Area
Bolt Bolt Oil Mesh Mesh
Bolts Bolts Bolts Oil Oil Mesh Mesh
BoltOilMesh
Kanban Card Box Pit Bottom Full Supplies for Panel
Oil
Oil
Oil
Mesh
F A R T H I N G W E S T P T Y L I M I T E DM A N A G E M E N T C O N S U L T A N T S
A.C.N. 063 498 886
24 April 2007 38
Panel Lay Down Area
Bolt Bolt Oil Mesh Mesh
Bolts Bolts Bolts Oil Oil Mesh Mesh
BoltOilMesh
Kanban Card Box Pit Bottom Full Supplies for Panel
Oil
Oil
Oil
Mesh
F A R T H I N G W E S T P T Y L I M I T E DM A N A G E M E N T C O N S U L T A N T S
A.C.N. 063 498 886
24 April 2007 39
Panel Lay Down Area
Bolt Bolt Oil Mesh Mesh
Bolts Bolts Bolts Oil Oil Mesh Mesh
BoltOilMesh
Kanban Card Box Pit Bottom Full Supplies for Panel
Mesh
Oil
F A R T H I N G W E S T P T Y L I M I T E DM A N A G E M E N T C O N S U L T A N T S
A.C.N. 063 498 886
Mesh
24 April 2007 40
Panel Lay Down Area
Bolt Bolt Oil Mesh
Bolts Bolts Bolts Oil Oil Mesh Mesh
BoltOilMesh
Kanban Card Box
Mesh
Oil
Empty Pit Bottom Lay Down Area
F A R T H I N G W E S T P T Y L I M I T E DM A N A G E M E N T C O N S U L T A N T S
A.C.N. 063 498 886
Lesson – Manage the doing
Manage the doing
24 April 2007 41
F A R T H I N G W E S T P T Y L I M I T E DM A N A G E M E N T C O N S U L T A N T S
A.C.N. 063 498 886
24 April 2007 42
Manage the Doing
Ensure:
The people doing the work adhere to standard operating procedures.
The people doing the work managing their performance by-the-hour, shift-to-shift against the agreed metrics.
Supervisors, and managers auditing performance and providing feedback and guidance on progress, by-the-hour, shift-to-shift, week-to-week, month-to-month.
Regular after action Reviews to capture the positive and negative aspects of work activity and resource “problem solution”.
F A R T H I N G W E S T P T Y L I M I T E DM A N A G E M E N T C O N S U L T A N T S
A.C.N. 063 498 886
24 April 2007 43
Continually reduce variability
Implement the philosophy not just the tools
People learn by doing
Go to the place where value is added
Learn to see non Value Adding Activities
Think systemically – not just locally… Map the Flow of Value
Develop a “dashboard” that measures success – not just failure
Ask your people to help you solve the problems
Build into “Standard Work” processes that audit the way work is done
Develop front line managers into coaches and mentors
Take on board ideas that work and roll them out
Manage the doing
In Closing
F A R T H I N G W E S T P T Y L I M I T E DM A N A G E M E N T C O N S U L T A N T S
A.C.N. 063 498 886
24 April 2007 44
Nationally Accredited
Practical – On the Job
Advanced DiplomaLean Six Sigma
F A R T H I N G W E S T P T Y L I M I T E DM A N A G E M E N T C O N S U L T A N T S
A.C.N. 063 498 886
24 April 2007 45
3 Prizes to winEnter the Guessing Competition to win a 5 months licence of
SigmaFlow Modeller
T D F A R T H I N G W E S P T Y L I M I T E
M A N A G E M E N T C O N S U L T A N T S A.C.N. 063 498 886
F A R T H I N G W E S T P T Y L I M I T E DM A N A G E M E N T C O N S U L T A N T S
A.C.N. 063 498 886
24 April 2007 46
F A R T H I N G W E S T P T Y L I M I T E DM A N A G E M E N T C O N S U L T A N T S
A.C.N. 063 498 886
SU ITE 3 8 , 4 2 SWAN AVEN UE, S TR ATH F IE LD NS W 2 1 3 5 Te l ep h on e : 0 2 9 7 6 3 2 62 2 Fa c s imi l e : 0 2 9 7 6 3 26 3 3 Ema i l : s t a f f@ fa r wes t . c o m.a u