Earning the Right to Do Lean - mb.cme-mec.camb.cme-mec.ca/download.php?file=h3hfomx7.pdf · Earning the Right to Do Lean ... Dynic Corporation Textiles TPM Company Name Awards

Earning the Right to Do Lean “How to Build a Successful and Sustainable

Performance System”

Phil McIntyre

Director of Business Development and Marketing

• Established in 1865 • Privately Held, Third Generation

Seth Milliken Gerrish Milliken Roger Milliken

Who are we?

Manufacturing a wide range of products with

over 7500 Associates at over

• 40 locations in 8 countries

Apparel Fabrics

markets served

Interior Furnishings

Industrial

Fabrics

Specialty

Chemicals

Performance

Services

Malcolm Baldrige National Quality Award (US)

Malcolm Baldrige National Quality Award

British Quality Award Canadian Quality Prize

Japan Institute of Plant Maintenance TPM Prize

ISO Registered

QS Registered

54 JIPM Awards

… in quality Operational Excellence

European Quality Award

Ten years ago we had a least 8 competitors in

the U.S. with sales over a Billion dollars.

Today we have none.

our reality...

How has Milliken

survived and thrived?

our question...

1. Positioned in the right markets

2. Innovation

3. Operational Excellence

Over

125 Corporate Initiatives

Era of People Excellence

1980 to 1985

1985 to 1990

Era of Process Excellence

1990 to 1996

Era of Business Excellence

1996 to 2012

Implementation of the Milliken Performance System

• We hit a plateau on each initiative. • We were forgetting what we had done 3 years before.

1980

1985

1990

2012

Evolution of Operational Excellence

Approach to Management

Information

Inventory

Breakdowns

Method

Training issues Raw

Material

Productivity

Priorities

Resources

Fire-fighting Reaction

Traditional

1994 25

Benchmarking World-Class Manufacturing Practices

Study Missions to Japan

Product Produced

Copier Parts Deming, TPM Ricoh

Auto Parts Deming, TPM Nippondenso

Electronics Deming, TPM, TPM Special NEC

Butyl Rubber TPM Japan Butyl

Automobiles Deming, TPM Nissan

Lighting Deming, TPM Toshiba (Kanuma)

Lighting Deming, TPM Toshiba (Himeji)

Air Conditioners Deming, TPM, TPM Special Daikin Industries

Plastic Film Deming, TPM, TPM Special Sekisui Chemical

Textiles TPM Gunze

Textiles TPM Dynic Corporation

Awards Company Name

Study Missions – Companies Visited

# of Companies Reporting Improvement Measurement

6

7

9

8

9

85%

74%

92%

32%

61%

Claims

Defects

Breakdowns

Process Reliability

Productivity

Milliken sent 120 managers

on 4 Study Mission Trips

Japan Study Mission Results 1994-1996

Safety is the foundation and the ‘Trust Component’ of our manufacturing operating system.

© 2011 Milliken & Company

What is a ‘Loss’ ?

Cost

Reduction

Opportunity

The

difference

between

actual cost

&

ideal cost

Loss

Actual Cost

Total real dollars

spent to manufacture

a product.

Ideal Cost

Absolute minimum cost

required to

manufacture a product.

(theoretical cost)

What is a ‘Loss’ ? (Challenge Your Paradigms !)

Targeted Cost Reduction

Labor Energy Supplies Indirect

Materials

Typical Manufacturing Variable Conversion Costs

(excluding Raw Materials)

Breakdowns

Minor Stops

Change Over

(Style Change)

Waste Off-Quality

PM & Clean

Advantages of the ‘Loss’ Approach

1. Cost is segregated by ‘Activity’

rather than ‘Process’

2. Cost Reduction projects are easily

definable.

3. Resources can be allocated

proportionately to the opportunity.


Other Conversion Costs

Yield Losses

Quality Losses (Yield) Performance Rate (Speed)

OEE Losses (Downtime)

Loss Categories

1. Breakdowns 2. Change Over (Make Ready) 3. Start-Up and Shutdown 4. Minor Stops (Process Downtime) 5. PM & Cleaning Downtime 6. Planning 7. Material Handling (Stop Time) 8. Speed Loss 9. Off-Quality 10. Rework 11. Waste 12. Obsolescence 13. Allowances 14. Inventory Variances 15. Material Handling (Run Time) 16. Inspection & Testing 17. Indirect Materials 18. Purchase Price Variance 19. Vendor Claims 20. Spending Not Captured

Milliken Losses


Loss Analysis

11.7

Millions $ /

Year

Average “loss” per plant (millions) / year

Milliken & Company

Note: All

‘Losses’ are

Full Variable

175 asso/site

~ 50 mil in rev/site


Zero Loss Improvement

Milliken & Company

reduced losses 30% on average per plant

within the first 24 months of implementation

of the Milliken Performance System

3.5 million $ reduction per plant

Loss Reduction Improvements 1996 - 2011

12%

19%

22%

23%

25%

26%

27%

27%

30%

34%

36%

41%

60%

67%

Start-Up / Shut Down

PM & Cleaning

Changeover

Energy Performance

Planning

Waste (RM Yield)

Inspection & Testing

Material Handling

Process Reliability

Breakdowns

Minor Stops

Returns & Allowances

Off-Quality

Speed

Zero-Based Standard-Based

In 2010, we initiated over

1,300 projects with an

average savings per project

of $18,500

Co

st

of

Go

od

s S

old

Performance System Capabilities

Fixed

Cost

Raw

Material

Cost

Variable

Cost

Zero-Based Cost Opportunity

In 1995

Losses

57%

57% of COGS (excluding

Raw Material except but

including Yield Losses)

was identified as a LOSS

Losses

31%

By 2010, we had

reduced LOSSES by

45% (from 57% of

COGS to 31%of

COGS)

LOSSES became 26% of

COGS (excluding Raw

Material except but

including Yield Losses)

was identified as a LOSS

Baseline Information

Co

st

of

Go

od

s S

old

Performance System Capabilities

Fixed

Cost

Raw

Material

Cost

Variable

Cost

Losses

57% Losses

31%

Where did the change come from ?

Loss Reduction Activities by Pillar

5S 2%

Continuous Skills

Development 11%

Daily Team

Maintenance 13%

Planned

Maintenance 18%

Quality

Management 13%

Focused

Improvement

31%

EEM 4%

CNPD 4%

Lean 4%

What

pillars

drove the

change ?

Our

equipment

was not as

stable and

capable as

we thought

Where does LEAN fit in a

Daily Management System?

Lea

n M

anag

emen

t

Primary Lean Benefits to Milliken

• Aligned Business and Operational

Strategy

• Sustained Operational Improvements

through a Daily Management System

Primary Lean Benefits to Milliken


Strategy



Aligned Business and Operational Strategy Lean Tool Deployment

Demand Planning

Value-Stream Maps

One Piece Flow

Supermarkets

Level Schedules

Schedule Wheels

Hijunka Boards

Kanban Cards

Address Systems

PFEP

Logistic Maps

Shipping Windows

Trailer Maps

Layered Auditing

Standard Work Managers

Standard Work Associates

Waste Walks

Work Flow Diagrams

Operator Balance

Work Combination Tables

Kaizen Events

SMED

Restock Routes

Aligned Business and Operational Strategy

• Value Stream Mapping

– Plant Level

– Enterprise

– Transactional

We used the Value Stream Map to visibly

see the ‘flow’ from a different perspective

than we had previously (multi-plant product

flow, identification of wastes, etc.)

• Demand Planning

• Level Schedules

• Schedule Wheels

Aligned Business and Operational Strategy

We were able to level or

smooth our plants run

schedule through better

visibility of customer

demand cycles.

Lean Benefits


Strategy



Sustaining Operational Improvements through Daily

Management System

• Layered Auditing

• Standard Work for Managers

• Daily Performance Review

Lea

n M

anag

emen

t

DTM

Checklist

5S

Checklist

Safety

Audits

PM

Checklist

Q Component

Checklist

Standard

Work

The Basic Pillars create the foundation for stability

and the audits and checklists sustain the gains

Daily Audit Structure

Chris

Kiki Denise Jerry Matt Carmon Wayne

Keith Jack

Sara

Chris Mary

Paul Lue Jean Carolyn

Amy

Pat

Andrew

Paula

MILLIKEN

Pine Mountain Plant

Layered Audit Assignments 1-17

1-17 2/3/9/11 10 1/7 4/5/12/13 1/8/15

4

1/7

2/3/11

1/9/11/12

2/3/14

4/6/11 5/6/9/11/15 16/17

6/15 9/11 5/13 4/11 11

L1 Complete by 12:00

L2 Complete 12:00 – 2:00

L3 Complete 2:00 – 4:00

L4 Complete by 5:00

Eric

Albert

1/12

Jean

8

1. Doffer/Recycler 11.Weaver

2. Extruding 12.Sulzer Maint

3. SES/Beamer1 13.Dornier Maint

4. Red Cards 14. SES Quick Test

5. Sultex Maint 15. DTM Checker

6. Weav Process 16. Prep Maint

7. C/S Operator 17. Prep Process

8. Raw Material

9. Cleaner

10. Audit the Auditor

Janice

2/3/14

Lucille

9/11

David

6

Nyesha

2/9/11

Mike

Rose Cindy

1/15 Greg T

5/12/13

9/11

1/5/9/11/12

16/17

April

Ruby

9/11

Charles

17

Eric P

17

Satara

11

L1

L2

L3

L4

Process Q Component Audits

Standardized Work Audits

Audit Performance Tracking and Review

•Daily Process Audits

and Standard Work

Audits using layered

audit methodology

•Failed Audits

reviewed at 4:00 pm

Daily for root cause

analysis and

corrective actions

Daily Audit Board

L3’s

L4

L2’s

Auditor Completion Tracking Charts

Sustaining Operational Improvements through Daily

Management System




New Management Challenge

Now we have

earned the right

to do Lean !

Daily Checklist

and Times for

Completion

Record of

Attendance

issues

Record of

Quality Issues

Record of

Breakdowns

Daily

organization of

things to do

Record of

complaints from

customer

(weave room)

Production Manager Standard Work

Manager Standardized Work Documents

Daily Management System




Daily Performance and Waste Walk

• All associates plot

performance measures

daily

• Boards in every area

Lean Pillar Results

Measurement

40% (last 12 mos.) Cycle time

Improvement

Inventory Turns

Working Capital

15 to 25%

24%

125 Mil $ of cost taken out of the Supply

Chain in the last 12 months

Lessons Learned

• Stabilize before you Standardize

• You get what you inspect not what you expect

• You must Earn the Right to do Lean

• Lean is most powerful in the context of an

overall Performance System


44

Challenges/Lessons Learned on translating Cost to Losses

1. Losses should be used initially to directionally

point you to projects, not for $

2. You need to put $ to losses as quickly as possible

3. Is the data available from a plant level ?

4. Is the data machine specific ?

5. Avoid ‘adjustments’ early…recognize adjustments

will eventually be needed.

6. Make sure you pick the ‘right’ model


45

Challenges/Lessons Learned on translating Losses back to Cost

1. In order for some loss improvement to translate

to cost improvement a ‘decision’ is required.

Know ahead of time how you will react to a loss

improvement.

2. Put your efforts in reducing the loss, i.e.

understand the level of accuracy you need

3. Calculate yield losses on the basis of cost only,

not sales price, i.e. avoid ‘cost avoidance or

missed opportunity’ $

4. Share projects (organizational in nature)


46

Challenges/Lessons Learned on translating Cost to Financial Statements

1. Who has visibility of financial improvements and

who should have it ?

2. Understand pricing, i.e. do top line changes mask

improvements driven by COGS improvements ?

3. Understand the strategic impact of

improvements, i.e. 200 lines of operation at 40% OEE is

equivalent to 123 lines of operation at 65% OEE. What are you going

to do with that capacity ? It would be preferable to sell it.

4. Utilize a loss/project/cost improvement database

Contacts

• Phil McIntyre

• [email protected]

• If you’re interested in touring Milliken sites or learning

more, I will be available after the session

Please complete your surveys

mailto:[email protected]