Improving SMART Gas Meter output by 72% in 9 months

Improving SMART Gas Meter output by 72%

in 9 months without CAPEX

A case study of delivering lasting step improvement

Adrian Howem: +44-7702-444744 e: [email protected]

November 2017

© Chartwell Consulting Limited 2013–2017. All rights reserved.

11

Chartwell is a specialist implementer of rapid operational improvementAbout us

• Founded in February 2013

• Offices in London, Berlin, Zurich

and Boston

• 33 employees and growing

• We work all over Europe and

worldwide

Chartwell Offices Project locations


22

Like Simon Sinek, I’ll start with “why”Why we do what we do – a personal story

This is Karl-Christian Hansen. I worked with Karl-Christian at the start ofwhat became the global change programme in the wind energy leader

Karl-Christian and his colleagues were living with major quality problems,such as “dry glass” that resulted in:

• 1 in 20 blades being scrapped

• 1 in 5 mould days being lost due to rework

• 28% resin waste

After 3 months of coaching, Karl and his colleagues had:

• Made 100 blades sequentially with no “dry glass”

• Eliminated the lost mould days, so output went up by 25%

• Reduced the resin loss by 71%

I asked him whether he thought that this achievement would have beenpossible and what he had learnt:

“I would never have believed you.

I can do a lot more than I think I can”

This is a fundamental principle upon which we founded Chartwell:

To replicate this belief in all organisations with whom we work


33

What do clients in diverse industries have in common?They all recognise huge hidden potential, that they want to recover


44

We are results-focussed, rather than activity-leadYou can deliver 20% - 50% improvement in a few months without CAPEX

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Performance vs Baseline before project start

Performance vs Baseline during Project

Performance vs Baseline after project end

Baseline


55

We put our skin in the gamePerformance guarantee

Our work should deliver superior value:

We don’t take on work if it won’t pay back at least 4 times our fees

Accountability is key in getting results. This applies to us, as well as our clients:

Our implementation projects are covered by our “no result, no fee” guarantee

Case study:Improving SMART Gas Meter output by

72% in 9 months without CAPEX


77

“What am I going to share with you?”About the case study

This case study shows some of the highlights of a recent project that I am very proud of:

• The client team achieved a 72% increase in output

• They reduced their scrap cost per product by more than 50%

• Most importantly, they have continued to improve since we left at the end of March

We will take a look at:

• The assessment

• Mobilisation and implementation

• Sustainability

I will try to highlight some of the important enablers, that you can maybe take home and hopefully help you to

drive your rate of improvement and implement change


88

We were asked to deliver step improvement and help drive long-term growthAbout the client

About the client:

• Industry SMART Gas Meters

• Revenue >£100m

• Employees > 600 on site

• Part of a larger group, parented by a Japanese

multinational

About the project:

The site had already improved significantly, but still

needed to quadruple output in 2 years

A capital plan was in place, however this would take

18 - 24 months to come on stream - It would not

address the order backlog or the 2017/18 plan

The assessment“If you want to go up Mount Everest, then have a very clear game plan”


1010

We assess the business in four “layers” Understanding more deeply why opportunity exists

Opportunity Value

Operational Performance

Improvement Cycle

Leadership and Culture

• Total value of all improvement from output, raw material

yield, inventory, quality/risk, capital avoidance

• Zero-based effectiveness and trends, top loss trend, detailed

study of failure modes and organisation’s response

• How effectively is operational loss measured, prioritised,

resourced and acted upon to permanent root cause solution

• The mindset, behaviour and actions of the leadership team

to create an environment in which improvement thrives

By viewing the situation in this way, we are more likely to be able

to deal with the underlying organisational conditions that allow

the opportunity to exist


1111

We have 35 assets and 500 people to look atPerformance assessment

Rod room

CNC Room

Transducer Build

Meter Build

Null Test

Full Flow Test

CAW Manometer

Customisation

Unit A

Unit B

Rods

Cups

Transducers

Tube Assembly

Transducer Test

White Mix

Polyurethane

Intermediate

Goods

Warehouse

Keep

The situation

• There are 35 different assets across 10 sub-

processes

• There is product mix dependency

• Several suppliers are also capacity constrained

The challenge

• At some point, every asset in every sub-process is

going to require de-bottlenecking

• There is a mixture of automatic and manual

processes and some technical constraints to solve

• This needs to be done in a very deliberate order to

make maximum improvement in the shortest time

• We can’t boil the ocean, so we want to ensure we

make the best use of resources and at the same

time, transfer skills to ensure sustainability


1212

“Zero Loss” concept gives a complete view of potentialZero Loss definition

What is Zero Loss?

* No loss from speed, downtime or quality

This principle can be applied to almost any process. We most often apply it to:

• Asset time / efficiency

• Raw Materials

• Energy

• Labour

• Manufacturing cost

Zero Loss Efficiency =

Time required under optimal conditions, without losses*

Amount of time actually used


1313

When we do this, we find far more potential than anyone thinks possibleZero based potential per process

• Hidden opportunity exists because people don’t see or believe the potential of their process

• We use a zero based approach to understanding losses and cycle time

• For example, build cells are running at 30 second cycle time – the team identified and delivered opportunity to run at

< 22 seconds

Internal View

An internal exercise

had been done, we

found a lot more

potential – think of it

as speed and hidden

lost time

Whilst this approach exposes more opportunity, it

means we have to solve “speed of sound” type

constraints


1414

There are multiple bottlenecks to overcome, one after anotherCapacity profile and line improvement strategy

We cannot work on all of these projects at once – and nor would we want to:

• We have a finite amount of time each day and finite resource to take action

• Not every action will get us improvement right now (come and try our de-bottlenecking exercise afterwards)

0

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Output Profile and Future Improvements

May-16 Jun-16 Jul-16 Aug-16 Sep-16

Oct-16 Nov-16 Target Baseline

* * *

* Tube build, CAW and Customisation currently have latent

capacity that is not required, hence the low baseline

*

* Hiring of 2nd operator for all shifts

to consistently hit 4-lift target

Any supplier can and

will limit effective line end output, unless we

work on them in

parallel

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65

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We model what happens over time as we work on each constraint“Tube map” – output profile per process over time

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Difference UNIT B UNIT A Target

• If we work through the sequence of projects, we can predict what the overall nett throughput will be

• Each asset group has its own improvement line over time

• The best we can achieve is the lowest of these (the shaded area)

Each asset group

has its own

improvement line

The lowest at any

point in time

determines the

maximum nett

throughput


1616

And we work with the client to build up the game planProgramme plan – phase 1

Workstream June July Aug Sept Oct Nov

Beacon ProjectsUnit A and B

SCM

Quality

Capital Plan

Improvement processes

Governance

Tx Test

Improve & supplier engagement programme

Improvement cycle

Quality improvement programme

• Zero based FRS to give timely at a glance reports

• SIC, SHO, daily review

Rod Room

Tx Build

CAW validation

Stewardship and steering

Interim (Landis Resource)

Null and Flow

Build C1,C2,C3

CNC

Build A,B

OPEX Transition

• Visual management aids incl. Buffer management

• SMED, Line Control, Problem Solving

Customisation

CAW

Tube Build

Chartwell fully

supported workstream

Internally lead

workstream

Mobilisation and Implementation“A great plan is only as good as the execution”


1818

We use a proven approach to changeJohn Kotter – Leading and Accelerating Change

Source: John Kotter XLR8

• We apply the principles prescribed by John Kotter

• 1996 Leading Change

• 2014 XLR8 (Accelerate)

• These books offer a good structure for change that is

also results focussed

• In this project, our efforts centre on:

1. Describing the opportunity in a way that everybody

can understand to create urgency

2. Enlisting volunteers to start many pockets of

improvement

3. Creating quick wins, using them to motivate and

convince the rest of the organisation

4. Creating a sustainable vehicle for improvement


1919

Get the whole senior team deeply involved & enlist a network of volunteersMobilisation - critical success factors

For this programme, the critical steps are:

• Leadership alignment – a number of background sessions are run

until we have a “critical mass” of support. Discuss the potential

roadblocks ahead of time with your new guiding coalition. Know the

value of the opportunity when someone says “this is too difficult”

• Communication – we run 7 two-hour briefings for over 700 employees

– stopping the shifts so people knew if was important. Repeat the

message until it’s understood

• Asking for volunteers – we need a range of skills on the pilot project

teams and everyone who touches the product to have a say. Don’t

choose all your “favourites”

• Giving people the time, skills and support – if you expect your folks

to do improvement in there spare time, it will usually be the least urgent

task on their plate. If it’s worth doing, dedicate the resource and backfill

key roles

• Leadership presence – regular touch points and visibility to

demonstrate importance. Be there in good and tough times to show

you care and want to help


2020

The first results you get set out your stall for the rest of the programmeUnit A Team – “Beacon Project Team”

The first round of results are critical:

• It shows what really can be done – the potential is not just theoretical and should be celebrated

• This is not just another poster campaign, you are doing what you said you are going to do

• People can be empowered to fix things, if the conditions are right

• Getting results (and recognition) is fun

Doing what you say

you are going to do

builds credibility and

belief that step

improvement can

happen in your plant


2121

Create and bond a network of improvers from across the organisationThe PACE Room – a centre of excellence for improvement

• The whole programme is run from a

project office – a base for the teams

who spend most of their time on the

shop floor

• Each team has its own boards with

daily updated KPIs and simple visual

management of actions

• Leadership presence at weekly

reviews is “mandatory”

• “On feet” meeting

• Each team has a dedicated lead and some full and part time members

• Chartwell provides training and on the job coaching

• No time is spent on “window dressing” PPT slides => focus on results

• Shift management is embedded in the teams to help roll out

improvement and embed new processes through SOPs and training on

the shifts

Working this way demolishes inter-departmental

boundaries, creating One Team


2222

Fix the hard stuff, not just the low-hanging fruitAn example of technical constraint breaking

• It’s not all about doing the obvious “low hanging fruit” – of course there are easy wins

• If you have been improving already, it is the big gains that will come from breaking the more difficult constraints

• These problems require a very robust problem solving process

• New skills and coaching come in to solve issues that people don’t believe are possible


2323

3 months in, we are de-bottlenecking the “full flow” testing process Full flow cycle analysis

• People know how many meters they process and they guess that the average cycle time is “about 15 minutes”

• What they don’t know is what the “best observed” and “golden cycle” times are – so they don’t know how much

improvement potential there is:

• The average is 18 mins

• The best cycle we see is 12 mins

• What we find is that loading is a small part of the total cycle – asking people to work faster won’t gain much

• We need to dig down further into where in the cycle this variation is happening

Understanding cycle time variation is completely hidden

and its value is therefore not understood

FID413-UK/G470

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RFT Meters/Shift Zero Loss Efficiency Average Cycle Time Mins


2424

Sign on

Valve Open Check

Leak Test (30s)

Null Calibration (15s)

Flow Calibration (6mins)

Read A23

Pressure Drop Check

Sign off

Register and Checks

Closing Valves (30s)

Start Keep

Flow Cal Initialisation (120s)

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p T

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(m

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Calibration: Nozzle Utilisation Times (6 Banks)

Total Requirement per bank Future Total requirement

Sign on

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Pressure Drop Check

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Start Keep


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We deep dive into the machine code to understand what is happeningPhase step cycle time analysis

Flush was being done with one of the smaller nozzles. We swapped these out and installed new filters

Sign on

Valve Open Check

Leak Test (30s)



Read A23

Pressure Drop Check

Sign off

Register and Checks


Start Keep


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2525

This constraint is completely removedImmediate impact seen from the 600L nozzle change

• This process had become the factory bottleneck. It was completely hidden in the past

• Nothing else we did would increase output until this was resolved

• After months of record weeks, people were questioning whether we really needed to do this modification

• They were only convinced once the results came in on the first modified machine

1. Beware improvement fatigue

2. If you smash enough constraints, you will make huge gains

If you don’t heed these 2 points, improvement will stop

We see and

immediate step

change after the

modification

RFT Meters/Shift Average Cycle Time Mins


2626

The client team improved output by 72%Results

• Over the course of 9 months, the client team was able make a massive step in performance and productivity

‘The critical improvements that our work with Chartwell delivered brought our company’s planned

deliveries back on track and ensured that we were prepared for the unprecedented ramp in demand

that our customers have requested over the next five years.’

– Steve Cunningham, Senior Vice President Infrastructure Programmes, EMEA

Improvement Project

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Sustainability“Make sure you nail down every detail of the new behaviours and habits”


2828

Step results are one thing, what about sustainability?Working out key levers for long term improvement and change

To understand the reasons why opportunity

exists, we do an in depth study during the

implementation

• We reflected on 20+ years of experience to

develop the HPO framework to look at the

right drivers for results

• The model has 8 main headings and > 80

sub-objectives, each with individual criteria

This enables us to work with clients to build a

tailored solution, with the right conditions for

improvement to thrive

The High Performance Operations Model

A High Performance Operation will deliver

sustained best in class rate of improvement

year after year


2929

Some highlights: building habit takes time and repetitive effortProduction Office: The operations manual

• We work with shifts and departments to codify and implement the “Landis Way” of doing the day job and improvement in

shift management, supervision, maintenance and supply chain

• A new RFC (Request for Change) process is established to fast track improvements

• These are trained, auditable processes

• On a six month follow up visit, the routines are running better then when we left


3030

Since we left in March, productivity has continued to improveFinancial impact statement from CFO

• When we left, scrap cost per meter was down more than 50%, saving £1.4m

• Labour cost per meter was reduced by 29.9%, valued at £3.4m p.a.*

• On a follow up visit at the end of September, further productivity gains had been made, taking total labour

cost savings to £5.2m p.a.

Total financial impact > £6.4m p.a.

2016-0

3

2016-0

4

2016-0

5

2016-0

6

2016-0

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2016-0

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-11

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1

2017-0

2

Q1

Q3

Labour Cost per Meter

* Based on 3 month rolling average

Key learning points


3232

If you want to win matches, get the right coachWhy does this approach get results?

We see the role of the Chartwell staff as akin to a coach or personal trainer:

• The coach is there with you on and off the field until you achieve your objectives

• Minor changes to technique, thinking ahead, creating passion and belief to win

• Direct access to the top for resources normally not available to the individual

• Our aim is for your team to get winning results. Faster and better than the competition

Anyone

know who

this is?

Choose a coach who focuses on results


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Take Aways & Questions

Alignment

• Know and refer to the value of the opportunity

• Create a guiding coalition that won’t give up at the first hurdle or keep changing priorities

Communicate

• “The problem with communication is the illusion that it has happened”

• Do x10 more than you are today

Create an army of results focussed volunteers

• Give them time, skills and the right coaching support

• Work on the constraints, not just “low hanging fruit”

• Activity does not equal results

Be a visible servant leader

• “Be the change you want to see in the world”

• Beware improvement fatigue

• Keep it fun - spread the word and grow your network of improvers

www.chartwell-consulting.com │ [email protected]

United Kingdom

Chartwell Consulting Limited

Richmond Bridge House

419 Richmond Road

Twickenham, TW1 2EX

Tel: +44 (0)208 296 1854

Switzerland

Chartwell Consulting GmbH

Sihleggstrasse 23

8832 Wollerau

Tel: +41 (0)43 888 0710

Germany

Chartwell Consulting

Deutschland GmbH

Unter den Linden 10

10117 Berlin

Tel: +49 (0)30 60984 90211

United States

Chartwell Consulting, Inc.

The Schraffts Center Power House

529 Main Street

Charlestown, MA 02129

Tel: +1 857 203 8740

Documents

Improving SMART Gas Meter output by 72% in 9 months