Agenda

8.35 Company presentation, Anette

9 00 P d ti d l t A tt9.00 Production development, Anette

9.30 Logistic development (material supply systems), Anders

10 00 Transport10.00 Transport

10.30 Tour of the factory (½ class), Lennart

VPS introduction (½) MarcusVPS introduction (½), Marcus

11.10 Tour of the factory (½), Lennart

VPS introduction (½) MarcusVPS introduction (½), Marcus

VPS Academy2009-09-08VPS-1214, Issue 3

Slide 1

Volvo Production S t P i i lSystem Principles“VPS is the way to Operational Excellence”Operational ExcellenceKatarina LindströmChairwoman, VPS Steering Committee

VPS Academy2009-09-08VPS-1214, Issue 3

Slide 2

CS09 – Component Step 2009CS09 Component Step 2009New production and assembly concepts

Line assembly instead of static assembly

One flow for axles and one for transmissions

Extension from 53,000 m2 to 63,000 m2,

Lean production will result in higher quality less waste more flexibleA ld l f t quality, less waste, more flexible production

A world class factoryHigher capacity that can be doubled in the long run.

VPS Academy2009-09-08VPS-1214, Issue 3

Slide 33 2010-09-14

We are moving into a completely new production set-upproduction set-up

Current/historical set-up New production set-up

Incremental expansion Lean Manufacturing concept in line with VPS

Complex flowsHigh WIP

High quality and delivery precisionImproved flows and flexibility to handle g

Currently runs in five shiftsLow/no flexibility

…

ydemand variations

Lower product costDecreased investment levels

VPS Academy2009-09-08VPS-1214, Issue 3

Slide 44 2010-09-14

Volvo Production System

“…VPS combines the vision with principles - tools and techniques. Teamwork, Process Stability, Built-in Quality, q y yJust-in Time and Continuous Improvement are not new principles to most people, but it is how it is part of a total system and can be used in all processes and operationsbased on the Volvo Way, that makes it unique to the Group and is our competitive advantage.” Ebly Sanchez, Director, VPS Academy

VPS VisionAn organization where we continuously improve quality,

delivery and productivity, in everything we do.

VPS Academy2009-09-08VPS-1214, Issue 3

Slide 5

What is VPS?

Volvo Production System (VPS) is a customer-driven, people-oriented, unifying system that serves as the source of common principles and

tipractices.

VPS is not just for manufacturing operations – it requires all areas and individuals to commit to living according to lean principles and contribute to the transformation of the Volvo Group in the 21st century.

VPS Academy2009-09-08VPS-1214, Issue 3

Slide 6

Avoid Wastes

Overproduction TransportMovementsWait

Inventory Defects and ReworkUnnecessary Processes

+ Not used employee creativity

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Slide 7

The Volvo Way is our foundation

Leadership Safety & health

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Slide 8

VPS History and focus

VPS Launch

Pre-studyDevelop VPS

Operational Excellence

VPS Expansion

VPS /ODOpExLaunchDevelop VPS

overview

2004 6 2007 2008 2010

Excellence Expansion OpEx office

2009

• Initiation• Overview of

• VPS launch with Manufacturing

• Description of VPS-OtD modules

2004-6 2007 2008 2010

• Description of VPS PDP modules

2009

• GIB-OpEx governanceOverview of

existing production systems

• Collect best practices De elop

Manufacturing Managers at VPS Conference

• VPS assessment 1.0

• VPS homepage and doc ment database

• VPS Assessment v2.0

• VPS Global Conference

• Extended scope

VPS-PDP modules• VPS Toolbox• Launch of OpEx• OD Office• Expanded scope to

governance• Expansion-VBS,

Business Admin Process

• PD assessment and lf di i• Develop

VPS strategy• Benchmarking• Create and

communicate guiding principles

document database

• Good ExamplesVBS

• Operational Excellence Office formed with OD Office and VPS

self-diagnostic• 2nd round OtD

Assessments• VPS-PDP

Assessment v1.0• Begin

development of toolkit

• VPS Academy and Working Group formed

Academy • OD/VPS integration

VPS Academy2009-09-08VPS-1214, Issue 3

Slide 9

formed

The Volvo Production System covers 3 i t t di i3 important dimensions

5 PrinciplesVision Modules with tools and techniquesp and techniques

We base our guiding i i l Th V l

An organizationh ti l

Practical tools and t h i th t hprinciples on The Volvo

Way including our corporate Values, our Culture, our Leadership—

where we continuously improve quality, delivery and productivity, in everything we do

techniques that when applied in each specific area drive operational excellenceCulture, our Leadership

how we go from Word To Action.

everything we do excellence

VPS Academy2009-09-08VPS-1214, Issue 3

Slide 10

VPS is one of the key parts to achieve our strategic objective of operational excellence but also a way toobjective of operational excellence, but also a way to

create an attractive workplace

Increase productivity and cost efficiency:C t d i l t th V l P d ti S t• Create and implement the Volvo Production System

• Increase productivity by 5%• Reduce cost of poor quality by 25% by end of 2009

Create a competitive customer oriented culture:• Common language with shared terminology• Avoidance of duplication of efforts

C l ti• Common solutions• Ability to find and benchmark against best practice

VPS Academy2009-09-08VPS-1214, Issue 3

Slide 11

Volvo Production System - Principles

Teamwork means creating a sound organization where all employees are involved in the improvement process contributing to achievement of our goals and strategic objectives. This isimprovement process contributing to achievement of our goals and strategic objectives. This is where everyone’s experience, knowledge and creativity is put in play.

Process Stability means reducing all kinds of variability and waste in our processes to make them predictable and efficient. Deep knowledge and understanding of the operation is essential forpredictable and efficient. Deep knowledge and understanding of the operation is essential for succeeding as we strive for process stability.

Built-in Quality means doing things right the first time, detecting and correcting problems at the point of origin. We move towards zero-defects by having the mindset of not accepting bad quality, p g y g p g q y,being proactive, and eliminating root causes.

Just-in-Time means producing and conveying what is needed, when it is needed, in the amount needed in the shortest possible lead-time. The mainstays of the principle are minimal inventory, p y p p ycustomer demand and one-piece flow.

Continuous Improvement is the driving force behind our efforts and requires a systematic and long-term approach. Generation and implementation of improvement ideas is essential. It is based on standardisation and a clear vision of the future desired state.

VPS Academy2009-09-08VPS-1214, Issue 3

Slide 12

VPS-OtD (Order To Delivery) Modules

Operational development •Design of improvement organization •Problem solving methodology •Value stream mapping •a ue st ea app g

4

3

5Quality cultureZero defectsQuality assurance

Flexible manpowerPull systems

Takt time

4

2

3

• Standarized workVisualization •

2

1

Quality assuranceProduct and processquality planning

Continous flow processingMaterial supply

2

1

Standarized work• Production leveling

• Maintenance systems• 5S

Cross functional work •Goal oriented teams •Organizational design •

Leadership Safety & Health Environmental care• • •

VPS Academy2009-09-08VPS-1214, Issue 3

Slide 13

VPS Structure in EskilstunaM t T

VPS CouncilEskilstuna

Management Team

VPS principer (core team)

M. Karebo M. Pettersson M. WiströmK. Björklund

F. Berntsson

I. Obrovac

Principle-team

L. Da Ros P. Andersson

T. Andersson*

M. Bengtsson D. Adolfsson* J. A. Ahmedi

Key initiatives Key initiatives Key initiatives Key initiatives Key initiatives Key initiatives Key initiatives

L. Ståhlberg Magnusson

Team Work

Process Stability

Continuous Improvement

Just In Time

Built In Quality

The Volvo Way

Customer

Key initiatives________________________________

Key initiatives________________________________

Key initiatives________________________________

Key initiatives________________________________

Key initiatives________________________________

Key initiatives________________________________

Key initiatives________________________________

Value Stream - Lågvolymflöde

Value Stream - Axelflöde

Value Stream - Transmissionsflöde

M. Bengtsson (L. Da Ros)

A. Ahmedi (L. Ståhlberg)

VPS Academy2009-09-08VPS-1214, Issue 3

Slide 14

Value Stream Lågvolymflöde * OD

Same model from different viewpointsProduct DevelopmentProduct Development

The purpose of VPS-PD is to create a product development environment that consistently and efficiently developsconsistently and efficiently develops excellent products; products which are win-win solutions for all stakeholders.

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Slide 15

VPS-PD Modules

Operational development •Problem solving methodologies •

Value centric approachProblem solving methodologies •Innovation management •

Product assurance practices (VRES) •

Product launch assurance •

Quality culture •• Concurrent engineering

• Front loaded PD

• Project assurance practices

Extended value chain • • Pull systems

• Resource flexibility

• Standard way of workingCross-functional work •

Vi li ti dg

• Product standardization and modularization

• Process simplicity

• Project portfolio

Visualization and • communicationGoal-oriented teams •Organizational design •

• • •Leadership Safety & health Environmental care

• Project portfolio management

• Competence management

VPS Academy2009-09-08VPS-1214, Issue 3

Slide 16

The VPS Academy’s central function is to collect d h b t ti i thand share best practices in the group

There are five main roles and areas of responsibility within VPS:

1. VPS Academy owns the model and maintains knowledge and documentation

5Offer support 2

needed for its areas of responsibility, e.g. Module Reference Material and Good Examples

1Own and develop

Assess level

2. Assess the performance level at all plants in the Volvo group

3. Recommend improvement opportunities to

Own and develop VPS knowledge and

documentation

reach the next performance level

4. Suggest how to drive improvements in the respective plants

4Suggest how

to do it3

Recommend improvement opportunities

5. Offer support for training and implementation

opportunities

VPS Academy2009-09-08VPS-1214, Issue 3

Slide 17

VPS Assessment

Follow-up on data analysisCreate themes develop conclusion and final roadmapCreate themes, develop conclusion and final roadmap

Initial presentation to plant manager

1. Overview of the plant

0,0

1,0

2,0

3,0

4,0

5,01. The Volvo Way

2. Team workContinuous improvement

O e e o t e p a tperformance per area, highlighting strong areas and areas for improvement

3. Process stability

4. Just-in-time

5. Built-in quality

Build up small scale organization

and scale upsupport

2007

2008 Š

A d � M k b t ti � C ti t d t

Build up small scale organization

and scale upsupport

2007

2008 Š

A d � M k b t ti � C ti t d t

2. Road Map for short, medium/long term improvement opportunities

Academyfocus

� Make best-practiceknowledge available to organization

� Recruit small dedicated teams with experienced practitioners

� Start conducting assessments

� Continue to conductassessments

� Complete library of best-practice knowledge

� Regularly update with feedback from organization

� Expanded scope

Academyfocus

� Make best-practiceknowledge available to organization

� Recruit small dedicated teams with experienced practitioners

� Start conducting assessments

� Continue to conductassessments

� Complete library of best-practice knowledge

� Regularly update with feedback from organization

� Expanded scope

VPS Academy2009-09-08VPS-1214, Issue 3

Slide 18

Final presentation

Strength and recommendations

Road Map

Good examples

VPS Academy2009-09-08VPS-1214, Issue 3

Slide 19

The VPS Academy collects and shares good examples across the groupgood examples across the group

VPS Academy2009-09-08VPS-1214, Issue 3

Slide 20

Information about VPS and Good Examples

VPS Academy2009-09-08VPS-1214, Issue 3

Slide 21

”It is common sense to take a method and try it. If it fails, admit it frankly and try another. But above all, try something.”

--Franklin Roosevelt

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