People + Lean + Process Innovations

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October 2009

Russ Scaffede

Leadership Roadmap

Objectives

• A Little History Leading to My Being Here Today• Mass Production VS. Toyota Production System• Tiara Yachts Lean Development• Integration of a Total Lean System• Observations and What I Have Found Has Failed• Closing and Questions

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• Henry Ford’s Mass Production System– Henry Ford developed a Mass Production System,

the World Followed

– It is Important to keep in Perspective the Great Success the Ford System Makes

The Past

• 20 years at General Motors and 5 years at Toyota Motor Manufacturing

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Early 1900s

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But, by the 1970s and 1980s until today!!

• Toyota Introduced Us To The “Toyota Production System”

– Material is looked at from Just In Time Processes

– Quality and Cost are controlled by Build In Station

– Sequential level production synchronizes the system

– Machine PM replaces repair after breakdowns

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• The System is Uniform and Consistent Plant to Plant

• All Employees are Challenged to Participate in Reducing Cost

• All Toyota Staff from Chairman to the Line Workers Understand the System

But, by the 1970s and 1980s until today!!

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• Almost Every Company Has Some Form Of Lean/Continuous Improvement Initiative

– Fewer than 5% of companies are achieving long term success like Toyota

WHY?

– I believe it is the failure of executives to understand lean as a company enterprise system

– I believe in most companies Scanlon Principles are the key Missing Link

But, by the 1970s and 1980s until today!!

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TRADITIONAL MASS PRODUCTION(FORD MASS PRODUCTION 1910’s)

VS.

Lean Production(Toyota Lean Production 1950’s)

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Cost Quality Safety Morale

Maximize Equipment Run Time (Repair only after break down)

All Materials Necessary to Run Any Schedule

Productivity

Labor

Daily Schedule Run by Production Without Plant-wide Communicated Sequence (Prepared Ground Work)

Continuous

Run

Inspect and repair Classifications of Support

Float for Breakdown

Labor Efficiency Measurable

Large I.E. / Mfg.. EngineeringLargest Possible Batch RunSkilled

Trade Response to Work Orders

SafetyQuality

Cost by Maximum Run

TraditionalMass Production

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The History of Lean is NOT from Japan

• Deming’s Leadership in Statistical Process Control

• “Ford Today and Tomorrow”–Toyota Trained Under Ford’s Leadership

• Training Within Industry–Job Methods (Standardized Work)–Job Instructions (Job Instruction)–Job Relations–Union Job Relations

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Training Within Industry Materials

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Successful Implementation Must be a Systematic Process

“One of my concerns after reading several books on the Toyota Production System is that, while such books do outline principles and techniques with detailed explanation, their treatment of the subject is specific and anecdotal rather than systematic.”

Source: Shigeo Shingo, A Study of the Toyota Production System From an Industrial Engineering Viewpoint, Cambridge, MA. Productivity Press, 1989

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Cost Quality Safety Morale

Equipment Reliability

(Rock)

Just-In-Time

Standards Aimed at Continuous Improvement

Level Production

(Formulas, Policies)

In-Station

Process

Control

Productivity

T/M Morale Quality Cost Safety

Solid

Support

Solid

Support

Standardized Work

Continuous Improvement Teams Job Rotation

Andon Boards

Suggestion System

Visual Factory and 5S

Total Productive MaintenanceBatch of

One Capability

My Vision of TPS

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The setting of STANDARDS aimed at continuous improvement by ALL team members through the constant elimination of waste.

Definition ofLEAN MANUFACTURING SYSTEM

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“Standards” from Webster

“Something used as a rule or ‘BASIS OF COMPARISON’

to evaluate quality, quantity, value, etc..”

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These philosophies and tools provide for two major focuses of improvement and waste reduction:

1) Aimed at material/value stream change control.

(JIT, Level Scheduling, Hijunka Boards and Kanban Cards)

2) Aimed at total team participation through individual/team control of quality and machines.

(ISPC, Equipment TPM, Standard Work, Participation, Job Inst. Training.)

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Both are guided by cascading the annual planning process of goal setting aimed at waste reduction and total team participation enhancing the individual team members self satisfaction and company identity.

A Key Tool Allowing Focus From The Entire Team

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Integration of Scanlon and Lean

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Toyota Is 50 Times More Scanlonized Than We Have Ever Thought Of Being And They Have Never Heard The Term !

Joanne DuQuette, VP of Human Resources, speaking to the Donnelly executive team

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You Do Not Want To Be Toyota, Just Achieve Toyota Results

• Processing of product is the same for Mass and Lean companies

• Equipment purchased is the same for Mass and Lean companies

• People hired are the same for Mass and Lean

– What Makes The Difference

An absolute belief that everyone wants to winThe engagement of ALL the People

An absolute commitment of constant Process Improvement

Customer

Customer

Customer

AdvancesProcessR & D

TPS

AdvancedProductPlanning

TPS

TPS

TPS

TPS

TPS

TPS

Marketing

ProductionEngineering

ProductDesign

ManufacturingTooling

Engineering

Product

Planning

Human

Resources

Product

Engineering

Sales

CorporateManagement

Team

Financial

TPS

Product LaunchCycle

(Updated Improved Standards)

Life CycleOf Product

Achieving Lean Manufacturing Leadership

(Continuous Improvement)

At lowest possible cost

TPS

TPS

TPS

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We believe that within every person is a deep-seated desire to realize his or her full potential through growth and development to make a difference and to be part of a winning team.

What Makes a Winning Organization?

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“Brilliant process management is our strategy. We get brilliant results from average people managing brilliant processes. We observe that our competitors often get average (or worse) results from brilliant people managing broken processes.”

Mr. ChoVice Chairman of Toyota

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Broad Research Has Shown Only About 25% Of Workers:

• Are fully engaged in their work

• Are enthusiastic about team and organization goals

• Feel they are fully enabled to execute their goals

• Have a clear line of sight between their work and their teams organizational goals

• Work in an open trust-filled environment

How Are We Doing With People Systems?

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Total Employee Involvement

Scanlon Principle

• Identity

• Competency

• Participation

• Equity

Total Employee Involvement

OROR

Lean Manufacturing

System

Lean Manufacturing System

Level

Production

Just-In-Time

Visual Delivery System

Machine

Reliability

Preventative Maintenance

Total Productive Maintenance

Stop the

LineTraffic Light SystemMistake ProofingIn-Station-Process-Control

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Identity

Purpose:Exceed Customer expectations by eliminating waste through a

process of continuous improvement where people and teams

including suppliers and customers are engaged in the process

together and constantly striving for perfection. Do we believe that the

process of becoming lean is permeating every part of our business

and requiring a relentless pursuit to eliminate waste as a core value

Business Reality:Waste exists in all parts of the business. If we understand

“COST = SALES PRICE – PROFIT” and cost is the only

controllable. Then are we understanding lean principles as

the enabler for a “WAR ON WASTE”.

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Right Job:Have we developed a vision of our long-term lean system?

Have we developed an implementation plan and dedicated the resources to accomplish the task?

Have we developed a cascading annual planning system and supportive review to align the organization for improvement?

Job Right:

Progress of continuous improvement can only be measured against results.

Have we identified the right matrix (safety, quality, cost, productivity, delivery and morale)?

Is the entire organization aligned with our lean principles and values?

Identity

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Understand that becoming lean is a process that is done “With” people and “Not To” people. A total commitment to mutual trust and teams is an absolute essential part of the lean journey. Do we see lean principles as the main enable to accomplish meaningful, inspiring participation?

Participation

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“Two reasons appear then for looking toward the fuller involvement of people in their work. We need their help in reaching for market leadership, and the people are entitled to the consideration that recognizes their ability to help. This process

of involvement is what we call participation.”

Participation

- John F. Donnelly, 1967

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Develop leaders who understand and live the lean enterprise philosophies.

Are we developing a process for continuous learning by refining personal and organizational understanding of the lean tools and applications of these tools through supportive review.

Competence

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Recognize, with lean, we need to achieve a fair and balanced return for all the stakeholders. Work closely with suppliers to eliminate waste in the total value stream and treat suppliers with respect as long term partners.

Equity

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What I Have Found Will Fail

• The executive leadership team not developing their lean system

– Develop your house and megaphone for the team to understand

• Functional departments leaders and team not understanding the lean enterprise and setting policies and methods to allow success

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• Installing Kanban or Other Tools and State We Are Lean

What I Have Found Will Fail

• Hire Outside Consultants Without Your Lean

Vision

- Your team wants to please you and your company,

not outsiders.

• Kaizen the Team Lean

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Toyota: The Benchmark for World Manufacturing

“The Toyota Production System is a production system, and a kanban method is merely a means for controlling the system.”

Source: Shigeo Shingo. A study of the Toyota Production System From an Industrial Engineering Viewpoint. Cambridge, MA. Productivity Press, 1989

- Shigeo Shingo

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• And the Worst One Is:

What I Have Found Will Fail

• Attempt Empowering Employees Without the Lean Tools

• Assume Management Will Install Lean as You Teach Them Without Resources

• Part-Time Won’t Cut It

Do Nothing at All

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Lean without Scanlon Little ImprovementScanlon without Lean Limited Improvement

Closing Thoughts

Scanlon with integrated Lean = Perpetual Success

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There is a Roadmap

“The Leadership Roadmap Book”Purchase on Amazon.com or Barnes and Noble.comContact us at info@leanprocess.com

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Thank You For Your Time

Questions and Discussion