Title of Date Presentation1€¦ · Presentation1. LERC ANNUAL CONFERENCE The Royal Mint 26th June 2012 ... • Annealing and Plating (Blank Processing) • Coin Production (Finishing

NameDate

Title ofPresentation1

LERC ANNUALCONFERENCE

The Royal Mint26th June 2012

LERC ANNUAL CONFERENCE

26TH JUNE 2012

Cash Flow: transforming the UK’s oldest manufacturing company”

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BACKGROUND TO THE ROYAL MINT

• 1100 years old; the oldest manufacturing operation in the U.K. and possibly the third oldest in the world.

• Move from London to Llantrisant completed 1980• 38 acre site, 760 employees (900 with agency)• Exclusivity on UK coinage• Manufactures coins for 60 other countries• Self-financing Trading Fund status 1975• Vested 2009,Royal Mint Ltd, 100% Treasury-owned• 5 billion coins manufactured annually• Prior to vesting, Mint run by Civil Service as a manufacturing

operation

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THE ROYAL MINT

– Two “businesses” • Circulating and Commemorative Coin

– Four Production Departments• Melting, Rolling and Blanking • Annealing and Plating (Blank Processing)• Coin Production (Finishing and Processing)• Commemorative Coin

– Functional support• Business Services, Finance, Procurement



MANUFACTURING SYSTEM

-HISTORICAL CONTEXT

– Manufacturing units run as silos

– Volume mentality (tons and millions)

– Highly variable product quality

– High rectification costs

– Poor inventory management

– Little “through-business” visibility

– Overseas delivery performance historically not a key focus but performance poor

– No fixed plan-high levels of expediting• Lots of “Parachute” orders



MANUFACTURING SYSTEM-HISTORICAL CONTEXT

– New Senior Management Team• New mind-set, new values

– Increased levels of global competition

– We had a smouldering platform…

– We had to win hearts and minds



HOW WE’VE APPROACHED LEAN (1)

– We started doing lean by introducing one-piece flow cells in our manual press operations in Commemorative Coin

– This worked well but..

Before After

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HOW WE’VE APPROACHED

LEAN (2)

– Struggled to see how that could work on our process lines in Circulating Coin

– Lots of different products, routes all going down shared resources

– Went back to the lean principles to design flow system in Circulating: this meant significant changes to how we planas well as produce

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LAYOUT OF THE SITE AND VIRTUAL PIPELINES

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COPPER PLATED BLANKS/COINS

Cu Plating Striking Packing

Sorting

CP33 day buffer

Copper Pipeline Average 9.63 Total Stillage:230 (184 tonnes)

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NICKEL PLATED BLANKS/COINS

AnnealingNi Plating Finishing Striking Packing

3 day buffer

Sorting

Nickel Pipeline Average 14.17Total Stillage : 600(480 tonnes)

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BRASS PLATED BLANKS/COINS

AnnealingCu Plating Finishing Striking Packing

3 day buffer

Sorting

Zn Plating

Brass Pipeline Average 10.87Total Stillage : 250(200 tonnes)

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NON FERROUS BLANKS/COINS

FinishingAnnealing Ringmaster Striking Packing

3 day buffer

SortingEdge letter

None-Ferrous Pipeline Average 9.98

Total Stillage : 360(288 tonnes)

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THE CHALLENGES

– Mix – synchronisation coin versus blank

– Key equipment availability

– Load swings

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– Realised that we’d missed out the planning part in Commemorative: we’d only tackled the physical flow

– Re-traced our steps and transformed our forecasting, order handling, purchasing and planning

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HOW WE’VE APPROACHED

LEAN (3)



HOW DID WE DIAGNOSE THE TOOLS

AND TECHNIQUES TO USE?

– We didn’t start with tools and techniques!

– We asked: what was causing our capacity and material supply to be out of kilter with customer demand?

– After that, the solutions were straight-forward…

– We’d done that with the Commemorative cells (and with TPM in the past)

– We used mapping to help the cross-functional team visualise the whole system (first time people had understood the whole rather than their part of it)

– Everyone understood why they had to change to make the whole system work better

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HOW WE’VE APPROACHED LEAN (4)

– In both areas, we’ve used the lean principles to improve the whole system – not just the production flow

– It’s created a stable production environment which enables us to engage people in improvement

– Team leaders have time to lead improvement because they’re not fire fighting and expediting

– We can see what needs to be improved and what lean tools to use where

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WHAT HAVE WE LEARNT?

– Tackle the whole system with a cross-functional team: sales, planning, production

– Don’t just look at part of the flow or one product family

– Dedicate resources to an intensive project and give them a coach

– Keep everyone informed about findings not just solutions

– Take difficult decisions and make policy changes clear (e.g. stock write-off)

– Bed in by changing what people do in their everyday job

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IT’S HOW WE WORK, NOT A PROJECT…

– Daily flow meetings• Standard meetings to understand performance of schedule execution

– Day by hour boards• Measure against the standard throughput • daily meeting to resolve issues and escalate problems

– New rules and routines for sales, planning and production. • Sales and operation planning process vital to the success of new way of working

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Supporting Data (Circulation delivery performance - ROTIF)

0

10

20

30

40

50

60

70

80

90

%

Circulation

OTIF %

Target

GO LIVE

- Better Planning

tools

available

- No Back

log

- Overloading due to

swing in mix

- Order back log

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SO, WHAT’S NEXT....?

– MORE SALES?• The planning tools and delivery performance enable us to target markets and

customers

– COST?• The stability of production enables us to use appropriate tools to target cost

savings

– PRODUCTIVITY?• All of the daily/weekly/monthly performance reviews are all focus on

increasing productivity

We have a very long way to go!29



IT’S HOW WE THINK… (REAL QUOTES)

– We used to work in departments with lots of inventory between each one: now everyone has an end-to-end view

and material keeps flowing: we think about delivery to the customer, not just what our department has produced

– We were always “moving orders to the right” because we couldn’t be sure of our capacity or material when we

offered a delivery date: now, all promises are equal ( well, most of the time)

– We spent all day expediting material because priorities were always changing: now the schedule is stable so we

can concentrate on team-leading

– We used to be driven by measures of volume (tonnes and millions): now we aim for delivery performance and

prioritise by schedule adherence and flow rate

– When machines broke down, we used to move material and people which hid the problem: now we can see clearly

where downtime is hurting us

– It was the same with quality: if we had a problem, we would put the job to one side and work on something else.

Now we intervene straight away to stop the flow rate deteriorating.

– We never had time for problem solving: now problems are escalated from production meetings, it’s visual and we

have clear priorities for tackling them.

– In the past, we wanted to get better but we didn’t know how: now there’s a clear view of where we need to

improve and everyone knows where we want to get to

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Documents

Title of Date Presentation1€¦ · Presentation1. LERC ANNUAL CONFERENCE The Royal Mint 26th June 2012 ... • Annealing and Plating (Blank Processing) • Coin Production (Finishing