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A report on Kaizen A report on Kaizen LessonsLessons
Our past cultureOur past culture
Our current lessonsOur current lessons
Our future cultureOur future culture
A management perspective of Uniparts Olsen Inc. Kaizen
October 30, 2007October 30, 2007
This presentation reflects ourThis presentation reflects ouractivities and behavior activities and behavior
changeschangesas a result of a kaizen as a result of a kaizen
implementation facilitated by:implementation facilitated by:
Toyota Material Handling Toyota Material Handling CompanyCompany
The Raymond CorporationThe Raymond Corporation
October 30, 2007October 30, 2007
A report on Kaizen A report on Kaizen LessonsLessons
Presented by:Presented by:
Mark DawsonMark Dawson
Global Operations DirectorGlobal Operations Director
Brad MillerBrad Miller
Plant ManagerPlant Manager
Uniparts Olsen Inc. has been on a successful lean manufacturing journey for eight years
Throughout these years we felt something was missing in the process
We have realized large gains
The gains have been key in assuring our viability
Injury Reductions Injury Reductions Historical Injury Frequency
(2007-2008 is fiscal year all others are calendar year)
10.9
14.6
10.18.7
7.2
13.712.7
6.5
2.3
2.5
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
-200
8
Injuries per 100K Shop
Hours
84% reduction1999 to present
Reject ReductionsReject ReductionsHistorical Rejects PPM at Final Inspection
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
Ja
n-0
3
Ap
r-0
3
Ju
l-0
3
Oc
t-0
3
Ja
n-0
4
Ap
r-0
4
Ju
l-0
4
Oc
t-0
4
Ja
n-0
5
Ap
r-0
5
Ju
l-0
5
Oc
t-0
5
Ja
n-0
6
Ap
r-0
6
Ju
l-0
6
Oc
t-0
6
Ja
n-0
7
Ap
r-0
7
Ju
l-0
7
95% reduction
August 2003 to present
Scrap ReductionsScrap Reductions
Historical Scrap $ as a Percentage of Sales
0.75%
1.00%
1.25%
1.50%
1.75%
2.00%
2.25%
2.50%
2.75%
3.00%
3.25%
3.50%
May
-03
Au
g-0
3
No
v-03
Feb
-04
May
-04
Au
g-0
4
No
v-04
Feb
-05
May
-05
Au
g-0
5
No
v-05
Feb
-06
May
-06
Au
g-0
6
No
v-06
Feb
-07
May
-07
Au
g-0
7
61% reduction
August 2003 to present
Rework ReductionsRework Reductions
Historical Rework Hours per Million Production Hours
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
Fe
b-9
8J
un
-98
Oc
t-9
8F
eb
-99
Ju
n-9
9O
ct-
99
Fe
b-0
0J
un
-00
Oc
t-0
0F
eb
-01
Ju
n-0
1O
ct-
01
Fe
b-0
2J
un
-02
Oc
t-0
2F
eb
-03
Ju
n-0
3O
ct-
03
Fe
b-0
4J
un
-04
Oc
t-0
4F
eb
-05
Ju
n-0
5O
ct-
05
Fe
b-0
6J
un
-06
Oc
t-0
6F
eb
-07
Ju
n-0
7
68% reduction
January 1998 to present
Total Cost of Quality Total Cost of Quality ReductionReduction
Total Cost of Quality as a % of Sales
costs captured: external failure, internal failure, prevention costs, appraisal costs
0.50%
1.50%
2.50%
3.50%
4.50%
5.50%
6.50%
Ju
l-0
4
Se
p-0
4
No
v-0
4
Ja
n-0
5
Ma
r-0
5
Ma
y-0
5
Ju
l-0
5
Se
p-0
5
No
v-0
5
Ja
n-0
6
Ma
r-0
6
Ma
y-0
6
Ju
l-0
6
Se
p-0
6
No
v-0
6
Ja
n-0
7
Ma
r-0
7
Ma
y-0
7
Ju
l-0
7
42% reduction
August 2004 to present
WIP ReductionsWIP Reductions WIP $ as a Percentage of Sales $
30%35%40%45%50%55%60%65%70%75%80%85%90%95%
100%46% reduction
February 2001 to present
Tool Cost ReductionsTool Cost Reductions
Tooling Cost per Operator Hour
$4.00
$4.25
$4.50
$4.75
$5.00
$5.25
$5.50
$5.75
$6.00
$6.25
$6.50
$6.75
Mar
-06
Apr-06
May
-06
Jun-0
6
Jul-06
Aug-
06
Sep
-06
Oct
-06
Nov
-06
Dec
-06
Jan-0
7
Feb-0
7
Mar
-07
Apr-07
May
-07
Jun-0
7
Jul-07
Aug-
07
$ per DirectHour
18% reduction
March 2006 to present
ProductivityProductivity IncreasesIncreases
Direct shop Labor
22% increase
2003 to present
Total Shop Labor
6% increase
2003 to present
Historical Pieces Produced Per Labor Hour
10
12
14
16
18
20
22
24
26
28
Jan-0
3
Apr-03
Jul-0
3
Oct
-03
Jan-0
4
Apr-04
Jul-0
4
Oct
-04
Jan-0
5
Apr-05
Jul-0
5
Oct
-05
Jan-0
6
Apr-06
Jul-0
6
Oct
-06
Jan-0
7
Apr-07
Jul-0
7
Direct Hours Only Direct + Indirect Hours
But…But…
we have always fallen short of reaching world class targets
that approach perfection
We never fully sustain the lean tools
and
never realize their full potential
? ?
Here is a snapshot of our past method for implementing lean manufacturing :
1) Study and learn an individual Lean Manufacturing tool (single piece flow cells, set-up reduction, pull scheduling, 5S, etc.)
2) Solid planning
3) Launch the tool on our shop
Past ImplementationsPast Implementations
Straight forward - black and white - remote control from the office
= shop domain where we produce safety, quality, delivery, cost
= lean manufacturing project management
cleaning &
organization
communication
start-up announcement
after- put up posting & “walk away”
very few standards
written & complex
Project implementation
at gemba (35% interaction with the workers)
Management
BLIND in office
Plan (always) Do (always) Check (sometimes) Act (sometimes)
(2% interaction with workers) 98% office meetings with team to insure implementation
Let’s look at 2S as an example!
Great results are the norm …
But they last only
two weeks !two weeks !toto
two months !two months !
The Olsen wayThe Olsen way
Then performance slowly slips to Then performance slowly slips to lower levels lower levels
The Olsen wayThe Olsen way
We blamed them- We blamed them- not us!not us!
The Olsen wayThe Olsen wayWe usually gathered in We usually gathered in approximately 30% of the approximately 30% of the potential gainpotential gain
In management In management conversations we blamed conversations we blamed workers for “pocketing” a workers for “pocketing” a portion of the gains.portion of the gains.
It made their job easier but it It made their job easier but it did not give the company a did not give the company a full improvementfull improvement
Mr. Nomura, Mr. Okada, and Mr. Sakata from Toyota Material Handling Company visited Uniparts Olsen Inc.
They presented slide shows on 2S and quality and explained how the methods work
We were very open to this We were very open to this information. Toyota’s success from information. Toyota’s success from using TPS is unmatched by any other using TPS is unmatched by any other methods in industrymethods in industry
The Toyota WayThe Toyota Way
We studied the information and started implementation after completing our current project load and our ISO triennial audit
Following is what we have implemented & learned thus far in the journey:
The Toyota WayThe Toyota Way
Involvement - colorful - interaction
standards- simple & based around pictures
At gemba with the workers
cleaning &
organization visual
countermeasures Ijo kanri ***
communication
train & retrain until
understood & performing correctly
1) Management is at the machines daily
and operating a system that
constantly reviews gains, problems,
countermeasures, and improvements
2) This system of constant
management and worker involvement insures sustaining
gains and achieving new gains
3) This system creates a hard shell
around the domain of safety, quality,
delivery, and cost. It does not allow the
activities to “slip out” of the
domain
*** ijo kanri = being able to see and quickly taking action to correct any straying from Standard Work.
This is the goal of standardization and visual management.
Continuous waste elimination and problem solving through kaizen are only possible when abnormalities are visible.
Our previous management model Our previous management model had arrows (focus and leadership) had arrows (focus and leadership) from outside of the work areasfrom outside of the work areas
We worked in isolation- disconnectedWe worked in isolation- disconnected
In TPS, the In TPS, the arrows enter into arrows enter into gemba – all are gemba – all are working on working on kaizen where kaizen where safety, quality, safety, quality, delivery, & cost delivery, & cost happenhappen
The arrows were The arrows were not always aimed not always aimed properly due to properly due to inadequate inadequate management management involvement at involvement at the sourcethe source
At the start of the Toyota projects, At the start of the Toyota projects, we were sure it was about learning we were sure it was about learning and applying Toyota methodsand applying Toyota methods
toto thethe shopshop . . . . . .
Instead, the project’s biggest Instead, the project’s biggest impact is on . . .impact is on . . .
Surprise!Surprise!
ManagementManagement
!!
Operator
Supervisor
MaintenanceMaterialHandlers
ProcessEngineers
Support for the value add Support for the value add personperson
The old paradigm
Operator
MaintenanceMaterialHandlers
Managers
QualityEngineers
Purchasing
Controllers
Corporate
SupervisorProcess
Engineers
Support for the value add Support for the value add personperson
Our new paradigm
The methods are simple and yet The methods are simple and yet elegantelegant
Basic facts we have Basic facts we have witnessed through witnessed through implementing TPSimplementing TPS
They have solid philosophical They have solid philosophical and psychological foundationsand psychological foundations
The methods The methods integrateintegrate management management and workers and workers at the processat the process focused focused on common targetson common targets
Our understanding ofOur understanding ofTPS philosophy:TPS philosophy:
The customer’s needs are top priority
Management at the shop floor- always
Involve the workers-respect & implement their ideas
Effective communication of overall company strategic goals and daily area goals
Workers know the goals and understand their contribution to the goals
Our understanding of Our understanding of TPS philosophy:TPS philosophy:
Standardization and visual shop allows ijo kanri
Patiently improve. Make many small gains- over and over- endlessly- continuous improvement
Standardize all gains- once again allowing ijo kanri
Mass improvement becomes Mass improvement becomes visible at the total company visible at the total company level through the level through the accumulation of many small accumulation of many small improvementsimprovements
World class performance will World class performance will be reached in timebe reached in time
The effectThe effect
Scrap reduction 70%Scrap reduction 70%
Employee turnover reduction Employee turnover reduction 100%100%
Production improvement 44%Production improvement 44%
The effectThe effect
This philosophy is opposite US This philosophy is opposite US business culture normsbusiness culture norms
The challengeThe challenge
No quick fixes No quick fixes No big splash and instant gratificationNo big splash and instant gratification
After implementation, US After implementation, US management gravitates to the management gravitates to the workers “being the process” and workers “being the process” and management moves on to new issuesmanagement moves on to new issues
Management involvement is never endingManagement involvement is never ending
How we must thinkHow we must think The journey is endless The journey is endless
We must have faith in our We must have faith in our workers-unleash their minds & workers-unleash their minds & provide motivation to contributeprovide motivation to contribute
TPS is a way of being- it must be TPS is a way of being- it must be part of our human fabric- it is not part of our human fabric- it is not something we can buy and installsomething we can buy and install
TPS requires patience, heart, andTPS requires patience, heart, and huge commitmenthuge commitment
How we must thinkHow we must think Management must provide Management must provide
leadership and always remain leadership and always remain directly involved in kaizendirectly involved in kaizen
Management must go to the floor daily Management must go to the floor daily to review and guide kaizen already in to review and guide kaizen already in place and new kaizen workplace and new kaizen work
Use gemba kanri & ijo kanri structure Use gemba kanri & ijo kanri structure for insuring kaizen sustainsfor insuring kaizen sustains
We must continue to grow in We must continue to grow in our understanding of TPS- our understanding of TPS- this too is an endless this too is an endless journeyjourney
In-depth study of TPS is In-depth study of TPS is essential for all levels of the essential for all levels of the organizationorganization
Future actionsFuture actions
Thank youThank you
for your for your
time and attentiontime and attention