Post on 16-Mar-2018
transcript
Earning the Right to Do Lean “How to Build a Successful and Sustainable
Performance System”
Phil McIntyre
Director of Business Development and Marketing
• Established in 1865 • Privately Held, Third Generation
Seth Milliken Gerrish Milliken Roger Milliken
Who are we?
Manufacturing a wide range of products with
over 7500 Associates at over
• 40 locations in 8 countries
Apparel Fabrics
markets served
Interior Furnishings
Industrial
Fabrics
Specialty
Chemicals
Performance
Services
Malcolm Baldrige National Quality Award (US)
Malcolm Baldrige National Quality Award
British Quality Award Canadian Quality Prize
Japan Institute of Plant Maintenance TPM Prize
ISO Registered
QS Registered
54 JIPM Awards
… in quality Operational Excellence
European Quality Award
Ten years ago we had a least 8 competitors in
the U.S. with sales over a Billion dollars.
Today we have none.
our reality...
How has Milliken
survived and thrived?
our question...
1. Positioned in the right markets
2. Innovation
3. Operational Excellence
Over
125 Corporate Initiatives
Era of People Excellence
1980 to 1985
1985 to 1990
Era of Process Excellence
1990 to 1996
Era of Business Excellence
1996 to 2012
Implementation of the Milliken Performance System
• We hit a plateau on each initiative. • We were forgetting what we had done 3 years before.
1980
1985
1990
2012
Evolution of Operational Excellence
Approach to Management
Information
Inventory
Breakdowns
Method
Training issues Raw
Material
Productivity
Priorities
Resources
Fire-fighting Reaction
Traditional
1994 25
Benchmarking World-Class Manufacturing Practices
Study Missions to Japan
Product Produced
Copier Parts Deming, TPM Ricoh
Auto Parts Deming, TPM Nippondenso
Electronics Deming, TPM, TPM Special NEC
Butyl Rubber TPM Japan Butyl
Automobiles Deming, TPM Nissan
Lighting Deming, TPM Toshiba (Kanuma)
Lighting Deming, TPM Toshiba (Himeji)
Air Conditioners Deming, TPM, TPM Special Daikin Industries
Plastic Film Deming, TPM, TPM Special Sekisui Chemical
Textiles TPM Gunze
Textiles TPM Dynic Corporation
Awards Company Name
Study Missions – Companies Visited
# of Companies Reporting Improvement Measurement
6
7
9
8
9
85%
74%
92%
32%
61%
Claims
Defects
Breakdowns
Process Reliability
Productivity
Milliken sent 120 managers
on 4 Study Mission Trips
Japan Study Mission Results 1994-1996
Safety is the foundation and the ‘Trust Component’ of our manufacturing operating system.
© 2011 Milliken & Company
What is a ‘Loss’ ?
Cost
Reduction
Opportunity
The
difference
between
actual cost
&
ideal cost
Loss
Actual Cost
Total real dollars
spent to manufacture
a product.
Ideal Cost
Absolute minimum cost
required to
manufacture a product.
(theoretical cost)
What is a ‘Loss’ ? (Challenge Your Paradigms !)
Targeted Cost Reduction
Labor Energy Supplies Indirect
Materials
Typical Manufacturing Variable Conversion Costs
(excluding Raw Materials)
Breakdowns
Minor Stops
Change Over
(Style Change)
Waste Off-Quality
PM & Clean
Advantages of the ‘Loss’ Approach
1. Cost is segregated by ‘Activity’
rather than ‘Process’
2. Cost Reduction projects are easily
definable.
3. Resources can be allocated
proportionately to the opportunity.
© 2011 Milliken & Company
Other Conversion Costs
Yield Losses
Quality Losses (Yield) Performance Rate (Speed)
OEE Losses (Downtime)
Loss Categories
1. Breakdowns 2. Change Over (Make Ready) 3. Start-Up and Shutdown 4. Minor Stops (Process Downtime) 5. PM & Cleaning Downtime 6. Planning 7. Material Handling (Stop Time) 8. Speed Loss 9. Off-Quality 10. Rework 11. Waste 12. Obsolescence 13. Allowances 14. Inventory Variances 15. Material Handling (Run Time) 16. Inspection & Testing 17. Indirect Materials 18. Purchase Price Variance 19. Vendor Claims 20. Spending Not Captured
Milliken Losses
© 2011 Milliken & Company
Loss Analysis
11.7
Millions $ /
Year
Average “loss” per plant (millions) / year
Milliken & Company
Note: All
‘Losses’ are
Full Variable
175 asso/site
~ 50 mil in rev/site
© 2011 Milliken & Company
Zero Loss Improvement
Milliken & Company
reduced losses 30% on average per plant
within the first 24 months of implementation
of the Milliken Performance System
3.5 million $ reduction per plant
Loss Reduction Improvements 1996 - 2011
12%
19%
22%
23%
25%
26%
27%
27%
30%
34%
36%
41%
60%
67%
Start-Up / Shut Down
PM & Cleaning
Changeover
Energy Performance
Planning
Waste (RM Yield)
Inspection & Testing
Material Handling
Process Reliability
Breakdowns
Minor Stops
Returns & Allowances
Off-Quality
Speed
Zero-Based Standard-Based
In 2010, we initiated over
1,300 projects with an
average savings per project
of $18,500
Co
st
of
Go
od
s S
old
Performance System Capabilities
Fixed
Cost
Raw
Material
Cost
Variable
Cost
Zero-Based Cost Opportunity
In 1995
Losses
57%
57% of COGS (excluding
Raw Material except but
including Yield Losses)
was identified as a LOSS
Losses
31%
By 2010, we had
reduced LOSSES by
45% (from 57% of
COGS to 31%of
COGS)
LOSSES became 26% of
COGS (excluding Raw
Material except but
including Yield Losses)
was identified as a LOSS
Baseline Information
Co
st
of
Go
od
s S
old
Performance System Capabilities
Fixed
Cost
Raw
Material
Cost
Variable
Cost
Losses
57% Losses
31%
Where did the change come from ?
Loss Reduction Activities by Pillar
5S 2%
Continuous Skills
Development 11%
Daily Team
Maintenance 13%
Planned
Maintenance 18%
Quality
Management 13%
Focused
Improvement
31%
EEM 4%
CNPD 4%
Lean 4%
What
pillars
drove the
change ?
Our
equipment
was not as
stable and
capable as
we thought
Where does LEAN fit in a
Daily Management System?
Lea
n M
anag
emen
t
Primary Lean Benefits to Milliken
• Aligned Business and Operational
Strategy
• Sustained Operational Improvements
through a Daily Management System
Primary Lean Benefits to Milliken
• Aligned Business and Operational
Strategy
• Sustained Operational Improvements
through a Daily Management System
Aligned Business and Operational Strategy Lean Tool Deployment
Demand Planning
Value-Stream Maps
One Piece Flow
Supermarkets
Level Schedules
Schedule Wheels
Hijunka Boards
Kanban Cards
Address Systems
PFEP
Logistic Maps
Shipping Windows
Trailer Maps
Layered Auditing
Standard Work Managers
Standard Work Associates
Waste Walks
Work Flow Diagrams
Operator Balance
Work Combination Tables
Kaizen Events
SMED
Restock Routes
Aligned Business and Operational Strategy
• Value Stream Mapping
– Plant Level
– Enterprise
– Transactional
We used the Value Stream Map to visibly
see the ‘flow’ from a different perspective
than we had previously (multi-plant product
flow, identification of wastes, etc.)
• Demand Planning
• Level Schedules
• Schedule Wheels
Aligned Business and Operational Strategy
We were able to level or
smooth our plants run
schedule through better
visibility of customer
demand cycles.
Lean Benefits
• Aligned Business and Operational
Strategy
• Sustained Operational Improvements
through a Daily Management System
Sustaining Operational Improvements through Daily
Management System
• Layered Auditing
• Standard Work for Managers
• Daily Performance Review
Lea
n M
anag
emen
t
DTM
Checklist
5S
Checklist
Safety
Audits
PM
Checklist
Q Component
Checklist
Standard
Work
The Basic Pillars create the foundation for stability
and the audits and checklists sustain the gains
Daily Audit Structure
Chris
Kiki Denise Jerry Matt Carmon Wayne
Keith Jack
Sara
Chris Mary
Paul Lue Jean Carolyn
Amy
Pat
Andrew
Paula
MILLIKEN
Pine Mountain Plant
Layered Audit Assignments 1-17
1-17 2/3/9/11 10 1/7 4/5/12/13 1/8/15
4
1/7
2/3/11
1/9/11/12
2/3/14
4/6/11 5/6/9/11/15 16/17
6/15 9/11 5/13 4/11 11
L1 Complete by 12:00
L2 Complete 12:00 – 2:00
L3 Complete 2:00 – 4:00
L4 Complete by 5:00
Eric
Albert
1/12
Jean
8
1. Doffer/Recycler 11.Weaver
2. Extruding 12.Sulzer Maint
3. SES/Beamer1 13.Dornier Maint
4. Red Cards 14. SES Quick Test
5. Sultex Maint 15. DTM Checker
6. Weav Process 16. Prep Maint
7. C/S Operator 17. Prep Process
8. Raw Material
9. Cleaner
10. Audit the Auditor
Janice
2/3/14
Lucille
9/11
David
6
Nyesha
2/9/11
Mike
Rose Cindy
1/15 Greg T
5/12/13
9/11
1/5/9/11/12
16/17
April
Ruby
9/11
Charles
17
Eric P
17
Satara
11
L1
L2
L3
L4
Process Q Component Audits
Standardized Work Audits
Audit Performance Tracking and Review
•Daily Process Audits
and Standard Work
Audits using layered
audit methodology
•Failed Audits
reviewed at 4:00 pm
Daily for root cause
analysis and
corrective actions
Daily Audit Board
L3’s
L4
L2’s
Auditor Completion Tracking Charts
Sustaining Operational Improvements through Daily
Management System
• Layered Auditing
• Standard Work for Managers
• Daily Performance Review
New Management Challenge
Now we have
earned the right
to do Lean !
Daily Checklist
and Times for
Completion
Record of
Attendance
issues
Record of
Quality Issues
Record of
Breakdowns
Daily
organization of
things to do
Record of
complaints from
customer
(weave room)
Production Manager Standard Work
Manager Standardized Work Documents
Daily Management System
• Layered Auditing
• Standard Work for Managers
• Daily Performance Review
Daily Performance and Waste Walk
• All associates plot
performance measures
daily
• Boards in every area
Lean Pillar Results
Measurement
40% (last 12 mos.) Cycle time
Improvement
Inventory Turns
Working Capital
15 to 25%
24%
125 Mil $ of cost taken out of the Supply
Chain in the last 12 months
Lessons Learned
• Stabilize before you Standardize
• You get what you inspect not what you expect
• You must Earn the Right to do Lean
• Lean is most powerful in the context of an
overall Performance System
© 2011 Milliken & Company
44
Challenges/Lessons Learned on translating Cost to Losses
1. Losses should be used initially to directionally
point you to projects, not for $
2. You need to put $ to losses as quickly as possible
3. Is the data available from a plant level ?
4. Is the data machine specific ?
5. Avoid ‘adjustments’ early…recognize adjustments
will eventually be needed.
6. Make sure you pick the ‘right’ model
© 2011 Milliken & Company
45
Challenges/Lessons Learned on translating Losses back to Cost
1. In order for some loss improvement to translate
to cost improvement a ‘decision’ is required.
Know ahead of time how you will react to a loss
improvement.
2. Put your efforts in reducing the loss, i.e.
understand the level of accuracy you need
3. Calculate yield losses on the basis of cost only,
not sales price, i.e. avoid ‘cost avoidance or
missed opportunity’ $
4. Share projects (organizational in nature)
© 2011 Milliken & Company
46
Challenges/Lessons Learned on translating Cost to Financial Statements
1. Who has visibility of financial improvements and
who should have it ?
2. Understand pricing, i.e. do top line changes mask
improvements driven by COGS improvements ?
3. Understand the strategic impact of
improvements, i.e. 200 lines of operation at 40% OEE is
equivalent to 123 lines of operation at 65% OEE. What are you going
to do with that capacity ? It would be preferable to sell it.
4. Utilize a loss/project/cost improvement database
Contacts
• Phil McIntyre
• phil.mcintyre@milliken.com
• If you’re interested in touring Milliken sites or learning
more, I will be available after the session
Please complete your surveys