1

Sam Wagner, Director of Advanced ManufacturingDonnelly Custom Manufacturing Company

IndustryWeek ’09 Best Plants ConferenceNashville, TN

Tuesday, April 28, 2009

Managing Manufacturing Complexity through Innovative Processes

A Donnelly Custom Manufacturing Case Study

2

The Donnelly story

• Donnelly was founded in 1984 as a custom, plastic injection molding company

• A small, one-story building in Alexandria, MN• Four presses, eight people, no customers• One idea: to focus on short run, close tolerance parts

3

The Donnelly story

• Today, the organization is over 225 people strong– Best-in-class technologies and quality systems– 24/7 operations, 110,000 square foot facility with 33 presses– 700+ materials used– 2700+ active molds and 3200+ active parts– Median run time of less than 8 hours– 40 to 50 changeovers per day– Industry-leading and world-renowned OEM customers – $29+ million in revenues

4

The Donnelly story

0

5

10

15

20

25

30

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Sales Dollars

0

5

10

15

20

25

30

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Orders Shipped

0.0

0.5

1.0

1.5

2.0

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Sales Dollars/Order Shipped

5

The Donnelly story

0

50

100

150

200

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Molding Hours Run

0

5

10

15

20

25

30

35

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

# of Presses Available

0.0

1,000.0

2,000.0

3,000.0

4,000.0

5,000.0

6,000.0

7,000.0

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Hours Run /Press Available

6

The Donnelly story

• Plastics News Processor of the Year Finalist 2007

7

What is short run?

• Short run is not defined by part quantities/EAUs

• Short run is defined by the number of hours per production run

• Donnelly’s short run– Average production run is 11 hours– Median production run is 7+ hours– Production runs range from .25 to 240 hours– Short run is defined as more than one changeover

per week, per press– We average 9 changeovers per week, per press

8

Why short run?

• It is not possible to do short and long run well– Short run focus is on changeover optimization– Long run focus is on process optimization

• A need exists for a supplier committed to short run expertise– Pressure to reduce inventory, but continue to meet

stringent delivery dates– A supplier with short run expertise allows these

vital needs to be met economically

9

10

Donnelly’s mission and values

• Vision: To be the recognized leader in setting the standards in short run molding and related services

• Mission: To deliver good products on time• Core values

– Do your best– Treat others the way you want to be treated– Don’t be afraid to ask for help– Always work as a team

11

Donnelly’s complexity factor

All

pa

rtic

ipa

tin

g

co

mp

an

ies

Ov

er

50

%

Inje

cti

on

Mo

ldin

g0

Ov

er

25

%

Me

dic

al

Ov

er

25

%

Au

tom

oti

ve

Ov

er

$2

5M

M

in s

ale

s

Do

nn

ell

y

• Complexity factor = active molds x materials used x presses

• Comparative data– Plante Moran’s 2004 North

American Study of the Plastics Molding Industry

Bottom quartile

50th percentile

Upper quartile

12

Complexity-driven challenges

• Setting and holding priorities – making decisions

• Shooting at a moving target – planning

• Communication, alignment and teamwork

• Training and continuous improvement

13

Addressing the complexity factor

Complexity

• Peer accountability– Manufacturing War Room– Visual Management

• Attention to detail– Checklists– Supervisor Audits– Team Leader audits– Pricing Volatility

• Process orientation with measurements– Manufacturing Launch (40 measures)– Critical Success Factors

(12 key measures – 30 elements)

• Constancy of purpose– Short Run– Quality Management System (incl. MRT)– Lean Manufacturing Techniques– Training & Workforce Development

14

Addressing the complexity factor

• The cosmic Law of Nature– Nothing is static

Prog

ressing

Regressing

15

Process orientation with measurements

• Manufacturing launch process– Developed in 1999

• Hard work & diligence wasn’t enough with 250+ molds/year

– 80 % of tooling launches will have no problem, but it is the 20 % that a highly defined process allows you to succeed at

– Defined, comprehensive and measured so output is repeatable, reliable and profitable

– Avoids the finger pointing at hand-offs • Responsibilities are defined and reviewable

16

Process orientation with measurements

• Manufacturing launch process– Owned by the people who hold responsibility– Result is unique 3-pronged engineering model

• Project Engineer on-site at customer location for design and mold-build support

• Manufacturing Launch Engineer who oversees sampling, measurement and approval process

• Process Engineer for day-to-day production

– Value of a highly defined process is that you can evaluate and change it

• Manage, measure and improve it

Donnelly Manufacturing Launch Process(2)

18

Peer accountability

• Daily War Room meetings– This is a problem identification, not problem solving meeting

– Action items are assigned with peer accountability to resolve them within 48 hours

19

Peer accountability

Review last 24 hours• Safety• Changeovers & efficiency• Hours run & efficiency• Down time• Scrap• Problem jobs• Action items

Look ahead to the next 24 hours• Set priorities• “At risk” shipments• High scrap jobs• Mold issues

• Daily War Room meetings

20

Constancy of purpose

• Donnelly quality system– Deliver good products on time

– ISO 9001:2000

– ISO 13485:2003

• Management Review Team– Corrective action process

RCAWhy was the defective partproduced?

Why was the defective partshipped?

What other parts mighthave this same issue?

Corrective Action Process

Management Review Team

21

Constancy of purpose

• The Law of Prosperity/ Law of Compensation– What we make is in

direct proportion to the quality and quantity of the services we deliver

22

Constancy of purpose• Results

– Value added per employee

– 14 years without increasing press rates

23

Attention to detail• 5S

– Sort: Separate the necessary from the unnecessary– Set in Order: Put everything in its place, label its place– Shine: Keep everything clean, helps identify potential

problems– Standardize: Defines how a task should be performed, sets

the performance standard – Sustain: Most important – requires regular inspections, with

action items identified, assigned, and addressed

“Good factories develop beginning with the 5S’s. Bad factories fall apart beginning with the 5S’s.” Hirouki Hirano

24

Attention to detail• Early 5S process results

Old Setup Carts New Setup Carts

25

Attention to detail• 5S event results – set in order

Aisles before 5S Aisles after 5S

26

Attention to detail• 5S color coding

Green White and blue

Finished goods or inserts Trash Mobile Eqpt

27

Attention to detail

• 5S: Middle section: Green– Notice the numbers on

the wall and on equipment (204)

– Numbers on the floor as well

28

Attention to detail• 5S: Back section: Orange

29

Attention to detail• 5S audit process

– Next shift team leader audits section with current shift team leader

– Record results on current shift schedule showing assignments

– Highlight in green if OK, pink if a problem with notes on the bottom

– Hang schedule on current shift clip board for supervisor to review

30

Attention to detail

• 5S process benefits– Much more than just housekeeping– Develops the discipline to follow through– Teaches employees to work in teams– Creates a safer workplace– Attacks quality issues– Attacks waste of searching for things– Clean workplace is more inviting, making it easier

to recruit and retain workers (and customers)– 5S is a fundamental to Lean

31

Attention to detail• 5S: Visual workplace progression

Visual Order

Visual Standards

Visual Measures

Visual Controls

Visual Guarantees

Ref. Visual Workplace Visual Thinking, Gwendolyn D. Galsworth

32

Success in short run

• Continuously develop and improve upon its leadership position in short run

• Occurs as a result of aligning company’s people, processes and actions with business strategy

• Donnelly employees’ ability to improve upon its hedgehog concept, help the company to grow and thrive

• All actions are tied to processes rather than events, ensuring the business output is repeatable, reliable and profitable

33

Sam Wagner, Director of Advanced ManufacturingDonnelly Custom Manufacturing Company

IndustryWeek ’09 Best Plants ConferenceNashville, TN

Tuesday, April 28, 2009

Thank you

Questions?