Chris Bardeggia

Vice President, Global Quality & Lean

ASQ – Grand Rapids

The Benefits/Challenges of a Global Quality Effort

OPERATIONS2015GLOBAL

GLOBAL OPERATIONS 2015

ASQ AGENDA THE BENEFITS/CHALLENGES OF A GLOBAL QUALITY EFFORT

• Why Go Global

• How to Move to Global

• Benefits

• Challenges

QUALITY WHY GLOBAL

BUSINESS PERSPECTIVEWHY GO GLOBAL

• You will have more customers

• You will have access to a larger talent pool

• You will have more profits

• You will become more efficient

• You will iterate faster and create more products

• It’s the futureGLOBAL

OPERATIONS 2015

QUALITY PERSPECTIVEWHY GO GLOBAL

How do we measure quality

globally?

How do we partner?

How do we give customers

a consistent experience

How do we focus the

organization

How standard is TOO

standard?

How do we leverage scale?

How do we achieve

alignment?What needs to be different if

we act global?

How do we structure?

???

GLOBAL OPERATIONS 2015

QUALITY HOW TO MOVE TO GLOBAL

ALIGNING THE PIECESHOW TO MOVE TO GLOBAL

• Networking

• Strategy

• Structure

• Talent

• Metrics

• Processes

GLOBAL OPERATIONS 2015

NETWORKING: ASSEMBLING THE RIGHT PLAYERSHOW TO MOVE TO GLOBAL

Executive Quality Council

Objective: Strategic direction + decisions

Frequency: 2x/YearDuration: 90 MinutesDocs: Pre-Read >6 PgsMembers: 13

• CEO• SVP OPERATIONS

• Chief of Operations • VP Americas• VP EMEA• VP Asia Pacific• VP Quality

• VP LEGAL• VP ENGINEERING• VP MARKETING• VP SALES - AMERICAS• VP SALES - EMEA• VP SALES – ASIA PACIFIC

Quality Performance Steering Team

Objective: Performance review + improvement actions

Frequency: 1x/QuarterDuration: 60 MinutesDocs: Convergence ChartsMembers: 26

• GLOBAL: Quality, Metrics, Legal, Product Engineering, Technology, Architectural Products, Wood, Strategic Products, Coalesse, Seating, Furniture, Project Management, Supplier Quality, Turnstone, Procurement

• Americas: Operations, Manufacturing Engineering, Quality, Channel Development, Order Fulfillment, Logistics

• EMEA: Operations, Quality

• ASIA PACIFIC: Operations, Quality

Global Quality 3.0 Team

Objective: Strategy development + implementation

Frequency: 1x/Month (FTF/Quarter)Duration: 1-4 Hours (as needed)Docs: Plans/ProgressMembers: 22

• Quality: Global, Metrics, Supplier Quality, Systems, Americas, EMEA, Asia Pacific, Reliability

• Engineering: Global, Resident Engineering, Brand, EMEA

• Procurement: Supply Chain Development, Supplier Development

• Legal: Global• Project Mgmt: Global• GM: Seating• Labs: Global• Logistics: Americas• Process Engineering: Global• Order Fulfillment: Americas• Specials: Americas GLOBAL

OPERATIONS 2015

STRATEGY: GLOBAL QUALITY 3.0HOW TO MOVE TO GLOBAL

KPI FY14 (Baseline) FY15 (+1 year) FY16 (+2 years) FY17 (+3 years)

Metrics Regional (internally focused) Global (internally focused) Global (customer-focused) Global (customer-focused)

Defect Codes Plant/Region level Global alignment Defect code logic trees (pilot) App with defect code logic trees

Goal Deployment Top-down Top-down guidance + catchball Catchball with data Catchball with data + actions

Goal Management Focus on past performance Convergence: focus on gap to goal Advanced analytics: application pilots Advanced analytics: predictive

Poke Yokes Focus on implementation Focus on effectiveness Focus on improved effectiveness Focus on optimization

Alert Management Local processes Global process Permanent corrective action focus Permanent corrective action excellence

PD&L Deliverables No data on “How done” risk 20 Keys Pilot 20 Keys implementation Predictive equation of performance

PD&L Quality Not predicted Predicted at every Phase Predicted at every Phase Prediction accuracy

Lab Testing Tribal knowledge; BIFMA + Validating prioritized tests 30% validated tests 100% validated tests

Reliability Reactive; problem-solving Proactive; influencing tests Proactive; owning test plans Robust; influencing designs

FMEA Not standard; component-focused Standard; product-focused Global, formal DFMEA to PFMEA link Excellence; driving design activities

Compliance Tests Regional; inconsistent Regional; inconsistent Global, prioritized on risk not volume Global, driving Reliability

Test Kitchens Regional Global Global; focused on data Global; system improvements

1st Piece Signoffs Local standards Global standards Global standards; discipline Global standards, traceability

Supplier Quality Incoming inspection; locally managed Supplier recovery; glocally managed Global supplier excellence framework Systemic, supplier excellence

Problem-Solving Intuition-based Data-based Global competition to drive effectivenes Global competition to evolve standard

GLOBAL OPERATIONS 2015

STRUCTURE: GLOBAL QUALITYHOW TO MOVE TO GLOBAL

North America

EMEA Asia Pacific

Metrics

Product Dev & Launch + Supplier Quality

+ Reliability

Systems + Alert

Management

Metrics, Dealer Scorecards, Defect Codes, LASER, Accountability, QOR

20 Keys, Reliability Targets, FMEA, Test Plans, Supplier Excellence, 50% DPPM New Products, MBR

Alert Management System, Risk, Global Compliance Test Plan, ISO9001 Audits, Field Actions

6

3

2

GLOBAL OPERATIONS 2015

STRUCTURE: GLOBAL QUALITY (LEVEL 2)HOW TO MOVE TO GLOBAL

Quality Director

Plant 1 Quality

Manager

Plant 2 Quality

Manager

Plant X Quality

Manager

Lean Leader

PD&L, Supplier Quality,

ReliabilityMetrics Systems

QE

Lean

GLOBAL OPERATIONS 2015

TALENT – CURRENT STATEHOW TO MOVE TO GLOBAL

Local Opening

Local Talent

Local Opening

Local Talent

GLOBAL OPERATIONS 2015

TALENT – FUTURE STATEHOW TO MOVE TO GLOBAL

Attraction

Acquisition

Development

Retention

Promotion

10%Global

Opening

Internal Talent

QualityTalent

ExternalTalent

10%

GLOBAL OPERATIONS 2015

METRICS (EXTERNAL)HOW TO MOVE TO GLOBAL

Symptoms … Language & terms hard to understand Reporting the newsNot actionable

Actions …Operations workshopAlignment on what’s importantMetric definitionsExpectationsTools to improve

GLOBAL OPERATIONS 2015

METRICS (INTERNAL)HOW TO MOVE TO GLOBAL

September, 2014FY15 - Period 7

Actual Goal Actual Goal PYEDPPM: 4,780 15,010 8,911 18,797 20,236

Functional Owner DPPM

DPPM % Contrib. DPPM % Contrib. PYE

Manufacturing 2,128 45% 5,567 62% 13,549

Engineering & Mkting 646 14% 1,008 11% 3,469

Logistics 794 17% 1,067 12% 1,324

Procurement 94 2% 194 2% 63

SFT 81 2% 395 4% 1,191

Specials 323 7% 341 4% 351

Other 714 15% 339 4% 289FY15 P7 Performance Explanation

Actual Goal Actual Goal PYECost of Non-Quality: 1.93% 0.68% 2.04% 0.68% 2.49%

Active Convergence Projects Target Achieved in:10000

Period 7 FYTD

Arch Solutions MBR

Period 7 FYTD

Period 7 FYTD

Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan FebFY14 16,448 7,968 9,384 40,337 22,415 23,574 19,909 38,049 30,398 9,237 14,351 9,472FY15 18,240 14,713 5,045 7,979 6,209 6,788 4,780 0 0 0 0 0Goal 21,031 21,031 21,031 18,020 18,020 18,020 15,010 15,010 15,010 12,000 12,000 12,000R&A 1.88% 2.57% 1.20% 1.46% 2.25% 3.78% 1.93%

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

4.00%

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000Arch Solutions DPPM - Shipped Previous 12 Months

• ArchSol category continues strong performance based on extensive work in FY14• 35 pcs, feature strips not staying in place - Interim corrective action in place• 24 pcs various specials errors• 21 pcs - wrong color sent - operator error

Project Product Line PlantDefect Code / Descrip. Impact

PeriodImpact

Qty1 SAW Paint Color Privacy Walls Athens 2250 - MFG - Finish Coverage 6 2872 3 4 5 6 7 8 9

10 11 12 13 14 15 16 17 18 19 20

835

1,165

574

295

478

294338 355

0 0 0 0 00

200

400

600

800

1,000

1,200

1,400

PYE Ave/Mo. P1 P2 P3 P4 P5 P6 P7 P8 P9 P10 P11 P12

Arch Solutions Pieces Defective & Convergence Line (Active & Complete) Actual Def. Qty Target Achieved Period Convergence Qty

GLOBAL OPERATIONS 2015

PROCESSESHOW TO MOVE TO GLOBAL

Global Lean Quality Report Inventory Updated: 20-Aug-14

Priority "R" Group Report/Dashboard Name Description Freq. EQC AP E NA G AP E NA G AP E NA G Status Comments

1Leadership Meetings Customer Satisfaction

Accountability MeetingIncoming Orders/lines, Say Yes, Delivery Perf., DPPM dashboard.

W P C P C P C AP

1 Leadership Meetings Plant MBR DPPM, R&A, Projects - Plant View M AP E1 Leadership Meetings Category MBR DPPM, R&A, Projects - Category View M E AP G Pcs shipped by category-EMEA/APAC3 Leadership Meetings QOR AP E NA H Requires definition

n/a Customer Focus Say Yes W

2Customer Focus Perfect Orders -

DeliveredShipped complete, DELIVERED on-time

W/M/Q/YTD AP EData on delivery at customer

n/a Customer Focus Perfect Orders - Shipped Shipped complete, SHIPPED on-time W/M/Q/YTD1 Customer Focus Splits (quantity) W E AP Data availability AP and EMEA1 Customer Focus Splits PPM W/YTD E AP Data availability AP and EMEA3 Customer Focus LASER/QR Volume Number of claims filed per month M AP E G H LASER hold for CIC3 Customer Focus Responsiveness Time to respond - dealer claim (G001) M AP E H

3Customer Focus Customer Satisfaction

ScoreH

Requires definition

3Customer Focus Dealer Report Card Modification of existing NA report

NA AP E COMPSCNA changes complete…dealer validation.

2Customer Focus Customer Shot Clock Comprehensive customer/dealer

report (dppm, perf order, etc.)adhoc AP E G

Data requirements/availability

2 Systems Approach Alert Management Number of "Alerts" by region Q Y P C P C P C P C AP E NA G Requires definition2 Systems Approach Alert Management Number of "open" Alerts - Status Q Y P C P C P C P C AP E NA G Requires definition

EMEA SCNA

P P P

APAC EMEA SCNA GLB

P P P

P PC

APAC EMEA SCNA

P P P

P P PC C C

SCNA GLBAPAC

APAC

EMEA

Scope

P

FY'15 Q4 FY'16

Schedule

APAC EMEA SCNA GLBAPAC EMEA SCNA

APAC EMEA SCNA

APAC EMEA SCNA

FY'15 Q3

GLOBAL OPERATIONS 2015

PROCESSESHOW TO MOVE TO GLOBAL

GLOBAL OPERATIONS 2015

QUALITY BENEFITS

GLOBAL VERSUS REGIONALBENEFITS

Networking: Leverage of TRUE best practices … One system to evolve … Global conversation … Sense of belonging

Strategy: Clarity … Leverage … Integrated … CEO-Level … Branding

Structure: Standardized … Opportunities … Strategic evolution … Role clarity

Talent: Opportunities … Pull versus Push … Experiential vs role-based learning … Global development

Metrics: Aligned to customers … One language … Leverage of knowledge … Meaningful … Integrity

Processes: Alignment to business … Alignment to metrics … Scale

GLOBAL OPERATIONS 2015

QUALITY CHALLENGES

GLOBAL VERSUS REGIONALCHALLENGES

Networking: Language … Time Zones … Availability due to Matrix

Strategy: Focus … Alignment … Proactive vs Reactive

Structure: Fiefdoms … Economies of Scale … Justification

Talent: Paradigm shift … Talent “protection” … Inertia

Metrics: Transparency … Understanding … Competing methodologies … Conformance vs creativity

Processes: Energy … Level of variation … Tradeoffs

GLOBAL OPERATIONS 2015

THANK YOUOPERATIONS2015GLOBAL