© 2011 IBM Corporation
ISC SMART LeanISC SMART Lean
An Overview of IBM’s Lean Deployment Strategy
Rochester, MN
© 2011 IBM Corporation2
IBM Rochester Manufacturing SiteIBM Rochester Manufacturing Site Overview
Year Plant Opened: 1956 875,000 Sq Ft of space
– Largest IBM site under one contiguous roof Type of Product Assembled:
© 2011 IBM Corporation3
Power Systems
Power 750 Watson
Gaming Technology
Supercomputing
Worldwide Supply Chain
Global Customer Solution Center
Analytics and Software Development
Americas Finance Center of Excellence
Global Systems Software Support Center
Global Business and Technology Services
Cloud Computing
A Leader in Innovative SolutionsA Leader in Innovative Solutions
© 2011 IBM Corporation4
© 2011 IBM Corporation5
Incentive and Motivators for a Lean TransformationIncentive and Motivators for a Lean Transformation What are some of the key challenges this domain experiences?
– Customers expectations are increasing for more performance, cost and quality
– Highly competitive marketplace coupled with the economic downturn in 2008-09
– Multiple new products introduced; varying complexity of design• Inefficient and non-adaptive processes for these products causes delays in
prototyping and launch
– Increasing cost to maintain facilities and infrastructure, with the constant business pressure to reduce operational costs
– Mature workforce drives ‘passive’ behaviors
– Declining employee morale and engagement
Source: “The Supply Chain of the Future”, IBM Study, 2010
© 2011 IBM Corporation
What is Lean? What is Lean? Defining Lean:
“A systematic approach to identifying and eliminating wastes (non-value-added activities) through continuous improvement by flowing the product at the pull of the customer, in pursuit of perfection”
Lean is a set of processes, philosophies and improvement techniques that eliminate waste to improve operational efficiency and financial performance of a business
Lean is a term that is adapted from the Toyota Production System (TPS) where Lean methods were formalize and popularized
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© 2011 IBM Corporation
Why do we want to improve the process?Why do we want to improve the process?Our customers require from us accuracy, speed, reliability, responsiveness,
features and lower cost
To achieve these requirements, we have to constantly look at our processes to ensure we are meeting our goals in all these metrics
Nature of work - Value Analysis
Steps that are ESSENTIAL because they physically change the product / service.
The customer is willing to pay for them and they are done right the first time.
Value-added work
Steps that are ESSENTIAL because they physically change the product / service.
The customer is willing to pay for them and they are done right the first time.
Value-added work
Steps considered non-essential to produce & deliver the product / service to meet customer needs.
Customer is not willing to pay for step.
Non-value-added work
Steps considered non-essential to produce & deliver the product / service to meet customer needs.
Customer is not willing to pay for step.
Non-value-added work
Steps not essential to the customer, but allowing value-adding tasks to be done better / faster;Needed for control
Value-enabling work
Customer value-added steps require a “yes”
to all three questions:
1.Will the customer pay for it?2.Is the product transformed?3.Is it done right the first time?
Customer value-added steps require a “yes”
to all three questions:
1.Will the customer pay for it?2.Is the product transformed?3.Is it done right the first time?
(Also called non-value add essential)
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The Eight Lean Wastes, or, ‘DOWNTIME’The Eight Lean Wastes, or, ‘DOWNTIME’
INVENTORYAny excess storage or supply
MOTIONAny wasted motion to pick up parts/ information. Also, wasted walking
WAITINGAny non-work timewaiting for tools, supplies, parts, etc..
OVERPRODUCTIONProducing morethan is needed before it is neededTRANSPORTATION
Movement of parts and materials or information
NON-VALUEADDED
PROCESSINGDoing
more work than is necessary
DEFECTSRepair or Rework
EMPLOYEE TALENT NOT USED
Not using or being aware of people’s talent
VA
LU
E A
DD
ED
WO
RK
5 t
o 3
0% Toxic effects of waste
• Physical fatigue • Emotional fatigue • Increased frustration • Increased stress• Placement of blame• Decreased self-worth• Indecisiveness
Tip: The 8 wastes are – “D-O-W-N-T-I-M-E”
© 2011 IBM Corporation
House of Lean- Concepts and Knowledge ElementsHouse of Lean- Concepts and Knowledge Elements
Transformational Leadership
High Performing and Adaptive Culture
Clie
nt
Sa
tisfa
ctio
n
Em
plo
yee
Em
po
we
rme
nt
Pro
cess
Exc
elle
nce
Fin
an
cia
l Exc
elle
nce
Lean Vision of Success
Basic Knowledge(Getting Started)
Basic Stability
Structured Problem Solving
Plan -Do-Check -Act
Information & Support Systems
Strategic Planning
Continuous LearningOrganization
Lean 101Core Team Training
Science of Mfg.Web Lectures
LeadershipBook Clubs & Workshops
5S, Visual Management
Standard WorkProcess Map, Value Add Analysis
KaizenEvents
8D Problem Solving & A3 Process Improvement
DMAIC &DFSS FMEA
Decision Support Systems QFD
Visual Control Board
Deployment Leadership & VSM Management
SimulationModeling
Lean/Agile/LSSApplied Learning
HoshinPlanning
House of Lean Building BlocksCapabilities & Skills
Pull Value & Streamline E2E Flow
Pull Systems, Kanban
POUSSingle Unit
FlowProcess vs.
Functional LayoutResults Feed the
Organization’sBalanced Score
Card
MappingMapping
StreamStream
ValueValue
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© 2011 IBM Corporation
Streamline E2E Flow: Optimizing ProcessStreamline E2E Flow: Optimizing Process
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Process Flow Lean Waste
Root Cause Analysis
Opportunity Analysis
© 2011 IBM Corporation11
Lean Foundational Competencies: 5SLean Foundational Competencies: 5S Mission: To utilize the Lean team ingenuity along with Japanese 5s concepts to implement
organization, orderliness, and cleanliness for establishing a highly functional, visual, state-of-the-art manufacturing facility
What are the goals and expectations?
We will succeed in building a world class visual factory and “set the bar” for the future
We will all take personal responsibility for our work areas
We will establish the Lean stability required as a foundation to our Lean transformation
MF
G
AR
EA
© 2011 IBM Corporation12
Lean Foundational Competencies: 5SLean Foundational Competencies: 5SBEFORE AFTER
© 2011 IBM Corporation13
Lean Foundational Competencies: 5SLean Foundational Competencies: 5SBEFORE AFTER
© 2011 IBM Corporation14
Smart Lean Success MeasuresSmart Lean Success Measures
YEAR 2009 2010 2011 2012
Lean Certified Candidates Under Plan Improving >90%
Lean Projects Implemented Under Plan Improving >90%
Innovation Idea Implemented Under Plan Improving Exceeded Plan
5S/Kaizen Implemented Under Plan Improving Exceeded Plan
Internal Process Improvements Under Plan Improving >90%
© 2011 IBM Corporation
BusinessPerformance
Success
Process
Technology
Peo
ple
Lea
rnin
g
Innovation and continuous improvement enabled through process excellence and high performing organization culture
Innovation and continuous improvement enabled through process excellence and high performing organization culture
TransformationalLeadership
Adaptive Culture Process
Excellence
Building OrganizationalCapabilities for Business Transformation
Path Forward Change Paradigm
“Teach your associates to teach themselves and in that way you will strengthen the entire organization” – IBM
Founder, Thomas J. Watson, Sr. 1947
“Teach your associates to teach themselves and in that way you will strengthen the entire organization” – IBM
Founder, Thomas J. Watson, Sr. 1947
Balanced Scorecard
• Customer Value
• Financial Excellence
• Process Excellence
• People Learning & Growth
Path Forward* Approach to Lean Transformation
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*Path Forward is a global IBM business transformation initiative driven out of the corporate center for Learning and Development
© 2011 IBM Corporation
Lean Transformation Roadmap
Compelling Reason for Change ( Why leave where we are? )
Vision ( Where do we want to go? )
Transformational Leadership ( Who will take us there? )
Change Plan ( How will we get there? )
Enable advocates for change ( How will we enroll others to go where we want them to go? )
Path Forward Transformational
Leadership Development
Path Forward Transformation Teams
OCI©
Current State
OCI©
Preferred State
*Reference: Adapted form Dr . Marvin Washington
*The OCI is a registered Trademark of Human Synergistics International, Inc.- Dr. Robert Cooke
Our Approach to a Successful Change Initiative*Our Approach to a Successful Change Initiative*
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© 2011 IBM Corporation
Why Culture?Why Culture?
LEAN Disciplines are 90% People, 10% Tools
Adapted from:
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© 2011 IBM Corporation
Over the past 8 years,
the OCI has been used to
measure the current and
preferred states of the
STG/ISC Organizational
Cultures to identify the
key Levers for Change.
Significant culture and
business performance
improvement have been
realized.
Organizational Culture Inventory – OCI®
“Culture is everything” – Lou Gerstner (2002)Organizational Culture Inventory – OCI®
“Culture is everything” – Lou Gerstner (2002)
What is the OCI? Most widely-used and thoroughly-researched tool for measuring organizational culture
Quantifying and managing organizational culture is critical
Brings an organization’s values “to life,”
Supports the implementation of its strategies
Promotes adaptation, goal attainment, and sustainability
How does the OCI work? Provides organizations with a visual profile of their operating cultures (Current
Culture) in terms of the behaviors that members believe are required to "fit in and meet expectations."
These behavioral norms have a significant impact on the organization’s ability to solve problems, adapt to change, and perform effectively
Why do an OCI? Provides a reliable, valid, and true measure of culture—clearly distinguishing culture
and climate as distinct yet interrelated organizational variables
Supporting programs designed for strategy implementation, employee engagement, organizational learning, quality and reliability, and/or customer service (a balanced scorecard approach)
Human Synergistics International ®, 2012
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© 2011 IBM Corporation
Why Transformational Leadership?Why Transformational Leadership?
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Transformational Leader**
• Individual and collective consideration
• Attentive to employee and organizational needs
• Coach and mentor, encourages and recognizes
• Intellectual stimulation
• Challenges assumptions, takes risks and solicits employees' ideas
• Continuous learning and innovation is valued
• Inspirational motivation
• Challenge their employees with high standards
• Communicate optimism about future goals
• Role model through living the values of the organization
**Bass, B.M., Leadership and Performance, N.Y., Free Press (1985)
© 2011 IBM Corporation20
Leadership Impact (LI)
Assessment (SLT);
1:1 Debrief
Leadership Impact (LI)
Assessment (SLT);
1:1 Debrief
Composite LSI Reports;
Transformational
Communication Module
Composite LSI Reports;
Transformational
Communication Module
Life Styles Inventory (LSI)
(First Lines, Technical Leads);
1:1 Debriefs
Life Styles Inventory (LSI)
(First Lines, Technical Leads);
1:1 Debriefs
Identify Common Themes;
Implement Actions
Identify Common Themes;
Implement Actions
Update Management System to Sustain the
Change
Update Management System to Sustain the
Change
Path Forward to a Lean TransformationIllustration of a Transformational Leadership Roadmap
Path Forward to a Lean TransformationIllustration of a Transformational Leadership Roadmap
Senior Leadership
CommitmentSenior Leadership
Commitment
Develop Transformational Leadership Strategies
(SLT and First Lines)
Develop Transformational Leadership Strategies
(SLT and First Lines)
1
2
3
4
5
6
7
8
Composite LI Reports;
Transformational
Communication Module
Composite LI Reports;
Transformational
Communication Module
Kaizen, Lean Certif
ication, P
DCA, SDWT, G
emba…
© 2011 IBM Corporation
Lean Competencies: Using the right tools to address business challenges Lean Competencies: Using the right tools to address business challenges
Kaizen Events
• Simple Projects / Low Complexity• Very QUICK wins.• Low Analysis• Main Objectives
• Train Organization• Drive Business Benefit
Lean Projects for Certification
• Lean Wastes Identified• Opportunity Analysis • Moderate Complexity• Moderate degree of technical Analysis• Prioritized on Business Value• Moderate Time to complete
Lean Sigma BB
•High Complexity•Cross Functional
• High Risk•Long Duration• Large Payback
HIG
H C
OM
PLE
XIT
Y L
OW
LO
W N
° Em
ployee Engagem
ent HIG
H
All EmployeesOperator, Subcontractor,
Supplemental ,Team Lead, Manager, Supervisor,
Technical, etc
Subject Matter ExpertsTechnician, Team Lead,
Manager, Supervisor, etc
EngineeringAny Engineering level,
Any Area (Quality, IndustrialManufacturing, Testing, etc
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© 2011 IBM Corporation22
Lean Certification LevelsLean Certification Levels
BRONZE LEVEL
1. Complete LVC and Pass the Bronze Level Certification Examination2. Lead or Actively Participate in 1 Lean TACTICAL* Project3. Knowledge of 8 Step Structured Problem Solving
BRONZE LEVEL
1. Complete LVC and Pass the Bronze Level Certification Examination2. Lead or Actively Participate in 1 Lean TACTICAL* Project3. Knowledge of 8 Step Structured Problem Solving
SILVER LEVEL
1. Pass the Sliver Level Certification Examination2. Lead or Actively Participate in 3 Lean TACTICAL* Projects3. Coach and Mentor; Conduct Workshops or Kaizen Events using 8 Step* - Deployment and application of lean principles, concepts and methods within a work cell, work group or value stream
SILVER LEVEL
1. Pass the Sliver Level Certification Examination2. Lead or Actively Participate in 3 Lean TACTICAL* Projects3. Coach and Mentor; Conduct Workshops or Kaizen Events using 8 Step* - Deployment and application of lean principles, concepts and methods within a work cell, work group or value stream
GOLD LEVEL
1. Pass the Gold Level Certification Examination2. Lead or Actively Participate in 5 Lean TACTICAL* Projects3. Coach and Mentor; Conduct Workshops or Kaizen Events using 8 Step4. Lead or Actively Participate in 3 STRATEGIC# Projects
GOLD LEVEL
1. Pass the Gold Level Certification Examination2. Lead or Actively Participate in 5 Lean TACTICAL* Projects3. Coach and Mentor; Conduct Workshops or Kaizen Events using 8 Step4. Lead or Actively Participate in 3 STRATEGIC# Projects
* - Deployment and application of lean principles, concepts and methods within a work cell, work group or value stream# - Projects that demonstrate the transformation of a business or organization
Adapted from SME Lean Certification BOK
Gold practitioners help to lead the Lean deployment across an organization
Bronze Level practitioners help lead Kaizen events
Silver practitioners Lead Lean
Improvement Project teams
© 2011 IBM Corporation23
•Lean Certification Training• Transformational Leadership Training• Lean 101 Basics
OCI Workshop
• Review external best practice opportunities
Monthly 5S audit/Re-audit&
Innovation on Job
External Benchmarking 2x per quarter
•Project Management•Financial Roll-Out
2015 RoadMap
© 2011 IBM Corporation
SMART Lean ContactSMART Lean Contact
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Sathish Selvaraju
Office – Rochester, MN
Email – [email protected]
Michael V. Testani
Office – Endicott, NY
Email – [email protected]
Sreekanth Ramakrishnan
Office – Waltham, MA
Email – [email protected]
© 2011 IBM Corporation25
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