e - TRACC

ForewordWhat Does Good Look Like?Pat is the products director of CCI, responsible for the development, translation andmarketing of the TRACC product range.Pat started her career in corporate HR in the insurance and IT industries. Shethen established her own training and change management consultancy whichsubsequently merged with CCI. She completed assignments in the aviation, foodand beverage, brewing, pharmaceutical, clothing, heavy engineering and otherindustries in Africa, Asia, United Kingdom and Canada.PAT WHELANContinuous Improvement (CI) practitioners constantly ask us “What is good?” and “Whatdoes it look like?” Two years ago we realised we needed a broader approach to questionssuch as these, and decided to provide thought leadership and visual examples of bestpractice. Through this desire to add value in the CI community, the concept for ‘WhatDoes Good Look Like?’ (WGLL) was born.First we provided the WGLL website where members can gain free access to avast visual studio containing photographed examples of best practice. Sincelaunching the WGLL site, we decided to publish this, the second edition of the WGLLjournal. It combines the latest thinking of some leaders in the field, the expertiseof our consultants and the experiences of some of our clients who are successfullyimplementing CI. In this journal we share the best of the best in CI thinking and someoperational narratives we have observed and experienced in the last two years.CCI, the owner of TRACC, and its business partners have been in the best practice field for25 years. This has given us the collective experience to know why some clients implementbest practices well and why others have a more difficult journey. It basically boils down toclear strategies implemented in a disciplined and consistent way, and staying committedto the process over a long time. The organisations that do well have a solid understandingof why they’re on the continuous improvement journey, driving it to action whileconstantly monitoring and adapting. Not only are these organisations flexible, theyembrace change and constantly work at creating a greater understanding among theirpeople. Once the plants are performing well, these organisations create a culture ofsharing — the mark of a truly great operation.This journal is part of TRACC’s contribution to sharing and learning. We have learnt thatthrough sharing knowledge, thinking and know-how, the best simply implement better.We hope that this journal and the WGLL online community of best practice keep you andyour organisation inspired to continue learning and sharing.WGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net

WGLLTMWhat Does Good Look Like? (WGLL)What Does Good Look Like?an online community of best practicewww.etracc.netCHINAINDONESIAMEXICOCLEANING UP & OPTIMISING SPACESHIFT-BASED TEAM MEETINGSTAPPING INTO PRIDE - EVERY MEMBERCOUNTS - SENSATIONTRACC Ref:TRACC Stage: 45S------------------------------------------------------TRACC IMPLEMENTATION ACTION 4IA2Allocate Storage LocationsTRACC Ref:TRACC Stage: 2TEAMWORK------------------------------------------------------TRACC IMPLEMENTATION ACTION 2IA9Start Team MeetingTRACC Ref:TRACC Stage: 2LEADING AND MANAGING CHANGE------------------------------------------------------TRACC IMPLEMENTATION ACTION 2IA9Formulate and CommunicateWGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net

What Does Good Look Like? (WGLL)To register go towww.etracc.netToday online communities reach out across much greaterdistances than ever before. Technology allows for amuch richer participation that can be more meaningfuldespite limited ‘face time.’ Continuous Improvement (CI)practitioners are constantly challenged with the question, ‘Whatdoes good practice look like?’. Due to the constantly changingcompetitive landscape, the demonstrated best practice example/answer of yesterday may not apply today. More importantly, thereis a different example/answer for the various stages of CI.NEW ZEALANDTRACKING IMPROVEMENT PROJECTSWhile an online community of practice cannot replace the value of‘face time’, it does allow for knowledge sharing and for communitymembers to stay in touch between meetings.We offer the global CI community two collaborative learning services:1. Regular TRACC conferences combined with plant tours in eachmajor region around the globe.2. The ‘What Does Good Look Like?’ (WGLL) online community of bestpractice. WGLL is a membership service providing access to avisual studio filled with photographed examples of best practicesand tried and tested templates being used by leading globaloperations that are on the CI journey. Members can also sharetheir thinking and ask questions via the WGLL discussion forum.--------------------------------------------------------------------------------------------------------------------------------------TRACC Ref:TRACC Stage: 2FOCUSED IMPROVEMENT------------------------------------------------------TRACC IMPLEMENTATION ACTION 2IA6Initiate and Track Improvement ProjectsSLOVAKIAThe WGLL Visual Studio contains examples from a broad range ofindustries including brewing, food & beverage, healthcare, mineralprocessing, and packaging. The visual studio is dynamic and isconstantly growing. Companies that have already shared their bestpractice examples on the WGLL platform are:VISUAL INDICATION OFOPEN/CLOSE STATE--------------------------------------------------------------------------------------------------------------------------------------Through these organisations’ willingness to share their experiencesand progress in CI, excellent examples are available on what bestpractice looks like at various maturity stages. These visual examplesare what the WGLL members value the most. By gaining free access tothis content, you can:• benchmark your own progress by choosing to look at and sharethe visual examples that are applicable to your operation’s CImaturity stage• learn from other operations around the world and what otherindustries are doing• inspire and create the will to keep improving by studying theexamples in the next stages of CI advancementSince its inception in 2008, WGLL has gained hundreds of membersfrom Africa/Middle East, Australasia, Asia Pacific, Europe, LatinAmerica and North America.With WGLL, TRACC hopes to provide not only a new perspective, butalso allow users to gain an understanding of what CI communitieswant to share and how they wish to help each other in creating mutualunderstanding on many of the issues faced. In 2011, the service will beexpanded to allow greater group interaction and collaborative networking.TRACC Ref:TRACC Stage: 3AUTONOMOUS MAINTENANCE------------------------------------------------------TRACC IMPLEMENTATION ACTION 3IA6Implement Visual ControlsCLEAN AND TAGUNITED STATESThe WGLL service is complimentary. To join, simply register as amember and start sharing this free knowledge base. The service isavailable in English, Mandarin and Spanish.TRACC Ref:TRACC Stage: 2AUTONOMOUS MAINTENANCE------------------------------------------------------TRACC IMPLEMENTATION ACTION 2IA4Perform the Clean and Tag4WGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net

Strategy“As a company’s understanding of CI matures, they recognise the need to standardise the CIapproach and move from a project-based improvement approach to include a process-based one.”WGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net

StrategyLEAPFROG YOUR WAY TOWORLD CLASSAn innovative management system for implementing and sustainingcontinuous improvement (CI) methodologies.Glenn is the president of CCI Inc. (USA). He helped co-found CCI twenty five years agoand assisted in formulating and innovating the TRACC Management Solution.He has extensive experience in manufacturing strategy and implementing world classcompetitiveness philosophies and techniques. Glenn has consulted to numerous bluechip corporations in the USA, UK, Europe, Central America, Russia and Africa. He remainsclose to the TRACC innovation process as its footprint expands around the world.This white paper seeks to do a number of things. Firstly, it distinguishes three levels atwhich world class companies must manage knowledge and learning: execution level,systems level, and organisational transformation level. Secondly, it addresses aspects ofthe ‘holy grail’ of continuous improvement (the journey towards world class) and howto become a learning organisation. Sustainable transformation requires engagementat all levels as well as a management system that addresses the long-term, incrementalnature of culture-based change. Thirdly, it seeks to describe the evolutionary stages anddetails of continuous improvement (beyond the project level) and to situate these in anall-encompassing framework for a successful world class transition. It does so byaddressing the two primary paradigm shifts in operations management thinking sincethe Industrial Revolution (exemplified by Ford and Toyota) as well as aspects of Leanmanufacturing. Figure 1 illustrates the structural components of an effective IntegrativeImprovement System.The paper’s premise is that the long-termnature of the transformation requires a systemicapproach to managing such change. Featureswithin the system are identified and addressed in“The journey towards world classis long, arduous, and incremental.It is indeed a holy grail.”turn, describing these evolutionary stages and also details an all-encompassing frameworkfor a successful world class transition. Figure 2 shows five evolutionary stages of improvementfrom an expert-based approach through to an Integrative Improvement System that drivesculture-based improvement. Attaining each of these allows progressively increased returns.The paper describes the ways in which these evolutionary stages and features have beenbuilt into an all-inclusive system called TRACC. Companies starting the journey can use TRACCto leapfrog the decades of implementation experience required by companies like Toyotato develop their internal production systems. This will allow these companies to generateexponential savings and competitive advantage substantially sooner than those trying todevelop home-grown solutions.My proposition is that, without all the elements of the framework, the vision exemplified bythe CI journey will not be achieved.GLENN LEASKMultiple levels of learningWorld class companies successfully engage all employee levels to identify problems andthen ‘swarm over’ and solve these problems to build new knowledge. Companies seekingto do this must manage knowledge and learning on multiple levels at the:• execution level – how work is done• systems level – how effectively systems are used to prevent non-conformance• organisational transformation level – the process of creating culture-based changeThe journey towards world class is long, arduous, and incremental. It is indeed a holy grail.Leading companies that have successfully made this transition have done so over manyyears – often decades. While various methodologies used by some companies attemptingWGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net

Strategy - LEAPFROG YOUR WAY TO WORLD CLASSjourney have been considered ‘successful’(depending on objectives, scope, andcriteria), most such journeys have notbeen sustainable.Sustainable transformation requiresengagement at all levels as well as amanagement system that addressesthe long-term, incremental nature ofculture-based change.If we know what features have evolvedin world class companies’ managementsystems, and we introduce these in anintegrative system that companies new onthe journey can use, it will enable themto leapfrog many years of implementationexperience. Thus they would generateexponential savings and competitiveadvantage much sooner than companies seeking to develop this in-house.Modern management principlesThere have been two paradigm shifts in operations management thinking since theIndustrial Revolution. Both have been well documented and have advanced organisationalmanagement; and each was exemplified by two major automotive companies: Fordand Toyota.Henry Ford was responsible for the first big shift. His famous offer of “You can have anycolour, as long as it’s black” encapsulates a broad range of initiatives to standardise andreduce automobile manufacturing complexities. Such standardisation allowed themanufacturing and assembly process to be divided into a number of small tasks for relativelyunskilled workers. Thus, quality was drastically improved while costs were reduced. Thestandardisation process was also applied to management tasks to create the functionalorganisation we still use today.While this was a great step forward from the craft archetype used prior to Henry Ford’stime, this model still contained inherent inefficiencies. It assumes that only managersand technical experts can add value. It also relies on a top-down management style withprocess improvements only in functions. In this model, the role of operations is thusreduced to managing cost.After World War II, another paradigmshift emerged in Japan. However,it was only recognised in the Westfrom the early 1980s. The firstcomprehensive documentation ofthis new management model waspublished in 1990: Womack andJones’ The Machine that Changedthe World. This work described the“Successful Lean implementation requires arobust management system. Such a systemrequires three key structural components toeffectively drive the transformation process:maturity-based transformation, functionalintegration, and sustainability through athree-tiered system.”management systems used by top-performing auto companies, especially Toyota, in astudy that compared performance figures and processes in multiple sites across the globe.This model’s premise is that all employees must add value; the organisation must bedesigned around processes, value streams, products, and customers – as opposed tofunctions. There must therefore be a fundamental shift if we are to effectively lead andmanage people so as to bring about the required transformation. In this model, the roleof operations thus moves from cost management to exploiting operations as the ultimatesource of competitive advantage.Essential structural components of a management systemDespite many books, articles and white papers on the advantages of the managementsystem called Lean Manufacturing, companies have not seen sustained success as a resultof adopting this model. The few companies that have experienced success have typicallyundergone long-lasting and significant organisational transformation so as to make thismodel sustainable.Successful Lean implementation requires a robust management system. Such a systemrequires three key structural components to effectively drive the transformation process:WGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net

LEAPFROG YOUR WAY TO WORLD CLASS - Strategymaturity-based transformation, functional integration,and sustainability through a three-tiered system.Component 1: Maturity-based transformationThere is no quick-fix approach to changing anorganisation’s culture. Engaging all employees,developing their skills and competencies to effectprocess improvements, and the fundamental shiftin leadership style from ‘cop to coach’, take effortand time.Transferring process improvement ownership fromtechnical experts to front-line workers requiresstructural reorganisation around lateral processes.Employee skills and knowledge must also be built.Employees must be motivated to remove all obstacles(including traditional management’s tendency to solveproblems on behalf of employees). We can only holdemployees accountable as they become competent inevery new work element.A maturity-based management system needsa three to five year execution road map and mustmeasure exactly where a particular site or process areais on this journey. Appropriate implementation actionsare determined by the evolving maturity of the processarea and process-based team, ensuring consistencyin the long-term execution plan required by culturebasedchange.Component 2: Functional integrationOne of the key principles of the new managementmodel is that the organisation should be designedaround processes, products and customers.Multifunctional teams optimise processes and valuestreams to deliver superior products to ‘delighted’customers.This management system must drive this process-basedapproach and prevent possible sub-optimisation of functional improvement approaches.This means that the functional improvement requirements (quality, maintenance, planning,HR, etc) as well as all the continuous improvement methodologies (Lean, Six Sigma, TPM,TQM, WCM, etc.) are on the same platform and are executed simultaneously.Component 3: Sustainability through a three-tiered systemSustainable improvement does not result from the mere application of continuousimprovement tools. The introduction of autonomous maintenance checks, one-pointlessons, five why problem-solving forms, visual management boards, and so on are notsustainable without supporting systems and underpinning management principles.Sustainable change requires a three-tiered system; these three tiers are the managementprinciples, systems, and tools.An example in the quality function illustrates the three tiers:1.2.3.A fundamental principle of the modern quality management approach is: “Ensuringgood quality by controlling it at the source: in the process, by the operator, and atthe supplier.”The quality system will document the training plans, audit procedures, SOPs, qualityplans, critical control points, etc. to help ensure that control approach, measures, andprocedures have been formulated and are available.The operators will use tools such as run charts and SPC charts to ensure processesremain under control.An effective quality management system requires that the principles, systems, and tools bein place. This is true for all our functional systems.A complete management system requires that the management principles, systemsand tools are ready in all functions to ensure implementation sustainability, that thetransformation process be managed effectively according to a maturity-based system,WGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net

Strategy - LEAPFROG YOUR WAY TO WORLD CLASSand that the functional improvement approaches and CI methodologies are integrated.Figure1 illustrates the structural components of an effective management system.Figure 1:more than just toolsSustainable implementation requires that the toolsintegrate into an operating system and are bound by clearmanagement principles into a complete framework.A COMPANY’S CULTURE IS A RESULTOF ITS MANAGEMENT SYSTEMOPERATING PRACTICESAND TOOLSENABLING SYSTEMSPRINCIPLESan integrated approachImplementation cannot be done functionally. Every newcomponent of change becomes “the way we do work”.BEST PRACTICE MATURITYincremental sequence of implementationTransformation behavioural-based change requiresan evolution of the organisation and its people.The implementation approach must incrementallydevelop the maturity of the organisation.Legend:LMC - Leading & Managing Change, EHS - Environment, Health & Safety, TW - Teamwork,5S, VM - Visual Management, FI - Focused Improvement, AM - Autonomous Maintenance,AC - Asset Care, STR - Set-Up Time Reduction, QU - QualityThe evolution of continuous improvement towards a management systemA company’s initial approach to CI is typically project-based and often takes place only inselected functions. Companies will identify their critical systems – for example, the qualitysystem in the food industry, or the maintenance system in the aircraft or chemical industries.Due to the importance of such systems to a company’s survival, corporate will typically setup a policy document and then audit the site systems to ensure policy conformance. Theseare examples of functional improvement approaches.Organisations also typically adopt one or more of the standard CI methodologies. Aseparate function is usually created to drive the implementation of these methodologies;the approach adopted usually varies across sites in a global organisation.As a company’s understanding of CI matures, it sees the need to standardise the CI approachand move from a project-based improvement approach to a more inclusive, process-basedone. This evolution flows from the recognition that there is a limit to the number of systemicopportunities that can be accessed using a project-based approach to CI.The opportunity to engage all organisational levels (including the shop floor) to attack bothsituational and systemic problems as they occur, eventually becomes apparent.A recent industry trend is to develop and implement production or performance systems.Several such systems have been introduced into organisations. To date, there has beenWGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net

LEAPFROG YOUR WAY TO WORLD CLASS - Strategyno shared framework that allows for either the understanding or the benchmarking ofsuch systems.Benchmarking your improvement systemGlobal organisations intent on engaging employees and implementing currentoperations philosophies must evaluate their current continuous improvementmethodology, and must be aware of gaps that may result in failed implementation,as well as between different implementations. Companies that have undergone manyinitiatives will have experienced failure at some level.What then do we need to build into our management systems to enable us to successfullyand sustainably execute the long-term transformation process?Figure 1 depicts five stages of evolution in CI systems. Typically, successful world classcompanies have evolved through these stages as they have experimented with CI. If werecognise that companies that have been successful in finding the holy grail of culturebasedCI have done so through their management systems, we need to understand thesemanagement systems’ critical features.A question for companies starting this journey is: Can we get a head start in this longjourney if we build these features and structural components into our managementsystems from the outset?The paper is based on the premise that the long-term nature of the transformation requires asystemic approach to managing such change. Aspects within the system are listed below:• StrategyIs the end state vision clear? What will the new work organisation, determined bythe adopted management principles, look like? Is this vision described in themanagement system? Does the leadership group responsible for the managementsystem design understand the critical components and features of a successful system?Have these been built into the design?• StandardisationSuccessful learning across plants and value streamsrequires a standard approach, a shared end point, anda standard execution plan. This is the detailed ‘how to’– the step-by-step methodology that drivestransformation over multiple years, depending on thematurity of the site or implementation area.• IntegrationThe functional system (quality, maintenance, planning,HR, etc) improvement requirements need to be onthe same platform as the standard CI methodologies.All standard CI methodologies apply to operations, buthow and when will depend on the organisation’sprocess and maturity. All these CI methodologiesshould be incorporated into the same standardplatform as functional CI programmes. Detailed‘how to’ for all functions and methodologies mustalso be integrated to allow a seamless front lineexecution. There must be a shared dashboard toenable measurement and progress visibility of thesites and value streams in the supply chain in terms ofprocess and practice improvement status.• TransformationThe implementation phases for each function andthe CI methodologies must be documented anddetailed with the explicit understanding of the skillsand competencies to be built into the organisation.This should include organisational design changes tosupport engagement of multifunctional processbasedteams and customer-focussed value streams.• SystematisationSystems need to be updated and enhanced tointegrate with the front line tools, as these areimplemented to ensure sustainable use andapplication. These include elements such asWGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net

Strategy - LEAPFROG YOUR WAY TO WORLD CLASSSOPs, audits, schedules, managing competencyacquisition, etc.• Training and developmentImplementation is ultimately the responsibilityof line management. Initial deployment may involveusing facilitators to build the line manager skills aswell as ensure consistency across the organisation.The skills development requisite for sustainabletransformation requires that training be built intothe overall execution road map and deliveredjust in time with deployment of the new frontline tools, processes, and structures. Companiesstandardising their management system acrossmultiple geographies will require content andtraining in all relevant languages.• Roles and responsibilitiesRapid deployment across multiple sites andgeographies can be initiated by central andregional continuous improvement resources. The handover to line personnel and theresponsibility for building capability within each process and value stream need to beclearly documented and built into the performance management system.• Knowledge managementManaging and sharing implementation learning across the organisation will ratchet upprogress. Learning occurs at two levels: learning about implementation, and learning asprocess teams eliminate non-conformances daily (tacit knowledge). Sharing technologyin the management system for collaboration, against the standard execution framework,is essential to manage and share learning and best practice.• Results and trackingThe ability to track the sites’ implementation progress on project-based and process-basedperformance results is beneficial to employees and management alike.A structured and codified integrative improvement system enables exponential returnsA company’s management system can be benchmarked against a maturity matrix based onthe stages in Figure 2 against the above-mentioned components and features. The maturitystages for these features are:Figure 2:IMPACTNo cont. imp.No continuousimprovement plansor structure“Stagnant”Expert-basedImplementationapproach based onthe capability ofthe local expert“Learn as you go”(ad hoc)FunctionalExcellenceStructuralimplementationapproach withinthe functions“FunctionalExcellence”(systemic)IntegrativeImprovementSystemCodified andintegratedimplementation“OrganisationalExcellence”(situational andsystemic)LearningNetworkCulture of innovationand sharing of‘production know-how’“LearningOrganisation”(situational, systemic,and strategic)1950 20102013• No continuous improvementCompanies in this stage (Stage 1) manage their operations as a cost-adding functiononly. No formal improvement initiatives are in place.WGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net

LEAPFROG YOUR WAY TO WORLD CLASS - Strategy• Expert-basedThe focus of these companies is to minimise operations’ potential negative impactto the business. Internal financial control systems are the primary means for monitoringoperational performance. External experts (corporate staff or consultants) are used fordecisions on strategic operational issues and do CI at the sites. The experts have avision of where they want to go from previous implementation experience and aplan for how to get there. They’re often functional (maintenance, quality system, etc) ormethodology-based (Lean, etc). Different experts often have diverse end state visionsas well as different road maps for how to reach the end state. At this stage, CI is projectbasedand takes place mostly in the manufacturing sites. There is no standard CIapproach across sites. The transformation process and competency developmentrequirements for the organisation are neither documented nor understood.• Functional excellenceCompanies at this stage follow industry practice and seek competitor parity. Theplanning horizon for investment decisions is generally within one single businesscycle only. Capital investment often is regarded as the primary means for catching up tocompetition or achieving competitive edge.Companies at this stage (Stage 3) identify their critical systems, which depend on theindustry. (For example, the airline and chemical industries require fail-proofmaintenance systems. The consequences of failure in these critical systems areusually dire, with potential loss of life.) At this stage, these companies wouldhave pushed the evolution of their critical systems, codifying and standardising therequired system elements to ensure that all sites comply. A standard CI approach mightalso have been adopted to follow competitors’ approaches. The functional CI initiativesand adopted standard CI methodology are integrated but are not on the sameplatform. Competency development requirements within functions are understood,but there is no cross-functional visibility. Improvements are functional rather thanprocess-based. The standard approachesadopted have been translated to allow sitesin all geographies to comply. At this stage,most of the formal CI processes are stillin manufacturing.• Integrative improvement systemCompanies at this stage (Stage 4) aremanaging their internal operations as a meansto obtain competitive advantage. Operationalinvestments are screened for consistencywith the business strategy. Business strategychanges are translated automatically intooperational implications. Manufacturing is keyto major marketing and engineering decisions.Long-range initiatives (for example, culturebasedchange programmes) are pursued toacquire capabilities in advance of needs.These companies have evolved to a completemanagement system and have documentedbest practice requirements across all theirfunctional systems with accompanying roadmaps for the sites to close gaps with adiagnostic tool that measures current status.They have incorporated all CI methodologiesinto a shared platform with the functionalimprovement methodologies. At this stage,CI is process-based and the entire organisationis engaged in improvements across thesupply chain. While the incremental approachto the required organisational transformationis documented, the competency acquisitionprocess to move towards multifunctionalteams that optimise processes and valuestreams is driven by a documented andintegrated road map.The management system with implementationdetail and training programmes is availableWGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net

Strategy - LEAPFROG YOUR WAY TO WORLD CLASSin multiple languages to enable front line associates to be engaged across multiplegeographies. Included in the management system is technology to allow rapid sharingof implementation techniques and tacit knowledge between functions, shifts,lines and sites. Results are tracked against projects as well as key processperformance indices. Iplementation status can be measured across sites and valuestreams, allowing progress visibility of the transformation against the maturity curve.• Learning networkThis is where the holy grail of continuous improvement starts. Efforts are made toanticipate the potential of new manufacturing and supply chain practices andtechnologies. All aspects of the internal and external supply chain are used forcompetitive advantage.These organisations are learning at multiple levels, not only about improving processes,systems and practices, but also about improving the learning process. Systems arein place to encourage and facilitate learning and collaboration across sites within theorganisation as well as up and down the external value stream.The five levels are depicted in Figure 2. Attaining each of these allows progressivelyincreased returns.SummaryThis white paper sought to do a number of things. Firstly, it distinguished three levelsat which world class companies must manage knowledge and learning. Secondly, itaddressed aspects of the holy grail – the journey towards world class. Thirdly, it describedthe evolutionary stages and details of continuous improvement and situates these inan all-encompassing framework for a successful world class transition. This paper’spremise is that the long-term nature of the transformation requires a systemic approachto managing such change. The features within the system were identified and addressedin turn. The paper also addresses the five levels of organisational learning, with level 5representing thorough and integrated transformational behavioural-based change.The paper described the ways in which these evolutionary stages and features havebeen built into an all-inclusive system called TRACC. Companies starting the journey canuse TRACC to leapfrog many years’ implementation experience to generate exponentialsavings and competitive advantage substantially sooner than companies trying to developthis in-house. My proposition is that, without all the elements of the framework, the visionexemplified by the CI journey will not be achieved.----------------------------------------------------------------------TRACC is an Integrative Improvement System that transforms organisationsthrough functional best practice improvement and people development to realisesustainable process-based excellence.----------------------------------------------------------------------WGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net

Strategy“Many organisations are moving beyond a ‘tools’ approach to continuous improvementand are now either considering or actively pursuing an integrated productionmanagement system, or production system approach.”WGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net14

StrategyTOO FAR TOO FASTTen common design errors which undermineproduction system success.Dean is Phase 5 Group’s managing director overseeing business development, staffdevelopment and service delivery for the group’s North American clients.He currently works with clients throughout the Americas. Prior to forming the Phase 5Group, Dean had 10 years of professional experience as a consultant and trainer, andin research and product development in a variety of industries. In addition to the US,he has worked extensively in Latin America and speaks Spanish and French fluently.DEAN COOKIn 2009 my team and I had the pleasure of speaking to many manufacturing executivesof supply chain, manufacturing and continuous improvement in large, multinationalorganisations. We learned that many organisations are moving beyond a ‘tools’ approachto continuous improvement and are now either considering or actively pursuing anintegrated production management system, or production system approach.As more organisations take this path, and because of the need to make progress quickly,many are implementing the system without first giving careful consideration to its design.Here are ten common pitfalls:Defining what it is but not how it’s implementedDesign is based on deep content knowledge, but isn’t actionable at plant and line level.This results in different implementation approaches and lack of a standard framework formeasuring progress.Focusing on technical tools without first addressing basic systems, processes andstandardsThe emphasis is on advanced tools such as Six Sigma or Reliability Centred Maintenance(RCM) while skipping daily problem-solving systems and cleaning, lubrication andinspection schedules, among others. Small improvement opportunities aren’t addressed,while project-based improvements aren’t sustained.Pursuing multiple improvement agendas without integrationVarious improvement programmes are driven by functional needs such as maintenanceexcellence, Six Sigma, Lean and TQM. This not only dilutes scarce specialist continuousimprovement resources, but also creates conflict between improvement agendas andfunctional priorities.Trying to get too far (World Class, Lean) too fastGoing straight to self-directed work teams without first building team and interactive skillsor focusing on maintenance reduction without first stabilising equipment reliability. Also,setting unrealistic benchmarks, eg. ‘World Class in a year’s time’.Underestimating the personal change challengeAssuming operators, supervisors, line managers and site staff will get on board withoutdefining their new roles and responsibilities or responding to “What’s in it for me?”Failing to design in-line management accountabilityLine managers regard continuous improvement as a corporate/specialist responsibilityor as a temporary initiative. They don’t lead the continuous improvement effort, becausethey don’t believe it merits their time and attention.WGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net

TOO FAR TOO FAST - StrategyNeglecting to design a mechanism toleverage scarce specialist resourcesLine managers regard continuousimprovement as a corporate/specialist responsibility or temporaryinitiative. They don’t lead thecontinuous improvement effort,because they don’t believe it meritstheir time and attention.Failing to implement managementprocesses designed to sustainimprovementsWithout these sustaining processes,initiatives such as 5S are deployed toareas with much fanfare and all butforgotten six months later as the area buckles under production pressure.Neglecting to create a mechanism to identify and share learnings and practicesacross plantsThis results in isolated pockets of excellence within the organisation, but an inability toidentify best practice or replicate it across shifts, areas, sites and divisions.Failing to create a mechanism providing systematic visibility for senior leadershipinto programme progress and resultsThus the next leadership generation questions ‘cultural’ programmes such as 5S becausetangible benefits aren’t apparent immediately. The continuous improvement budget isseen as non-essential and staff is cut or programme commitment wanes.To obtain production system success, organisations must include not only the vision ofhow the organisation will operate under the system, but also a well thought-outimplementation process in the design. Anything short of a design considering boththe ‘what’ and ‘how’ might mean the production system effort will become nothingmore than a temporary corporate initiative that’s abandoned because of one or more ofthese challenges.WGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net

Strategy“Businesses are taking a refreshed view of supply chain strategy. The result is an end-to-endbusiness capability that’s prioritised to sense and translate demand into the supply network.”WGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net

StrategyCHANGING FACESupply chain and manufacturing thinking is changing fundamentally — not onlyin Europe and the United States, but in emerging markets as well.Roddy is senior vice president, Global Supply Chain for CCI Inc. Previously hewas senior vice president and a distinguished analyst at AMR Research. Roddy hasover 27 years of industry experience, most recently at South African Breweries, wherehe was also appointed to lead a portion of the SAB Performance ManagementIntervention. He travels, presents and advises global industry leaders onsupply chain best practices, supply chain strategies and manufacturingchange management.RODDY MARTINSupply chain, manufacturing strategy and performance improvement used to be an‘inside-out’ supply-focused discussion among logistics and manufacturing leaders.But spurred by recent economic challenges driven by structural demand changes, thisis changing to an end-to-end, ‘outside-in’ discussion with the focus on sensing truedemand accurately and responding profitably across the end-to-end business network.Leading companies have moved the priority to making balanced trade-offs in managinggrowth, productivity and assets across the business.Of course the prioritised ‘outside-in’ customer-focused supply chain discussion doesn’tmake ‘inside-out’ performance any less important; in fact, it puts even more pressure onreliable and repeatable product supply from manufacturing and supply operations.The goal is to make exactly what’s needed and deliver perfect orders and services.Fundamentally this is the crux of the business capability of sensing and respondingprofitably to demand, or demand–driven value networks, as the strategy is called inmany companies.The change is so significant that in leading companies across various industries thesupply chain strategy has become the business operating strategy. It’s spearheadingmajor transformation in the way companies manage sales and marketing, manufacturing,deliver products and services, sourcing, procurement and innovation.To drive this focus and execution, global manufacturers have appointed chief supplychain officers at executive level, and are prioritising development of new businessleadership talent and capabilities to support the change.New end-to-end supply chain strategyEvery business cares about growth, profitability and productive asset use. In the pastmany supply chain decisions were classically made from cost-to-deliver rather thanend-to-end costs-to-serve information. This resulted in unbalanced operationstrade-offs and one-sided decisions. As a result of cost-to-deliver priorities, supply chainand manufacturing leaders concentrated on waste reduction and cycle times insideplants but not on reducing variability from manufacturing operations in response to truemarket demand changes.However, with the global economic scenario of the last two years, traditional supplychain and manufacturing efficiency paradigms were challenged in their contribution tobusiness value. This was because of the lack of end-to-end cash and demand visibility,and poor collaboration processes across the business.Weak visibility and process management across the business led to inadequate workingcapital management and organisational effectiveness, as well as ineffective organisationalstructures and asset utilisation focused on the wrong goals.WGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net

Strategy - CHANGING FACEManufacturing, incentivised to utilise assets efficiently, continued to churn out producteven after true demand had fallen away dramatically and consequently locked in businessworking capital that needed to be flushed. In turn, the business was disconnected in theway it managed product portfolios and innovation. The business battled to operationaliseinnovation at the heart of growth.Even the billions spent on enterprise IT investments to improve transaction efficiency didn’tyield the expected returns. Reasons were: IT investments were made in application andfunctional silos and information wasn’t available to support the end-to-end processes andcontinuous improvement of supply chain and manufacturing performance aligned withmarket demand.Thus today’s transformation and change-leadership focus, for both leading medium-sizedand large global companies, is to build and continuously improve end-to-end demanddrivenvalue network capabilities.It starts at the source of real demand (the actual buyer) and includes translating thatdemand into value and the trade-offs that must be made across the operational supplynetwork. This has profound implications on continuous improvement strategies,performance metrics, change leadership and the use of enabling IT. Variability in supplyresponse is the enemy — in any form.Because the main concern of transforming the end-to-end supply chain has been elevatedto such a strategic level, it’s now being led and prioritised by the highest level businessleadership team. This has forced the leadership team to understand the end-to-endbusiness operation. While traditional supply chain and manufacturing efficiency hasbeen important and dominated performance discussions in the past, it’s nowacknowledged that costs alone aren’t crucial business growth differentiators and thebusiness can’t simply ‘save’ its way to growth.A business must determine what these new critical capabilities are that must bedeveloped across the end-to-end business. To explore and discover that capability, theleadership team is now tasked with challenging cross-functional discussions:• Defining and aligning buy and make side segments• Reducing non-value-adding complexity• Using end-to-end information visibility to improve growth and productivity acrossthe business• Using core processes such as sales and operations planning to translate demand andmake balanced trade-offs• A distributed organisational structure and competency model that supports organisationaleffectiveness across globally developed and emerging marketsContinuous improvement priorities have changedTo achieve and maintain balanced excellence, organisations should look at allinterdependent aspects of the end-to-end business and its processes differently.Traditional supply chain performance and efficiency metrics that preoccupied continuousimprovement discussions, now require more upstream and downstream context tocontribute to end-to-end business performance improvement.Thus today’s performance improvement agenda includes developing and improving newcapabilities and processes. These include using demand data and insights to advanceforecast accuracy and defining segments, based on buying and manufacturing behaviours,to address different characteristics in each segment appropriately.Even individual site manufacturing priorities have changed. Sites must operate as aglobal product supply network that includes suppliers and design partners. Local sitecharters must ensure that capabilities are in place to support matching supply todemand segments.Traditional continuous improvement approaches, such as Lean, Total Quality and SixSigma, simply aren’t enough on their own to improve customer-facing performance andsupport growth and productivity across the end-to-end business.ConclusionBusinesses are taking a refreshed view of supply chain strategy. The result is an end-to-endbusiness capability that’s prioritised to sense and translate demand into the supplynetwork. To support the refocus, changes are taking place in leadership and executionpriorities, organisational design, developing leadership talent, and priorities in theenabling IT Strategy.WGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net

03 StrategyStrategy“New thinking recognises that no one is better positioned to address anoperation’s problems than the people who do the work.”WGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net20

StrategyMAKING IT STICKHow to get to WCM and Lean, making itwork with a new management style.DAVID VERBLEDavid has been a performance improvement consultant and executive coachsince 2000. Prior to that, he worked for North American Toyota for fourteen years.He also has been on the workshop faculty of the Lean Enterprise Institutein Boston for six years and has recently become a faculty member ofthe Lean Management Institute of India. David has worked with clients inmanufacturing, healthcare, service, finance and higher education in North America,Europe, Asia and Australia.His training and experience have focused on performance improvement,Lean systems and tools, facilitation of strategic thinking and problem-solving,coaching, as well as delivering instructional and organisational developmentinterventions. He’s a founding member of the Lean Transformation Group whichprovides Lean implementation support to a number of manufacturing andnon-manufacturing clients.In my early days at North American Toyota, we were handed a world class facility withToyota Production System instructions and Japanese trainers, but had to solve theproblems ourselves. We often lose sight of the latter when trying to implementoperations based on world class practices. And failure to make line teams responsiblefor problem-solving or not entrenching continuous improvement as part ofmanagement and operations reinforces this notion.When Toyota defined the Toyota Way, it identified two fundamental issues: ContinuousImprovement and Respect for People. Two of three aspects identified when Toyotadecided which practices were core to its way of doing business, were ToyotaProblem-solving and People Development through the Job. These aspects indicatethat Toyota’s way of problem-solving is its continuous improvement process andrespect for people, which means recognising their ability to think and developing theirproblem-solving capability.Using this developmental approach, I’ll share an experience at a multi-site companyI’ve been supporting in their Lean transition. The regional director organised animprovement project involving four plants with similar processing operations. Operatorsfrom the four plants met at one of the sites for a value stream improvement workshoppresented by the regional continuous improvement facilitator and a Lean consultant.The team mapped the state of the common process flow, identifying bottlenecks,quality issues and other problems. They designed a future work flow state with majorchanges. This new process flow showed a 30% inventory reduction, an improvedfill rate and a 6% productivity increase. Similar results were achieved when teammembers implemented the improvements at their base sites.A few months later a consulting firm was hired to conduct rapid improvement projectsat all plants. They did more than 50 five-day spot improvements. Pilot projects wereselected based on identified opportunities for significant performance improvements. Theconsultants decided the solutions for each location and directed improvement changes.Their improvements often replaced or discontinued the operator teams’ earlier work.Changes were pilot-tested and once the desired results were achieved, improvements weredocumented. They then moved to other sites.Within about three months, plants went from showing no further productivityimprovement to an average 2% productivity loss. The consulting firm ascribed this topoor plant management. An informal follow-up by the regional continuous improvementleader found that where spot improvements were made, operators had minimumunderstanding of what was changed and why. They also had little idea how totroubleshoot changes when problems occurred. He also learnt that changes made by theconsultants increased process outputs initially, but then inventory soon built up andcreated line flow bottlenecks.WGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net

MAKING IT STICK - StrategyMy perspective on the abovesituation is: We set up manufacturing,processing or service operationsto provide a product or serviceeffectively and efficiently. Whetherthese operations are engineered orevolved from individual processesand practices, there are always manyproblems that prevent operationsfrom performing as intended.Old management thinking givesmanagers and specialists the roleof figuring out how to resolve anoperation’s problems. But thereare never enough managers andspecialists to be everywhere all the time to deal with problems. New thinking recognisesthat no one is better positioned to address an operation’s problems than the people whodo the work.Therefore, the role of managers and specialists is to help ensure that those doing the worksee the right problems at their level, recognising the importance of addressing them;and respect the thinking abilities of people doing the work, while coaching to develop theirproblem-solving skills.As we enter a new decade, greater interest in leveraging the power of employeeproblem-solving in a continuous improvement culture has emerged in manycompanies. This creates a dilemma for most managers who are now expected tolead engaged employees. There are few, if any, road maps for success through thisnew territory.The traditional command-and-control method of delegating tasks and focusingon accountability for results doesn’t create or sustain the type of environment needed.Employees don’t react well to being given responsibility and then feeling it’s been takenaway when managers take over the problem-solving.Is there an approach that strikes a balance between the responsibility for deliverables,focus of traditional management, and the opportunity to engage and think of theempowerment style? If there is, we don’t yet have a name for it.To be self-initiating problem-solvers, employees need a leadership and managementapproach that emphasises role, responsibilities, requirements and purpose, and thendemonstrates respect for their ability to think and learn. This is achieved by making sure thesurrounding conditions allow them to succeed, supporting their efforts through coachingand teaching when needed.The challenge of moving from a traditional results-oriented manager to a managerwho sees his or her role as leading, engaging, enabling and coaching the thinkingand performance of others, shouldn’t be underestimated. It’s a difficult transition formanagers whose own success has been based on their problem-solving and individualdrive. In short, you have to learn to leave your ego in the office.WGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net

Strategy“Smart companies seize competitive advantage through managing environmental challenges strategically.”23WGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net

StrategyLEAN AND GREEN —THE NEW WORLD CLASSBridget has extensive experience in facilitating and supporting organisationalchange, learning and development. She consults to national and multinationalcorporates in the fields of identity, brand and values management.Bridget was instrumental in developing the first TRACCs and more recently, hasled a research and development team in developing a TRACC for EnvironmentalSustainability.------------------------------------BRIDGET WOODSIngrid is a co-developer on the Environmental Sustainability TRACC. During thelast 12 years she has built up experience in the environmental and broadersustainability field.Her focus is on the environment/business interface, balancing the environmentalprotection with the production needs of business. Her experience has been gained inboth the public and private sectors, predominantly in the extraction industries. She iscurrently also involved with environmental training at a tertiary education level.INGRID WATSONThe threats to our planet from greenhouse gas emissions and other forms of pollutionand resource depletion, are becoming increasingly clear. Volatility and increases in energy,water and raw materials costs, increasing environmental regulation and a growing consumerdemand for eco-friendly processes and products, are on the rise. The new competitiveadvantage will be and, in many cases already is, ‘eco-advantage’. Harvard Business School’sMichael Porter describes two basic categories for competitive advantage: lower costscompared with the competition and product differentiation in terms of quality, featuresor service. In line with this thinking, improving resource productivity — the amount ofenergy or material needed per output unit — goes straight to the bottom line. Productdifferentiation through good environmental stewardship, can up sales and justify aprice premium as well as strengthen relationships with customers, employees and otherstakeholders. To survive and thrive in today’s new economic and environmental climate,going ‘lean and green’ might be the best move an organisation could make.Drivers of the new green business paradigmClimate change and emission regulationRising temperatures and sea levels, unpredictable weather conditions and disruptedecosystems, already are impacting livelihoods and industries. Forecasts predict climatechange in the form of drought and flood conditions that could affect productivity of currentfarming regions dramatically. Furthermore, as habitats change, they predict fundamentalchanges to which (and where) species will thrive or die. Agriculture, forestry and fishingindustries already are feeling the impact of the sudden loss or migration of species. Andwe see an increase in extreme weather events that influence the lives of millions, disrupttransport systems and halt business altogether.WGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net

Strategy - LEAN AND GREEN — THE NEW WORLD CLASSBeyond these direct weather and temperature effects, every company will face increasedregulatory policies to control greenhouse gas emissions. Regulations may take theform of higher taxes on fossil fuels or emissions trading (cap-and-trade); energy efficiencystandards or policies to ensure use of cleaner technologies. Many leading companies havecalculated their carbon footprint, are reducing electricity consumption and are investingin solutions such as renewable energies to reduce emission levels. Their experience showsthat taking early and voluntary action makes good business sense, drives innovation,offers new competitive opportunities and boosts profits. DuPont, for example, has seensignificant savings, estimated at US$2 billion annually through increased energy efficiencyand US$10-15 million annually from using renewable energy.Resource availability and costsGlobally, we’re seeing growing populations, changing lifestyles and increasedconsumerism, especially in countries such as China and India. Increased consumerismlifts the demand for, and price of, resources. Oil supplies are dwindling; water demand isoutstripping its availability while the quality of the world’s water is deteriorating steadily;and converted and degraded land is resulting in biodiversity loss and stressed ecosystems.Organisations able to reduce resource consumption through efficiency optimisation,waste reduction and product and process innovation, will cut costs and emerge aheadof competitors.Managing and converting waste products into raw materials can both add to the bottomline and reduce input costs. Using sludge from an SABMiller brewery as soil-boostingcompost is an example. The sludge, residue from the malted barley, hops and yeast, waspreviously removed from the brewery three times a week and disposed to landfill. As thesludge is now largely being reused as a nutrient source, its removal as waste has droppedto once a week, resulting in savings of about US$39 000 a year.No place to hideThe Internet has empowered consumers to seek out independent information onorganisations and their behaviour. Consumers also are able to use the Internet tocommunicate widely and almost instantaneously with other consumers around the worldand launch campaigns to advocate their cause. Sites such as Google Earth make visiblethe impact that some organisations are having on the natural environment anywhereon the globe.Organisations literally have nowhere to hide. To address consumer perceptions andconcerns, many release their own information in the form of annual reports or regularwebsite updates detailing the impact of their operations on the natural environment andcommunities. A number of initiatives such as the Global Reporting Initiative, the CarbonDisclosure Project and the World Economic Forum Global Greenhouse Gas Registerattempt to standardise reporting and encourage transparency from organisations.Supply chain greeningOrganisations are beginning to recognise that the environmental performance ofsuppliers can by association impacttheir business. Every supply chainelement affects the environmentalfootprint of an organisation’s productsand services. Organisations areengaging with suppliers to improvetheir environmental practices andincreasingly listing key environmentalperformance standards and practicesas requirements in supplier contracts.To green their supply chain, Walmartnow requires its major suppliers tomeasure and provide informationon their greenhouse gas emissions,solid waste production and waterWGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net

Strategy - LEAN AND GREEN — THE NEW WORLD CLASSInnovateInnovation drives the step changein environmental performancerequired to become ‘lean and green’.Innovation of processes, workplaces,supply chains and products results insubstantial savings and again createsnew competitive opportunities.General Electric’s ‘Ecomagination’initiative is an example of innovativethinking producing products thatare significantly more efficient oremit less greenhouse gasesor other pollutants, while stillgenerating profitable corporategrowth. Developing partnershipswith a range of stakeholders — NGOs, experts, government, communities and othercompanies — is key to driving innovation and improved environmental performance.Industry-wide concerns are often addressed more effectively through industrypartnerships that may standardise processes, or develop codes of conduct specific tothat industry (Esty and Winston, 2006). Partnershipswith government can allow businessesto keep abreast of and give input into legislative changes. NGO partnerships canfocus on specific shared resources, such as water. SABMIller recently partnered withthe conservation NGO, WWF, to tackle water scarcity in a number of its key operatingcountries by engaging with its supply chain, strengthening policy and sharing best practices.ConclusionSmart companies seize competitive advantage through managing environmentalchallenges strategically. They know that mismanaging issues such as pollution, toxinsin products and consuming large quantities of scarce resources, can be costly torepair, damage brand reputations that have taken years to develop, and can threatencontinuation of operations.Therefore, leading companies don’t only focus on managing environmental risks and costs,but also know that building environmental factors into their business strategy sparksinnovation, creates value and builds competitive advantage. As a result, these companiesnot only build more resilient, profitable and longer-lasting businesses, but also ensure asafer, healthier and more sustainable planet.----------------------------------------------------------------------“Businesses that ignore the overwhelming consensus to act on climatechange will miss out on one of the most seismic shifts in government policyand business strategy in history.”Andrew S Winston, Green Recovery----------------------------------------------------------------------WGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net

Strategy“Line managers need to play two key roles: manage employee work and performance; andmanage employees’ relationship with the organisation.”WGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net

StrategyTHE PEOPLE IMPERATIVEResearch from Washington DC-based Corporate Leadership Council (CLC) offers10 imperatives for first-line managers to maximise employee performance and retention.Roger is a senior director of Implementation Services with Phase 5 Group,supporting TRACC implementation for companies such as DuPont and Land O’Lakes.He has extensive experience as a trainer/facilitator and is an accredited TRACCMaster Trainer.ROGER PRICEFew would argue that first-line managers play a critical role in employee performanceand retention. But a more difficult task is to articulate what managers need to do and howthey should do it. With data from more than 90 000 employees at 135 organisations, CLCidentified a core set of imperatives.Using dozens of performance impact drivers (e.g. strategies, actions, experiences, orcharacteristics), CLC concluded that line managers directly influence the two mostimportant performance drivers. These are: providing fair and accurate informal feedbackand clarifying employees’ performance expectations. In addition, CLC learned thatline managers control most employee ‘intent to stay’ drivers, such as facilitating internalcommunication and advising on career development.To be effective people managers, line managers need to play two key roles: manageemployee work and performance, and manage employees’ relationship with theorganisation. For each role, line managers need to keep five key essentials in mind.Provide fair and accurate informal feedback — coming from a knowledgeable source(in particular, the line manager), this is the most effective performance managementstrategy for an organisation.Emphasise employee strengths in performance reviews — during formal reviewsmanagers should emphasise positives while grounding discussion of weaknesses onspecific improvement suggestions.Clarify performance expectations — a manager’s most important role in the formalperformance management system is to provide specific, outcome-focused clarification ofperformance expectations.Leverage employee ‘fit’ — match employees to jobs carefully. Employees who understandand enjoy their work significantly outperform those who don’t.Provide solutions for day-to-day challenges — one of the most important ways toimpact performance is by helping employees find tangible, immediate solutions tospecific work challenges.Amplify the good, filter the bad — in the unique role as conduit, a manager shouldstrengthen employee engagement by amplifying organisational traits that positivelyimpact performance, while filtering negative effects.Connect employees with the organisation and its success — take time to explain the‘big picture’. Employees who feel connected to the organisation and see how their effortcontributes to its success, engage with the organisation and do their best work.WGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net

THE PEOPLE IMPERATIVE - StrategyInstil a performance culture — whenpromoting open communication,flexibility, innovation and risk-taking,an environment fostering employeeengagement is created. This enablesemployees to perform at their best.Connect employees with talentedco-workers — helping employeesbuild a high-quality colleaguenetwork is one of the most importantroles. Exposure to talentedco-workers develops employees forhigh performance.Demonstrate a credible commitment to employee development — engagementgrows in a climate of organisational commitment to employee development. This requiresmanagers to implement development plans with the necessary resources and support toconvince employees of the organisation’s commitment to their development.Through these 10 imperatives, line managers can influence both direct on-the-jobemployee performance, as well as indirect performance. The latter being commitment totheir job and organisation, and overall discretionary effort level.WGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net

Strategy“We all need to find our own vantage point at the customer interface.”WGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net

StrategyCUSTOMER ADVANTAGEGlobalisation is an economic tsunami creating new supply chain dynamics.And for supply chain executives it’s time to innovate and change strategies.Professor Daniel T Jones is a management thought leader and advisor on applyingLean to all types of businesses across the world. He’s the founding chairman of theLean Enterprise Academy in the UK.More recently he organised the first Global Lean Healthcare Summit, wrote theLean Thinking for the NHS report and published the Making Hospitals Workguide to using Lean for improving hospital performance. He’s the author withJames P Womack of the influential management books, The Machine thatChanged the World, Lean Thinking and Lean Solutions. Daniel was Europeandirector of MIT’s Future of the Automobile and International Motor Vehicleprogrammes and Professor of Manufacturing Management and founder of the LeanEnterprise Research Centre at Cardiff University Business School.DANIEL T JONESLean thinkers know that you can learn much about an organisation by finding a goodspot on the shop or office floor (the Gemba) to observe what’s happening. From here youcan see how management thinks and how the work is organised. The shop floor actuallyreflects management.But everyone should spend time observing at an equally important place: the pointwhere the end-customer buys or uses the product or service. If your product is a hospitalemergency room, it may be the triage desk, or maybe a call centre handling telecombreakdowns. In essence, the supply chain reflects the end-customer interface.Much time was spent studying these situations. Unfortunately most manufacturing peopledon’t get to see beyond the shipping dock, because what happens downstream isn’t theirresponsibility. Likewise, those at the customer interface spend little time thinking about thesupply chain feeding them.In our experience, efforts to spread Lean beyond the factory and across the supply chaincan’t realise their full potential unless they start by working back from the end-user orcustomer. Developing suppliers upstream from manufacturing is only half the story. Theinitial Mura (variation not caused by the customer) is created at the customer interface.This causes much Muri (overburden) that in turn causes all the Muda (waste) throughoutthe supply chain.Upstream bufferingMura feeds on Mura all the way upstream (triggering the well-known Forrester effect).Unless the root causes of Mura are addressed, the supply chain will be much longer, lessresponsive, more expensive and less able to deliver the right products on time. Bufferingagainst Mura upstream helps considerably, but is only a sub-optimal solution. Wediscovered that you can only address the root causes of Mura passed upstream bycollaborating with those who deal directly with the end-customer. Good news is that thisactually opens up a powerful win-win-win opportunity to serve customers better whileimproving the efficiency and profitability of each supply chain participant.Value stream managers should begin their work by thinking back from the customer,understanding the root causes of Mura and working out the win-win-win opportunities ofworking with customers and retailers, distributors or service providers.There’s as much potential for Lean dealer/distributor development as there is for Leansupplier development upstream.WGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net

Strategy - CUSTOMER ADVANTAGEThe Creating Lean Dealers workbookby Dave Brunt and John Kiffpoints out that once you startmeasuring real customer fulfilment,it’s surprising how few cars areserviced and repaired right-firsttime-on-time(typically between 30 to70%). This service level is commonacross industries if you could but see it.However, as almost no attempt ismade to diagnose the work until thecustomer turns up, it’s not surprisingthat they then have to stock manyparts, scramble to find the necessaryparts, can’t plan the time requiredto do the work and can’t streamline work flow through the workshop. An unreliable andinfrequent parts supply system adds to the headache.Turn this around by developing a structured customer dialogue a few days ahead of arrivalto pre-diagnose the work. This changes unpredictable into predictable work for which partscan be pre-ordered and the time to do the work planned accurately. Thus it’s possible tosegment work types, standardise the sequence and flow of cars through the workshop, anddouble staff productivity.Parts kits for each job can be ordered as needed rather than holding parts in stock. And withthis signal of true demand, cost-effective rapid replenishment loops can be created backupstream all the way to the manufacturer with minimum Mura. The end result is 90% pluscustomer fulfilment, doubled workshop productivity and levelled orders, making it possibleto produce and ship in line with demand.Creating Lean Dealers shows how this same logic can transform all other dealershipactivities — from new and used car sales to body shops and customer account management.It will be a wake-up call to the auto industry still wedded to customer satisfaction scores andin denial about how poorly their sales and service processes actually perform. But it also hassome practical lessons for many other activities — from sales and service of equipment andinfrastructure to managing diagnostic and treatment processes in healthcare.If we’re serious about redesigning end-to-end value streams to create more value forcustomers using less resources and generating higher profits, we all need to find our ownvantage point at the customer interface.WGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net

Strategy“It’s often possible to give all operators something of their own to take forward, so thateach has contributed to the current best way.”WGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net

StrategyWORTH THE JOURNEYStandard Work is the foundation forcountinuous improvement.John is managing director of CCI Australia and a director of the CCI Group. Hehas a particular interest in large-scale projects in manfacturing competitiveness. Hehas over twenty years’ experience in the manufacturing industry as a consultant inworld class manufacturing. During this time he has led major interventions in industriescovering automotive, consumer goods, engineering, aerospace and packaging.He has lectured in operations management at both MBA and executive level and isan invited speaker at private and public functions.JOHN VAUGHAN-JONESIt’s widely recognised that standardisation forms the basis for continuous improvement.In their seminal Harvard Business Review article Decoding the DNA of the Toyota ProductionSystem, Steven Spear and Kent Bowen state that the first of four unwritten TPS rules isthat “all work shall be highly specific as to content, sequence, timing and outcome”.Standard work is important because as we standardise processes and technique, weminimise, or at best eliminate, one variability source — the operator’s practices — whilemaking it easier to identify and take action against other variability sources such as machineor material defects.But implementing standard work isn’t easy. To be successful, organisations mustaccomplish three primary tasks:• Gain consensus on the ‘right’ standard work at the appropriate detail level• Unlearn old habits and establish new ones• Establish a systematic process to review and improve standard workGain consensus on the ‘right’ standard work at the appropriate detail levelMost organisations that we’ve worked with in implementing standard work, start with asituation in which each shift-based operator has his or her own technique for running aprocess or machine. This personal technique, developed over many years, is sometimescalled ‘black art’ or ‘tribal knowledge’ and it’s highly valued within plants. It’s notuncommon to see operators applying this ‘black art’ to the machine or process whenstarting their shift — rearranging the workstation, adjusting process parameters andfine-tuning machine adjustments.When challenged to define ‘one best way’, each operator usually believes his/her techniqueis best. In some cases, physical ability or skills differences dictate different techniques fordifferent operators. But in many cases there’s an emotional attachment to the personalisedtechnique, rather than an objective review of one another’s techniques.The team’s task is to define standard work through a process which encourages all operatorsto offer their technique as a potential standard, while creating conditions for operators torelease that technique in lieu of the best way to operate the process. This requires carefulchange management. Done well, it’s often possible to give all operators something of theirown to take forward, so that each has contributed to the current best way.Unlearn old habits and establish new onesOnce operating teams agree on the right activities and technique, they then must supportall operators in adopting this standard work. A common pattern is to pay attention to andstandardise the technique during the first couple of weeks — referencing a glossy newwork manual — and declare victory. However, over time the focus on standard work fadesand old habits resurface. It’s not uncommon to find that the operating technique andindeed the process itself, contain significant unwarranted variability a few weeks later.WGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net

WORTH THE JOURNEY - StrategyTo guard against this, teams shouldestablish rigorous reinforcingprocesses, including self-audits andteam leader coaching, to ensurethat new habits are sustained. Thisis the substance and essence ofLeader Standard Work and whenabsent, variation will re-emerge.Systems always tend towarddisorder. Thus ongoing effort isrequired to sustain orderliness.We should expect nothing else.That also suggests that the longtermmanagement role always willencompass a good degree ofchecking in the form of LeaderStandard Work. And we shouldn’t see this requirement as a sign of failure. Done properly,Leader Standard Work should be nurturing and rewarding for all parties, as well as themeans by which the system is taught and lived.Improving the standardOnce operating teams are successful in adopting standard work, the final challenge is tocreate a meaningful feedback and improvement process involving all operators to test andimprove standard work over time. While some processes are fairly static in the short term,almost all production processes and work environments are subject to three types ofchanges in the medium to long term:• Ongoing changes in process inputs, including production planning, product mixes, rawmaterial variability and raw material substitution• Implementation of best practices such as Focused Improvement, Set-up TimeReduction, and Quality• Equipment and technology upgradesEquipment and technology upgradesOrganisations that are most successful in leveraging standard work for performanceimprovement clearly identify operational non-conformances and environmentalchanges (such as those listed above), which should trigger a standard work review in theirenvironment, building an efficient process for enacting improvements. This improvementcycle ensures that the operating team can take advantage of opportunities presented bythese changes, while minimising potential negative impact on process effectiveness.Not easy, but worth the journeyMost organisations will struggle with one or more of these tasks, especially whenembarking on the standard work journey. By developing standard work collaboratively,managing change effectively and developing a participative standard workimprovement process, organisations can build the foundation to improve and sustaintheir performance continuously.WGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net

IMPLEMENTATIONby Bill HughesAsset Care subject matter expert — CCI-GrowthconWGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net

MAINTAIN IT!Fast TRACC RCM is a more efficient and resource-friendly way todevelop reliability-based maintenance schedules.ImplementationThere have been many maintenance changes over the years because of a huge increasein the number and variety of physical assets (plant, equipment and buildings) to bemaintained throughout the world, increasingly complex designs, new techniques andevolving views on maintenance organisation and responsibilities.Maintenance is also responding to changing expectations. These include a growingawareness of both the extent to which equipment failure affects safety and theenvironment, and the connection between maintenance and product quality, plusincreasing pressure to achieve high plant availability and contain costs. Thus, maintenancepeople have to adopt new ways of thinking and acting, both as engineers and managers.SABMiller subsidiary, Grupo Cervecería Nacional de Panamá (Cervecería Nacional) inPanama City, is no exception to modern maintenance demands. The brewery wasintroduced to Reliability Centred Maintenance (RCM) several years ago by an externalconsulting company promoting aerospace-type RCM methodology, including inputfrom a US-based brewery. Sadly, attempts to translate into practice what had been learntfrom these sources met with little success.CCI was approached to provide an innovative fast track solution on 12 critical packagingmachines using minimum resources. The brief from SABMiller vice president manufacturing,Duncan Crow, was succinct, “We’re not in this to spend our lives analysing. We need toensure throughput and generate results rapidly. You should ensure that the length andbreadth of analysis is appropriate and that my team has confidence in what they’re doing.”To meet the required time scales, RCM analysis templates were sourced from CCI andSABMiller in Africa and used in combination with digital photographs of the actualmachine. These served as a vehicle for communicating failure modes, assessing currentcondition and a comparison base for implementing 5S on the actual machine.It’s a well-known notion in maintenance circles worldwide that RCM provides the userwith the most cost-effective way of realising equipment reliability. Unfortunately, mosttraditional RCM implementations in the past have resulted in long front-end analysistimes and large group analysis activity, which in most cases consigned RCM to just anotherfailed intervention.Thus, dispensing with the traditional RCM implementation approach of large groupanalysis activities, a flexible style was adopted in which only one specialist was withdrawnfrom the business at any one time. An action-learning approach was adopted duringanalysis of the first non-performing machine to ensure effective skills transfer to the teamand related specialists. Regular feedback sessions were held with the management team toexplain each step and its role in the asset care journey.Using the launch phase digital photographs coupled with the template approach, itbecame apparent that facilitation of the analysis sessions was made easy and front endanalysis time was reduced. On the palletiser, identified as the number one problemmachine, the entire analysis was completed within six working days, of which 10% wasviewed as once-off training time.In addition to the reliability-based maintenance programme developed for the machine,the specific focus was on using the existing high in-house predictive maintenancecapability and further realising the equipment operator’s potential of delivering acost-effective maintenance programme. During the analysis phase on the machine,other improvement opportunities were identified. Some, such as introducing a standardthree-tier root cause analysis system extending the 5S programme onto the machine andwork order management improvement procedures, already have commenced.Following completion of the first machine, Cerveceria Nacional’s facilitator team notedthe following, “Compared to the aerospace process introduced previously, Fast TRACC RCMis a more efficient and resource-friendly way to develop reliability-based maintenanceschedules. Furthermore, by concentrating on the actual failure mechanisms, we can identifyall problems causing poor machine performance.”WGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net

IMPLEMENTATIONby James Romero,senior consultant — CCI North AmericaWGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net

SHIFTING FOCUSLeader Standard Work (LSW) is truly about changing behaviours —from front-line leaders to chief executives.ImplementationIncreasingly, there’s recognition that the sustainability of any management system isLeader Standard Work (LSW). It focuses management on a process of producing, ratherthan merely expecting, results. Attention is transferred from what happened last week towhat’s happening today. Once the management team has gained a deeper understandingof these processes they’ll be integrated into the problem-solving culture.In Creating a Lean Culture, David Mann describes the substance of LSW as: “On this journeyyou learn to impose on yourself [as a leader] the same kind of disciplined adherence toprocess you now expect of operators in following their standard work.”Mann identifies four inter-related components to creating a management systemspecifically for Lean: Leader standard work; Visual controls; Daily accountability process;and Discipline. The foundation of the first three components rests on Lean leaders’commitment to discipline. Without the various management tiers following the daily tasksof their LSW consistently, the Lean system won’t produce the expected results and chaosmay ensue.Built into the fine details of the structured LSW are the very factors that make for flexibility.If, for instance, leaders at team, supervisory and value stream levels check charts and attenddaily meetings, they should be able to identify and remove production obstructions.Structured LSW also makes for efficiency and less wastage because management controllayering is built from the bottom up, based on what happens on the shop floor. Operatorsknow best why the production process is or isn’t working. For leaders and operators,visual control charts (rather than IT controls) make simple and concrete the process in whichthey’re involved. Daily accountability is ensured through shop floor (or nearby) meetings tofacilitate teamwork and problem-solving. And regular management gemba walks facilitate— through posing questions rather than issuing orders — not only learning Lean methodsby trainee leaders, but also introduce new ideas.Mann says LSW is the powerhouse of the Lean production method. “But a ‘cultural’requirement for Lean to succeed is the managers’ disciplined daily and consistentperformance of their standard work.”Structure of Leader Standard WorkLSW creates the structure and routine for all leaders to drive value-added actions, identifyand remove barriers, and routinely improve and audit processes. It’s either adopted or notas a tool for all management levels. Unless each management layer is connected to theother layer by the tool, LSW can’t be effective. This enforces behaviour and enables the plantstrategy for everyone to work in the same direction.In LSW roles and tasks, team leaders should allocate 100% of their time to LSW, withsupervisors spending 75%, operations managers 50% and plant leaders 25%.The continuous and never-ending Plan-Do-Check-Act cycle is a core LSW managementactivity. In Lean Production Simplified, Pascal Dennis says a manager’s job is to practiseand teach PDCA. “PDCA thinking must inform all our activities — from day-to-day kaizen toproblem-solving to strategic planning.”While simple in nature, the PDCA concept has various levels of understanding and requiresmany years’ practice. It’s considered one of the iconic pillars for the Toyota ProductionSystem’s success along with LSW. Its simplicity and effectiveness have eluded many in thejourney to transform into a Lean organisation and has contributed to less than successfulimplementations when not used.Plan — where do we want to go and how do we get there; Do — go out and try somethingnew; Check — confirm whatever was done and that meaningful results were achieved;Act — after whatever was done has achieved the desired outcome, make it a standard thateveryone impacted by it will follow.An Integrative Improvement System requires both the framework and operating system toensure and manage ongoing improvement. And the foundation of the operating system tosustain improvement is indeed Leader Standard Work.WGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net

IMPLEMENTATIONby John Vaughan-Jonesmanaging director — CCI AustraliaWGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net

THE SHARING GAMEKey characteristics necessary for true sharing ofcorporate know-how.ImplementationSophisticated software programmes have been the main enablers in structured approachestowards sharing corporate know-how. But a true understanding of what exemplifiessuccessful sharing is still lacking.Shallow copying happens across companies and between plants within multi-site ormultinational organisations. Some of the incidents discussed below took place within globalblue-chip organisations where copying was often easy to do, given the desire for replicationand system standardisation in these environments. The risk of blind copying is givenadded impetus through knowledge management systems such as Microsoft’s Sharepoint®(which is used in digiTRACC’s service and support module called TRACClog).Real life examplesBy applying lean approaches diligently, as well as careful thought and involvement, a visualcontrol technique had been developed for operators at a multinational giant’s mineralsprocessing installation in South America (Site A). This enabled operators and others in thearea to visually identify the operating condition of critical equipment through standardwork — and used in conjunction with a well-designed daily management system, washighly effective. This beneficial technique has been expanded across the site.Site B is an identical operating unit of the samecorporation located in another country. Afterseeing the technique at Site A, Site B managersintroduced it at their plant. Tool/technique“The tools, approaches and what’smeasured need to be different indifferent environments.”examples were replicated and implemented on identical equipment. However, within ashort time, the flashy new tool had begun to rust through lack of use, and in one application,the colour-coded visual indicator itself had been lost.Where did it go wrong?Transmission of and sharing specific templates and ideas usually aren’t the constraint.The real constraint is failure to create an environment driving improvement from a leanperspective, which requires great focus and perseverance. Once this is in place and thriving,the time is ripe for ideas or solutions to be seeded from outside the immediate environment.Some 15 years prior, the same thing happened across departments at a motor industryclient. I had assisted in implementing a visual daily management system on the engineassembly line. Results, typical of properly implemented lean approaches, were impressive(a 50% drop in defects per unit in 4–6 weeks for example). Managers from nearby processesnoticed the results and requested assistance to implement this early stage of a leanapproach in their departments.Pressed for time, I asked them to wait a few months. The impatient managers then simplycopied the engine assembly process. Unfortunately, what works in an assembly environmentwon’t necessarily ensure repeat success with a ‘copy and paste’ exercise in a machine-intensivecontinuous batch environment. The tools, approaches and what’s measured need to bedifferent in different environments.One manager was responsible for the engine block machining line where the machine,rather than the people, adds product value (capital-intensive process). So, if the machineruns smoothly and no machine-tool breaks occur, then no defects arise and takt is achieved.However, in an assembly environment, people need to follow detailed standard workpractices diligently to achieve the desired result.After three weeks of trialling his new visual boards for daily management, the engine blockmachining manager asked, “Why is there no information on my board, while your engineassembly boards are filled with valuable information by mid-morning?”Lesson 1: Copying a tool or technique without insight and understanding is highly likelyto fail.Lesson 2: Make sure that what you copy is appropriate to your process type (different leantools are applied to different process types).Lesson 3: Don’t blame the channel through which you copied when a tool or leanapproach fails. Blame yourself.WGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net

Implementation - THE SHARING GAMEReasons for failurePerfectly good systems, tools ortechniques, each with a good fitin a particular lean environment, failbecause of these common reasons:They were copied by enthusiastswho had insufficient understandingabout what it takes to grow a leanenvironment.Tools don’t make a lean environment.Lean is primarily a thinking process.It’s critical to create a situation thatsearches for and develops solutions,before attempting to short-cut thisprocess by copying solutions. But, once this environment is established and developing,borrowing ideas from others must become a key part of the process.Understanding your specific value-adding process is an important first step in the leanjourney, and insights from this will indicate the implementation process, as well as the mostappropriate lean tools.Beware of substituting systems or tools for thinking — you’ll fail.“The real constraint is failure to createan environment driving improvementfrom a lean perspective, which requiresgreat focus and perseverance.”There’s a need to differentiate between‘structural and irreversible’ solutionsto problems (such as moving a machine)and solutions involving behaviouralchange. It’s easy to imagine that ideasof the former type should be easy enough to copy and their benefits should belong-lasting by definition. This is indeed true. Not so for behavioural changes. Thesechanges are reversible and need to be developed with the people involved, firstby recognising the problem, then by accepting the challenge of solving it, doing so andbeing committed to maintaining the solution and developing supporting systems toachieve this, such as leader standard work.A Knowledge Management (KM) system implemented prematurely in a lean journeymight implode. And even if the KM system doesn’t implode, it may well be the catalystfor a failed lean journey. Decide on the priority and how to nurture the lean journey.A KM system implemented incorrectly or ill-conceived, could be your undoing. Butcorrectly implemented at the right journey stage, it could be one of your greatest assets.WGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net

IMPLEMENTATIONby Jacques van Heerdeninstructional designer — CCI ProductsWGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net

ImplementationBLENDED LEARNING ONTHE FACTORY FLOORThe question is not whether you can afford to implemente-learning — it’s whether you can afford not to.If your organisation has embarked on the journey to world class competitiveness,chances are good that continuous improvement is an essential part of the businessstrategy and that you have embraced the need for a competency developmentprogramme. After all, if you want your workforce to excel, you need to ensure that theyare willing, able, accountable and allowed to develop their abilities and knowledge.As part of this strategy, some kind of e-learning programme may have been implemented.And contrary to common perception, an e-learning programme could bring severaladvantages to the factory floor.The new e-learning: Integrated and Just-in-TimeInstead of implementing training as a separate activity where valuable production ormaintenance time is spent away from the shop floor, one could use technology toimplement a Just-in-Time approach to information and training. People are thereforeprovided with the essential information needed to perform their daily tasks, while alsoempowering them to continually improve their performance based on detailed, on-time,task-based instructions, support and feedback.“The goal is to take the guessworkout of a task and help the workforceto work safer, more efficiently andmore accurately.”The last few years have seen significantchanges in the way we think about e-learning.In particular, there has been a move awayfrom replacing formal classroom trainingwith online training programmes thatpresent the same material electronically. We need to change our basic approach to trainingand learning in such a way that it allows us to use all the tools at our disposal to improveand increase the opportunities for self-motivated learning.Performance support: Through the labyrinth with a GPS“I often describe performance support as job aids on steroids… Technology does amazingthings for the humble job aid.” — Allison RossettBlended learning strategies allow you to combine traditional, instructor-based trainingwith ongoing learning opportunities and performance support provided in the workplace,and integrated with each employee’s daily tasks. In this context, e-learning is any kindof training that is delivered electronically, whereas performance support is task-relatedinformation that members of the organisation can access when they need it (pull) and thatyou can send them when you want them to have it (push).The goal is to take the guesswork out of a task and help the workforce to work safer,more efficiently and more accurately. But there’s an added benefit — it also makes for moreeffective learning. People learn the most by doing, and integrated learning has long beenthe holy grail of training. As a result, it’s not just about how the initial training is performed— it’s also about providing ongoing, on-the-job performance support, using technology todeliver relevant, timely and specific information.E-learning… but not as you know itThink about the different ways of learning how to use a software application. You couldread the manual, enrol in an instructor-led course, do some online training, or download afree tutorial. These are all formal, structured training approaches.Conversely, informal training includes using the programme’s built-in Help features toget the required information. In addition, many helpful features are built into theinterface itself.Consider the descriptive names of options, which explain their functionality and messageboxes that appear when you need to do something. Some interface elements, such aswizards, even ‘tell’ you how to use them by guiding you through a complex process one stepat a time, or by forcing you to make decisions. All these features give you help and guidancewhen you need it most. Often, they are more practical than formal training because they’respecifically intended to help you accomplish a particular task while doing it.WGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net

BLENDED LEARNING ON THE FACTORY FLOOR - ImplementationFrom the shop floor to the top floorNow let’s look at an example from the factory floor. Suppose you are the global assetcare manager of a multinational company, and you want the company to invest in anew filling machine. To get sign-off on the acquisition, you need the go-ahead from theexecutive leadership team. So you arrange a webinar about the operational implicationsof the new equipment, detailing the benefits to asset care timelines and operationalprocesses. You invite the relevant stakeholders and because the information sharingsession is online, many of them can attend despite the fact that they’re in different partsof the world. You also record the webinar and upload it to the organisation’s internalsite, so that the regional asset care managers can view it at their leisure. Once the newequipment has been commissioned, you make a video recording of someone performinga changeover on the new machine, and make this available on the same internal learningsite. Then you post the video and an article about it on the organisation’s blog and e-mail,or Skype people to let them know it’s there. You also compile the list of changeover stepsand create a schedule for when and how changeovers should take place. Next you set up anautomatic messaging system that sends relevant personnel a reminder of the changeoverprocess they need to follow, exactly when they need it.Finally, you create a PowerPoint presentation that you publish on the same network,so that the internal facilitator can access it and prepare a formal training session for theset-up specialists. All these are practical examples of e-learning as a component of blendedlearning: using technology to share information and transform every operational area ofthe organisation into a learning centre.Implementing intelligent e-learningA simple way to minimise the cost of setting up a dependable platform is to use yourorganisation’s existing technologies — many of which involved significant investmentsof their own. Think of a tradesperson who needs to perform an intricate on-siteinspection as part of scheduled maintenance. In this case, e-learning could be as simpleas documenting the procedure in the Computerised Maintenance Management System,or CMMS, so that they can access the exact procedure to be followed at any time. Moreover,e-learning characteristics make it easier to adapt than formal training programmes,so it presents a unique solution to some globalisation challenges, such as providingcustomised training material for different sites around the globe. For example,you might implement digiTRACC, TRACC’s online Integrative Improvement System.This system allows customised learning for a site or region and then sharingthat information throughout the global company by adding photographs, examplesand case studies to each best practice implementation action. The benefit of this is thatonce the system is set up, there is no limit to the number of people who can use it to learnor how often it can be updated.However, a blended learning strategy can only succeed if it becomes ingrained in thecorporate culture. For this to happen, it needs the full support of leadership at allorganisational levels, and it needs to be implemented alongside a cultural changeprogramme that encourages knowledge sharing.It is also important to decide how and why you want to utilise e-learning in yourorganisation — that is how to deliver it in a way that not only communicates the necessaryinformation, but simultaneously increases the organisation’s competitive advantage.So when planning or adopting a blended solution, think carefully about why e-learningis useful, what it can do, and how it can be used. For many years, organisations tendedto upgrade software every time a new version was released, regardless of whether itwas an intelligent investment in new technology. However, experience has clearlyillustrated the perils of ‘technology for technology’s sake’, so it’s important to rememberthat the technology should serve the instruction — not the other way around. Andno form of training will ever replace adequate planning, well-designed processes, or amotivated workforce.It’s equally important to realise that e-learning is only as effective as its implementation —the information needs to be kept current, relevant, and useful.WGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net

CASE STUDYWGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net

Case StudyGLOBAL TRACCINGThe global TRACC implementation to support the DuPont Production System (DPS) bodeswell for the organisation’s future success.Company backgroundFounded in 1802, DuPont has a rich history of science andinnovation. The organisation puts science to work bycreating sustainable solutions essential to a better, safer,healthier life for people everywhere. Operating in morethan 70 countries, DuPont offers a wide range of innovativeproducts and services for markets including agriculture,nutrition, electronics, communications, safety and protection,home and construction, transportation and apparel.DuPont’s production environments range from immenseindustrial sites running high-volume continuous chemicalprocesses, to small seed packaging operations. In 2006,the organisation began developing the DuPont ProductionSystem, a multi-year effort to standardise and improvemanaging and operating practices across its globalmanufacturing base of more than 300 sites — leveragingthe power of ‘One DuPont’. Through DPS, DuPont seeks todo three things: drive operating discipline through bestpractices; align a diverse, global organisation; and drivebottom line returns.SituationThe operations team began applying the DuPontProduction System in its largest sites, with Sabine RiverWorks in Orange, Texas piloting the programme.By identifying and delivering against improvementopportunities, the DPS team drove success while buildingcapacity and understanding for implementing bestpractices at the sites. As DuPont initiated the programme,Don Wirth, DuPont’s vice president – Global Operations –Corporate Supply Chains, established a Global ProgrammeManagement Office (GPMO) to conduct a weekly shortcyclefeedback and improvement process. Based on feedbackfrom the initial sites, this GPMO recognised threerequirements to improve the DPS programme:• An execution framework to focus operating teams on bestpractice implementation in an integrated, systematicand sustainable way• A process to engage and empower shop floor operatingteams to contribute to plant performance throughoperating discipline and effective problem-solving• A way to reach all sites across a diverse global footprintto include small and far-flung sites, with scarceprogramme resources to support themAs the DuPont operations team sought to build a processto meet these requirements, Phase 5 Group, a US-basedmanagement consultancy with expertise in designing,developing and supporting the implementation ofintegrated production management systems, introducedthe DuPont Operations team to TRACC. According toChris Koelsch, DuPont’s supply chain director, the companywas attracted to many TRACC features, including:• Speed — it was available at the time of need and couldbe deployed rapidly• Codification and indexing — the TRACC road mapcodifies a step-by-step, logical and integrated bestpractices implementation process, creating a commonstructure for all to follow; the road map is descriptiveenough to provide guidance to operating teams onwhat to do next and how to go about it, while beingsufficiently flexible to be relevant across a diverse rangeof operating environments• Built-in assessment tool — tied to the integrated contentto adapt the road map to each area while providing anongoing measuring and monitoring capability• Languages — it was available in multiple languages tosupport global use by frontline operators• Web-based — for good visibility into performance andpractices at every location• Common platform for internal body of knowledge —the ability to add detailed DuPont-specific guidance forbest practice implementation• Accountability system — the ability to add evidentiarystandards to define expectations for implementationstandards• TRACC Community — other companies travellingthe same journey provide the opportunity tobenchmark and learn from one anotherActionDuPont procured a global TRACC licence in January 2009and began introducing the DPS TRACC process to its sitesthe following month. By the end of 2009 — less than a yearinto the deployment process — steering committees hadinitiated the DPS TRACC process at 56 sites in all globalregions. Within those sites, 59 implementation task forcesled by line managers had assessed their current operatingpractices, developed systematic improvement plans, andbegun implementing the TRACC best practices.ResultsDuPont is seeing early signs of success with the DPSTRACC programme. The first sites to commence TRACCwork have started reporting performance gains and apositive impact on work discipline and culture. Based onits initial successes, the GPMO plans to introduce the DPSTRACC process to an additional 70 sites in 2010, and toreach DuPont’s entire global operations footprint by 2012.DPS TRACC programme manager Tom Takacs said, “We’restarting to hear a positive buzz about the programme.Word is getting out and people at sites which have yet tobe introduced to the programme are asking when theycan begin. It’s a logical, well thought-out approach whichbenefits everyone involved.”Creating a standard approach which is being embraced byDuPonters globally, is a testament to the thoughtfulnessand discipline with which the organisation has deployedthe TRACC framework. This bodes well for the group’ssuccess by leveraging it for aligning the organisation,improving operating discipline, and securing bottom lineresults for years to come.WGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net

CASE STUDYWGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net

Case StudyKETCHUP WITH IMPROVEMENTHJ Heinz has embarked on a global roll-out of the TRACC IntegrativeImprovement System across 65 operations.Company backgroundAs one of the world’s largest food manufacturers, Heinzis a $10 billion global company, enjoying number one ortwo market share in more than 50 countries. The group’stop 15 power brands account for more than two-thirdsof its annual sales. Founded in Sharpsburg, Pittsburgh,Pennsylvania in 1869 by entrepreneur Henry John Heinz,it employs approximately 32 500 people around the globe.Heinz’s Ketchup & Sauces, Meals & Snacks and Infant/Nutrition are sold in most countries all over the world.Adapting to changes in the global economy, theorganisation focuses on the five ‘Cs’ — consumers, costs,commodities, cash and currency. As such, it’s gearedto make swift tactical adjustments, innovate for valueconsciousconsumers, emphasise margins and cash, andinvest in the business continually.SituationBent on planning, innovating and navigating activitiesfor sustainable long-term success, Heinz researched asystem that would allow global standardisation of itscontinuous improvement processes, while allowingregional implementation flexibility. In short, it neededa system enabling best practice management acrossmultiple plants, integrating its regional/local improvementinitiatives such as Six Sigma, Lean, WCM and TPM.Developed over 18 months, the Heinz Global PerformanceSystem (HGPS) includes integrating its global supplychain by better leveraging direct and indirect procurement,rationalising the manufacturing footprint and drivingcontinuous improvement initiatives. By introducing TRACC,it is also aiming to reduce short-term gains dependency.ActionEach of the company’s factories is at a different stage, butfoundations have been built by introducing the Leadingand Managing Change TRACC. Time has been spent withmanagement to help them understand their role in thechange programme. Thereafter the company will expandinternal skills to move the process forward. It’s aboutsustainability — engaging and mobilising change throughthe people. A major focus is on changing behaviour at theexecution point.Heinz’s fastest-growing emerging markets are Russia,India, China, Indonesia and Poland, which represent morethan 40% of the global population and 15% of the world’sGDP growth. The TRACC system is being implemented in allthese countries as well as many others from across NorthAmerica, Europe and Australia.ResultsCommitment has been the key. It started with seniorleadership and is being pushed down through theorganisation. As the programme grows, Heinz should seea shift from a senior leadership-driven programme to anemployee-owned one.Heinz started with four pilot sites in North America andone site each in Spain, Italy, The UK and The Netherlands.So far it has rolled out the TRACC Integrative ImprovementSystem to more than 20 sites across the globe.HEINZ PILOT SITESNORTH AMERICATHE UNITED KINGDOMSPAINITALYTHE NETHERLANDSNORTH AMERICA---------------------------------------------------------------INDIAN OCEANAFRICAEUROPEWGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net

Case StudyCULTURE REVOLUTIONWhen the people at ILC Brewery realised that there were better ways to manage thevarious processes and lines, there was a change of culture at the company.Company backgroundILC was founded by Don Rafael Meza Ayau in 1906.SABMiller took a controlling interest in both the breweryand the company’s carbonated soft drinks (CSD) Coca-Colabottling plant in 2001. Four years later, ILC became awholly-owned SABMiller subsidiary.SABMiller first entered the Latin American market with theacquisition of Cerveceria Hondurena in Honduras. It wasthe first international brewer to enter Central America.Since then the group has expanded its Latin Americanoperations into six countries, including Colombia,El Salvador, Ecuador, Panama and Peru.SituationAs is usually the case with resurgent economies,competition in every business sphere is fierce and mostmultinationals want a piece of the action. Markets andmarket share are changing continuously, no less so inthe bottling industry. Therefore, the challenge at ILC wasto implement World Class Manufacturing best practicesin a market undergoing quantum changes and on a plantwith ageing equipment and machinery.ActionThe TRACC intervention emphasised quality improvementsand worker training in housekeeping and hygiene. Todevise a prioritised replacement strategy, existingequipment was evaluated rigorously in terms of materialrisk, energy usage and environmental impact.On the brewing side, beer losses dropped from 11.31% in2001 to 5.96% in the 2006 financial year, placing it topsin SABMiller’s global rankings. Line efficiencies improvedfrom 78% to 91%, while brew house performance went upfrom 5.85 to 7.15 brews a day.Electricity consumption showed a marked improvement,down from 18.5 to 10 kWh/hl. Similar reductions wereexperienced with water and thermal energy consumption,dropping from 11.15 to 4.36 hl/hl and 164 to 99.32 MJ/hlrespectively.In 2005, ILC became the first Central American plantto receive the Coca-Cola Phase 4 Quality Award, amanagement-driven measurement system of all plantprocesses and strategic objectives. This demonstrates thecompany’s commitment to WCM. It has since becomethe number one CSD plant in SABMiller’s global rankings,with lowest syrup, sugar and pre-form losses and bestfactory efficiencies.Management also confirmed that there had been a culturechange: people realised that there are better ways tomanage the various processes and lines. And thecompany’s quality awards prove the prevailing mindset.PRODUCTION BEFORE AFTERBeer losses 200111.31Implementation concentrated on 5S, Teamwork, VisualPerformance Measurement and Focused Improvement.The latter was accompanied by intensive trainingand outcome expectations were communicated to allemployees.Beer losses 2006Line efficienciesBrews in one day78%5.865.96%91%7.15Daily production meetings focused intensively on keyperformance indicators. Changeover time reduction alsoreceived attention.ResultsSoon the prevailing downtime of 3-4 hours dropped toless than one hour. Despite the mean age of the plantequipment, innovative ideas and adjustments assistedgreatly with the positive outcomes.ElectricityWaterThermal energy18.5kWh/hl11.15hl/hl164MJ/hl10kWh/hl4.36hl/hl99.32MJ/hlWGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net

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Case StudyK-LEAN FOR KELLOGG’SEVOLUTIONCompany backgroundHeadquartered in Battle Creek, Michigan, USA, is Kellogg’s,the world production leader for cereals, snacks andalternative food. The group has a presence in 180 countries,with eight plants in Latin America; four of them in Mexico.In 2009, Kellogg’s had sales of $12.6 billion for flakes,cookies, cereal bars, breads, waffles and alternative food.SituationKellogg’s decided to implement K-Lean, the name for theglobal journey to implement world class manufacturing,at all its plants in Latin America. Before embarking on theWCM journey, Kellogg’s defined several challenges: worldeconomic changes; supporting consumers and clients; howthe supply chain could be a facilitator and not an obstacle;developing people to manage the business in the future;and creating future results today.After a selection process, Kellogg’s selected CCI to supportK-Lean implementation at its Mexican plants in Queretaro,Linares, Toluca and Mexicali. The Linares, Toluca andMexicali plants were targeted to receive training in Leadingand Managing Change, Teamwork, Focused Improvement,and 5S. During the assessment phase the Queretaroplant was identified as ideal to convert plant capacityimprovements quickly into product sales and cash flow.ActionA 42-week plan was designed using additional CCIresources to expedite achieving incremental capacity,reducing downtime and waste.The Process and Packaging lines were selected as pilot sitesat all the plants. After a Loss and Waste Analysis, historicalproduction volume data was evaluated to determinemain breakdown causes. From this LWA, improvementprojects were identified for execution during the next sixmonths. A critical issue was using new teams to implementK-Lean and achieving improvement at the same time.Opportunities were identified for non-planned shutdown,cleaning, fumigation and adjustments. Also, otheropportunities that surfaced during project executionwere added to the list. Each product requires a specificproduction equipment combination, especially at theCorn Combo line.The fumigation procedure was unique to the overallplant and needed almost one shutdown day a month.Equipment cleaning procedures weren’t standardised —each operator followed his own procedure, while othersdidn’t know any procedure or time required to completeadjustments.Another important matter was energy consumption(water and steam) which contributed to non-plannedinterruptions of steam supply and waste generation inthe production process. Instability made it difficult toschedule set-up preparation and changeovers. Theseunpredictable events led to frustration in certainproduction and utility processes.Fortunately, a training programme was developed forthe three task forces and internal trainers were trained tosupport the implementation process. Thus the foundationfor quick wins was created. MDT and SBT meetings werestarted to track and focus on problems during shifts andthey reduced response time by more than 50%.Maintenance Efficiency Analysis (MEA) showed thatnon-planned shutdowns caused big problems at thepackaging lines. This guided the maintenance area to focuson problems caused by spares and resources unavailabilityand maintenance inefficiency. Preventative maintenanceproved to use less time and increase availability ofcertain equipment.A valuable tool during implementation was LeaderStandard Work for line supervisors in their daily or routinework and process mapping during problem-solvinganalysis sessions. LSW allowed remarkable improvementopportunities in various production process areas.ResultsSet-up Time Reduction (STR) was used in the fumigationprocess, achieving a drop of 40%; allergenic cleaning timeat line 14A in Packaging improved; and the number ofboxes produced increased by 50%. Initially STR was alsoapplied to the steamers’ maintenance on the Corn Comboline and a potential reduction of up to 40% in the first stageand up to 64% in the second stage was shown. As a resultof these improvements, plant capacity was increased by3% on a per annum basis. Although additional capacityimprovements were identified, these will require carefulstudy and the completion of Kaizen blitz projects beforethey’re implemented.Intangible benefits from the TRACC implementationinclude the improvement of worker-supervisor-managerrelationships, and expansion of the internal capabilityof the Kellogg’s Mexican plants to conduct training usingstaff resources.In supporting K-Lean, the TRACC implementation achieveda major expansion in training hours per worker andexpansion of the number of trainers.Productivity has improved and using teamwork,management noted a number of operational changes:more eyes looking for and eliminating waste; reducedproduction cycle time; 4% pa capacity increase onPackaging; reduced non-productive time (cleaning andfumigation); 40% time reduction for fumigating all plants;66% time reduction for cleaning dryers (Proctor).The TRACC programme is being rolled out in India andColombia for Kellogg’s.WGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net

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Case StudyAQUATIC SENSATIONWorld class operations are well on their wayat Danone Aqua in Indonesia.Company backgroundAqua was established in 1973 as the pioneer of bottledmineral water in Indonesia and soon expanded to 13factories throughout Indonesia and one in Brunei. In 1998a strategic alliance was established between Aqua and theDanone Group, making Danone Aqua the largest mineralwater company in the world in terms of water volume. Itsupplies Aqua products to more than a million outletsthroughout Indonesia.SituationDanone Aqua initiated WCM because efficiencies werebecoming lower and machinery was getting older.Systems weren’t working and there was no safety culture.Although the workforce was huge (7 500 people), therewas little discipline and only top management wasdriving improvements. The major objective of the WCMprogramme was to engage all employees and get the shopfloor involved in driving sustainable improvement in safety,quality and performance.In 2007 the WCM programme kicked off and was rolled outin three waves: four factories started in March that year,the second wave of four in March the following year, andthe third wave of two factories in March last year. All wave1 sites were supported by CCI for one week a month forthe first two years, then one week per two months for thethird year, and now one week per four months. For wave 2and 3 sites, the supporting schedule was ramped down ata faster pace.Three new smaller sites have been added to the programmerecently and will be supported entirely by the Aqua coreteam. This core team consists of 12 people: core teamleader, master facilitator, master trainers and elementleaders for every Foundation and Pillar TRACC. Mostmembers are corporate managers but some are seniormanagers at the plants. For a multi-site implementationprogramme it’s imperative to have a strong core team thatcan drive implementation throughout the organisation.ActionThe objective is to have approximately eight internaltrainers per plant. From this large group of internal trainers,the two most competent people were promoted tomaster trainer, a corporate role. When element leaders arecorporate managers, the challenge for them is to keep intouch with what’s happening in the plants. The core teamshould take things that worked well in the wave 1 sitesand replicate them to the other waves. By the same token,what didn’t work well in wave 1 sites should be reviewedand improved.For instance, in wave 1 sites not enough time was spent ontraining Fast TRACC RCM and Autonomous Maintenance.There also was a considerable time lag between trainingsessions and implementation of the Business CentredMaintenance and Autonomous Maintenance (AM) Pillars.That’s been improved in wave 2 sites.After the pilot line completed Stage 2, the implementationstructure workload increased dramatically — the reasonbeing that the pilot line now has to reach Stage 3,WCM is rolled out to new lines and at the same timethe Pillars are being implemented. This puts strain on thesteering committees, internal facilitators and internaltrainers. An added challenge is then to sustain the resultsand keep momentum once the pilot line has completedStage 3 Foundations.ResultsAqua’s wave 1 sites are completing Stage 3 FoundationTRACCs. Savings of 11.2% in production efficiency havebeen made since launching WCM.Wave 2 sites are halfway through Stage 2. Although Aquahasn’t rolled out the Set-up Time Reduction (STR) TRACC,one of the plants used the STR approach in a blitz formatto reduce the lid changeover time on water cups. Theaverage time before the blitz was 5 minutes. Now it takesthem 3 seconds on average to change lids. Another blitzwas done on sanitation time. The same plant reduced itsdaily sanitation time from 60 to 15 minutes.Wave 3 sites are completing Stage 2. Good results wereseen on water usage ratio. For instance, on one of thesites, the ratio was reduced by 36% after a PIP (ProfitImprovement Project).Recently the core team facilitated a ‘Jug Blitz’ across theplants. Aqua fills on average 750 000 5-gallon water jugsa day. The objective of this country-wide AM exercise wasto ensure everybody understands how the jug washershould work, bring the machine back to its original state andreduce downtime, electricity consumption, water anddetergent usage. Unique in this approach was that notonly the shop floor was involved, but also supervisors, headoffice directors and even the vice president of operations.Said master facilitator, Agus Budian, “TRACC helps managementto see people as an important part of thebusiness, and assists managers in every departmentto understand when and where to play their part in astructured way.”WGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net

CASE STUDYWGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net

Case StudyOVERHAULING SUCCESSLand O’Lakes Spencer Plant in the USA is deferring large capital expenditure byimproving the condition and reliability of critical equipment.Company backgroundA national, farmer-owned food and agriculturalcooperative, Land O’Lakes Inc., recorded sales of$12 billion in 2008. The company does business in all50 US states and more than 50 countries. It’s a leadingmarketer of a full line of dairy-based consumer, foodservice and ingredient products across the United States;serves its international customers with a variety of foodand animal feed ingredients; and provides farmers andranchers with agricultural services and supplies (feed, seedand crop protection products). Land O’Lakes also providesagricultural assistance and technical training in more than25 developing nations.Since 1921 the company has been member-ownedand -directed. Today, it’s the third-largest cooperative inNorth America with about 9 000 employees, 3 200 directproducer-members and 1 000 member-cooperativesserving more than 300 000 agricultural producers.SituationIn 2008 the cooperative partnered with Phase 5 Group toimplement TRACC, internally branded as the Land O’LakesProduction System Shop Floor Deployment, across theDairy Foods division.The implementation site, located in Spencer, WI, makesprocessed cheese for restaurants and delicatessens andsupplies leading snack food manufacturers.During the initial opportunity analysis of the pilot linethat produces 5-lb blocks of delicatessen cheese, theimplementation task force identified equipment nonconformancesat the pouch forming machine thatcaused significant downtime. In fact, senior managementhad already requested an estimated US$300 000 for anew machine.ActionAs part of the pilot line’s Business Centred Maintenanceimplementation, a cross-functional team of operatorsand mechanics conducted a clean and tag exerciseon the pouch former. They identified and corrected allnon-conformances, thus returning the machine to a ‘likenew’ condition while setting standards for operating andmaintaining the machine correctly.After completing the clean and tag, the maintenancedepartment set out to fix outstanding work orders andwrite new PMs for the machine, while the productiondepartment created visual work instructions for machineset-up and operation. Today, maintenance and productionjointly use structured problem-solving techniques toaddress outstanding issues on that machine, focusingparticularly on eliminating film jams.ResultsDue in large part to the success of the clean and tagexercise — at a cost of about US$50 000 — seniormanagement withdrew the US$300 000 capital requestfor a new pouch forming machine with no plans tore-submit for years to come. In addition, maintenanceand production have partnered to run a second cleanand tag exercise on the filler machine and plan to do thesame for each piece of equipment on that line.Apart from improving equipment condition, theimplementation task force reported that the clean andtag exercises led to a greater understanding of theequipment and its trouble spots by both operationsand maintenance.What they do with that knowledge will be key to continuingthe good work already done.Sixty-six non-conformances were identified during theclean and tag exercise in three categories:• Deterioration issues, including the machine’s structuralcondition and deterioration of clearances and tolerances• Set-up issues, meaning that the current machine assemblywas difficult to set up with precision• Design issues, including the need for guard modificationsto enhance workers’ ability to clean and inspect equipmentWGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net

CASE STUDYWGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net

Case StudyALWAYS BETTERRecording incredible process improvement results a few months after embarking on itsWCM journey, XStrata’s Eland Concentrator has exceeded all operational objectives.Company backgroundXStrata Alloys is the world’s largest ferrochrome producerand a leading primary vanadium producer. In addition, thegroup owns carbon and anthracite operations that supplykey raw materials to its ferrochrome smelters, plus a jointventure interest in a platinum group metals mine andconcentrator. The latter is the Elandsfontein mine, alsoknown as Eland Concentrator. In operation for about threeyears, it’s the first plant in the growing XStrata PlatinumDivision in South Africa. This shallow 183 million tonresource has an estimated 22.7 million ounces of platinum,palladium, rhodium and gold.SituationIn the platinum processing industry, profitability isimpacted significantly by ore quality (Precious GroupMetals grade per ton — PGM g/ton). To operate at a goodprofitability level, the grade ideally should be above3.5 g/ton. But if it’s lower, the process needs to beextremely efficient in extracting sufficient PGMs from theore to make the operation profitable. In this instance, thehead grade could drop as low as 2.5 g/ton.Thus a world class programme needed to ensure:optimised performance in specification grind, lowertailings and higher recoveries — even though ore grademight drop; and sustained performance with ingrainedworld class practices throughout XStrata’s platinum division.Some of the goals were: grade improvement from 150 to170 g/ton; a 10% cost reduction; concentrate chromecontent of less than 2.5%; and a 70% recovery efficiencyduring the first half of 2009 and 75% in the second half.XStrata group platinum divisional manager Buang Molotoexplained the rationale for embarking on this journey,“We want to be the primary vehicle for building criticalcompetitive capabilities for the Elandsfontein platinum mine”.ActionConsisting of XStrata staff and personnel from theoperations and maintenance contracting companyMinopex, the management team decided on a holisticapproach covering all aspects of a world class organisation.This led to the following implementation approach in thejourney branded Faranani, meaning ‘always better’:• A loss and waste analysis and best practice assessmentdetermined the exact performance improvementopportunities and best practice maturity. This clearlyindicated major opportunities around process variabilityin a concentrator process.• A steering committee was formed with key resources toensure removal of all barriers and the necessary supportto plant resources for implementing and sustaining bestpractices.• On commencing the journey, a Six Sigma approach wasfollowed to address performance improvements. Thisled to a dramatic reduction in variability and subsequentplant stability improvement.• Best practice implementation started in parallel toensure that performance improvements weresustainable and to create a world class culture throughoutthe organisational levels. The goal was sustainablebest practices at shop floor level and the TRACCimplementation included the Leading and ManagingChange, Teamwork, Visual Performance Measurement,5S, and Focused Improvement foundation practices.Key personnel were trained as internal trainers toestablish internal capability for improving thesepractices continuously in the future, and decreasingthe impact of resource changes such as promotions/vacancies.• XStrata has a rigorous and comprehensive sustainabledevelopment programme. During implementationit was found that the TRACC approach would assistEland Concentrator significantly in aligning andimplementing the required sustainable developmentpractices and processes. Hence the initiation of TRACCand sustainable development standards mapping.ResultsImproved results can have significant benefits in theprecious metals industry, but on the downside there aremany variable factors that impact the effective and efficientoperation of a concentrator. Therefore, it’s imperative tohave good plant stability, high recoveries, low tailings (i.e.as little as possible PGMs being discarded at the back-endof the process), and excellent equipment availability.Impressive process improvement results, enabled theconcentrator to operate profitably even when receivinglower grade ore. Although a significant zero baseopportunity exists financially, the initial target was to gainR141 million revenue growth through the intervention, ofwhich more than R100 million has been realised already.The Eland Concentrator team has been achieving platinumrecovery performance targets since October 2009, fivemonths into the journey.Despite substantial progress in performanceimprovements, best practices will pose the biggestchallenge. Nevertheless, the group is expecting greatresults in years to come.Noteworthy advancement has been made on theLeading and Managing Change front and an effectivecommunications strategy has been developed. The 5Simplementation results became evident through visibleimprovements in the lubrication rooms, toolboxes,workshop layouts and safety since the start of the journey.During the Teamwork and Visual Performance Measurementimplementation, team meetings were formalised and anengaged workforce is becoming more evident by the day.A problem-solving culture is emerging and successes arecelebrated monthly.Although excellent performance improvements have beenachieved, the steering committee ensures that theseperformances are made sustainable with correctimplementation of the current best practices. Specialisedpractices, such as Asset Care, are now enjoying attentionand continuous focus is being placed on communicationsand shop floor ownership.WGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net

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Case StudyPHARMACOLOGICAL ACTIONFaced with the potential threat from competitors overtaking its generics market share,Polpharma implemented world class manufacturing to counter this.Company backgroundAs one of the largest and most modern Europeanpharmaceutical plants, Polpharma specialises inmanufacturing both generic and over-the-countercardiological, gastrological and neurological drugs.Founded in 1935, the company combines tradition andexperience with modern technology and the highestmanufacturing standards.After years of nationalisation, a milestone in Polpharma’shistory was its privatisation in 2000, funded solely throughPolish capital. This gave the green light for thoroughchanges, which turned it into a strong business and the topplayer in the Polish pharmaceutical market. Together withthe Medana Pharma Terpol Group, in which Polpharmais a majority shareholder, it’s the Polish market leader byvolume of drug packages sold. Reinforcing its positionin international markets, the company has representativeoffices in Russia, Lithuania, Kazakhstan, Belarus, Vietnamand the Ukraine.SituationCompetition in the generics market, particularly in Centraland Eastern Europe, is robust. Thus there was a need forimproved flexibility. Since flexibility might be a growthlimitingfactor, it could be addressed either via new capitalinvestment or improving inherent process flexibility.Direct goals of the WCM implementation were to lowermanufacturing cost and active ingredient losses, shortenchangeover times and increase flexibility in response tomarket needs, without upping stock levels.ActionFollowing a steering committee workshop, part of theDry Forms section was identified as the pilot area, asbottlenecks usually were encountered with the threegranulation lines and, to a lesser extent, packaging. Stage 1of the roll-out embraced the TRACC Best Practicesof Teamwork, Visual Performance Measurement,Focused Improvement, and 5S, supported by Set-up TimeReduction blitz exercises in the pilot area. This wasfollowed by broadening implementation androll-out to other parts of the company in Stage 2 — theremaining Dry Forms sections, as well as the Wet Formsand Infusions departments.Problem areas identified on these lines included a systemiclack of treated water for washing on the granulationside, as well as complex and extensive changeovers forpackaging, often causing prolonged stoppages. Threeline operator teams were assigned to the granulation andpackaging lines while profit improvement projects wereintroduced simultaneously.A structural analysis approach was followed with theemphasis on shortening washing time (changeover) ofthe granulation lines, as well as curbing changeover onthe packaging lines.ResultsImmediate results were impressive — washing time on thegranulation lines dropped from 14.7 to 8.7 hours, whilepackaging posted a similar improvement after a SMED blitzwith changeover time decreasing from 11 to 6 hours.But results in the pilot area were most inspiring in terms offinancial gains — direct cost savings amounted to €150 000pa of which €110 000 was due to yield improvement alone.Future investment costs of €968 000 were also averted.To support production improvements, Polpharmarequested additional support via a supply chain project.It was aimed at limiting stock levels and improvingwarehouse service flexibility, which resulted in betterplanning and delivery capability. Elements of TRACCFoundation practices also were rolled out to warehousingto improve communication and cooperation throughTeamwork, order and organisation through 5S, and tostimulate better support for production departmentsthrough VPM. It’s anticipated that once the company’sWCM implementation reaches maturity, it will up itsproduction volume by 50-70 million packages a year. Theaim also is to increase the number of key brands from thecurrent 10 to between 20 and 30.WGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net

CASE STUDYWGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net

Case StudyCREAM OF THE CROPOne of the success factors in Beyti’s history was its TPM implementation.Company backgroundIGI Beyti, the food and agricultural division of Egyptianprivate investment company, International Group forInvestments, is setting that country’s dairy market onfire with rapid growth and an expanding product rangewhich is fast becoming a quality benchmark.Established in 1998, Beyti currently employs more than600 workers. It produces a wide range of high-qualitydairy products for local and international markets,including UHT milk in varying sizes, fruit juice, yoghurt andcheese. Even the company’s name, Beyti, which translatesas ‘home-made’, reflects its wholesome products.SituationCultural change was needed in the plant to improveperformance in a sustainable way. This would make itpossible for Beyti management to unearth new talentfrom inside and develop them into leaders. In addition, milkand yoghurt production volumes needed to be increased.Beyti produces a range of blow-formed HDPE in 250 ml,1 000 ml and 1 500 ml sizes. Blown bottles arrive atthe production line sealed and are opened with a knifeblade machine (neck trimmer). Excess material is passedback up the packaging line to the blow moulder forreuse in new bottles. Excess material savings on this linewas on the priority list.ActionThe TRACC assessment in 2005 resulted in a master planand specific performance improvement targets as the18-month programme’s framework. This was followed byanother implementation phase from June 2008 to June2009 to roll out the TPM best practices all over the plantand sustain best practices implemented in phase one.It’s important to note that implementation has followed atwo-pronged approach:. TPM best practices were implemented step by step,driven mainly by an internal steering committee adedicated TPM facilitator and departmental task forces,supported by licensed internal trainers — this approachis crucial to ensure ownership and sustainability. In parallel, a loss and waste analysis sparked a series offocused Profit Improvement Projects (PIPs) to eliminatewaste and generate quick savings to ensure that theprogramme was self-funding. These pilot projectscentred on reducing fruit losses in the yoghurtdepartment, preventing overweight bottles inblow-moulding, modifying the machine programmeto optimise milk losses in processing, and also reducingchangeover times and defects on the UHT lineA practical and hands-on consulting approach createdmuch enthusiasm on the shop floor. Furthermore, witha company-wide incentive scheme, shop floor teamsparticipated and shared in the improvement projects.ResultsThe performance improvements exceeded all expectations.Also, the plant is much cleaner, tidier and moreorganised than before — which was great news for Beyti’sHACCP programme.In 2005 the UHT line produced 21 Mio bottles and twoyears later it successfully produced 35. And in 2009 85 Miobottles were produced. That’s almost a 400% productionincrease in four years.An exponential increase took place in the yoghurtproduction too. In 2005, about 30 Mio cups of yoghurtwere produced; two years later the number of cupsreached 40. In 2009 Beyti produced 53 Mio cups — a175% plus production increase in four years.Total production in 2005 was 17 000 tons and in 2007it went up to 28 000 tons. Two years later, total productionof 47 000 tons was achieved — an increase of morethan 275%.There were a series of attempts to reduce plastic sheets,fruit and raw material losses, in addition to other PIPsthat were based on a thorough loss and waste analysis.This has saved Beyti US$2 million over the four-year periodfrom 2005 to 2009.Given the achievements above, in October 2009 SaudibasedAlmarai agreed to buy Beyti for US$115 million,allowing a new joint venture with PepsiCo to set foot in theArab world’s most populous nation.“The acquisition of Beyti is an important step forwardfor our joint venture with Almarai,” said Saad Abdul-Latif,CEO of PepsiCo Asia, Middle East and Africa. “Beyti’s dairyand juice brands build on our commitment to world classquality, while addressing consumers’ need for nutrition aswell as fun and refreshment.”This transaction complements PepsiCo’s existing Egyptianmarket leadership in non-alcoholic beverages and savourysnacks and it expands Almarai’s leadership in dairyoutside its core markets within the Gulf CooperationCouncil (GCC).INCREASE IN PRODUCTIONTotal production in 2005:17 000 tonsTotal production in 2007:up to 28 000 tonsTotal production in 2009:achieved 47 000 tons275% INCREASEWGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net

CASE STUDYWGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net

Case StudyCAN DOKaizen blitz results at Fonterra subsidiary Canpac demonstrated that changeovertime could be cut by 50%, thereby exceeding the 30% improvement target.Company backgroundA global top ten dairy company, New Zealand’s Fonterrais the world’s leading dairy exporter, responsible for morethan one-third of international dairy trade. It’s owned bymore than 11 000 New Zealand dairy farmers and has acombined output capacity of more than 14 billion litres ofmilk each year.Wholly-owned subsidiary Canpac, manufactures andprints can packaging for a wide range of dairy-based fastmoving consumer goods. Vertically integrated, it takesorders on demand and provides a one-stop customer shop.Canpac receives virgin tinplate, then prints the tinplate,presses and assembles can components, blends powdersand packs sachets and cans in many formats.SituationThere are about 100 different changeover combinationsin Canpac’s Line 4 can assembly plant, excludingreference changeovers. The longest changeover timewas on the flanger-beader, slitter or seamer (endchangeovers). For a variety of reasons, the actual timetaken to perform each change differs widely from oneto the next and from person to person. In some cases, agood deal of time was spent on adjusting and resetting.After changeovers, the line had to be ramped up to speedagain — which took more time and contributed to waste.Unstable production plans also made it difficult to planchangeovers and training sessions. (Training setters maytake up to two years.) These unpredictable processes led tofrustration and inefficiency.At 24 minutes, reference changeovers were relativelyshort but frequent — approximately 20 a week. ‘Cut-allplate’changeovers are shorter than other referencechangeovers and the first observed time taken forthis reference change was eight minutes.Changeovers accounted for 25% of lost production time,unplanned setting for 30%, and unplanned maintenancefor 10%.ActionMapping the overall production process highlightedmany problem areas and improvement opportunities.A Kaizen blitz was initiated, targeted with improvingOn-Product-Time (OPT) performance by 30% on Line4 can assembly. This was to meet current increaseddemand, while growth forecasts indicated 20% moredemand by March 2008. OPT at the time was 40-50%. Theblitz also was aligned with the gradual introduction of a24/7 production process, which was fully implemented inOctober 2007.Set-up time reduction methodology was applied toreference changeovers and during preliminary trials, aconventional reference change was recorded at 12 minutesand a ’cut-all-plate’ reference change at two minutes— down from eight minutes. The same methodologyalso revealed similar improvements on the seamer endchangeovers. Although historical data wasn’t available,seamer changeovers were believed to have averagedeight hours, while only three hours was noted duringa blitz trial.ResultsKaizen blitz results on Line 4 further indicated thatchangeover times could be cut by half over time, whichmeans the improvement target of 30% had beenexceeded. The business has now stabilised changeoversat 13 minutes for reference changeovers — which isnearly a 50% improvement and has released significantcapacity (over 3 hours’ line time per week for thesechangeovers alone) as a result. Similar results have beenachieved for other changeovers, releasing more than 10%line capacity.Achieving effective and rapid changeovers requiresseveral people to work together effectively and the blitzproved that it can be done. Also, the blitz process hashelped to develop an improvement culture throughfocus and more structured communication. The key tosustainability is the continuous improvement processsupported by VPM and other TRACC Best Practices.More importantly, capacity constraints resulted in missedsales opportunities.WGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net

CASE STUDYWGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net

Case StudyTRUE TEST IN WCM QUESTSimple MFG, the Contract Electronics Manufacturing (CEM) division of the globalTru-Test Group, has had an impressive operational transformation journey.Company backgroundHeadquartered in Auckland, New Zealand, Tru-Test designs,develops, manufactures and markets technology-basedagricultural solutions for global markets. In recent yearsthe company has emerged as one of New Zealand’s leadingcontract manufacturers, culminating in re-branding itscontracting division, Simple MFG.SituationFaced with the same difficulties as other manufacturersand exporters such as high exchange rates,stiff competition from Asia and higher regional inputcosts, action was required. Reviewing its corecompetencies and value-adding capability, the companydecided to outsource a few commodity products toAsia while all technology-based manufacturing remainedin New Zealand. This decision was influenced by theability to maintain flexibility because of the largeproduct range made in small to medium volumes, aswell as the need to protect intellectual property inproducts and processes. An extended supply chain wasn’tcommercially viable.After reviewing many global industries and improvementsystems, the choice fell on the TRACC IntegrativeImprovement System in 2006. Initially it started as a pilotproject before being rolled out across other company areas.Tru-Test commenced its Lean transformation in November2006 to improve customer service; reduce inventory levelsthrough improved skills and flexibility; and to integrateand streamline manufacturing processes.ActionIn its quest for operational excellence, Tru-Test usesthe same process as some of the world’s best knownmanufacturers including Unilever, Coca-Cola, Ansell andFonterra. The benefits are particularly relevant to theAustralasian CEM market and include:Greater flexibility: A major improvement has beenreduced set-up times for key processes such as the SMTline, which showed a 75% upturn in changeover time.Known as Single Minute Exchange of Dies (SMED), thisimproves flexibility as it means run sizes are better andmore cost-effectively matched to customer requirements.Improved quality and yield: By using Visual PerformanceMeasurement (VPM), each team member is involved incapturing and using quality and yield information. Thisclosed loop system enables actions to be taken real timeon individual items during manufacture and supports theone piece flow manufacturing strategy.Better product turnaround: Combined with the benefitsachieved in SMED, value stream maps are prepared totrack value-adding activities. This value stream activityhas helped eliminate non-value processes and improveproduct velocity through the entire supply chain.Improved service offering: Tru-Test continues to investsignificantly in capability enhancing capital equipmentdue to better utilisation of existing equipment. Jobchangeover was the largest downtime source.ResultsDuring implementation, changeover times droppedconsiderably. World class sub-10-minute changeoversare now a way of life. This benefits customers as Tru-Testis able to offer an increasing and broader range of productdelivery and supply chain services, as well as an ability toproduce small runs efficiently and cheaply.At the end of the pilot trial period, which was set up in amachine- and a labour-based department, the results were:Floor space reductionDelivery performance improvementChangeover time reductionThroughput time reductionMACHINE-BASED15%20%75%The key deciding factor for selecting this methodologywas TRACC’s objective measurement process, allowingthe company to benchmark its performance in key areaswithin the organisation, as well as across organisationsinternationally. Another deciding factor was the system’sability to facilitate shop floor engagement.In addition, the Tru-Test Group has learnt a number ofthings by implementing the improvement methodology:. A structured process with a common language is essentialin achieving and maintaining improvements in progressingtowards world class performance. Shop floor engagement and process ownership sustainimprovements. Success requires high-level organisational support. Successful implementation and achieving gains needsubstantial investment in people due to the requiredculture shift. Targeted capital investment also may be neededto support the value stream and capability enhancement. Using an external consultant helps provide focuson implementing changes and processes; however,ownership must reside internally. The world class quest is a journey, not a raceLABOUR-BASED75%60%60%WGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net

TRACC Product DevelopmentTRACC Version 5---------------------------------------------------------The new TRACCs in development for release in 2011/20122009 and the first half of 2010 have been dominatedby upgrading TRACC from Version 4 to Version 5 (V5) —incorporating the development of multi-site TRACCimplementation methodologies to enable our globalclients to simultaneously implement TRACC across theiroperations. We have invested heavily in completelyrevamping all TRACC training workshops, includingcomprehensive Facilitator Guides. The V5 developmentteam spent more than 10 000+ hours on creating a newstandard of product excellence, culminating in the launch ofV5 UK English in June 2010 at the TRACC Conference in theCzech Republic. TRACC V5 is now in the translation phaseand will become available in 14 languages: Chinese, Dutch,French, German, Hungarian, Indonesian, Italian, Korean,Polish, Portuguese, Russian, Spanish, UK and US English.NEWTRACCsENVIRONMENTALSUSTAINABILITY(part of the Manufacturing TRACC suite)Sustainability makes good business sense, as it:. manages risk. saves costs. enhances the company’s reputationVolatility and increases in energy, water and raw materialcosts, increasing environmental regulation and a growingconsumer demand for eco-friendly processes and productsare evident worldwide. To survive and thrive in today’snew economic and environmental climate, going ‘leanand green’ might be the best move an organisation canmake. The new Environmental Sustainability TRACC formanufacturing offers a leading-edge framework forassessing and implementing environmental best practicesthat build eco-advantage.HUMAN CAPITALEmployees are valuable assets and their effectivemanagement can make a fundamental difference tothe success of an organisation’s Continuous Improvement(CI) implementation. Organisations on the CI journey needto be clear on what they expect from their HR divisions,and HR in turn need to understand how their role shouldsupport line management in the CI process.This TRACC moves HR to a more customer-centricapproach, where HR provides a broader set of services tothe organisation while gearing up its internal capacity.WGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net

TRACC Product DevelopmentADMINISTRATIVEEXCELLENCETo support an organisation’s Continuous Improvementjourney, it’s critical for all administrative areas to implementworld class best practice. For instance, quicker transactionprocessing will save time, fewer errors or omissions willimprove quality, and eliminating unnecessary work andduplications will reduce cost.Flexibility also will improve when people are released todo more value-adding work. Administrative excellencewill enhance service delivery and impact positively oncustomer relationships.SUPPLY CHAIN TRACCa suite of nine TRACCsA company’s Supply Chain (SC) represents an untappedopportunity to realise increased short-term and long-termprofits and cost savings.Organisations that are on the Continuous Improvementjourney realise that they need to implement moreefficient SC processes, and enable best practiceimprovement across their entire value stream with theuse of an Integrative Improvement System. By doingthis they stand to free up both working capital andcash, prospering as the business cycle turns to growth.Continuously optimising SC leads to many increasedsystemic efficiencies. These include:• aligning people and processes around the businessgoals and promises made to the market• improved forecasting and inventory management• more effective sourcing and supplier management• streamlined order fulfilment• more efficient logistics management• the integration of Lean, Six Sigma and other bestpractices into one management system• enhanced customer satisfactionThe rest of 2010 and most of 2011 will be dedicatedto the development of the new Supply Chain rangeof TRACCs for release in 2011. The most significantdevelopment project is the creation of a suite of nineSupply Chain TRACCs. This development project istruly collaborative and includes supply chain expertsfrom around the world. The following Supply ChainTRACCs are currently in development:1. Supply Chain Alignment2. Demand Planning3. Sales and Operations Planning4. Supply Planning5. Procurement6. Warehouse Management7. Transport Management8. Order Fulfilment9. Product Portfolio ManagementWGLL Journal Volume 2 © CCI info@etracc.net www.etracc.net