Leading Lean SMTA Chapter Meeting

Leading LeanSMTA Chapter MeetingMay 9, 20061

Contact Information• For Future Questions please feel free to contact:• Desi Narayanan; Continuous Improvement Coach• 905-754-0055• desi.narayanan@creationtech.com• Tracy Langheinrich; Dir. US Central Sales• 952-443-2053• tracy.langheinrich@creationtech.comCONFIDENTIAL2

Introduction• WELCOME Everyone• As a courtesy, please follow these simple rules duringtoday’s presentation:• Please turn Cell phones, Pagers and Laptops off• Ask questions at any time• Challenge everything• Be open-minded• and Remember, we’re all at the same level• Let’s Have fun!CONFIDENTIAL3

Goals• Why go lean?• What should we expect?• How can we really harness lean?• Who are the key players to make it happen?• How do we lead a change?CONFIDENTIAL5

Why Go Lean?MotivationCONFIDENTIAL6

MotivationAuto IndustryDecline of Automobile Manufacturing in the USAGlobal % - Number of Autos Built100%90%80%70%60%50%40%30%20%10%0%1950 1960 1970 1980 1990YearRest of WorldJapanUSACONFIDENTIAL7

MotivationEMS IndustryDecline of Electronic Manufacturing in North AmericaGlobal Split of EMS 2003Global Split of EMS 20087%5%32%17%32%27%ROWEuropeAmericasAsia57%57%21%34%CONFIDENTIALSource: ETPs EMS Market, 1 st Edition8

SupplierMeetingsForecastis wrongMotivationCurrent StatePCBSupplierWeeklyForecastProductionControl&CustomerForecastCustomerSCMSuppliersare lateExpeditesMeetingsStuffShipScheduleCustomer andCustomerELT MeetingsMeetingshappensWeekly ScheduleISearch forPartsSMTMachinesWave Press Mechanical ShippingPeoplebreak downget sickOvertimeI I I I ICONFIDENTIAL9

MotivationUnderstanding LeanWhat?• A continuous improvement system that empowerseveryone in the organization to identify andeliminate waste in every facet of the company.Why?• To integrate all aspects of the business to produce aperfect quality product and deliver it on time at thelowest cost.Quality, Delivery, CostCONFIDENTIAL10

MotivationSummary• North American EMS providers are fighting for asmaller share of the market.• What happened to the auto industry is happening tothe EMS industry.• In order to thrive, we will need to be better, cheaperand faster than our competition.• We need to harness lean to make breakthroughimprovements.CONFIDENTIAL11

What Can We Expect?“If a company is really maniacal about Lean, ittakes two to three years to go from kindergartento first grade. That’s how tough it is.”~Mark DeLuzioArchitect of the Danaher Business SystemCONFIDENTIAL12

ExpectationsInvestmentwith leanProfitswithoutleanTimeCONFIDENTIAL13

ExpectationsEffort• The speed at which we advance depends on the effortwe apply.• Knowledge and skill are gained by doing.• The ability to sustain or move forward is based on theperseverance and culture that leadership brings to thetable.• Staying in one place is as bad as moving backwards,the competition is always moving.CONFIDENTIAL14

ExpectationsStagesStage 1: Batch production, departments organized byfunction, multiple scheduling points, workers told whatto do by supervisors, high levels of defects, muchinspection and test.Stage 2: Initial Kaizen events, moving towards cellularproduction, using lean concepts to reduce batches,working on low-hanging fruit, 5S.Stage 3: Start of U-shaped cells, fewer schedulingpoints, reduced travel, start of visual management,some pull.CONFIDENTIAL15

ExpectationsStagesStage 4: Linked cells, cell captains appear, layers ofmanagement are reduced, plant-wide pull systems,elimination of scheduling, significant reduction inexpediting, factory is visually managed.Stage 5: Focused factories in place, significantbreakthroughs in cost.Stage 6: Full integration of Lean and Six Sigma – partof the culture.CONFIDENTIAL16

ExpectationsTrainingValue StreamMappingCell DesignSMEDTPM3PTPIStandardWorkMaterialSystems5SPoka-Yoke6 SigmaCONFIDENTIAL17

ExpectationsTrainingToolVSMCell DesignSMEDTPM3PTPIStandard WorkMaterial Systems5SPoka Yoke6 SigmaGoalIncrease visibility of factory wide improvementsIncrease continuous flow in a manufacturing environmentReduce time lost due to product change oversIncrease the effectiveness of production equipmentImprove the absorption potential of lean processesImprove continuous flow in transactional processesReduce variation in operator work cyclesImprove material availabilityReduce waste caused by physical disorderReduce the probability of defectsReduce process variationCONFIDENTIAL18

ExpectationsAssistant Coaches• Develop a Assistant Coaches who are certified to leadspecific event types.Benefits• Career growth for team members• Spreads lean knowledge• Speeds up rate we can do kaizen events• Succession planning for coaches• Eventually makes coach role redundantCONFIDENTIAL19

ExpectationsSummary• Lean is not a quick fix for manufacturing problems.It requires long-term commitment and ongoingperseverance.• There will be an initial investment of time, money andtraining to get things moving.• Assistant coaches accelerate the dissemination oflean concepts.CONFIDENTIAL20

Any questions around the Motivationto Go Lean or Lean Expectations?CONFIDENTIAL21

Harnessing LeanBreakthroughsWIPFloor spaceCycle TimeLead TimeInventoryChangeover timesDL Efficiency75% Reduction60% Reduction30% Reduction40% Reduction15 + TurnsUnder 10 Mins30% ImprovementCONFIDENTIAL23

Harnessing LeanApproachIn order to make breakthroughimprovements:• We need a vision of the future.• We need to empower people.• We need a strategy that ties kaizenbreakthroughs to business needs.CONFIDENTIAL24

Harnessing LeanStrategy DeploymentWhat is Strategy Deployment?• Strategy deployment is a process to plan andexecute leadership’s vision.Also known as:• Policy Deployment• Management by Policy• Goal Development• Hoshin PlanningCONFIDENTIAL26

Harnessing LeanBenefits• Focuses on the vital few, rather than the trivial many.• Creates alignment towards breakthrough objectives.• Integrates and encourages cross-functional cooperationto achieve breakthroughs.• The review process results in response to nonexecutionand in corrective action.CONFIDENTIAL27

Harnessing LeanProcessLink to DailyManagementEnvision theFuture StateIdentifyBreakthroughObjectivesAssess theCurrent StateImprovethe PlanningProcessConductAnnualReviewReviewProgressCreate theX MatrixDeploy thePlan“Catch Ball”Implementthe PlanCONFIDENTIAL28

Harnessing LeanSummary• Breakthrough improvements are only possible in anenvironment of stability.• Strategic planning is a process that is owned andoperated by the leadership team of an organization.• Breakthrough improvements can be realized whenleadership’s vision is crystallized in a cohesivestrategy that is communicated to empowered peopleat all levels of the organization.CONFIDENTIAL29

Key PlayersSponsorRole• Understand and communicate limitations of the current state• Facilitate a vision of the future state• Translate vision into a strategic plan• Mentor and motivate process owners to work the planAttitude• Committed• Supportive• Non-judgmental• Trusting• Open-mindedCONFIDENTIAL30

Key PlayersProcess OwnerRole• Understand the limitations of the process• Understand the future state• Work the plan• Sustain the resultsAttitude• Teamwork• Fail forward• ‘Analysis Paralysis’• Creativity before capital• Focus on doing• Always ask whyCONFIDENTIAL31

Key PlayersCoachRole• Facilitate and educate at all levels of the organization• Plan kaizen events along with business owners• Train team during kaizen events• Guide the team to lean solutions• Provide ongoing coaching and mentorship• Should be a full time role in the early stages of atransformation• Function at a high enough level to guide leadership teamsin lean thinking• Certify others to coach specific eventsCONFIDENTIAL32

Key PlayersRelationshipSponsorProcessOwnerCoachCONFIDENTIAL33

Key PlayersSustaining ResultsStrategic PlanningHigh ResultsLow SustainabilityLow ResultsLow SustainabilityHigh ResultsHigh SustainabilityLow ResultsHigh SustainabilityCONFIDENTIALProcess Ownership34

Key PlayersSummary• The Sponsor provides the reason for change.• The Process Owner has the knowledge of the processbeing changed.• The Coach provides the tools to facilitate change.CONFIDENTIAL35

Leading ChangeGembaLeaders should go to the Gemba and:1. Show why work is worthwhile.2. Empower people to manage their own destiny.3. Cheer everyone on.Good judgment comes from experience.Experience comes from poor judgment.~UnknownCONFIDENTIAL37

Leading ChangeThe Importance of 5S• Changes culture• Embodies Lean in a nutshell• Builds pride and sense of ownership• Acts as a baseline that supports all otherContinuous Improvement activitiesWorld Class Facilities develop beginning with the 5S’s , andfacilities that fail, fall apart beginning with the 5S’s.~ Hiroyuki Hirano5 Pillars of the visual workplaceCONFIDENTIAL38

Leading ChangeLead by Example• Keep your own work area clean and orderly• Do a Gemba walk with 5S as the theme• Select a few areas• Don’t overlook 5S violations• Follow up the walk with a memo• As a team, brainstorm questions to ask• Post metrics for your team in your team’s area• Coach your teams to excel at 5S• Give recognition to teams/individuals who excel at 5SCONFIDENTIAL39

CONFIDENTIALLeading ChangeCell FocusGoalsInformationCellOperatorsSkills MaterialsEngineeringSCM - BuyerOps ManagementVisual ToolsProcesses40

Leading ChangeCell Culture• Everything should be structured around the cell.This is where all value is created.• The cell must have easy access to everythingrequired in order to add value.• This arrangement will result in sustainableimprovements over time.CONFIDENTIAL41

Leading ChangeEmpowermentEmpowerment occurs in an environment where thefollowing exist:• ‘Leadership’ as opposed to ‘Management’• Recognition that employees are the most valuable resource• Teamwork• Decision-making is assigned at the appropriate level• Openness, initiative and risk-taking are encouraged• Accountability, credit, responsibility and ownership aresharedCONFIDENTIAL42

Leading ChangePitfalls• Lack of trust• Trust managed by approval• Poor communication• Communicate often• Popular advertising “Four Times Rule”• Clarify expectations• Lack of training• Lack of appropriate Measurements• What gets measured gets done• Fear• Fear of the unknown• Fear of change• Job securityCONFIDENTIAL43

Leading LeanSummaryCommitment cannot be created.It is the natural result of empowered process ownersaligned by a strategic vision .Success cannot be guaranteed.It is the natural result of committed process ownersguided by facilitative leaders .CONFIDENTIAL44

Any Further Questions?• For Future Questions please feel free to contact:• Desi Narayanan; Continuous Improvement Coach• 905-754-0055• desi.narayanan@creationtech.com• Tracy Langheinrich; Dir. US Central Sales• 952-443-2053• tracy.langheinrich@creationtech.comThank you very much for yourtime today!CONFIDENTIAL45