Company Overview

1. Company Overview

2. What is Lean? • The art of producing and delivering goods and services that deliver maximum value to the customer with minimal waste in the process.  • Doing the right things (as defined by your customer) and doing them better, faster, and cheaper. • Using less of everything compared to traditional business systems • Less: • Effort • Space • Investment • Inventory • Time • A process management philosophy • Derived in large part from the Toyota Production System (TPS) • Later successfully adapted in a wide variety of business settings: manufacturing, maintenance & repair, healthcare, professional services, office processes

3. The “Eight Wastes” • Overproduction • Excess Transportation • Waiting • Inventory • Unnecessary Motion • Over Processing • Defects • Under-Utilised People

4. Lean Principles • Define value in the customer’s terms. • Understand what it is that your customer values and is willing to pay for. • Map and define the value stream.  • The series of actions that collectively build value for the customer is the value stream.  Identify and eliminate non-value added activities. • Make value flow.  • Strive to implement a process in which value-creating activities can move quickly, seamlessly, with minimal effort and without backtracking or rework. • Pull from later processes to earlier ones.  • Have the cadence, or rhythm of activity, driven by being pulled from the customer at the end of the process, rather than pushed by the producer or supplier to the process. • Continually strive for perfection. • Constantly learn and improve.

5. 1970’s: Auto & Electronics Japan Late 1940’s: Deming and Juran go to Japan 1950’s-60’s: Toyota Production System Developed E.g. Toyota, Sony 2000’s: Services, Retail, Healthcare, Office Processes 1990’s: Other Manufacturing 1980’s: World Auto & Electronics E.g. GE Engine Overhaul, Southwest Airlines, Tesco, Walmart, Mayo Clinic, Citibank E.g. General Electric mfg, Hewlett Packard, Black& Decker E.g. Toyota US, Nissan UK, Ford, Motorola Growth and Spread of Lean

6. Extend to Enterprise Senior Management Sponsorship Organisation Culture • Application of • Lean Tools • VSM • Kaizen • Flow • 5S • TPM • Poke Yoke • Set Up Time ↓ Continuous Improvement Organisation Organisation Structure Training & Communication Steps in the Lean Journey Lean Awareness: Why Do It?

7. Extend to Enterprise Senior Management Sponsorship Organisation Culture Integral to Organisation • Networking • Industry Groups • Conferences • Etc. • Application of • Lean Tools • VSM • Kaizen • Flow • 5S • TPM • Poke Yoke • Set Up Time ↓ Continuous Improvement Organisation Organisation Structure Training & Communication Internal & External Consultants Resources Lean Awareness: Why Do It?

8. Lean CI Company Background • The two principal founders: • Experienced CEOs • Over 40 years experience in implementing lean in a variety of industries and environments • Manufacturing • Overhaul & repair • Aviation • Government & military • Health care • Publishing • Office processes & professional services—legal, financial, engineering • Network of associates throughout Europe and North America

9. Lean CI Team • Stephen Hardgrave—Co-founder and Managing Partner • 25+ years of aviation experience, 12+ at CEO/MD level • 20+ years of lean experience • Industry Experience: • Aircraft Management Technologies (CEO) • Sermatech UK (CEO) • Pratt & Whitney (Managing Director, VP & General Manager) • US Navy aviator (Commander, USNR, retired) • Education: MBA (Harvard), MSc. In Operations Research (US Naval Postgraduate School), BA (Duke University) • Owen McClave—Co-founder and Managing Partner • 20+ years of aviation experience, 10+ at CEO/MD level • 13 years of lean experience • Industry experience: • Lufthansa Technik (CEO of Turbine Overhaul business) • Pratt & Whitney (Managing Director, VP & General Manager) • Qualified accountant (Fellow, Chartered Institute of Management Accountants) • Education: BSc in Management (Trinity College Dublin)

10. Industry Experience

11. Lean CI Services • Lean Consulting Services • Lean Overview and Training • Lean Audit • Lean Organisational Design • Value Stream Mapping (VSM) • Kaizen Event Facilitation • Product and Process Flow • 5S • TPM • Mistake Proofing (Poka Yoke) • Set-up Time Reduction • Lean Impetus or Restart

12. Lean CI Services (cont’d) • General Management Consulting and Mentoring • Management Offsite Strategy Session Facilitation • Annual Planning and Monitoring for all Business Functions • CEO Mentoring and Problem Resolution • Management Team Mentoring and Problem Resolution

13. Questions?

14. Back Up Slides

15. Toyota Production System World Class Manufacturing Lean Manufacturing Flexible Manufacturing Six Sigma Kaizen TQM JIT SPC BPR DFO TPM SMED Poke Yoke Kanban Lean programmes have gone by a variety of names... And buzzwords abound... All have the same overall goal and all follow the same set of principles BUT:

16. There are many different sets of tools and techniques which can be adopted. There are four universal principles to accomplish this*: The one overall goal is the elimination of waste These are universal truths This is the “alphabet soup” of buzzwords and acronyms *source: Womack & Jones, Lean Thinking All Lean programs work on the same principles, but use different tools and techniques... 1. Identify the value stream 2. Make value flow 3. Pull from later processes to earlier ones 4. Continuously strive for perfection

17. There is one fundamental goal of all Lean companies Eliminate waste Waste takes many forms: • Wasted motion (product or people) • Producing a defective part • Providing a defective service • Producing unneeded product (inventory) • WIP levels above minimum needed • Unnecessary work effort • Rework • Wasted time (queuing) • Inspections and approvals Waste is anything that the customer doesn’t value and is not willing to pay for

18. TPM BPR Right First Time TQM Fishbone Flowlines JIT One touch SPC Kaizen SMED Methods to achieve the four universal principles (value, flow, pull, perfection) are of two types... Organisational Design Process Improvement Tools • Small teams: self-contained, autonomous • and process-focused • Ownership of end-to-end process • Decision making at low level • Employee involvement & • empowerment • Multi-skilled & cross trained These are complementary and mutually supporting

19. Organisational Design

20. Sales Production Finance Product is ordered Product is manufactured Product is delivered Invoice is received Most companies are not structured to support the value stream... Companies are usually organised by function... But the end to end process that provides value to the customer cuts across functions...

21. Sales Production Finance Query on product spec Backlog in shipping Query on contract terms Functional departments (“silos”) impede the flow of value... Product is ordered Product is manufactured Product is delivered Invoice is received

22. Even within a department, functional specialisation impedes the flow... Actual Example: Jet Engine Component Overhaul Receiving Shipping Production Department Milling Machining Storage Disassembly CMM Inspection Cleaning Assembly FPI Inspection Turning Machining Plasma Spray Average turntime:28 days Heat treatment Visual Inspection EB Welding X-ray Inspection Tig Welding Engineering Department

23. Shared Resources: Vacuum Heat Treat, FPI, X-ray Shared Resources: Plasma, EB Weld Lean companies structure themselves into teams which “own” much of the process… New Layout and Organisation, Jet Engine Component Overhaul Product Cell 5 Product Cell 1 Product Cell 4 Product Cell 2 Product Cell 3

24. Shared Resources: Vacuum Heat Treat, FPI, X-ray Shipping Final Inspection Product Cell 5 Assembly Milling Product Cell 1 Turning: smooth machining Product Cell 1 Product Cell 1 Product Cell 1: Compressor Cases Product Cell 1 Product Cell 4 Product Cell 2 Cell Leader and Engineering Turning: rough machining Materials and fixtures storage Welding/ local heat treat Shared Resources: Plasma, EB Weld Product Cell 3 Receiving/ Inspection Disassembly Turning: heat shield removal FPI Lean companies structure themselves into teams which “own” much of the process… New Layout and Organisation, Jet Engine Component Overhaul

25. Shipping Final Inspection Assembly Milling Turning: smooth machining Product Cell 1: Compressor Cases Cell Leader and Engineering Turning: rough machining Materials and fixtures storage Welding/ local heat treat Receiving/ Inspection Disassembly Turning: heat shield removal FPI These teams are focused on the end-to-end process, and control as much of it as possible... Average turntime: 13 days (54% reduction) Labour hours: 30% reduction Materials cost: 20% reduction Plasma EB Weld CMM

26. TPM BPR Right First Time TQM Fishbone Flowlines JIT One touch SPC Kaizen SMED Process Improvement Tools

27. Process improvement tools have many of the characteristics of other tools... • They are very useful under the right circumstances. • They can make a job easier • They can accomplish the job faster or reduce the effort required • They can even make a job feasible which otherwise couldn’t be done

28. Process improvement tools have many of the characteristics of other tools (cont’d)... • They are specialised--designed for a particular job. • But some are more versatile than others.

29. Process improvement tools have many of the characteristics of other tools (cont’d)... • They can be destructive or dangerous if misused. All have their uses, none is a panacea

30. Example: Going through several continuous improvement programmes over period of years TQM A common problem: cynicism towards “flavour of the month” programmes... Just in Time Right First Time Flexible Manufacturing Kaizen This happens at many companies. Occasionally, it occurs because the chosen tools were inappropriate or were not used correctly. More often, the changes represent positive development and evolution. As the operation improves, new tools are needed to reach the next stage of development. Usually, the cynicism occurs because people don’t understand the difference between principles (which are universal, and have not changed) and tools (which are specialised, and will change)

31. World Class companies are continuously searching for new ways to improve... TQM Just in Time Right First Time Flexible Manufacturing Kaizen Changing tools does not mean that the old tools were worthless! The new tools will not be a universal “miracle cure” either!

32. Elimination of waste TPM BPR Right First Time TQM Fishbone JIT One touch Flowlines 1. Identify the value stream Kaizen SPC SMED Remember: process improvement tools are only tools... To achieve the one overall goal: But they can be useful in advancing the four universal principles: 2. Make value flow 3. Pull from later processes to earlier ones 4. Continuously strive for perfection

33. But by understanding the universal principles: Flow Eliminate waste Pull Value Perfection TPM One touch BPR Right First Time TQM Fishbone Kaizen SMED JIT Flowlines SPC Conclusion: companies around the world, in every industry, have proven the benefits of Lean... Not by doing exactly the same things... And then creating streamlined, process-focused organisations And using a selection of tools appropriate to their circumstances