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Implementing World-Class Manufacturing for Profit & Growth

Learn why you need to embrace World-Class Manufacturing (WCM) to boost profits, customer satisfaction, and job security. Discover the 8 types of waste and techniques to eliminate inefficiencies. Improve quality and efficiency to excel in a competitive market.

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Implementing World-Class Manufacturing for Profit & Growth

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  1. Chapter 1 Why Implement World Class Manufacturing? Proof of the Need to Change

  2. Why do you come to work?

  3. Why Implement WCM? • Profits are the reward of satisfied customers and, ultimately, the source of jobs. • Increased customer satisfaction • Defined as meeting a customer’s expectation for the quality, delivery, price, performance, and service of its products. • Requires execution by the entire company team on the customer’s requirements.

  4. Why do we need WCM? Total Product or Service Price to Customers Budget Constraints and Competition Drive a Lowered Price Profit Profit Total Cost to Produce or Provide Waste (COPQ) Price $ Profit Profit COPQ Theoretical Costs i.e.., Cost of Doing the Right Things Right the First Time Waste (COPQ) Theoretical Theoretical COSTS COSTS 0 a. b. c. d. e. “The price of gaining knowledge is nothing compared to the cost of ignorance.” Anonymous

  5. Customer Satisfaction • Customer satisfaction alone has the power to guarantee profits and jobs. • Customers guarantee the jobs of employers and companies. • Customers will not pay the wages of anyone, hourly or management, who does not add value to the future product. • Improved through continuous improvement “It’s not the employer who pays the wages. Employers only handle the money. It’s the customer who pays the wages.” -Henry Ford

  6. is a mindset or attitude focused on the continuous elimination of waste. Continuous Improvement It’s a way of life!

  7. What is Waste? • Is anything other than the MINIMUM amount of people, time, equipment, material, parts, and space required to ADD VALUE to the product Maximize Value Added Activity Minimize Non-Value Added Activity OUR OBJECTIVE Eliminating Waste Will Make Us More Competitive

  8. Eight Types of Waste Defects Overproduction Waiting Non-utilized resources Transportation Inventory Motion Extra Processing The 8 General Types of Waste

  9. Class Exercise - Office Type Waste • Office/service areas produce “knowledge and information products” • Give examples of office type waste for each category • Defects • Overproduction • Waiting • Non-utilized resources • Transportation • Inventory • Motion • Extra Processing What can you use to identify waste? Value Stream Mapping

  10. Office Area Waste Examples • Hunting, Looking, Searching • Waiting Time • Purchasing Reorders, Transactions, Supplier Invoices • Authorizations • Double checking work • Conflicting Department Goals • Traditional Accounting Methods • Poor Product Designs • Order Processing Time • Errors • Copy and paste

  11. How do we uncover these problems?? – Go look MAKE THE WASTE UGLY !! Identify the waste, expose it, and eliminate it!!

  12. Adding Value / Eliminate the Waste Any operation or process the customer is willing to pay for. • How? • Ask the customer! • Adding value generally means changing the shape or form of the product. • Converting wasted activities to value-added activities. • Doing less may give you more!

  13. Improved Profitability • Waste Elimination Leads to….. • Improved Customer Satisfaction Leads to….. • Improved Profitability Yeah!!

  14. Change = Improvement If you always do what you have always done, you will always get what you have always got. • Japanese Success Factors • Teamwork • A company-wide war on waste • Dedication to perfect quality It is part of the culture – they listened to Deming

  15. Lower Costs= Customer Satisfaction • The reality of satisfying the customer is that it does not raise costs. • Customer satisfaction always costs less. • The reason is simple. • In every business, there are inherent roadblocks which prevent the business from performing in a manner that meets the customer’s expectations. We have created these roadblocks!

  16. Roadblocks • Material Handling • Inspection • Inventory Storage • Product Test • Counting Inventory • Late parts • Thinking you are unique • Scrap/Rework • Machine Setups/Unplanned Downtime • Supplier Lead Times • Inventories • Lost Time Accidents • Bias processes • “Experience”

  17. Scrap/Rework • Limits competitiveness, costs are borne by the buyer. • Prevents on-time deliveries which cause additional costs in overtime, premium freight, warranty, and/or administrative costs. • Represents quality problems which could reach the customer. • 100% inspection is only 85%* effective.

  18. 100% Inspection Four fully armored aircraft carriers launched fifteen flights of fighter planes on a daily basis. In each flight of planes, there were four F-15's, five F-14's, and a few support aircraft. For three hours the planes flew, finding target after target to attack, with few enemy fighters to bother them. Finally, after the mission was over, they did a flyby at the airfield, to show their friends how well they had fared. Their mission had been very successful. How many F’s, f’sdo YOU see?

  19. How Many F’s? • How many did you find? • There were 29 F’s • Do you still think inspection is the answer? I cdnuolt blveiee taht I cluod aulaclty uesdnatnrd waht I was rdgnieg  THE PAOMNNEHAL PWEOR OF THE HMUAN MNID. Aoccdrnig to rscheearch atCmabrigde Uinervtisy, it deosn't mttaer in waht oredr the ltteers in a word are, the olny iprmoatnt tihng is taht the frist and lsat ltteer be in the rghit pclae. The rset can be a taotl mses and you can sitll raed it wouthit a porbelm. Tihs is bcuseae the huamn mnid deos not raed ervey lteter byistlef, but the wrod as a wlohe. Amzanig huh? Visual inspection only catches 85% of the errors*

  20. Machine Setups/Unplanned Downtime • Reduces manufacturing capacity • Prevents on-time deliveries • Promotes building inventories • Supports the requirement for indirect labor and higher costs. Creates a whole hidden factory!

  21. Supplier Lead Time • Prevents the reduction of product lead times. • Prevents the ability to becoming a World Class Company. • Since world class companies require world class suppliers How do you have perfect quality and deliver on-time if half of your supplied product is late and non-conforming?

  22. Inventories • Adds carrying cost of inventories. • Approximately 25-30% per year is waste • Hides unsolved manufacturing problems: • Scrap • Rework Lean is not about inventory reduction - it is about right sizing your inventory This is measured in Turn Times

  23. Lost Time Accidents • Causes physical and mental hardships on team members and their families. • May limit the full participation and involvement of the team member. • Prevents a member from being available to serve the customer. • Injury claims add cost to the product. This affects our number one resource – human resources

  24. Product Test • Not a value added operation when used as an audit of manufacturing or assembly processes.

  25. Summary • World Class Manufacturing & World Class Enterprise • A technique that can continuously improve the following business and manufacturing processes: • Quality, delivery, responsiveness, cost, safety, …… • While reducing: • Lead-time & costs

  26. Where do you start?

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