Foseco Mr.

David Huges, MD
Our Vision: The supplier to the foundry industry providing greatest value A highly respected company with which all stakeholders are proud to be associated with Business Strategy: Key Strategic Objectives Good to great KAIZEN Pillars of success Supply Chain Efficiency Lean Organization High Performance Orientation Quality Systems Process Orientation

Foseco Mr.David Huges, MD

KAIZEN is in line with our Values Team working Continuous Improvement SHE Empowerment High Performance Employee Focus

Lead by Example
Critical new technique to take forward a number of our key objectives on the path from good to great Very strong fit with out Values Kaizen will become a natural part of the way the whole company works. Historically we have been looking at quantum leaps and big decisions

Target: By end of the day: Some clarity on what is going to be involved What changes in our approach to work is required What interventions (training workshops) are going to be involved

By end of the year: Change in way of thinking and attacking problems Seeing opportunities where none seem to exist

What is KAIZEN?
(Original Definition)

= KAI = CHANGE = ZEN = GOOD (FOR THE BETTER)

= KAIZEN = CONTINUAL IMPROVEMENT

GEM = Real; BA = Place

Proposed Agenda

Top Management key note address Introduction of participants Brief Introduction of Kaizen Institute What is KAIZEN; relation to problem solving What is going to be involved Roadmap for the next year Planning for the first GEMBAKAIZEN Workshop Conclusion

What really is KAIZEN?

Extracting money by eliminating waste from process is Kaizen. Kaizen is process improvement: which is significant (large) done in strategically important areas speedily in sustainable manner using Scientific data; not opinion. using Systematic Roadmap, Tools & Techniques under KAIZEN Paradigms resulting in Human Development

What is your job?

Your job contains two parts: Improve Standards Set and Sustain Standards

Problem
(Sporadic) A

Company dies
Problem solved: Sustenance of standard

Good

Cost or Quality (parameter) Std

Problem created Chronic (B) Problem Solved: Improvement of standard

Time

Your Job is: Improvement of Standards Set & Sustain Standards

MANAGEMENT TOP

Who should do KAIZEN

Investment

Managers have more scope to do KAIZEN; not workers!

MIDDLE MANAGEMENT SUPERVISORS WORKERS

Sustenance (Routine Work)

Kaizen done without managerial involvement does not sustain.

FOCUSED IMPROVEMENT

Steering Committee

Small Group Activity

AUTONOMOUS MAINTENANCE, 5-S & Visual Management

When there is a problem, what do we do?

What we do is: 1. We analyze, find root cause, take corrective action, and preventive 2. Panic, concern,

Pl use verb noun combination

Problem Specifications (Symptoms) Diagnostic Journey (1) Root Cause

How to ensure that problem solving is ineffective?

Solution Generating Journey (2)

Alternative Solutions (Countermeasures)

Decision Making Journey (3)

Easy! Just skip one of the steps or Use ineffective technique in one of the steps

Decision (Selected Countermeasure)

Potential Problem Prevention Journey (4)

Note: Doing fast is not the same as skipping

Implementation (PDCA)

Problem Solving Approaches

Basis Problem Definition Method of Data Collection Traditional Grand composite Suggested in Books Deployed (Broken down) Optimal Deployed (Broken down) & One at a time Primary always & Secondary as required Crude Statistical & Backward thinking Attack muda (non value adding area); then mura & muri pros and Compare take up cons in Potential Problem Analysis

Opinion of Expert Secondary data

Method of Forward thinking Data Analysis (from cause to effect) Paradigm

Rigorous Statistical (segregation of effects muda (non Attack technical Attack first) area (value value adding adding area) first area) first Weigh Pros & Cons Compare pros only

Decision making

Problem Solving Approaches

Basis Technique Nearest Pitfall Aggregated data for problem definition Value Stream Mapping; BPR Opinions, QC 7 tools, Statistical techniques, knowledge Mass Production Division of Labour Info Technology Departmentation Demarcation Meetings off gemba Optimal
Deployed (Broken down) & One at a time Primary always & Secondary as required

Problem Deploying Problem (Pareto) Definition Defining Problem as gap Method Asking the Process of Data (Learning to look) Collection Method of Data Analysis Paradigm 1. 2. 3. 1. 2. 3. 4. 5. 1. Muda identify Mura KDD, AM approach Muri - ergonomics Single Piece Flow Unification of work Visual Management Autonomous Maintenance Responsibility overlap KAIZEN Decision Making & FMEA

Crude Statistical & Backward thinking

Attack muda (non value adding area); then mura & muri

Decision Making

Compare pros and take up cons in Potential Problem Analysis

TOTAL SUPPLY CHAIN COST STRUCTURE XYZ MAKING & PACKING Elements

PRODUCTION EXPENSES: XYZ MAKING & PACKING Elements 11 Electricity Fuel Oil Steam & Water Wages/Salaries Kaizen Project 1

264

OTHERS

31 3

243 3 402 12 24

PRODUCTION EXPENSES 38 Loss- Pkg. Material PACKING MATERIAL Loss- Raw Material Give Away - Packing 57 WIP Kaizen Project 2

1351

RAW MATERIAL 50 4 18 4 27 Repairs & Maintenance Internal Transfer Other Materials Packing Fee Depeciation Production Expenses o

2300

Total Supply Chain Cost 243

KAIZEN Approach Deploying the Problem Defining the Problem

Black Spots

Others
Accepted product

Thin Spots

In terms of leading to rejection Most serious

Rejection 36%
Rs18 crore
($3.75million)

1%=Rs50lakh ($100,000) pa

ULMA NT 50%

Holes

per annum

Drawn to scale

Corporate Strategy: Doubling sales in Singapore

Eliminate purchase of new equipment save USD 6 million Loss 70%

Loss
70%

Loss

Loss 55%

55%

OEE 30%
12/08/100

OEE 30%

KAIZEN

OEE 45%

OEE
45%

Loss Tree (Finding Waste)

Calendar Time (525,600 min) Available Time Operating Time Changeover Time Quality Output
Speed Short Loss Stops
Quality Loss

Break Shut Sundays down down

Availability Rate = Available Time / Calendar Time Performance Rate = Operating Time / Available Time Quality Rate = Quality Output / Output during operating time OEE = Availability Rate X Performance Rate X Quality Rate

Typical OEE is 30~50%

Selection of Theme for KAIZEN Narrowing down to the Most Important Issue:

Plan

Select for Focused Improvement

Loss
OEE Target 45%

Availability Loss
61%

70%

Performance Loss OEE 30% Jan- Jun 35% 4% Quality Loss

2

12/08/100

All Problems are universally defined as: Gap between Expected and Actual Results.
Problem is always defined in terms of results; never in terms of causes. Expected Result could be the Target Result.
Event chain Expected Result

Problem

Root Cause

Actual Result

Go to gemba and have a good look. Look for muda, mura, muri

Officer of Electircity company attending to customer Go to actual place of action (gemba) and observe

Identifying & Eliminating Muda

Kaizen Philosophy: Where does the saving come from?

muda

All activity is either value adding or non value adding. There is nothing else.

Kaizen Philosophy

muda

Kaizen Philosophy
Attack first

muda

11

REG. MATERIAL & TRANSPORT MANAGER

10
ELECTRICAL CONTRACTOR

12
STORE KEEPER

13

9
DISTRICT MANAGER

DISTRICT TECHNICAL OFFICER

14

8 3

REGIONAL ENGINEER

5 4
CUSTOMER PREMISES

DISTRICT ACCOUNTANT

JOB

COSTING

CUSTOMER RELATION OFFICER

CUSTOMER RELATION OFFICER

COSTING, JOB CARD REQUISITIONS CODING & SIGNING

ELECTRICAL CONTRACTOR

STORE KEEPER

DISTRICT TECHNICAL OFFICER

CUSTOMER PREMISES

Setting Up Customer Account

Data Capture 3

New Block 8

BPO

7 Actions after KAIZEN: 6 DM DTO receives info from field. Old Block 5 DTO fills data into CS 111 form. 1 DTO DTO fills meter no., CS111 no. etc., in register 2 DTO takes form to DM DM verifies and approves by signing 4321 DTO picks up signed form from DM DTO sends form to data supervisor Data supervisor cross checks serial numbers and signs in courier book Data supervisor allots it to data capture assistant Data capture assistant enters data into system. Estimator

Result of 3 Processes: pplication for new service, connecting it, and setting up for billin
30 steps Obvious muda (wasteful activities) removed 15 steps
How much money saved?

Sample calculation done for one process

Achieved So Far: (This is DONE; it is not a mere recommendation) Savings: $$$,$$$/year for one KAIZEN project Setting Up New Customer Account Calculation of savings (forfeited revenue recoverable per annum): Avg time for setting up of new account is 3 to 4 months before KAIZEN Avg time expected is 1 to 2 months after KAIZEN (depends on billing cycle) Avg saving in set up time: 2 months Avg billing of customer in a month: 100,000 cedi Avg no. of new customers/day (Kumasi alone): 30 No. of days per year: 250 Savings (forfeited revenue): 100,000 X 2 X 30 X 250 = 1,500,000,000 cedi For 4 regions (120 new connections/day): 6 billion cedi Assume 50% failure rate.

Savings (forfeited revenue recovered): 3 billion cedi = USD 350,000/ year with 50% failure rate and from one project alone.
(1USD=8,500 cedi)

CS 111

All Problems are universally defined as: Gap between Expected and Actual Results.
Problem is always defined in terms of results; never in terms of causes. Expected Result could be the Target Result.
Event chain Expected Result

Problem

Root Cause

Actual Result

Identifying & Eliminating Mura

Material

Machine
Designed for batch loading High operation time Breakdown

Not Available

Not Trained Absent Batch Production Long Waiting (WIP)

Effect (Problem) High Lead Time

M/C Utilization is the key measure

Man

Method

Check Sheet Cause Batch Prodn High WIP M/C Util Breakdown Batch loading High Op Time Mat/Man Not available Tally Mark ///// ///// ///// ///// ///// ///// // ///// ///// /// ///// ///// ///// ///// / // Occur Freq 15 18 10 03 20 01 02

Pareto Analysis

Leader : PAV Member : PTP, KCK, RC, WLD, TU, NI, KP

BRAKEDOWN OF SOAP LINE 2 JAN-MAR 2000 80 75 70 65 60 55 50 45 40 35 30 25 20 15 10 5 0

95 90 81 71 48 24

97

99

100 100

100 80 60 40 20 0

Keep asking WHY WHY WHY WHY WHY, till you feel satisfied at having arrived at the root cause.

Problem

WHY

WHY WHY WHY

WHY

Root Cause

Sawdust Cons. High

Oil on floor mopped up

Spills while pouring

New No training Production operators subverts dont training know

Training is bypassed

Batch Loading of m/c

M/C designed so

Max m/c speed

Isolated islands

Prodn system linkage not understood by mgt

Mgt does not understand prodn sys linkage

Progression of Knowledge - Goldratt Model

Cause-Effect

Correlations

Taxonomy

Mura Case Studies

Deploying KAIZEN Projects Hidden Waste

Called Teian
Suggestion Small Kaizen

savings Savings

To be done through Individual Suggestions

To be done by Small Group Activity To be done by Manageme nt

Small Group Activity Moderate Kaizen

Known Waste GEMBAKAIZEN

Workshop

Big Savings

Improvement v/s Focused Improvement

Improvement

Focused Improvement

Paper does not burn in sunlight

Paper burns

GEMBAKAIZEN Workshop approach

The GEMBAKAIZEN Workshop

CHECK & ACTION Post workshop day

PLAN

DO

Pre workshop day

Day 1 Day 2 Day 3 Day 4 Day 5

Collect Data from gemba Analyze Data (diagnose)

Confirm diagnosis experimentally

Start Implementing countermeasur e Implemention & Presentation

The GEMBAKAIZEN Workshop

PLAN

1. Understand strategy of the company Is it Cost Reduction? Is it Quality Improvement? What is your companys strategy 2. Identify Projects, from strategy, in advance 3. Set target on the projects 4. Form teams from management staff 5. Make schedule for workshop 6. Identify technique 7. Give training to the teams

The GEMBAKAIZEN Workshop

DO

1. Collect data Go to gemba and collect primary data Collect secondary data only if necessary 2. Analyze data using technique 3. Confirm analysis experimentally, if required 4. Find temporary countermeasure 5. Implement temporary countermeasure 6. Display Results set up a measure 7. Do Potential Problem Analysis (prevent future problems) 8. Make permanent implementation

The GEMBAKAIZEN Workshop

CHECK

1. Monitor data - visual graph on board in gemba 2. Modify, if required 3. Validate, if required (prove over long enough period)
ACTION

Standardize new process, if successful: Use Standard Operating Procedures (SOP) One Point Lessons (OPL) Repeat cycle, if failure

During the workshop Safety first Health next KAIZEN third Routine work fourth inform people, marketing Monday:
Walk through the process (physical process observation) Allow cross functional people to make comments, ask questions Observe with eyes, all relevant senses and make needed measurements Identify muda, mura, muri. Focus on muda Typically it will take half day Identify the big muda, and find countermeasure discussion Please discuss standing By end of day you will have some clarity on some countermeasures Look between the operations, more than the operations Identify the seven mudas Look at batch size for processing and transfer Look for mura (inconsistency) Look for muri (strain) Look for clutter and outbreak of material, dirt, leak, spill, Identify the equipment that is critical from outbreak point of view Identify areas to do 3-S

Tuesday: Cleaning the equipment Put tags Analyze the tags Take Countermeasures Do Seiri (sort out and discard unwanted items and equipment and parts of equipment) put tags where equipment cannot be moved What can be moved, please move it out. Either discard it, or put it in red tag area Start taking countermeasures against the muda Some countermeasures will be change of management decisions. Bolt example attack toolboxes

Wednesday:: Start 2nd S in the tool box and spares area and WIP area and make standard inventories.
Mid term review and then we decide what to do. Changed a lot of things in the working methods

Focused Improvement uses PDCA Cycle

4. Act: Standardize SOP One Point Lesson Audit progress: Close or go to next cycle 3. Check: Monitor Results Modify (if reqd) Validate Audit progress 1. Plan: Select Theme Select Problem Define Problem Form Team Make Schedule Audit progress 2. Do: Collect Data Analyze Data Confirm Analysis Finding Countermeasures Potential Problem Analysis Implementation

Focused Improvement uses Techniques

Simple Techniques: Stratification Fishbone Diagram Check Sheet Pareto analysis Histogram 5-S Scatter Diagram Brainstorming Run chart & Control Chart Why-Why Analysis (WWBLA) Ergonomics 5W-1H Analysis Process Mapping Muda Time study Mura Process Capability Analysis Muri IE Techniques

Powerful Techniques: Process Observation Kepner-Tregoe P-M Analysis Shainin-Bhote SMED Jidoka Poka-Yoke Cell Layout Taguchi Methods Optimization FMEA

Uncovering Hidden Waste

1. Annual Targets2. Loss Tree 3. JIT/Lean

time

Compute VAR (Value Added Ratio) Identify Non Value Adding Activities

Mgt Kaizen

Brilliant Suggesti on (Teian)

Kaizen needed

Do Process Observation:
Identify the process to be improved Walk through the process Identify muda

Golden Rules of Gemba Management Go to Gemba Have a good look (observe carefully) Take countermeasure on the spot Diagnose root cause Standardize to prevent recurrence

What is a Process? A process has something flowing through it. To that something, value is added at some stages. There is a definite starting point, where that something enters the process, and there is a definite ending point, where that something exits from the process. That something has activities done to it. Some are value adding and some are muda.

Now it needs 2 minutes only !

Remove isolated islands Before KAIZEN Cutting m/c Stitching m/c Cutting m/c Connect the operations

After KAIZEN

World class possi ble

Stitching m/cs

muda

Muda - how to see it?

What should flow
Material in a factory guest in a hotel document in an office

Muda = Waste with a special meaning

Is it stopping? Muda! Is it retracking?Muda! Is it piling up? Muda! Reprocessing? Muda!

7 - Muda List 1. Muda of over-production 2. Muda of waiting

3. Muda of repair/rejects
4. Muda of transport

5. Muda of inventory
6. Muda of motion 7. Muda of processing

Sustenance thru 5-S, Autonomous Maintenance, Visual Management

QFD
Co Voice Cust Voice Competitor position TFM Top notes ratio Moisture content additives

Wash well
Smell good till end Soft, not slushy Dissolve fast in water

How to show higher value addition How to stop losing business to competitor No product differentiation Fear of losing business Cavities in Kalpur Higher DSO 120 days JDE not friendly Why frequent price rise Customers having O/S for more than 365 days Poor prediction/correlation between lab and shopfloor results Test certificate problem How to improve logistics No new innovation Poor obsolescence Low hit rate for projects Poor customer process knowledge

How to eliminate general ledger and kardex differences Better cash forecasting to avoid idle cash Crashing annual closing deadlines without annual stress How to ensure the farden is maintained with lesser water consumption

Projects to be taken up in first workshop

Zero discharge to ETP from Resin Plant Reduction of inventory in outsourcing (local & imported) & 100% OTIF in outsourcing. Reduciton in admn costs associated with invoicing (reduce no of invoices) Reduction in phenol and formalin loss in politec How to eliminate general ledger and kardex differences