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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


rom 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 contains two
your job? parts:
•Improve Standards
•Set and Sustain
Standards
Problem
(Sporadic) Company dies
A
Problem solved: Good
Sustenance of
standard
Cost or Quality
(parameter)

Std Problem Solved:


Improvement of
Problem created standard
Chronic (B)

Time
Who should do KAIZEN®
Your Job is: Improvement of
Standards
Set & Sustain Standards
Managers have more scope to d
TOP Investment KAIZEN; not workers!
MANAGEMENT

MIDDLE E N
IZ
KA
MANAGEMENT

  SUPERVISORS
Sustenance
(Routine Work)
  WORKERS

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)


How to ensure that
Root Cause
problem solving is ineffective?
ineffective

Solution Generating Journey (2)

Alternative Solutions (Countermeasures) Easy! Just skip one of the steps


or
Use ineffective technique in one of
Decision Making Journey (3)
the steps

Decision (Selected Countermeasure)


Note: Doing fast
is not the same
Potential Problem Prevention Journey (4)
as skipping

Implementation
(PDCA)
Problem Solving Approaches

Suggested in Books
Basis Traditional Optimal
Problem Grand Deployed Deployed
Definition composite (Broken down) (Broken down) &
One at a time
Method of Opinion of Secondary data Primary always
Data Expert & Secondary as
Collection required
Method of Forward thinking Rigorous Statistical Crude Statistical
(from cause to (segregation of
Data effect) effects first) & Backward
Analysis thinking
Attack technical Attack muda (non Attack muda (non value
Paradigm adding area); then mura &
area (value adding value adding area) muri
area) first first

Decision Weigh Pros & Compare pros Compare pros and


take up cons in
making Cons only Potential Problem
Analysis
Problem Solving Approaches

Basis Technique Nearest Pitfall Optimal


Problem Deploying Problem (Pareto) Aggregated data for problem Deployed (Broken
definition
Definition Defining Problem as gap down) & One at a
time
Method of “Asking the Process” Value Stream Primary always &
Data Secondary as
Collection (Learning to look) Mapping; BPR required

Method 1. Muda identify Opinions, QC 7 Crude Statistical &


Backward thinking
of Data 2. Mura – KDD, AM tools, Statistical
Analysis approach techniques,
3. Muri - ergonomics knowledge
Paradig 1. Single Piece Flow Mass Production Attack muda (non
Division of Labour value adding area);
m 2. Unification of work
then mura & muri
Info Technology
3. Visual Management
Departmentation
4. Autonomous Maintenance
Demarcation
5. Responsibility overlap

Decision 1. KAIZEN Decision Meetings off Compare pros and


take up cons in
Making Making & FMEA gemba Potential Problem
Analysis
TOTAL SUPPLY CHAIN COST STRUCTURE PRODUCTION EXPENSES:
XYZ MAKING & PACKING XYZ MAKING & PACKING
Elements Elements

11 Electricity

264 OTHERS 31 Fuel Oil

3 Steam & Water


243 PRODUCTION EXPENSES
38 Wages/Salaries Kaizen Project 1
3 Loss- Pkg. Material

402 PACKING MATERIAL

12 Loss- Raw Material 57 WIP


24 Give Away - Packing
Kaizen Project 2

1351 RAW MATERIAL

50 Repairs & Maintenance

4 Internal Transfer

18 Other Materials
4 Packing Fee

27 Depeciation
2300 Total Supply Chain Cost
243 Production Expenses o
KAIZEN Approach
Deploying the Problem
Defining the Problem

Black Spots

Thin In terms of
Others Spots leading to
Accepted rejection
product

Most
serious
1%=Rs50la
kh
ULMA NT
Holes
Rejection ($100,000)
36% 50%
pa
Rs18 crore
($3.75million)
per annum

Drawn to scale
Corporate Strategy:
Doubling sales in Singapore
Eliminate purchase
of new equipment

save USD 6 million

Loss Loss
Loss Loss
70% 70%
55% 55%

OEE OEE
KAIZEN OEE OEE
30% 30%
45% 45%
12/08/100
Loss Tree
(Finding Waste)

Calendar Time (525,600 min)


Available Time
Operating Time Break Shut
Changeover Time Sundays
Quality Output down down

SpeedShort
Loss Stops
Quality
Loss
Typical OEE is
30~50%
ailability Rate = Available Time / Calendar Time
formance Rate = Operating Time / Available Time
ity Rate = Quality Output / Output during operating time

= Availability Rate X Performance Rate X Quality Rate


Selection of Theme for KAIZEN
Plan
Narrowing down to the Most
Important Issue:
Select for
Focused
Improvement

Loss Availability
70% Loss
OEE Target 45%
61%

Performance Loss
OEE
35%
30%
4% Quality Loss
12/08/100 Jan- Jun 2
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

New
E vent Actual Result
Root Cause C hain
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
REG. MATERIAL &
TRANSPORT MANAGER
11 10

12 13
ELECTRICAL
STORE KEEPER CONTRACTOR

9 14
DISTRICT 6 DISTRICT TECHNICAL
MANAGER OFFICER

7 8 REGIONAL
5
ENGINEER
CUSTOMER PREMISES
3 4

DISTRICT 2 JOB 1 CUSTOMER


ACCOUNTANT COSTING RELATION OFFICER
CUSTOMER COSTING, JOB CARD
RELATION OFFICER REQUISITIONS CODING & SIGNING

ELECTRICAL DISTRICT TECHNICAL


STORE KEEPER OFFICER
CONTRACTOR

CUSTOMER PREMISES
Setting Up Customer Account

Data
New Block BPO
Capture
8

3
7
ctions after KAIZEN: DM 6
TO receives info from field. Old Block 5
TO fills data into CS 111 form.
1
TO fills meter no., CS111 no. etc., in register 2 DTO
TO takes form to DM
M verifies and approves by signing
4321
TO picks up signed form from DM
TO sends form to data supervisor
ata supervisor cross checks serial numbers and signs in courier book
ata supervisor allots it to data capture assistant
ata capture assistant enters data into system. Estimator
Result of 3 Processes:
ation for new service, connecting it, and setting up for

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

New
E vent Actual Result
Root Cause C hain
Identifying & Eliminating Mura
Material Machine
Designed for batch loading
High operation time
Breakdown
Not Available

Effect (Problem)
Not Trained
High Lead Time
Batch Production
Absent
Long Waiting (WIP)
M/C Utilization is the key measure
Man Method
Check Sheet

Cause Tally Mark Occur Freq


Batch Prodn ///// ///// ///// 15
High WIP ///// ///// ///// // 18
M/C Util ///// ///// 10
Breakdown /// 03
Batch loading ///// ///// ///// ///// 20
High Op Time / 01
Mat/Man Not // 02
available
Pareto Analysis

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

BRAKEDOWN OF SOAP LINE 2 JAN-MAR 2000

95 97 99 100
80 90
100 100
75
70 81
65 71 80
60
55
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20
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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 Oil on Spills New No training Production Training is


Cons. High floor while operators subverts bypassed
mopped pouring don’t training
up know

Batch Loading M/C Max m/c Isolated Prodn Mgt does


of m/c designed speed islands system not
so linkage not understand
understood prodn sys
by mgt linkage
Progression of Knowledge
- Goldratt Model

Cause-Effect

Correlations

Taxonomy
Mura Case Studies
To be
Deploying KAIZEN Projects done
Called
Teian through
Hidden Individual
Waste Suggestion Small savings Suggestio
Kaizen
Tonsbe
Small Group done
Moderate Savings
Activity
by
Kaizen
Small
Group
Activit
Known To
y be
WasteGEMBAKAIZEN done
Workshop Big Savings by
Manage
ment
Improvement v/s Focused
Improvement
Improvement Focused Improvement

Paper does not


burn in sunlight

Paper burns
GEMBAKAIZEN
Workshop
approach
The GEMBAKAIZEN Workshop

CHECK
&
PLAN DO
ACTIO
N
Pre Day 1 Day 2 Day 3 Day 4 Day 5 Post
workshop workshop
day day

Collect Confirm Start


Data from diagnosis Implementin
gemba experiment g
Analyze ally countermeas
Data ure Implementi
(diagnose) on &
Presentatio
n
The GEMBAKAIZEN WorkshopPLAN

1. Understand strategy of the company


• Is it Cost Reduction? Is it Quality Improvement?
• What is your company’s strategy
1. Identify Projects, from strategy, in advance
2. Set target on the projects
3. Form teams from management staff
4. Make schedule for workshop
5. Identify technique
6. 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
1. Analyze data using technique
2. Confirm analysis experimentally, if required
3. Find temporary countermeasure
4. Implement temporary countermeasure
5. Display Results – set up a measure
6. Do Potential Problem Analysis (prevent future problems
7. 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 T a rge t
r o m e nt
F m
e pl oy
D
4. Act: Standardize 1. Plan: Select Theme
SOP Select Problem
One Point Define Problem
Lesson Form Team
Audit progress: Make Schedule
e en ZE
Close or go to next cycle etw AI Audit progress
B
BAK hops The AIZE
E M orks B AK ops
G W M h
3. Check: N 2. Do: Collect Data GE Works
N
Monitor Results Analyze Data
Modify (if reqd) Confirm Analysis
Validate Finding
Audit progress Countermeasures
Potential Problem Analysis
Implementation
Audit progress
Focused Improvement uses Techniques

Simple Techniques: Powerful Techniques:


•Stratification •Process Observation
•Fishbone Diagram •Kepner-Tregoe
•Check Sheet
•Pareto analysis •P-M Analysis
•Histogram •Shainin-Bhote
5-S

•Scatter Diagram
BrainstormingSMED
•Run chart & Control Chart •Jidoka
•Why-Why Analysis (WWBLA) Ergonomics
•Poka-Yoke
•5W-1H Analysis
•Process Mapping •Cell Layout
•Time study Muda •Taguchi Methods
•Process Capability Analysis Mura •Optimization
•IE Techniques Muri
•FMEA
Uncovering Hidden Waste

1. Annual Targets
2. Loss Tree 3. JIT/Lean
P

Compute VAR
time
(Value Added Ratio)
Brilliant
Sugges
Identify
Kaizen Non Value Adding
tion
Mgt (Teian) neede Activities
Kaize d
n
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 Connect
isolated the
islands operations Worl
d
Before KAIZEN After KAIZEN class
Stitching possi
m/c ble

Cutting Cutting
m/c m/c

Stitching m/cs
muda
Muda - how to see it?
• What should flow
– Material in a factory
– guest in a hotel
– document in an office
• Is it stopping? Muda!
• Is it retracking?Muda!
• Is it piling up? Muda!
Muda = “Waste”
• Reprocessing? Muda!
with a special meaning
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
S, Autonomous Maintenance, Visual Manageme
QFD

Co Voice TFM Top notes Moisture additives


ratio content
Cust Voice Competitor
position
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