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Kepner Tregoe Hi Performance Manufacturing Alex Diong

Outline of Presentation Introduction to Kepner –Tregoe What does Kepner – Tregoe do? What is Hi Performance Manufacturing (HPM)? Improvement Initiatives Client Results

Who are Kepner – Tregoe? Founded in 1958 by Charles Kepner and Benjamin Tregoe. International Consulting Company servicing 44 countries in 14 languages. Our people are Engineers and Science graduates who have held line management positions . Brand Recognition established in the areas of Problem Solving, Decision Making, Risk Management and Project Management. Our Strategic Focus is to configure our proprietary processes into application models which deliver real and tangible results to our manufacturing client base.

What does Kepner Tregoe do? Public Sessions (PSDM, PMW, Lean Manufacturing/Office) Six Sigma – Green & Black belt Intercompany Sessions Process Facilitators Program Leaders Problem Solving & Decision Making Facilitation Project Planning Facilitation Focused Work Sessions + Follow-Up Shutdown Management OEE Improvement MRO Inventory Reduction “ Footprint” Analysis Complexity Reduction Strategy Formulation & Implementation Training Short – Term Consulting HPM Consulting

HPM Clients BHP Steel One Steel SSM Boral Masonry Boral Bricks, GA Boral Bricks, AL Aristocrat Aristocrat, NV JNJ Consumer, NJ Kimberly Clark, WA North America Moen, OH Amcor Aerosols CSR Sugar Europe CSR Monier Wunderlich One Steel Pipe & Tube Visy Pulp & Paper Cement Australia Corning CSR Insulation China CSR Insulation Malaysia BlueScope Steel Thai Corning Shanghai UK Coal LaFarge Dieconnex Bona Floors Burgmann Simplot Rio Tinto One Steel Rod & Bar APAC Amcor Fibre Packaging Mitsu Metals

What is Hi-Performance Manufacturing? Safety & Environment Focus – Zero Harm Mentality Process Control – (Six Sigma Quality) Equipment Reliability (95% Availability) Continual Cost Reduction 100% On Time Delivery Focus on products able to maintain a healthy profit margin

Achieving HPM “ Achieving Manufacturing perfection is like any form of excellence: It is a defined combination of doing the right thing and doing it in an extraordinary manner”

Achieving HPM Structural Costs “ Doing the Right Things” Products we offer Customers we serve Supply Chain Partners Operational Costs “ Doing Things Right” Safety & Environment Prime First Time Production Rate Equipment Reliability Process Control 100% On-Time Delivery Structural Costs Operational Costs

Inputs to Hi Performance Manufacturing Variation Reduction Critical Variables Identified Disciplined Change Control Disciplined Shift Handovers SOP Compliance Technical Knowledge Product & Process Regular Predictable Up-skilling User Based Design Role Model Leadership Critical Few Focus Commitment to Data Accuracy Performance System Management Effective Involvement Daily Discipline Critical Thinking Skills Critical Mass of Critical Thinking discipline Facilitation Expertise on shop-floor Structured Approaches to Issue Resolution & Implementation

Improvement Initiatives Analysis Project Identification Implementation Sustainability

Analysis – The Challenges Strategy Analysis Project ID Implementation Sustainability Suggestion Box Resource Constrained New View / Paradigm Shift Management Input Level Payback level $ Step Change Zone Efforts – Diagnostics – Systems - Resources Incremental Improvement Zone

Analysis – Recommended Approach Use Data to Drive Quality Improvement Initiatives: Structural Cost: Customer, Product & Finished Goods profiling, e.g. Sales Revenue by Customer, Sales Revenue by Product. Operational Cost: Measure waste / yield / prime first time by product, crew, stage of the process, time Cycle Time, Uptime, Bottleneck analysis Maintenance Performance: Reliability, Shutdown Performance Employee Performance: Day-In-The-Life studies Crew Variability Performance System Audits Systems: Meeting Studies Planning and Control System Audits Strategy Analysis Project ID Implementation Sustainability

Analysis – Recommended Approach (cont.) Ensure data sample size is large enough to take into account; crew rosters, product mix, seasonality, maintenance periods Ensure timing of data sample reflects the current state of operations Use Employee Interviews as a vehicle to generate the right commitment and involvement Calculate improvement targets from average and Best Demonstrated Performance If you do not have the required data – get it! Strategy Analysis Project ID Implementation Sustainability

Analysis – Self Assessment Volume-Margin matrix assist in assigning specific improvement areas Margins Low High Volume High Low Margin Improvement Growth Substitution, Outsourcing, Elimination Protection Operational Marketing Marketing / Operations Operations / Marketing Responsibility Focus

Analysis – Self Assessment

Project Identification – Recommended Approach Accurate Definition of Improvement Projects Rigorous Assessment of bottom line benefits for all potential improvement initiatives Get management to develop prioritisation criteria Use of Decision Analysis and Portfolio technologies to develop a Prioritisation Matrix Select the Critical Few and do not be tempted to try and “Boil the Ocean” Communicate final projects selected and selection process Strategy Analysis Project ID Implementation Sustainability

Documented Savings Sheet Strategy Analysis Project ID Implementation Sustainability

Prioritisation Matrix Strategy Analysis Project ID Implementation Sustainability

Implementation – Recommended Approach Select Capable Resources with the Correct Skill Sets Ensure Resources are 100% Full-Time Use a systematic approach for issue resolution and establish a common language within the business Transfer Project Management Capability Disciplined Project Planning Process Complete Extensive Risk Assessment Process with Key Stakeholders Clear Accountability – Roles & Responsibilities Established Disciplined Project Monitoring system: Weekly Reviews, Milestone Reviews, Visual Performance Indicators Extensive Coaching and Support Strategy Analysis Project ID Implementation Sustainability

Sustainability – Recommended Approach Implementation Plans include a detailed transition phase Disciplined Coaching and Mentoring in the use of Rational Process during Implementation Re- Engineering of the Performance System to support required behavioural changes Developing Internal Program Leader Capability Project results are signed off based on a six week moving average Strategy Analysis Project ID Implementation Sustainability

Fb S P R C + Situation How clear are the performance expectations and how well are they understood? How clear is the signal to perform? How well does the work environment support expected performance? Consequences How well do the Consequences encourage expected performance? Response What is the observed performance? How does it compare with expectations? Performer How capable is the Performer to meet the performance expectations? The Performance System Feedback How appropriate is the Feedback and how well is it used to influence performance?

Melt Shop Increased Caster Start-Up success from 85 % to 92.3% Reduced MLC delays from 120 mins / week to Zero Increased Melt Shop Yield from 89.2% to 91.0% Rolling Mill Reduced Cobble Rate from 0.85% to 0.41% Increased Throughput from 350 tonnes / shift to 455 tonnes / shift Steel Manufacturer

Problem Solving & Decision Making

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Hi Performance Manufacturing

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