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Creating Profit Through Lean
- 1. Creating Profit Through Lean in Custom Short Run Presented on 11/19/08 by for 1
- 2. Agenda ? Donnelly & the Short Run Challenge ? Business Results ? Our Continuous Improvement Process: Lean in the Short Run 2
- 3. Donnelly Story Challenges Results TWI Mistake-proofing The Donnelly Story ? Donnelly was founded in 1984 ? A small, one-story building ? Four presses, eight people, no customers - ? An idea to focus on short run, close tolerance parts 3
- 4. Donnelly Story Challenges Results TWI Mistake-proofing The Donnelly Story ? Today, the organization is over 225 people strong - Best-in-class technologies and quality systems - 24/7 Operations, 125,000 square foot facility with 33 presses - 700+ Materials used - 2500+ active molds 3000+ active parts - 40-50 changeovers per day; median 8-hour run - Industry-leading and world-renowned OEM customers - - $29+ Million in Revenues 4
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- 6. The Cos m ic Law Of Nature g s s in e o gr Pr Nothing is Static Re g re ssi ng 6
- 7. Donnelly Story Challenges Results TWI Mistake-proofing The Donnelly Story Brief overview of Donnelly¡¯s Journey ? 1991 ¨C Completed 25,000 sq ft expansion ? 1991 ¨C Establish internal training process & sales strategy ? 1993 ¨C Expand value-added services & leadership training ? 1994 ¨C Incorporated TOC in our operations ? 1995 ¨C Completed 5,000 sq ft expansion ? 1996 ¨C Attained ISO 9001 Certification ? 1996 ¨C Completed 36,000 sq ft expansion ? 1997 ¨C Implemented the War-Room Concept ? 1998 ¨C Focused our selling on industrial OEM¡¯s - ? 1999 ¨C Implemented a new Manufacturing Launch Process 7
- 8. Donnelly Story Challenges Results TWI Mistake-proofing The Donnelly Story Brief overview of Donnelly¡¯s Journey (Continued) ? 2000 ¨C Discipline of Market Leadership in Customer Intimacy ? 2001 ¨C Initiated a Customer Qualification Process ? 2002 ¨C Marketing Communications and Formalized Sales Process ? 2003 ¨C Adopted the principles of Lean Manufacturing ? 2004 ¨C Used Strategic process outlined in ¡°Good to Great¡± ? 2005 ¨C Added Training Within Industry component to Lean Mfg. ? 2005 ¨C Developed the process for finding ¡°bulls-eye¡± customers ? Developed Industry/Product & Customer Profiles (filters) ? Set process for mining companies with selected products ? 2006 ¨C Completed a 19,500 sq ft expansion - ? 2007 ¨C Attained ISO 13485 certification 8 ? 2007 ¨C Finalist ¨C Plastics News Processor of the Year
- 9. 42 million Donnelly Story Challenges Results TWI Mistake-proofing The Complexity Factor 7,000,000 Complexity Factor = Active Molds 6,000,000 x Materials Used x Presses 5,000,000 Comparative Data: 4,000,000 Plante Moran¡¯s 2004 North American 3,000,000 Study of the Plastic Molding Industry 2,000,000 1,000,000 0 Over 50% Over 25% Automotive Donnelly Over $25MM in Participating Injection Molding Companies Over 25% Medical sales All 9
- 10. Donnelly Story Challenges Results TWI Mistake-proofing Addressing the Complexity Factor ? Process orientation with measurements ? Peer Accountability - Manufacturing Launch (40 measures) - Production War Room - Critical Success Factors (12 key - Visual Management measures) Complexity ? Constancy of purpose ? Attention to detail - Short Run - Checklists - Quality Management System (incl. MRT) - Supervisor audits - Lean Manufacturing Techniques - Team Leader audits - Training 10
- 11. Agenda ? Donnelly & the Short Run Challenge ? Business Results ? Our Continuous Improvement Process: Lean in the Short Run 11
- 12. Donnelly Story Challenges Results TWI Mistake-proofing 30 30 Sales Dollars Orders Shipped 25 25 20 20 15 15 10 10 5 5 0 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2.0 Sales Dollars/Order Shipped 1.5 1.0 0.5 12 0.0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
- 13. Donnelly Story Challenges Results TWI Mistake-proofing 200 35 Molding Hours Run # of Presses Available 30 150 25 20 100 15 10 50 5 0 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 7,000.0 Hours Run /Press Available 6,000.0 5,000.0 4,000.0 3,000.0 2,000.0 1,000.0 13 0.0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
- 14. Donnelly Story Challenges Results TWI Mistake-proofing 100% 99% % On-time Delivery 98% 97% 96% 95% 94% 93% 92% 91% 90% 1st 3rd 1st 3rd 1st 3rd 1st 3rd 1st 3rd 1st 3rd Qtr Qtr Qtr Qtr Qtr Qtr Qtr Qtr Qtr Qtr Qtr Qtr '03 '04 '05 '06 '07 '08 14
- 15. Donnelly Story Challenges Results TWI Mistake-proofing Value-added per Employee $70,000 $65,000 $60,000 $55,000 $50,000 $45,000 Jan-07 Jul-07 Jan-05 Jul-05 Jan-06 Jul-06 Jan-08 Jul-08 Oct-05 Oct-07 Oct-04 Oct-06 Apr-05 Apr-07 Apr-08 Apr-06 15
- 16. Donnelly Story Challenges Results TWI Mistake-proofing Scrap value Scrap History Scrap$/prod'n$ at std cost at std cost $1,400,000 9.0% $1,200,000 8.0% 7.0% $1,000,000 6.0% $800,000 5.0% $ $600,000 2008 Goal = < 4.5% 4.0% % 3.0% $400,000 2.0% $200,000 1.0% $0 0.0% 2005 2006 2007 2008(proj) 16
- 17. Agenda ? Donnelly & the Short Run Challenge ? Business Results ? Our Continuous Improvement Process: Lean in the Short Run 17
- 18. Components of Continuous Improvement ? Quality System ? Daily War Room Meetings ? Visual Management ¨C beyond 5S ? Lean Events ¨C at least 9 per year ? Technical Training ? Leadership Training ? Training Within Industry 18
- 19. Donnelly Quality System Deliver Good Products On Time Management Review Team Corrective Action Process RCA What other Why was the parts might ISO 9001:2000 ISO 13485:2003 defective part have this produced? same issue? Why was the defective part 19 shipped?
- 20. Daily War Room Meetings Review last 24 hrs Look ahead to the next 24 hrs ? Safety ? Set Priorities ? Changeovers & efficiency ? ¡°At Risk¡± shipments ? Hours Run & efficiency ? Down Time ? High scrap jobs ? Scrap ? Mold issues ? Problem Jobs ? Action items ? This is a problem identification, not problem solving meeting 20 ? Action items assigned with peer accountability to resolve them within 48 hrs
- 21. Color Coding 21
- 22. Press Visual Management Large press group ? Blue light (flashing): Waters not running ? White light (flashing): Barrel temps left on ? Red: ¡°Must run¡± press ? Green: ¡°Needs to run¡± press ? Yellow: ¡°Should run¡± press 22
- 23. 5S Audit Process ? Next shift Team Leader audits section w/current shift Team Leader ? Record results on current shift schedule showing assignments ? Highlight in green if OK; pink if a problem with notes at bottom ? Hang schedule on current shift clipboard for Supervisor to review 23
- 24. Certified Molding Operator Training ? Must apply ? 16-18 classes ? Mix of classroom & hands-on training ? Final written test ? Must pass muster by doing most complex mold changeovers within standard ? Pass and receive raise, bonus, plaque, CMO shirt ? CMOs fill many 24 other positions
- 25. Training Within Industry ? Training for those who direct the work of others (supervisor) ? ¡°The Foundation of Lean¡± ? Three Key Elements or Skills - Job Relations: get results by gaining cooperation of others - Job Instruction: efficiently and effectively train others - Job Methods: generate & imple- ment ideas for improving the work 25
- 26. Donnelly Story Challenges Results TWI Mistake-proofing Training Within Industry structure ? Training in 2-hour blocks for 4-5 days ? Small classes of 8-10 people ? Demonstrate, then learn by doing ¨C learn from each other ? Identify and solve today¡¯s real problems during the training ? Focus on areas within your control ? Learn how to implement your ideas ¨C SAUC ? Pocket-sized reminder card TWI is a proven method of providing relevant solutions to today¡¯s real problems 26
- 27. Job Methods Improvements Job Methods Improvement Activity 110 100 90 80 Goal >= 40/mo # of Proposals 70 60 50 40 30 20 10 0 27
- 29. Donnelly Story Challenges Results TWI Mistake-proofing Structured Approach to Mistake- proofing ? What went wrong ¨C what mistake was made? ? Identify the root cause(s) - Has the job been simplified using Job Methods? - Was Job Instruction used to train effectively? ? Develop the best solution - Consider cost versus risk - Is the right way the easy way? ? Apply the solution 29 Is the risk reduced?
- 30. Mistake-proofing & Core Values - Do your best ? Eliminate barriers like mistakes so we can take pride in what we do - Treat others the way you want to be treated ? With respect for the human condition - Don¡¯t be afraid to ask for help ? Identify mistakes and work with others to discover the root cause - Always work as a team ? Mistake-proofing builds teamwork 30
- 31. Donnelly Story Challenges Results TWI Mistake-proofing What it¡¯s really all about... ? Believe in something bigger than ourselves ? Believe in the company, its leadership, values, vision and mission; and our products and services ? Eliminating motivational inhibitors ¨C like making mistakes True Compensation 31
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