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Lean Through Operational Excellence
Experiences of Tata Chemicals
Ashok Muthuswamy
Nov 2014
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Tata Chemicals Limited (TCL)
• World’s second largest producer of soda ash
• Contributes 12% of India’s private sector’s urea production
• Carved a niche in India as a crop nutrients provider
• TATA SWACH: Water purifier providing affordable, safe drinking water to masses using innovative nano technology
• Pioneer & market leader in India’s branded Iodized salt segment
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TCL’s Global Footprint
Tata Chemicals Limited
Rallis India Limited
Tata Chemicals North America
EPM Potash Mines, USA Tata Chemicals Europe
British Salt, UK
Tata Chemicals Magadi, Kenya
IMACID,
Morroco JOIL,
Singapore
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Improve Control Cost Reduction
Action 500
1999
Operational
Excellence
2007
2010
Cash
Generation
2009
Manthan
2002
Total Operational
Performance & Cost Focus
Common Business
Language & people
Development
Improvement Journey at Tata Chemicals
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Operational Excellence at Tata Chemicals
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Lean Journey facilitated by OE
• Ensuring effectiveness and efficiencies throughout the value chain is what we perceive as Lean
• This presentation focuses on how we developed and deployed operational excellence process to boost our Lean pursuits
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Operational Excellence – Lean Boosted
• Lean Manufacturing is a well-understood system driving waste from current operations
• In our OE program, we embraced traditional Lean tools, and then went further to engage people to seek innovations and breakthroughs
It is a system that says there is no limit to people's creativity. People don't go to
Toyota to 'work' they go there to 'think‘.
Taiichi Ohno
The father of the Toyota
Production System
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Operational Excellence – Lean Boosted
• OE goes beyond the event-based model of improvement (eg: lean drive, Kaizen event, LSS Wave, etc.), and serves as an execution platform to continuously pursue Lean journey
• Therefore, OE is a systematic framework that helps increase effectiveness and efficiencies on a sustainable basis
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Conceptualization of OE Process
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We have implemented an earlier version of OE process named Udaan with great success, first at our main plant and subsequently at other plants; Udaan was our starting point
Our Road Map to Define OE
We spoke with people at all levels across Tata Chemicals facilities in India UK, UK, Kenya to gather what they understood by OE; What we found is some commonality in the understanding, but variances in articulation and deployment across as well as within plants
We visited and studied the processes of Tata Steel (lowest cost steel maker in the world, and thus most lean steel company), to understand how they achieved such excellence
These internal and external inputs were further processed to define our operational excellence model; {details in upcoming slides)
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Planning the Development OE Process
• We identified best in class areas within & outside our company
• We studied them in detail to collect best practice nuggets
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Development of OE Process
• The nuggets we collected from our exhaustive study were grouped into 13 different elements, bucketed into three categories
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Workshop Outcome: Definition of OE
• OE is a set of 13 elements that defines our Operational Excellence and asses its maturity
• These 13 elements help us to strive towards excellence in operational performance by – Developing a robust improvement system
– Having a process for management of the system
– Enabling and motivating people to manage the system
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“Improvement
Systems” “Improvement
Management”
“Improvement
Enablers”
1. Analytics
2. Standardization
3. Strategy
Deployment
4. Technology led
Simplification
5. SHE and Asset
Management
6. Measurement and
tracking
7. Improvement
Initiatives
8. Strategic
Investments &
Strategic
Outsourcing
9. Certifications,
Audits,
Assessments
10. Communicating purpose and
direction
11. Collaborative Culture
12. Rewards & Recognition
13. Capability Building
OE – The Tata Chemicals Way
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OE Assessment Criteria
• We developed assessment criteria for these 13 elements
• This criteria was used to assess departments, functions and plants
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Enterprise Support Functions (Finance, HR, Legal, Admn)
Where do we apply OE?
• OE Process is domain agnostic:
– It helps us assess excellence across the value chain
Suppliers
Distribu-tion
Sales & Mktg
Mfg Ops
Customers
Value Chain
Source & Procure
Engg R&D
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Positioning OE Among Other Initiatives
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• OE process supports better execution of all corporate initiatives
• It doesn’t compete with those initiatives
OE Process
Sreshto
How OE Supports Other Initiatives
LSS
TBEM
Safety
Cu
stom
er C
entricity
Emp
loyee
Eng
ag
emen
t
IMPA
CT
X Y
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How OE Supports Other Initiatives – (An Example)
• OE supports robust execution of any corporate initiative – For example, customer centricity initiative requires mapping out current
environment, benchmarking that with world class practices, capturing key customer data, analyzing it for customer behavior, developing actions based on the analysis, etc.
– While the strategic aspects of the program remain with the customer centricity initiative, OE process provides a deployment mechanism for the initiative
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How OE Relates to TBEM
• OE doesn’t compete with Tata’s Business Excellence Model (or Baldrige framework), but is a subset of it
• Such clear mapping helps us understand how various models dovetail among themselves, instead of competing
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ISO/EPM Audits 5S/GHK
RCA
CSI/SSI ICSI ESI
Business Results SDM LSS B
E In
dex
Outcome
Measures
Process Excellence
Customer Centricity
CIP
Even Explain How OE Metrics Don’t Compete with Other Indices
Leve
l of
Ass
essm
ent
Width of Assessment
OE Scorecard
Improvement Systems
1. Analytics 2. Standardization 3. Strategy
Deploy. 4. Tech led
Simplification 5. SHE/Asset
Mgmt
Improvement Management
6. Measurement and tracking
7. Improvement Initiatives
8. Strategic Investments
9. Certs, Audits, Assessments
Improvement Enablers
10. Communicate
purpose and direction
11. Collaborative Culture
12. R & R 13. Capability
Building
Process
Measures
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Deploying OE
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Develop a Deployment Plan
Activity
Communicate the initiative to leadership
Create initial communication package
Shoot videos of sr. leadership, advocating OE
Develop Collaterals (physical/soft posters, screensavers, etc.)
Identify assessors
Train assessors
Conduct site/functional assessments and generate improvement themes
Develop action plan to implement improvement themes
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Name the Champions
Function Name
Program Chair/Sponsor
Program Lead
Human Resources
Finance & Accounting
Plant A
Plant B
Plant C
Division A
Division B
Subsidiary
Marketing
Supply Chain Management
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OE Score Sheets
• These handy score sheets were used in assessments of multiple plants, units and enabling functions
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Assessment Score: 3.53
Assessment Scores
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Element Improvement Opportunities
Analytics Quality tools usage is limited to LSS projects, Such quality tools usage to be expanded and leveraged to identify /define wide ranging problems and develop solutions
Strategic Investments & Strategic Outsourcing
Risk assessment and mitigation plan to be done for all projects
Structured process for strategic outsourcing like LTSP is required
SHE and Asset Care Pace of structure repair and replacement doesn’t match deterioration rate
Communication Communication across work level needs to be improved (management staff, workmen, contract workmen)
Improvement Initiatives Involvement & participation of workmen in improvement initiatives to be strengthened
Strategy Deployment Detailing of activities and weightages in Project Planning Sheet [PPS] need to be improved
Improvement Opportunities Coming Out of Assessment
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Results
• Without OE framework, we wouldn’t have known the existence of several opportunities for improvements
The best approach is to dig out and eliminate problems where they are assumed not to
exist. Shigeo Shingo
The leading expert on the
Toyota Production System
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Thank You