gearing up for dubai world expo 2020 with dave watkins · gearing up for dubai world expo 2020...

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Gearing up for Dubai World

Expo 2020 with Dave Watkins

Tips for Top Management to build

organizational Efficiencies

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The Vision of Dubai 2020

• First time in Middle East

• 6 months duration

• Expected 25 Million Visitors

• Economic impact of € 7.7 Billion

• Creating 275,000 Jobs

• Offering access to market of 2.9 Bn people

• Celebrating Golden Jubilee for UAE

• Showcase progressive and sustainable vision for future

Copyright 2015 Omnex Inc. All Rights Reserved. 2

Source: expo2020dubai.ae

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What is at stake

• Revenues

• Profits

• Image

• Confidence in the abilities of the region to deliver the scale


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Making most of the opportunity

• Question: Can we consistently deliver value at lowest cost?

• Answer: We know how to “Build Organizational Capability to deliver”, it’s not by accident:

– Use BOS/TQM to target and manage strategically critical improvement

– Use Process Review to continually improve capability

– Create and sustain a Problem Solving culture

– Use Lean to radically increase efficiency, shorten lead times

– Use Six Sigma to eliminate systemic defects


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Challenges

• Traditional approaches: – “Cost cutting” vs. achieving real efficiencies

– Correcting defects rather than preventing systemic causes of defects

– Fixing blame rather than fixing problems

– Demanding performance rather than enabling it

– Controlling products rather than processes

– Focusing on the factory floor rather than integrated systems of business processes

– Reacting rather than anticipating

– Aiming too low!


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What is Needed?

• Strategic Performance Management to drive down costs while increasing value

• Operations Excellence: – Efficient—minimal waste

– Capable― <3 ppm defect levels

– Fast—extremely short lead times, true JIT performance

• Problem Solving Culture and Discipline – “No Problem” is a problem—use problems to learn

• Efficient & Effective Process Control – Minimal use of non-value-added, ineffective inspection/detection

controls


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IMS*

9001, 18001,

14001 Lean Six Sigma

Performance-Driven Culture

Systems &

Tools

Employee

Attitudes

Integration of Systems, Methods & Tools

5S

TPM Error-

Proofing

CRM BOS

DFSS

LPA

SPC

Problem

Solving

*IMS: Integrated Management System


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BOS: Alignment of Customer Requirements & Quality Objectives


No Operational Interruptions

Receive required parts at

scheduled time

100% of shipments received by

customer on scheduled day

% On-Time (on day required)

Customer Expectations

Result Measurable

Quality Objective

Customer Requirements

An Example

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The Basic Operation of a BOS


Customer

Expectations

Internal

Key Processes

and Events

Measurables for

Key Internal

Processes

Trend of

Measurables

Predict

Downstream

PerformanceConstant

Employee

Awareness

CO

NT

I NU A L P R O C E S S I M P R O V E

ME

NTVerify & Adjust

Establish

Correlation Identify

Track

Select

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Basic Elements of a BOS


Customer

Expectations

Competitive

Benchmarks

Mission

Statement

Teams

Strategic Goals and Objectives

Result

Measurable

Result

Measurable

Key

Process

Key

Process

Key

Process

Key

Process

Key

Process

Key

Process

Process

Measurable

Process

Measurable

Process

Measurable

Process

Measurable

Process

Measurable

Process

Measurable

Improvement

Action

Improvement

Action

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Data Driven – Cascade To All Levels


Company

% Production to

Plan

Plant One Plant Two

Product/

Process

Unit

Product/

Process

Unit

Product/

Process

Unit

Product

Sub-Process

Unit

Product

Sub-Process

Unit

Product

Sub-Process

Unit100 90 80 70

Unit Ouputs

Perf

orm

ance

Time

100 90 80 70

Aggregated Outputs

Perf

orm

ance

Time

100 90 80 70

Process Outputs

Perf

orm

ance

Time

Cascading

Objectives

Additive

Performance

Metrics

Key performance

objectives cascade

down while performance

data pass upward for

analysis and action at each operating level.

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Operations Excellence

• Combines Lean, Six Sigma and a Problem Solving “Kaizen” Culture

• Creates a discipline of continual improvement

• Engages and empowers process owners

• Focuses on Processes rather than Functions

• Pushes decision making to the lowest possible level; does not rely on “Command and Control”

• Involves leadership at the Gemba, rather than the conference room.


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Operations Excellence Core Values

Excellence is:

• Customer Success

• Value-Added Content

• Consistency

• Built-In

• Continuous Improvement


SS

20%

10%

50%

30%

10%

Lean

30%

60%

20%

20%

40%

LSS

50%

70%

70%

50%

50%

LSS – Complimentary Strategies

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Profits

Performance

Process

Projects

People

Scorecard

Scorecard

Scorecard

Scorecard

Scorecard

Operations Excellence – Linked Scorecards Aligning Goals, Projects & People

Planning

Improving


Performance

Scorecard

Profits

Process

Projects

People

Scorecard

Scorecard

Scorecard

Scorecard

B.O.S. – Business Operating System

Value Stream Maps

Continuous Flow

Supermarket Pull

Six Sigma Breakthru

SMED/TPM/Five S

Standards

Education

Training

Resources

Feedback

Planning for Improvement

GAPS

(PROJECT

SELECTION)


Performance

Scorecard

Profits

Process

Projects

People

Scorecard

Scorecard

Scorecard

Scorecard

Achieving Improvement

New Knowledge, Skill, Attitudes

and Behaviors

New Methods, Policies

& Procedures

Lean Productivity &

Six Sigma Quality

Improved Satisfaction

Increased Sales

Increased Margins


Accounting Human Resources

Operations Purchasing Sales

Strategic Objective & Measures – Voice Of the Customer

Process Variation

Process Measures

Voice Of the Process Leadership Team Objectives

Lean Six Sigma Aligned with B.O.S.

Projects

Lean Six Sigma Improvement Organization

Lean Six Sigma Sensei

LSS Project Team

LSS Project Team

LSS Project Team

Lean Six Sigma Project Manager

LSS Project Team

LSS Project Team

LSS Project Team


LSS Project Team

LSS Project Team

LSS Project Team


Lean Champion

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Balanced Scorecards

• Performance measures must address the concerns of ALL Stakeholders. – We can’t afford to optimize one measure at the expense of the others.


•Cost •Quality •Delivery •Technology •Sales •Margins •Satisfaction

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What is Lean?

• Maximizes “value-added” content – Define value in the eyes of the Customer

– Eliminate waste

• Optimizes “flow” – Cost of Poor Flow

– Pull systems

– One piece flow

• Process approach

• Pursue perfection (the pit crew)



Extra Handling & Storage

Costs

Expediting Costs

Premium

Freight

Charges

Late Deliveries

Long Lead-times

Cost to Customer

Excess Inventory

Excess Scrap & Rework

Excess Capacity

Lost Customer loyalty

Excess Labor Costs

Opportunity cost if sales

Potential is greater than Current capacity

Cost of Poor Flow (COPF)

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Lean Strategies


• Implement Continuous Flow Processing

• Manufacturing and Assembly Cells

• Use Pull not Push Scheduling

• Supermarket Pull With Kanban

• Level Demand

• Heijunka

• Control Quality at the Source

• Source Control & Error proofing

• Develop Flexible Production Equipment

• Quick changeovers - SMED

• Manage Overall Equipment Effectiveness

• Total Productive Maintenance

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Operational Benefits of Lean


General Motors Framingham Assembly Plant versus Toyota Takaoka

Assembly Plant, 1986

GM

Framingham

Toyota

Takaoka

Gross Assembly Hours per Car 40.7 18.0

Adjusted assembly Hours per Car 31 16

Assembly Defects per 100 Cars 130 45

Assembly Space per Car 8.1 4.8

Inventories of parts (average) 2 weeks 2 hours

Note: Gross assembly hours per car are calculated by dividing total hours of effort in

the plant by the total number of cars produced.

“Adjusted assembly hours per car” incorporates the adjustments in standard activities

and product attributes described in the text.

Defects per car were estimated from the J.D. Power Initial Quality Survey for 1987.

Assembly space per car is square feet per vehicle per year, corrected for vehicle size.

Inventories are a rough average for major parts.

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Cost Savings from Continuous Flow

• 30 to 50% reduction in direct and in-direct labor

• 50 to 75% reduction in WIP inventories

• 75 to 90% reduction in process lead time

• 30 to 40% reduction in floor space

• Significant improvements in quality due to fast feedback

• Increased flexibility to adjust to volume or mix variation



Example: Inventory Carrying Costs

Inventory Cost Categories: Cost of Money 6-12% Taxes 2-6% Insurance 1-3% Warehouse 2-5% Handling 2-5% Clerical 3-6% Obsolescence 6-12% Loss 3-6% Total 25-55%

Source: Strategic Logistics

Management, 2nd edition, 1987, Stock &

Lambert, Irwin, Homewood Illinois.

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What is Six Sigma?

• A systematic, scientific, fact based, data-driven problem solving process

• Projects are led by Black belts

• Corporate culture and structure

• Process capability = 3.4 defects/million


2σ 308,537

3σ 66,807

4σ 6,210

5σ 233

6σ 3.4

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Six Sigma Deliverables

• An understanding of the product – process relationship

• Key Product Output Variables (KPOV) as a function of Key Process Input Variables (KPIV)


Y = (X1, X2, X3, X4. . . ) Output Input Variables Process Variables


Quality engineering

and administration

Inspection/test (materials, equipment, labor)

Expediting

Scrap

Rework

Rejects Warranty

claims

Maintenance and service

Cost to customer

Excess inventory

Additional

labor hours

Longer cycle times

Quality audits Vendor control

Lost customer loyalty

Improvement program costs

Process control

Opportunity cost if sales

greater than plant capacity

Cost of Poor Quality (COPQ) We See Only the Tip of the Iceberg

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Sigma is Directly Correlated to Cost of Poor Quality


6050403020100

7

6

5

4

3

2

1

0

COPQ (% Sales)

Sig

ma L

evel

Industry average is 20% COPQ for a 4 Sigma Company

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What is Process Review?


Systematic approach to analyzing and keeping “live” our Process Flows, PFMEAs, Control Plans, and Plant Floor Controls

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What is a Process Review?

• A systematic approach to analyzing and making “live” our Process Flows, PFMEAs, Control Plans, and Plant Floor Controls

• A discipline for determining and defining linkages between FMEA, Control Plan, and Plant Floor Controls – Use error proofing and layered process audits to ensure control


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What is a Process Review?

• A discipline that updates the FMEA regularly using information regarding customer, warranty, and internal failure history – The process then updates the mistake proofing worksheet, the control

plan and the layered process audit

• A process for empowering employees on the shop floor to take ownership and manage “Process Control” – Work the hand-off from “quality” to “manufacturing”

• An approach to ensure employees know how their actions affect customer perception of quality and company expectations of performance


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The Objectives of Process Review

• Process Review…

– enforces standardization (definition and actions)

– simplifies processes

– provides a knowledge base for Advance Product Quality Planning (APQP)

– guarantees employee involvement

– provides for cross-functional communication

– provides an understanding of shared problems


Process Review is a Vehicle for Knowledge Management & CIP

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The Objectives of Process Review

• Process Review… – identifies areas where engineering changes may be

required

– highlights areas needing improvement

– identifies the methods that will be used to achieve improvements

– focuses attention on processes


The Goal of Process Review is Zero Defects

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What is Problem Solving?

– Creative Thinking – Rational Thinking – Decision Analysis – Risk Analysis – Checksheets and Work

Instructions – Pareto Diagrams and Trend

Charts – Process Flow Diagrams,

FMEA and Control Plans

– Cause and Effect Diagrams – Dot Plots and Histograms – Scatter Plots and Analysis

of Variation – Control Charts – Simulation – Regression Analysis – Designed Experiments


• A disciplined process used to identify root causes of problems

and provide permanent corrective actions to eliminate them

• Strictly fact based

• Uses various tools:

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Root Cause Analysis and Methodologies


FMEA

Disciplined

Problem Solving

DMAIC

(DOE)

Root Cause

Known

Root Cause

Found

yes

no

no

Basic

Intermediate

Advanced

yes

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Team Based Problem Solving…

• Addresses Complicated Problems – The team approach works best when the problem – and its associated

information – is complicated and beyond what one member is reasonably capable of knowing

• Addresses Special Cause and Common Cause Problems – Designed to work best with special cause problems

– Can also be used with common cause problems and improvement actions


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Team Based Problem Solving…

• Uses Cross-Functional Inputs – Working in a cross-functional team means:

• Each problem solver no longer needs to know all the technical details about how things work

• Necessary information is available from a variety of team members

• Promotes Standardization – A team approach to problem solving leads to:

• A common language

• Effectiveness, consistency, time savings, and change control

• Designed for Problems with Unknown Root Causes – Used to identify root causes of problems and provide corrective

actions

• Facilitates Timely Solutions


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The Problem Solving Process


Become Aware of Problem

Form Team

Describe the Problem

Implement & Verify

Containment Actions

Identify Potential Causes

Select Likely Causes

Identify Alternative Solutions

Select Permanent Corrective

Actions

Is Potential Cause a

Root Cause

Implement Permanent

Corrective Actions

Prevent System Problems

Congratulate the Team

Step

0

1

2

3

4

5

6

7

8

Find and Verify

Root Causes

“No Problem” Is a Problem

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In Summary

• The current economic climate, while threatening, also provides opportunities to achieve and sustain competitive advantage via: – Sustained Strategic Performance Management

– Creating an “Excellence Culture” that drives down cost while sustaining or increasing value

– Employing Operations Excellence to maintain a focused, disciplined approach to radically improve efficiency and capability

– Becoming a knowledge management and problem solving culture.


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In Summary

• Operations Excellence will aggressively attack the costs of inefficiency and defects: – BOS/TQM Strategic Improvement Management

– Integrated Lean/Six Sigma in Process & Product Development

– Process Review targeting Zero Defects

– Disciplined Problem Solving Culture

– Effective Supplier Development and Supply Chain Management, to develop and sustain these methodologies throughout the value stream.



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gearing up for dubai world expo 2020 with dave watkins · gearing up for dubai world expo 2020...

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