taking lean to the enterprise

to theLeanLean

Taking

EnterpriseEnterprise

Kent SearsVice PresidentGeneral MotorsNorth AmericaManufacturing Processes and GMS Implementation

Kent SearsVice PresidentGeneral MotorsNorth AmericaManufacturing Processes and GMS Implementation

John ShookSenior AdvisorLean Enterprise InstitutePresident TWI Network

John ShookSenior AdvisorLean Enterprise InstitutePresident TWI Network

Today’s PresentationToday’s Presentation

History of Lean at GM

Taking Lean to the Enterprise

“Learning to See”

Value Stream Mapping

Nature of office work

History of Lean at GM

Taking Lean to the Enterprise

“Learning to See”

Value Stream Mapping

Nature of office work

The Awakening…The Awakening…

Feeling the competitive threat

Toyota introduces something new

GM and Toyota negotiate

NUMMI joint venture– Toyota Production System

– Manufacturing in the United States

Feeling the competitive threat

Toyota introduces something new

GM and Toyota negotiate

NUMMI joint venture– Toyota Production System

– Manufacturing in the United States

“All GM plants“All GM plants are a part of the same company are a part of the same company and must operate with and must operate with oneone production system production system with common elements…run common, run lean”with common elements…run common, run lean”

Jack Smithpast

GM Chairman

Lean HistoryLean History

GM Global Manufacturing System

Develop leadership

Deliver superior business results

Build value and reduce waste

GM Global Manufacturing System

Develop leadership

Deliver superior business results

Build value and reduce waste

Standardization

Standardization

PeopleInvolvement

PeopleInvolvement

ContinuousImprovementContinuous

Improvement

ShortLead Time

ShortLead Time

Built-in QualityBuilt-in Quality

5 Principles5 Principles

Global Manufacturing SystemGlobal Manufacturing System

LEAN thinking leadership

Exceptional business results

Sustained performance improvement

Competition was not standing still!

Fierce competitive pressures

LEAN thinking leadership

Exceptional business results

Sustained performance improvement

Competition was not standing still!

Fierce competitive pressures

The ChallengeThe Challenge

Leverage the learning

Optimize the whole

Leverage the learning

Optimize the whole

Accelerate performance

Competitive challenge

Accelerate performance

Competitive challenge

Success with Lean in manufacturing was difficult and took a long time.

Was taking GMS, GM’s Lean production system, from the plant to the office even possible?

Success with Lean in manufacturing was difficult and took a long time.

Was taking GMS, GM’s Lean production system, from the plant to the office even possible?

Lean at General Motors:From the plant to the office

Lean at General Motors:From the plant to the office

NUMMI: The Success Story:Lean Success with a UAW Workforce

Agreement between Toyota and GM:Toyota manages the plant and implements the Toyota Production System

Almost all former GM workers offered jobs: Including the old “troublemakers”

Extensive training program:Over 600 employees sent to Japan for trainingOver 400 trainers sent from Japan to NUMMI

About 30 managers or "coordinators" from Japan

Results: Quality Equal to Takaoka JapanProductivity Close to Takaoka Japan

NUMMI: The Other StoryWhat did the JV partners really get?

The Business Agreement:Toyota manages the plant and implements the Toyota Production System

The Business Case for GM:Small profitable carTPSIdle capacity – plant and people

The Business Case for Toyota:??

Results: GM ??Toyota ??

The Toyota Production SystemThe Toyota Production System

Just in TimeJust in Time“The right part“The right partat the right timeat the right timein the right amount”in the right amount”

•Continuous Flow•Pull System•Takt Time

Leveled ProductionLeveled Production

JidokaJidoka

Production LinesProduction LinesThat Stop forThat Stop forAbnormalitiesAbnormalities

•Automatic Machine Stop•Fixed Position Line Stop•Error Proofing•Visual Control•Labor-Machine Efficiency

Standardized Work Robust Products and ProcessesPreventative Maintenance; 4S Supplier Involvement

Best Quality Best Quality -- Lowest Cost Lowest Cost -- Shortest Lead TimeShortest Lead TimeThrough Shortening the Production Flow By Eliminating WasteThrough Shortening the Production Flow By Eliminating Waste

“Built“Built--in Quality”in Quality”

Operational Stability and KaizenOperational Stability and Kaizen

What could GM, or any company, do??

Toyota is Toyota.

We can learn from them, but we can’t copy them exactly.

How can we operationalize the same principles in our own organizations?

Lean ThinkingWomack and Jones’ Five-Step Approach has

been followed by many:

1. Find a change agent (how about you?)2. Find a sensei (a teacher)3. Seize or create a crisis4. Map your value streams 5. Pick something and get started

But, many skipped Step Four and jumped from Step Three to Step Five.

“Learning To See”“Learning To See”

VALUEVALUE--STREAM MAPPING: STREAM MAPPING:

Welding

Assembly

Stamping

•Draw a map of your current material and information flows•Draw a map of how your material and information should flow•Create and implement a plan to achieve your future state vision

“Learning To See”

VALUEVALUE--STREAM IMPROVEMENT STREAM IMPROVEMENT and PROCESS IMPROVEMENTand PROCESS IMPROVEMENT

RawMaterial

PROCESS

VALUE STREAM

FinishedProduct

PROCESSPROCESSStamping Welding

AssemblyCell

• Order to Delivery• Concept to Launch• Life Cycle Maintenance and Service

CurrentCurrent--State Map State Map

What To Do?What To Do?What To Do?

Reduce Lead Time!Reduce Lead Time!–– Get each process to produce only what Get each process to produce only what

the next process needs when it needs it.the next process needs when it needs it.

–– Orchestrate (control, manage, regulate) Orchestrate (control, manage, regulate) operations to get ever closer to this ideal, operations to get ever closer to this ideal, ever shortening the lead time.ever shortening the lead time.

ORDER CASH“All we’re trying to do is shorten the time line…”

Taiichi Ohno

INDIVIDUAL EFFICIENCY vs.INDIVIDUAL EFFICIENCY vs.SYSTEM EFFICIENCYSYSTEM EFFICIENCY

Takt Time = 58

FutureFuture--State Map State Map

<5d

The Work Planand Implementation

The Work PlanThe Work Planand Implementationand Implementation

Product Family

Current-State

Drawing

Work Plan andImplementation

Future-StateDrawing

A Detailed Plan of How to Get There•Step-by-step -- When, Who, How•Clear checkpoints with

•real deadlines and•named reviewers•reviewable outcomes

A Detailed Plan of How to Get There•Step-by-step -- When, Who, How•Clear checkpoints with

•real deadlines and•named reviewers•reviewable outcomes

EXTENDED V.S. GOALS Person REVIEWV.S. OBJECTIVES (measurable) YEARLY TIMELINE In

and PLANT and ChargeOBJECTIVES ACTIVITIES 1 2 3 4 5 6 7 8 9 10 11 12

Value-StreamValue-Stream MANAGERDATE

INITIALS

Value-Stream Plan

PP--DD--CC--A CycleA Cycle

ACTION

CHECK

PLAN

DO

GRASP the SITUATIONGRASP the SITUATION

HYPOTHESIS

TRYREFLECT

ADJUST

Lean: From the “Gemba” to the OfficeLean: From the “Gemba” to the Office

What’s so different, really, between the “Gemba” (the plant floor or the “real place”) and the office?

The office is also a “Gemba”.

How should we think about the Office Gemba?

Let’s use the Value Stream Mapping tool.

How?

What’s so different, really, between the “Gemba” (the plant floor or the “real place”) and the office?

The office is also a “Gemba”.

How should we think about the Office Gemba?

Let’s use the Value Stream Mapping tool.

How?

Applying VSM to the Office Gemba-- What we knew

Applying VSM to the Office Gemba-- What we knew

Lean works everywhere we’ve tried it.

Leadership will be key.

Learning must be the focus.

Lean works everywhere we’ve tried it.

Leadership will be key.

Learning must be the focus.

Applying VSM to the Office Gemba-- What we thought

Applying VSM to the Office Gemba-- What we thought

A workshop will be an effective process.

If we provide good training and clear expectations, excellent GM people will deliver results.

The specific benefits of the VSM tool are natural for the Office Gemba.

A workshop will be an effective process.

If we provide good training and clear expectations, excellent GM people will deliver results.

The specific benefits of the VSM tool are natural for the Office Gemba.

Applying VSM to the Office Gemba-- Some initial bothersome questionsApplying VSM to the Office Gemba-- Some initial bothersome questionsCan we distinguish work (“material”) flow from information (“control information”) flow?

Can we do system Kaizen as well as process or point Kaizen?

What is “waste” in the Office Gemba?

What about “creative” or “knowledge-based” work?

How to think about the “core value stream”, the real work of the business, versus support processes?

How to think about internal customers vs. external customers?

Can we distinguish work (“material”) flow from information (“control information”) flow?

Can we do system Kaizen as well as process or point Kaizen?

What is “waste” in the Office Gemba?

What about “creative” or “knowledge-based” work?

How to think about the “core value stream”, the real work of the business, versus support processes?

How to think about internal customers vs. external customers?

Lean FunctionsLean Functions

Takt Time = 58

<5d

What must your function do to help create the Future State?

“The aim of the Product Development process is the creation of Profitable Value Streams.”

“The aim of the Product Development process is the creation of Profitable Value Streams.”

Product Development as an example function…

Product Development as an Product Development as an example function…example function…

-- Al Ward

In Overall Value Stream Terms…

THE VALUE STREAMDefine value from the perspective of the customer

What thecustomer wants

when he/shewants it

Support Processes

Support Processes

Support Processes

Support Processes

Support Processes

Insurance Claim Processing

CompileFolder

withDocs

Receiving:Open &

Array Docs

VerifyClaim

CalculateAmount &Address

Print,Stuff &

MailCheck

Policy Holder’sFamilyFuneral Home

FIFO FIFO FIFO

2 Min 5 Min 10 Min 1 Min 1 Min

P/T =

L/T =

# inputs =

Reliability =

P/T =

L/T =

%C&A =

# ops =

P/T =

L/T =

% rejects =

Reliability =

P/T =

L/T =

% rework =

# ops =

P/T =

L/T =

Reliability =

% errors =

7 Days7 Days7 Days7 Days

FIFO

28 Days

19 Min

email mail

manualfinan

Process Box

Process DataBox

Inbox Queue

Customer/Supplier

TechnologyUsed

Work Priority:FIFO

System Metric

Information System Output

Getting StartedGetting Started

Communicating the vision

Leadership buy-in

Mapping the flow of value

Let’s go big!

Communicating the vision

Leadership buy-in

Mapping the flow of value

Let’s go big!

Roll Out Process:Roll Out Process:Shared vision

Leadership engagement

Dedicated resource

Clear objective

Simple metrics

Detailed strategy

Individual accountability

Monitoring and follow up

Shared vision


Dedicated resource

Clear objective

Simple metrics

Detailed strategy

Individual accountability

Monitoring and follow up

Shared VisionShared Vision

Lean principles apply equally well in the office and on the factory floor

Using lean thinking to optimize the enterprise

Lean principles apply equally well in the office and on the factory floor

Using lean thinking to optimize the enterprise

Leadership EngagementLeadership Engagement

“Top 50” leadership meeting– Dr. James P. Womack

Extensive debate

“All in” consensus

Taking LEAN to the enterprise

“Top 50” leadership meeting– Dr. James P. Womack

Extensive debate

“All in” consensus

Taking LEAN to the enterprise

Dedicated ResourceDedicated Resource

Candidate selection

Selection process– High potential list

– North American Strategy Board approval

GMS Functional Implementation Leader– 13 executives assigned

Candidate selection

Selection process– High potential list

– North American Strategy Board approval

GMS Functional Implementation Leader– 13 executives assigned


13 Functional Implementation Leaders13 Functional Implementation Leaders– Planning

– Quality

– Purchasing

– Human Resources

– Information Systems

– Legal

– Finance

– Planning

– Quality

– Purchasing

– Human Resources

– Information Systems

– Legal

– Finance

– Design

– Vehicle Engineering

– Powertrain Engineering

– Manufacturing Engineering

– Manufacturing

– Vehicle Sales, Service, and

Marketing

– Design

– Vehicle Engineering

– Powertrain Engineering

– Manufacturing Engineering

– Manufacturing

– Vehicle Sales, Service, and

Marketing


Training– Lean principles

– “Learning to See”Value Stream Mapping

– Facilitation and coaching training

– Workshop mentoring

Training– Lean principles

– “Learning to See”Value Stream Mapping

– Facilitation and coaching training

– Workshop mentoring

Roles and ResponsibilitiesRoles and Responsibilities

Leadership development– Leadership matrix

Deliver results– Manage the process

– Coach and support

Leadership development– Leadership matrix

Deliver results– Manage the process

– Coach and support

Clear ObjectiveClear Objective

Confirm our original hypothesis– “Lean Applies Everywhere”

Not just a philosophical exercise

Urgency and context

$1 Billion/year Structural Cost Improvement

Confirm our original hypothesis– “Lean Applies Everywhere”

Not just a philosophical exercise

Urgency and context

$1 Billion/year Structural Cost Improvement

Simple MetricsSimple Metrics

Leadership matrix

$$$ of structural cost saving confirmed

Leadership matrix

$$$ of structural cost saving confirmed

Detailed StrategyDetailed Strategy

Needed a NEW approach

Not just:– Belt tightening

– Head count reduction

Lean Principles and Value Stream Mapping

Hidden processes

Optimize the Enterprise value streams

Needed a NEW approach

Not just:– Belt tightening

– Head count reduction

Lean Principles and Value Stream Mapping

Hidden processes

Optimize the Enterprise value streams

The New Way: Lean Approach The New Way: Lean Approach

Planning R&DFinancialHR

WWPLabor Relations

IS & SLegalCommunications

DesignDesign EngEng MfgMfgEngEng SellSell

ActAct

PlanPlan

DoDo

CheckCheck

Product Plan

Product Plan

CustomerDealer

CustomerDealer

Leadership Board

Leadership Board

ScopingScoping

Project sponsor

Process owner

Project purpose statement

Metrics

Customer and customer requirements

Process data set

Workshop participants

Leadership panel

Project sponsor

Process owner

Project purpose statement

Metrics

Customer and customer requirements

Process data set


Leadership panel

Conducting the WorkshopConducting the Workshop

Participant training

Current state map

Waste and root cause identification

Applying lean principles

Future state map

Leadership review

Implementation planning

Leadership panel approval

Participant training

Current state map

Waste and root cause identification

Applying lean principles

Future state map

Leadership review


Leadership panel approval

Enablers for SuccessEnablers for SuccessLeadership engagement

Business objective

Project scope


Quantifiable metrics

Bold moves


Bottom line results


Business objective

Project scope


Quantifiable metrics

Bold moves


Bottom line results

Value Stream Mapping Status Value Stream Mapping Status

Lean-VSM Training 4000

Workshops 200

Workshop participants 3500

Hundreds of $Millions Saved $$$

Lean-VSM Training 4000

Workshops 200

Workshop participants 3500

Hundreds of $Millions Saved $$$

How it went…How it went…The EVSM Workshops were successful.

They were not easy:

- not easy to map the Current State

- not easy to map the Future State

- not easy to get enough learning in the

right people quickly enough

The project to apply Lean (GMS) to the enterprise was successful by any measure.

The EVSM Workshops were successful.

They were not easy:

- not easy to map the Current State

- not easy to map the Future State

- not easy to get enough learning in the

right people quickly enough

The project to apply Lean (GMS) to the enterprise was successful by any measure.

The Nature of Office

Work

The Nature of Office

Work

The Nature of Office WorkThe Nature of Office Work

Value is always assumed:

Question the value of everything!

Value is always assumed:

Question the value of everything!


Office processes are not visible

All process steps are not comprehended

Business processes rarely operate as expected

Mapping exposes the hidden process

Office processes are not visible

All process steps are not comprehended

Business processes rarely operate as expected

Mapping exposes the hidden process


Standardized work is the fundamental building block of lean

There are two types of work in the office: Creative and Transactional

Contrary to popular belief the majority of is transactional

Even the creative process can be standardized

Standardized work has wide application

Standardized work is the fundamental building block of lean

There are two types of work in the office: Creative and Transactional

Contrary to popular belief the majority of is transactional

Even the creative process can be standardized

Standardized work has wide application


Are the customer requirements understood?

Are they detailed and specific?

Unfortunately, in the office this is not the case

First time quality is extremely low (5-15%)

Built-in-Quality is the key

Are the customer requirements understood?

Are they detailed and specific?

Unfortunately, in the office this is not the case

First time quality is extremely low (5-15%)

BuiltBuilt--inin--Quality is the keyQuality is the key


What constitutes inventory in the office?

Primary value streams generally lack ownership

Process flow breaks down at the functional intersection

There are few formal tools to manage this discontinuity

Lean material flow strategies can help

What constitutes inventory in the office?

Primary value streams generally lack ownership

Process flow breaks down at the functional intersection

There are few formal tools to manage this discontinuity

Lean material flow strategies can help


Performance metrics are not widely used

Process out-puts may be measured

Effectiveness and efficiency are not!

Waste reduction opportunity is consistently greater than

Performance metrics are not widely used

Process out-puts may be measured

Effectiveness and efficiency are not!

Waste reduction opportunity is consistently greater than40%

Consider the Notion…Consider the Notion…

If nearly half of what we do in the office is non-value added waste why would our organization allow it to exist?

If nearly half of what we do in the office is non-value added waste why would our organization allow it to exist?

EVSM at GM-- Reflections EVSM at GM-- Reflections

Value Stream Mapping proved to be even more powerful in the office than it is in the factory.

But, the real key to the project success was the leadership provided by GM senior management.

Value Stream Mapping proved to be even more powerful in the office than it is in the factory.

But, the real key to the project success was the leadership provided by GM senior management.

taking lean to the enterprise

Education