Process Re-engineering in a Transactional Environment


Published on

  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide
  • Touching lives in very meaningful ways… Protecting our troops and protecting our borders with products from Textron Systems. Rescuing people with our Bell medivac helicopters. Transporting cancer patients and transplant organs to hospitals with Cessna jets. Helping small business owners realize their dreams of entrepreneurship through Textron Financial. Supplying the entire country of Trinidad with water through our Maag pump systems…and Bringing water purification systems to the villages of Indonesia with our Cessna Caravan aircraft…  Supporting the Tsunami relief effort with our LCAC amphibious vehicles from Textron Marine and Land.  Innovation… Making a car’s fuel system safer, lighter and more efficient by using advanced plastics. Re-defining the way the world flies with tiltrotor technology. Developing the next generation golf car, with a global positioning system to help locate the ball and hole faster.  Making weapons and surveillance systems SMART.
  • ADDITIONAL HIGHLIGHTS… Distribution Finance Exclusive and non-exclusive relationships Leading national provider of “pay-as-sold” floorplan programs Captive E-Z-GO and Jacobsen programs Centralized origination and service Asset Based Lending Working capital facilities complement inventory financing for full suite manufacturer financing ABL products include revolving lines of credit, CAPEX, debtor-in-possession, and companion term loans, among others. ABL facilities are secured by accounts receivable and/or inventory. Specialty ABL factors freight bills and utility service receivables Golf Finance Major presence in US, Canada, Mexico, and Caribbean Combined forces w/EZ GO and Jacobsen in ‘04 to become only single source resource for equipment selection and course and equipment financing Entered Marina Financing marketplace in ‘0X Not Pictured: Structured Capital Structured Capital provides tax-oriented, long-term leases of large-ticket equipment and real estate Predominantly investment-grade leasees Nearly 25 years of experience Origination is highly selective and opportunistic Textron Financial’s Strategic Advantage Industry experience – long-standing presence in core markets allows us to avoid adverse selection and apply sound underwriting standards Customer relationships – our privileged relationships with manufacturers, developers and other industry leaders, provide us with access to a steady flow of quality financing opportunities Product knowledge – our superior knowledge of deal structures, collateral values and remarketing channels justifies premium pricing Textron relationship – provides us with the market stability of a strong industrial parent, and the opportunity to support Textron’s product sales through captive financing programs
  • Some examples: We designed and deployed Textron Six Sigma as our fundamental business process improvement approach. More than 3,000 Black Belts and Green Belts have been trained since the program’s inception three years ago. We created Shared Service organizations in IT, HR and Finance. We developed new enterprise approaches to measure Customer Satisfaction and Loyalty. We completely revamped the performance management process to ensure that Textron employees have deeper and more frequent dialogues with their managers. We consolidated and outsourced much of our IT infrastructure. We created a Global Technology Center in Bangalore, India. We revamped our acquisition due diligence and integration processes. We revamped our approach to strategy development. We created centralized purchasing capability to take advantage of our collective buying power, particularly in commodity products. We consolidated more than 1500 separate payrolls…to three today… And we went from 152 separate health care plans…to one. And the list goes on.
  • Process Re-engineering in a Transactional Environment

    1. 1. Process Re-engineering in a Transactional Environment WCBF’s Lean Six Sigma Summit - Chicago
    2. 2. <ul><li>Martina Kuhlmeyer </li></ul><ul><ul><li>Work experience split between manufacturing and finance </li></ul></ul><ul><ul><li>Introduced to Lean in 1998 </li></ul></ul><ul><ul><li>5 years at Textron Financial, 4 years with GE </li></ul></ul><ul><ul><li>Current Position: VP of Six Sigma </li></ul></ul><ul><ul><li>Heavy focus on Transactional Lean </li></ul></ul><ul><li>Jonathan Wiederecht </li></ul><ul><ul><li>Work experience split between manufacturing and finance </li></ul></ul><ul><ul><li>Introduced to Lean in 1998 </li></ul></ul><ul><ul><li>21 years at Textron, last 4 being with TFC </li></ul></ul><ul><ul><li>Current position: Master Black Belt </li></ul></ul><ul><ul><li>Heavy focus on Transactional Lean </li></ul></ul>Presenter Backgrounds
    3. 3. Textron Inc. at a Glance Textron Financial Corporation Cessna Cessna Industrial E-Z-GO Fluid & Power Greenlee Jacobsen Kautex Finance Bell Bell Helicopter Lycoming Textron Systems <ul><li>NYSE: TXT </li></ul><ul><li>2006 Revenue: $11 Billion </li></ul><ul><li>Fortune 500 Ranking: 190 </li></ul><ul><li>2006 Ranking on Forbes Global 2000 Largest Public Companies: 731 </li></ul>© 2007 Textron Inc.
    4. 4. Distribution Finance Aviation Finance Golf Finance Resort Finance Asset-Based Lending <ul><li>Inventory financing programs </li></ul><ul><li>Network of 16,000+ manufacturers, distributors and dealers </li></ul><ul><li>Expert provider of financing for new and used Cessna aircraft, Bell helicopters and general aviation aircraft </li></ul><ul><li>Financing middle market manufacturing, distribution, service industry sectors </li></ul><ul><li>Golf course mortgage and financing for E-Z-GO and Jacobsen equipment </li></ul><ul><li>Timeshare, commercial resort, and hospitality financing </li></ul><ul><li>Diversified market leader in specialty niche commercial finance </li></ul><ul><li>Also Provides financing programs for products manufactured and serviced by Textron </li></ul><ul><li>Over $10 billion of managed receivables </li></ul>Textron Finance Corporation (TFC) © 2007 Textron Inc. Structured Finance <ul><li>Equity capital for large ticket transactions </li></ul>
    5. 5. TFC Background <ul><li>Approximately 1,200 employees </li></ul><ul><li>11 Locations in USA, 1 Location in Canada </li></ul><ul><li>Niche player with over $10B in managed receivables </li></ul>
    6. 6. <ul><li>Early Success </li></ul><ul><ul><li>Removing Waste (6S, Visual Management, Standard Work) </li></ul></ul><ul><ul><li>Improving Touch Time </li></ul></ul><ul><ul><li>Improving Throughput </li></ul></ul><ul><li>Implementing a Lean System in a Transactional Environment </li></ul><ul><ul><li>Moving from Low Hanging Fruit to complex tools & concepts </li></ul></ul><ul><ul><li>Training and Engaging all Employees </li></ul></ul><ul><ul><li>Culture and Mindsets </li></ul></ul>TFC’s Implementation
    7. 7. 6S in the Office 1S - S ort 2S - S traighten When in doubt, throw it out! Decide and organize where to keep necessary items. Perform a thorough cleaning. 3S - S hine Incorporate cleaning procedures into the daily work. Management and leadership to motivate and sustain. 4S - S tandardize 5S - S ustain Training needs to be Office examples for each step Early Success-Removing Waste 6S - S afety Not just looking for safety hazards – but more like Business Continuity Plans
    8. 8. 6S in the Office Rarely will you not see this level of “output” from Sort Early Success-Removing Waste
    9. 9. 6S in the Office Indicates when to reorder Indicates what belongs Early Success-Removing Waste
    10. 10. 6S in the Office Standards set for like titles – easily find files in each other office Early Success-Removing Waste
    11. 11. Visual Management Early Success-Removing Waste Communication at a Glance
    12. 12. Communication at a Glance Early Success-Removing Waste Visual Management
    13. 13. Standard Work <ul><li>Standardized high impact processes </li></ul><ul><li>Access in one place (rev control) and virtual </li></ul><ul><li>Created by Users of the Process </li></ul><ul><li>Contains target times for completion of each step </li></ul><ul><li>Tool is user friendly / interactive </li></ul>Early Success-Removing Waste
    14. 14. Interest Collections <ul><ul><li>Eliminated unnecessary steps in the process </li></ul></ul><ul><ul><li>Standardized process </li></ul></ul><ul><ul><li>Metrics Impacted </li></ul></ul><ul><ul><ul><li>Touch Time </li></ul></ul></ul><ul><ul><ul><li>Quality </li></ul></ul></ul>Early Success – Improve Cycle Time / Touch Time Reduced From 317 hours/month to 56 hours/month Quality already good at 98.1% - but improved to 98.4% even with 82% reduction in Touch Time.
    15. 15. Quick Draw <ul><ul><li>Eliminated unnecessary steps in the process </li></ul></ul><ul><ul><li>Standardized the process </li></ul></ul><ul><ul><li>Metrics Impacted </li></ul></ul><ul><ul><ul><li>Cycle Time to Customer </li></ul></ul></ul><ul><ul><ul><li>More deals per month </li></ul></ul></ul>Early Success – Improve Throughput Average Cycle time reduced from 15 days to 3.3 days (later improvements reduced it to 1.5 days)
    16. 16. Implementing A Lean System <ul><ul><li>Training and engaging all employees </li></ul></ul><ul><ul><li>Next Level Execution (Operating Metrics, Problem Solving, Level Loading) </li></ul></ul><ul><ul><li>Culture / Mindsets </li></ul></ul>
    17. 17. Training and Engaging All Employees <ul><ul><li>Training </li></ul></ul><ul><ul><ul><li>Top Down </li></ul></ul></ul><ul><ul><ul><ul><li>Sr. Managers first to become certified Green Belts </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Managers of managers next to become Green Belts </li></ul></ul></ul></ul><ul><ul><ul><ul><li>TFC President and TXT President both certified as GB’s early on in the deployment </li></ul></ul></ul></ul><ul><ul><ul><li>Bottoms Up </li></ul></ul></ul><ul><ul><ul><ul><li>All employees receive general training </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Ongoing training each year for all employees as things evolve </li></ul></ul></ul></ul>Implementing a Lean System
    18. 18. <ul><ul><li>Change Management, Change Management, Change Management… </li></ul></ul><ul><ul><li>Tools such as 6S and Standard Work drive engagement </li></ul></ul>Training and Engaging All Employees Implementing a Lean System
    19. 19. Next Level Execution <ul><ul><li>Operating Metrics Are The Key </li></ul></ul><ul><ul><ul><li>Activity based – not financial based </li></ul></ul></ul><ul><ul><ul><ul><li>(ie # of payments process / per person / per day) </li></ul></ul></ul></ul><ul><ul><ul><li>Clear Link to Financial Metrics (Lean Accounting) </li></ul></ul></ul><ul><ul><ul><ul><li>(ie payments processed links to profitability) </li></ul></ul></ul></ul><ul><ul><ul><li>Easy to measure (Daily if possible) </li></ul></ul></ul><ul><ul><ul><ul><li>(can measure payments processed daily) </li></ul></ul></ul></ul><ul><ul><ul><li>“ Front line” can impact the metric </li></ul></ul></ul>Implementing a Lean System
    20. 20. Next Level Execution <ul><ul><li>Company Wide Problem Solving </li></ul></ul><ul><ul><ul><li>4 levels at TFC </li></ul></ul></ul>Implementing a Lean System 1. BB Project 2. GB Project 3. A3 4. Just Do It Level of Complexity Time to Complete
    21. 21. Next Level Execution <ul><li>Level Loading </li></ul><ul><ul><li>Key Ingredients </li></ul></ul><ul><ul><ul><li>Skills Matrix </li></ul></ul></ul><ul><ul><ul><li>Cross Training </li></ul></ul></ul><ul><ul><ul><li>Understanding Pitch / takt time of your processes </li></ul></ul></ul><ul><ul><li>Key Enabler to Level Loading </li></ul></ul><ul><ul><ul><li>Heijunka </li></ul></ul></ul>Implementing a Lean System
    22. 22. Heijunka Box Early Success-Removing Waste
    23. 23. System of Heijunka Boxes Early Success-Removing Waste
    24. 24. <ul><ul><li>5 Minute Daily Meetings </li></ul></ul><ul><ul><ul><li>Need Operating Metrics first (front line’s link to high level business objectives) </li></ul></ul></ul><ul><ul><ul><li>Basic problem solving at the front lines (Closed Loop System) </li></ul></ul></ul><ul><ul><ul><ul><li>Just Do It </li></ul></ul></ul></ul><ul><ul><ul><ul><li>A-3 (employing 5 why’s) </li></ul></ul></ul></ul>Culture and Mindsets Implementing a Lean System
    25. 25. Culture and Mindsets <ul><li>How do you build that Continuous Improvement Culture? </li></ul>Ongoing Training Operating Metrics Top Down/Bottom Up Deployment Fin/Bus Objectives Daily 5 Minute meetings Problem Solve At all levels Implement Improvement Ideas from Front line Early Success TFC’s Answer
    26. 26. Summary <ul><li>For Early Success – Focus on what employees easily understand </li></ul><ul><ul><li>Eliminate Waste </li></ul></ul><ul><ul><li>Improve Cycle Times </li></ul></ul><ul><ul><li>Improve Throughput </li></ul></ul><ul><li>Implementing a Lean System </li></ul><ul><ul><li>Proper Operating Metrics are key </li></ul></ul><ul><ul><li>Problem Solve at all levels of the organization </li></ul></ul><ul><ul><li>Continuous training </li></ul></ul><ul><ul><li>Top Down and Bottom Up Deployment </li></ul></ul><ul><ul><li>Change Management, change management, change management </li></ul></ul>
    27. 27. <ul><li>Jonathan Wiederecht </li></ul><ul><li>[email_address] </li></ul><ul><li>Martina Kuhlmeyer </li></ul><ul><li>[email_address] </li></ul>Questions?
    28. 28. APPENDIX
    29. 29. Textron’s Vision <ul><li>To be the premier multi-industry company, recognized for our network of powerful brands, world-class enterprise processes and talented people </li></ul>© 2007 Textron Inc.
    30. 30. <ul><li>Textron Financial Global Reach </li></ul><ul><li>North America </li></ul><ul><li>Distribution Finance </li></ul><ul><li>Asset Based Lending </li></ul><ul><li>Cessna Finance </li></ul><ul><li>Golf Finance Division </li></ul><ul><li>Resort Finance Division </li></ul><ul><li>Central/South America and Caribbean </li></ul><ul><li>Cessna Finance </li></ul><ul><li>Golf Finance Division </li></ul><ul><li>Resort Finance Division </li></ul><ul><li>Africa </li></ul><ul><li>Cessna Finance </li></ul><ul><li>Asia/Pacific </li></ul><ul><li>Cessna Finance </li></ul><ul><li>Europe </li></ul><ul><li>Cessna Finance </li></ul><ul><li>Resort Finance Division </li></ul>
    31. 31. <ul><li>Textron Six Sigma “rolled out” in 2002 </li></ul><ul><ul><li>Uniform continuous improvement program across the enterprise </li></ul></ul><ul><ul><li>While titled Six Sigma, program includes Lean </li></ul></ul><ul><ul><li>Lean component garnered more attention starting late 2004 </li></ul></ul><ul><ul><li>6 years into program & Textron CEO is committed more than ever </li></ul></ul>Program Background
    32. 32. <ul><li>No data entry required by employees to submit status (self documenting) </li></ul><ul><li>No computer systems to maintain </li></ul><ul><li>Visible to all team members what work is needed to be accomplished </li></ul><ul><li>Capacity issues immediately visible, work level loaded (self regulating) </li></ul>Heijunka Box Benefits
    33. 33. <ul><li>Need to understand how long each process takes (range is fine) </li></ul><ul><li>Work best when adequate volume flows through cell (one file per day curtails its real benefit) </li></ul><ul><li>Team members are willing to share their work and share other work </li></ul><ul><li>Team members are willing to accept SLA and meet them </li></ul>Heijunka Box Demands
    34. 34. Heijunka Box - Capacity Early Success-Removing Waste When volume exceeds capacity based upon color folder system, flag is changed to Red – triggering pre-established personnel to come support this process
    35. 35. <ul><li>TFC journey has lots of lessons learned, with 3 sticking out: </li></ul><ul><ul><ul><li>Need to Make it Transactional </li></ul></ul></ul><ul><ul><ul><li>Change Management, change management and then some more change management </li></ul></ul></ul><ul><ul><ul><li>Time & Rate </li></ul></ul></ul>TFC’s Implementation
    36. 36. <ul><li>Being a manufacturing company, our initial training materials were focused as such </li></ul><ul><li>Transactional folks were essentially being asked to make the mental translation </li></ul><ul><li>The result: </li></ul><ul><ul><li>Some not capable </li></ul></ul><ul><ul><li>Each translation may be different </li></ul></ul>Make it Transactional
    37. 37. <ul><li>Convert training into target audiences language. For example: </li></ul><ul><ul><li>Laptop = machining center </li></ul></ul><ul><ul><li>Documentation, including email = inventory </li></ul></ul><ul><ul><li>5S = show office files, messy desk </li></ul></ul>Make it Transactional People looking for reasons not to adopt change – presenting examples & materials in manufacturing lingo gives them that reason
    38. 38. <ul><li>Very simple – if folks aren’t ready to accept change, don’t waste your time </li></ul><ul><ul><li>2002 – 95% focus on tools, 5% on change management (CM) </li></ul></ul><ul><ul><li>2007 – 20% focus on tools, 80% on CM </li></ul></ul>Change Management “The soft stuff is really the hard stuff” – with soft referring to people side
    39. 39. <ul><li>If mindsets aren’t dialed in, you wouldn’t get the behavior you need to have change “stick” </li></ul><ul><li>Don’t underestimate resistance to change </li></ul>Change Management Burning platforms are needed, but you need more than burning platforms to get meaningful change to be sustained
    40. 40. <ul><li>Lots & lots of examples of “huge impact events (home runs)” in literature, talks, etc. </li></ul><ul><li>Natural to “want some of this action” </li></ul><ul><li>But don’t be lured into unrealistic “time to impact” </li></ul>Time & Rate False expectations will lead to delusion and disappointment
    41. 41. <ul><li>Appreciate its incremental change </li></ul><ul><li>Requires a plan detailing digestible size change – strung together to make impact </li></ul><ul><li>Can’t implement all Lean tools at once – understand the progression </li></ul>Time & Rate Prepare for a journey
    42. 42. Training and Engaging All Employees <ul><ul><li>Black Belt Certification (some key requirements) </li></ul></ul><ul><ul><ul><li>Specified as either DMAIC or DFSS </li></ul></ul></ul><ul><ul><ul><li>5 weeks training (over 5 months) </li></ul></ul></ul><ul><ul><ul><li>Minimum of 2 projects closed with total $500K in savings </li></ul></ul></ul><ul><ul><ul><li>Mentor Green Belts to certification </li></ul></ul></ul><ul><ul><ul><li>Pass test </li></ul></ul></ul>Implementing a Lean System
    43. 43. Training and Engaging All Employees <ul><ul><li>Green Belt Certification (some key requirements) </li></ul></ul><ul><ul><ul><li>Specified as DMAIC, DFSS, or LEAN </li></ul></ul></ul><ul><ul><ul><li>Complete 2 weeks training (about 7.5% of population each of the last 2 years) </li></ul></ul></ul><ul><ul><ul><li>Complete 2 projects, or 1 Cycle of Learning on a BB project plus one project of their own </li></ul></ul></ul><ul><ul><ul><li>Pass tools demonstration with an MBB </li></ul></ul></ul>Implementing a Lean System
    44. 44. <ul><li>Heijunka Box * – WHAT IS IT? </li></ul><ul><ul><li>Heijunka Box, or leveling box, is a physical device used to manage the scheduling </li></ul></ul><ul><ul><li>The load is leveled with consideration for the most efficient use of people and equipment. </li></ul></ul><ul><ul><li>Kanban cards are placed in slots corresponding to the pitch increments in which products are to be released and subsequently replenished. </li></ul></ul>Visual Management Industry wide literature all shows/discusses manufacturing – need to convert “lingo” *Source: Value Stream Management – Don Tapping, Tom Luyster, Tom Shuker Early Success-Removing Waste
    45. 45. <ul><li>Excellent tool that self documents work status versus employees manually documenting work status </li></ul><ul><li>Simple system for scheduling work, leveling work load </li></ul><ul><li>Team sets rules </li></ul><ul><li>Visual feedback to team, manager </li></ul><ul><li>Immediately exposes capacity issues </li></ul>Visual Management - Heijunka Box Early Success-Removing Waste