Good morning. I would like to first start by providing an overview of Delphi, for those of you who may not be as familiar with our company. Delphi is a world leader in supplying vehicle electronics, transportation components, integrated vehicle sub-systems and modules. We have 171 manufacturing locations, 42 joint ventures, 34 technical centers and more than 186,000 employees. 2003 sales were $28.1 billion …we are a top auto supplier … and fifty-sixth on the 2004 Fortune 500 list. Simply put, Delphi is a technology driven company, and we are everywhere in the world – we are a global organization, capable of following the customer anywhere in the world We currently operate under three sectors: First, Electrical, Electronics & Safety … whose 2003 sales were $12.9 billion … and produces integrated body electronics, powertrain electronics, chassis & safety electronics, audio systems & mobile multimedia, safety systems, electrical & electronic systems and product & service solutions. Second, Dynamics, Propulsion, Thermal & Interior … which includes engine & emission management systems, energy management systems, vehicle dynamics, thermal management systems and interiors. Its 2003 sales were $14.2 billion. And lastly, Automotive Holdings Group .. which includes mainly generators and instrumentation … 2003 sales for the sector were $3.0 billion.
Lean uses the minimum amount of Man, Machine & Material required to build the product. Lean strives to continuously match capacity with current demand. Opportunity exists whenever a volume change occurs. Flexibility is a major objective for establishing a manufacturing system.
What must be achieved is the best combination of Man, Machine, & Material. How …This is accomplished by the identification of waste and reduction of fluctuations thereby permitting even flow. In addition, constant attention must be paid to the existing resources required to achieve production. Burden ( fixed costs) tends to become cumulative over time.
Lean & six sigma are critical elements to stabilize manufacturing performance with the first two issues being the ability to achieve scheduled commitments and getting control of product quality . As these two activities become manageable then the focus becomes a cycle of improvement (Kaizen)
Lean and Six Sigma really focused on the same activity reduction of variation . This presentation helps you to “see” abnormal variation when it isn’t apparent. History has shown that the only problem we’ll never solve is the one that we don’t know that we have. Sharpening our ability to see is a critical skill that all employees need to develop. The presentation will show examples of process and flow variation in a manufacturing situation, then demonstrate a method to see through the “data smog” to identify high priority projects that maximize the use of your critical resources.
As compared to the process of Six Sigma , Lean is often counter intuitive. The critical focus is on maintaining flow without either under loading or overloading the operation. This even applies to the learning process: We often train with too much material leaving the student overwhelmed and under equipped to use the information. How many 3” notebooks are in your office from a conference? More importantly how often have you referenced them? We should deliver to people what they need to know then immediately allow them to use that knowledge. Learn & Do
There are many types of flow. Flow can be deceiving depending on our ability to see and our viewpoint. The best example is freeway traffic flow. How often have you driven into a traffic backup only to find later that there was really no visible reason for the backup? This situation is caused by variation in traffic flow that ebbs and tides throughout the day by minor taps on the brakes . The same waste happens in your production system but it is not obvious unless your are knowledgeable about the nature of flow.
What appears to be a normal stock rack storage has many drawbacks: Doesn’t allow best use of the rack and box sizes. Part placement & retrieval is random access not enabling standardized work. Material flow does not maintain FIFO seamlessly. Fork trucks are required to lift material. Materials on the top shelf are beyond an operators normal reach. Addressing scheme connects material with “point of use” through an information flow system. After the reorganization the above conditions are resolved in addition to providing visual control.
Many fixtures have been designed and built without consideration for the need for rapid changeover capability. This simple use of a wing bolt vs. a machine bolt allows rapid changeovers without the need for any special tools .
Many times we simply transfer incoming materials into another container at the operator workplace. In this case the wonderful part orientation of the incoming packaging was lost. Part orientation allows the operator to minimize movement and helps establish a part quantity verification as well as standardized work.
Daily or even hourly crisis management of schedules and part supply wastes valuable management and operator time. A Kanban board provides level & standardized schedule instructions to the operator without the need for management intervention. This provides tremendous operator empowerment and liberates management time to work on the next level of improvement.
25 % Improvement in cycle time was achieved by just moving the light screens and allowing the operator to have free movement in and out of the machine.
Even waste streams can generate poor flow. Both the good parts and the die trim are being discharged into this container. A simple change allowed the die trim to be automatically separated from the good material thus eliminating future handling and sorting.
This example has several waste reduction elements: Reduced capital expense Improved Uptime and less maintenance Small lot material flow Prevention of different parts being mixed Enabling of standardized work
This is a clear example of label variation and lack of system integration among various business functions. What is important for the operator? Can I see it readily? What is important to the customer? Does this provide quality at the source?
Put yourself into the mind of the operator: Can you determine your job instructions? Which document is important? Can you determine and follow standardized work?
The ability to “See” what problem to solve can be even more difficult than making observations on the factory floor. We are flooded with helpful information that causes “data smog”. We need a simple process that will help you take this information and focus it into something that will clarify our priorities. Traditionally, the squeaky wheel gets the grease. And many times this is the right thing to do but often the political, social, structural norms of a company may generate the wrong thing to do. This is not malicious obedience but the lack of clear methods to put the information to work.
First determine the area of focus. In this case its product quality. There are data sources that measure product quality from various perspectives. Each metric is valid and important but how in the world do we find a common dominator to assure the best use of limited resources?
“Normalize Weighted Sum” method funnels all these metrics into a pareto analysis that can clarify the priorities and maximize the use of your resources.
Gather the diverse but appropriate metrics into a table with their actual results. This can be dollars, percentages, failure rates, etc…
First establish a multiplier based on your judgment of importance for each data category
Now we normalize each metric by dividing by the total for each metric so the sum of each category is always 1. Then we multiply each normalized metric by the weighting that we just established. Now add the resulting values by failure type.
This shows a table for “Customer B Complaints”. A similar table needs to be made for each Metric.
This shows our original table with the new weighted data. We now group the common failures so they can be added together. This slide shows all “Switch A” failures highlighted.
This chart shows the same table for “Wrong or Missing parts” This is repeated for each failure mode.
Now all “Switch A” failures are shown together in this pareto chart along with all other failure categories.
This chart groups all “Switch” failure together, so the magnitude of this problem becomes even more apparent. Switch failures is a quality problem that lends itself to Six Sigma methods. Wrong/Missing parts are more appropriately resolved by the application of Lean principles.
This simple method can be used for many situations including production losses, supplier analysis, Business Line analysis. The example used in the presentation focused on “ Product Quality”
Lean and Six Sigma are both complimentary disciplines that are focused on the reduction of variation. Learning how to “see” material flow and operational variation is am important skill to develop. “Data Smog” can inhibit working on the most important issues that have leverage across the company.
Delphi - “Eyes for Waste” & “ Eyes for Flow”
“ Eyes for Waste” & “ Eyes for Flow” Brian O’Neill – General Director, Manufacturing Operations, Delphi Steering December 3, 2004
2003 Revenue * Does Not include Inter-Sector eliminations of ($2.0B) Dynamics, Propulsion Thermal & Interior Sector 2003 Sales $14.2 B <ul><li>Engine & Emission Management Systems </li></ul><ul><li>Energy Management Systems </li></ul><ul><li>Vehicle Dynamics </li></ul><ul><li>Thermal Management Systems </li></ul><ul><li>Interiors </li></ul>Electrical, Electronics, & Safety Sector 2003 Sales $12.9 B <ul><li>Integrated Body Electronics </li></ul><ul><li>Powertrain Electronics </li></ul><ul><li>Chassis & Safety Electronics </li></ul><ul><li>Audio Systems & Mobile Multimedia </li></ul><ul><li>Safety Systems </li></ul><ul><li>Electrical & Electronic Systems </li></ul><ul><li>Product & Service Solutions </li></ul>Automotive Holdings Group 2003 Sales $3.0 B <ul><li>Generators </li></ul><ul><li>Instrumentation </li></ul><ul><li>Other </li></ul>Enterprise Technologies Sales & Marketing 2003 Sales $28.1 B* Lean Manufacturing
Extensive Global Presence As of October 16, 2003 Mexico & South America Manufacturing sites: Employment: Joint ventures: Technical centers: 49 51,000 7 14 Manufacturing sites: Employment: Joint ventures: Technical centers: 47 76,500 9 4 Manufacturing sites: Employment: Joint ventures: Technical centers: 61 49,000 9 10 Asia Pacific Total Delphi Manufacturing sites: Employment: Joint ventures: Technical centers: Manufacturing sites: Employment: Joint ventures: Technical centers: 14 10,000 17 6 171 186,500 42 34 U.S. & Canada Europe & Middle East
Customer Breadth Represents only a sample of our customers
What’s Lean? Over Short Demand Capacity = $$ $$$ Lean = Minimum Gap TIME Man Machine Material
Approach for matching capability… … through the identification and elimination of Fluctuation – Overburden - Waste Mura - Muri - Muda Man - Machine - Material Implement the best possible combination of : … focusing on: Standardization & Simplification What How
The Lean Journey Time Performance INSTABILITY (No sustainable Improvement) STABILITY (Sustainable Improvement) <ul><li>Get control of quality </li></ul><ul><li>Get to schedule </li></ul>
Lean is often Counter Intuitive <ul><li>One piece flow </li></ul><ul><li>Slowing down operations </li></ul><ul><li>Small lot containers </li></ul><ul><li>Training in too large a bucket </li></ul><ul><li>Overproduction </li></ul><ul><li>Learn & Do </li></ul><ul><li>Some systems shield the waste </li></ul>
Flow Can Be Deceiving River flow Air flow Traffic flow Information flow Product flow Manufacturing flow Engineering flow Process flow What we “see” is not always what is happening
Uptime Variation <ul><li>High Maintenance </li></ul><ul><li>High Utility Cost </li></ul><ul><li>Permanent Sump </li></ul><ul><li>Investment $125,000 </li></ul><ul><li>Commercial washers </li></ul><ul><li>Investment $700 </li></ul>B E F O R E A F T E R
Labeling Variation <ul><ul><li>Must improve System Integration between : </li></ul></ul><ul><ul><li>Quality Control </li></ul></ul><ul><ul><li>Engineering </li></ul></ul><ul><ul><li>Manufacturing </li></ul></ul>
Operator Instruction Variation Helpful Notes Or Standard Work
Step 2: Determine Importance <ul><li>“ Customer is King” Weighting: </li></ul><ul><ul><li>3X for Customer Shutdown </li></ul></ul><ul><ul><li>2X for Customer Complaints & Warranty </li></ul></ul><ul><ul><li>1X for Plant Performance Metrics : </li></ul></ul><ul><ul><li>First Time Quality </li></ul></ul><ul><ul><li>Supplier Complaints </li></ul></ul><ul><ul><li>Inspection </li></ul></ul><ul><ul><li>Scrap </li></ul></ul>
Step 3: Analyze for Leverage <ul><li>Determine weighting on metrics </li></ul><ul><li>Normalize each metric </li></ul><ul><li>Multiply by weighting </li></ul><ul><li>Add the resulting values by failure type </li></ul>
Look for leverage by grouping common failures Boxes are all “Switch A” failures
Look for leverage by grouping common failures Boxes are all “Wrong or Missing parts”
Stacked Bar Pareto by common failure 0 0.5 1 1.5 2 2.5 3 3.5 Switch A Failure Wrong/Missing Parts Switch D Defect Switch B Failure Lever Defect Switch C Defect Noise Normalized Score Scrap $ Online Inspection Supplier Complaints FTQ Warranty $ Warranty Incidents % Customer B Complaints Customer Shut Down
Stacked Bar Pareto by common event 0 1 2 3 4 5 6 7 All Switch Failures Wrong/Missing Parts Lever Defect Noise Normalized Score Scrap $ Online Inspection Supplier Complaints FTQ Warranty $ Warranty Incidents % Customer B Complaints Customer Shut Down
Normalized Weighted Sum % Production losses Can be used where diverse metrics exist
Summary <ul><li>Lean and Six Sigma both reduce variation </li></ul><ul><li>You must know a problem exists to solve it </li></ul><ul><ul><li>Develop “Eyes for Flow” and “Eyes for Waste” </li></ul></ul><ul><ul><li>Make regular observations </li></ul></ul><ul><ul><li>Observed Normal vs. Abnormal activity </li></ul></ul><ul><ul><li>Establish standardized work </li></ul></ul><ul><ul><li>Make interruptions in flow visible ( small lot ) </li></ul></ul><ul><li>Learn to “see” thru database smog using </li></ul><ul><ul><li>Select Focus </li></ul></ul><ul><ul><li>Select Metrics </li></ul></ul><ul><ul><li>Analyze for leverage </li></ul></ul><ul><ul><li>Apply the appropriate problem solving tool </li></ul></ul>Normalized Weighted Sum