BAP_Kelly Sibiet_ Reducing Cost at GKN using Lean and QRM

Preface
With completing my thesis and doing my internship at GKN Wheels and Structures,
I conclude the end of my bachelor degree. The thesis is based on everything I have
learned during my classes and internship.
At first I want to thank the employees I have worked with at GKN Wheels and
Structures for their help, for their constant guidance and for answering my
questions, especially Mr. Marshall and Mr. Smart for their guidance and supporting
me during my internship. I would also like to thank Mr Mares for giving me the
opportunity to do my internship at his company.
A special thanks to Mr. Williams and Mss Nichols for letting me stay at their house
during my internship. Also a special thanks to Mss Willaert for supporting me
during my internship abroad. I would also like to thank Mr. Cornet for being my
external promotor and assisting me with my thesis.
I would also like to thank Mr Rajan Suri, the inventor of POLCA, for helping my
research. Mr Riezenbos from the University of Groningen was also very helpful in
giving me information for my research, so I would also like to thank him.
At last I want to thank my mother and my entire family who have made this
possible for pushing me to do my internship abroad and supporting me during the
time abroad.
Kelly Sibiet
Student of Logistics Management

Introduction
The purpose of this thesis is to demonstrate what I have learned over the course of
my 3 years bachelor and have put into practice during my internship. For the
company, it has been an opportunity to bring fresh and possibly innovative ideas to
the employees and to their departments.
The subject deals with reducing cost at the Wheels department of GKN through the
usage of Lean 5S and QRM POLCA. The concepts developed in this document can
also be used by other companies. In this particular case, Lean 5S has already been
adopted by the company as suggested during the course of this internship. At the
time of writing, the usage of the POLCA system is highly recommended but
presented as a suggestion for improvement to the department performance. It is
therefore yet to be approved for production.
This thesis starts with an explanation of the problem with research questions and
strategy attached to it. Following the problem statement, I will elaborate more about
GKN. So you have a better idea what kind of company it is. After this you can find
the research study on Lean and more specifically 5S. Following that research
chapter you kind find the research on QRM and POLCA. After the research studies
you can find the AS IS situation, which contains the value stream map and the
specific problems in Wheels. Following this is the TO BE situation, this chapter is
divided in 5S and POLCA. After all these chapters you can find the conclusion of
this thesis.

Kelly Sibiet Logistics Management 2014-2015
6
Table of Content
PREFACE...........................................................................................................................................................4
INTRODUCTION................................................................................................................................................5
LIST OF ABBREVIATIONS...................................................................................................................................8
GLOSSARY ........................................................................................................................................................9
I PROBLEM STATEMENT........................................................................................................................... 10
1 PROBLEM STATEMENT.................................................................................................................................... 10
2 RESEARCH QUESTIONS AND STRATEGY .............................................................................................................. 10
II LITERATURE RESEARCH.......................................................................................................................... 12
1 LEAN PHILOSOPHY ........................................................................................................................................ 12
1.1 Definition......................................................................................................................................... 12
1.2 History ............................................................................................................................................. 13
1.3 Different kinds of Muda .................................................................................................................. 14
1.3.1 Overproduction........................................................................................................................................... 15
1.3.2 High stock level ........................................................................................................................................... 15
1.3.3 Waiting........................................................................................................................................................ 15
1.3.4 Unnecessary motion.................................................................................................................................... 16
1.3.5 Unnecessary transportation........................................................................................................................ 16
1.3.6 Rework ........................................................................................................................................................ 16
1.3.7 Over processing........................................................................................................................................... 17
1.3.8 Unused creativity of the workers ................................................................................................................ 17
1.4 5S..................................................................................................................................................... 17
1.4.1 5S English vs Japanese................................................................................................................................. 18
1.4.2 5S Principles ................................................................................................................................................ 18
1.4.3 The benefits of 5S........................................................................................................................................ 19
2 QUICK RESPONSE MANUFACTURING................................................................................................................. 20
2.1 Definition......................................................................................................................................... 20
2.2 History ............................................................................................................................................. 20
2.2.1 Background ................................................................................................................................................. 20
2.2.2 Development............................................................................................................................................... 21
2.3 The Concept of POLCA..................................................................................................................... 21
2.3.1 Definition..................................................................................................................................................... 21
2.3.2 Working of POLCA....................................................................................................................................... 23
2.3.3 Limitations................................................................................................................................................... 24
2.3.4 Implementation........................................................................................................................................... 24
2.4 POLCA Case studies ......................................................................................................................... 25
2.4.1 Case study 1: POLCA at a manufacturer of machined parts........................................................................ 25
2.4.2 Case study 2: POLCA at Bosch-Hinges ......................................................................................................... 27
2.4.3 Case study 3: POLCA at a manufacturer of motor control centres.............................................................. 30
2.5 POLCA vs KANBAN........................................................................................................................... 32
III RESEARCH AND ANALYSIS...................................................................................................................... 34
1 INTRODUCTION - GKN AS A COMPANY.............................................................................................................. 34
1.1 Strategy........................................................................................................................................... 34
1.2 Vision............................................................................................................................................... 34

7
1.3 Divisions .......................................................................................................................................... 35
1.3.1 Land System ................................................................................................................................................ 35
1.3.2 Powder Metallurgy...................................................................................................................................... 41
1.3.3 Driveline ...................................................................................................................................................... 42
1.3.4 Aerospace.................................................................................................................................................... 42
2 AS-IS – WHEELS DEPARTMENT....................................................................................................................... 43
2.1 Wheels Value stream mapping ....................................................................................................... 43
2.2 Identified Issues in the Wheels Department.................................................................................... 43
2.2.1 The “Wheels Shop 1” Production Floor....................................................................................................... 43
2.2.2 The Paint plant ............................................................................................................................................ 49
3 TO BE – WHEELS DEPARTMENT ...................................................................................................................... 52
3.1 5S..................................................................................................................................................... 52
3.1.1 Wheels Shop 1............................................................................................................................................. 52
3.1.2 Paint plant ................................................................................................................................................... 55
3.2 POLCA.............................................................................................................................................. 57
3.2.1 Pre-POLCA assessment................................................................................................................................ 57
3.2.2 Design of the POLCA system ....................................................................................................................... 58
3.2.3 Launch of the POLCA implementation ........................................................................................................ 61
3.2.4 Post implementation evaluation................................................................................................................. 62
CONCLUSION.................................................................................................................................................. 64
LIST OF GRAPHICS AND TABLES...................................................................................................................... 65
Graphics..................................................................................................................................................................... 65
Tables......................................................................................................................................................................... 66
REFERENCES................................................................................................................................................... 67
Thesis/ Syllabus.......................................................................................................................................................... 67
Digital work................................................................................................................................................................ 67
Books ......................................................................................................................................................................... 68
Technical Report........................................................................................................................................................ 68
International Journal.................................................................................................................................................. 68
APPENDIXES................................................................................................................................................... 69
Appendix A: Case: Parker Filtration ........................................................................................................................... 70
Appendix B: POLCA –scan.......................................................................................................................................... 72
Appendix C: Value stream map wheels ..................................................................................................................... 76

8
List of abbreviations
GKN Guest, Keen and Nettlefolds
POLCA Paired-cell Overlapping Loops of Cards with Authorization
QRM Quick Response Manufacturing
OEM’s Original Equipment Manufacturer
AFV Armoured Fighting Vehicle
MRP Material Requirement Planning
TPS Toyota Production System
HL/MRP High Level Material Requirements Planning system
WIP Work in progress
PCP Packaged Control Products
BPCS Business Planning and Control System
CTL Cutting to length
FIFO First in, first out
STD OP Standard operation
MAVT Manually Adjustable Variable Track

9
Glossary
Ohno Taiichi Ohno, Toyota’s Chief Engineer, as the core of the Toyota
Production System was the developer of “the seven wastes”

10
I Problem statement
1 Problem statement
GKN is divided in to 4 different divisions (see III Research and Analysis, chapter
1.3), with Land Systems being the department I have been assigned to. The Land
systems product portfolio is composed of 15 different articles distributed over a
large amount of countries. The specific department considered here is called
Wheels, where they are responsible for the production of wheels for different
industries such as construction, forestry or agriculture.
The problem presented by the Wheels department relates to operational efficiency.
Indeed, because they manufacture wheels of many different sizes and shapes, this
department has to maintain a large number of (distinct) stocks. In addition, Wheels
has also noticed large inventories in between the processes, causing inefficiencies: if
the products do not need to be painted right away they are moved to the side where
they remain for undefined time, increasing costs, defects and ultimately leads to
rework. The apparent root cause is that Wheels produce more wheels than can be
painted at the paint plant, causing bottlenecks on the line.
The purpose of this project is to reduce the operation costs of the Wheels
department. In all likeliness, this implies introducing important changes in the way
work is organized which will probably cause resistance. In handling this resistance,
several strategies and suggestions will be made as part of this work. As an
additional constraint, Wheels is already familiar with the Lean concepts; it is
requested that this fact be taken into account for the project.
2 Research Questions and Strategy
In the scope of this applied research, the primary goal is driven by the need to
address the issue at hand and present a solution that will be immediately and
directly relevant to the management.
Given the time allocated for this project, it has been decided to focus on two aspects
of the optimization of the production line:
 Lower the WIP inventory, as it represents tied up capital, increased costs linked
to storage and can hide defects or possible damage, resulting in rework.
 Improve the production flow through the means of a better ‘Lean’
synchronisation.
The two aspects are inter-related, in the sense that increasing the level of
synchronisation in the flow should influence the inventory levels in the right
direction. It is to be noted that the inventories resulting from the total output of the
production chain are not considered here, as there may be business reasons or
choices made to maintain large inventories (e.g.: high variability in demand).

11
Preliminary interviews have been conducted in order to determine the focus of the
project. In so doing, it has become apparent that Wheels had made previous
attempts to improve their operations through the usage of Lean synchronisation
techniques (KANBAN) but had been unsuccessful. Based on the variety of the
manufactured products, this student suggested a lesser known production chain
synchronisation method (POLCA) that could be more adapted to their specific
needs.
Consequently, the following pragmatic research questions have been defined:
 How can Lean Thinking help the Wheels department to lower their operation
costs?
 Which steps of the 5S do Wheels already use and what else can be useful in
achieving the set goals?
 In evaluating POLCA, what would be the respective advantages of POLCA vs
KANBAN and how to best implement this technique?
The research strategy will be a case study aimed at answering above questions. In
so doing, this student will first research the literature, focusing on Lean Concepts,
more specifically 5S, and QRM concepts, more specifically POLCA and POLCA
implementation. A comparison between POLCA and KANBAN techniques will be
made, focusing on the reasons why one method would be more suitable than the
other. An AS-IS view of the Wheels department will then be created via
unstructured interviews, before proposing a TO-BE situation for implementation.
Information will be gathered from academic references, books, cases, articles, the
internet and unstructured interviews of knowledgeable people who have used it.

12
II Literature Research
1 Lean Philosophy
1.1 Definition
The Lean Philosophy has been around for more than 50 years. It found its origin in
the automotive manufacturer Toyota and is also known as Lean production/
manufacturing.1 Today Lean sometimes gets the name Lean Sigma and Agile
manufacturing.2 It developed and started an interest in the manufacturing as part
of the Supply Chain. This evolved and grew from cradle to grave with Lean supply
and distribution.3
Because Lean manufacturing has been around for more than 50 years, it is only
natural that someone wrote a book about it. This book was written by Womack and
Jones in 1990 with the title “The machine that changed the world”. Finding a good
definition of Lean manufacturing was hard because Lean is continuously improving
and developing its philosophy. The other reason for it is also that it is different for
each and every company.4
The only real value in a manufacturing system is in the services or products that a
customer can purchase. Coming from this context, available inventory, equipment
and labour that is not properly deployed are considered to be a waste. Lean
business is designed to remove this waste. In Lean management it is believed that
products should only be made to demand, which means that overproduction lead to
waste. Unsold products sit on shelves or take up space in warehouses, they have no
value while they increase cost. A company that has overproduction uses equipment
and labours for processes that have no value from a Lean management perspective.
Advocates of Lean logistics say that there is only value when customers purchase
items that are manufactured. Coming from this belief, business models are never
perfect and can always stand for improvement. Every time the customers demand
change, so must the Lean business model. At the same time when new kinds of
technologies are invented, Lean business has to reorganize manufacturing systems
so as to achieve new heights of efficiency.
1 Ehsanifar, F. & Rasmus Rubin, J.L. (2011). Exploring Lean Principles in automotive
aftermarket for spare parts distribution: a case study at Volvo parts. [Master thesis].
Chalmers University of technology, Sweden. Department of Technology Management and
Economics.
2 Earley, T. (2015). What is lean/ lean manufacturing definition? Consulted on March 10th
2015 via http://leanmanufacturingtools.org/34/lean-manufacturing-definition-2/
3 Ehsanifar, F. & Rasmus Rubin, J.L. (2011). Exploring Lean Principles in automotive
aftermarket for spare parts distribution: a case study at Volvo parts. [Master thesis].
Chalmers University of technology, Sweden. Department of Technology Management and
Economics.
4 Earley, T. (2015). What is lean/ lean manufacturing definition? Consulted on March 10th
2015 via http://leanmanufacturingtools.org/34/lean-manufacturing-definition-2/

13
A business model should be constantly changing according to the principles of Lean
logistics. Taking this into account, Lean managers understand that all the data and
measurements regarding processes should be accurate and constant. This is the
way to assure that new practices are effective and to determine where
improvements can be made. Another important component of Lean managers is the
easy implementation and effective training of the workers. To make sure that these
practises and models are effectively implemented, the workers should understand
why these new practices are better and how they can contribute to efficient
production.5
1.2 History
Most people think Lean manufacturing began with Toyota and some go as far back
as Ford and his production lines for the Model T Ford. Depending how you define
Lean, it has a long history. While Ford put many ideas together when he first
designed his production line for his model T-Ford, he did not invent very much
himself. The idea of interchangeable parts and the like were not new to Ford, they
have been around for a very long time. It has been used by Eli Whitney to
manufacture muskets at the end of the 18th century. King Henry III watched the
hourly production of Galley ships in 1574 through continuous flow processing by
the use of production lines. Production lines were also used for the Royal Navy in
1810 by Marc Brunel. The scientific management of Frederick Taylor’s work
investigated workplace efficiencies, while Frank Gilbreth looked at motion studies.
Ford based his design and functioning of his production lines on both these works.
Although Ford production lines were not flexible and they fostered a very much
“them and us” attitude between the workers and the management. With the
management doing the thinking and the workers doing as they were told. Ford’s
method worked for mass production and was very effective during WWII, where he
helped build bombers and Boeings.6
The world wanted larger variety, but Ford could not deliver this. This is because
Ford only made one model in one colour. Other auto manufactures saw this need
for many models and less time to wait for them to be made. Over time these
manufactures started to fill their factories with larger machines that ran faster and
made cars in less time. Through the complex part routing that the machines
created, the MRP-systems were invented.
The people over at Toyota looked at this situation in 1930 and more closely after
WWII. It occurred to them that series of simple innovations might make it more
possible to provide both continuous flow in process and a wide variety in product
offerings. They returned to Ford’s original thinking and invented the Toyota
5 WiseGEEK. (2003-2015). What is lean logistics? Consulted on March 10th 2015 via
http://www.wisegeek.com/what-is-lean-logistics.htm
6 Earley, T. (2015). History of lean manufacturing. Consulted on March 10th 2015 via
http://leanmanufacturingtools.org/49/history-of-lean-manufacturing/

14
Figure 1: The seven types of waste
Production System. Here the focus lies on the flow of the product through the entire
process instead of the individual machines and their utilization.7
1.3 Different kinds of Muda
Now that we know a bit more about Lean, we can explain the elements that do not
provide any added value to the process or product. We have a name for the non-
value added elements and that is Muda or waste.
There are eight different kinds of Muda, namely:
 Overproduction
 High stock level
 Waiting
 Unnecessary motion
 Unnecessary transportation
 Rework
 Over processing
 Unused creativity of the workers
According to Ohno the most important waste is the first one “overproduction”. The
others are consequences from this waste. Companies that are focused on working
with big batches assume that while workers and machines keep working nothing
can go wrong. But having stock between processes leads to wrong behaviour. 8
Disposing of waste is one of the most effective ways to increase the profitability of
any business. “The seven wastes” is a tool to identify and categorize the waste/
Muda. To dispose of waste it is important to know what it exactly is and where it
exists. The wastes found in different manufactures are quite similar and for each
waste there is a strategy to reduce or eliminate it. This improves the overall
performance and quality. Further explanation of “the seven wastes” and the eight
unadded waste can be found further in this chapter. 9
7 Lean Enterprise Institute. (2000-2015). A brief history of lean. Consulted on March 1st
2015 via http://www.lean.org/WhatsLean/History.cfm
8 Carmois, A. (2011-2012). World Class Manufacturing. [Syllabus] University College of West-
Flanders. Department Business Management
9 McBride, D. (2003-2012) The 7 manufacturing wastes. Consulted on February 27th 2015
via http://www.emsstrategies.com/dm090203article2.html

15
1.3.1 Overproduction
Overproduction is the production of products or services that are not ordered.
These goods are then stored without knowing if they are going to get sold. This
means that labour cost are wasted by making these overproductions, that space
has to be made available or rented to store these goods and this can leads to
unnecessary transport orders that can be useful elsewhere.10
So you can say that overproduction is highly costly to a manufacturing plant
because it stops the smooth flow of materials and causes low quality and
productivity. The Toyota Production Systems is also called “Just in Time” (JIT),
every item is made as it is needed. Another word for overproduction is “Just in
Case”. The easy solution to overproduction is to stop the line, this way the problems
overproduction is hiding will be revealed. The idea is to schedule and produce only
what can be immediately sold or shipped and improve machine change-over or set-
up capability.11
1.3.2 High stock level
High stock levels of raw material, semi-finished products and finished products can
lead to longer delivery times. But it can also lead to damage by storage, transport
and storage costs.
Besides this having a high stock level is usually a sign of:
 Production is not in balance;
 Suppliers who deliver too late;
 Machines who are out because of break down or maintenance;
 Long cycle times of the machines.12
1.3.3 Waiting
The waste of waiting occurs when goods are not being moving or not being
processed. 99% of a products life in traditional batch and queue manufacture will
be spent waiting to be processed. In the lead time of a product, the most of is tied
up in waiting for the next operation. This happens because of poor material flow,
long production runs and great distances between work centres. One hour lost in a
bottleneck process is one hour lost to the entire factories output and it can never be
10 Carmois, A. (2011-2012). World Class Manufacturing. [Syllabus] University College of
West-Flanders. Department Business Management

16
recovered, this is stated by Goldratt (author of Theory of Constraints). Making sure
processes feed directly in one another can dramatically reduce waiting.13
1.3.4 Unnecessary motion
Every unnecessary motion made by a worker, taking a tool, component or material
is considered a waste. Even searching or looking for a part is lost time. In theory
every unnecessary motion should be eliminated from the process.14
1.3.5 Unnecessary transportation
Transportation between processes are a non-value added element and cost a lot of
money. Too much handling and movement can cause damage and are a prime
opportunity for quality to deteriorate. To transport material you use material
handlers, but they add no customer value. To reduce transportation can be
difficult, because moving processes and machines closer together can be more
expensive. It is also hard to figure out which process or machine has to stand
together. Mapping out the production flow can make this easier to see.15
1.3.6 Rework
The making of faulty pieces or goods is asking for them to be repaired or be thrown
in the bin. Either way it is considered waste, but it goes further than that. It also
asks for control, treatment, time and resources.16
Quality defects have a direct impact to the bottom line and result in rework or scrap
which costs the organization a lot of money. Related costs are quarantining
inventory, re-inspecting, rescheduling and capacity loss. In a lot of organizations
the total cost of defects is a main percentage of the total manufacturing cost.17

17
1.3.7 Over processing
The use of expensive high precision equipment where simpler tools would be
sufficient. This often leads to poor plant lay-out because subsequent operations are
located far apart. They also encourage high asset utilization (over-production with
minimal changeovers) in order to recover the high cost of this equipment. Investing
in smaller, more flexible equipment where possible; creating manufacturing cells;
and combining steps will greatly reduce the waste of inappropriate processing.18
1.3.8 Unused creativity of the workers
The last waste is a new one and that is the unused creativity of the worker. Because
it is so new it is not put in to the figure above, but that does not mean it is not
important. The outcome for not listening to co-workers or workers is no learning
curve, lost time and unused opportunities. Innovation can come from anywhere and
co-workers have skills that should be used.19
1.4 5S
One of the 12 principles of the TPS is 5S and it helps businesses to evaluate their
workplace organisation capabilities and visual management standards. It engages
people through the use of “Standards” and “Discipline”. The five steps are shown on
the figure below.20
Figure 2: 5S steps21
20 Kaizen institute (1985 – 2015). About 5S. Consulted on February 20th 2015 via
http://uk.kaizen.com/knowledge-center/what-is-5s.html

18
1.4.1 5S English vs Japanese
Japanese English Explanation
1 Seiri - Orderliness Sort Sort through everything and red tag
everything that is not needed in that
area.
2 Seiton – Neatness Set in order Arrange items that are needed so that
they are ready & easy to use. Mark out
where everything goes after usage.
3 Seiso – cleaning Shine Regularly clean the workplace and
equipment so you find defects.
4 Seiketsu – Cleanliness Standardize Frequently re-do the first 3 steps of 5S,
make it part of the standard procedure.
5 Shitsuke - Discipline Sustain Keep up the standard procedure and
improve every day.
Table 1: 5S steps with Japanese and English words and explanation2223
The difference between the words in English and Japanese of the 5S is important as
it reflects the different mind-sets of the east and west. In Japan, cleanliness means
overall cleanliness and order that results from the strict observance of the previous
3S’s.24
1.4.2 5S Principles
The purpose of Lean 5S is to create a safe and comfortable work environment by
keeping the area in order, neat and clean by the workers themselves. As a result,
motivation in the workplace is fostered.
The 5S principles was created for Lean production, cost reduction and employee
empowerment. The techniques of 5S work from the assembly line to the office.
Wherever there are inefficiencies 5S is the solution to create order and motivation in
the workplace.
The 5S workplace works on the idea that a workplace full of clutter is less
productive and motivating than a clean and orderly area. Clutter and dirt get in the
way of the workers and caused negative impact on productivity. A life without 5S
results in waste. 25
22 Process improvement Japan. (2010). Lean 5S. Consulted on February 20th 2015 via
http://www.process-improvement-japan.com/lean-5s.html

19
1.4.3 The benefits of 5S
The benefits of 5S are as followed:
 It reduces the cost of inventory, because fewer items means less storage
needed;
 Increased workspace;
 Clean and orderly workspace instead of dirty cluttered areas;
 Fewer delays= saves time, lower cycle time;
 Less rework;
 Safer work environment;
 Better team efficiency;
 Better company morale;
 Increased customer satisfaction.26

20
2 Quick Response Manufacturing
2.1 Definition
Quick Response manufacturing is a company-wide strategy for reducing lead times
throughout the enterprise. QRM pursues the reduction of lead times in all aspects
of a company’s operations, both internally and externally. Specifically, from a
customer’s point of view, QRM means responding to the customers needs by rapidly
designing and manufacturing products customized to those needs. This is the
external aspect of QRM. Next, in terms of a company’s own operations, QRM
focuses on reducing the lead times for all tasks within the whole enterprise. This is
the internal aspect of QRM. Examples of such internal lead times are the time to
approve and implement an engineering change or the time to issue a purchase
order to a supplier. Typically such lead times are not directly observed by the
customer.
QRM strategy is based on four core concepts: the power of time, organization
structure, system dynamics and enterprise-wide application. The fourth principle –
the fact that QRM is not just a shop floor approach – has been a key element in its
success. An illustration of just how powerful QRM can be beyond the shop floor is
provided by TCI, LLC, a manufacturer of customized power inverters in Milwaukee,
Wisconsin. When TCI received an order for a customised inverter, it used to take
the company over a week in office operations before the order was released to the
shop floor. By applying QRM methods, TCI was able to reduce this time from over a
week to just an hour.27
2.2 History
2.2.1 Background
The organizations of manufacturing enterprises have always been influenced by the
changing customer demands and technology innovations. QRM focus on the
increasing demand for customized products at shorter lead times and this is a
powerful trend in the manufacturing today. The 21st century markets are destined
to be dominated by product customization with possibilities of modern
communications technologies and driven by technological innovation and customer
demand.28
27 Suri, R. (2010). It’s about time: the competitive advantage of Quick Response
Manufacturing. Page 2-4. CRC Press- Taylor & Francis group
28 University of Wisconsin. (2012). Evolution of manufacturing strategy. Consulted on
February 20th 2015 via https://qrm.engr.wisc.edu/index.php/what-is-qrm/background

21
2.2.2 Development
QRM was first developed in the late 1980s by Rajan Suri. He is a professor of
industrial and system engineering at the University of Wisconsin-Madison. He
combined academic research on Time-based Competition (TBC) with his own
observations from various lead time reduction projects. Suri conceived QRM as a
concept espousing a relentless emphasis on lead time reduction that has a long-
term impact on every aspect of a company.
The centre for QRM was launched in 1993 by Suri along with a few US Midwest
companies and academic colleagues at the University of Wisconsin-Madison. This
centre is dedicated to the development and implementation of QRM principles in an
industry setting.
QRM extends basic principles of time-based competition while including these new
aspects:
 Singular focus on lead times reduction
 Focus on manufacturing enterprises
 Clarification of the misunderstanding and misconceptions managers have about
how to apply time-based strategies
 Companywide approach reaching beyond shop floor to other areas such as
office operations and the supply chain
 Use of cellular organization structure throughout the business with more
holistic and flexible cells
 Inclusion of basic principles of systems dynamics to provide insight on how to
best reorganize an enterprise to achieve quick response
 New material planning and control approach (POLCA)
 Specific QRM principles on how to rethink manufacturing process and
equipment decisions
 Novel performance measure
 Focus on implementation and sustainability
 Manufacturing critical-path time metric to measure lead times.29
2.3 The Concept of POLCA
2.3.1 Definition
POLCA is not a well-known technique in Belgium and UK, where the Wheels
division is located, as this is a system developed in the United States. POLCA is the
abbreviation of Paired-cell Overlapping Loops of Cards with Authorization. POLCA is
one of the instruments to make QRM work in your factory.30
29 Suri, R. (1998). Quick Response Manufacturing. A companywide approach to reducing lead
times. Productivity press
Manufacturing. Page 133. CRC Press- Taylor & Francis group

22
An MRP system by its very name indicates that it is a planning system. When a
plan is executed, then that plan, no matter how good, still needs to be managed and
fine-tuned. As the real world intervenes, there will be unanticipated customer
orders and schedule changes as well as unexpected problems and events. You need
a control system to cope with these changes and help you modify and execute your
plans as best possible. POLCA is just such a system, designed to work within the
QRM structure of cells, teams, ownership and the MRP-system.31
We already know that POLCA is an abbreviation of Paired-cell Overlapping Loops of
Cards with Authorization. What that means is explained more in details below.32
2.3.1.1 Paired-cell…
Underneath the POLCA system is a cellular organization, which is not divided into
functional departments but into cells. Each of these cells operates for a certain
production phase. They work independent and have the means to perform the
required activities. In theory it is not allowed to share machines with other cells.
POLCA only coordinates the flows between the cells. Within each cell you have to
find the most suitable system, this means that if the operations in a specific cell are
routine than you can apply KANBAN. In POLCA, two cells are connected this means
if for example cell 1 wants to start production. It is only allowed to start if there is
space in cell 2 when cell 1 will be finished. If not, cell 1 better starts working on
another order. When there are no more other orders, the employees from cell 1
should not start working on other order, but they can make themselves more useful
by for example joining quality circles and thinking about ways to improve the
productions process.33
2.3.1.2 Overlapping Loops of Cards …
The connected cells are tied together with a POLCA card. This card makes a loop
when an order goes from cell 1 to cell 2. The card namely shares an order from the
start of operation 1 until the end of operation 2. Then the card is returned to the
start of operation 1. When cell 1 is finished, cell 2 and 3 are the connected pair. The
loops that the POLCA cards make are overlapping. It shows the routing of a certain
order.34
32 Epping, E. (2005). Let’s POLCA [Master Thesis] University of Groningen. Faculty of
Management and Organization

23
2.3.1.3 With Authorization
POLCA cards are used at a quite detailed level. To get a more aggregated impression
of the production process, the HL/MRP is developed. This system oversees the
whole production process and gives permission to start an order. This permission is
given when all material to start producing is available and when it is the right time
to start producing. The latter is because not all customers want their products as
soon as possible, but at a certain point of time. Then it is useless to start producing
earlier (and build up an inventory). We have seen that for a cell to start working on
an order, there are two prerequisites: authorization by the HL/MRP and the
availability of a POLCA card.35
2.3.2 Working of POLCA
Material flowing between any two cells, let us say from Cell A to Cell B, in POLCA
they are connected by a POLCA loop. A POLCA loop contains a number of cards
called POLCA cards that circulate within the loop; these cards are specific to this
loop and are labelled based on the origin and destination cell; in this case they
would be called A/B cards. When Cell A is scheduled to start a job that is destined
for Cell B, it needs to have an A/B card available in order to launch the job into Cell
A. If the card is available, the job is started and the card is kept with the job or with
its paperwork, to signify that the card is associated with that job. When Cell A
completes the job, it sends the product along with the A/B card to Cell B. A second
card is attached to the job namely card B/C. When the job is finished in Cell B, the
card A/B gets send back to Cell A and the job gets send to Cell C to get a new card
attached to it.
Sending the card A/B to Cell A, means that we have finished one of the jobs you
sent; you can send us another. To put in other words returning the POLCA cards
signify the availability of capacity in downstream cells.36
The second feature of POLCA concerns the issue of how Cell A decides which job to
start next. Remember that in QRM you have an MRP-system that plans your
material flow. Thus, based on the ship dates of end products, this system back
schedules the requirements of materials and calculates the start dates for each job
at each cell. In POLCA we call these dates authorization dates because we want to
signify that the cell is authorized to start the job from the MRP viewpoint, but it also
needs to follow additional POLCA rules before it can actually start the job.

24
Essentially, jobs with start dates of today or earlier are authorized, while jobs with
dates of tomorrow or later are not authorized.37
2.3.3 Limitations
We have been talking about POLCA which is a production planning system for
companies making a wide range of products, and/or making customer-specific
products. A lot of companies meet this definition. But like all systems, POLCA could
be a wrong solution for them. Three boundary conditions have to be met:
1. It should be possible to re-organize the shop floor by forming a network of
loosely connected work cells. These can then connect and supply to each other
at will, and this makes an endless number of production routes possible.
2. On average the capacity utilization of each work cell may not exceed 80-90%.
So, like in Lean manufacturing it is needed to invest in structural overcapacity.
3. The capacity which is needed per cell and per product should be roughly
predictable. If there is a strong variation in workload per product, that makes
POLCA harder to implement. However, this hurdle van be overcome.
If a shop floor meets all the conditions listed above, implementation of POLCA may
not always be possible or fully possible. This can be more explained in the case
study of Parker Filtration in appendix A.38
2.3.4 Implementation
The University of Groningen invented a POLCA-scan to see if your company should
implement POLCA. The translated version can be found in Appendix B. The
students of the university can do this scan for you for a small feed. You do not have
to do the scan to implement POLCA, but it can be a benefit.
For the implementation of POLCA there are two main demands, namely:
 HL/MRP system
 Cellular organization
Besides these two demands for POLCA implementation it also requires that cells
that are involved in the implementation have the ability for rough cut capacity, lead
time planning and the HL/MRP system can produce dispatch lists for each cell. The
implementation of POLCA in a factory consists of four main phases.
38 Van Ede, C.J. (2006-2015). Introduction of POLCA; Consulted on February 12th 2015 via
http://www.business-improvement.eu/qrm/polca_eng.php

25
They are:
 Pre-POLCA assessment
 Design of the POLCA system
 Launch of the POLCA implementation
 Post-implementation evaluations.39
A complete and deeper explanation of these steps can be found in chapter 6.2 (TO
BE at wheels – POLCA)
2.4 POLCA Case studies
The following sub-chapter are case studies of companies that have already
implement POLCA.
2.4.1 Case study 1: POLCA at a manufacturer of machined parts40
Olsen Engineering is a contract manufacturer located in Eldridge, Iowa, supplying
hardened and precision ground steel pins, bushings, CNC parts, and tube bending
parts to OEM’s. POLCA was implemented at Olsen in the spring and summer of
2002. The manufacturing facility produces over 5000 different part numbers in a
138,000 square foot area that houses among other equipment, a heat-treating and
a zinc plating facility. The POLCA implementation at this facility was motivated by
two challenges faced by Olsen: They had an excess of finished goods as well as WIP
inventories throughout their facility, and they had long lead times that resulted in
frequent expediting, frequent rescheduling, and overtime. Faced with the pressure
to be more responsive to customer demand and reduce costs of production, Olsen’s
management was looking for a way to better control the production and inventory of
its very large population of products.
Olsen already had in place a partnership with John Deere, one of its leading
customers, to engage in some process improvements. Since Deere had been
involved with the Centre for Quick Response Manufacturing for several years, and
many of its personnel were familiar with QRM methods, the Deere representative
working with Olsen suggested the possibility of using POLCA. Olsen management
saw the potential of POLCA for their environment and decided to investigate it
further. A team including Olsen and Deere personnel attended a workshop on
POLCA implementation at the Centre for Quick Response Manufacturing in early
2002.
39 Krishnamurthy, A. & Suri, R. (2003). How to plan and Implement POLCA. [Technical
Report]. Centre for Quick Response Manufacturing

26
This workshop accomplished three things for the team:
 It convinced them that POLCA would be an effective method to deal with their
challenges
 It gave them a detailed roadmap for POLCA implementation
 It enabled them to talk with other companies that had implemented POLCA and
obtain specific pointers from the experiences of those companies.
To implement POLCA, Olsen put together an implementation team comprised of
factory managers, schedulers, other shop floor personnel and the representative
from Deere. To focus the implementation efforts, the team decided that the scope of
the initial POLCA implementation would be confined to products belonging to one of
their key market segments. In the pre-POLCA assessment the team identified that
these products were being manufactured in product-focused cells. The typical
routing for a product involved from two to five cells. The assessment also revealed
that the facility satisfied the main prerequisites for POLCA implementation.
Additionally, this pre-POLCA assessment also helped to initiate several
improvement activities aimed at set-up reduction, cross training, and improving
quality. These were conducted in parallel with the POLCA implementation.
During the detailed design of the POLCA system, the implementation team
identified over a dozen POLCA loops for implementation. Next, modifications were
made to the existing scheduling procedures at the cells to incorporate release
authorizations. Revised dispatch lists were then generated for each cell. The team
computed the number of POLCA cards in each loop using the formula. Next, the
physical POLCA cards were designed, incorporating the dual colour coding
explained previously. Finally, in addition to the POLCA cards, the implementation
team decided to introduce additional Safety Cards in each POLCA loop. The number
of such Safety Cards was set to approximately 10% of the total number of cards in
the loop. Prior to launching the POLCA system, the team conducted training
sessions for all the personnel who would be affected. POLCA was implemented in
the various loops in stages. It took approximately six months from attending the
workshop to completion of the POLCA implementation for all these loops.
The POLCA implementation at Olsen Engineering resulted in several improvements.
Lead time reduction across the different products ranged from 22% to 68%. WIP
and stock inventories were reduced significantly from 75% in some cells to over
90% in others. In addition to the quantitative improvements, there were qualitative
improvements as well. The POLCA process helped in achieving better visual control.
It also helped surface opportunities relating to quality issues, machine down times,
and material availability that would have otherwise gone unnoticed. More
importantly, it significantly improved the operator morale and instilled a culture of
continuous improvement at the facility. The success of POLCA implementation in
one area of the facility increased the enthusiasm for implementation in other areas
of the facility.

27
2.4.2 Case study 2: POLCA at Bosch-Hinges41
To our knowledge, the first implementation of a fully operational POLCA system in
The Netherlands occurred in 2007 at Bosch Hinges. Until then, several case studies
had been performed in firms that were interested in applying the POLCA system.
These firms had experimented with (elements of) the POLCA system, but had not
implemented it yet. The firm that has implemented POLCA is a small to medium
sized enterprise that produces custom-made hinges (see Figure 3) for industrial
applications, i.e., in the business-to-business market.
Figure 3: Example of custom-made hinges
Their customers are e.g., ship builders, furniture producers, train and machine
builders. They need these hinges at the assembly line in their processes for their
custom-made products. Batch sizes range from 10 to 5000, with an average of 500.
The size of the hinges ranges from smaller than a centimetre to more than four
metres. The total number of orders per year is 1500 with an average repetition rate
of 2.5 orders per year for similar products.
The first stage of the scan revealed that the main objectives of implementing POLCA
were to improve the dependability (many orders were delivered two weeks over due)
and reduce WIP and throughput time. Their lead times were 6–8 weeks, which
needed to be reduced by more than 50% whenever the dependability had increased.
The ultimate lead time target is two weeks. It appeared that the most important
causes for the high throughput times and the bad due date performance were due
to the large work in progress, lack of information when deciding on the acceptance
and release of jobs, and the functional organisation of the shop floor. It was decided
that these issues could be addressed using a POLCA system.
The second stage investigated the possibility to apply a cellular structure. Until
then, a pure functional structure had been applied, where machines were allocated
without a clear plan and employees arrived at the start of their shift and asked the
planner to assign them a job. It was up to the planner to select jobs that both could
be produced (i.e., availability of materials, machine, tools and capabilities of
employee matched) and needed to be produced (priority). The cellular structure that
was proposed in stage 2 assigned employees to six cells. The tools and machines in
the cells were colour-coded. Each cell received an input-area, where products that
need to be processed in that cell could be located and the accompanying order
information could be left. In the new situation, buffers of inventory could only occur
at these locations. A training program for the employees was developed to enable
them to perform as many operations in the cell as possible.
41 Riezebos, J. (2010). Design of POLCA material control systems. [International Journal of
Productions Research]

28
The third stage focused on the ERP system, cell throughput times, and order
information. The firm did have estimates of process and set up times (the latter
ranging from two minutes to one hour for a single order), but the information on
expected throughput times of jobs in a cell could not be obtained from the ERP
system. It was decided to buy some additional presses and milling machines in
order to reduce the utilisation rate and/or avoid too much intercellular traffic. This
would change cell throughput times as well. Finally it was decided that the planner
should make a realistic estimate of the cell throughput times, based on his
experience. With respect to work content, it was decided to divide the large orders
into several jobs in order to reduce the average work content of a job. This was
preferred instead of adding complexity to the POLCA system by introducing a
quantum (maximum of work content) per card.
Figure 4: Example of order information slide
The fourth stage identified the product routings of the jobs. Each job needs to visit
6–30 operations, including external operations such as heating, special cleaning,
etc. The average number of operations required is eight. The use of cells has
decreased the number of steps in the routing, but only slightly. Hence, each order
information card uses colour coded routing information, showing the sequence of
cells that need to be visited through coloured stickers. The planner prepares these
accompanying slides before the job is released to the shop floor (see Figure 4). It is
interesting to note that between two cells flows can exist in both directions, i.e., a
flow from the third red cell to the fourth black cell and a flow back from the fourth
black cell to the red cell. The cards that were designed for this POLCA system have
both the colour of the two cells as well as their names on it (see upper side of Figure
5), which makes identification of the correct card easy. There are 24 different
control loops in this system with six cells, so on average each cell has relations with
four other cells. The black cell is an externally located supplier and functions as a
cell in the POLCA system.

29
Figure 5: POLCA's awaiting new orders (above) and order awaiting POLCA's (below)
Finally, stage 5 identified the number of cards that should circulate in these control
loops. As there was no information on the cell throughput times and waiting times
between the cells. This firm did not encounter serious problems with convergent or
divergent routing structures, so no special modifications of the POLCA system were
needed. Due to the absence of convergent routing structures, special release lists
per cell were not required. A simple priority system was used instead. The
information slides of all orders awaiting a POLCA in this cell are put in sequence of
arrival in a file box (see lower part of Figure 5). The planner is authorised to re-
sequence this list for planning reasons, and the employee is authorised to select a
job that is not first in the list if he/she does not have the skills to complete the job.
However, he/she should maintain the sequence as much as possible.
The firm implemented both the cellular structure and the circulating POLCA’s in
October 2007. Dependability issues have been solved and throughput times are
much shorter. Lead times have been reduced by more than 70%, and the firm now
even offers lead times of two to three weeks for special products to their customers.
An important benefit is that productivity per employee has increased, due to the
cellular organisation and the focus on craftsmanship in that area. The material
planner has a better view of the progress of orders in the system. There are less
peaks and troughs, and the reaction speed in case of machine breakdowns is much
better. Employee satisfaction has increased as well. The team concept and the
improved control of workload in the system helped them to focus on their area. The
skills training and increased autonomy worked out well.
However, system design is still not finalised and it is too early to conclude that all
objectives have been achieved. One of the things that has changed and works out
very well is the change in behaviour of the employees when starting their shift. They
now know their responsibilities and tasks are less dependent on the decisions and
authority of the planner, as they understand the basic mechanism of the POLCA
system: only start working at a job when a signal is available that the next cell in
the routing of this job has capacity available.

30
2.4.3 Case study 3: POLCA at a manufacturer of motor control centres42
Rockwell Automation’s Packaged Control Products Division is a leading
manufacturer of Motor Control Centres. These consist of steel cabinets that enclose
large modular assemblies of motor starters, variable speed motor drives,
programmable controllers, and other electrical control equipment. These control
panels vary significantly in size and are highly customized on an order-to-order
basis. POLCA was implemented at several facilities of the PCP Division during 2001.
We will focus here on the facility in Richland Centre, Wisconsin. At this facility, all
the different types of steel cabinets were fabricated and assembled in a single
cabinet assembly cell. The cabinets were then sent to final assembly cells where
various other components were assembled into the cabinets to form each
customized Motor Control Centre. The cabinet cell supplied seven final assembly
cells with cabinets. As can be seen from this description, the facility had already
been organized into cells.
The main motivation for implementing POLCA was as follows. At this facility, all the
products were built to order or engineered to order with no finished goods support,
and the quoted lead times varied from a few days to several weeks depending on the
product configuration. With this large variation in lead times across orders, it was
to be expected that changes in the ship dates could also range from a day to several
weeks. These changes could be due to changes in customer request dates,
unanticipated urgent customer orders (for example if there had been a breakdown
in the field), holdups due to non-availability of component parts, and so on. With all
these changes taking place on different time scales, it was hard to change the cell
production schedules in a timely manner, and so the assembly of cabinets in the
cabinet cell would often be out of synchronization with the requirements of the final
assembly cells. This resulted in excess inventories of unwanted cabinets for some
cells and late deliveries of cabinets to other cells and, as could be expected, a lot of
time spent by schedulers and supervisors on expediting and communication.
In summary, the motivations for implementing POLCA were:
 The facility needed to control the WIP inventory levels of the steel cabinets
throughout the facility, not so much because of cost but because these large
cabinets occupied a lot of floor space in the assembly areas and constrained the
assembly operations.
 They wanted to ensure that the cabinet manufacturing cell could effectively
respond to the frequently changing demands at the final assembly cells.
 They wanted to ease the stress on the cabinet assembly cell team and
schedulers, who were constantly under pressure to expedite orders for one
assembly cell or another.
Pre-POLCA evaluation conducted by the team revealed that the facility satisfied the
main prerequisites for POLCA implementation. A rough cut capacity planning model

31
was developed that enabled the estimation of the lead times for the products in the
different cells.
The goals of the POLCA implementation were primarily to:
 Improve on-time delivery performance of the cabinets to the assembly cells;
 To reduce the WIP inventories in the facility.
During the detailed design of the POLCA system, seven POLCA loops were identified
for implementation. Each POLCA loop included the cabinet cell as the upstream cell
and one of the assembly cells as the downstream cell. Next, modifications were
made to the existing MRP driven scheduling procedure at the cells to incorporate
release authorizations, and a dispatch list was generated for each cell. The team
then determined the quantum. There were several options with regard to setting the
quantum.
The quantum could be set equal to:
 A single cabinet section;
 A block, which was composed of several sections attached together;
 An order, which was composed of several blocks.
Setting the quantum to correspond to a single section would result in an excessive
number of POLCA cards. On the other hand, setting the quantum to correspond to
an order would result in “lumpy” signals of capacity as orders varied greatly in the
number of sections they needed. Therefore, to determine the right quantum, the
implementation team conducted a statistical analysis of order patterns and
determined that setting the POLCA quantum to correspond to a block would work
well. Even though individual blocks varied in the number of sections they
contained, it turned out that on average a block contained two sections, and this
average remained fairly constant from week to week. The implications of this
decision was that the average load represented by a POLCA card would be two
sections and this average would not vary too much (workload represented by the
POLCA cards would not be too “lumpy”). Another fact that supported this choice of
quantum was that the cabinet cell was already transferring the cabinets to the
assembly cells in blocks.
Having determined the quantum, the implementation team computed the number
of POLCA cards in each loop using the equation above. The calculations indicated
that a total of 227 POLCA cards would be needed in the seven loops with
approximately 30 POLCA cards in each loop. The physical POLCA cards were made
out of magnets so that they would easily attach to the steel cabinets. Finally, it was
observed that the cabinet and assembly cells did face component part shortage
problems occasionally and hence the implementation team decided to introduce
additional Safety Cards in each POLCA loop. The number of such Safety Cards was
set to 10% of the total number of cards in the loop.
Prior to launching the POLCA implementation, all the shop floor personnel that
would be affected by the POLCA implementation were trained. Subsequent to

32
implementation, regular POLCA audits were conducted and the key metrics were
tracked. The POLCA implementation resulted in several improvements.
Overproduction of unneeded cabinets at the cabinet cell was completely eliminated,
and the variability in the time of delivery of cabinets to assembly cells was reduced
from (plus or minus) several shifts to the point where 92% are now being delivered
within one hour of the stated requirement! It should be noted that on-time delivery
here does not just measure lateness – early deliveries are also docked as not on
time in this measurement. Hence the 92% statistic shows that POLCA truly assists
with allocating capacity to make just what is needed – no more and no less.
Correspondingly, WIP inventories were also reduced. As observed by an assembly
cell operator during one of the surveys, “We are not buried in cabinets all the time!”
In fact, after the POLCA implementation, lead times at the seven (downstream)
assembly cells were reduced by an average of 25%.
In addition to the quantitative improvements, there were qualitative improvements
as well. The POLCA process considerably simplified the tasks of schedulers in trying
to be responsive to demand changes. Additionally the process resulted in better
communication between the cabinet and the assembly cells. The operators also
discovered several opportunities for continuous improvement relating to material
availability and inventory reduction. Implementations carried out at other facilities
of the PCP division in US and Canada resulted in similar benefits. In the other
facilities, WIP inventories shrunk by over 30% and one facility even achieved an
18% increase in throughput.
2.5 POLCA vs KANBAN
Before going on about POLCA, it would be interesting to know why a new system
was needed. In particular, since KANBAN systems are designed for shop floor
coordination and control and have been very successful, why not just use KANBAN
within the QRM framework of cells and MRP? To answer this question observe first
that KANBAN was designed as part of Toyota’s production system, which worked in
the context of high-volume production of similar products and with fairly stable
demand. But the customer demand has been changing the last years to custom-
products with high variability of demand. KANBAN is not able to work in these
conditions because you while have a large amount stock which creates wastes.43
An important difference between POLCA and KANBAN is that the latter is an
inventory signal. The signal gets triggered when a certain quantity of parts is used
up and the signal tells the previous operation to make up that inventory by
supplying that quantity of parts. On the other hand POLCA is a capacity signal: the
signal is triggered when a job is completed and the signal tells the previous cell that
it is okay to send another job to this cell. This difference between an inventory
signal and a capacity signal is in fact very significant and underlies why POLCA

33
works for low-volume and custom parts while KANBAN is not suited to these
environments.44
Another important difference between POLCA and KANBAN is their card. A KANBAN
card has part numbers written on it, while the POLCA does not. This is an
advantage that POLCA has over KANBAN for low-volume or custom products.45
Manufacturing. Appendix E. CRC Press- Taylor & Francis group

34
III Research and Analysis
1 Introduction - GKN as a Company
1.1 Strategy46
GKN strives to make the continuous rising profits and dividends of shareholder
value longer lasting and sustainable. They do this by delivering sustainable growth
in revenue, profit and cash flow. They have good positions in long-term growth
markets such as aerospace, automobile- and land systems. They build strong
relationships with international OEM’s and prime contractors. To create value, they
have five strategic objectives:
 Leading in their chosen markets;
 Leveraging a strong global presence;
 Differentiating themselves through technology;
 Driving operational excellence;
 Sustain above market growth.
1.2 Vision47
They are constantly looking for ways to improve their people, products and
processes to ensure that they create the maximum value for their customer and the
efficiency of their shareholders. In 2003, they started their Lean journey at their
different locations and business units by setting up a Lean steering committee and
an improvement plan. Through this journey GKN has created 1 200 value streams
for increasing customer value stream. Next to this they are also improving their flow
in their key business processes. They will continue developing their best asset –
their 40 000 employees across 30 countries worldwide- by involving them in their
continuous improvement culture and supporting the business by ensuring
sustainable growth.
46 GKN. (2015). Strategy. Consulted on February 14th 2015 via
http://www.gkn.com/aboutus/Pages/our-strategy.aspx
47 GKN. (2015). Vision Consulted on February 14th 2015 via
http://www.gkn.com/aboutus/lean-enterprise/gkn-vision/Pages/default.aspx

35
1.3 Divisions
1.3.1 Land System48
The sales of Land Systems for 2014 are £776 million. They are the leading supplier
of engineered power management products, systems and services. They design,
manufacture and supply products for agriculture, construction, mining and utility
vehicle markets and also key industrial segments, offering integrated powertrain
solutions. On the graph below you can see in which sectors Land Systems supplies
and who their customers are.
Table 2: Sales figures of Land Systems, 201449
Their products include:
 Brakes  Fuel systems
 Clutches  Gearboxes
 Controls  Hub systems
 Discs  Structures
 Disc brakes  Tractor attachment systems
 Driveshafts  Transparencies
 Electric & hybrid  Wheels
 Flexible coupling
From these 15 products, I will explain 2 of them further into detail. They have over
5 200 employees across 36 manufacturing and service locations in 14 countries.
The head office is located in Redditch, United Kingdom.
48 GKN. (2015). Land System Consulted on February 14th 2015 via
http://www.gkn.com/aboutus/at-a-glance/Pages/GKN-Land-Systems.aspx
49 GKN. (2015). Land System Consulted on February 14th 2015 via
http://www.gkn.com/aboutus/at-a-glance/Pages/GKN-Land-Systems.aspx

36
1.3.1.1 Structures50
It is a full service supplier from design through to the manufacture of chassis;
aluminium cast wheels and suspension components. They do this for a number of
key sectors like automotive, off-highway equipment for agriculture and
construction, defence, rail and mass transit sector.
Cast aluminium wheels51 (figure 6)
Here they manufacture cast aluminium wheels by using the squeezeforming
process. This has been proven in high hazardous defence applications and is now
used to benefit agriculture construction, motorsport and rail. The main advantage
of these wheels ae that they are 35 % lighter than their standard counterpart. The
weight of the vehicle is brought down with 300kg, bringing critical improvements in
operational performance and running costs. Besides being lighter, the wheels
benefit from a quadruple increase in endurance compared to the standard forged
steel AFV wheels. For the past 15 years, the company has perfected this method of
production. This makes it possible for the company to offer these improved wheels
to all its customers, not just in Defence.
Figure 6: Cast Aluminium Wheels52
50 GKN. (2015). Structures Consulted on February 14th 2015 via
http://www.gkn.com/landsystems/products/structures/Pages/default.aspx
51 GKN. (2015). Structures Consulted on February 14th 2015 via
http://www.gkn.com/structures/products/cast-aluminium-wheels/Pages/default.aspx
52 GKN. (2015). Structures Consulted on June 1st 2015 via
http://www.gkn.com/structures/products/cast-aluminium-wheels/Pages/default.aspx

37
CSL53
CSL stands for Chassis Systems Ltd and is the product of a joint venture between
Metalsa and GKN Structures. Here they use to produce the chassis structures for
two Land Rover’s leading brands namely the Discovery and the Sport (figure 7). The
fabrication operation produced an excess of 100 000 units per year covering both
variants. Right now they only make the chassis for the Discovery Land Rover. The
chassis contains over 200 parts, many of which come from the specialist pressed
steel capabilities on site. This is a precision process with highly automated welding.
Figure 7: Chassis54
Suspension components & systems55
Through design, analysis and testing, they developed vehicle suspension systems.
The objective is to ensure that the vehicle performance is achieved, while making
sure that the strength and durability are met. As is the case of modern vehicle
chassis components, a continuous process of optimisation is sought out to
minimise mass and maintain cost targets. They encourage the development of
suspension components as a system, maintaining component interaction, this
process is reflected in a number of methodologies that they have developed.
Figure 8: Suspension Components & systems56
53 GKN. (2015). CSL Consulted on February 14th 2015 via
http://www.gkn.com/structures/products/chassis-systems/Pages/default.aspx
54 GKN. (2015). CSL Consulted on June 1st 2015 via
http://www.gkn.com/structures/products/chassis-systems/Pages/default.aspx
55 GKN. (2015). Suspension Components & Systems Consulted on February 14th 2015 via
http://www.gkn.com/structures/products/suspension-components-and-
systems/Pages/default.aspx
56 GKN. (2015). Suspension Components & Systems Consulted on June 1st 2015 via
http://www.gkn.com/structures/products/suspension-components-and-
systems/Pages/default.aspx

38
1.3.1.2 Wheels57
GKN are the world’s leading manufacturer of off-highway wheels and they provide
the most innovative engineering solutions. They supply to the global mining,
construction, industrial and agricultural industries and most of the leading
international OEM’s. The products are designed and manufactured to work in the
most challenging environments. At the heart of their reputation for outstanding
products and services are the continuous investment in research, development and
testing and the commitment to engineering and design excellence.
Agriculture58
In this sector GKN is the leading manufacturer of single piece fixed and adjustable
wheels suitable for tractors, combines, towed agricultural implements and trailed
applications. The wheels are first designed and studied through the use of
computer simulation with field and experience then confirming rim capabilities. The
greatest advantages are their strength and durability, with easier wheel change and
tyre fitting, through this the weight is reduced and it can perform under challenging
load capacities. All the wheels made at GKN have a well-proven protective paint
finish as standard, it gets e-coated and then top coated. Tractor, combines and
implement wheels are manufactured in the UK, Denmark, Italy and USA. Irrigation
wheels are manufactured in USA. Below can be seen the two different types of
wheels made for agriculture and made at the Telford Site.
Figure 9: Fixed Wheel (Red) and MAVT Wheel (blue)59
57 GKN. (2015). Wheels Consulted on February 14th 2015 via
http://www.gkn.com/landsystems/products/wheels/Pages/default.aspx
58 GKN. (2015). Agriculture Consulted on February 14th 2015 via
http://www.gkn.com/wheels/productsandservices/agriculture/Pages/default.aspx
59 GKN. (2015). Agriculture Consulted on June 1st 2015 via
http://www.gkn.com/wheels/productsandservices/agriculture/Pages/default.aspx

39
Construction60
Here GKN is the well-known leader in design, manufacture and supply of 3 and 5
piece wheels to the construction industry. They are suitable for a wide range of
applications. In the last couple of years they have encouraged to change from a 5-
piece to a 3-piece wheel, this offers fewer components, less material and it reduces
weight. This is done without losing cost efficiency and performance and in fact it
even enhances the performance. These wheels are constructed in China, Denmark,
Italy, the UK and the USA. A wheel made for construction can be seen on the figure
below.
Figure 10: Construction Wheel61
Heavy construction & mining62
Here they design, test and manufacture a range of wheels in sizes up to 63” in
diameter to suit vehicle applications like for instance quarry haul trucks or large
mining trucks. The wheels are designed to meet the customer’s needs and the
applications need without adding unnecessary weight, that way it is controlling
product costs, reducing fuel consumption and increasing payloads. These wheels
are made in China, Denmark and the USA. An example of the wheel can be seen
below.
Figure 11: Heavy Construction & Mining Wheel63
60 GKN. (2015). Construction Consulted on February 14th 2015 via
http://www.gkn.com/wheels/productsandservices/construction/Pages/default.aspx
61 GKN. (2015). Construction Consulted on June 1st 2015 via
http://www.gkn.com/wheels/productsandservices/construction/Pages/default.aspx
62 GKN. (2015). Heavy construction & mining Consulted on February 14th 2015 via
http://www.gkn.com/wheels/productsandservices/heavy-construction-
mining/Pages/default.aspx
63 GKN. (2015). Heavy construction & mining Consulted on June 1st 2015 via
http://www.gkn.com/wheels/productsandservices/heavy-construction-
mining/Pages/default.aspx

40
Industrial & material handling64
Durable and reliable wheels are required in heavy engineering environments to
tolerate high loads and stability. Here GKN relies on the expertise of their two world
class design centres to develop and test innovative products for fork lift trucks,
container handlers, reach stackers and harbour cranes. These wheels are made in
China, Denmark, Italy and the USA. An example can be seen, below on figure 12.
Figure 12: Industrial & Material Handling Wheel65
Forestry66
The machines in forestry work in difficult terrain, generating high loads and
stresses on wheels rims. The wheels of GKN are intentionally designed and field
tested for these tough conditions. They are simultaneously developed with leading
tyre manufactures to optimise fitness for the objective. They are manufactured in
Denmark. An example can be seen, below on figure 13.
Figure 13: Forestry Wheel67
64 GKN. (2015). Industrial & material handling Consulted on February 14th 2015 via
http://www.gkn.com/wheels/productsandservices/industrial-material-
handling/Pages/default.aspx
65 GKN. (2015). Industrial & material handling Consulted on June 1st 2015 via
http://www.gkn.com/wheels/productsandservices/industrial-material-
handling/Pages/default.aspx
66 GKN. (2015). Forestry Consulted on February 14th 2015 via
http://www.gkn.com/wheels/productsandservices/forestry/Pages/default.aspx
67 67 GKN. (2015). Forestry Consulted on June 1st 2015 via
http://www.gkn.com/wheels/productsandservices/forestry/Pages/default.aspx

41
Custom solutions68
GKN offers innovative custom solutions across all sectors and markets relying on
their extensive technical expertise. They facilitate help from concept, through
design, analysis and testing. They have specialised facilities to design, manufacture
and test these unique designs. Below you can see where the technical expertise
lays.
Figure 14: Customs solutions69
1.3.2 Powder Metallurgy70
The sales for Powder Metallurgy of 2014 are £916 million. This is a joint-venture of
Hoeganaes and GKN Sinter Metals. Hoeganaes is among one of the world’s largest
metal powder manufacturers. Here they make the metal powder that GKN Sinter
Metals and others use to manufacture precision automotive components and
components for industrial and consumer applications.
Their products are:
 Metal powders
 Sintered components for engines and transmissions, as well as pumps, bodies,
chassis and compressors.
 Sintered bearings and filters
 Metal injections moulded components
 Soft magnetic components for use in electric motors
 Sintered components for numerous industrial applications.
The strategy of Powder Metallurgy is to exploit powder metal technology and work
closely with their customers to develop “design for powder metal” applications. They
have around 6 900 employees located in 34 manufacturing locations across 10
countries.
68 GKN. (2015). Custom solutions Consulted on February 14th 2015 via
http://www.gkn.com/wheels/technologyandinnovation/product-design/custom-
solutions/Pages/default.aspx
69 GKN. (2015). Custom solutions Consulted on June 1st 2015 via
http://www.gkn.com/wheels/technologyandinnovation/product-design/custom-
solutions/Pages/default.aspx
70 GKN. (2015). Powder Metallurgy Consulted on February 14th 2015 via
http://www.gkn.com/aboutus/at-a-glance/Pages/GKN-Powder-Metallurgy.aspx

42
1.3.3 Driveline71
The sales figures of Driveline for 2013 are £3,444 million. Driveline supplies the
world’s leading vehicle manufactures. They develop, build and supply a wide range
of automotive driveline products and systems.
Their products are:
 Constant velocity jointed systems including CV joints and sideshafts
 All-wheel drive systems including propshafts, coupling and final drive units
 Trans-axle solutions including open, limited slip and locking differentials and
electronic torque vectoring products.
 eDrive systems including electric rear axles, transmissions and motors.
They have about 25 650 employees in 46 manufacturing locations across 22
countries.
1.3.4 Aerospace72
The sales figures for Aerospace for 2013 are £2,226 million. GKN is the leading and
global first ranked supplier of airframe and engine structures, components,
assemblies and transparencies to a wide range of aircraft and engine prime
contractors and others first level suppliers. It works in three important product
areas namely aerostructures, engine structures and systems, and niche products.
Their products are:
 Integrated aerostructures, including wing/empennage and flight control surface
assemblies and fuselage structures.
 Fixed and rotating propulsion products for aircraft engines, fan cases, engine
components, exhaust systems and nacelles.
 Transparencies including specially coated cockpit and cabin windows.
 Niche products such as ice protection, fuel systems and flotation devices.
They have around 12 350 employees in 33 manufacturing locations across seven
countries.
71 GKN. (2015). Driveline Consulted on February 14th 2015 via
http://www.gkn.com/aboutus/at-a-glance/Pages/GKN-Driveline.aspx
72 GKN. (2015). Aerospace Consulted on February 14th 2015 via
http://www.gkn.com/aboutus/at-a-glance/Pages/GKN-Aerospace.aspx

43
2 AS-IS – Wheels Department
2.1 Wheels Value stream mapping
Based on interviews with Wheels management and personnel, the following Value
stream Mapping has been created:
Figure 15: Value stream map of wheels
This exercise had not yet been done at that level in the Wheels department and was
very well received. We see that the lead time is 27.5 days with a process time to
create the product of 42 minutes. Remark: A larger version of above graphical
representation can be found in appendix C.
2.2 Identified Issues in the Wheels Department
2.2.1 The “Wheels Shop 1” Production Floor
“Wheels Shop 1” is a production floor responsible for a number of steps in the value
chain, fully described in the following subchapters. In Wheels Shop 1 the biggest
issue is the enormous amount of WIP inventory and associated rework at all levels.
There is no allocated place to store items such as inventory or delivered material.
The people who have been working here for a long time know where to find
everything, but newcomers have a long learning curve because of that fact.
The workers also use a ‘Push’ system at this moment, in the sense that they keep
producing in an unsynchronized way without emptying their rim store (representing
their WIP inventory), leading to overproduction. They is also a lot of reworks and
wheels with bad quality. According to the people on the line, this can partially be
explained by the quality of the steel, but it seems that the dirt on the floor could
account for at least some of the defects.

44
Figure 16: Floor in Wheels Shop 1 (left), dirt beneath the paint on the rim (right)
Indeed, once produced the wheels are rolled over the floor before being sent to the
next steps (coating). Dust is a well-known cause of defect in coating operations and
can therefore explain some of the quality problems. (Figure 16)
2.2.1.1 Discs
Steel plates, when arriving for the disc operation, are stored near the docks where
they arrive. From there the large plates have to be transferred to shot blasting and
are subsequently sent to be cut. This is necessary because the square discs have
been prepped (have been shot blasted), but the round discs have not. After the shot
blasting phase and the cutting phase, the discs are put in the same area as the
scrap and reworks (figure 17). However, they have to go the other side of the factory
to be pressed which indicated possible transportation waste. In addition, there are
no markings on the floor or signs on the ceiling as to where the semi-finished
product should be placed. Consequently, the items are simply “put somewhere”,
without indication of production date, where they can once more collect dust (figure
18).
Figure 17: Scrap plates between round discs
Figure 18: Square disc next to round discs covered in dirt
After the semi-finished products undergo the pressing operation, they get washed.
After washing they are brought to WIP stores where they can dry. In the store
workers are doing their best to arrange them by size but short of clear guidance, are
usually not very successful. When the products are dry, they are brought to the

45
assembly line to be mounted on the rims. Some are welded in, others are bolted in,
depending on the type of wheel.
2.2.1.2 Flanges
Here the material gets left at the machines, but again there no available place to be
found where to put it and what the difference is between the sheets of steel. If
someone new starts he/she could take the wrong sheets of steel and the wrong
flanges could be made. The same can said for every part of the making of the wheel,
there is no specific placement for the different material or sizes and if there is, the
workers do not use it properly. Besides the sheets of steel not having a specific
place, at the flange line there is nothing else wrong. Pictures of the steel used for
the flange line (figure 19) and what a flange looks like (figure 20) can be seen.
Figure 19: Sheets of steel for flanges
Figure 20: Flanges
2.2.1.3 Rims
The rim lines start when the coils of steel arrive at Wheels Shop 1. Here the coils of
steel are cut to lengths, after that they go to their respective lines or are stored
somewhere. The different size coils do not have a specific place at the station before
the coils are cut to length. (Figure 21)
Figure 21: Rim coils for cutting to length

46
At the rim lines, the CTL sheets are spun in to rims according to the size that is
needed. From here the rims are put on the wash line or placed for rework/shot
blasting in case something is wrong. At the line itself the rework is just put to the
side, with no marking on the floor. There is also no consistency in the pickup of
rework rims. (Figure 22)
Figure 22: Rim line Lemmerz 3
After the wash the rims are stored on pallets to dry, near the wash or in the rim
stores (WIP). In the rim stores, there is a board that can be used to identify the type
of rim located in that lane. However it only works if it is properly used. (Figure 23)
Figure 23: Rim store after wash
2.2.1.4 Assembly line
The assembly line consists mainly of the welding cells and the Conco’s. In the
welding cells, the rims get the flanges welded in and some of the wheels get discs as
well. The rims where the discs and flanges are welded have the name fixed wheels.
The fixed wheels are directly sent to the waiting line before e-coat loading. (Figure
24) The second type of wheel is named the MAVT wheel this is where the bolts are
bolted into the flanges. See the difference in Research and Analysis, 1.3.1.2 Wheels
- Agriculture.

47
Figure 24: Welding cell of fixed wheels
The wheels where the flanges get welded in are send to the Conco’s or stored near
the Conco’s to get the discs bolted in. (Figure 25) As seen on the figure the bolts,
washes and nuts are stored in poly boxes, which are too heavy for the worker to
carry. The workers always take the same boxes and never use the boxes below,
because it is too heavy to carry. Besides this issue of carrying boxes, there is
another issue namely sometimes the welding cells and Conco’s do not have the
right material to work with.
Figure 25: Conco
Besides the welding cells and the conco’s, there is also the harmonics and the valve
guarding. This is also the place where the wheels are checked for their quality.
Once all the rims are assembled, the wheels are put waiting for e-coat loading. The
wheels are put wherever the line feeder has a place to store them before going on
the e-coat line. This is also where wheels get dropped off from the rework station.
(Figure 26)

48
Figure 26: Wheels waiting to go on e-coat
2.2.1.5 E-coat loading
The loading of the e-coat is done by one person, who has the knowledge of every
type of wheels made at GKN Telford. This is the first place where the wheels gets
scanned and therefore put on BPCS (MRP-system). Besides scanning the barcode
labels, the worker manually writes down the type of the wheel and the amount. This
is done because either the barcode label is gone or cannot be scanned. Examples of
the barcode labels can be seen in figure 27. These barcode labels are put in the
holes of the rims where the air valve goes with the arrow inside the valve.
Figure 27: Barcode labels for the wheels

49
2.2.2 The Paint plant
2.2.2.1 E-coat unloading and cooling down
At e-coat unloading the workers take the wheels off in batches to put on the pallets
so the product can cool down. The wheels are stored by customer with all the
different sizes mixed. (Figures 2 and 29)
Figure 28: Unloading of e-coated wheels
Figure 29: E-coat cooling down
2.2.2.2 Paint loading and paint booths
After the wheels have cooled down, they are put on the chain to go through the
paint booths. (Figure 30) This is where a large bottleneck can be found, because the
workers have to change colours at least 10 times a day. This is caused because the
wheels are put on by customer when the product needs to be shipped right away.
This could be solved if there was a small amount of inventory in their warehouse.
The workers in the paint booths know which colour the wheels have to be painted
because of the coloured gongs that are put before every batch.
Figure 30: Paint loading

50
2.2.2.3 Paint unloading and packaging
At paint unloading the workers scan the barcode labels and print off the sticky
labels for the customer. At this stage, the wheels are also checked for quality, all
the bad wheels are sent over to the rework area in the paint plant. When the quality
of the wheels has been approved and they have received their sticky label, they are
packaged for shipment on wooden pallets. After packaging the finished products are
placed near the shipment bay. On the figure 31, it can be seen that the wheels for
rework are stored close to the wheels ready for shipment. The way to tell the
finished for the rework apart is that packaged wheels have wooden pallets above it
for securing, like the grey and yellow wheels in the back. The wheels in the front are
wheels for rework.
Figure 31: Paint unload and dispatch area
2.2.2.4 Warehouse
The warehouse is used for storage of old machines and for rework wheels. There are
two dispatch areas that are not used and a large amount of space that is used in
the wrong way.
Figure 32: Pictures of the rework in the warehouse

51
Figure 33: Pictures of old machines, tools and old wheels in warehouse

52
3 TO BE – Wheels department
To create the TO-BE vision at the Wheels department, the topics from the literature
research are proposed for implementation. The first topic is the Lean Concept 5S,
this is implemented in both Wheels Shop 1 and Paint Plant. After this topic, the
implementation plan for POLCA is introduced. The plan is adapted from a generic
blueprint that has been successfully used for other factories and has been adjusted
to the specificities of the Wheels department.
3.1 5S
The proposed implementation of the five steps of 5S are individually explained for
Wheels Shop 1 and Paint Plant. It must be mentioned that at the time of writing, 5S
is being introduced and rolled out at Wheels Shop 1; the full implementation is still
pending validation.
3.1.1 Wheels Shop 1
3.1.1.1 Sort
 Cleaning out of the old office in the middle of the shop floor (figure 34)
 Emptying the cabinets;
 Sorting through everything from the cabinets, keep what can be saved and
bin the rest of it according to what it is (paper, metal, electronics, rags)
 Laying all the furniture out in the warehouse lanes for selling (desks and
cabinets)
 Scrapping the metal cabinets
 Moving of the boards of the daily meeting from the old office to the training
room in the paint plant along with the blinds (to cover them up, so customers
do not see it)
 Knocking down of the office in the middle of the shop floor
 Red tag all none essential material at the assembly line
 Get rid of the unused machine between the CTL and the wash line (berry line)
Figure 34: The old office after cleaning (removal of desk, cabinets ...)

BAP_Kelly Sibiet_ Reducing Cost at GKN using Lean and QRM

BAP_Kelly Sibiet_ Reducing Cost at GKN using Lean and QRM

Recommended

Recommended

More Related Content

Similar to BAP_Kelly Sibiet_ Reducing Cost at GKN using Lean and QRM

Similar to BAP_Kelly Sibiet_ Reducing Cost at GKN using Lean and QRM (20)

BAP_Kelly Sibiet_ Reducing Cost at GKN using Lean and QRM