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Process Improvement Basics Astpl 2012


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Process Improvement Basics
Why, How, Tools & Approach, Case Study
Learn how to double your profits in simple steps...

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Process Improvement Basics Astpl 2012

  1. 1. Process Improvement BasicsArmstrongFuture Perfect
  2. 2. Agenda• Process Improvement (5W 2H)• Perspectives• Program v/s Culture• Lifecycle of Process Improvement Drive• Criteria for Success (6 ‘C’s)• Common Tools & Approach• Case Studies• What’s Next © Armstrong STPL - Confidential 2
  3. 3. Definition, Need, Location, Ownership, Timing, Tools & ApproachPROCESS IMPROVEMENT (5W 2H) © Armstrong STPL - Confidential 3
  4. 4. Process Improvement (5W 2H)Definition, Need, Location, Ownership, Timing, Tools & Approach Making things better, not just fighting fires or managing crises• What A way of looking at how we can do our work better• Why Better Safety, Lesser wastage of resources, More competitive• Where Not only shop floor / workshop but throughout the organization• Who Management, Staff, Workmen, Process Improvement Leader• When NOW• How Communicate Vision, Equip with the right tools, Manage Change• How Much Continuous & Gradual Improvement, Stabilize and Sustain © Armstrong STPL - Confidential 4
  5. 5. Process Improvement Making a Case Cost to Customer •New Product New •Higher S.P. Profit Profit •PremiumCost to Increase the Profit Cost toCustomer Company a) Increase Cost to Customer Profit Cost to CustomerCost to •Process Imp.Company •Waste Redn Profit New •Alternates Profit Cost to Company b) Decrease Cost to Company © Armstrong STPL - Confidential 5
  6. 6. Process ImprovementMaking a Case High Process Improvement Alternate Source Wastage Reduction Degree of Control* Alternate Site Cost Implementation Low High New Product Unique Product Higher Selling Price Charging Premium Low * On acceptability by Market © Armstrong STPL - Confidential 6
  7. 7. Process ImprovementWhere’s the Money, Honey?• Let’s assume a case of a company 100Cr company earning a 5% profit i.e. 5Cr per annum. They want to double the profit.• Traditional strategy is to double the revenue i.e. 200Cr to generate 5% i.e. 10Cr = 2 x 5Cr.• But this also means, they have to incur cost to double company’s capability.• Another strategy is to target 10-30% of the company’s revenue being spent on generating waste.• Improving the processes by 10% would earn (10% of 95Cr) 9.5Cr of extra profit, without extra headcount or additional capital in many cases. © Armstrong STPL - Confidential 7
  8. 8. Management, Staff, Process Improvement LeaderPERSPECTIVES © Armstrong STPL - Confidential 8
  9. 9. Perspectives Management, Staff, Process Improvement Leader Process Improvement How do I drive PI? can generate more How many belts? money for me? How to bridge the gap? Process Improvement Leader Just another Initiative. Not going to workManagement / Owner here…Nothing for me! Workmen / Staff © Armstrong STPL - Confidential 9
  10. 10. Should we drive it as a program or try to imbibe as a culture?PROGRAM V/S CULTURE © Armstrong STPL - Confidential 10
  11. 11. Program v/s CultureShould we drive it as a program or try to imbibe as a culture?• Program: A program provides impulsive moment in the organization which is important to communicate change and gain initial success. One time initiative. Need continuous push.• Culture: A state of organization where values, processes and people are aligned with the methodology in whatever they do. It gives the initiative the required acceptability and sustainability.• “Process Improvements need to be driven into culture of an organization. Then it will enable us to continuously seek improvement in whatever we do. Right from design stage to procurement, planning, manufacturing, dispatch, sales, service and marketing, it will be a common thread and language of a Learning Organization” …Armstrong © Armstrong STPL - Confidential 11
  12. 12. Understand  Implement EngrainLIFECYCLE OF PROCESS IMPROVEMENTDRIVE © Armstrong STPL - Confidential 12
  13. 13. Lifecycle of process Improvement driveUnderstand  Implement Engrain Understand Implement Engrain • Aim • Plan • Change • Consult • Do • Raise • Learn • Check • Sustain • Teach • Act • Challenge © Armstrong STPL - Confidential 13
  14. 14. Commitment, Communication, Consultation, Cost, Consistency, ChallengeCRITERIA FOR SUCCESS (6 ‘C’S) © Armstrong STPL - Confidential 14
  15. 15. Criteria for Success (6 ‘C’s)Commitment, Communication, Consultation, Cost, Consistency, Challenge Commitment Communicate Management must commit to The drive, goals and program the process improvement drive. must be communicated and Clarify priorities and goals. cascaded till bottom of pyramid Consultation Cost Internally with employees to Sow something to reap in future manage change and involve Invest in tools & training people Externally with experts to drive Rewards & Recognition drive Consistency Challenge Drive it continuously and with Challenge Status-quo & improve steady rigor. Take a step every Don’t limit your day however small it may be. challenges, challenge your limits. Sustain the Change © Armstrong STPL - Confidential 15
  16. 16. Lean, Six Sigma, IECOMMON TOOLS & APPROACH © Armstrong STPL - Confidential 16
  17. 17. Common tools & approachLean, Six Sigma, IE• Lean Thinking – Attacking waste, VSM, 5s, Flow, Pull, Kaizen, VF• Six Sigma – Attacking variability, DMAIC Approach, C&E diagram, 5Why• TQM – PDCA (Plan-Do –Check-Act)• Industrial Engineering (IE) – Time, Motion Study, BPR, Facility Mapping etc.• Waste Management – Seven waste framework, w-VSM, CONC analysis © Armstrong STPL - Confidential 17
  18. 18. Bicycle Manufacturing PlantCASE STUDIES © Armstrong STPL - Confidential 18
  19. 19. Bicycle Manufacturing Plant Layout Customer Counter AssemblyPainting QAStorage Planning Casting Fork Lift © Armstrong STPL - Confidential 19
  20. 20. Bicycle Manufacturing PlantDecision Variables Customer Counter Planning RM Storage Casting Assembly Painting Check in FG, If N  If Quality meets standards Customer FG Storage QA Rejection Storage If Quality not acceptableStation / Object Decision VariableCustomer Counter MoveQA Move, Sell StationCasting Move, Configuration (Smart Mode / FIFO), QA@Source (Y/N)Fork Lift Sell, Batch Setting (Min. how many items to be moved at a time)Planning Move, Schedule (Forecast/Current Demand), PM (Y/N)Storage MovePainting Move, Batch Setting, QA@Source (Y/N)Assembly Move, QA@Source (Y/N) © Armstrong STPL - Confidential 20
  21. 21. Bicycle Manufacturing PlantSimulationsChanges Made… Results…• Casting: Smart mode, QA@Source • Earning increased by 27%• PM, Assembly QA@Source • Earning increased by 4.6%, Defects reduced by 7%• Layout changes • Earning increased by 8.4%• Painting: Batch setting=1, • Earning increased by 8.6% QA@Source Almost 50% increase in Earning and Profit © Armstrong STPL - Confidential 21
  22. 22. Building Case for Action, Gap Analysis, Plan, EngageWHAT’S NEXT © Armstrong STPL - Confidential 22
  23. 23. What’s NextBuilding Case for Action, Gap Analysis, Plan, Engage• Building Case for Action – Aim at Stars, At least you’ll land on the Moon – Set yourself targets e.g. 20% cost reduction, 30% waste reduction• Do a Gap Analysis – As-Is v/s To-Be state modeling• Plan – Make a 5 years Road Map with desired targets and timelines – Map all required programs and tools• Engage – Identify and allocate projects to employees – Continuously review and re-invest – Manage change and participate © Armstrong STPL - Confidential 23
  24. 24. Armstrong Solutions – Future PerfectKeeping you ahead of Competition, Cost pressure and ChangeFor more details, please write to us at: © Armstrong STPL - Confidential 24