WCM (World Class Manufacturing)


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World Class Manufacturing and its aplications in automotive industry

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WCM (World Class Manufacturing)

  1. 1. Prepared by Özcan ÇAVUŞOĞLU
  2. 2. 1. Meaning & Scope 10. WCM Checklist2. Criteria 11. Types of Operation Which3. How a WCM is Achieved ? Creates a WCM Units4. Characteristics of World-Class 12. Just In Time (JIT)Organizations Manufacturing5. How to Make an Organization 13. JIT Improvements toWorld-Class? Manufacturing6. World-Class Manufacturing: 14. CONWIP ControlWhat it takes? 15. Factors Which Can Make a7. Implementing WCM WCM8. Contrasting Mass Production & 16. Some Other FactorsWCM 17. Conclusion: Control of9. The Grades for WCM Operation CASE: Fiat
  3. 3.  It refers to the practice followed in a manufacturing organizations, in order to consistently deliver exceptional performance, frequently in excess of expectations. World Class Manufacturers are those that demonstrate industry best practice.
  4. 4. There are two overridingcriteria when using thischecklist to judge whetheryour company can beregarded as World Class1) How does the companycompare with its bestcompetition?2) Has the companyincreased its score sincelast year?
  5. 5.  Develop the awareness of the need to make the transition to World Class Manufacturing Develop the ability to search for relevant tools and to apply them effectively Monitor progress so that an improvement program can be systematically utilized.
  6. 6. 1. Customer service.2. Quality control and assurance.3. Research and development/ new product development4. Acquiring new technologies5. Innovation6. Team-based approach (adopting and using effectively)7. Best practices (study and use of)8. Manpower planning9. Environmentally sound practices10. Business partnerships and alliances11. Reengineering of processes12. Mergers and acquisitions13. Outsourcing and contracting14. Reliance on consulting services15. Political lobbying
  7. 7. 1. Worker productivity (improvement)2. Employee training and development3. Open communication between management and employees4. Employee benefits and perquisites5. Codes of workplace conduct6. Conflict resolution7. Employee satisfaction8. Flextime arrangements9. Management-employee-union relations10. Child care
  8. 8. 6. World-Class Manufacturing: What ittakes?1. Competitive analysis strategies (cost efficiencies in operations, speed to market, research and development supremacy, zero defects, real-time order management etc.)2. Production and supply chain (collaborative planning, forecasting and replenishment, collaborative manufacturing and product design, supplier-managed inventory etc.)3. Customization strategies (building to order, customized mass production, global sourcing and manufacturing, etc.)4. Electronic commerce strategies (supply management, Internet ordering, status and availability tracking by Internet)5. Compensation systems (product profitability, inventory levels, manufactured/delivered costs per unit, worker productivity, employee retention rates, etc.)
  9. 9. Success WCM Tools Measurement IndicatorsFactors1. Cost control Just-in-time logistics, · Inventory holdings quality at source and · Absence of defects and rework supply chain management · Cost of incoming materials tools2. Quality Statistical Process Control, · Customer return rates fool-proofing to prevent · Internal reject, rework & scrap errors, Pareto analysis of rates types and causes of · Supplier quality Performance production defects3. External Just-in-time logistics, · Time from customer order toflexibility quality at source and delivery supply chain management · Delivery frequency & reliability tools to customers · Delivery frequency and
  10. 10. Success WCM Tools Measurement IndicatorsFactors4. Internal Cellular layouts, single unit · Machine changeover timesflexibility flow, production pulling, · Batch and lot sizes Kanban signaling system, · Inventory levels single-minute exchange of · Throughput time through factory dies for rapid machine changeover, · Machine utilization levels supply chain management5. Capacity • Multi-tasking, · Numeracy and literacy levels to change • Multi skilling, · Labor/management turnover levels(Human • Quality circles, · Absenteeism ratesresource • Kaizen groups, · Training expenditure and types ofdevelopment) • Training, training • Incentive schemes. · Employee development · Suggestion schemes/continuous improvement6. Innovation Concurrent engineering, · R&D expenditurecapacity new product development · Proportion of sales from techniques new products
  11. 11. 8. Contrasting Mass Production & WCMCritical Control Mass Production World ClassPoints ManufacturingLogistics · Large batch · Single unit flow production production · Just-in-time inventories · Just-in-case · Flexible machinery and inventories rapid machine changeover Specialized machineryQuality · End of line inspection · Quality-at-source at each · Reworking of defects part of production processWork organisation · Division of labor · Multi-tasking and multi between skilled and skilling unskilled workers · Continuous improvement in · Specialized R&D and green areas as well as product development specialized staff
  12. 12.  "W“ - World class "X“ - Very good but not quite world class – (country class) "Y“ - Better than many – (city class) "Z“ - Poor – (village class)
  13. 13. Q1) Do you have a 99% or better level of customer ser vice (or product availability)?Grade CriteriaW 99% or better customer service level (on time in full or availability).X 95% up to 99% customer service.Y 90% up to 95% customer service.Z Below 90% customer service.
  14. 14. 10. WCM ChecklistQ2) Does everyone in the company know who the keycustomers are and what differentiates the company’s products and services from the competition?Grade CriteriaW Everyone knows key customers through a new employee induction scheme and regular updates, meetings, notices etc.X Most people know key customers.Y Managers know key customers.Z Customers known mainly on a "need to know" basis.
  15. 15. 10. WCM ChecklistQ3) Do all staff who are in contact with customers have the authority and empowerment to resolve customer problems? Grade CriteriaW A person answers telephone calls within 4 rings and takes responsibility to deal with the call either immediately or by getting back to the caller within 24 hours. Similar standards are used for e-mail and written complaints.X A person answers telephone calls and takes responsibility to deal with the call either immediately or by getting back to the caller within 5 days. Similar standards are used for e-mail and written complaints.Y Customer problems are dealt with as soon as possible.Z Many customer problems are outstanding or not satisfactorily resolved.
  16. 16. 10. WCM Checklist Q4) Do Kanban control your supply chain? Grad Criteria question e W At least 75% of your shipments to customers controlled by Kanban or vendor managed inventory (i.e. shipped / delivered based on customer usage) or you are able and willing to make Kanban shipments if requested. X Some but less than 75% of shipments under Kanban control or you are probably able to make Kanban  shipments if requested. Y You may be able to make Kanban shipments if requested. Z You would not make shipments under Kanban control.
  17. 17. 11. Types of Operation Which Creates a WCM Units The Kanban Control Concept Kanban control Kanban control. The Kanban means that the Movement of parts messages can take authority to make shown in blue, the form of an e- or move an item is circulation of mail, fax, card, based on that Kanban in red. empty container or items usage Machines are require you to visit unless there has shown as circles their plant to been a properly and buffers as replenish their stock approved and triangles. The last of your products strictly limited buffer is the (usually referred to deviation finished goods (FG) as vendor managed
  18. 18. 12. Just In Time (JIT) Manufacturing Just in Time manufacturing is a systems approach to developing and operating a manufacturing system. We will take an example of banking process: In short, JIT means making what the market wants, when it wants it. JIT has been found to be so effective that it increases productivity, work performance and product quality, while saving costs                                           
  19. 19. 13. JIT Improvements to Manufacturing In Summar y, JIT Systems requires Changes in:  System Design  Organization Attitudes and Structures  External Relationships  New Management Priorities Tim e
  20. 20. 14. CONWIP ControlCONWIP stands for Once the parts are released, theyConstant Work-In-Process, are processed as quickly asand designates a control possible until they wind up in thestrategy that limits the total last buffer as finished goods. Onenumber of parts allowed way to view this is that theinto the system at the system is enveloped in a singlesame time Kanban cell: Once the consumer removes a part from the finishedCONWIP control. Movement goods inventory, the firstof parts shown in blue, machine in the chain iscirculation of release authorized to load another part.authorizations in green.
  21. 21. 15. Factors Which Can Make a WCM
  22. 22. 16. Some Other Factors
  23. 23. Before commencing implementation of control systemsthere are always five beneficial things to do which will makeany method of control easier to implement and make thesystem work better operationally(Generally world class manufacturing businesses havedone these things)   Reduce time wasted in setting and reduce set up times  Form Natural Groups (cells)  Reduce throughput times  Postpone product mutation  Remove the trivial many, to focus on the vital few
  24. 24.  We have started a program designed to achieve the standards of excellence associated with World Class Manufacturing (WCM) policies: a company organization methodology that leads to excellence of the entire production process through the continuous improvement of all performances and the contribution of all company employees, at every level. Our manufacturing facilities use the Fiat Advanced Production System (FAPS),an integrated model that optimizes production and logistic processes. The program was launched two years ago but the plants of Tychy in Poland, Melfi in Italy and Bursa in Turkey have already attained a competitive rating according to World Class Manufacturing criteria
  25. 25. 2. WORLD CLASS MANUFACTURINGWorldClass Manufacturing principles apply to all aspects of plant organization,from the quality system to maintenance, from cost control to logistics, in aperspective of continuous improvement.WorldClass Manufacturing (WCM) in fact was born of the collaborationbetween Fiat and the best European and Japanese experts, with the aim toenhance the production standard to a recognized world standard.The system is based on a systematic reduction of all types of loss and wastethrough the contribution of everyone and the rigorous use of methods andstandards.
  26. 26. 2. WORLD CLASS MANUFACTURING The system is based on a systematic reduction of all types of loss and waste through the contribution of everyone and the rigorous use of methods and standards. Care for the Environment is one of the pillars of the system, encompassing all the people, regulations and rules of conduct making up our Environmental Management System (EMS). This is the management tool that will enable us to determine, reduce and control the environmental impact of our manufacturing facilities, knowing that every activity has repercussions on the environment. The system specifies a number of actions geared to the reduction of the environmental impact of manufacturing activities, both in order to ensure compliance with the applicable regulations and in order to prevent the waste of energy and natural resources
  27. 27. 3. TOFAŞTofaş has been the best of the world in manufacturing, now itwill set a model for Chr ysler’s world beside Fiat’s.(18.11.2009)Tofaş who has been producing Fiat branded passenger cars andcommercial vehicles for 41 years in Turkey with the cooperation of FiatS.P.A and Koç Holding and who has manufactured its 3 millionth vehicle in2009 has received the “Silver Level” (World Class Manufacturing) award, ithas achieved in WCM, with a ceremony, organized in Turkey.Being the first production center that has achieved “Silver” level in “WorldClass Manufacturing” in Fiat’s world, Tofaş’s Bursa factory has beenchosen as the factory who has “the highest quality and who makes thesafest manufacturing” after the last audit, carried out by WCM teams lastweek.
  28. 28. 3. TOFAŞTofaş has been the best of the world in manufacturing, now it willset a model for Chr ysler’s world beside Fiat’s. (18.11.2009)FiatGroup’s CMO (Chief Manufacturing Officer) who has come to Turkey for theceremony on Tofaş’s being chosen as the best factory; Stefan Ketter explained,“Making R&D and manufacturing of important models like Fiat Fiorino, Lineaand Doblo, Tofaş’s place in the Fiat’s world as is very strong without anydispute.Tofaş’s success globally is a true example of discipline, quality and success inthis period when Fiat and Chrysler factories are in common action in terms ofproduction in world’s class”.
  29. 29. World Class ManufacturingStefan KetterLingotto - November 8 & 9, 2006
  30. 30. WCM Focus All Employees Waste and Losses Standards and MethodsLingotto - November 8 & 9, 2006 2
  31. 31. Structure/Objectives Workplace Quality Maintenance Logistic Organization Total Industrial Total Quality Total ProductiveMethod Control Maintenance Just in Time Engineering& std. Quality Technical ServiceFocus Productivity Improvement Efficiency Level zero zero zero zeroTarget waste defects breakdowns inventoryValues People involvement, value creation, customer satisfactionLingotto - November 8 & 9, 2006 3
  32. 32. WCM Principles 1. World Class Safety is the foundation of World Class Performance 2. WCM Leaders have a passion for standards 3. In a World Class Company the voice of the customer can be heard in the plant 4. WCM does not accept losses of any kind (The goal is always Zero: accidents, service & quality defects, inventory, breakdowns) 5. A rigorous application of WCM methods guarantees the elimination of lossesLingotto - November 8 & 9, 2006 4
  33. 33. WCM Principles 6. In a World Class plant all abnormalities are immediately visible (Dust & contamination free, tracking, control charts …) 7. WCM takes place in the workplace, not in the office 8. WCM is most effectively learnt by practicing the techniques with the plant teams 9. The power of WCM comes from the involvement of people 10. World Class companies create the energy of a crisis in the face of continued successLingotto - November 8 & 9, 2006 5
  34. 34. Main Actual Activities 2005A 2006E 2007E WCM Basics / Safety Training / Leadership / Organisation Cost Deployment Investments & Fix Plants Labour efficiency / Capacity Utilization Environment / Ergonomy Maintenance Process Quality Process Improvement Logistic Process TimeLingotto - November 8 & 9, 2006 6
  35. 35. Actual Best Results/WCM Audit Workplace Organization Quality Maintenance Logistic Methodologies 1 Safety New approach 2 Cost Deployment 100 % plants 3 Focused Improvement 147 events 4 Work Place Organization 7 model areas 5 A.M.: Autonomous Maintenance 58 model areas 6 P.M.: Professional Maintenance 34 model areas 7 Quality Control 10 model areas 8 Production Logistic System 4 model areas 9 Early Equipment Management First exercises 10 People development/qualification New approach 11 Environment New approach 100%Lingotto - November 8 & 9, 2006 7
  36. 36. Model Area: Tychy/PolandPeople Involvement: Proposals/Employee/Year 4,5 Target = 4 4,0 3,5 3,0 2,5 Implementation 2,0 rate 50% 1,5 1,0 0,5 0,0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecLingotto - November 8 & 9, 2006 8
  37. 37. Model Area: MelfiQuality: Electric Check Defects - Grande Punto - 50%Lingotto - November 8 & 9, 2006 9
  38. 38. Model Area: MelfiProductivity: Hours per Vehicle - Grande Punto -12% in 8 monthsLingotto - November 8 & 9, 2006 10
  39. 39. Average Hours/Vehicle Vs. Benchmark (Harbour Report) - 20%* Segment Ranking A Leadership B Leadership C Top 5 D Top 10 LCV Leadership 2006E 2010E* As result of new vehicle introductionLingotto - November 8 & 9, 2006 11
  40. 40. Labour Productivity Target (Italy/Poland) 100% Technical efficiency Losses Waste/Rework - 30% Losses Line Balancing Range - 50% Non Value Added • Logistic layout • Time Optimization Operation Operation Actual 2010ELingotto - November 8 & 9, 2006 12
  41. 41. Towards World Class Manufacturing100 90 Competitive Consolidation / 80 Level Autonomous 70 Improvement 60 Horizontal expansion 50 40 30 Knowledge Saving: > €500mn 20 creation Model areas 10 2006E 2007E 2008E 2009E 2010E 0 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 months form program launch Lingotto - November 8 & 9, 2006 13
  42. 42. WCM - Extension towards Suppliers Cost Quality Maintenance Logistic Q M L € SUPPLIER World Class Manufacturing integration/extension throughout Supplier Process EngineersLingotto - November 8 & 9, 2006 14
  43. 43. WCM - A Corporative Approach WCM Implementation, Auditing and Best Practice SharingLingotto - November 8 & 9, 2006 15