Visual Management by Operational Excellence Consulting

2. © Operational Excellence Consulting. All rights reserved. 2 Learning Objectives 1.  Understand that visual management is an integral part of Lean transformation 2.  Familiarize with the common visual tools such as red tagging, activity boards, A3 storyboards, mistake- proofing, one-point lessons, standard work, kanban, etc. 3.  Gain knowledge on how to apply visual tools to add structure and stability to operations, reducing variation and increasing efficiency Copyrights of all the pictures used in this presenta4on are held by their respec4ve owners. NOTE: This is a PARTIAL PREVIEW. To download the complete presentation, please visit: http://www.oeconsulting.com.sg

3. © Operational Excellence Consulting. All rights reserved. 3 Contents •  Introduction •  5S - The foundation for a visual workplace •  Types of visual management §  Visual display §  Visual metrics §  Visual control •  Mistake-proofing •  Common visual tools §  Red tagging §  Activity board §  A3 storyboard §  One-point lesson §  Standard work chart §  Takt time versus actual cycle time §  Kanban

4. © Operational Excellence Consulting. All rights reserved. 4 What is Visual Management? •  Visual management is the concept of making a workplace more effective by making the current condition of a workplace obvious at a glance •  Visual Management enhances the smooth flow of information by using visual and audio signals instead of texts or other written instructions •  It includes a set of techniques that makes operation standards visible so that people can follow them more easily •  These techniques expose waste so that it can be prevented and eliminated

5. © Operational Excellence Consulting. All rights reserved. 5 What Visual Management Is NOT •  Putting up displays and charts to impress corporate visitors or customers •  Cluttering empty walls with visuals as if decorating for a birthday or Christmas party •  A one-time effort, only to have the visuals or information become outdated over time •  Isolated from management standard work

6. © Operational Excellence Consulting. All rights reserved. 6 Why Visual Management? •  In an instant, view the situation globally or in details • Resources • Tools & equipment • Materials • etc. • Norms • Methods • etc. • What's right • What's wrong • What's done • What's left to be done • The delays

7. © Operational Excellence Consulting. All rights reserved. 7 Applications of Visual Management •  Display standards and reliable methods •  Identify abnormal conditions immediately •  Prompt quick action and communication

8. © Operational Excellence Consulting. All rights reserved. 8 5 Disciplines for a Successful Visual Management System Disciplines Description Project identification •  Define implementation areas and establish current conditions and baselines Workplace organization •  Implement the 5S as a strong foundation Visual display •  Create a visual communication system providing the right information in the right format at the point of need Visual metrics •  Quantify the path to targets for success Visual control •  Create an error-proofed environment to promote easy adherence to standards

9. © Operational Excellence Consulting. All rights reserved. 9 Examples of 5S Visuals Stocking fixtures Mark your shelves, flow racks, totes, and other stocking fixtures with industrial labels that are large enough to read at a glance. Source: Brady 50 Lean Visuals Pocketbook Inside and outside of drawers, cabinets and toolboxes All drawers, cabinets, toolboxes, and other organizers should be marked on the outside to clearly indicate what is contained within. Also mark the inside of your storage compartments to clearly identify where each item is properly stored. Rejects or materials on hold for QA Mark parts and products that need to be inspected, or that have been inspected and have been rejected as defective. It is recommended the color orange be used to indicate that inspection is needed before use; red can be used to indicate if the product has been rejected.

11. © Operational Excellence Consulting. All rights reserved. 11 Three Types of Visual Management •  Label to make it perfectly clear where things belong and what the procedures are Visual Displays •  Quantify the path to targets for success •  Graphs and Pareto charts Visual Metrics •  Create an mistake-proofed environment to promote easy adherence to standards Visual Controls

12. © Operational Excellence Consulting. All rights reserved. 12 Examples of Visual Display Hazardous areas or equipment Use a black and yellow striped marking as a border around any area or piece of equipment where employees may be inadvertently exposed to a special hazard. The black and yellow border indicates that special caution should be exercised when entering and working in the area. Source: Brady 50 Lean Visuals Pocketbook Point-of-need safe work instructions Hazard warnings and safe work instructions should be posted at the point of need - right where the hazard exists for your employees. Safety and fire protection equipment floor markings Use red and white striped floor tape to mark off the areas in front of safety equipment and firefighting equipment that must be kept clear, per OSHA requirements.

14. © Operational Excellence Consulting. All rights reserved. 14 Visual Metrics •  Visual metrics allow everyone to “know the score” and they make out-of-standard situations immediately obvious •  Enables everyone to ‘see’ how we’re performing •  Helps highlight problems, or variances from standard •  Encourages employee involvement and open discussions

15. © Operational Excellence Consulting. All rights reserved. 15 •  Gaps? Trends?What is happening? •  Root causes?Why? •  Correct the problem – implement containment action? •  Prevent the problem – permanent corrective action? What needs to be done? •  Who does what? •  Any support needed?Who is going to do it? •  Prioritization? •  Deadline? •  Milestones? When is it going to be done? Visual metrics facilitates communication and identification of areas that need improvement Productivity Delivery Quality Customer Satisfaction Sales per Employee Cost Per Employee First Call Resolution SLA Metrics Met Actual $3,200 Target $3,500 Actual $91.50 Target $78.39 Actual 80% Target 95% Actual 4.8 Target > 4 of 5 Actual 7.0 Target 9.0 Actual 5.0 hrs Target 4.5 hrs Actual 2 hr Target 1 hrs Customer Complaints Actual 2.0 Target 1.0 Turnaround Time Response Time Overall Satisfaction 12108642 USL Process Data Sample N 100 StDev(Within) 2.25841 StDev(Overall) 2.39212 LSL * Target * USL 9 Sample Mean 6.21762 Potential (Within) Capability Overall Capability Pp * PPL * PPU 0.39 Ppk 0.39 Cpm Cp * * CPL * CPU 0.41 Cpk 0.41 Observed Performance PPM < LSL * PPM > USL 130000.00 PPM Total 130000.00 Exp. Within Performance PPM < LSL * PPM > USL 108973.12 PPM Total 108973.12 Exp. Overall Performance PPM < LSL * PPM > USL 122385.02 PPM Total 122385.02 Within Overall Process Capability of C2 12108642 USL Process Data Sample N 100 StDev(Within) 2.25841 StDev(Overall) 2.39212 LSL * Target * USL 9 Sample Mean 6.21762 Potential (Within) Capability Overall Capability Pp * PPL * PPU 0.39 Ppk 0.39 Cpm Cp * * CPL * CPU 0.41 Cpk 0.41 Observed Performance PPM < LSL * PPM > USL 130000.00 PPM Total 130000.00 Exp. Within Performance PPM < LSL * PPM > USL 108973.12 PPM Total 108973.12 Exp. Overall Performance PPM < LSL * PPM > USL 122385.02 PPM Total 122385.02 Within Overall Process Capability of C2 12108642 USL Process Data Sample N 100 StDev(Within) 2.25841 StDev(Overall) 2.39212 LSL * Target * USL 9 Sample Mean 6.21762 Potential (Within) Capability Overall Capability Pp * PPL * PPU 0.39 Ppk 0.39 Cpm Cp * * CPL * CPU 0.41 Cpk 0.41 Observed Performance PPM < LSL * PPM > USL 130000.00 PPM Total 130000.00 Exp. Within Performance PPM < LSL * PPM > USL 108973.12 PPM Total 108973.12 Exp. Overall Performance PPM < LSL * PPM > USL 122385.02 PPM Total 122385.02 Within Overall Process Capability of C2 Example of a visual metrics board

16. © Operational Excellence Consulting. All rights reserved. 16 “Spaghetti” diagrams BEFORE AFTER Process maps BEFORE AFTER Process flow charts AFTERBEFORE Photos BEFORE AFTER Process observation forms BEFORE AFTER Action listing 5S rating BEFORE AFTER TAKT vs. cycle time BEFORE AFTER Teams should collect data and display their 5S projects Visual management board for Kaizens and continuous improvement projects

17. © Operational Excellence Consulting. All rights reserved. 17 Examples of Visual Control Gauge labels Adding a simple gauge label enables any employee to easily detect abnormalities at a glance and at a distance. Without the label, only a trained inspector would know if the temperature or pressure setting is correct. Drive tension guides Drive tension guides help operators inspect for proper tension on the drive system. Using red and green color blocks, these visuals indicate when a chain or belt needs to be tightened or replaced. Oil level indicators Placing a green and red striped label behind the oil sight tube helps operators quickly detect when oil levels are too high or too low. Source: Brady 50 Lean Visuals Pocketbook

18. © Operational Excellence Consulting. All rights reserved. 18 Mistake-proofing •  Mistake-proofing refers to techniques that make it impossible to make mistakes •  Also known as Poka Yoke in Japanese •  Mistake-proofing helps people and processes work right the first time

19. © Operational Excellence Consulting. All rights reserved. 19 Mistake-Proofing Has Dual Focus DefectsMistakesProcess Prevention Poka-Yoke that focuses here works on mistake prevention or making mistakes impossible. Detection Poka-Yoke that focuses here works on mistake detection, or making sure mistakes do not turn into defects. People and systems do make mistakes. A portion of mistakes turn into defects.

20. © Operational Excellence Consulting. All rights reserved. 20 Examples of Mistake-Proofing (2) Go/No-go Turnstiles are commonly used in subways to regulate the flow of human traffic, especially during peak hours. As a “go/no go” or “pass/fail” device, it prevents defects by determining if a feature is present or not. At airports, go/no-go luggage gauges ensure that carry-on luggage can fit into the overhead compartments or under the seat. Time separation Mistakes can be prevented by separating contradictory or opposing feature requirements in time. The light indicates the allowed flow of traffic separating the flow by specific periods of time. Many stoplights are timed with a three-second delay to allow previous cars to exit the intersection before cross traffic is permitted to enter. Space separation A common problem in waiting lines is having customers accidentally or deliberately cutting into the queue. To prevent this problem and have better control of physical space, barriers are erected to guide customers to enter from the end of the line to approach the serving area.

21. © Operational Excellence Consulting. All rights reserved. 21 7 Steps of Mistake-Proofing Select Process Define Problems Prioritize Opportunities Find Root Causes Create Potential Solutions Select / Implement Solutions Monitor / Standardize

22. © Operational Excellence Consulting. All rights reserved. 22 What is Red Tagging? •  Red tagging is a method used in the sorting phase of 5S that involves placing tags on items to designate their status •  Red tags are used to identify unnecessary items that need to be either thrown out, recycled, sold or relocated •  They are especially useful as a visual management tool as they easily communicate visually to other staff members that the tagged items are unneeded/unwanted

23. © Operational Excellence Consulting. All rights reserved. 23 Examples of Reg Tagging Event 5S sort event: Red tagging on items which are unwanted or to be removed. Above: Tagging (common called ‘fuguai tagging’) of production equipment during initial cleaning in TPM activities. Below: Tag is removed only after repair is made.

24. © Operational Excellence Consulting. All rights reserved. 24 What is an Activity Board? •  Activity board is a visual tool to guide teams to action •  It is a visual scorecard for the team’s progress toward company, departmental and team visions and targets •  It keeps everyone’s attention on the project, using colors and graphs to make information clear to everyone who sees it •  Is a focal point for team meetings, and a place for management’s feedback and encouragement Key TPM Tools

25. © Operational Excellence Consulting. All rights reserved. 25 Example: Daily Management Board Daily management boards Format your daily management boards to not only track metrics, but to also drive improvement! Consider maintaining 4 charts for each metric that is important to that area: •  Chart #1: A trend chart comparing actual metrics to goals over time (day, week, month, etc.). •  Chart #2: A living Pareto chart, which includes issues that have been identified and the frequency of their occurrence so problems can be prioritized. Source: Brady 50 Lean Visuals Pocketbook •  Chart #3: A sheet that guides employees through root cause analysis and problem solving. •  Chart #4: An action plan spreadsheet that outlines existing countermeasures, along with their owners, due dates and statuses.

26. © Operational Excellence Consulting. All rights reserved. 26 A3 Thinking is a “Funneling” Thought Process 5 Whys Root Cause Initial Problem Perception (large, vague, complicated problem) The “Real” Problem Identify Causes Grasp the Situation Cause Investigation Countermeasure Basic Cause-Effect Investigation Investigation to Root Cause

27. © Operational Excellence Consulting. All rights reserved. 27 Examples of One-point Lesson One point labels One-point lessons are typically depicted as standard letter size documents. However, they are even more effective the critical information is condensed onto a label or set of labels. The information can then be posted right at the point of need – exactly where your employees can benefit from it. One-point lessons If employees are struggling to remember one step in a procedure, consider creating a “one point” or “single point” lesson. A one-point lesson is different from a typical procedure in that it focuses on one critical point. Source: Brady 50 Lean Visuals Pocketbook

28. © Operational Excellence Consulting. All rights reserved. 28 A Good Standard Should be Visual Training matrix A cross-training matrix provides visibility on the current training status of the team Firefighting equipment Firefighting equipment, eye wash stations, first aid stations, safety showers, and other safety equipment should be clearly marked with signage to help employees easily locate them throughout the facility. Colored containers Color-coded disposal container station ensures the right waste is disposed into the right container John Mark Sue Jim Pack Table Restocking X X X Supply Shelf Restocking X X X Handling Incompletes X Equipment Maintenance X File Organizing X X X X Visual Charts X X X Cleaning X X X X

29. © Operational Excellence Consulting. All rights reserved. 29 Examples of Standard Work Source: Brady 50 Lean Visuals Pocketbook Dance charts Post standard work flow diagrams or “dance charts” in the work area to help employees remember the proper task sequence based on the number of people assigned to the cell. Procedures If the steps associated with performing a task are challenging to follow, make sure you have detailed procedures available. Procedures should include: •  What the employee needs to do •  Order in which it should be done •  Amount of time it takes to do the •  Desired outcome

30. © Operational Excellence Consulting. All rights reserved. 30 How to Achieve Takt Time •  Line Balancing - How to evenly distribute work in a cell so that Takt time can be met A B C D E Step A1 Step B1 Step A2 Step B2 Step A3 Step B3 Step C1 Step C2 Step C3 Step C4 Step C5 Step E1 Step E2 Step E3 Step E4 Step E5 Step D1 Step D2 Step D3 Step D4 Step D5 Operators Takt Time ( 60 sec ) Step A4 10 20 30 40 50 60 0 A B C D E Step A1 Step B1 Step A2 Step B2 Step A3 Step B3 Step A4 Step C1 Step C2 Step C3 Step C4 Step C5 Step E1 Step E3 Step E4 Step E5 Step D1 Step D2 Step D3 Step D4 Step D5 Operators Takt Time ( 60 sec ) Step E2 10 20 30 40 50 60 0 Before Line Balancing After Line Balancing

31. © Operational Excellence Consulting. All rights reserved. 31 Examples of Production & Inventory Control Visuals Kanban cards Kanban systems not only control inventory, but also make the reordering process more visual and efficient. Kanban cards (e.g. tags or magnets) can include product descriptions and ordering information, depending on the need. Batter’s boxes and FIFO lanes Lines and boxes can help sequence work with batter’s boxes and FIFO (first in, first out) lanes. Batter’s box: a storage area next to a machine where the “next-up” product should be stored. FIFO lanes: visuals that mark the staging spots in a lane of work. The number of staging spots also indicates the maximum amount of WIP that can be stored, which helps prevent overproduction. Kanban labels on bins In a 2-bin system, labels are placed on the outside of the bins to communicate information. In this example, the empty bin is taken back to the central inventory area for replenishment. Parts do not need to be packed into intermediate transport containers or placed into other storage bins for the production line. (No more lost kanban cards!) Source: Brady 50 Lean Visuals Pocketbook

32. © Operational Excellence Consulting. All rights reserved. 32 Summary •  Visual management is an essential part of a Lean management system •  Visual management uses displays, metrics and controls to help establish and maintain continuous flow •  Visual tools reinforce standards, and help people detect abnormalities at a glance •  For visual management be effective and sustainable, it has to be integrated with management standard work

34. © Operational Excellence Consulting. All rights reserved. 34 About Operational Excellence Consulting •  Operational Excellence Consulting (OEC) is a management training and consultancy firm that assists organizations in improving business performance and effectiveness using Lean methodologies. •  The firm’s mission is to create business value for organizations through innovative operational excellence management training and consulting solutions. •  OEC takes a unique “beyond the tools” approach to enable clients develop internal capabilities and cultural transformation to achieve sustainable world-class excellence and competitive advantage. For more information, please visit www.oeconsulting.com.sg

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