The document discusses implementing lean processes at The Sky Factory to improve efficiency and reduce costs. It describes the current state as having suboptimal processes and layout. Plans are outlined to map current processes, identify lean metrics, make improvements through kaizen events, and conduct ongoing analysis of lean initiatives. Cost-benefit analysis of two areas found lean could increase margins by over $100,000 annually through reduced labor and transportation costs. Continued lean implementation is projected to provide compounding benefits through increased productivity and revenues.

2. THE SKY FACTORY – LEAN’S THE LIMIT Presented By: Emery, Solange, Pappu, Ravi, Pingshan, Helen, and Christian

3. INTRODUCTION

4. W. Edwards Deming “It is not enough to do your best; you must know what to do, and then do your best.” Peter Drucker “There is nothing so useless as doing efficiently that which should not be done at all.” Tom Peters “Excellent firms don't believe in excellence - only in constant improvement and constant change.” INSPIRATION FOR EXCELLENCE

5. Double production volume with minimal increase in costs (i.e. hiring new employees) Load leveling Evenly distribute work by volume and variety over a specified period of time in order to make the most effective use of employees’ time Achieved improved layout and flow Optimal work environment Clean, organized, standards Improved job satisfaction OUR LEAN VISION

6. Based on two examples of cost-benefit analysis we have determined that: Margins can be increased through savings of $100,000’s Compounding effects can be achieved through continued implementation of lean SUMMARY OF COST-BENEFIT ANALYSIS

7. CURRENT STATE

8. Pre-Lean status Layout not optimized Very cluttered work space Waste accumulation in production Long lapsed time between steps Poor process management Poor coordination Sub-optimization of department communication CURRENT STATE

9. Lean steps already implemented Value Stream Mapping Process mapping for custom elevator Process mapping for tile lamination Process mapping for layout Process mapping for Sky Mobile 5S – Initial Sort, Set, and Sweep CURRENT STATE

10. Needs Analysis of the organization and resources Reengineer the processes Deploy resources optimally Selection of issues to be addressed - Criteria used include: potential benefit; ease of completion; visibility; mission critical Custom elevator process & production Put everything in order Shorten design time Streamline process Tile production and scheduling Design and develop lean work process Focus on communication Measure process time Scheduling for Sky Mobile Meet the needs of the customer Minimize miles per prospective customer Leaner meetings Recruitment of new employees Sales and marketing process CURRENT STATE

11. PLANNED IMPLEMENTATION

12. Identify lean managers Identify value stream champion and lean managers Value stream champion should be someone with the authority to allocate the organization’s resources Value stream champion reviews the future-state map and reviews improvement (kaizen) plans Value stream champion also reports to Bill Witherspoon Value stream champion offers assistance to lean managers PLANNED IMPLEMENTATION

13. Process mapping Map the current state Identify lean metrics Total lead time Total waiting time Internal errors Overtime Map the future state Customer demand Continuous flow Leveling PLANNED IMPLEMENTATION

14. PLANNED IMPLEMENTATION Make metrics visual

15. PLANNED IMPLEMENTATION Catchball

16. Sustaining lean initiative Kaizen events have to be scheduled (e.g. every Friday) Lean events must be tied to strategy Tie bonus of lean managers to lean initiative PLANNED IMPLEMENTATION

17. View Gantt Chart GANT CHART OF KAIZEN ACTIVITIES

18. COST BENEFIT ANALYSIS

19. Implementation of lean at The Sky Factory will benefit the whole organization. We have applied cost-benefit analysis to two examples: Labor costs Sky Mobile scheduling Cost of initial project Estimated consulting fees over 4 months - $7,800 Benefits Increased margins Reduced sales costs COST-BENEFIT ANALYSIS

20. PROJECTED BOX SCORE FOR LEAN IMPLEMENTATION $436,320 $363,600 $303,000 PRODUCTION SALARIES & WAGES WITH LEAN assuming 20% pa growth $209,930 $71,150 SAVINGS ON SALARIES AND WAGES FROM LEAN $646,250 $434,750 $303,000 PRODUCTION SALARIES & WAGES WITHOUT LEAN $5,500,000 $3,700,000 $2,600,000 REVENUES 2008 2007 2006

21. PROJECTED BOX SCORE FOR LEAN IMPLEMENTATION 43 43 43 50 SKYMOBILE MILES PER PRESENTATION WITH OUT LEAN 26,740 13,370 13,370 23,032 SKY MOBILE MILES TRAVELLED WITHOUT LEAN 36,099 18,050 18,050 31,093 SKY MOBILE COSTS WITHOUT LEAN: assuming a cost per mile of $1.35 2008 2007 2006

22. PROJECTED BOX SCORE FOR LEAN IMPLEMENTATION $24,177 $14,692 $ 18,050 $ 31,093 SKY MOBILE COSTS WITH LEAN ASSUMING A COST PER MILE OF $1.35 17,909 10,883 13,370 23,032 SKY MOBILE MILES TRAVELLED WITH LEAN 30 35 43 50 SKY MOBILE MILES PER PRESENTATION WITH LEAN 2008 2007 2006

23. PROJECTED BOX SCORE FOR LEAN IMPLEMENTATION 2008 2007 2006 $11,922 $3,358 MILEAGE SAVINGS DUE TO LEAN IMPLEMENTATION $221,852 $74,508 GRAND TOTAL SAVINGS DUE TO LEAN IMPLEMENTATION

24. Cost-benefit analysis shows Margins can be increased through savings of $100,000’s There is a significant difference between the benefits achieved from applying lean in different areas of the company Compounding effects can be achieved through continued implementation of lean The cost-benefit ratio is approximately: 1/10 COST-BENEFIT ANALYSIS

25. CONCLUSION

26. CONCLUSION Current state Strengths Strong team Dynamic culture Visionary leader Special unique product Open book system

27. CONCLUSION Current state Opportunities Processes not well managed Cluttered workspace Sub optimization of department communication Layout not optimized

28. CONCLUSION Introduced lean (VSM, Process mapping) Needs of the Company Improve production Handle bigger work load with least resources Other needs identified where lean could add value Lean steps taken Aligning strategy with lean (strategy overview) 5S Mini-kaizen

29. CONCLUSION Continued implementation of lean 4 month projection Cost-Benefit Analysis Analyzed 2 areas Increase production without increasing labor cost Sky mobile: Better scheduling system More exposure per mile Increased margins

30. Thank you!