Lean leadership to Grow Shareholder value

TRB Lightweight Structures CONFIDENTIAL & PROPRIETARY
Lean leadership to Grow Shareholder value
Leading the lean journey
Richard Holland

My background
Perkins Engines 91 – 99
Started in Personnel and Training
Moved to implement lean with consultant support
Moved to production management
Goodrich Aerospace 99 – 01
Created Internal lean consulting team
Plant moves in EU and US
Whirlpool 01 – 06
Refrigeration Plant management
TBM consulting 06 – 14
Led Consulting Europe
TRB Lightweight structures 14 – now
Managing Director

Did you know...
77%of manufacturers have some sort of continuous
improvement program in place
75%of manufacturers are increasing or maintaining CI
project activity
Nearly 50% of executives say their CI initiatives are
“not or somewhat effective” at helping achieve
operational and market objectives
Sources: RSM McGladrey 2010 MWD Survey and proprietary research by TBM Consulting Group and Training Industry, 2010.

Why are many companies hitting a plateau
with lean?
▪ Lean is seen as a cost reduction activity in manufacturing
▪ Focus is on activity and tools
▪ Leadership are not seeing results
TIME
RATEOF
CHANGE
TRADITIONAL LEAN
MATURITY
Year
1
Year
2
Year
3
Year
4

The Focus Has Shifted to “Intelligent
Growth”
▪ Can’t cost-cut our way to prosperity
we want growth with “attention” to
cost
▪ Customer intimacy
▪ Culture change is critical – employees
must buy in
▪ Open to looking at business structure
in new ways
Source: Kennedy Consulting & Research Advisory, May
2011.

Cut or Grow?
6

“Unreasonable
ambition”
Growth is a great challenge
Vision

Achieving Vision through Strategy
Deployment

Three Stages of a Lasting Lean
Transformation
9
TIME
RATEOFCHANGE
Year
1
Year
2
Year
3
Year
5
Year
4
TOOL DRIVEN SYSTEM DRIVEN PRINCIPLE DRIVEN1 TOOL DRIVEN1 SYSTEM DRIVEN2 PRINCIPLE DRIVEN3

Three Stages of Lasting Lean
Transformation
▪ Functional approach
with focus on
manufacturing only
▪ Studied & embraced
lean concepts
▪ Tool application not
yet wide-spread
▪ Results not clearly
reflected in the
financial statements
▪ Culture change not
yet grounded
10
TIME
RATEOF
CHANGE
Year 1 Year 2 Year 3 Year 5Year 4
TOOL DRIVEN1
1. Tool Driven
TOOL DRIVEN1
SYSTEM
DRIVEN
2
PRINCIPLE
DRIVEN
3

Transformation
11
TIME
RATEOF
CHANGE
SYSTEM DRIVEN ▪ Systematic approach
involving many other
functions
▪ Widespread tool
application, awareness &
acceptance
▪ Visible improvements in
cost reduction and cash
generation
▪ Beginning to extend lean
across value streams
▪ Culture change
spreading
2. System Driven
TOOL DRIVEN1
SYSTEM
DRIVEN
2
PRINCIPLE
DRIVEN
3

Transformation
12
TIME
RATEOF
CHANGE
PRINCIPLE DRIVEN ▪ Business-wide
philosophy for intense
focus on customers
▪ VOC focus for value
innovation & significant
competitive advantage
▪ End-to-end value chain
alignment for seem less
customer value delivery
▪ Comprehensive
business management
system for growth
▪ Embedded culture
3. Principle Driven
TOOL DRIVEN1
SYSTEM
DRIVEN
2
PRINCIPLE
DRIVEN
3

TIME
RATEOFCHANGE
Year
1
Year
2
Year
3
Year
5
Year
4
TOOL DRIVEN PRINCIPLE DRIVEN2 3
Results of Lasting Lean Transformation
13
Are your lean results directly aligned to top and bottom line growth?
Revenue
Growth
Cash
Net Income
TOOL DRIVEN1 SYSTEM DRIVEN2 PRINCIPLE DRIVEN3

“The culture of a company is the behavior of its leaders.
Leaders get the behavior they exhibit and tolerate. You
change the culture of a company by changing the
behavior of its leaders. You measure the change in
culture by measuring the change in personal behavior of
its leaders and the performance of the business.”
▪ Larry Bossidy (former CEO of Honeywell)
▪ Author of the book “Execution”
A Great Working Definition

Are Leaders Born or made?
15
“10 out of eleven good to great CEO’s came from inside the
company, three of them by family inheritance. The
comparison companies turned to outsiders with 6 times
more frequency.”
Jim Collins “Good to Great”

● “Brilliant process management is our
strategy
● We get brilliant results from average
people managing brilliant processes
● We observe that our competitors often get
average (or worse) results from brilliant
people managing broken processes”
● Which is why Toyota will be No 1 by 2010
presented at Production Systems Conference – Stuttgart in June 2004 – www.leanuk.org
Toyota’s Lean Strategy

Leadership Blueprint for Culture Change
High Speed Culture
Improvement Methodology
▪ Kaizen
▪ Sigma/Project
methodology
▪ Improvement
Organisation
Employee empowerment
and teamwork
Strategy and values
Shared and compelling vision
Strategy Deployment
Business objectives
translated to action plans
Annual Target setting
Investing in people
skills
Creating Favorable
environment
Lean Management System
▪ Daily management
system
▪Visual Management
▪Root cause problem
solving
▪ Standard work
DAILY EXECUTIONVISION/LEADERSHIPIMPROVEMENT
METHODOLOGY

TRB Case study
THE BUILDING BLOCKS OF LIGHTWEIGHT STRUCTURES ARE CONTINUALLY EVOLVING
Experts In Composites

19
The TRB story
What I found when I arrived
56 people who I sat with for 1hr each during my first two weeks, they told me
what was wrong!
● Letter from the workforce signed by all - unhappy with pay mechanism
● Full time customer representative sitting in the foyer waiting for parts
● Many people didn’t know who their boss was
● Everyone busy but no idea how we are doing
● No Bills of material – running the company on excel
● No idea of product margins
● Quotes sent to customers late and often to make a loss
● Multiple Portacabin offices inhumane!
● Financial numbers produced sometimes
● People didn’t have accountabilities clear
● No project planning
● Leadership behaviour very poor

Ticket Barriers
MANUFACTURE:
Gate paddles
manufactured using
lightweight honeycomb
core structure

LIGHTWEIGHT DURABLE SOLUTIONS FOR INDUSTRIAL APPLICATION
LTC Taxi Ramp and Steps

COMPLETE FEA ANALYSIS AS WELL AS PHYSICAL PROTOTYPE AND MOCK UP TESTING
In-house design capability and
validation

In-house Design capability
RAMP DEPLOYMENT
Exit door on underground trains
23

Bike Storage Solution

25
The Numbers?
My 2013 predecessor had recruited new young talent and ran policy of
win work at low prices

26
The last 2 yrs of change!

27
How it looked!

28
How it looks now

• Shop relay out
complete
• Shop floor
problem solving
teams
• 5S program
installed
• Competency
program with
training centre
World Class Manufacturing Journey

World Class Manufacturing Journey

New Machine Shop
First Machine arrived Nov
and is commissioned
5 Axis CNC mill, 5 Axis
lathes and laser cutter still
to come

Clean Room
● 4000 sq ft clean room
● ISO 14644 classified
● Aerospace grade and F1 ready
● Sales Jan £10k, Feb £60k Mar £100k

Autoclave System
1.5M Ø x 3.0M long, the vessel is designed and
manufactured to meet the requirements of PD
5500 with a design pressure capability of 10
Bar @ 250°C.

34
Visual Standard

35
Performance room

36
Looking after people
Training
● 2 shop floor on engineering
apprenticeships
● 2 Buyers studying for CIP’s
● 1 shop floor studying HNC for
Quality role
● 1 Engineer Prince 2 trained
● HR director studying Personnel
qualification
Competencies
● New 4 level Competency pay
structure introduced. Trainer
now hired to carry out training
for new and existing staff
● New unemployed from Job
centre are trained by local
college for 2 weeks prior to our
interviews for jobs
Team Leader structure introduced
All team leaders appointed internally

37
Operations
Mngr
New
Old
Production
mngr
now lean
and
facilities
Finance
Director
New
Old
finance
director
now HR
director
Quality
Mngr
New
Old
mngr
was
sacked
Engineering
Director
New
Old Director
now
Technical
sales
support
HR
Mngr
New
Old
mngr
sacked
Sales
Director
New
Old director
selling
composites
Getting the team in place
All those sacked were new hires from the previous
attempt to bring in talent!!
2 people on performance management,
HR, Quality, Salesman

38
Early Kaizen activity
● NPI process with gateway structure
○ 1st large project launched on time, under cost in January
● RFQ to quote process
○ Quotes now on time and turnaround in 10 days av
○ 116 RFQ’s declined in 2015
● Product margin review
○ Led to significant price increases (10-50%) to many customers.
○ Not one customer has left
● Shop floor kaizen on ramp product
○ move the cell but otherwise no affect
● Stores Kaizen
○ Relayed out stores and increased capacity 37%
Kaizen activity

39
How we are doing now?
34% 40% 41% 36% 31%Overhead %
● 2015 Increased sales £1.6m and improved profit by £400k
● 2016 Will increase sales £ £3.1m and improve profit by £700k

Any questions
40
Thank you

Lean leadership to Grow Shareholder value

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