Lean lecture at Harvard Business School - Yves Merel on 10 November 2011

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Lecture done by Yves Merel at Harvard Business School on November 10th, 2011

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Lean lecture at Harvard Business School - Yves Merel on 10 November 2011

  1. 1. Group 4 Week 1 Learning Points November 10th, 2011 Lean (Toyota Production System), a risk free way to execute a strategyYves MerelFCI AutomotiveVP Industrial Developmentymerel@gmp11.hbs.edu
  2. 2. The visible part of Learning Points Group 4 Week 1 Lean (Lean)(Not Lean)
  3. 3. The systemWeek 1 Learning Points Group 4 underneath Cost Customer Satisfaction Delivery Quality . Just In Time Jidoka Waste elimination Immediate reaction on process lead time to any process issue Problem Solving Workshops Kaizen Improvement SuggestionsShop Floor Visual Control Standardized Work Management RoutinesStrategy Deployment Hoshin Kanri Progressive Targets
  4. 4. My Lean 4 Week 1 Learning Points Group Background• I discovered Lean while working for , 10 years in France and in the USA (Valeo is doing Lean with Toyota support since 1992)• Then during 3 years I led the Lean transformation of (a British automotive components supplier)• And 3 years ago I joined to lead the Lean program from Singapore• For 6 years I’m coached by Freddy Balle (retired CEO, implemented Lean at Valeo, Sommer Allibert, Faurecia and author of The Gold Mine and The Lean Manager)• Pierre Vareille (Wagon CEO, FCI CEO) uses Lean to execute his strategies
  5. 5. Group 4Group Learning Points FCI Week 1 Is one of the largest connector manufacturers, owned by Bain Capital since 2005 Its 14,000 employees are achieving a turnover of 1.3 billion € Electronic DivisionAutomotive Division In your car In communications In hospitals In your In electric computer vehicles In your TV In trucks In your In your Cell phone credit card Microconnections Division
  6. 6. Group 4 Week 1 Learning Points 24 Factories Europe Besancon, France Mantes , France Epernon , France Nuremberg, Germany Mattighofen, Austria Tatabanya, Hungary Turin, Italy Asia Bangalore, India Cochin, India Cochin, India Americas Cochin, IndiaHuntingdon PA, USA Changi SingaporeHuntingdon PA, USA Jurong SingaporeJuarez, Mexico Senai, MalaysiaSan Pedro Sula, Honduras Nantong, ChinaSao Paulo, Brazil Nantong, China Dongguan, China Namyang, Korea Ishioka, Japan
  7. 7. LeanGroup 4 Week 1 Learning Points System examples Customer Satisfaction Just In Time Jidoka Waste elimination Immediate reactionon process lead time to any process issue Kaizen Standardized Work Hoshin Kanri
  8. 8. Group 4 Week 1 Learning Points The amazing Just In Time principleHolding more inventory does not help to delivery on time
  9. 9. The amazing4Jidoka Learning Points Group Week 1 principleRejecting more products does not improve the quality
  10. 10. LeanGroup 4 Week 1 Learning Points System examples Customer Satisfaction Just In Time Jidoka Problem Solving Workshops Kaizen Improvement SuggestionsShop Floor Visual Control Standardized Work Management Routines Hoshin Kanri
  11. 11. KaizenGroup 4 WeekatLearning Points Workshop 1 Cochin• With Anil Kannat (Global Business Service Director) we launched in June 2011 a Lean system focused on labor efficiency improvement• During 3 days with a team we analyzed, simulated ideas and implemented many suggestions. We finally reduced the lead time from 43.5 to 23 hours• G.Kumar (GBS Lean Manager) then continued by leading one workshop per week• We expect to save by the end of the year 25% productivity on 130 people
  12. 12. Visual Control Routine Learning Points Group 4 Week 1 at Ishioka• With Takeuchi san (Ishioka Factory Director) in May 2009 we trained all his managers to perform the Visual Control Routines• We practiced these daily routines on the shop floor with each manager• In one hour maximum they have to go around all production cells and check if any delay may impact the customers deliveries• Then encourage the operators to make improvement suggestions on it
  13. 13. LeanGroup 4 Week 1 Learning Points System examples Customer Satisfaction Just In Time Jidoka Kaizen Standardized WorkStrategy Deployment Hoshin Kanri Progressive Targets
  14. 14. Hoshin Kanri at Wagon Points Group 4 Week 1 LearningSince we had labor intensive operations in high cost counties, we chose in May 2005 to target: Direct Labor – 1 %/monthDirect Labor Headcount Saved Over 3 years 915 saved out of 3081
  15. 15. Hoshin Kanri at Learning Points Group 4 Week 1 FCI Since we wanted to grow our sales, we chose in Sept.2008 to target: 12 Safety - 3 %/month 200 Quality - 2 %/month 11 180 10 160Number of Accidents Quality Complaints 9 140 8 120 7 6 100 5 80 4 60 3 40 2 20 1 0 0 Group target Group 6MRA Group actual Group target Group 6MRA Group actual 90 Inventory - 2 %/month 400 000 Delivery - 2 %/month 80 350 000 Plant Flow time in days 70 300 000 60 250 000 50 MPM 200 000 40 150 000 30 20 100 000 10 50 000 0 0 000 Group target Group 6MRA Group actual Group target Group 6MRA Group actual
  16. 16. A toolbox full ofWeek 1 Learning Points Group 4 Lean solutions • Kanban • Single Piece Flow • Flow Rack • Flexible Manpower Line • Leveling • Externalized Changeover • Small Train • Minimum Technical Solution • Milk Run • Andon Light • Cross Dock • Kamishibai • Zoning • Concept Paper • Red Bin • Set Based • Poka Yoke • Design Checklist • First Defect Stop • Autonomous TeamBut copying Lean solutions only provides local improvement, rarely sustainable
  17. 17. Our way to lead the1changes Group 4 Week Learning Points• A set of Strategic KPI tracking the continuous improvement speed (at all levels of the hierarchy from the entire group to every single operating team)• A Lean Manager assigned in each site, leading workshops and implementing visual control (trained on Lean tools and leadership techniques)• A small team of Lean Experts leading workshops, training people and auditing processes (Quality, Supply Chain , HR, Manufacturing Engineering)• A quarterly Lean Review for managers to meet their peers, visit a factory, share good practices and learn about Lean management• A structured Communication (feedback emails, news letter, seminars, awards)• A yearly CEO Visit at each factory to review, challenge and recognize the continuous improvement
  18. 18. Lean ProsWeek 1 Learning Points Group 4 and ConsAdvantages:• It is less risky than massive breakthrough• It is free of investment• It is applicable on any type of process• It is a structured way to execute a strategyRequirements:• It needs a mid term strategy• It needs a boss leading it 15% of his time• It needs an expert implementing the system• It needs one manager per site implementing the solutions
  19. 19. Group 4 Week 1 Learning Points Financial Impact 2008 2009 2010 EvolutionMissed Delivery 6MRA % 35 25 20 -43%Quality Complaints 6MRA 149 104 59 -60%Sales M€ 1 096 935 1 298 18%Active Suppliers Number 1 083 1 018 888 -18%Material / Sales 38% 37% 40% 6%Safety Accidents 6MRA 8.3 2.3 1.7 -80%Labor / Sales 31% 32% 27% -12%EBITDA / Sales 13% 12% 14% 8%Inventory Flow Time 6MRA Days 60 48 36 -40%Cost of Investments Capex / Sales 6% 5% 3% -49%

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