creating profit through lean

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Creating Profit Through Leanin Custom Short Run

Presented on 11/19/08 by

for

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Agenda

• Donnelly & the Short Run Challenge

• Business Results

• Our Continuous Improvement Process:

Lean in the Short Run

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• Donnelly was founded in 1984• A small, one-story building• Four presses, eight people, no customers• An idea to focus on short run, close tolerance parts

The Donnelly Story

-

Donnelly Story Results TWI Mistake-proofingChallenges

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• Today, the organization is over 225 people strong- Best-in-class technologies and quality systems- 24/7 Operations, 125,000 square foot facility with

33 presses- 700+ Materials used- 2500+ active molds 3000+ active parts- 40-50 changeovers per day; median 8-hour run- Industry-leading and world-renowned OEM customers - $29+ Million in Revenues

The Donnelly Story

Donnelly Story Mistake-proofingResults TWIChallenges

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The Cosmic Law Of Nature

Nothing is StaticPro

gress

ing

Regressing

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The Donnelly Story

Donnelly Story Mistake-proofing

Brief overview of Donnelly’s Journey

• 1991 – Completed 25,000 sq ft expansion

• 1991 – Establish internal training process & sales strategy

• 1993 – Expand value-added services & leadership training

• 1994 – Incorporated TOC in our operations


• 1996 – Attained ISO 9001 Certification


• 1997 – Implemented the War-Room Concept

• 1998 – Focused our selling on industrial OEM’s

• 1999 – Implemented a new Manufacturing Launch Process

Results TWIChallenges

-

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The Donnelly Story

Donnelly Story Mistake-proofing

Brief overview of Donnelly’s Journey (Continued)

• 2000 – Discipline of Market Leadership in Customer Intimacy

• 2001 – Initiated a Customer Qualification Process

• 2002 – Marketing Communications and Formalized Sales Process

• 2003 – Adopted the principles of Lean Manufacturing

• 2004 – Used Strategic process outlined in “Good to Great”

• 2005 – Added Training Within Industry component to Lean Mfg.

• 2005 – Developed the process for finding “bulls-eye” customers• Developed Industry/Product & Customer Profiles (filters)

• Set process for mining companies with selected products

• 2006 – Completed a 19,500 sq ft expansion

• 2007 – Attained ISO 13485 certification

• 2007 – Finalist – Plastics News Processor of the Year

Results TWIChallenges

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0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

All

Par

tici

pat

ing

Co

mp

anie

s

Ove

r 50

%In

ject

ion

Mo

ldin

g

Ove

r 25

%M

edic

al

Ove

r 25

%A

uto

mo

tive

Ove

r $2

5MM

in

sale

s

Do

nn

elly

The Complexity Factor

42 million

Comparative Data:Plante Moran’s 2004 North American Study of the Plastic Molding Industry

Complexity Factor = Active Molds x Materials Used x Presses

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Complexity


Addressing the Complexity Factor

• Peer Accountability- Production War Room- Visual Management

• Attention to detail- Checklists- Supervisor audits- Team Leader audits

• Process orientation with measurements- Manufacturing Launch (40 measures)- Critical Success Factors (12 key

measures)

• Constancy of purpose- Short Run- Quality Management System (incl. MRT)- Lean Manufacturing Techniques- Training

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Agenda





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ChallengesDonnelly Story Mistake-proofingResults TWI

0

5

10

15

20

25

30

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Sales Dollars

0

5

10

15

20

25

30

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Orders Shipped

0.0

0.5

1.0

1.5

2.0

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Sales Dollars/Order Shipped

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ResultsDonnelly Story Mistake-proofingTWIChallenges

0

50

100

150

200

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Molding Hours Run

0

5

10

15

20

25

30

35

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

# of Presses Available

0.0

1,000.0

2,000.0

3,000.0

4,000.0

5,000.0

6,000.0

7,000.0

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Hours Run /Press Available

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TWIDonnelly Story Mistake-proofingResultsChallenges

90%

91%

92%

93%

94%

95%

96%

97%

98%

99%

100%

1stQtr'03

3rdQtr

1stQtr'04

3rdQtr

1stQtr'05

3rdQtr

1stQtr'06

3rdQtr

1stQtr'07

3rdQtr

1stQtr'08

3rdQtr

% On-time Delivery

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Value-added per Employee

$45,000

$50,000

$55,000

$60,000

$65,000

$70,000

Oct

-04

Jan-

05

Apr

-05

Jul-0

5

Oct

-05

Jan-

06

Apr

-06

Jul-0

6

Oct

-06

Jan-

07

Apr

-07

Jul-0

7

Oct

-07

Jan-

08

Apr

-08

Jul-0

8

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Scrap History

$0

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

$1,400,000

2005 2006 2007 2008(proj)

0.0%1.0%2.0%3.0%4.0%5.0%6.0%7.0%8.0%9.0%

$

%2008 Goal = < 4.5%

Scrap value at std cost

Scrap$/prod'n$at std cost

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Agenda





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Components of Continuous Improvement

• Quality System

• Daily War Room Meetings

• Visual Management – beyond 5S

• Lean Events – at least 9 per year

• Technical Training

• Leadership Training

• Training Within Industry

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Donnelly Quality SystemDeliver Good Products

On Time

ISO 13485:2003ISO 9001:2000

RCAWhy was the defective partproduced?

Why was the defective partshipped?

What other parts mighthave this same issue?

Corrective Action Process

Management Review Team

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Daily War Room Meetings

• This is a problem identification, not problem solving meeting• Action items assigned with peer accountability to resolve them

within 48 hrs

Review last 24 hrs• Safety• Changeovers & efficiency• Hours Run & efficiency• Down Time• Scrap• Problem Jobs• Action items

Look ahead to the next 24 hrs• Set Priorities• “At Risk” shipments• High scrap jobs• Mold issues

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Color Coding

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Press Visual ManagementLarge press group• Blue light (flashing): Waters

not running• White light (flashing): Barrel

temps left on• Red: “Must run” press• Green: “Needs to run” press• Yellow: “Should run” press

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5S Audit Process• Next shift Team Leader audits

section w/current shift Team Leader

• Record results on current shift schedule showing assignments

• Highlight in green if OK; pink if a problem with notes at bottom

• Hang schedule on current shift clipboard for Supervisor to review

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Certified Molding Operator Training

• Must apply• 16-18 classes• Mix of classroom &

hands-on training• Final written test• Must pass muster

by doing most complex mold changeovers within standard

• Pass and receive raise, bonus, plaque, CMO shirt

• CMOs fill many other positions

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Training Within Industry

• Training for those who direct the work of others (supervisor)

• “The Foundation of Lean”• Three Key Elements or Skills

- Job Relations: get results by gaining cooperation of others

- Job Instruction: efficiently and effectively train others

- Job Methods: generate & imple-ment ideas for improving the work

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Training Within Industry structure

• Training in 2-hour blocks for 4-5 days• Small classes of 8-10 people• Demonstrate, then learn by doing – learn from

each other• Identify and solve today’s real problems

during the training• Focus on areas within your control• Learn how to implement your ideas – SAUC• Pocket-sized reminder card

TWI is a proven method of providing relevant solutions to today’s real problemsTWI is a proven method of providing relevant solutions to today’s real problems

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Job Methods ImprovementsJob Methods Improvement Activity

0

10

20

30

40

50

60

70

80

90

100

110

# of

Pro

posa

ls Goal >= 40/mo

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Job Methods Examples

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Structured Approach to Mistake-proofing

• What went wrong – what mistake was made?• Identify the root cause(s)

- Has the job been simplified using Job Methods?- Was Job Instruction used to train effectively?

• Develop the best solution- Consider cost versus risk- Is the right way the easy way?

• Apply the solution

Is the risk reduced?

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Mistake-proofing & Core Values- Do your best

• Eliminate barriers like mistakes so we can take pride in what we do

- Treat others the way you want to be treated• With respect for the human condition

- Don’t be afraid to ask for help• Identify mistakes and work with others to

discover the root cause

- Always work as a team• Mistake-proofing builds teamwork

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What it’s really all about...• Believe in something

bigger than ourselves• Believe in the company,

its leadership, values, vision and mission; and our products and services

• Eliminating motivational inhibitors – like making mistakes

True Compensation

creating profit through lean

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