wcm (world class manufacturing)

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Prepared by Özcan ÇAVUŞOĞLU

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Page 1: WCM (World Class Manufacturing)

Prepared by Özcan ÇAVUŞOĞLU

Page 2: WCM (World Class Manufacturing)

1. Meaning & Scope2. Criteria3. How a WCM is Achieved ?4. Characteristics of World-Class Organizations5. How to Make an Organization World-Class?6. World-Class Manufacturing: What it takes?7. Implementing WCM8. Contrasting Mass Production & WCM9. The Grades for WCM

10. WCM Checklist11. Types of Operation Which Creates a WCM Units12. Just In Time (JIT) Manufacturing13. JIT Improvements to Manufacturing14. CONWIP Control15. Factors Which Can Make a WCM16. Some Other Factors17. Conclusion: Control of OperationCASE: Fiat

Page 3: WCM (World Class Manufacturing)
Page 4: WCM (World Class Manufacturing)

It refers to the practice followed in a manufacturing organizations, in order to consistently deliver exceptional performance, frequently in excess of expectations.

World Class Manufacturers are those that demonstrate industry best practice.

Page 5: WCM (World Class Manufacturing)

There are two overriding criteria when using this checklist to judge whether your company can be regarded as World Class

1) How does the company compare with its best competition?

2) Has the company increased its score since last year?

Page 6: WCM (World Class Manufacturing)

Develop the awareness of the need to make the transition to World Class Manufacturing

Develop the ability to search for relevant tools and to apply them effectively

Monitor progress so that an improvement program can be systematically utilized.

Page 7: WCM (World Class Manufacturing)

1. Customer service.2. Quality control and assurance.3. Research and development/ new product development4. Acquiring new technologies5. Innovation6. Team-based approach (adopting and using effectively)7. Best practices (study and use of)8. Manpower planning9. Environmentally sound practices10. Business partnerships and alliances11. Reengineering of processes12. Mergers and acquisitions13. Outsourcing and contracting14. Reliance on consulting services15. Political lobbying

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1. Worker productivity (improvement)

2. Employee training and development

3. Open communication between management and employees

4. Employee benefits and perquisites

5. Codes of workplace conduct

6. Conflict resolution

7. Employee satisfaction

8. Flextime arrangements

9. Management-employee-union relations

10. Child care

Page 9: WCM (World Class Manufacturing)

1. Competitive analysis strategies (cost efficiencies in operations, speed to market, research and development supremacy, zero defects, real-time order management etc.)

2. Production and supply chain (collaborative planning, forecasting and replenishment, collaborative manufacturing and product design, supplier-managed inventory etc.)

3. Customization strategies (building to order, customized mass production, global sourcing and manufacturing, etc.)

4. Electronic commerce strategies (supply management, Internet ordering, status and availability tracking by Internet)

5. Compensation systems (product profitability, inventory levels, manufactured/delivered costs per unit, worker productivity, employee retention rates, etc.)

6. World-Class Manufacturing: What it takes?

Page 10: WCM (World Class Manufacturing)

Success Factors

WCM Tools Measurement Indicators

1. Cost control

Just-in-time logistics, quality at source and supply chain management tools

· Inventory holdings· Absence of defects and rework· Cost of incoming materials

2. Quality Statistical Process Control, fool-proofing to prevent errors, Pareto analysis of types and causes ofproduction defects

· Customer return rates· Internal reject, rework & scrap rates· Supplier quality Performance

3. External flexibility

Just-in-time logistics, quality at source and supply chain management tools

· Time from customer order to delivery· Delivery frequency & reliability to customers· Delivery frequency and reliability of suppliers

Page 11: WCM (World Class Manufacturing)

Success Factors

WCM Tools Measurement Indicators

4. Internal flexibility

Cellular layouts, single unitflow, production pulling,Kanban signaling system,single-minute exchange ofdies for rapid machine changeover, supply chainmanagement

· Machine changeover times· Batch and lot sizes· Inventory levels· Throughput time through factory · Machine utilization levels

5. Capacity to change(Human resourcedevelopment)

• Multi-tasking, • Multi skilling,• Quality circles,• Kaizen groups, • Training,• Incentive schemes.

· Numeracy and literacy levels· Labor/management turnover levels· Absenteeism rates· Training expenditure and types of training· Employee development· Suggestion schemes/continuous improvement

6. Innovation capacity

Concurrent engineering,new product developmenttechniques

· R&D expenditure· Proportion of sales from new products

Page 12: WCM (World Class Manufacturing)

Critical Control Points

Mass Production

World ClassManufacturing

Logistics · Large batch production· Just-in-case inventories Specialized machinery

· Single unit flow production· Just-in-time inventories· Flexible machinery and rapid machine changeover

Quality · End of line inspection· Reworking of defects

· Quality-at-source at each part of production process

Work organisation

· Division of labor between skilled and unskilled workers· Specialized R&D and product development

· Multi-tasking and multi skilling· Continuous improvement in green areas as well as specialized staff

8. Contrasting Mass Production & WCM

Page 13: WCM (World Class Manufacturing)

"W“ - World class "X“ - Very good but not

quite world class – (country class)

"Y“ - Better than many – (city class)

"Z“ - Poor – (village class)

Page 14: WCM (World Class Manufacturing)

Q1) Do you have a 99% or better level of customer service (or product availability)?

Grade Criteria

W 99% or better customer service level (on time in full or availability).

X 95% up to 99% customer service.

Y 90% up to 95% customer service.

Z Below 90% customer service.

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Q2) Does everyone in the company know who the key

customers are and what differentiates the company’s products and services from the competition?

Grade CriteriaW Everyone knows key customers through a

new employee induction scheme and regular updates, meetings, notices etc.

X Most people know key customers.Y Managers know key customers.Z Customers known mainly on a "need to

know" basis.

10. WCM Checklist

Page 16: WCM (World Class Manufacturing)

Q3) Do all staff who are in contact with customers have the authority and empowerment to resolve customer problems? Grad

eCriteria

W A person answers telephone calls within 4 rings and takes responsibility to deal with the call either immediately or by getting back to the caller within 24 hours. Similar standards are used for e-mail and written complaints.

X A person answers telephone calls and takes responsibility to deal with the call either immediately or by getting back to the caller within 5 days. Similar standards are used for e-mail and written complaints.

Y Customer problems are dealt with as soon as possible.

Z Many customer problems are outstanding or not satisfactorily resolved.

10. WCM Checklist

Page 17: WCM (World Class Manufacturing)

Grade

Criteria question

W At least 75% of your shipments to customers controlled by Kanban or vendor managed inventory (i.e. shipped / delivered based on customer usage) or you are able and willing to make Kanban shipments if requested.

X Some but less than 75% of shipments under Kanban control or you are probably able to make Kanban shipments if requested.

Y You may be able to make Kanban shipments if requested.

Z You would not make shipments under Kanban control.

 

Q4) Do Kanban control your supply chain?

10. WCM Checklist

Page 18: WCM (World Class Manufacturing)

11. Types of Operation Which Creates a WCM Units

The Kanban Control Concept

Kanban control means that the authority to make or move an item is based on that item's usage unless there has been a properly approved and strictly limited deviation

Kanban control. Movement of parts shown in blue, circulation of Kanban in red. Machines are shown as circles and buffers as triangles. The last buffer is the finished goods (FG) inventory.

The Kanban messages can take the form of an e-mail, fax, card, empty container or require you to visit their plant to replenish their stock of your products (usually referred to as vendor managed inventory)

Page 19: WCM (World Class Manufacturing)

Just in Time manufacturing is a systems approach to developing and operating a manufacturing system. We will take an example of banking process:

In short, JIT means making what the market wants, when it wants it. JIT has been found to be so effective that it increases productivity, work performance and product quality, while saving costs                                          

12. Just In Time (JIT) Manufacturing

Page 20: WCM (World Class Manufacturing)

13. JIT Improvements to Manufacturing

Time

In Summary, JIT Systems requires Changes in:

System Design Organization

Attitudes and Structures

External Relationships

New Management Priorities

Page 21: WCM (World Class Manufacturing)

CONWIP stands for Constant Work-In-Process, and designates a control strategy that limits the total number of parts allowed into the system at the same time

CONWIP control. Movement of parts shown in blue, circulation of release authorizations in green.

14. CONWIP Control

Once the parts are released, they are processed as quickly as possible until they wind up in the last buffer as finished goods. One way to view this is that the system is enveloped in a single Kanban cell: Once the consumer removes a part from the finished goods inventory, the first machine in the chain is authorized to load another part.

Page 22: WCM (World Class Manufacturing)

15. Factors Which Can Make a WCM

Page 23: WCM (World Class Manufacturing)

16. Some Other Factors

Page 24: WCM (World Class Manufacturing)

Before commencing implementation of control systems there are always five beneficial things to do which will make any method of control easier to implement and make the system work better operationally (Generally world class manufacturing businesses have done these things) 

Reduce time wasted in setting and reduce set up times

Form Natural Groups (cells) Reduce throughput times Postpone product mutation Remove the trivial many, to focus on the

vital few

Page 25: WCM (World Class Manufacturing)
Page 26: WCM (World Class Manufacturing)
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We have started a program designed to achieve the standards of excellence associated with World Class Manufacturing (WCM) policies: a company organization methodology that leads to excellence of the entire production process through the continuous improvement of all performances and the contribution of all company employees, at every level.

Our manufacturing facilities use the Fiat Advanced Production System (FAPS),an integrated model that optimizes production and logistic processes.

The program was launched two years ago but the plants of Tychy in Poland, Melfi in Italy and Bursa in Turkey have already attained a competitive rating according to World Class Manufacturing criteria

Page 28: WCM (World Class Manufacturing)

2. 2. WORLD CLASS MANUFACTURINGWORLD CLASS MANUFACTURINGWorld Class Manufacturing principles apply to all aspects of plant organization, from the quality system to maintenance, from cost control to logistics, in a perspective of continuous improvement.

World Class Manufacturing (WCM) in fact was born of the collaboration between Fiat and the best European and Japanese experts, with the aim to enhance the production standard to a recognized world standard.

The system is based on a systematic reduction of all types of loss and waste through the contribution of everyone and the rigorous use of methods and standards.

Page 29: WCM (World Class Manufacturing)

2. 2. WORLD CLASS MANUFACTURINGWORLD CLASS MANUFACTURING The system is based on a systematic reduction of all types of loss and

waste through the contribution of everyone and the rigorous use of methods and standards.

Care for the Environment is one of the pillars of the system, encompassing all the people, regulations and rules of conduct making up our Environmental Management System (EMS).

This is the management tool that will enable us to determine, reduce and control the environmental impact of our manufacturing facilities, knowing that every activity has repercussions on the environment.

The system specifies a number of actions geared to the reduction of the environmental impact of manufacturing activities, both in order to ensure compliance with the applicable regulations and in order to prevent the waste of energy and natural resources

Page 30: WCM (World Class Manufacturing)

3. TOFAŞ3. TOFAŞTofaş has been the best of the world in manufacturing, now it will set a model for Chrysler’s world beside Fiat’s. (18.11.2009)

Tofaş who has been producing Fiat branded passenger cars and commercial vehicles for 41 years in Turkey with the cooperation of Fiat S.P.A and Koç Holding and who has manufactured its 3 millionth vehicle in 2009 has received the “Silver Level” (World Class Manufacturing) award, it has achieved in WCM, with a ceremony, organized in Turkey.

Being the first production center that has achieved “Silver” level in “World Class Manufacturing” in Fiat’s world, Tofaş’s Bursa factory has been chosen as the factory who has “the highest quality and who makes the safest manufacturing” after the last audit, carried out by WCM teams last week.

Page 31: WCM (World Class Manufacturing)

3. TOFAŞ3. TOFAŞTofaş has been the best of the world in manufacturing, now it will set a model for Chrysler’s world beside Fiat’s. (18.11.2009)

Fiat Group’s CMO (Chief Manufacturing Officer) who has come to Turkey for the ceremony on Tofaş’s being chosen as the best factory; Stefan Ketter explained, “Making R&D and manufacturing of important models like Fiat Fiorino, Linea and Doblo, Tofaş’s place in the Fiat’s world as is very strong without any dispute.

Tofaş’s success globally is a true example of discipline, quality and success in this period when Fiat and Chrysler factories are in common action in terms of production in world’s class”.

Page 32: WCM (World Class Manufacturing)

World Class Manufacturing

Stefan Ketter

Lingotto - November 8 & 9, 2006

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WCM Focus

All Employees

Waste and Losses

Standards and Methods

Lingotto - November 8 & 9, 2006 2

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Structure/Objectives

Workplace Organization

Quality Maintenance Logistic

Method & std.

Focus

Target

Total Industrial Engineering

Productivity

zero waste

Total Quality Total Productive Just in Time Control Maintenance

Quality Technical Service Improvement Efficiency Level

zero zero zero defects breakdowns inventory

Values People involvement, value creation, customer satisfaction

Lingotto - November 8 & 9, 2006 3

Page 35: WCM (World Class Manufacturing)

WCM Principles

1. World Class Safety is the foundation of World Class Performance

2. WCM Leaders have a passion for standards

3. In a World Class Company the voice of the customer can be heard in the plant

4. WCM does not accept losses of any kind (The goal is always Zero: accidents, service & quality defects, inventory, breakdowns)

5. A rigorous application of WCM methods guarantees the elimination of losses

Lingotto - November 8 & 9, 2006 4

Page 36: WCM (World Class Manufacturing)

WCM Principles

6. In a World Class plant all abnormalities are immediately visible (Dust & contamination free, tracking, control charts …)

7. WCM takes place in the workplace, not in the office

8. WCM is most effectively learnt by practicing the techniques with the plant teams

9. The power of WCM comes from the involvement of people

10. World Class companies create the energy of a crisis in the face of continued success

Lingotto - November 8 & 9, 2006 5

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Main Actual Activities

2005A 2006E 2007E WCM Basics / Safety

Training / Leadership / Organisation

Cost Deployment

Investments & Fix Plants

Labour efficiency / Capacity Utilization

Environment / Ergonomy

Maintenance Process

Quality Process Improvement

Logistic Process Time

Lingotto - November 8 & 9, 2006 6

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Actual Best Results/WCM Audit

Workplace Organization Quality Maintenance Logistic

Methodologies

1 Safety New approach2 Cost Deployment 100 % plants3 Focused Improvement 147 events4 Work Place Organization 7 model areas5 A.M.: Autonomous Maintenance 58 model areas6 P.M.: Professional Maintenance 34 model areas7 Quality Control 10 model areas8 Production Logistic System 4 model areas9 Early Equipment Management First exercises10 People development/qualification New approach11 Environment New approach

100%Lingotto - November 8 & 9, 2006 7

Page 39: WCM (World Class Manufacturing)

Model Area: Tychy/Poland

People Involvement: Proposals/Employee/Year

4,5

Target = 4 4,0

3,5

3,0

2,5 Implementation

2,0

1,5

1,0

0,5

0,0 Jan Feb Mar Apr May Jun Jul Aug Sep

rate 50%

Oct Nov Dec

Lingotto - November 8 & 9, 2006 8

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Model Area: Melfi

Quality: Electric Check Defects - Grande Punto

- 50%

Lingotto - November 8 & 9, 2006 9

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Model Area: Melfi

Productivity: Hours per Vehicle - Grande Punto

-12% in 8 months

Lingotto - November 8 & 9, 2006 10

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Average Hours/Vehicle

Vs. Benchmark (Harbour Report)- 20%*

Segment Ranking

A Leadership

B Leadership

C Top 5

D Top 10

LCV Leadership

2006E 2010E

* As result of new vehicle introduction

Lingotto - November 8 & 9, 2006 11

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Labour Productivity Target (Italy/Poland)

100% Technical efficiency

Losses

Operation

- 30% Waste/Rework Line Balancing

- 50% Non Value Added • Logistic layout • Time Optimization

Losses

Operation

Range

Actual 2010E

Lingotto - November 8 & 9, 2006 12

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Towards World Class Manufacturing 100

90

80

70

60

50

40

30

Competitive Level

Horizontal expansion

Consolidation / Autonomous Improvement

20

10

0

Knowledge creation Model areas

2006E

1 3 5 7 9 11

2007E

13 15 17 19 21 23 25

Saving: > €500mn

2008E 2009E 2010E

27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67

months form program launch

Lingotto - November 8 & 9, 2006 13

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WCM - Extension towards Suppliers

Cost Quality Maintenance Logistic

€ Q M L

SUPPLIER World Class Manufacturing integration/extension

throughout Supplier Process Engineers

Lingotto - November 8 & 9, 2006 14

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WCM - A Corporative Approach

WCM

Implementation, Auditing and

Best Practice Sharing

Lingotto - November 8 & 9, 2006 15