The Association of Manufacturing Excellence Presents…

1. The Association of Manufacturing Excellence Presents…

2. People Powered Lean “Business is a Team Sport” March 14-15, 2007

3. Or People are Better Than Materials!

4. Core Beliefs • Start with the end in mind! …Take a Systems Approach • Be in the business of making hard things easy…not easy things hard. • People are good and want to do the right thing • It is the organizations responsibility to create an environment for its’ people to be successful…and our people’s vote counts more than ours. • Our People’s “Vote” counts more than ours • Every organization has a limited bandwidth for change • Culture vs. Change and Leading • Turf, Ego, and $$$ and the end of the day it is about…

5. Business is a Team Sport • Think Hard: Are we organized for success and doing the right things? • Right Plays • Right Rules • Right Positions • Work Hard: Are we executing the plays? • Putting the right people with the right skills in the game to run the plays • Motivating them to produce and Win! • Talk: Communicate • Everything is constantly changing • Providing Aggressive Leadership

6. Army Basketball Team 1976-1977

7. Task Force 2-4 Cavalry Tactical Operations Center TeamFeb 21, 1991 - Northern Saudi Arabia

8. Workshop Learning Objectives • Allow you to “see” People from a business perspective • Understand and Define the Lean Value Stream from a People Perspective • Link your People programs to the business • Understand how Senior Leaders evaluate People investments • Learn from others like you • Take a Good Idea home with you…

9. The Lean House without Waste

10. Session Feedback Start with the end in mind!

11. Business Card Exchange • Position on the Team? • Type of Company? Manufacturing; Services; Other • Product? • Number of Employees? • Number of Locations?

12. AgendaMarch 14, 2007 8:00 – 8:20 Welcome 8:20 – 9:45 “Seeing the Big Picture”: Organizing for Success-- The Theory 9:45 – 10:00 Break 10:00 – 11:00 Recruiting: Finding the Right Athletes (Scenario Exercise) Trying Out: Verifying Skills and Attitude Making the Team: Right Fit; Finding Your Seat on the Bus 11:00 – 11:30 STIHL Case Study: Simon Nance 11:30 – 12:00 Lunch 12:00 – 1:00 Pre-Season Training Building Your Depth Chart Improving the Performance of Your Current Team. 1:00 – 3:00 Playing to Win Leaders Executing the Plays: Current Leader; Current Job (Scenario Exercise) Building Bench Strength: Future Leaders (Scenario Exercise) 3:00 – 3:15 Break 3:15 – 4:00 Speeding the Lean Journey: Keith Hornberger (Lead Sensei and 6 Sigma Black Belt) 4:00 – 5:00 Keeping Score: Putting it All Together Wrap Up and Closing

13. AgendaMarch 15, 2007 8:00 – 8:30 Welcome: Bruce Bolton, Operations Manager, Creative Memories 8:30 – 10:30 Creative Memories Plant Tour 10:30 – 11:00 Conference Wrap Up 11:00 – 12:00 Lunch Optional 1:00 – 6:00 Golf Outing

14. Today we will generate a lot more questions than answers… ….and that is OK

15. Take a Blue Slip Our Way to Communicate and Facilitate Our Journey!

16. Take a Blue Slip What do you want to learn today?

17. Break-Out Product Information • Realistic Job Previews • Training Program Design • Electronic Performance Support Module Development • Learning Management Systems • Depth Charts to Manage “Right Person; Right Job.” • Deriving Job Descriptions from Value Stream Maps • Attrition Analysis • Building Human Capital Budget Request • Aging of the Workforce • Others: Name: Company:

18. Getting Out of the Box… Big Picture Thinking!

19. …It is All About Business Performance! REQUIRED Level of Performance CURRENT Level of Performance Resources Required Performance Gap Measures of Performance

20. Business Metrics If we completely align our Lean Journey with our People SYSTEMs we will: • Improve Quality • Improve Production to Headcount Ratio thus Reducing Labor Cost per product • Reduce Defects through focused Continuous Improvement • Reduce Lead Time to Increase Market Share • Increase production capacity and… • Improve PROFIT margin …by optimizing the plant’s physical production capacity to our production process.

21. Business of People The Mission: Provide Leaders with right people in the right numbers, in the right skills, at the right time, at the right cost to meet business needs. The Goal: An agile, competent workforce capable to move at the speed of business.

22. Alternative Roles for Corporate Learning • Training Did the Learner accomplish the Learning Objectives efficiently? Business Metric: Time Invested vs. Skills Outcome • Performance Improvement Did the Leader receive “improved job performance” as a result of the investment? Business Metric: Overhead Cost to Improved Job Performance • Human Capital Management Do we have a system to provide the Manager’s with Right People in the Right Numbers with the Right Skills at the Right Time? Business Metric: Headcount to Productivity • Organizational Effectiveness Are we organized, labor resourced and costed correctly to accomplished the business objectives? Business Metric: Full Time Equivalents vs. Profit Margin

23. Team SportValue Stream • Organizing for Success • Recruiting • Trying Out • Making the Team • Pre-Season Training • Playing to Win • Keeping Score

24. Business is a Team Sport! Building High Performance Teams • Organizing for Success: Aligning Production Process with People • Recruiting: Finding the Right Athletes • Trying Out: Verifying Skills and Assessing Attitude • Making the Team: Best Player or Best Athlete: Right Fit? • Pre-Season Training: • Learning Your Position and the Depth Chart • Developing Leaders at every Level • Current Workforce Skills Development: Building Benchstrength • Playing to Win: • Leaders emerge: Leader Performance Improvement: Identifying and empowering leaders with the right behaviors • Teams play smart and hard: Continuous Improvement • Keeping Score: How do you know you are Winning?

25. Organizational Scheme GM OM OM OM GM: General Manager 10 OM: Operations Manager 30 SS: Shift Supervisor 60 1S: 1st Line Supervisor 160 MU: Make Up Supervisor 100 GT: Go To Employee 500 E: Employee 1600 NE: New Employee 600 SS SS SS 1S 1S 1S GT MU GT NE NE Based Upon a Total Operational Headcount of 3060 Vertical Dyad Linkage

26. Building Pipelines Recruiting Trying Out Making the Team Adult Education Temp Agencies Community Colleges College Transfers Generate Labor Req’s Orient, Screen & Identify Candidates High Schools Interview & Assess Skills Common Skills Training 1st Job Skills Development Tech Schools Other Companies Current Employees Hiring Decision Increase Cost Decrease Cost State Employment Offices Military

27. Life Cycle Skills Development Program Management Skills Complex Tasks Supervisor Development Training Supervisor Practical Application/ Evaluation VI Pre-Employment V Employment Skills Mentor Skills Basic Skills Intermediate Skills Advanced Skills Soft Skills Development IV Initial Entry Skills Training Basic Training Intermediate Training Advanced Training III Practical ApplicationCoaching/ Evaluation Practical ApplicationCoaching/ Evaluation Practical ApplicationCoaching/ Evaluation Skills Evaluation II Experienced Personnel I Competency Level Career

28. Current State Leader Development conducted informally or not at all. Usually best operators promoted to Supervisors Experience gained over time Many training courses available but not mapped to critical tasks. Undocumented program that is dependent on individual Management implementation On the Job Training is ad hoc with few Training Materials available on the Job Site. Perfect State Systematic Approach to Leader Development Manager’s are Responsible as the Primary Trainers of their Supervisors Manager’s are responsible to tailor skill development to each individual supervisor and each operational area. Leader Development Programs mapped directly to Performance Review System Leader Development Program

29. Bench Strength is Working the Blue Lines Operations Manager Current Shift Supervisor – Future Operations Manager Current Shift Supervisor– Current Job Current 1st Line Supervisor – Future Shift Supervisor Current 1st Line Supervisor – Current Job Current “Go To” Operator – Future 1st Line Supervisor

30. Putting It All TogetherWhen the CEO/CFO say… “OK… we see all the pieces, we understand the problem, we know this critical to our business…” “How much money do you need and when do you need it, and how will we know it made our business better?”

31. Human Capital ManagementSuccess Principles • Business Focus (People + Process + Material = Products) • Senior Leader “Hands On” Business with embedded Metrics and Regular Reporting • Centralized Planning while Executing Program as close to the work area as possible. • Managers are responsible and accountable for the performance and development of their people… • Be the P&L Responsible Managers best resource for support by providing them the processes and programs to do better meet their business objectives. • Do not be a part of the problem by putting HR mechanics ahead of business support. • Constantly Link the Corporate Strategy to the Human Capital Management Program…be proactive

32. Human Capital ManagementProgram Design Challenges • No silver bullet…Big Problem with a lot of moving parts in a dynamic business environment • Focused effort based upon real analysis…not a “Good Idea of the Day” approach. • Recommendations must make good business sense • Design Executable Programs and be good Program Managers (Cost, Schedule, Quality) • Be realistic in execution and “eat the elephant” one bite at a time. • Focus on PEOPLE first; then FTE. • Requires long range thinking… People are multi-year projects-- if fact Life Long Projects • Do not be a part of the Profit and Loss problem!

33. What group represents the biggest risk for the future of your business? (Rank Order with 1 the Highest Priority) __ Hourly Workforce __ 1st Line Supervisors __ Plant Middle Management __ Plant Managers __ Executive Staff __ Administrative Support staff __ Temporary Workforce

34. Which part of the People Life Cycle requires the most urgent attention? (Rank Order with 1 the Highest Priority) __ Organizational Scheme __ On Boarding (e.g. Acquiring New Employees) __ Incumbent Production Workforce __ Line Supervisors Performance Improvement __ Executive Leadership Development Program

35. Workshop ParticipantSnapshot“Take a Blue Slip” • Title: • Company: • Type of Business: • #1 Challenge:

36. Organizing for Success Theory and Application

37. People Powered LeanAssumptions • Sound Business Model: Crisis? • Value Stream Map is Present

38. Business Process Sales/Quoting CustomerOrders ReceivingComponentsAssembly Finished GoodsProcessing Sampling Scheduling Planning Staging Sequencing PurchasingComponents Pulling Components Sterilizer Ship toDistributor/Customer

39. Value Stream Map How do we create value?

40. Value-Adding Activities ….transform materials and information into products the customer pays for Non-Value-Adding Activities ….consume resources, but don’t directly contribute to the product and/or the customer Non-Value-Adding but Required ….consume resources, but are required by government regulation or company policy

41. Team Sport: Defining Positions Mold Maker & Maintenance Mold Setter Mold/Part Designer Sales Representative Quality Control Customer Order and Materials Machine Finished Products and Satisfied Client Machine Operator/ Packer Material Handler Process Technician Assembly Operator Press Maintenance Technician

42. Value Stream to Cell Map Production Cells Who is going to do it?

43. Horizontal Labor Planning Considerations • Job Complexity • Production Tempo • Level of Manual Labor • Level of Intellectual Labor • Quality Standards • Availability and Skill Set of Labor Pool • Availability of Leaders (Leader to Led Ratio)

44. Vertical Labor Planning Senior Management P & L Responsible Leaders Sales IT/HR/ Accounting Engineering 1st Line Supervisors Production Workforce Machine 1 Machine 2 Machine 3 Machine 4 Machine 5

45. Creating the Conditions for Success • Owner: Creating the Business Model (Profit and Loss) • General Manager/Front Office: Runs the Business • Head Coach: Decide the Game Plan (Players and the Plays) • Coordinators: Call the Plays • Coaches: Ensures the Players know how to run the Plays • Leaders: Read the current situation and execute the Plays • Players: Execute the Plays

46. Vertical Labor Planning Considerations • Span of Control (Leader to Led Ratio) • Physical Environment • Tempo • Hourly or Salaried • Complexity • Same Labor Categories or Mixed • IT/ERP System Granularity • Support Staff Availability (Production Control, Planning, Quality Control, Engineering, Training, HR, etc.)

47. Business is a Team Sport • Think Hard: Is our business model sound, are we organized for success and doing the right things? • Right Plays • Right Rules • Right Positions • Work Hard: Are we executing the plays? • Putting the right people with the right skills in the game to run the plays • Motivating them to Produce and Win! • Talk: Communicate • Everything is constantly changing • Providing Aggressive Leadership

48. Business is a Team Sport Mission Provide our leaders and teammates with the tools, skills, training, and procedures to improve our production processes through continuously identifying and eliminating waste.

49. Lean Goals • Improve Quality • Eliminate Waste • Reduce Lead Time • Reduce Total Costs • Process • Materials • Cost (People) • Equipment Through Near Real Time Visibility over:

50. People Powered Lean: A SYSTEM to Align People to Process obtaining Employee Ownership Process Materials Cost Equipment People