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BUSINESS EXCELLENCE

BUSINESS EXCELLENCE. WITH L EAN. VALUE to SHAREHOLDERS and VALUE to CUSTOMERS WITH L EAN B USINESS E XCELLENCE. BUSINESS EXCELLENCE VISION. E XCELLENCE is achieved when: a company continuously IMPROVES and EXCEEDS the “Quality, Cost, and Delivery Requirements to its Customers.

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BUSINESS EXCELLENCE

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  1. BUSINESS EXCELLENCE WITHLEAN

  2. VALUE to SHAREHOLDERSandVALUE to CUSTOMERS WITHLEAN BUSINESSEXCELLENCE

  3. BUSINESS EXCELLENCE VISION • EXCELLENCE is achieved when: a company continuouslyIMPROVES and EXCEEDS the “Quality, Cost, and Delivery Requirements to its Customers. • COMPONENTS for EXCELLENCE are:1. Leadership & Culture 2. Lean, Flexible & Disciplined Organization 3. Proper Tools, Methods, Techniques

  4. BUSINESS EXCELLENCE OBJECTIVE To create and implement business solutions with: • Systems thinking • Customized to the needs of our Clients • Achieve top and bottom-line results, such as: • Increased Profits, Revenue • Reduced Cost, Improved Cash Flow • Improved Quality & Productivity • Improved Equipment Management • Better Customer Focus

  5. DEFINITION OF LEAN • LEAN means that we continuously REDUCE WASTE • Waste in Concept To Launch • Waste In Manufacturing • Waste in Order to Cash • LEAN means that we consistently RENEW THE BUSINESS • Flexible to adapt and diffuse new technologies • Change methods for the better • Become modular and scalable - right sized machines & designs • Launch faster with consistent quality – time to market • LEAN means that we are SUSTAINING & CONSISTENT • Working according to the policies and schedules • Delivering according to schedules From START to FINISH

  6. DEFINITION OF LEAN • (Cont’d) • LEAN means that groups of CAPABLE, ENABLED, and Continuously LEARNING PEOPLE are working together • Motivated and • Capable and enabled people for independent decision making • LEAN means CONSISTENTLY EXCEEDING CUSTOMER EXPECTATIONS • Exceeding the Known requirements • Anticipating the Unknown requirements • Understanding the Latent requirements

  7. WHY CANADA NEEDS CHANGE • Canadian controlled plants are 30% less productive than foreign controlled Companies operating in Canada • Canadian firm’s profit margin is about 75% of US counterparts • Profits need to be generated through cost reduction,not only through price increase and margin squeezing • Customers want “Solutions on their terms, according to their Timeline, Quality & Quantity Delivery” • Over time, organizations have become unsuspecting of their own “Waste – Hidden Factories” • We cannot depend on the old “Success Formulas” • Improving Economies • Returning Reasonable Customers • Exchange Rates • Exit of weak competitors Source; Consortium for Advanced Manufacturing, Next generation Manufacturing Systems, Leaders for Manufacturing Program, MIT

  8. FOUNDATION Methods & Tools People & Teams Goals & Targets

  9. STRATEGY • From “Policy Deployment” to “Policy Management” • From “Top-down Cascade of Tasks” to Emergence of policies based on “cascade of responsibility” • Gets the desired direction without anyone telling anyone exactly what to do • Maximum Flexibility with Maximum Control • Flexibility with responsibility to think and initiate • Control with need to justify each action

  10. STRATEGY (cont’d)

  11. PEOPLE PEOPLE SYSTEMS FOR BUSINESS RENEWAL LEAN EXCELLENCE Empowerment Programs, (Enabling) QC Circles Suggestion Programs Rewards and Recognition Employee Development Employees as Citizens Standardized Work/Kaizen JIT/Automation with Human Touch Respect for People Responsibility pushed down

  12. ALIGNMENT TARGETS vs. GOALS BUSINESS EXCELLENCE CONVENTIONAL Plans are things to adhere to Plans are things that change • GOALOriented • Responsibility Focus • Individual Initiative • System or ProcessLevel Response • TASK Oriented • AUTHORITY Focus • Upper-Level Control • IndividualLevel Response

  13. RENEWAL TECHNOLOGY & BUSINESS RENEWAL TECHNOLOGY LEVEL PREFERRED PROCESS END PRODUCT TECHNOLOGY ORIENTED INNOVATION INNOVATIVE PRODUCT HIGH TECHNOLOGY With LEAN ORIENTATION TECHNOLOGY ORIENTED LEAN PEOPLE ORIENTED LEAN LEAN ORIENTED PRODUCT LOW TECHNOLOGY

  14. REASONING DIMINISH AND ELIMINATE YOUR HIDDEN FACTORY TRADITIONAL THINKING LEAN BUSINESS EXCELLENCE THINKING Profit Profit Profit Profit COST COST COST HIDDEN COST Work = Capacity – Waste Price = Cost + Profit Capacity = Work + Waste Profit = Price – Cost

  15. EFFECTS OF WASTE REDUCTION REVENUES NEEDTODOUBLED REVENUES 1.0 M 2.0 M 1.0 M Waste = 100,000 To get 200,000 Into Bottom Line @ 10% Margin Without Reducing Waste 200,000 100,000 PROFITS PROFITS

  16. EXCELLENCE TARGETS FOR PROCESSES Waste = Zero Response Time = Zero Ideal State • UPSTREAM • DOWNSTREAM • LEVELED LOAD • ONE PIECE FLOW • (6 Sigma) • (TPM) • (right-sized tools) Create PULL Level the Load • ONE PIECE FLOW • (6 Sigma) • (TPM) • (right-sized tools) Future State Current State • Capable – right every time (6 Sigma) • Available – always able to run (TPM) • Adequate – with capacity to avoid bottlenecks (right-sized tools) Identify Value, Eliminate Waste Create Flow

  17. DO YOU ASK THE RIGHT QUESTIONS? • Does my value-added activity consumeless than 5% of the total process time? • What is my competitive advantage gainif I deliver in 50 to 80% less time? • What financial gain would I realize witha 20% reduction in cost of quality? • What cash infusion / debt reduction wouldI gain with a 50-80% reduction in work-in- process and finished good inventory? • What revenue growth would I realize byreducing delivery time and time-to-market?

  18. FROM BATCH TO DEMAND DRIVEN

  19. INITIAL VISIT - ASSESSMENT • DAY 1 • Plant Tour (Initial, pre-assessment) • Team Assessment • Assessment Compilation • DAY 2 • Second Plant Tour for Waste • Waste Recommendations • Report and Presentation to Management

  20. THE ASSESSMENT • Production • Equipment • Engineering • Customer Focus • Business Renewal • Culture of Improvement • Managing the Renewal • Employee & Supplier Partnering • Information Architecture

  21. THE ASSESSMENT EXPLAINED MAJOR HEADING Mass Start Develop Maturity Excellence INTRO YELLOW - BLUE - TURQUOISE CUBES HAVE “NO” SIGNIFICANCE OTHER THAN TO SIMPLIFY THE OVERALLSURVEY READING EACH “CUBE” HOLDS A UNIQUE STATEMENT WHICH DESCRIBES THE CONDITION AT EACH LEVEL BETWEEN MASS & EXCEL Mass Excellence SUB-HEADING SUB-HEADING - DESCRIPTION Mass Start Develop Maturity Excellence

  22. ASSESSMENT SAMPLE BUSINESS RENEWAL (Flexibility / Agility) Mass Start Develop Maturity Excellence Management is efficient and a subject matter expert in modeling The future is not modeled or modeling of future is very unsystematic; Top Management starts the "what if scenarios" for better business models Top management starts to "anticipate changes" in business as a result of strategic response (alignment) Management is fully competent in "what-if and change scenarios" (may include the use of computer modeling) Vision is constant, no change, it is single model Information gathering process for the 3 year plans is started 3 or 5 year strategic plans are based on modeling and scientific Company easily assimilates new methods, systems and technologies - Benchmarking is above industry average Company is in tune with its capabilities and core competencies - leading in core competencies Business Renewal Continuous Improvement to Business Limited knowledge of core competencies Core Competency Analysis starts Core Competencies are understood - capabilities and fitting the market is much more aligned No long range plans Policies are not clear and plans are not streamlined yet Policies define clearly targets and means but the results to targets of the whole work environment as a team is not there yet Short and mid term plans and their execution are consistently successful but the link to long-range is weak There is a clear link between long and mid range plans and all is supported by Plan Do Check Act cycle application

  23. REPORT-CARD ON GAP GAP

  24. THE SCORECARD FOR BUSINESS EXCELLENCE

  25. END OF ASSESSMENT DELIVERABLES Assessment – recommendations on the Gap to Excellence Report on Observed Waste, including the savings Blueprint for Excellence Program, Future State Training Plan for Excellence Documents & Metrics Verification Report THE BUSINESS EXCELLENCE PROGRAM WE PRESENT THE BUSINESS EXCELLENCE PROGRAM WE PERFORM BUSINESS EXCELLENCE ASSESSMENT & WASTE AUDIT WE RECOMMEND IMMEDIATE PROJECTS TRAINING & WORKSHOPS LEANPROGRAMS CONTINUOUS LEARNING & GROWTH WE BLUEPRINTFUTURE STATE

  26. CURRENT INDUSTRY PROFILE 18% START - Planning No implementation 46% DEVELOPMENT - Early Just starting to implement in pilot areas; some positive results MATURITY - Extensive Implementation is underway; many areas of the business are applying many Lean concepts and tools; solid progress being made 28% 4% EXCELLENCE - Advanced Lean has become the standard way of operating; employees, supervisors, and managers understand and use Lean concepts; Lean is being extended to Strategic Suppliers No Answer 7% PHASES OF LEAN BUSINESS EXCELLENCE (LEI Survey 2003, 2004)

  27. TEAMING UP for EXCELLENCE Business Objectives Vision/Strategy 360 Degree Communication Agenda Lean Training 1) Executive 2) Champion 3) Lean Consultant Site Assessment Value Stream Mapping Kaizen Focus 5S Set-up Flow Defect/ Variation Business Process TPM CEO and Senior Management

  28. BENEFITS OF OUR SERVICES FINANCE YOUR OWN CONVERSION TO EXCELLENCE WITH US RESPOND TO CHANGING CUSTOMER VALUES

  29. OUR OWN - SCORE CARD Some of our Lean, Supplier Development and Continual Improvement efforts; • QFD, Design Review 2004 Canada, US • TPS - Project Management 2003, 2004 Canada • Controlled Shipping 2003 GM, 3rd Party, US&CDN • 5S-Visual and Blitz 2002, 1996, 1997 US, Canada, England • Corrective Actions 2001 Canada • New Plant Launch - Engines 2001 Canada • Constraints Management 1999 US • Process re-engineering (JIT) 1996 - 97 Canada, England • Process Start Ups (JIT) 1996 – 97& 98 Canada, China • JIT- Kanban & Pull 1996 – 97& 98 Canada, England, China • QS 9000 (Q1, Q101) 1996 – 97& 98 Canada, Italy, China • TPM 1996 Canada • Training 1987 to date US, Canada, China • Continuous Improvements 1985 to date US, Canada, England, China • Error-Proofing (Prevention) 1995 to date US, Canada, England • Problem Solving 1985 to date US, Canada, England

  30. TRAINING - KNOWLEDGE TRANSFER • Customer Focus • Reach the Person • Match the Next Economy • Train for Business Impact • Build the Capacity to Learn • Pre-Post Assessment forKnowledge Inventory • Post Training Action Plan Evaluations for Achievementsbased on knowledge learned • Technology is central • For going to scale • Consistency • System Preparedness

  31. SERVICES FOR BUSINESS EXCELLENCE

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