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Copyright Autoliv Inc., All Rights Reserved

Developing & Leading a mature lean organisation

Strategy Actions Results Standards

“The way we do things at Autoliv”

APS/Lean Summit/2010 Copyright Autoliv Inc., All Rights Reserved

Complete Safety System Supplier

Steering Wheel

Driver Airbag

Pelvis & ThoraxSide Airbag

Inflatable Curtain

Passenger Airbag

Seatbelt Systems

Rear Side Airbags

Electronic Control Unit (ECU)

Knee Airbag

Vision System

Pedestrian Protection

Night Vision System

Satellite Sensor

Anti-Whiplash System

Anti Sliding AirbagOther Important Products:Child SeatsActive Seatbelts

Technology

Driver Assist Radar


Autoliv in Brief

Sales and technology leader

Sales: US $6.5 billion

Fortune 500 company

Sales to all major vehicle manufacturers

~80 facilities in 29 vehicle producing countries

All facilities have deployed Autoliv’s lean system, APS.

13 technical centers in 9 countries and 21 crash test tracks

~38,000 associates and 3,600 in R,D&E

RoW12%

Japan

11%

Europe

53%

North America

24%

Autoliv in Brief


Autoliv in the World

USA

Mexico

Brazil

Australia

South Africa

EUROPE• Estonia• France• Germany• Hungary• Italy• Poland• Romania• Russia• Spain• Sweden• Turkey• UK

India

ChinaJapan

Indonesia

Canada

Korea

Malaysia

PhilippinesThailand

Taiwan

Autoliv in Brief

Tunisia


Our Belief

“It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change.”

Charles Darwin


Autoliv Production SystemIntroduction


Autoliv Production SystemThe Autoliv Production System (APS)is the formalization of the Autoliv business culture based on the Toyota Production System (TPS) to help every single Autoliv plant grow towards excellence.

With APS each Autoliv plant is working towards the same vision, to improve:

- Profitability- Competitiveness- Satisfaction (Shareholders, Customers,

Employees & Society)

Who will benefit from implementation of APS:

- Customers- Company/Shareholders- Employees- Society


Creating APS

APS was created based on TPS and LEAN concepts and launched to all Autoliv facilities during 2001-2002.

TPS LEAN

APSAutoliv

Quality assurance

Quality methods

Six Sigma

Standards

Pull system

Safety & Ergonomy

Don’t judge, don’t blame !

Flexibility & Motivation

Discipline to standards

Continuous improvement

Process & Result

Customers

Company Employees

Society

Quality first

ProfitabilityCompetitiveness

Satisfaction

Employee involvement

Team work 5S Muda elimination TPM

Just in time

Leveling & Capacity

Line concepts

Continuous flow

Takt time

Frequent deliveries

Autoliv

Quality assurance

Quality methods

Six Sigma

Standards

Pull system

Safety & Ergonomy

Don’t judge, don’t blame !


Discipline to standards

Continuous improvement

Process & Result

Customers

Company Employees

Society

Quality first


Satisfaction

Employee involvement

Team work 5S Muda elimination TPM

Just in time

Leveling & Capacity

Line concepts

Continuous flow

Takt time

Frequent deliveries

LeanProduct

Development

LeanManufacturing

LeanSupply

Network

LeanAccounting

LeanOrganisation

LeanInformation

Management

LeanQuality

Management

LeanDistribution

Customer Services

LeanThinking

The New Generation of Manufacturing Companiesmake use of less resources of everything

Operational StabilityStandardized Work Robust Products & Processes

Total Productive Maintenance Supplier Involvement

Just in Time“The right partat the right timein the right amount”

Pre-Conditions :

• Continious Flow• Pull Systems• Takt Time• Level Production

Built-in Quality

• Manual /Automatic Line Stop

• Labor-Machine Separation• Error Proofing• Visual Control

QCDBest Quality, Lowest Cost, Shortest Leadtime

through shortening the production flow by eliminating waste

CULTURE

Flexible, Capable,Highly Motivated

People

Culture

Operational StabilityStandardized Work Robust Products & Processes

Total Productive Maintenance Supplier Involvement


Pre-Conditions :



Pre-Conditions :


Built-in Quality



Built-in Quality







CULTURE


People

CultureCULTURE


People

Culture


People


People

Culture


APS HOUSE

Quality First


Satisfaction

Autoliv

Just In Time

Employee Involvement

Leveling

Pull System

Takt Time

Freq Deliveries

Line Concepts

Continuous Flow

Safety/ Ergonomy

Discipline to Stds

Cont Improvement

Process & Result

Don't Blame/Judge

Flexibility & Motiv.

Quality Assurance

Quality Methods

Six Sigma

Team Work

5S Standards MUDA

EliminationT.P.M.

PRIVATE PROPRIETARY


APS is the world’s best practice way of doing our job.


Policy Deployment at Autoliv


Do people know what we want?

Do people care? How do we know they

are working on important improvements first?

How do we get buy in? How can we follow up

without smothering?

How do we get everyone working towards our strategies every day?


The Compass

The compass is a very useful tool if we

are lost or not sure which direction to go.

Take any compass and it will point in the

same direction. True North.

Would it be useful to a business to have all it’s employees putting their efforts to move the company in the same direction?

Policy Deployment is the tool that helps the employees to see the company plan direction.

Policy Deployment


Autoliv Global Policy Deployment

Annually Autoliv Globally uses Policy Deployment to drive the following key indicators.

Quality Cost Reduction APS Deployment (Lean) Test Centre Efficiency Operations Efficiency Financial Reporting (Time & Accuracy of Forecast)


Policy Deployment at Autoliv

How the Policy Deployment is created


Policy Deployment Process Overview

Develop 5-year Plan

Prioritise current period

Define Shared

Ownership

Company Level

Department Level

Input

Department Drafts KPIs

and Priorities

Senior Management reviews and agrees on

shared targets

Department finalises Policy

Deployment and presents it

Input

Sub-Department LevelEach level decides how it can support

achievement of level above to meet

Department KPIs

Submits Draft Policy

Deployment for approval.



Develop 5-year Plan


Define Shared

Ownership

Company Level

Department Level

Input


and Priorities


shared targets



Input



Department KPIs




Senior Manager

Policy Deploy.

Company Plan

Deployment Target Agreement

Reporting Target Setting

Dept. Manager

Policy Deploy.

Staff Policy

Deploy.



Example of Dept level Policy Deployment.



Develop 5-year Plan


Define Shared

Ownership

Company Level

Department Level

Input


and Priorities


shared targets



Input



Department KPIs







Review Frequency

Updated Monthly Monthly review of Department Level Policy Deployments 6monthly review of Individual Staff Deployments by Managers Linkage to Pay reviews. Manufacturing Department internal review Weekly. All Policy Deployments for Departments and Work Groups

displayed. Regular review with Managers.


Visual Displays in work areas.

Office Factory


Visual Displays in work areas.

Work Platforms


Policy Deployment Objective

Get everyone to understand the Company plan direction. Allow all employees to see where their tasks contribute to the company plan. Provide clarity to all Staff Link Department Plans to Company Plan Link Individual targets to Department & Company Plans. Standardise target Format Monthly Scoring/Planning to aid self direction & Performance Review One Page Target Report to be Displayed in Work Area. Aid Communication up and down the Organisation Facilitate Employee input to company plans Reduce Direct Supervision time Empower Self Directed work teams with common goals. Move Decision Making to lower organisational levels. Encourages Planning for Continuous Improvement


People at Autoliv


OK team!



Flexible & Motivated

Employees

Communicate, Communicate, Communicate!

Employee Development

Valued Employees

Satisfying Work


Safety/ Ergonomics

Discipline to Standards

Continuous Improvement

Process & Result

Don't Blame/Judge



Training Doing Training Doing Training Doing

Our strategy us to train then apply learning straight away. Training is cascaded. The trained become the trainers. Training is a key element of all improvement workshops


Self Directed Work Teams

Bringing multi-discipline and multi-functional people together. Speeds up communication and improvement. Shared Goals and share understanding. Empowers all levels of organisation. Reduction in noise and waste between employees and functions.


Celebrate

Celebrate all improvement large and small. Use close out of workshops as recognition opportunity. Encourage and reward initiative. Mix formal and informal opportunities to praise and teach.


Improvement at Autoliv



Workshops

Cross Functional Teams Specific improvement Objective Learning Opportunity


Waste Elimination

Fundamental behind all activity Autoliv identifies 7 types of waste All employees trained to spot each type of waste.


5S – Improvement Foundation

Everything has a place and is in its place. Everyone can see problems, waste and improvement areas Powerful knowledge

– make workplace safer, simpler, cleaner & clearer


Autoliv Global Policy Deployment - Quality

Eliminate bad designs Eliminate bad

components Eliminate bad manufacturing Eliminate non-

conforming products

Autoliv Product Development System

(APDS)

AutolivProduction System(APS)

AutolivSupplier Manual(ASM)

Autoliv Quality System(AQS)

ZERO DEFECTS

Driven through 4 Streams


Global Customer Reject Index Quality

Index (2004=1.0)


Waste has no where to hide at Autoliv

Visual Management


Completed product sent to Store every

20mins

Each Box Taken releases a Kanban

Kanbans to line every 20mins same

qty each time

Material System Overview

Information Flow

Customer

3 x per dayLINE

HEIJUNKA

Material Flow

Kanbans sent 3 x per day

Finished Goods Buffer

3 x per day


Visual Management - Line Queue

•Yellow Means Running too fast. Minus 1 operator from Cell•Green means running to Takt time. OK.• Red means running too slow take action.• Blue means tell management. Serious issue may lead to missed supply to Customer.


Visual Management

Manager or Employee can easily see current condition.


Visual Management Only have signals for what is important. Reaction to condition must be clear. Responsibility must also be clear. If you measure and chart ensure the following –

Desired condition or target is shown. There is a displayed action plan to improve. Display who us responsible to update. Ensure the team understands the chart. Area leader must discuss chart with team regularly. Don’t be afraid to stop measuring and displaying if there is no value.

Avoid Signal Clutter


Standards & Discipline at Autoliv

Standards and Discipline


Standards & Discipline Always update the standard when an improvement is made. Ensure PDCA discipline in everything –

meetings workshops quality improvements Safety alerts and investigations testing , design etc.


How to implement ?

Standards (documented work instructions, procedures, etc.) are the “wedge” that keeps us from sliding back

Role of Standards in Continuous Improvement


Standards


Discipline to Standards

What is the result when we do not follow Standard?

Waste increasesQuality ProblemsCost increasesNo way to see what´s normal or abnormal In short we have Chaos


Safety/ Ergonomy

Discipline to Stds

Cont Improvement

Process & Result

Don't Blame/Judge

Flexibility & Motiv.


The solution is at the workplace at Autoliv

Key Lessons


Key Lessons Go to the workplace to find the answer 5S is the platform for improvement and Visual Management Management must demonstrate commitment, daily. Business Plan Deployment is at the core of the Autoliv Improvement Culture Plan Do Check Act runs through all processes Celebrate all improvements large and small Without Standards and Discipline there is only failure and chaos Passion Persistence Publicity


Autoliv

Every year, Autoliv’s products save over 20,000 lives

The Worldwide leader in Automotive Safety SystemsThe Worldwide leader in Automotive Safety Systems

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