A Culture of Continuous Improvement Gary Peterson Executive Vice President, Supply Chain & Production 1.

A Culture of Continuous Improvement

Gary Peterson

Executive Vice President,

Supply Chain & Production

1

People

How would you describe the role your people play?

Do they make your parts/ provide your services?

orDo they make things better?

How do you see your people?

Are they people like you, with real concerns, hopes, dreams, needs, and fears?

orDo they sometimes seem less relevant

than you, less important, less real?

Twin Pillars

Respect for People

Continuous Improvement

Managing by Metrics & ResultsResults come because people are passionately engaged and driving Continuous Improvement

Performance Measurements

Before

• Order Size:The bigger the better; small orders killed

us

Now

We make everything one at a time

Performance MeasurementsBefore

• Factory Layout: 28 Departments

Now

Fully Functional Mini-Factories


• Order Production Time: 26 Days

Now

1/2 Hour Throughput Time


• Gold WIP: 475,000 pieces

Now

<1,000 pieces


• Annual Paper: 6 million pieces

Now

Paper-Less Emblematic Production


• Extras: 17%

Now

0


Finished Goods

Now

No Finished Goods


• On-Time Delivery: 82%

Now

98%+

• Efficiency improved 300%• Floor space reduced by 70%• Eliminated 100% of the extremely toxic

hazardous wastes• Inventory turns improved 4x• Almost no missed banquets: 0.001%• Annual cost savings of $10 Million

Performance Measurements

Principles

Leaders spend time on the floor. They seek input. They teach and encourage. They hold themselves publically accountable for the success of their people. We develop, empower and involve all our people. We provide a safe workplace and continually strive to care for the environment. We value diversity. We know we are better together than we are apart. We understand that processes require good inputs to achieve good outputs. We focus on the foundational 5S practices of sort and shine as one way to ensure sound processes. Improvements of all kinds come from involving everyone in solving process problems and learning from out mistakes. We value great ideas, ingenious solutions and a collaborative spirit. Profits grow when we drive down costs. This is one way we deliver value to our clients. We use our scientific problem-solving model, S.T.E.P.S. , in our practice of continuous improvement. A3s help us follow the model, learn and challenge ourselves through discussion with others, and create a story for future learning. We focus on flow to better satisfy customers with efficient processes that produce high quality awards. We only pull materials when we have a customer order. Flow and pull together create value for the company and our customers. Our people do the right thing because it’s the right thing to do. We understand that poor quality comes from poor processes. We look to our people, as process experts, to surface problems, solve them and only pass on high quality. Our quality policy is ‘To touch the fringes of perfection.’ Toward this vision, we are disciplined in our adherence to our systems and principles. While we may not ever achieve perfection, we will never stop reaching for it. Our mission is to help companies appreciate people who do great work. Everything we do must be in service to this mission. Our first True North statement is to “Impact every life for good.” We strive to do this by providing meaningful work to our people and high impact recognition awards to our clients.

This is the unifying principle upon which all others depend. Systemic thinking requires logic and creativity, the ability to take things apart, and to see how they might work together. Constancy of purpose and continuous improvement rely on our ability to think systemically.

Lead with Humility

Respect Every Individual

Focus on Process

Embrace Scientific Thinking

Flow and Pull Value

Assure Quality at the Source

Seek Perfection

Create Constancy Of Purpose

Think Systemically

Respect for People

Provide a vision

Give them a reason to care

Create processes and systems that allow them to move closer and closer to perfection

Rational – “I get it”

Emotional – “I feel it”

Motivational – “I act on it”

Lead with HumilityRespect every Individual

How I am

How I interact

How I lead


How I am

Do I recognize the importance of others?Do I choose to be of service to them?Do I have a correct understanding of my own importance, and of everyone else’s value?Is it safe to make mistakes?


How I interactDo I show care and respect to others? Is it genuine?Do I engage people in an exchange of ideas?Do I extend myself, and show vulnerability that opens the conversation and makes it safe?Is my world non-zero sum – abundance?


How I lead

Am I aware of both my Position power and my Personal power?Neither Position or Personal power should ever be abused.


How I am

How I interact

How I lead


&

Create Constancy of Purpose

OUR MISSION we help companies appreciate people who do great work. because celebrating great work inspires people to invent, to create, to discover, and when people are inspired, companies grow.

Lead with HumilityRespect every IndividualCreate Constancy of Purpose

&

Seek Perfection

Obert C. Tanner“All my life I have tried to touch the fringes of perfection. And at best I sometimes came near.”

“ …..a future better beyond our present best.”

Seek Perfection

Processes and Systems

Continuous Improvement is improving all systems and processes at every level of the company every day.

Simple and repeatable processes that make it easier to do the right thing and harder to do the wrong thing.

Safety – wall

SystemsCoaching & Training help people learn how to learn. We

develop capable and committed employees who are aligned to and driving company strategies. We focus on creating strong teams who work together to build a better future of all. Our vision is that every employee will go home at the end of the day as healthy and well as they were when they arrive. We also believe in aggressively and efficiently using our resources in a way that minimizes waste and emissions into the environment. Learning is fundamental to building a better tomorrow. It is a necessary and lifelong endeavor. Through job skill training, scheduled classes, informal teaching moments, reflection and kata practice, we become a learning organization. Standardized work is the beginning point of how we improve, and the sustaining vehicle for the improvement cycle. It allows us to find the root cause of problems. It maximizes performance and minimizes waste. Our work environment is visual. Our workplace speaks to us. It tells us what we are doing, how we are doing, and what we need to do. With its focus on being clean and organized, is a foundational block upon which all improvements are developed. 5S helps prepare us as individuals, and our environment for improvement. We go to where the work is done to see and understand the current state. Our gemba assessment system involves leaders in seeing how our systems are working, and taking advantage of learning and teaching opportunities. We must involve everyone in problem-solving. The Red/Green card system, used in conjunction with the S.T.E.P.S. scientific model enables us to improve processes, morale and profitability. Leaders are committed solving the principles that will ensure a future better beyond our present best. They develop systems that strengthen the culture of continuous improvement. They develop people through stretch goals and then celebrate their achievements. Our daily improvement is driven by our strategy, and every person in our company is involved in the development and execution of the strategy. In this way we align our efforts and our improvements to that which is most important to our customers, our people and our company.

Coaching & Training

Safety, Health & Environment

Learning

Standardized Work

Visual Management

5S

Gemba

Problem Solving

Leader Daily Work

Strategy Deployment

Lean Visual Mgmt Bees

Mark non-conformities with an 'X'. 1 or more 'X' equals a 'No Pass'

Kanbans are being used properly

Signs posted have clear purpose

Team board is clean & easy to understand

Team board is up-to-date & being used

Assessment Status

Pass No Pass

Date:

Assessor:

Coaching Monthly JadeMark non-conformities with an 'X'. 1 or more 'X' equals a 'No Pass'

Coaching record form shows coaching is current for all team members for previous month

Ask 3 team members:

Do you get feedback on how you're doing?

Assessment Status

Pass No Pass

Date:

Assessor:

OUR PEOPLEwe appreciate people: who believe we’re bigger together than we are apart ▪ who work shoulder-to-shoulder even when they don’t see eye-to-eye ▪ who have great ideas, ingenious solutions and a collaborative spirit ▪ who understand what clients really need is a good listening to ▪ who watch out, speak up, and work safely ▪ who keep their promises, learn lessons, laugh, spread joy and create a sense of family ▪ who do the right thing because it’s the right thing to do ▪ who realize that ultimately we’re in the most important business of all: the business of valuing others

Principles, Systems & True NorthHow do I improve things?

How do I know what to work on?

How do changes get made?

How do we know we did the right thing?

True North

Our most importantlong-term objective:

Gross Profit Dollar Growth

True NorthImpact every life for good

Zero injuries and illnesses

100% Asset accountability

100% QualityZero defects and returns

100% Value-added1-Piece flow on demand

100% On-time deliveryZero missed events, zero out-of-stock

Delight clients 100%With the most relevant, creative product value

100% CapabilitySystem, process, people and equipment

Processes and systems

Processes and systemsGive them a reason to care

Processes and systems

Give them a reason to careProvide a vision

People

Who can make things better and better

Culture of Continuous Improvement- Are your lean practices primarily driven by your supervisors and managers or by your associates?- Do people express eagerness to share input up the ladder?- Do associates at every level routinely go above and beyond what is expected?- Do your people astonish you every day?

Clear expectationsTrainingDevelopmentAppreciation

Believe in themselves

Passionate, EmpoweredPeople

Trust

ResultsQualityCostDelivery

Impact

Culture“We learned a very valuable lesson today. We have the same equipment and systems . . . but what [they] did not see was our competitive advantage, which is our people. We are successful because we have intelligent, caring, highly successful team members.” – Mr. Cho