Turtle Toyota

8/10/2019 Turtle Toyota

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How to survive inCompetetive Industries

LEAN production system applied

Are Jaastad

1 April, 2014


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2

Hydro Aluminium KarmyPart of Norsk Hydro ASA


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Norsk Hydro ASA - 3Q presentation 2013News articles: Business systems provide results

The work processes have changed"

It is easy to execute cost cuts, but the most important thing is

to add competence, apply new technologies and at the sametime improve the work processes

Analysts: Still more to come"

We have almost completely changed the work processescompared to before the crisis in 2009. If you visit our sites

today, all our operators will be able to explain how theycontribute to operational improvements step by step on a daily

basis

Continuous improvement:


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Toyota ProductionSystem

LE

AN

Production systems -hard to survive without

1945 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 20101900s 1970s

TQM

WCM

BPR

Examples only

Data based on own research

Multi-plant systemsPlant system

Kilde: Torbjrn Netland, NTNU/SINTEF 2012


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Other processes(LEAN procurement, sales,

R&D.)

LEAN Business System

Toyota production

system

Automotive manufacturer/supplier

(Europe follows the US)

LEAN Production

Other industries

Aerospace industry

Process industry

Equipment and mechanical

industry

Construction industry

Services and retail

...

Abstract to

adapt

LEAN Business System - DevelopmentContinuing to penetrate new industries


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1) Pl Berthling-Hansen 2011, Norwegian School of Management, Associate Professor2) Harvard Business Review R0310j, The LEAN service machine

What are the results from LEAN?

Lund University Hospital Service industry: Insurance company Scottish public services

Study of implementation of LeanProcess in 8 Scottish public

services1)

Many Swedish hospitals haveimplemented Lean Process

Lund University Hospital is amongthe most experienced1)

More and more success stories arecoming from the service industry

Jefferson Pilot Financial, aninsurance giant in the US, utilized

LEAN as part of improvement

program spanning several years

! Results included strong

improvements within errors,

lead time and costs2)

Examples from public services and the service industry

The outcome of the projects weresignificant measurable benefits toproductivity in the form of speed and

quality by reducing flow time, numberof steps in a process, time to first

appointment, diagnostic wait

Radnor and Walley, 2008

The list of reported benefits is long,e.g. reduced evaluation time,increased number of reception hours

with less physicians, increasedaccessibility by more telephone hours,

reduction of waiting time by half forpatients with fractures, reduction of

overtime work by 50%, faster

recovery for some cancer patients byproviding examination, x-ray andsurgery in the same day, dramatically

improvements of evaluation ofpatients with eating disorders


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Different production systems LEAN as shared starting point

Design of business and production systemsExamples


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The history of LEANThe discovery of Toyotas four Rules in use

4 years study at Harvard by Steven Spear and H. Kent Bowen

Examined over 40 operations with large variations in TPS practice

The four Rules in use were discovered by observing how organizations were able to achieve a well performing TPSpractice

The results were approved by Toyota

Refer to the article Decoding the DNA of the Toyota Production System

The four Rules in use provide insights to how Toyota hasachieved its unrivalled competitive position

Harward Busines Review, 1999

S.Spear and H. Kent Bowen, Decoding the DNA of the Toyota Production System,Harvard Business Review, Sept.-Oct., 1999, p. 96.


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Lever

andr 1

2

3

4

Connection: Customer vs. Supplier2

Flow3

Improvement4

Standardized work processes1

Toyotas four Rules in use


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Implementation of the Rules in usePractical examples Rule 1

Standardization of work processesStart with the most critical processes



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Transparent customer and supplier agreements trough the whole organization

- Start with the most critical contracts

S.Spear and H. Kent Bowen, Decoding the DNA of the Toyota Production System, Harvard Business Review, Sept.-Oct., 1999, p. 96.



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Flow of goods, services and information


- Simple

- Pre defined

- Incorporated tests



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Timely productionWhats the difference from traditional production flow?

Customer

Sub-process

Customer

Every process is measured by efficiency Typically:Volume/time, Units/FTE, cost/unit, factor, etc.

TimeQualityCost

TimeQualityCost

Buffer between each process.

Either time, or goods.

The whole process is measured on leadtime. Every Sub-process deliveres exactly what the next step needs.

Time and Quality delivered is the leading measure.

Traditional

LEAN Controlled buffer. To even outproduction.

Sub-process

Sub-process

Sub-process Sub-process Sub-process

Sub-process

Sub-process

Sub-process Sub-process Sub-process Sub-process Sub-process

Sub-process


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Leverandr

Kunde

3

1

2

4


Rules in use: Three rules for design and one rule for system development

Implementation of the Rules in useSummary of rule 1-4

Basis for system

System development4Problem solving and

continuous improvement

1

2

3

The individual work task

Delivery between process sections

Preferred process flow


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Structured improvement work-Organized for both operations and improvement


Work forone person - Rule 1

Connection between

Suppliers and Customer- Rule 2

Supplier

Customer

Flow routes

- Rule 3

Improvements - Rule 4

- On site

- Scientific methods

- The involved

- With a trainer / coach

- Incorporated tests



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Near accident /Dangerous situations

TRI

Deviation from SOP or

customer / supplier agreement

Risk analyses

SafetyVariation in processes

or unplanned shut downs

Waste

Cost

NOK

Value chain analyses

Deviation from SOP orcustomer / supplier agreement

First aid

Deviation from SOP orcustomer / supplier agreement

Internal deviations

Customer claims

Deviation in customersprocess

FMEA

Quality

A common approach results for all areas


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Karmy smelter performance - HSE

Better than the average of top 10% in the world

HSE Environment C02equivalents

Sickness absence

Karmy smelter

TRI value Karmy smelter

12 months rolling


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Karmy smelter performance Technical parameters

Energy consumption Current efficiency

Improvements and cost reductions have achieved annual cost savings of NOK 100m


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Karmy smelter performance Inventory

Achieved results

Capital employed in inventoryreduced by 230MNOK (35MUS$)

Raw materials, WIP, supplies

and finished goods

Reduced # handling and man-hours

Reduced # of C&C due todamaged products

Free up space

Total stock

Improvement weeksA3

Defined a maximumand minimum level

of inventory

KPI and follow-up

Clear agreements between operations, procurement and logistics (customer / supplier agreements), in

addition to strong management focus, have achieved a reduction in the inventory of both raw materials andfinished goods


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Karmy smelter performance Customer feedback

Action taken

Use of Failure and Effect Analyses (FMEA)

Clear standards, SOPs and follow-up systems

Focus along the whole value chain, from plant to customer

Internal deviations is reported in a totally different magnitude

Customer/supplier agreements between departments involved


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Hydro Karmy Smelter

Winning the Hydro Primary Metal Cost Performance Prize 2011

Runners up for the Norsk Hydro ASA, Presidents Performance award 2011

Winning the Norwegian LEAN enterprise Prize 2012

Winning the Hydro Primary Metal, HSE award 2012

Winning the Norsk Hydro ASA, Presidents HSE award 2013

Acknowledgements

In March 2013 the Karmy Plant was chosen as the location to build a possible

new Pilot Plant for Aluminium production. 3.8 BNOK+ investment


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Introduction

Are Jaastad: Management consultant and owner

More than 20 years management experience from thealuminium and the energy industry. Last 5 years asplant manager for Hydros aluminium works atKarmy - a plant with c. 420 employees and revenueof c. 3.4 bnNOK (2012)

Main focus areas during my different roles as leader:

!Organisation development and improvement

!Strategy development and implementation:

! Restructuring of organisations / businesses tosecure competitive position

Exceptional strong results have been achieved within

the areas of HSE, efficiency, customer satisfactionand profitability. Results are supported bybenchmark reports and awards from both Hydro andexternal parties. Awards include the NorwegianLEAN enterprise Prize 2012.

Services offeredPerforms analyses of companies to provide advice on design ofimprovement programs

Tailor improvement programs and implementation strategies

Follow-up and evaluations

! We provide follow-up services to assist in continuous

improvement according to the strategy! Offer advice on practical ways to secure effective implementation

! Tailor the training program of whole businesses, divisions andindividuals

Our uniqueness

Characteristics of Jaastad Consults services

Advice based on extensive real-life experience from carrying out such processes

Based on a pragmatic and practical approach

Experience from top management secures an overall perspective


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Jaastad Consult and cooperation partners

Jaastad Consult AS

Established May 2013. Chairman of the Board: Bjrn Bugge. Former Director of BI Norwegian School of Management, Stavanger

Owner: Are Jaastad

! Email: [email protected]

! Phone: +4790985450

Address: Dovafjellvegen 33, 5542 KarmsundOrganisation number: 911938812

Cooperation partnersTo secure sufficient capacity and breadth of competence, Jaastad Consult AS has entered cooperation agreements with the following

parties:

Arkwright Norway AS - www.arkwrightgroup.com

! Consultancy firm with 70 consultants specialised on strategy processes. Today Arkwright has offices in Hamburg, Oslo,

Stockholm and Zrich

SINTEF Raufoss Manufacturing - www.manufacturing.no

! Capacity and competence on production optimisation

! Owners of the Lean lab training centre and founder of the LEAN Forum Norge
http://www.manufacturing.no/http://www.arkwrightgroup.com/mailto:[email protected]

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