Introduction to Operational Excellence - Pauwels Consulting Academy - Kris Van Nieuwenhove

PowerPoint-presentatie

OpEx

Kris Van Nieuwenhove

An Introduction

16/02/2017

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Before we start

Who has ever heard or used the word OpEx in a conversation?

Who knows what the acronym OpEx stands for ?

Who has worked already on OpEx-projects ?

Who wants an introduction in OpEx?

This will be an interactive evening.

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Before we start

It is appreciated if you respond on upcoming questions but dont do or take it too literally

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OpEx: An Introduction

What the acronym OpEx meansOperational Excellence . or Operating ExpendituresDepending the context:Operational Excellence: operations / processesOperating Expenditures: accountancy (Capex >< Opex copier >< paper)

The context during this introduction:Operational Excellence: operations / processes

Who has ever d the acronym OpEx ?Do you remember the search results?

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So, who of you can tell me what OpEx stands for?

What I found on for:

OpEx definition: 337.000 resultsOpEx meaning: 222.000 results

Just to prove

that a unique, single, definition or explanation for the acronym OpEx doesnt exist anymore in my opinion.

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OpEx: An IntroductionWhat we will handle in this session

What is OpEx and why needed ?

OpEx Tools

Example of a realized project and the tools I used in this project (lean, six sigma, 5S,)

Why/When OpEx does (not) work in companies personal experience

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OpEx: An IntroductionWhat is OpEx and why needed?

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What is OpEx ?

[how I resume/see it]

The effort and actions that a company puts in place, trough standardized processes, to drive its conviction to deliver towards the customer the requested product or service at the requested moment at the lowest production effort/cost and price the customer wants to pay for it.

In other words

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What is OpEx ?

[how I resume/see it in other words]

The effort and actions that a company puts in place, trough standardized processes, to drive its conviction to deliver towards the customer the requested product or service at the requested moment at the lowest production effort/cost and price the customer wants to pay for it.

In other words

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What is OpEx ?

[how I resume/see it in other words]

The effort and actions that a company puts in place trough standardized processes to drive its conviction to deliver towards the customer the requested product or service at the requested moment at the lowest production effort/cost and price the customer wants to pay for it.

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OpEx is needed for:

Maximizing the companys profitSatisfying the customer all his needsKeep the workforce happy and motivatedAssure EHS conditionsDo/deliver more than the customer expectAll above

What do you think?

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OpEx is (not) needed for:

[What I observe(d) in most companies:]

Maximizing the companys profitSatisfying the customer all his needsKeep the workforce happy and motivatedAssure EHS conditionsDo/deliver more than the customer expectAll above

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OpEx is (not) needed for:

Source: 3rd Biennial PEX Network report - 2013

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Who has heard/used/knows one of the following OpEx-Tools?Lean65S OEE VSM KPI dashboard balanced scorecard SMED HER FMEA ISOKaizen TQM DFSS scrum TPM GMPPRINCE2

OpEx: An IntroductionTOOLS

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RELAX in the time left I will only give a brief introduction onLean65S VSM

OpEx: An IntroductionTOOLS

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OpEx: An IntroductionMost common used tools in OpEx

Source: 3rd Biennial PEX Network report - 2013

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OpEx: An IntroductionWhat is 6-sigma?Before answering this question:Who has ever heard or used the words 6-sigma or DMAIC in a conversation?6 as explained on wikipedia[5] : Six Sigmais a set of techniques and tools for process improvement. It was introduced by engineerBill Smithwhile working atMotorolain 1986.[1][2]Jack Welchmade it central to his business strategy atGeneral Electricin 1995.[3]Today, it is used in many industrial sectors.[4]

It seeks to improve the quality of the output of a process by identifying and removing the causes of defects and minimizingvariabilityinmanufacturingandbusiness processes. It uses a set ofquality managementmethods, mainlyempirical,statistical methods, and creates a special infrastructure of people within the organization who are experts in these methods._______________________________________________________________"The Inventors of Six Sigma". Archived fromthe originalon 2005-11-06. Retrieved2006-01-29.Tennant, Geoff (2001).SIX SIGMA: SPC and TQM in Manufacturing and Services. Gower Publishing, Ltd. p.6.ISBN0-566-08374-4."The Evolution of Six Sigma". Retrieved2012-03-19."six sigma".https://en.wikipedia.org/wiki/Six_Sigma

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OpEx: An IntroductionWhere does the name 6-sigma come from?removing the causes of defects and minimizingvariability Sounds like Statistics Gauss Bell curve Standard deviation

DPMO means:DefectsPerMiljonOpportunities

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OpEx: An IntroductionMaths and stats in 6-sigma

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OpEx: An IntroductionMaths and stats in 6-sigma

Relax: no more maths or stats tonight!

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OpEx: An IntroductionThe 5 phases in the 6-sigma methodology

So... who has ever heard the word DMAIC already ?

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Does this ring a bell?

DMAICDefineMeasureAnalyseImproveControlDMAIC

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DMAICDefineMeasureAnalyseImproveControlDMAICProblems&objectivesProcess &factors of influenceImplementimprovementAssure thatimprovementwill sustainWhat dowe needto improve?

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OpEx: An Introduction6-sigma methodology: some tools

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PDCA ontbreekt25

OpEx: An IntroductionWhat levels of 6-sigma exists?

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Verschillende coaching and support levels26

OpEx: An IntroductionExample of a realized green belt project

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PDCA ontbreekt27


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PDCA ontbreekt29


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OpEx: An IntroductionWhat is LEAN?Before answering the question What is lean:

Who has ever heard or used the word LEAN in a conversation?

Who thinks that LEAN and 6-sigma are more or less the same?

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OpEx: An IntroductionWhat is LEAN?LEAN as explained on wikipedia[3] :

Lean thinkingis a business methodology that aims to provide a new way to think about how to organize human activities to deliver more benefits to society and value to individuals while eliminating waste. The termlean thinkingwas coined by James P. Womack and Daniel T. Jones[1]to capture the essence of their in-depth study of Toyotas fabledToyota Production System.[2]Lean thinking is a new way of thinking any activity and seeing the waste inadvertently generated by the way the process is organized by focusing on the concepts of:Value,Value streams,Flow,Pull,Perfection._________________________________________________________________Womack, James P., Daniel, T. Jones (1996) Lean ThinkingWomack, James P., Daniel T. Jones, Daniel Roos (1990) The Machine That Changed The Worldhttps://en.wikipedia.org/wiki/Lean_thinking

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OpEx: An IntroductionWhat is LEAN?LEAN:

how to organize human activities to deliver more benefits to society and value to individuals while eliminating waste

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OpEx: An IntroductionWhat is LEAN?LEAN:

how to organize human activities to deliver more benefits to society and value to individuals while eliminating waste how to organize human activities to deliver more benefits to society and value to individuals while eliminating waste

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OpEx: An IntroductionLEAN versus 6-Sigma

Question:

Who thinks that LEAN and 6-sigma are more or less the same?

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OpEx: An IntroductionLEAN versus 6-Sigma6-sigma: removing the causes of defects and minimizingvariability

LEAN: how to organize human activities to deliver more benefits to society and value to individuals while eliminating waste

Lean and 6-sigma are not equal or opposite They are complementary

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OpEx: An IntroductionHuman activitieseliminating waste How?Before eliminating the waste you must be able to know and to see the waste.[ever heard of TIMWOOD?]

To know and to see the waste, you have to walk the flow. [ever heard of gemba?]

To walk the flow you have to know the flow.[ever heard of value stream mapping?]

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Definition of Waste: Anything other than the minimum amount of Equipment, Material, Parts, Space and Operator time which are absolutely essential to add value to the product.Taiichi Ohno defined seven categories of wasteTo eliminate them, you have to be able to recognize them!OpEx: An IntroductionResources of WasteTaiichi Ohno[1](no Taiichi?, February 29, 1912 May 28, 1990)was aJapaneseindustrial engineer and businessman. He is considered to be the father of theToyota Production System, which becameLean Manufacturingin the U.S. He devised the seven wastes (ormudain Japanese) as part of this system. He wrote several books about the system, includingToyota Production System: Beyond Large-Scale Production.

1. https://en.wikipedia.org/wiki/Taiichi_Ohno

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38Taichi Ohno defined the Seven WasteThinking about these different kind of waste is a very simple concept, but its a very powerful concept for process improvement !!!

Some new waste can also be considered :Wasted human potentialpollution

OpEx: An IntroductionResources of WasteDo you know the 7 categories Taiichi Ohno defined ?

TransportTInventory IMotionMWaitingWOverworkOOver processingODefectsD

Often companies add an extra form of waste: RResources

So as a reminder for the 7 or 8 forms of waste one can think onMr. TIMWOOD or R. TIMWOOD

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39Taichi Ohno defined the Seven WasteThinking about these different kind of waste is a very simple concept, but its a very powerful concept for process improvement !!!

Some new waste can also be considered :Wasted human potentialpollution

Processing that goes beyond the customer requirement(Question the need for every step in a process!!!)OpEx: An IntroductionResources of Waste: OVERPROCESSING

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What is it?Adding more features to the product or requiringmore process steps than the customer wouldbe willing to pay for

Typical examples:Excessive checking/documentation work XYZ-approval signatures

Why does it happen?Tasks are not simplifiedOperations are not understoodLack of awareness about cost implicationsNo questioning attitude

OpEx: An IntroductionResources of Waste: OVERPROCESSING

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41Examples :Too much glue ( just to be sure, that sacks will be glued enough )Using 80 gr paper instead of 70 grWrapping paper from the reels

Waiting for parts or machine to finish.Waiting during set-up

OpEx: An IntroductionResources of Waste: WAITING

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42Example :1 operator doing the change over, and the other one waiting that the machine is ready

What is it?Any period of inactivity for paid resourcesWaiting for parts, machines, material, approval

Typical examples:Waiting for a decisionWaiting for tubesWaiting for raw materialsWaiting at quality/environmental controller Operator not active when the machine is running

Why does it happen?Unbalanced operations (Formulation / Filling / Inspection / )Low effectiveness and high machine downtimeShared equipment (Lift truck, )

OpEx: An IntroductionResources of Waste: WAITING

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43Example :1 operator doing the change over, and the other one waiting that the machine is ready

Unnecessary movements which can be avoided by reorganization of workflow.(Motion = person)OpEx: An IntroductionResources of Waste: MOTION

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Why is this thief starting at the bottom?

OpEx: An IntroductionResources of Waste: MOTIONCan this be also another form of (timwood) waste?

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What is it?Motion that doesnt add value to the processUnnecessary stretching, bending, walking, climbing

Typical examples:Large distances walked during setupOperator searching for toolsProduction managers office in administration

Why does it happen?Poor workstation configurationCluttered work areasWork imbalancedVisual factory, 5S not implementedStandardized work not implemented

OpEx: An IntroductionResources of Waste: MOTION

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BEFOREAFTEROpEx: An IntroductionResources of Waste: MOTION

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OpEx: An IntroductionResources of Waste: TRANSPORTUnnecessary transports which can be avoided by reorganization of workflow.Attention: Transport = Goods / product Motion = person

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MOVE IT OVER THERE UNTIL WE NEED ITWhat is it?Unnecessary movement of parts and equipmentA major cause of damage and deterioration!

Typical examples:Intermediate stocksStorage far away from production unitDouble handling, as a result of rework or checking

Why does it happen?Unnecessary inventoriesPoor workshop layoutWarehouse off-siteLong distances from operation to operationRework / return loop

OpEx: An IntroductionResources of Waste: TRANSPORT

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49To put some finish goods in a warehouse, and then to load them in a truck=> Why not loading the truck immediately after palletizing ???

OpEx: An IntroductionResources of Waste: TRANSPORT

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OpEx: An IntroductionResources of Waste: INVENTORY

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OpEx: An IntroductionResources of Waste: INVENTORYWhat is it?Holding and creating excessive materialIncreases lead times and costs money (working capital, additional cost if change occurs, needs more handling, lighting, heating)

Typical examples:Raw material stocksFinished goods stocksIntermediate stocksBlocked orders

Why does it happen?Bad forecasting / excessive production (currently not requested now)To hide deficiencies in the production process by creating buffer stocksJust-in-case, to feel safe, because of unreliable processes [often in maintenance (spare parts of old (obsolete / unused) equipment)]Bad production planningVisual factory not in use to controlSmall lots are too costly

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52Inventory of raw material : paper !!!

Sometimes inventory is needed !Processes can be managed differently to minimise inventory !

OpEx: An IntroductionResources of Waste: INVENTORY

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Too much, too soonDoes anybody even want these??Does it matter?PAGE 54OpEx: An IntroductionResources of Waste: OVERPRODUCTION

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What is it?Making or ordering more than required by the next processMaking or ordering sooner than required by the next processIncreases the risk of obsolete material

Typical examples:Grouping of ordersFilling up free capacity

Why does it happen?Labor and overhead metrics driving utilization of people and equipmentEmotions: Concerns, fears, feeling comfortable having stock, having done something, etc.(unstable) Production schedule & push production

OpEx: An IntroductionResources of Waste: OVERPRODUCTION

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OpEx: An IntroductionResources of Waste: OVERPRODUCTION

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What is it?Defects and mistakes requiring fixing and replacing

Typical examples:(Inspection) lossRejected productsCustomer complaints

Why does it happen?Procedures not being followed correctlyFew Error Proofing devices in useStandardized work not in placeRepair operations seen as part of the process [sometimes non-engaged co-workers]Poor, slow quality feedbackDefects are normalCorrecting defects is done by somebody else

OpEx: An IntroductionResources of Waste: DEFECTS

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OpEx: An IntroductionResources of Waste: DEFECTS

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Which waste is the worst one?

Why???

Overprocessing

Waiting

Motion

TransportationInventory

Overproduction

Defects & ErrorsOpEx: An IntroductionResources of Waste

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OVERPRODUCTIONOr producing too much or too soon.

Why?

It initiates and drives all the other sources of waste.OpEx: An IntroductionResources of Waste

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If you want to know more about LEANOne of the many reference books for lean: Lean thinking - Banish the waste and create wealth in your corporation, James P. Womack, Daniel T. Jones - 2003OpEx: An IntroductionInterested in more on LEAN ?

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OpEx: An IntroductionResources of Waste: GEMBA

What did you take away from these 2 explanations of GEMBA?

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OpEx: An IntroductionWhat is GEMBA?What did you take away from these 2 explanations of GEMBA?

place = where value is created

People / co-workers

Go and WALK

See issues

Ask questions

Difficult to get done a gemba-walk by the (upper-)managementGemba Principle = easy doing it = not always that easy or well done

SEE the PROCESS with your OWN eyes

Treat co-workers with respect and dont judge them on (current) way of working

Be straight and direct to the (upper) management

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OpEx: An IntroductionVSM: Value Stream MappingBy Adrian Grycuk - Own work, CC BY-SA 3.0 pl, https://commons.wikimedia.org/w/index.php?curid=50054053

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OpEx: An IntroductionVSM: Value Stream MappingBy DanielPenfield - Own work, CC BY-SA 3.0, https://commons.wikimedia.org/w/index.php?curid=28553995

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If you want to know more about VSMOne of the many reference books for VSM: Learning to See, Mike Rother, John Shook- 2003OpEx: An IntroductionInterested in more on LEAN ?

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OpEx: An IntroductionVSM: Value Stream Mapping

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OpEx: An Introduction5S

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OpEx: An IntroductionWhat is 5S ?Basics for having a standardized and organized workplace.

It comes form Japan and was developed to help with JIT manufacturing:

Seiri () : SortSeiton () : Set in OrderSeis () : ShineSeiketsu () : StandardizeShitsuke () : Sustain

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BEFORE AFTER

Red tag areaOpEx: An Introduction5S a real life example

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OpEx: An Introduction5S a real life example

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BEFORE AFTEROpEx: An Introduction5S a real life example

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BEFOREAFTEROpEx: An Introduction5S a real life example

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If you want to know more about VSMOne of the many reference books for 5S: 5 Pillars of the visual Workplace, Hiroyuki Hirano- 1995OpEx: An IntroductionInterested in more on LEAN ?

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OpEx means behavior, mindset and discipline leadershipOpEx touches all the levels in a company: from MD to co-workers

Bringing OpEx into a company often demands a (big) culture change, especially with poor knowledge and/or leadership

Educating everybody in all the tools needs time and patience, trial and error often a contradiction towards making profit

If the companys leadership team has no faith and doesnt drive the change: FAIL will be the result

A good culture change model (for bringing opex): See/read Leading Changes from prof. dr. J. KotterOpEx: An IntroductionWhy / when OpEx does (not) work in some companies

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OpEx: An IntroductionTo ConcludeWhat is OpEx ?The effort and actions that a company puts in place trough standardized processes to drive its conviction to deliver towards the customer the requested product or service, at the requested moment, at the lowest production effort/cost and price the customer wants to pay for it.

This means that OpExIs not a department Is not one person or function

Is business-area independentIs company-size independent

Needs OpEx-minded leadership / management / co-workers

Is more than only using the tools

Is customer driven Is a company journey / mindset Is a never ending story

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If you ever need advice or a leading hand in your project please contact us

Thank you

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OpEx

Kris Van Nieuwenhove

An Introduction

16/02/2017

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Business

Introduction to Operational Excellence - Pauwels Consulting Academy - Kris Van Nieuwenhove