Implementing Lean on a Global Scale ---------------------------------------------------------------------------------------------------------------------------------------------------------- Succeeding through Diversity of Products, Processes and People October 31, 2017
Luvata Special Products Five Business Units Superconductors Electrical Electrical Formed Pori Special Power Asia Products Power Products Americas High-quality Leader supplier of Global leader of World’s leading fully - Leading supplier in integrated welding electrodes high value-add integrated producer South East Asia of producer of to the automotive superconducting of copper alloy wire , busbars and products and industry with a wire to high-growth and supplier of choice anodes as well as solutions for the footprint on four MRI market for demanding photovoltaic metals and continents applications such as ribbons electrical industries alkaline batteries, ordnance and photovoltaic 2 | Luvata Special Products Confidential Information. Unauthorized Reproduction/Distribution is Prohibited
Global footprint Americas Asia 28% 40% 1300 employees 12 locations 7 countries Europe 32% Pori, Finland St. Petersburg, Russia Appleton, USA Wolverhampton, UK Branford, USA Delaware, USA Welwyn Garden City, UK Waterbury, USA Suzhou, China Zhongshan, China Pasir Gudang, Malaysia Sao Paulo, Brazil Formed Products Electrical Power Americas Pori Special Products Electrical Power Asia Superconductors 3 | Luvata Special Products Confidential Information. Unauthorized Reproduction/Distribution is Prohibited
Luvata Special Products Strategic House Vision We will use our unique technology know-how to influence the development of a sustainable modern world KEY GROWTH STRATEGY ELEMENTS Build on distinct strengths Grow in adjacent markets Partnerships beyond metals Focus on technically demanding products Geographical, complementary products Joint development teams, and similar technologies extend non-production offering CORE COMPETENCIES Innovation Procurement Production Sales Customer driven, agile Lean methodology Structured sales process Structured road map sourcing to new product and Application engineer Luvata Production System process development mentality (LPS) Open mindset Passion for results Delivering on our promises People 4 | Luvata Special Products Confidential Information. Unauthorized Reproduction/Distribution is Prohibited
Global LPS Team Europe Alejandro Tassara 32% Richard Hainrihar Vincent Li Europe Americas Asia Tara Christina John Nelly Jari Markku Steve Nicola Ariff Bob Roberto 5 | Luvata Special Products Confidential Information. Unauthorized Reproduction/Distribution is Prohibited
Our LPS Journey Step 5: 2016 Begin to focus The journey of a thousand miles up and down the supply chain, begins with a single step. working with Chinese Proverb suppliers and Step 4: 2012 customers LPS Audit Program developed and Step 3: 2010 administered Companywide globally learning, communication, benchmarking, and shared Step 2: 2008 experiences Conduct Lean Transformations at each location on selected value streams Step 1: 2007 Developed a Lean Production System for our business 6 | Luvata Special Products Confidential Information. Unauthorized Reproduction/Distribution is Prohibited
Step 1: LPS Vision, Principles, and Objectives Empowering capable people to Why hy we exist operate high performing businesses Our Vision by continually reducing waste in all daily activities. Wha hat t guide des s us Our Principles What t succe ccess ss looks ks like Our Objectives 7 | Luvata Special Products 7 | Confidential Information. Unauthorized Reproduction/Distribution is Prohibited
LPS Goal: eliminate 3 system inhibitors The additional costs Use of resources beyond what incurred by the current is needed to meet customer system in giving the requirements customer exactly what they Inflexibility Waste want Waiting Inventory Mix Motion Product Volume Over-Processing Delivery Transport Over-production Variability Rework and scrap Any deviation from standard Material Information People Process Environment 8 | Luvata Special Products Confidential Information. Unauthorized Reproduction/Distribution is Prohibited
LPS applies 4 critical components that are the basis of tactical work-streams and a focus for continual improvement People Flow Influence mindsets and behaviors Configure our assets so material and build skills to develop capable and information can flow through people who believe in the improved our operations way of working Align our organization to support the Manage our assets to new operating system so that systems improve overall equipment are in place to manage performance effectiveness and built-in quality and drive the improvements Performance Management Process Excellence 9 | Luvata Special Products Confidential Information. Unauthorized Reproduction/Distribution is Prohibited
Luvata Production System Plant Guide People Flow Plant Design Standard Operations Flow Philosophy 5 Workplace/5S Interval Planning 4 Continuous Improvement Sequence 3 Skill Building Inventory Mgmt 2 Culture Pull 1 Safety Customer Orientation 0 Review Practice Process Philosophy Solving Problems Built-in-quality Raising Problems TPM Target Setting OEE Visual Control Labour Productivity Responsibility and… Performance Management Process Excellence Process Excellence 10 | Luvata Special Products Confidential Information. Unauthorized Reproduction/Distribution is Prohibited
Step 2: LPS Transformation Approach 20 weeks Prepare LPS Prepare LPS LPS waves Diagnose Design Implement Refine Transformation Transformation (2 weeks) (2 weeks) (10 weeks) (2 weeks) (4 weeks) • Rearrange • Map product • Develop flow • Dedicate • Select focus inventory path Flow flows update product flows area • Flush out excess procedures inventory • Understand • Establish KPI's • Introduce daily • Develop system Performance • Train current • Introduce meetings on the reviews measurements/ management performance Management shop floor performance boards processes • Calculate • Institute • Plan further roll- • Identify • Initiate data Process improvement focused out of OEE or 6- bottlenecks and collection potential with problem Excellence sigma events quality issues new product solving flows • Map skill levels • Evaluate skill levels • Tailor training • On-the-job • Run People and required and define future programs training introductory improvement development Development workshops areas programs 11 | Luvata Special Products 11 | Confidential Information. Unauthorized Reproduction/Distribution is Prohibited
Step 3: Share the knowledge and experiences • Leadership and coordination • SharePoint site President Director Americas Director Europe Director Asia • Annual conference • Benchmarking 12 | Luvata Special Products 12 | Confidential Information. Unauthorized Reproduction/Distribution is Prohibited
Step 4: LPS Audit Program • Encourage and invigorate LPS efforts across all Business Units Why? • Evaluate facilities against a common ‘lean’ standard • Outline steps in order to reach this standard When? • Every 12-24 months • On-site at each Luvata location Where? that has completed their LPS pilot transformation • Conducted by LPS Office • 1 to 3 days visit per plant How? • Interviews, observations and assessment based on LPS Plant Guide 13 | Luvata Special Products 13 | Confidential Information. Unauthorized Reproduction/Distribution is Prohibited
Key Contributor to Success A Robust Performance Management Program • Structured approach KPIs for Reviews Individuals • All elements engaged simultaneously Visual Target Management Setting Solving Raising Problems Problems 14 | Luvata Special Products 14 | Confidential Information. Unauthorized Reproduction/Distribution is Prohibited
Main contributors to success: Correlation Study: Overall Score vs. each LPS Plant Guide Element 90% 88% 86% 84% 82% 80% 78% Raising OEE Workplace SOP/WI's Culture Problems 5S 15 | Luvata Special Products Confidential Information. Unauthorized Reproduction/Distribution is Prohibited
Culture is the difference between good and great ! 16 | Luvata Special Products Confidential Information. Unauthorized Reproduction/Distribution is Prohibited
Achievements to date Safer work environments through pro-active 45% reduction in Risk ‘near - miss’ corrections accidents Reduced costs, through reliability and 67% reduction in Quality repeatability defects Meet the needs of the market through 50% improvement in Customer Service improved operational effectiveness OTIF and Lead Time 52% improvement Opportunity to liberate capacity to drive sales Capacity in OEE 55% reduction in Release tied up Ability to operate reliably with less inventory inventory capital Deep implementation of LPS, lasting change 85% of our business Penetration 17 | Luvata Special Products Confidential Information. Unauthorized Reproduction/Distribution is Prohibited
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