Value Stream Transformation From the shop floor to the board room Chris Beaulieu Executive Director – CBS Global Operations 1
CUMMINS 1M+ 15M 100 engines annually engines in the years serving produced field customers UNDERSTANDS POWER — PA S T, P R E S E N T A N D F U T U R E .
56,00 ,000 190 190 Countries & Employees territories Global 600 600 7,2 ,200 00 Network Distributor Dealer locations locations 6 Shaded locations indicate CMI and JV territory
The COS 10 Practices 1. Put the 2. Synchronize 3. Design quality 4. Involve people 5. Ensure equipment customer first flows (material, in every step of and promote and tools are available and provide real physical and the process teamwork and capable value information) 6. Create 7. Establish the 8. Treat preferred 9. Follow common 10. Use Six Sigma functional right suppliers as problem solving as the primary process excellence environment partners techniques improvement method 7
31 Key Processes under COS 8
Bringing COS Alive in CBS 10 COS PRACTICES Cummins Operating System Principles and Behaviours Plant leadership led training 31 O.E. KEY PROCESSES Operational Excellence 1 2 3 4 5 6 7 8 9 10 Synchronize Flows Ensure Equipment Put the CustomerFirst DesignQuality in Every Involve People and Create Functional Establish the Right Treat Preferred Follow Common Problem (Material, Physical and Tools are Available Six Sigma and Provide Real Value Step of the Process Promote Teamwork Excellence Environment Suppliers as Partners Solving Techniques and Information) and Capable Customer Visibility Bottleneck Management Quality System People Involvement Crisis Management Functional Excellence Continuous Supplier Improvement Kaizen Six Sigma and Measures Structure Improvement Culture (Direct and Indirect) Takt Time and Line Process Change Standard Woorking Goal Tree and Supply Chain Management Problem Solving Value Stream Mapping Team Measures Equipment Maintenance Balancing Management Methods Performance Measures (Direct and Indirect) Techniques Workforce Capability "Go, See, Act" Scheduling and Load Process Control Setup Reduction and Flexibility Management Supplier Quality Leveling Engineered Material Flows/ Process Capability Communication Plan for Every Part Health, Safety and Environmental Management 5S (Sort, Set in Order, Shine, Standardize, Sustain) Visual Management F.E. ACCOUNTABILITY Assessments of 31 Key Processes Standard Work Definitions of Health, Safety and Takt Time and Line Supply Chain Management Setup Reduction Process Capability Team Measures Six Sigma Environmental Management Balancing (Direct and Indirect) of Operations Key Excellence Processes, Scheduling and Load Customer Visibility Process Change Problem Solving Engineered Material Flows/ Crisis Management People Involvement Leveling Plan for Every Part and Measures Management Techniques Training training Standard Woorking Functional Excellence "Go, See, Act" material QSI Process Control Equipment Maintenance Bottleneck Management Kaizen Supplier Quality material and Methods Structure Management docs QSI docs Supplier Improvement Workforce Capability Continuous Goal Tree and 5S (Sort, Set in Order, Quality System Value Stream Mapping Communication Visual Management Shine, Standardize, Sustain) (Direct and Indirect) and Flexibility Improvement Culture Performance Measures
Value Stream Transformation Value Stream: A collection of all the process steps involved in bringing a service from initiation to completion, raw information etc. to finished process(es) to serve our customers. Value Stream Transformation (VST): Value Stream Transformation (VST) – a systematic approach to achieve sustainable improvements in People, Quality, Delivery and Cost whilst developing a continuous improvement culture within our Business . Value Stream Transformation is an enabling process within Operations Excellence A preferred Cummins Continuous Improvement methodology
5 Steps – high level overview Define the Value Products (goods or services) D Streams with common process steps The basis for the future M Capture the state; 70 – 80% accurate is Current State OK (directionally correct) Creating flow through the A Design the elimination of waste found future State in your current state map I Your RACI with ownership Create and timeframes – implementation plan Simulation models C This is THE goal of mapping Implement & Sustain
Value Stream Transformation (VST) Common Mindset Supply Chain vs. Silo Visualize Current State Multi-Round VST Improvement Quick Win/Systematic/Deep Identify Opportunities Develop Future State 12
Cummins VST – Operations VST launched in 2013 (2016 VST standardized & became a 6S methodology) Trained over 450 people (over 1000 engaged - extended team members) Utilized in Supply chain / Plants and non-manufacturing locations Closed 161 VST projects in 2017. 13 Public
CBS by the Numbers 2017 data 20 yrs. 59,744 32,000 + 51,000 + 1,000+ CGDs accounts contact employees 427 (7 models) reconciled calls 94,128 5,000 translation 24,000 27 WWIDs people requests + 52,000 countries supported onboarded 9,175 2,145 7.3M+ lines of GL 9 variable servers surveys payment comp 1,080 Regional invoices 100,000 + 3,191 1,388,500 payments Centers sites travel survey immigration supported 4 9.9 PB initiations responses reservations 1,099 1,242 32,915 Service storage education intercompany pension Lines assistances (Petabytes) disputed items distributions 14 Public
Framework for Deployment • 6S Charter created and approved Prepare • Quality, Delivery & Cost improvements defined • Project Prioritized • 3 Day in region training delivered by OE team / building regional capability • 4 Projects per Wave • Min 20 people to be trained per wave Build Capability • Current State Map created • Opportunities documented and ranked • RACI created • 90 day delivery plan Deliver and Support • Weekly Stakeholder reviews to share progress and remove roadblocks • Monthly metric pack to track improvement to our results (Quality , Delivery & Cost) 15 Public
Project Charter Objective: Increase production rate from 159 per day to 180 per day without affecting product quality Benefits: Improved on time delivery, Reduced risk of losing business, reduced special transport costs, reduced inspection costs, reduced supplier management costs 16
Value stream mapping The process was walked to understand all steps and activities. An initial waste walk was conducted to capture non value added activities The current state value stream map was created during the training workshop 17 Public
Baseline I Chart of Diffuser_Volume 1 1000 Customer demand = 180 per day 800 UCL=620 600 Actual volume 5 Individual Value 159 units per day 400 _ 200 X=159 0 6 6 -200 LCL=-302 -400 1 5 9 13 17 21 25 29 33 37 41 Observation 18 Public
Key X’s identified X1 - 5s required across all processes X2 - Workload balancing required to achieve target time X3 - Workflow sequencing required X4 - Standard work implementation required X5 - Hourly production monitoring required 19 Public
Improvement Final capability chart Production volume increased from 159 to 255 parts per day (using same amount of resource in the same amount of time) Boxplot of Diffuser_Volume 1000 800 Diffuser_Volume 600 400 200 0 Baseline Transition Diff_Vol_Stage Target improvement 13%. Actual achieved 60% 20
First VST Project in CBS Y :Increase invoice Paid On Time % for direct materials suppliers, without impacting headcount. Results • Improved paid on time by 25% • Worst case lead time reduced from 140 days to 50 days (SLA is 60 days) • Team won Silver Shooting Star recognition award 21
CBS – VST Global Roll-out Europe 5 Waves complete Latin America North America China & NE Asia 11 th Oct 2016 2 Waves complete 1 Aug 16 4 projects Launched 7 Projects launched 4 Projects Launched India 19 Sept 16 4 Projects Launched Africa 2 May 2017 4 Projects Launched South Pac & SE Asia 10 July 2017 4 projects launched 22
Value Stream Transformation 1 2 Launched 41 projects and closed 25 15% of CBS trained on VST 3 4 Delivered People , Quality , Delivery and Cost improvements 3 Global Impact awards in 2017 projects
Thank you Questions 24
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