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need ? Begin performance data collection ? Begin demand pattern analysis ? Process mapping – Components of lead time – Sources of variability ? 8:00am 15 minute planning meeting ? Start to map Mamp。s approach to capturing opportunity – Ideal and target future states – Transformation model and approach – Typical end products for diagnostic ? Sample work plan – Work plan and resources – Principles and expectations ? Questions and discussion LAN010608119718320507 9 Source: McKinsey Overproduction Producing too much, or producing too soon Overprocessing Processing beyond required standards Intellect Failure to fully utilize the time and talents of people Motion Movement within a process that does not add value Rework Repair or scrap Transportation Unnecessary transport between processes Inventory Excessive raw materials, WIP or finished goods Waiting Parts, machines, or people TYPICAL TYPES OF OPPORTUNITY The 8 types of waste LAN010608119718320507 10 Attributes of a lean system ? Human resources at all levels focused valueadded activity ? Reliable, ready, and capable machines focused on adding value ? Constant flow of product in the value stream ? Compression of plete value stream to reduce lead time close to process time ? Marketpaced level production ? Pull vs. push systems ? Pressurized, visible, transparent operations with high performance focus ? Builtin quality ? Culture of continuous improvement ? A human resource environment for team member input based on human ingenuity vs. machine design Relentless elimination of waste Process time Process steps A B C D E F . . . Seamless flow between steps with no time or inventory buffers 100% valueadded Perfectly balanced IDEAL FUTURE STATE LAN010608119718320507 11 TARGET FUTURE STATE ? Longterm aspiration, end state ? Aligned with business strategy Nearterm feasible objective ? Specific design state and operating conditions ? Road map of target metrics ? Supported by Policy Deployment and Tactical Implementation Plan ? Validated by senior management as relevant and credible Vision ideal state Current state Target state ? Detailed picture of current system, operating performance, and methods Business need and strategy Opportunity indicator . . . Strategic options defined . . . LAN010608119718320507 12 *Data based on two sample work days, assuming an average possible output of 7 to 8 units Performance Indicator Measure November March June December Y1 Y2 Total cost Index 16 Productivity Man hours/unit Inventory ? Raw ? WIP ? F/G Days Days Days Quality First pass yield (pre run in) Percent Delivery Lead time total Lead time process Days Days Schedule attainment Percent Ontime delivery Percent 45 14 5 50 112 26 66 52 14 9 2 90 100 100 28 7 35 12 4 28 11 3 75 80 75 80 90 95 90 20 60 14 37 28 33 30 12 15 14 METRICS ROADMAP TO TARGET STATE EXAMPLE Cost Productivity LAN010608119718320507 13 CREATION OF THE TARGET STATE People system Operating system Quality system Business need Process and effect Delivery Reliability Minimum Lead time Lowest Possible Cost Zero Defect Total Quality Process F M S Automation J I T Element Over production Motion Waiting Inventory Rework Transportation Over processing Profitability Stable Employee Relations Human Resource Management Change management Work environment Organization structure Continuous improvement culture People Workplace anization TPM Process measurement amp。s approach to capturing opportunity – Ideal and target future states – Transformation model and approach – Typical end products for diagnostic ? Sample work plan – Work plan and resources – Principles and expectations ? Questions and discussion LAN010608119718320507 4 KICK OFF MEETING 8 . 10 . ? Introductions ? Current business situation review – Needs – Opportunities ? McKinsey39。 Company. This material was used by McKinsey amp。 Company during an oral presentation。s approach to capturing opportunity – Ideal and target future states – Transformation model and approach – Typical end products for diagnostic ? Sample work plan – Work plan and resources – Principles and expectations ? Questions and discussion LAN010608119718320507 5 What does the pany need to do to deliver existing corporate business strategy? Quality Improvement Cost Unit cost Asset utilization Delivery Reliability Flexibility Lead time People Workforce satisfaction What can operations do to create new strategic and tactical opportunities? Opportunity Need GOLDEN STATE FOODS OPERATIONS STRATEGY Since there is a need to improve operations, it is essential to be able to identify opportunity for improvement LAN010608119718320507 6 EXAMPLE OF BUSINESS NEEDS Early understanding ? Increase flexibility ? Reduce changeover time ? Increase number of changeovers ? Increase output ? Evaluate lost capacity ? Increase utilization ? Increase responsiveness ? Improve process for new product introduction ? Reduce order lead time Increase capability to profitably produce an increasing number of SKUs for an increasing number of customers LAN010608119718320507 7 PRELIMINARY INFORMATION FROM 1DAY VISIT EARL