How Donnelly manages being one of the most complex injection molding companies on the planet.

1. Managing Manufacturing Complexity
through Innovative Processes
A Donnelly Custom Manufacturing Case Study
Sam Wagner, Director of Advanced Manufacturing
Donnelly Custom Manufacturing Company
IndustryWeek ’09 Best Plants Conference
Nashville, TN
Tuesday, April 28, 2009 1

2. The Donnelly story
• Donnelly was founded in 1984 as a custom, plastic
injection molding company
• A small, one-story building in Alexandria, MN
• Four presses,
eight people,
no customers
• One idea: to focus
on short run,
close tolerance
parts
2

3. The Donnelly story
• Today, the organization is over 225 people strong
– Best-in-class technologies and quality systems
– 24/7 operations, 110,000 square foot facility with 33 presses
– 700+ materials used
– 2700+ active molds and 3200+ active parts
– Median run time of less than 8 hours
– 40 to 50 changeovers per day
– Industry-leading and world-renowned OEM customers
– $29+ million in revenues
3

4. The Donnelly story
30 30
Sales Dollars Orders Shipped
25 25
20 20
15 15
10 10
5 5
0 0
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
2.0
Sales Dollars/Order Shipped
1.5
1.0
0.5
4
0.0
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

5. The Donnelly story
200 35
Molding Hours Run # of Presses Available
30
150
25
20
100
15
10
50
5
0 0
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
7,000.0
Hours Run /Press Available
6,000.0
5,000.0
4,000.0
3,000.0
2,000.0
1,000.0
5
0.0
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

6. The Donnelly story
• Plastics News Processor of the Year
Finalist 2007
6

7. What is short run?
• Short run is not defined by part
quantities/EAUs
• Short run is defined by the number of hours
per production run
• Donnelly’s short run
– Average production run is 11 hours
– Median production run is 7+ hours
– Production runs range from .25 to 240 hours
– Short run is defined as more than one changeover
per week, per press
– We average 9 changeovers per week, per press
7

8. Why short run?
• It is not possible to do short and long run well
– Short run focus is on changeover optimization
– Long run focus is on process optimization
• A need exists for a supplier committed to
short run expertise
– Pressure to reduce inventory, but continue to meet
stringent delivery dates
– A supplier with short run expertise allows these
vital needs to be met economically
8

9. 9

10. Donnelly’s mission and values
• Vision: To be the recognized leader in setting
the standards in short run molding and
related services
• Mission: To deliver good products on time
• Core values
– Do your best
– Treat others the way you want to be treated
– Don’t be afraid to ask for help
– Always work as a team
10

11. Donnelly’s complexity factor
• Complexity factor = active
molds x materials used x
presses
• Comparative data
– Plante Moran’s 2004 North
American Study of the
Plastics Molding Industry
0
Injection Molding
Over 25%
All participating
Automotive
Over $25MM
Donnelly
Medical
Bottom quartile Over 25%
companies
in sales
Over 50%
50th percentile
Upper quartile 11

12. Complexity-driven challenges
• Setting and holding priorities – making
decisions
• Shooting at a moving target – planning
• Communication, alignment and
teamwork
• Training and continuous improvement
12

13. Addressing the complexity factor
• Process orientation with measurements • Peer accountability
– Manufacturing Launch (40 measures) – Manufacturing War Room
– Critical Success Factors – Visual Management
(12 key measures – 30 elements)
Complexity
• Constancy of purpose • Attention to detail
– Short Run – Checklists
– Quality Management System (incl. MRT) – Supervisor Audits
– Lean Manufacturing Techniques – Team Leader audits
– Training & Workforce Development – Pricing Volatility
13

14. Addressing the complexity factor
• The cosmic Law of
Nature g
s s in
e
– Nothing is static o gr
Pr
Re
g re
ssi
ng
14

15. Process orientation with
measurements
• Manufacturing launch process
– Developed in 1999
• Hard work & diligence wasn’t enough with 250+
molds/year
– 80 % of tooling launches will have no problem, but
it is the 20 % that a highly defined process allows
you to succeed at
– Defined, comprehensive and measured so output
is repeatable, reliable and profitable
– Avoids the finger pointing at hand-offs
• Responsibilities are defined and reviewable
15

16. Process orientation with
measurements
• Manufacturing launch process
– Owned by the people who hold responsibility
– Result is unique 3-pronged engineering model
• Project Engineer on-site at customer location for design
and mold-build support
• Manufacturing Launch Engineer who oversees sampling,
measurement and approval process
• Process Engineer for day-to-day production
– Value of a highly defined process is that you can
evaluate and change it
• Manage, measure and improve it
16

17. Donnelly Manufacturing Launch Process
(2)

18. Peer accountability
• Daily War Room meetings
– This is a problem identification, not problem solving meeting
– Action items are assigned with peer accountability to resolve
them within 48 hours
18

19. Peer accountability
• Daily War Room meetings
Review last 24 hours Look ahead to the next 24 hours
• Safety • Set priorities
• Changeovers & efficiency • “At risk” shipments
• Hours run & efficiency • High scrap jobs
• Down time • Mold issues
• Scrap
• Problem jobs
• Action items
19

20. Constancy of purpose
• Donnelly quality system
– Deliver good products on time
– ISO 9001:2000
– ISO 13485:2003
Management Review Team
• Management Review Team
– Corrective action process Corrective Action Process
RCA What other
Why was the parts might
defective part have this
produced? same issue?
Why was the
defective part
shipped? 20

21. Constancy of purpose
• The Law of
Prosperity/ Law of
Compensation
– What we make is in
direct proportion to
the quality and
quantity of the
services we deliver
21

22. Constancy of purpose
• Results
– Value added per employee
– 14 years without increasing press rates
22

23. Attention to detail
• 5S
– Sort: Separate the necessary from the unnecessary
– Set in Order: Put everything in its place, label its place
– Shine: Keep everything clean, helps identify potential
problems
– Standardize: Defines how a task should be performed, sets
the performance standard
– Sustain: Most important – requires regular inspections, with
action items identified, assigned, and addressed
“Good factories develop beginning with the 5S’s.
Bad factories fall apart beginning with the 5S’s.” Hirouki Hirano
23

24. Attention to detail
• Early 5S process results
Old Setup Carts New Setup Carts
24

25. Attention to detail
• 5S event results – set in order
Aisles before 5S Aisles after 5S
25

26. Attention to detail
• 5S color coding
Green White and blue
Finished goods or inserts Trash Mobile Eqpt
26

27. Attention to detail
• 5S: Middle section:
Green
– Notice the numbers on
the wall and on
equipment (204)
– Numbers on the floor as
well
27

28. Attention to detail
• 5S: Back section: Orange
28

29. Attention to detail
• 5S audit process
– Next shift team leader
audits section with current
shift team leader
– Record results on current
shift schedule showing
assignments
– Highlight in green if OK,
pink if a problem with
notes on the bottom
– Hang schedule on current
shift clip board for
supervisor to review
29

30. Attention to detail
• 5S process benefits
– Much more than just housekeeping
– Develops the discipline to follow through
– Teaches employees to work in teams
– Creates a safer workplace
– Attacks quality issues
– Attacks waste of searching for things
– Clean workplace is more inviting, making it easier
to recruit and retain workers (and customers)
– 5S is a fundamental to Lean
30

31. Attention to detail
• 5S: Visual workplace progression
Visual Guarantees
Visual Controls
Visual Measures
Visual Standards
Visual Order
31
Ref. Visual Workplace Visual Thinking, Gwendolyn D. Galsworth

32. Success in short run
• Continuously develop and improve upon its
leadership position in short run
• Occurs as a result of aligning company’s people,
processes and actions with business strategy
• Donnelly employees’ ability to improve upon its
hedgehog concept, help the company to grow and
thrive
• All actions are tied to processes rather than events,
ensuring the business output is repeatable, reliable
and profitable
32

33. Thank you
Questions?
Sam Wagner, Director of Advanced Manufacturing
Donnelly Custom Manufacturing Company
IndustryWeek ’09 Best Plants Conference
Nashville, TN
Tuesday, April 28, 2009 33