Transform your business: Create a culture for continuous improvement - Conference

HOW A GERMAN PLANT
WITH MAINLY MANUAL PRODUCTION
REACHED COST COMPETIVENESS OF
LOW (SALARY) COST COUNTRIES
The power of the „WHY“
The impact of operational excellence

© Robert Bosch GmbH 2016. Alle Rechte vorbehalten, auch bzgl. jeder Verfügung, Verwertung, Reproduktion, Bearbeitung, Weitergabe sowie für den Fall von Schutzrechtsanmeldungen.
2 Intern | WeP/PM | 15-Feb-2017

Intern | WeP/PM | 15-Feb-2017
5

6

7
Our products and assembly lines

8
Todays journey . . .
The
initial
condition

9
Factory “output”
174
119
2007
2011
PPC-Volume
[inMioEUR]
Staff | Salary earners
140
130
2007
2011
Associates
[inPK]
Staff | Directs
432
311
2007
2011
Associates
[inPK]
Illness rate | Directs
8,5 9,5
2007
2011
Illnessrate
[in%]
Fix costs
13,8 14,6
2007
2011
PPC-Volume
[in%ofAPC]
Productivity
Productivity
[in%vsPY]
Why we started our journey in 2012

10
The
initial
condition

11
Normally . . .
you would now see the slides
of our strategy, activities
and at the end (hopefully) . . .
some results . . .

12
In order to make this more efficient,
I will first show first the results
and then . . .
you can decide whether it’s
interesting enough to stay or not . . .

1) Reference 2012
The fruits of our work . . . so far . . .
Illness rate | Directs
Illnessrate
[in%]
1)
1) compared to 2012

14
or

15
The
initial
condition

16 In many areas no refurbishment done since the 80ths . . . .
Initial conditions in 2012

17
- 13 nationalities
- Ø age: 49 years
- 15,5 % handicapped associates in blue collar area

18
and with . . . .
- great experience in assembly
- enormous willingness to perform
- deep wish to bring back pride to “their” plant . . .
. . . especially the associates on the shop floor!!!

19
If problems seem to be almost
everywhere, when performance
is low over years and most
associates don’t “see” a real problem
What is the conclusion . . ?

20
Apparently we face (another?)
plant with leadership deficiencies
and missing entrepreneurial mindset.
So, we have to start from the top . .

21
Develop problem solving competence | Elements
"1-week
projects"
~20 x year
(1 week)
- Associates from:
- logistics and production
- Support department
- Indirect areas
- Implementation orientated projects
(no budget, as money ruins creativity . . .)
- Involve associates especially on "working level"
to further increase motivation and make it "their company"
"4-week
projects"
3 x year
(4 weeks)
- Department managers
- Group leaders
- MDP-Candidates
- Plant & GB-Externals
Built-up problem solving competence of leadership team
(focus: department managers and group leaders)
"Break trough
projects"
3 x year
(1 - 3 months)
- Group leaders
- MDP-Candidates
- Specialists
- Considerable changes within production & logistics, e.g.:
- movement of production lines, racks in warehouse, . . .
- indirect processes (e.g. QMM. TEF, CTG)
- Big KPI improvement steps in short time
System CIP
Workshops
4 x year
(á 2 days)
- Group leaders
- Workers council
- "plant external" moderator
- Review business requirements (inline with strategy)
- Set priorities for next 3 months
- Lessons learned out of last 3 months
- Develop entrepeneurial mindset of management team!
Topic Frequency Participants Target
"1-week
projects"
~20 x year
(1 week)
- Associates from:
- Indirect areas
"4-week
projects"
3 x year
(4 weeks)
- Group leaders
- MDP-Candidates
"Break trough
projects"
3 x year
(1 - 3 months)
- Group leaders
- MDP-Candidates
- Specialists
System CIP
Workshops
4 x year
(á 2 days)
- Group leaders
- Workers council
"1-week
projects"
~20 x year
(1 week)
- Associates from:
- Indirect areas
"4-week
projects"
3 x year
(4 weeks)
- Group leaders
- MDP-Candidates
"Break trough
projects"
3 x year
(1 - 3 months)
- Group leaders
- MDP-Candidates
- Specialists
System CIP
Workshops
4 x year
(á 2 days)
- Group leaders
- Workers council
"1-week
projects"
~20 x year
(1 week)
- Associates from:
- Indirect areas
"4-week
projects"
3 x year
(4 weeks)
- Group leaders
- MDP-Candidates
"Break trough
projects"
3 x year
(1 - 3 months)
- Group leaders
- MDP-Candidates
- Specialists
System CIP
Workshops
4 x year
(á 2 days)
- Group leaders
- Workers council
"1-week
projects"
~20 x year
(1 week)
- Associates from:
- Indirect areas
"4-week
projects"
3 x year
(4 weeks)
- Group leaders
- MDP-Candidates
"Break trough
projects"
3 x year
(1 - 3 months)
- Group leaders
- MDP-Candidates
- Specialists
System CIP
Workshops
4 x year
(á 2 days)
- Group leaders
- Workers council

22
Problemsolving
competenceof
associates
problemsolving
competenceof
management
Increasingteamagility
System CIP Workshop
Projects in production and logistics
“1-week-project”
Mindsetof
management
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 …..
2012 2013 2014 2015
System CIP Workshop
System CIP Workshop
Projects in all areas
System CIP Workshop
3 x
per year
9
projects
21
projects
4 x
per year
>30
projects
4 x
per year
Develop problem solving competence | Time line

23
The
initial
condition

24
Same bonus level for all
managers, defined one
year in advance . . .
1st step . . . the bonus system for all managers

25
2nd step | Target deployment based on A3

26
Background
Strategic action fields
Projects & timelines
Competitive costs
Productivity
Value stream 1
e.g.:
Re-Design packaging line
A3 used 4 business plan, quarterly targets & projects

27
A3 used for communication to the whole plant teams
Annual A3 of 2012 – 2016 & all project A3
displayed in Kaizen area @ Gemba
Standardized boards for all
projects with link to “Years-A3”

28
. . . our weekly project review with the plant team

29
We want to become better leaders
We want to further develop our culture
We want to be daily reminded about
our values and what we stand for
Our understanding as leaders

30
Our understanding of leadership
Your associates and colleagues
will value your strengths . . .
. . . but they admire you, when you
recognize your weaknesses

31
Two people that I learned from about leadership . . .
and learning continuous . . .

32
The
initial
condition

33
Deriving target and strategy from market requirements
Who are our competitors and
what is our position within the competition?

34
$
Understanding our position within the competition
Within Germany:
- Southern part of Germany
has highest wage level with
lowest weekly working hours
Within Europe:
- Wage level Turkey is 20% of Germany
- Highly motivated associates
- Very good qualification (esp. engineers)
Main markets in Europe:
- Germany
- UK

35
We can never
compensate that . . .
The figures must
be wrong . . .
There are other
things which are
important . . .
Conclusion?

36
Conclusion?

37
The
initial
condition

38
Project 1 | Change from 2 to 1-shift production

39
Our reasons for 1-Shift-Operation

PRODUCTION BUILDING
“ENTRANCE” FOR INTERNAL
LOGISTICS
(MILKRUNS, FORK LIFTS . . .)

44
Project 2 | Production Levelling
- Customer demand fluctuation covered
via stock of low runner and exotics
- Customer demand fluctuation
covered via stock of runner parts

45
Project 2 | Production Levelling | Result
-51%
-46%
WIP:
3 – 5 hours
[Mio EUR] [days]

47
Project
start

48
After
6 weeks
Packing are moved, adapted
and integrated into assembly line
in other building

49
After
7 weeks
Floor space reduction via ship-to-line
Instead of double handling + “free space”
 Elimination of external warehouse (95k/a)

50
The
initial
condition

51
Our Improvement work

52
Presentations done @ Gemba by the associates
Their projects, their responsibility, their story, their merits . . .

53
Our approach:

54
Our Setting of the project teams

55
Our Setting for the improvement projects

56
Change of working condition

57

58

59
Change of working condition s

60
The
initial
condition

61
Lessons learned

62
Thank you very much
for your time and attention
Questions / Comments?

63
Armin Schwab
Vice President
Bosch Thermotechnology

64
Attachment

65
Systematic of our ”implementation workshops”
Define stabilization criteria
Dauer der Einhaltung
des Stabilisierungskriterium
Stabilisierungskriterium
Dauer eines
Umsetzungsworkshops
performanceindicator
(e.g.outputinpcs)
time

Cultural Change & Leadership
Professor David Bamford, PhD
1
- the competitive edge?

Invest NI
• Transform your business: Create a Culture for
Continuous Improvement
– If you want better outputs, more motivated
staff, increasing profits and a culture
of continuous improvement you need to attend
this conference…
2

3
• Your Definitions of Leadership?
1. your favorite leader from history, a novel, or a film?
2. a favorite quotation pertaining to leadership?
3. a visual symbol of your view of leadership?

Why Change?
"There are four purposes of improvement:
easier, better, faster, & cheaper.
These four goals appear in the order of
priority."
Shigeo Shingo
4

But you need a strategy…
• Strategy = “a pattern of decisions that move
you towards a long term goal or series of
objectives”
• This facilitates the operational design
5

And you need control through
measurement…
• Key Performance Indicators
– Quality, Cost, Speed, Dependability, Flexibility
• Kaplan = “what gets measured gets done”
– But what’s the magic number of KPIs?
6

7
• W Edwards Deming
Quality is Management's
Responsibility
• Joseph Juran
Quality Trilogy -
Planning, Control,
Improvement
• Armand Feigenbaum
Total Quality Control
• Kaoru Ishikawa
Total Company Involvement
• Philip Crosby
Quality is Free
• Geniichi Taguchi
Quality Engineering
• Mazaki Imai
Kaizen - Continuous
Improvement
And you need to change…

8
Change Programmes?
1. Zero-defects
2. Quality circles
3. Kaizen
4. Quality improvement
teams
5. JIT
6. Value Analysis
7. Quality Function
Deployment (QFD)
8. Total Quality
Management (TQM)
9. Quality Costing
10. Business Process Re-
engineering (BPR)
11. Lean
12. Six Sigma
13. Value Stream
Management (VSM)
14. Frugal Innovation

9
Criticisms of Quality Improvement
Programmes
• Many programmes assume the existence of a compliant & pliable
workforce
– Is success of some programmes because workers & trade unions in the West
have reduced powers of defiance due to economic circumstances & industrial
action legislation?
– Under such circumstances, to what extent have employees actually taken
quality improvement in the form of these programmes truly to their hearts?
• To what extent are these programmes window dressing in the
interests of positive publicity & customer relations by senior
managers
– To what extent are they an attempt to cover over existing & perennial
problems within the organization?

10
• Many programmes present a threat to conventional
management-trade union negotiations
– Are we truly content to see direct individual relationships between
workers & managers replace collective bargaining in the workplace?
• It is often difficult for individuals to complain about the
imposition of these programmes because of the risk of appearing
"anti-quality“
– Most people are "pro-quality" in principle, but should there be more
open debate as to the ways and means of achieving optimal quality levels
in place of the imposition of new quality initiatives so often foisted on
the workforce by over-zealous managers?
Criticisms of Quality Improvement
Programmes

If the performance of a group of operations is compared, some will lie on the efficient frontier
(Slack et al, 2018)
The ‘Efficient Frontier’

Examples: The organisations’ state
before KTP
12
C8
C9
C10
C11
C13
C12
C1
C4
C5
Existing – Extended – New
Development
C3
C2
C6
C7
Manufacturing Cases C1-C7 Healthcare Cases C8-C13
Development
Know-How
Products,processofservice
Know-How

13
Manufacturing Cases C1-C7
C1 C4
C5
Development
C3
C2
C6C7
Know-How
C10
C11
Know-How
C13
C12
Healthcare Cases C8-C13
Development
C8
C9
The organisations’ state
after KTP

14
The top 15% of workers in any particular job
produced from 20 to 50% more output than the
average worker
(Burnes, 2017)
But How? – Motivation…?

15
Human Mental Models – Tools & Techniques!
• To mould followers perceptions, psychological concepts such as
influence, motivation and power are vital
• Two essential themes:
1. How the Brain Works – so that you can understand & monitor
how people think
2. Behaviour Modification – so that you can have influence over
people’s responses

16
Poulton’s Model of How the Brain Works!
(Poulton, 1981)

17
Behaviour Modification
Behavior modification consists of three ‘simple’
stages:
1. Recognising behaviour (in self and others)
2. Setting objectives (for self and others)
3. Modifying others behaviour

So, a summary…
• Strategy
– “a pattern of decisions that move you towards a long term goal or
series of objectives”
• Design
– “a bad process will beat a good human every time” – Demming
• Control
– “what gets measured gets done” – Kaplan
• Improvement
– “a warrior should never have a favorite weapon” – Tzsu
18

19
Cultural Change & Leadership
- Improving the Operations?
• How do organisations improve?
– Appropriately!
– Take into account the ‘environmental’ conditions under which they
operate
• Changing legislation, stakeholder demands, economic instability and
breakdown in some countries, etc
– These must be factored into and balanced with any improvement
methodology adopted
– As should the strategy the company is employing
– Whatever improvements are made they must fit with the current and
projected trajectory of the firm

W. Edwards Deming
- two powerful quotes…
“It is not necessary to change. Survival is not
mandatory”
“If you can't describe what you are doing as a
process, you don't know what you're doing”
20

Available from…
David.Bamford@hud.ac.uk

Closing your gaps
Dig Woodvine
MD, XCL Ltd
Bridging the gap
between process & people
Through your people we can help you achieve operational excellence

Outcomes
Actions Plans
LEAP Gap
Strategic Intent
Engagement GapPerformance Gap
Alignment Gap
Leadership Gap

What might they be
saying / doing?

Why might they be
behaving this way /
saying this?
Organisation….
Leaders….
Managers….
Shop floor….

What can they do?
Organisation….
Leaders….
Managers….
Shop floor….

Any questions?
Thank you
Dig Woodvine
XCL Ltd
www.xclinternational.com

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