I N T E R N A T I O N A L , I N C.J & A INTEGRATING PEOPLE AND TECHNOLOGY

FOR HIGH PERFORMANCE

Keith Johnson – Background and BIOwww.leantoc.com

• 30 years experience (18 yrs Consulting): Lean Six Sigma, Strategic Planning, Mergers & Acquisitions, Design/QFD and Quality Systems

• Over 60 Clients: Europe, Asia, Africa, North America•Nike, Owens Corning, Emerson Electric, Parker Hannifan, USMC, USAF, Verizon, Ryobi, Hexagon, Schneider Electric, Georgia Pacific, Chevron Nigeria, Auto Alliance of Thailand

• Trained by Disciples of Shingo, Goldratt and Shingijitsu Consulting

• Expertise: “Hands-on” implementation experience in TPS.

• Industries: DOD, Metal Working, Pumps, Assembly, Rubber Mixing, Nonwovens, Telecommunications, Food and Beverage, Fabrication, Chemicals, Pulp and Paper, Oil, Electronics

• Favorite Sushi: Sashimi - Toro Tuna

Metric Before After Percent

SavingsThroughput (monthly) 200 420 110% inc

Leadtime

(days in mfg)

43 days 19 days 56% dec

Inventory Turns 9.6 15.1 36.5% inc

Operating Expenses $1.00 $.83 17% dec

Total Inventory $4.2m $2.1m 50% dec

Order Entry CT 21 days 5 days 76% dec

Parker Hannifan-Zenith Pump - Results Sanford, NC/Monterry, Mexico – 8/97 to 8/99

KITSaw

Hitachi Seiki19

CNC Chucker78

Blanking77

Matsuura43

Tsugami56/58

Heat Treat57

Misc. Drilling33

Misc. Milling21

Surface Grind77

Lap84

Jig Grind45

Laser Etch01

Q.C.

Stores

Polish93

Relief Grind60

Steam Temper57

SubcontractProduct Flow Diagram

Summary of Improvements

Improvement Timing Increase % Potential

Pin and Run On-going completed by 7/1/98

15%

Flexible work force shift manning

On-going implemented by Jan 31st

6%

Maintenance policy Decision by Jan 31st 2%

3SM Fosdick retrofit laps layout

Assessment by Jan 31 11%

Total Savings 34%

USAF Foreign Missile SalesEglin AFB – Dec 12, 2006

Review History

Suspense SAPMs

SAPM Contact Country

SAPM Evaluate History

SAPM Coordinate with RMS

SAPM coordinate with Lead

SAPM

SAPM Coordinate

with FM

Determine Requirements

Requirements Meeting

3 Days

1 Day

1 day

Request Cost Proposal

Letter Requesting

Cost Proposal

Draft &

Submit

Technical Discussions

328 / RMS

Monitor Task

RMS Creates Cost proposal

30 days

Model Contract

30 Days

Cost Proposal

Technical Evaluation

5 days

2 days

Submit to Lead SAPM

for Coordination

Develop spreadsheet for Financial

Requirements

Review Cost Proposal

Budget Approval

(FM)

Load Finance From PR

Finance Certification

RA Approval

Contracting

1 day

3 days

1 day

120 days

1 day

On Contract

Final RDC

Test Reports

Internal Review

RMS Review and Sign

Final Build Contract

PCO Signs

Contract Loaded into

System

1 day

1 day

1 day

3 days

1 day

Contract / Contract Mod

Award

Request Execution of Task

On Contract?

Verify Hours and Dollars

Country Clearance

RMS Initiate Task

Contracting Letter/E-mail

Coordinate Personnel

Direction to Proceed

1 day

RMS Coordinate Personnel

Prepare for Task

1 day

4 days

4 days

Perform Task

10 days

DD250

Task In-process Status

Team Outbrief

Gov / RMS Outbrief

2-30 days

14 days

1 day

Task CompleteCompletion of

CLIN

Receive DD250 from

RMS

Verify CLIN Closeout

Sign DD250

Send DD250 to RMS

Compare Status with

MOCAS

Reconcile

Initial De-Ob Mod

Clin De-Ob

60 days

Requirements Change

New Requirement (CCSS)

New Requirement (Menu)

10 Mods in 2006

Purchase Request

Model Contract

Build

Multiple Tasks of Different Duration

Multiple Users

71 Taskings in 2006

- Coordinate requirements all year long.- Continue use of menu, matrix, Rqmts Sheets

- Continue use of CCSS for complex rqmtsFUTURE STATE: 5 DAYS VERSUS 30 DAYS

- Continue “One” page RFP and Proposal- Continue use of requirements matrix

- Continue use of pre-negotiated burdened rates

- Standardize SAPM coordination- Cross train FM Personnel

- FM BackupsFUTURE STATE: 1 DAY VERSUS 15 DAYS

- Continue current “On Contract” process.- Develop schedule board/digital calendar displaying 12 month period of performance

- Develop standard out-brief process to better monitor task completionFUTURE STATE: NO COORDINATION “SURPRISES” and LESS CONTRACT MODs/DIRECTION

- Add contract provision requiring DD250 within 120 days of CLIN closeout- De-obligate funds within 60 days of DD250

FUTURE STATE: 120 DAYS VERSUS 400 DAYS

5 Days 5 Days 7 Days 180 Days365 Days

30 days to 5 days

15 days to 1 day

400 days to 180 days

54% Total Cycle Time Reduction: Cross-trained Personnel, Standardization, Balanced Work, Improved Quality, Less Hand-Offs, Less Waiting Waste, Schedule/Tracking Board

A&E AutoElectric – Cowpens, SCKaizen Results – March 3, 2003

• Small Group Cell proposal approved• SGC CT = 2.0 hours per alternator• Inventory turns = 1,250 per year• WIP improvement = 38%• Floor space improvement = 78.7%• Productivity improvement = 45.0%• Direct Labor improvement = 31.0%• Direct Labor savings = $169,632 per year

Current Process FlowchartA

& E

AU

TOM

OTIV

E, IN

C.

Curr ent P

rocess FlowA

s of 2/27/03

Hi tachi, M

it subishi,and Bosch

Alt ernator Cores

Del ivered to Tear

Dow

n

Cor e I D

& Ext .Bolt R

emoval

Rem

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ect &label , Place in

Washer #1.

Di sassem

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Rem

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ut , Rem

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Rem

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et ainer & Br gFr om

D/ E

Wash Both

Fr ames in

Washer #2

Wash ShallPar ts i n

Washer #2

Steel ShotBlast Pulley

Powder C

oatPaint Pulley

Fr ame H

al ves& Sm

Metal

Par ts Blast edon Lr g SteelShot Blaster.

SREFrame

SmallParts

Pulley toFinal Assembly

SmMetalParts

Rem

oveC

i rcui ts

Hand or Aut o

Blast Cir cuit

Hol der

Inst all Br ushes

Inst all Cir cuits

On H

it achi ,Att ach R

eg &Baff le t oR

ect ifi er

Test Regulator H

and Bl astPlast ic Par ts.

Auto BlastPlast ic Par ts.

SmallPlasticParts

SmallPlasticParts

Regulator

Bad

Test Rect &

Stat or on ACE

Tester ,R

emove

Regul at or

Rem

ove BadR

ect fr omStat or

GoodRectifier &

Stator

Test Rectif ier

on D&V Tester

Di sassem

bleR

ect ifi er

Di p R

ect in Dip

Tank & Ai r Dr y

Blast Rect on

Auto Blaster

Inst all Diodes

GoodRectifier

BadRectifier

Reassem

bl eR

ect ifi er

Sand BlastStat or on

Stat or Bl aster

Sand Stat orLam

i nant onBelt Sander

Paint Stator i nPaint Booth &

Air Dry

Wir e Brush

Stat or Leadsand I nspect

Test & InspR

ot or on Rotor

Tester

Hand Bl ast

Rot or

Paint Rotor i n

Paint Booth &Air D

ry

MI T - Polish on

Sli p Ri ng

Poli sher

MI T - If Brush

Gr ooves Exist ,

Send t o Lathe

MIT

HIT/BOS

Install SRE

Br g

Tur n Rotor on

Lathe

Inspect Runout

wi th D

ial I nd.

FailsRunoutCheck

Rotor toFinal

Assembly

Sort Sm Part s

int o Di p versus

Plat ing( outs ide)

Send Par ts t obe Pl ated to

Out side

Vendor

Plating

Dip

Dip Sm

Par tsin C

lear Acr ylic& Ai r D

ry

Sm Parts ToInv/Assembly

Assemble D

/E( Front )

BOS -

Assemble

Stat or Rectif ier

Assembly

Assemble

Stat or/ Rectif ier

to SRE

Inst all Ext .N

ut s on SRE

Inst all Bat ter yPost &

Insul ator,Spr ay Acryl ic

on St eelBushing

Assemble D

/E& SR

ETogether

Final Test onD

i xie Tester

Rejected

Accepted

SRE

Package ForShipm

ent

Pall etize ForShipm

ent

Ship to theC

ust omer

Analyze andR

epai rAlt ernator

MI T - Instal l

Rect & R

eg inSR

E

MI T - Instal lInt ernal

Fastener s

MI T - Instal l

Batt ery Post &Insul ator

MI T - Instal l

Stat or to SRE,

Ali gn & Cr im

pW

ir es

MI T - Spray

Steel Part sw

i th Acr ylic

HI T - Solder

Stat or Leadsand R

eg/R

ect ,toC

onnecti ons

SRE

Plated Part sR

ecei ved fr omVendor

BOS - Sol der

or Re- Solder

Stat or Leads toR

ect Assembly

EN

D

Rotor

Slip Ri ng

Repai r

BOS/NDFailure

Bearing

BearingSalvage

Bearing

Pulley

RegulatorGood

Re-Test

Regul at or if

Necessar y

BadStator

Stator ToScr ap

HI T - Solder or

Scr ew Stat or

to Rect

Assembly

Apply Heat

Tr ansferG

r ease, I nstallSR

E

Inst all Ext .N

ut s on SRE

Inst all Bat ter yPost &

Insul ator,Spr ay Acryl ic

on St eelBushing

HI T - Instal l

Regul at or

SRE

Frames toFinal Assembly

Stator or Stator/Rectifier to Final Assembly

SmMetalParts

Sm Parts ToInv/Assembly

RegulatorTo

Inv/Assembly

BOS/MITRectifierto Final

Assembly

HIITRectifier to

BaffleAttachment

Final Assem

bly

SmPlasticParts

ToInv/

Assembly

SmallPlasticParts

ToInv/

Assembly

BadRect.

24 2

19

15

30

10 3

25

34 6

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15 Boxes( Scrap)

43 0

43 350 0

71

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45 023

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( Recti fier s)

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n

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&R

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over , &Insul ator

Pull Stator &R

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Rem

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egul at or,R

ect ifi er , &Br ush H

older

Rem

ove Pulley& Br eak Fr am

eH

al ves Apart ,R

emove R

otorBear ing

D/EBearing

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BrushHolder

NDCoverND

Frames

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Washer #2

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Blast er

NDPulley

NDPulley

Nut

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SendO

ut side forPlat ing

NDRotor

Powder

Coat Pulley

NDPulley

Pulley toFinal

Assembly

PaintC

over

NDCover

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Assembly

Large SteelShot

Blast er

NDCover

NDFrames

ND Frames to Final

Assembly

NDRectifier

SmallPlasticParts

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SolventW

asher

ToInv./FinalAssembly

Disassem

bleBr ush H

older

Rem

oveBr ushes

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Recti fier

Test

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ect . &R

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Install Diodes

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bl eR

ect ifi er

Good

Paint in Pai ntBooth

Inspect Regs &

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Wash in Sm

allSolventW

asher

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Test & Repair

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ove PlugW

ith Mill ing

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ND

- Instal lR

ect . & Reg.

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- Instal lC

over &Insul ator

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Bolt s, & Rotor

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15 254

12 3

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ta tors NDStator

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in Washer #1

Test Stator onAC

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Good

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Di p in Var nish,

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Scr ap

ND Stators to Inv/FinalAssembly

12 ,5 00

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15 ,0 00

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Small Group Cell (Hit/Mit/Bos)

TE

AR

DO

WN

4' B

en

ch

Ta

ble

PARTS WASHER(All Parts except Rotor &

Pulley)Est. 4' X 6'

5.00 Min. Cycle

HAND

BLASTER(Stator & Rotor)

4' X 4'

AUTOGLASSBEAD

BLASTER(Small Parts)

4' X 4'

STEELSHOT

BLASTER(Frames)2.5' X 6'

6.00 Min. Cycle

TEST STN(Stator, Rect,

Rotor)4' Bench Table

FRAME REPAIR2' x 3' Bench Table

.50 Mins/Frame x 50%

REG. TEST, INSTALLBRUSHES, REPAIR

RECT. & ROTOR2' X 6' Bench Table

BELTSANDER

(StatorLaminants)

2' x 3'

PAINT BOOTH(Rotor, Stator Laminants,

Pulley)4' x 6'

PA

INT

DR

Y2

' x

4'

Be

nc

h T

ab

le

BR

GP

RE

SS

(Rot

or)

2' X

2"

LA

TH

E T

UR

NIN

GW

/DIA

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D.

(Ro

tors

)2

' x

4'

AS

SE

MB

LE

SR

E &

RE

PA

IR2

' X

4'

Be

nc

h T

ab

le

ASSEMBLE D/E,FINAL ASSEMBLY

& REPAIR2' X 4' Bench Table

FINAL TESTDixie Tester

3' X 4' PACKAGING2' x 3' Bench Table

PA

LL

ET

STA

GIN

GA

RE

A F

OR

SH

IPM

EN

T6

' x 1

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AF

OR

ALT

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NA

TO

RS

4' x

8'

A & E Automotive, Inc.

SMALL GROUP CELLHitachi/Mitsubishi/Bosch (200 Alt./Day)

3/03/03

TeamLeader

Scheduler

5

1x5

5

5

5

5

5

5

Area of Responsibility

Legend:

5 WIP (Cart with # of Alternators

1x5WIP (Single

Alternators, No Cart) 1 Block = 2/3 FootLAYOUT Sq Ft = 24' x 32' = 768 Sq. Ft.

Layout Information:

# Carts = 7

WIP = 40 Alternators

Scale = 3.38 Ft./Inch

3.00M

ins/Alt.

1.50M

ins/Alt.

1.07M

ins/Alt.

1.61M

ins/Alt.

1.82M

ins/Alt.

1.82M

ins/Alt.

1.27M

ins/Alt.

15.0

0 M

ins

SHELVES FORBOXED ALTS.

Stanadyne Nozzle Assembly – Cell #1Kaizen Event –March 2007 – Jax, NC

• Output• Prod• WIP• Lead-time• Space

CurrentState

4190 N/day11.7 Pcs/p/hr20,000 pcs+4.5 days7980 ft2

Plan Actual & %Change

4300 N/day17.5 Pcs/p/hr445 pcs1hr 4 mins 1526 ft2

4300 N/day 8% Pcs/p/hr 48% 445pcs 84% 1hr 4min 98% 1526 ft2 80%

ImprovementMetrics

Nozzle Assembly = 3 cells times above resultsWIP Savings = 19.6pcs x 3 x $20/pc = $1,176,000.00

Issue:C-5 M Inner Piston high failure rate

Why:No standard process to identify and control rework

Action:Create standard work, perform root cause analysis on all rework, implement cause codes, install problem solving teams

Expected Results: Exceed Warfighters expectations, reduce rework/costs, Eliminate waste, reduce flow days, decrease WIP.

eLog21 Goal alignment: Increase aircraft availability by 20%

USAF – Hill AFB – Ogden, UTUSAF – Hill AFB – Ogden, UT C-5 Inner Piston Rework – Sept 2005C-5 Inner Piston Rework – Sept 2005

44100145Flow days

03048 since

9/29Rework Reduction

23.54747WIP

Where We Are Headed

Current Condition

Start of Project

Overlay Cost$39,517

Reduction to-0-

Payback periodTBD

Savings to investment Ratio TBD

Intangible Benefits Meeting the war fighters need

• Support Aircraft deliverydates

• 50% reduction WIP• Improved quality• Reduction in rework• Product flow• Less Travel due to

grind plate grind reduction

• Cultural change

Start date: September 2005Month 1 2 3 4

C-5 Value Stream Map Done

Fish Bone Wrk Sheet to Detirmine Prob. Done

Rew orked Master WCD Done

Created STD Wrk for ALL E&I steps Done

Data Base for RWRK & cause codes In Work 1st rev 9/28

STD Wrk proceedure in Disassembly Planned 12/6/2005

E&I to polish chrome rather than route Planned 12/6/2005

Std Wrk Proceedures for all steps Planned 12/6/2005

Month: December

Emerson Electric PIC Seals – Houston, TX Office Kaizen Project – March 2004

• Value added – Customer is willing to pay for this activity. We did not focus on this area. Small segment of the total.

• Non-Value added – Customer is NOT willing to pay for this activity.

– Batch focus shows impact of moving to one piece flow.

– W/O batch focus shows impact of eliminating queues from the process.

Total sec min hrs %Value Added 221 3.68 0.06 1.1%

Non-value ( w/o batches) 15312 255.20 4.25 79.4%Non-value (batch) 3749 62.48 1.04 19.4%

Total time 19282 321.36 5.36

Total sec min hrs %Value Added 201 3.35 0.06 4.2%

Non-value ( w/o batches) 1784 29.73 0.50 36.9%Non-value (batch) 2846 47.43 0.79 58.9%

Total time 4831 80.51 1.34

Total sec min hrs %Value Added 20 0.33 0.01 9.0%

Non-value ( w/o batches) 13529 225.48 3.76 88.4%Non-value (batch) 903 15.04 0.25 24.1%

Total time 14451 240.85 4.01 74.9%

Current State

Future State

Improvement

PIC Lean Activities:Office Kaizen Project

• Goals– Move orders though the

shop in a one-piece flow system

– Eliminate all NVA activities – Deliver orders to

manufacturing 4+ times per day

– Reduce cycle time for orders with non-forecasted seals from 1+ days to 30 minutes

Accomplishments

– Move orders in batches of 5 lines at a Takt time of 30 min/batch for continual flow

– Eliminated all identified NVA activities

– Delivering orders to manufacturing 8-10 times per day with a goal of 14

– Reduced cycle time for orders all orders to <1.5 hours (Based on WIP counts we showed a 860% cycle time reduction)

Emerson Electric China - SMT Kaizen Results

Schenzen, China – May 2003• Location : P1-1F (Machine #: MSH2)

•Purpose : Reduce set up time at Bottleneck Machine to increase capacity for entire plant

•Observation

• Set up team are in proper position.

• Each setup team member know their own task well.

• Material well prepared and can be plug in immediately.

• Little unnecessary movement.

• Result :

•March 26 set up time record -- 50 min.

•Demonstrated set up time -- 10 min.

• Saving of 40 min per set up. (80% saving)

Annual Savings:

40min * 10 setup/day * 21000 pcs/Hr * RMB 0.02 * 365 days = US$ 101,572

Stanadyne – Windsor, CTPump Head Cell Kaizen Results

Feb 2007 Item Improvement Metric Before Target for After

# # # % 1 Total OCT 3500 sec 1729 sec 50%2 RM/WIP 7768/3441 2289 Std

WIP 33%

3 Lead Time 8 days 1.5 hrs 99% 4 Productivity(pcs/person/hr) 1.26 1.62 29% 5 Space 7417 sq ft 5501 26% 6 Mistake Proof 0 5 % 7 Product travel PH - 3342ft PH -359 ft 89%

7363.2s

Emerson Electric - Astec Power China

LP Cell Kaizen Event

Annual saving on 8 workers:

=10 Hr. * US$ 0.92 * 250 * 8

= US$ 18,400

* LP Cell Line Layout Changed By Kaizen Event

USAF-Tyndale AFBDrone Parachute Packing Kaizen – Jan 2007

Current State Times – 28 Hours and 1 Minute

Future State Times – 19 Hours and 40 Minutes

30% Cycle Time Reduction: Over 8 hr reduction or 2 Man DaysImproved rigging methods, new fixtures, new designs, reduced soak times, reduced walking waste, PreKitting

Future State Value Stream