what’s the difference?instituteopex.org/site/writeable/custom_uploads/23def47875068c57… ·...

Operational Excellence and Lean:What’s the Difference?

Kevin J. DugganTim Healey

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© 2017 Institute for Operational Excellence. All Right Reserved.

Kevin J. Duggan

• Renowned author:– Design for Operational Excellence: A Breakthrough Strategy for

Business Growth– Creating Mixed Model Value Streams, 2nd Edition– The Office That Grows Your Business – Achieving Operational

Excellence in Your Business Process

• Executive mentor to FMC Technologies, United Technologies Corporation, Pratt & Whitney, Singapore Airlines, IDEX Corporation, GKN and Parker Hannifin and many more.

• Featured on CNN and the Fox Business Network.• Lecturer to graduate students in business at colleges

throughout the United States, including the University of Michigan, University of Rhode Island and Ohio State University.

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Kevin J. Duggan

• Kevin has assisted many major corporations worldwide including FMC Technologies, Chromalloy, Aetna, SpaceX, Caterpillar, Pratt & Whitney, Singapore Airlines, Sikorsky, IDEX Corporation and Parker Hannifin

• Frequent keynote speaker, master of ceremonies, and panelist at international conferences, and has appeared on CNN and the Fox Business Network.

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Continuous Improvement

Companies have done continuous improvement activities for years…

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Pareto

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Impact

Effort

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Six Sigma

Assembly

1

• Focuses on eliminating variation in the process to ensure it is:– Predictable.– Repeatable.– Dependable.– Provides perfect quality.

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Lean Value Streams

Lean value streams string these predictable, repeatable, dependable, controlled processes together so value flows with little waste from raw material to the customer.

AssembleCleanMachine

1 1 1

Waste Waste Waste

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Lean

Lean Value Streams


1 1 1

Six Sigma Six Sigma Six Sigma

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The Lean Journey

SustainImprove

SustainImprove

SustainImprove

Eliminating Waste

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Operational Excellence

Waste-free company

Time in Years

Leve

l of i

mpr

ovem

ent

1 5 10

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Time in Years

Leve

l of i

mpr

ovem

ent

1 5 10

Waste-free company

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“When each and every employee can see the flow of value to the customer, and fix that flow before it breaks down.” SM

Kevin J. Duggan

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Lean

Lean Value Streams


1 1 1

Six Sigma Six Sigma Six Sigma

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Lean vs. Operational Excellence

Lean Operational Excellence Focuses on eliminating waste. Designs value stream flow.Provides tools to use to eliminatewaste.

Makes flow autonomous and self-healing.

Target is to create value streams* that flow value at the rate of customer demand.

Eliminates the need for management intervention.

Endless Journey Management focuses on Voice of the Customer.Invests in becoming a solution provider,and/or new technology.Focuses on revenue generation.

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Lean vs. Operational ExcellenceSteel StreetAssembly

18,400 pcs/mo- 12,000 “L”- 6,400 “R”

Tray = 20 pieces2 Shifts

Shipping

Staging

C/T = 40 secs

C/O = 0

Uptime = 100%

2 Shifts

27,600 sec.avail.

1xDaily.

C/T = 62 secs

C/O = 0

Uptime = 100%

2 Shifts

27,600 sec.avail.

C/T = 46 secs

C/O = 10 mins

Uptime = 80%

2 Shifts

27,600 sec.avail.

C/T = 39 secs

C/O = 10 mins

Uptime = 100%

2 Shifts

27,600 sec.avail.

C/T = 1 secs

C/O = 1 hour

Uptime = 85%

2 Shifts

27,600 sec.avail.

MichiganSteel Co

500 ft coils

Tues &Thurs.

MRP

ProductionControl

90/60/30 dayForecasts

DailyOrder

6 WeekForecast

Weekly Fax

Weekly Schedule

Daily ShipSchedule

5 days 7.6 days 1.8 days 2.7 days 2 days 4.5 days

1 sec 39 secs 46 secs 62 secs 40 secs

Production Lead Time = 23.6 days

Processing Time = 188 s

Assembly #2

1

Assembly #1

1

S.Weld #2

1

S.Weld #1

1

Stamping

1

Learning to See Mike Rother John Shook Lean Enterprise Institute 1998

ICoils

5 Days1200L640R

I2700L1440R

I1600L850R

I1100L600R4600L

2400R

I I

Waste

Waste

Waste

Waste

Waste

Waste

Waste

Waste

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• Create the current state map.• Identify waste on the current state map. • Brainstorm ways to eliminate the waste. • Create a future state map with less waste.

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Learning to See

• 6 guidelines for what makes a value stream lean

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Creating Mixed Model Value Streams

• 10 guidelines for creating a mixed model pacemaker.

• 6 guidelines for creating flow through shared resources.

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Operational Excellence in Your Office

• 9 guidelines for creating flow through the office

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Normal

Abnormal

Normal vs. Abnormal Flow

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The Eight Steps to Achieve Operational Excellence

1. Design a lean flow using lean guidelines.2. Implement a lean flow.3. Make the lean flow visual.4. Create standard work for the lean flow.5. Make abnormal flow visual.6. Create standard work for the abnormal flow.7. Teach employees to maintain and improve the flow to

the customer.8. Free management to work on offense.

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Operational Excellence and Business Excellence

Increase efficiency

Cut costImprove quality

Increase OTD

Reduce lead time

Brand recognition

VOC

Increased sales

Higher market share

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Lean and Operational Excellence

Continue to drill deeply to eliminate waste

Ops management spends most of its time on activities that grow the business:

• Brand recognition• Voice of the customer• Solution provider• Technology

improvements

Lean Journey

Lean Journey


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The Bridge Operational Excellence and Business Excellence

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Operational Excellence at Micropump

“You have to earn the right to innovate with your customers!”

~President, Micropump

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Operational Excellence at Hypertherm

• No production control department.• The local labor market for machinists “dried up,” but

rather than outsource, they built the Hypertherm Technical Training Institute (HTTI).

• Hypertherm has not laid off any associates since they began operations over 40 years ago.

• In 2012- 2015, HT went from 1,000 associates to 1,400 associates.

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Operational Excellence at Hypertherm

“Going forward, we’re going to keep pushing the envelope for how autonomous our operations can be in terms of not relying on management for their day-to-day functioning,”

~Jim Miller, Vice President of Manufacturing

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Live Training EventsEach year the Institute for Operational Excellence produces training events throughout the U.S. and Europe.

London, EnglandMay 8-10, 2017

Denver, COJune 12-14, 2017

Anaheim, CAOctober 16-18, 2017

For more information please visit www.instituteopex.org/events

London, EnglandMay 11, 2017

Denver, CO June 15, 2017

Anaheim, CAOctober 19, 2017

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what’s the difference?instituteopex.org/site/writeable/custom_uploads/23def47875068c57… ·...

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