Manufacturing Business Management: A Practical and Cohesive Perspective for Long Term Success

1. Manufacturing Business Management: A Practical and Cohesive Perspective for Long Term Success

2. TPS Is Not TPS Is A Way of Managing the Whole Enterprise A System Focused only on the Production Process Applied Materials Confidential

3. Implement Adjust Starting Point: A Way of Thinking! Phase IHow to Think Phase IIWhat to Do Phase IIIImplementation Consistent Philosophy Practical, Value Added Study Workplace Determine What to Do

4. Impressions from My Transition: Traditional to Toyota Toyota Traditional Point Situational, consensus as goal Maximum possible Drives all actions Consistently deep Consistently highlevel required Group controlled with consistent thinking Top down directive Minimal, labor is labor Minimal, rely on reports mostly Inconsistent depth People dependent Individual manager driven Decision making Employee empowerment Focus at point of action Attention to detail Discipline Change

5. Linking the Vision I. Culture II. Management III. “Toyota Production System” IV. Summary

6. Perpetual Living and Evolving Organized System Standard: Record of best known method to perform work repeatedly Problem: Actual performance has fallen below proven capability Kaizen: Develop a better method to perform work repeatedly Standard (Capability) Kaizen Actual (Performance) Performance Kaizen People Problem Direct Team Member Team Leader Problem Group Leader Time Key: For problems and kaizen, an organized support system exists whereby people join as support to solve the problem or implement the kaizen.

7. Customer Focus Who is the customer? Customer Process Supplier Customer Process Supplier Customer Process Supplier 1 2 3 What is the customer’s expectation? “Work” is passed from supplier to customer with following expectations: 1. What is needed 2. Quantity needed 3. When it is needed 4. With Zero Defects

8. Safe Environment for Team Members Negative Method Not again! Help! Problem Supervisor TeamMember Problems = ?

9. Safe Environment for Team MembersSurfacing Problems Receive Positive Recognition Negative Method Positive Method Not again! Good job!How can I help? Help! Help, please! Tools Problem Problem Supervisor TeamMember Problems = Opportunities to Improve

10. Decision Making Methods • Decision making is highly situational • Philosophy is to seek maximum involvement for each situation Group Consensus, with Full Authority Group Consensus, Management Approval Fallback (if consensus not achieved) Seek Group Input, then Decide and Announce Level of Involvement Fallback Seek Individual Input, then Decide and Announce Decide and Announce Time

11. Discipline Everywhere Company Department Individual Department Individual Strict adherence to plan Identify problems Adjust Continue implementation Planning Execution

12. All Team Members Respected Equally Supervisor Technical Support Direct Line GOAL Management Administration

13. NO Simple Is Better

14. GO NO Simple Is Better Choose most simple flow or method for each situation

15. The Snowman Instruction

16. Linking the Vision I. Culture II. Management III. “Toyota Production System” IV. Summary

17. Managing Philosophy Direct Line Team Members Indirect Support Team Members Supervision Management Senior Mgmt Solve Problems Coaching Developing

18. “Go See” Managing Principle • Always “go see” the worksite to know the real problem • Do not take action based upon reports • Make frequent trips to worksite without specific problem Worksite Office 1 2 3

19. Management Team with Consistent Principles Managing Principle Manager A Manager B Manager C Yes Yes Yes Yes Yes Establish process flow Coaching, developing style Asks questions to learnsituation before action Encourages/teaches Kaizen Supportive, sees problems as opportunities Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Method to Practice Principle Personality Dependent

20. Cost and Product Quality Is in Our ControlSelling Price and Quality Expectation Is Market Driven MarketSets Price and Quality Expectation Company A B C D E Cost Quality Cost Quality Cost Quality Cost Quality Cost Quality Quality Impacts Market Price and Sales Volume Market Price Cost Profit

21. GO NO Focus on Change Only Error Margin Change Throw Outthe Old Error Margin N E W Bring in the New Current

22. Linking the Vision I. Culture II. Management III. “Toyota Production System” IV. Summary

23. Toyota Production System Kaizen J I D O K A Flexible, Motivated Employees J I T Most Essential Element Critical Activities Maintenance of Standards Standardization Foundation For the Customer For the Employees For the Company Goals/ Desired Outcomes Highest QualityLowest CostShortest Lead-Time Work SatisfactionJob SecurityConsistent Income Market FlexibilityProfit (fromcost reduction) Philosophies Customer First Respect for Humanity Elimination of Waste

24. Focus on JITBuilding Blocks of Just-In-Time Goal Just-In-Time Continuous Flow Processing Pull System (Kanban) Takt Time Level, Sequential Production

25. Unleveled Production Part A Line Following Process Part B Line C B A Storage Part C Line Preceding Process

26. Leveled Production Part A Line Following Process Part B Line C B A Storage Part C Line

27. Separately Positioned Processing Inventory A Materials Finished Products B C Inventory Inventory

28. Continuous-Flow Processing Finished Products A B C Materials

29. Focus on JIDOKA Objective: Pass 100% Good Quality to Next Process Andon Board 1 2 3 Andon Cord 1 2 3 Team Leader • Andon pull = opportunity to meet objective • Team member must feel safe to pull andon

30. Quality Circles • Study • Analyze • Plan • Implement • Check • Adjust Meeting Worksite

31. Types of Waste Waste of Waiting Waste of Correction Waste of Over- Production Waste of Motion Types of Waste Waste of Inventory Waste of Processing Waste of Conveyance

32. TPS: Myth vs. Reality Myth What TPS Is Not A Tangible Recipe for Success A Management Project or Program A Set of Tools for Implementation A System for Production Floor Only Implementable in a Short or Mid-term Period

33. TPS: Myth vs. Reality Myth What TPS Is Not Reality What TPS Is A Tangible Recipe for Success A Management Project or Program A Set of Tools for Implementation A System for Production Floor Only Implementable in a Short or Mid-term Period A Way of Thinking A Total Management Philosophy Focus on Total Customer Satisfaction An Environment of Teamworkand Improvement A Never Ending Search for a Better Way Quality Built in Process Organized, Disciplined Workplace Evolutionary

34. Linking the Vision I. Culture II. Management III. “Toyota Production System” IV. Summary

35. TPS Is a Managing Philosophy TPS Customer Focused Never ending Search for as Better Way Accounting Human Resources Engineering Production Information Systems Marketing Consistent Management, PositiveEnvironment for Success Tools and Techniques – Developedand Evolving with Experience

36. Preconditions for Successful Change 1. Company-wide philosophy and mindset 2. Company-wide hunger for long-term success, from top down 3. Consistent company-wide management direction with patience

37. Points to Remember: As Management: 1. A managing philosophy and way of thinking is the key to unlock systematic success! 2. A world-class business is a living, evolving organized system! 3. Everyone should remain focused on their customer!

38. Points to Remember: As Management: 4. An environment of support from each indirect and management position with respect for all positions, and problems are welcomed as opportunities is essential! 5. The “production system” is critical as the foundation for executing the management philosophy!