Get Continuous Improvement with Operational Excellence

1. Continuous Improvement with Operational Excellence Create Standard Work for Flow Easily with Operational Excellence

2. OperationalExcellence Systematic management of all the processes toachieve world class performanceby:    Efficient utilization oftools Optimization ofResources Elimination of process waste /inefficiencies www.opexsociety.org 307.222.6083 opexsociety5@gmail.com Let Your Organization Be at Competitive World for Long

3. Lack of operational Excellence… Resultsin low profitability andcash flowissues When do you addressit? www.opexsociety.org 307.222.6083 opexsociety5@gmail.com

4. Operational Excellence Becomes aConcern when… • Cash flow starts to get a littletight • Trouble meetingpayroll • Suppliers are screaming forpayments • Inventory is out ofcontrol • Expenses are rising faster thanrevenue • Backlog starts toshrink • Opportunities are missed due to cash flowissues www.opexsociety.org 307.222.6083 opexsociety5@gmail.com

5. Improving Profitability – TraditionalApproach • CFO/Department Head is responsible tolead • the cost cuttingefforts • Focus usually is on cuttingexpenses  Reduce EmployeePerks  Workforce Reduction Extend PaymentTerms Scrutinize Purchasing www.opexsociety.org 307.222.6083 opexsociety5@gmail.com

6. Performance Improvement: StrategicApproach Generate Ideasto achieve a better level ofoutput measure the current levelof performance identifywaste Performance improvement is allabout organizationalchange www.opexsociety.org 307.222.6083 opexsociety5@gmail.com

7. Ideas Shouldbe… • Effective • Efficient,and • Adhere toMarket Forces www.opexsociety.org 307.222.6083 opexsociety5@gmail.com

8. How to Generate The Ideas Value StreamMapping   Eliminate Waste $ Increase Profits VisualizeYour Processes • Lean: A business system for organizing and managing product development, operations, suppliers, and customer relations to create precise customer value—goods and services with higher quality and fewer defects—withless human effort, less space, less capital, and less time than the traditional system of mass production. • Value Stream Mapping is a Lean technique used to analyze the flow of materials and information currently required to bring aproduct or service to aconsumer. www.opexsociety.org 307.222.6083 opexsociety5@gmail.com

9. Purpose of Value StreamMapping • Identify processes where “Lean” techniques canbe applied • Help reduce / eliminate waittime • Eliminate processwaste • Reduce production cycle and processingtime • Understand process linkages anddependencies • Create the basis for “Lean” implementationplan www.opexsociety.org 307.222.6083 opexsociety5@gmail.com

10. Value Stream Mapping – CaseStudy www.opexsociety.org 307.222.6083 opexsociety5@gmail.com

11. BusinessCase ProblemStatement Losing Business to competitors dueto long lead times and latedeliveries. Solution Improve lead time performance by synchronizing production with customer demand. KeyRequirements • IdealState • On-Demand • DefectFree • •1-By-1 • LowestCost Reduce flow time to meetcustomer demand. Reduce RAW, WIP and FGIlevels. Measurements Total flowtime Inventorylevels EBITperformance. www.opexsociety.org 307.222.6083 opexsociety5@gmail.com

12. Value Stream Map – CurrentProcess www.opexsociety.org 307.222.6083 opexsociety5@gmail.com

13. Team Brain StormingSession • Can Customer increase the size of the blanket order and provide us with a longer term forecastvisibility? • Can we flow the demand down to the supplier with a longer termvisibility? • How can we reduce waittime? • How can we reduce change overtime? • Can we reduce lotsize? • Can we merge production processes to reduce travel time? www.opexsociety.org 307.222.6083 opexsociety5@gmail.com

14. Value Stream Map- FutureProcess www.opexsociety.org 307.222.6083 opexsociety5@gmail.com

15. Strategy Implementation CheckList • People Do Plan • Product • Systems Act Check • Processes www.opexsociety.org 307.222.6083 opexsociety5@gmail.com

16. NextStep • How would you apply Value Stream Mapping intoyour • Business? • Share the business challenge with your keystaff. • Define businesscase • Define a high level businessprocess • Define activities for each business process including waittime. • Randomly pick a minimum of 5 current jobs and record all activities and time. From the initial customer call to receipt of payment for the goods orservices. • Map the process – this is your current value streammap • Categorize each activity as value added or non valueadded • Define a map eliminating as many of the non valueadded • activities – now you have a first draft of the futurestate www.opexsociety.org 307.222.6083 opexsociety5@gmail.com

17. NextStep • StrategicPricing • Set the pricewhich is easily accessible to mass ofbuyers • UsePricing • CorridorTool • Adoption • Create aconsensus • Address adoption hurdles in actualizing the strategy • BalanceScorecard • Identify Initiative • Does your product offer exceptional Buyerutility? • Use BuyerUtility Map • Align Operations • Set TargetProfit • Come upwith • TargetCost • StreamlineCost Innovation www.opexsociety.org 307.222.6083 opexsociety5@gmail.com