Lean Supply & Continuous Improvement for High Performance

1. Agenda • Kaizen activity • Continuous improvement • Lean Supply • Value Stream mapping • Process workstream improvement • High Performance Programme (HPWS)

2. Programme overview • Two types of Kaizen Value – Stream improvement – “Flow Kaizen” – is management doing Kaizen Senior Management Flow Kaizen (Value Stream Mapping) Process Kaizen (Elimination of Waste Front Lines

3. Haddenham Supply Chain/Operation Improvement Programme 2010 a. VSM I JasonSanderson b. VSM II NickParr c. VSM III HelenCorbett d. VSM IV ShevaunNewsome Steering Committee RD MW NN TPCH Q2 Lean/Pull Supply Chain(Material/Information Flow) HPWS/CI Initiative(People/Process Improvement) Q1 Runners Lean/VSM Projects CI Project Lean Product Families Chilli con carne Repeaters Strangers Pull/Stock Reduction = Working Capital PR Improvement = Cost Reduction

4. Continuous Improvement • Continuous Improvement • Develop 7 elements fit for purpose in Haddenham • Project selection based upon Process Reliability data • Rate Loss • Targeted improvement Q1, Q2, Q3, Q4 • Process Reliability Improvement • Employee Engagement Q1, Q2, Q3, Q4 • Commitment – Ensure Senior team attendance at all Continuous Improvement project reviews. • Key Performance Indicators • Define what these are • Determine where / how these will be captured. • Communication • EMEA Level • Local Level

5. What is the USIG CI Process • What is C I • It is a structured process • Easy to follow, based upon DMAIC • Focuses on the process owners (Operators) determining both issue and resolution • Narrow focus on issue • Yields 40% - 50% improvement • Should not take more than 4 – 6 weeks to complete

6. C I Project / Team Selection • C I Methodology • Move away slightly from Dallas Model, two team types.. • Rate Loss accounts for 30% - 40% of non value add activity • Can be Difficult to uncover, requires traditional Industrial Engineering skills to have full understanding of both issue and resolution. • Solutions tend not to be solely process step driven but technically driven • Demands a different Skill Set Rate Loss Process Reliability Known Downtime • Easily understood, generally process step driven • Stand and watch for 5 minutes and you can see it. • Relatively quick and easy to fix • Dallas C I model fits this category very well

7. Haddenham Supply Chain/Operation Improvement Programme 2010 a. VSM I JasonSanderson b. VSM II NickParr c. VSM III HelenCorbett d. VSM IV ShevaunNewsome Steering Committee RD MW NN TPCH Q2 Lean/Pull Supply Chain(Material/Information Flow) HPWS/CI Initiative(People/Process Improvement) Q1 Runners Lean/VSM Projects CI Project Lean Product Families Chilli con carne Repeaters Strangers Pull/Stock Reduction = Working Capital PR Improvement = Cost Reduction

8. Lean Supply What is Lean Supply? “The use of the minimum resources, eg. Manpower, machinery, materials, space and time to manufacture and supply the product” Toyota Production System “Manufacturing is seen as product based with alignment to processes NOT distinct functional operations” The Lean Wheel measures categories, Objects Goals, Strategies, Measures, Tools and Techniques, which are deployed Easier Quicker More Safer Better Cheaper

9. Lean Supply Types of activities to make product • Value Adding – In the eyes of the customer make a product or service more valuable • Essential non value adding – do not make he product or services more valuable but are necessary unless the supply process is radically changed • Non Value – do not make a product or service more valuable and are not necessary even under present circumstances • The Eight deadly wastes: Over Production Defects Physical Resources Over Processing Transport Motion Storage Inventory Waiting

10. Share Benefit with customer Retain Benefit within McCormick Structure implications Manufacturing Supply Chain Commercial Procurement Customer PPV Recovery (ITO) COGS Purchase Price Raw Mat Std Total Cost Service GP% Over-riders & Discounts Value Stream – Total value impact approach – compromise on individual KPIs to achieve an overall objective

11. CM71 Current State Value Stream Map

12. CM71 Current State Value Stream Map

13. VSM output plan • Provides a process for what happens following VSM workshops • Identifies link with C.I. activity • Shows which items will be taken to steering committee for review.

14. Questions?

15. Agenda • Kaizen activity • Continuous improvement • Lean Supply • Value Stream mapping • Process workstream improvement • High Performance Programme (HPWS)

16. Number of Employees Performance Objective & Strategy • Provide a culture that motivates and empowers people to use their talents and potential for the purpose of attaining profits and a competitive advantage. Higher level skill-set, engagement & discretionary effort Increased individual, team & workforce performance Create capacity

17. HPWS Operating Model High Performance Culture Behaviours Role Model People follow the leader Norms 6 systems Values Principles Leadership Style

18. Evaluation & Revision SUCCESS Individual Sensing ATTRIBUTES SYSTEMS GUIDING PRINCIPLES CORE BELIEFS Continuous Improvement McCormick High Performance System Model SUCCESS Customer Quality product on time, right place, right price …EVERY TIME Business Employee Reduced cost Reduced waste Improved safety Improved quality Improved productivity Self esteem Job security Job satisfaction Individual growth ATTRIBUTES Operating Procedures and Processes Individual Capabilities & Skills Team Capabilities & Skills Attitude/Feelings Significant/Valued/Included SYSTEMS Rewards & Recognition Goals Setting Performance Management (Professional Development) Information Systems Problem Solving & Decision Making Training & Development GUIDING PRINCIPLES Results Focus Common Objective Management by Principles Team Work Total Task Problem Solving / Decision Making Multi-Skilled Productive use of Differences CORE BELIEFS The success of the company depends upon the capabilities and contributions of all people in the organization There is a deep respect for the capabilities of people People will contribute to what they understand and feel is in their best and self-interest

19. HPWS Design • Six Systems • Goal-Setting / OGSM’s • Performance Management / Personnel Development • Problem Solving / Decision Making • Training & Development • Information Sharing • Reward & Recognition Leader Execution & HR Governance Team Structure & Development

20. Background - MDC • Changing the culture of management • From “Directive” to “Supportive” • Goals: • Self directed work teams • Operators manage task assignment, workload completion, task scheduling etc • Free up management to drive forward innovation • 1/3 Coaching, 1/3 Projects, 1/3 Daily management • MDC roll out took 3 to 4 years • Timescale driven by management acceptance

21. Background - MDC • Significant training investment starting with management • Change role of managers • Build trust and engagement with operators • Establish shared goals and measures • Develop structure: • Development opportunities for operators • Career path options • Cross training and multi-skilling • Information sharing process – scorecard and objectives • Operator level training • HPWS process and expectations

22. Questions?