Case Study: Business Transformation – Benchmark Shop Floor Management (Toyota KATA)

Background

Our Client, a Leading Automotive Manufacturer, has a vision to be the Number One Carmaker globally. They have an excellent level of Lean Production System applications in most of its plants around the world. The next step in its roll out was to develop a management system that links the local plant shop floor performance directly to the central company Strategy, Business Plans and Targets. To create a Benchmark Shop Floor Management system that improves the overall plant performance was the challenge given to @Ingeniuslean. The project targets given to @Ingeniuslean were as follows:

  1. Create the link from the top company vision, Master Schedule (Hoshin) and targets centrally to the actions and results of the individual teams locally in the plant.
  2. Create a Policy Deployment method to ensure the activities at the local plant supported the Global Vision & Strategy.
  3. Improve the plant performance through shop floor management techniques and problem solving projects.
  4. Build into the company management appraisal system objectives and targets linked to the from the shop.

Our Approach

@Ingeniuslean developed a 3 step strategy to ensure the targets of the project were achieved whilst creating a management system that maintains the activity for the future.

  • First Step : Develop the Key Performance Indicator (KPI) Tree. Identify through multiple workshops with senior and mid management, what measures and activities are interdependent with each other to achieve the top line measures.

  • Second Step : Deploy the KPI tree metrics in the appropriate locations around the plant to create transparent performance and discussions. Measure the results and identify the gaps.

  • Third Step : Create management systems, improvement activities and multiple projects to close the identified gap and support the overall company targets.

The @Ingeniuslean Solution

Ingenius Lean Business Transformation 3 Step Strategy

  • A clear KPI Tree was developed for each department within the plant that clearly showed that the effect of activities at the bottom level supported the results at the top level.
  • The plant Hoshin developed and deployed to all areas of the business with concrete measures and actions at all levels.
  • A consistent plant direction and measurement system reporting at the right level and frequency.
  • Daily and weekly meetings measuring and reporting performance up to the Monthly Plant management meeting.
  • The plant shop floor visualisation showed clearly the status of activities and performance. Not only business metrics but physical indicators showing the condition of the plant.
  • Clear visualisation systems and escalation rules set in place to manage the plant in real time.

Based on the management systems set up, the goal was to visualise the GAP, the performance under target, and develop activities to bring the results to a good condition.

The solutions and implementation activities consisted of:

  • Identifying and setting-up Quality improvement activities to improve the amount of cars passing the quality checks first time.
  • Improvement activities to reduce the amount of hours per vehicle.
  • Eliminating waste from all processes to increase the Value Added Ratio per process.
  • Creating a visualised management system tracking the Lead Time per vehicle to improve the on time delivery to the customer.
  • Inventory management systems implemented to reduce the Work in Progress and inventory levels within the plant.

One to one coaching of senior management took place to coach how to lead the hourly and daily business reviews. Overall, the shop floor management system created a Plan, Do, Check, Act (PDCA) management system.

 

Results

The amount of vehicles passing quality checks first time increased from 78% to 92%. Hours per Vehicle is a critical indicator within the automotive industry. This reduced by 14% with the activities implemented. Further projects planned will reduce this further. Based on the initiatives across the plant focussing on inventory levels, the cost of inventory reduced by 18%. The plant visualisation was changed significantly allowing for live information and status of every line and area of the plant. Management can judge whether they are on plan or behind and therefore make informed decisions. The daily management meeting has created a culture of transparency which allows for quick action and teamwork when a business metric is highlighted as a problem. The plant organisation has created streamlined processes with the focus on eliminating waste with processes designed with one piece flow in mind and all parts and equipment visualised locally. This again allows for ownership with the craftsman to manage his process and escalate issues quickly. With all of these benefits, the bottom line is the improvement in business metrics. The on time delivery has increased from 86% to 95% with ongoing improvements identified. But above all, as mentioned previously, the daily management meeting has allowed for eliminating the information gap thus much quicker reactions.

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