Hosted by CIRAS: The Iowa Lean Consortium The Role of Leadership in creating a Lean Culture Mike Hoseus

Transcription

1 Hosted by CIRAS: The Iowa Lean Consortium The Role of Leadership in creating a Lean Culture Mike Hoseus Author, President, Lean Culture Enterprises Executive Director, Center for Quality People & Organizations (CQPO) mike.hoseus@gmail.com or

2 X-Y Exercise Ice Breaker Exercise

3 Typical Approaches to Lean Tools Focus Kaizens 5S Kanban Heijunka TPM Cells Teams System Focus Company X Production System Lean Six Sigma Subjective Assessments, Complicated Graphics, Corporate Staff Driven 3

4 Why do We Need the Tools? Lean tools were invented to help people analyze their own work processes, to help them learn how to see the waste (Muda) themselves so they can improve their work. Lean Tools Lean tools on their own don t create lean culture! 4

5 If Lean Tools don t Create the Lean Culture What does? 5

6 Three Levels of Culture Artifacts & Behavior What we see, what a newcomer, visitor or consultant would notice (e.g., dress, organization charts, physical layout, degree and formality, logos, and mission statement. Norms & Values Underlying Assumptions What they say, What we would be told is the reason things are the way they are and should be. Company philosophy, norms and justifications. What they deeply believe in & act on Unconscious, taken for granted beliefs about the organization and its work/purpose, about people, rewards etc.. Based on Edgar Schein, Coming to a new awareness of organizational culture, pp in J.B. Lau and A.B. Shani, Behavior in Organizations, Irwin, 1988

7 Lean Transformation Not Lean Implementation with tool focus System focused journey across the enterprise Develops all employees as problem solvers Competitive advantage Bottom line profits Mutual long term prosperity for all stakeholders

8 Fujio Cho, Chairman of Toyota These (concepts) are things companies (people) do not normally do. It s difficult to live the Toyota way of production.

9 Broader Definition of Lean Way of thinking Systematic Systems Thinking Connecting the Production System with the Human System creates a Total Business System 9

10 Lean Organization Purpose Vision/Values True North (Employee) Line of Sight Strategy Formulation & deployment) People Putting people before products Engaging, Involving Challenging & Coaching Teamwork Capability to ID & Solve Problems PDCA Thinking Core Process Horizontal flow of value at the pull of the customer Workplace Management through standardization & Visualization Relentless elimination of waste, overburden and unevenness Lean Tools 10

11 How do we Think as a Company? Problem solving should be an essential part of an organization s culture, from plant presidents to office work to manufacturing floor team members. Members should be aligning their daily work with the indicators of the Organization, those are: Quality, Safety, Productivity, Cost, and HR-T&D "Tell me and I will forget, show me and I might remember, involve me and I will understand." - Confucius 11

12 Defining the Purpose Capability to ID & Solve Problems Strategy Formulation & deployment) People Process Putting people before products Engaging, Involving Challenging & Coaching Teamwork PURPOSE Vision/Values True North (Employee) Line of Sight PDCA Thinking Core Horizontal flow of value at the pull of the customer Workplace Management through standardization & Visualization Relentless elimination of waste, overburden and unevenness Lean Tools 12

13 Horizontal Versus Vertical Lean management places the horizontal flow of value in the foreground: Lean managers think horizontally, with the help of value stream leaders. However Functions are still strong (or even stronger): Repositories of deep technical knowledge Home base for employees Guardians of career paths 13

14 Big horizontal business processes Value and work flows across functions Suppliers Sales Marketing/ R&D Supply Chain Human Resources Finance IT Customers Growing the Business Selling, market building Ideation, product development and launch Business development and alliances Most important problems are cross-functional Fulfilling Customer Orders Order to delivery Buy make ship Procurement and supplier development Growing and Developing People, Leaders Human resources management Training and development Learning and problem solving 14

15 Customer Focus Value added is always determined from the customer s perspective - Who is the customer? Every process should be focusing on adding value to the customer Anything that does not add value is waste Some non-value added activity is necessary waste

16 Which one describes your Company? Vertical Focus - Production Budgets, SOP s Make the numbers Leaders separated from the work People s ingenuity used to beat the system Supervisors manage people Horizontal Focus - Process Purpose Make problems visible Leaders focusing on the work People s ingenuity used to improve the system Supervisors work with the people to solve problems

17 True North Purpose, Philosophy and Beliefs Values Vision Big Picture Goals

18 Purpose Company Goals Employee Goals Profit Long Term Success Contribute to Economy Contribute to Society Good Quality Long Term Mutual Prosperity A Paycheck Growth Good Benefits A Safe Workplace Meaningful Work Mutual Trust

19 A Partnership between an Organization & its Employees Organization provides Stable Employment & Sustains or Improves Working Conditions Organizational Prosperity is achieved through Continuous Improvement Respect Partnership Mutual Trust Continuous Improvement Employees Satisfaction is experienced through the Continuous Improvement Process Employees Contribute Efforts to Realize Company Objectives

20 Intention of Customer First / Quality First Quality to Who? This process is good. Because defect ratio is about 0.01% Achievement of defect ratio equals good quality? Thinking just from Company Perspective. Quality is to Customers It s necessary to consider/judge from Customer perspective. Customer Expectation = always moving, variation. Quality Toyota STD Quality = Customer Expectation Cost & Productivity is for Company.

21 Quality vs. Cost/Productivity Good Quality Cost Productivity High Quality Lowest Cost Highest Productivity Bad High Cost Low Amount Strong Point of Toyota: Able to produce Best Quality Vehicle, at lower Cost, in Timely manner. Assure Quality First, Carry out the Lowest Cost/Highest Productivity

22 Alignment of Values Society Economy Company Group Self

23 Applicability of Values to Key Stakeholders Customer Suppliers Employee Community Owners/Investors Competitors

24 Benchmark-Toyota Way The Toyota Way 2001 is an ideal, a standard and a guiding beacon for the people of the global Toyota organization. It expresses the beliefs and values shared by all of us.

25 Toyota Way Values Beliefs Thoughts Actions Habits TBP 8 Steps Character Culture It Starts with Values Goals for the company 25

26 Servant Leadership Leadership develops the capacity that allows team members to improve what needs to be done Suppliers Team Members - Customers Team Members Group Leaders Asst. Manager/Manager Asst/General Manager Vice President President

27 Building the Lean Process PURPOSE Vision/Values True North (Employee) Line of Sight Process Strategy Formulation & deployment) People Putting people before products Engaging, Involving Challenging & Coaching Teamwork Horizontal flow of value at the pull Capability of the to customer ID & Solve Problems Workplace Management through standardization & Visualization PDCA Thinking Relentless elimination of waste, overburden Core and unevenness Lean Tools 27

28 Make problems & opportunities for kaizen visible. Safety Quality Productivity Cost HR PDCA Set up Standard Check Abnormality Standardized Work, 5-S 5-S Visual Control (Andon, Line-stop, Visual Management) Visual Standardized Control Work, & Management 5-S Kaizen Problem Solving

29 Lean Management Hoshin Thinking Process External and Internal environment at year-end SWOT True North Purpose of plan (start of year) Company business priorities (measures) Data Crunching Adjust Grasp the situation Plan Department goals for coming year Check Do New needs and expectations of team Plan: Goals, strategies, and activities Reflection: What actually happened? Shortfalls in previous outcomes and activities Manager grasps situation and prioritizes needs of team Goals and strategy for coming year Adapted from Getting the right things done Pascal Dennis Storytelling

30 Hoshin Kanri Process

31 Roadmap Start by knowing the destination Hoshin Kanri True North: Ideal Mid-Range Plan 2010 Annual Policy & Objectives 2010 Plant Annual Plan 2010 Manager Annual Plans Everyone knows the destination!!

32 Comparison between MBO and Hoshin Kanri Management by Objectives Results Oriented Evaluation of Effort Top down Communication Directive Hoshin Kanri Concerned with both Results and Process of getting those Results Top down Direction Setting and Bottom-up flow of Information and means Participative Primarily Authority Oriented Primarily Responsibility Oriented

33 Hoshin Roadmap Later Destination (Vision) Use Continuous Improvement to remove small obstacles on an ongoing basis Later Use Hoshin to remove the Big Boulders, one at a Time Starting Point (Current Condition) The Strategic Plan is the Road to a Desired Future State of the Organization 33

34 Hoshin Kanri = Direction Management Company Hoshin Function Hoshin OJD P/S Vertical Alignment Division Hoshin Horizontal Alignment Department Hoshin Individual Priority Themes

35 Lean Leader Model Based on Liker, The Toyota Way Bottom-Up Development Top-Down Directive Group Facilitator You re empowered Bureaucratic Manager Follow the Rules Builder of Learning Organizations Here is our purpose and direction. I will guide and coach Task Master Here is what to do and how do it General Management Expertise In-Depth Understanding of Work

36 Principal Roles For ALL The Lean Management System 1. Go and See: Understand the real situation, the real process, from the real people who work it, at the real place of action. 2. Define Normal Conditions Is the Current Condition (ab)normal? Prove it. Can you define (ab)normal? Write it. Can you SEE (ab)normal? Visual Management When is it (ab)normal? Tracking Metrics 3. Solve a Problem Teach the METHOD for Problem Solving get involvement. Implement Solutions / Permanent counter measures. 4. Sustain and Nurture the Processes/People

37 LEAN CULTURE OVERVIEW MODEL Human Resources ORGANIZATIONAL STRUCTURE & SYSTEMS Quality People INPUTS ATTRACT DEVELOP ENGAGE ENROLL OUTPUTS Assessment ORGANIZATIONAL LEADERSHIP & ENVIRONMENT Quality Organization

38 Role of HR The keeper of the values Determine organizational competencies Use demonstration of competencies to link hiring, training, evaluation, promotion, recognition and promotion Ensure fair and consistent policies System of checks and balances System of CA-PDCA culture

39 Identifying Lean Core Competencies Thinking and Operational Abilities Grasp the Situation Problem Solving Process Management Company Business Perspective Development Operational and Technical Skills

40 Identifying Lean Core Competencies Leadership & Teamwork Abilities Coordinate and Communicate Collaborate and Cooperate Initiate and Influence Build and Maintain Relationships

41 EZ App Recruiting Hiring Flowchart On-Site Testing Behavioral Interviewing Job Offer Health Screen Background Check

42 Sample TMMK New Hire Training Program Overview: 2008 PHASE I: New Hire 2010 or Temporary PHASE II: TMMK New Hire 2013 Each Step: Plan= Classroom Training Skills/Pay Action=Extend Assignment Check= Assess./ Evaluation Do= OJT/ Homework $$ *External Hire *Catch-up *STW II. *KPIÕs *Visual. Control *Ergonomics *Two Way Communicat. *Process Diagnostics *Conflict Resolution *Business Direction *STW III $$$ *Final Problem Solving Demonstration $ *Safety *Values *TPS *Teamwork *STW *QC Tools *PDCA *A-3 *Problem Solving *Meeting Facilitation *STW Ready to Hire Grow-in Complete Start 4/3/ years 5 years OJT/Production Experience

43 Step-by-Step Progression to Stable Job Performance ID Fundamental Skills for a Class of jobs Off-Line Skills Training Train in Fundamental Skills off of Line (GPC) Job Breakdown to Work Elements for Specific Job Use ToyotaJob Instruction (TJI) to Train Associate Continuously Improve Job & Job Instruction On-Job- Development Follow-up & Support until Masters Job

44 Example Video Manual

45 Example Simulated Jobs

46 Learning Example: Look at each list the same amount of time ocean/breeze leaf/tree sweet/sour movie/actress gasoline/engine high school/college turkey/stuffing fruit/vegetable chair couch bread/b_tter music/l_rics sh_e/sock phone/bo_k chi_s/salsa pen_il/paper river/b_at be_r/wine l_nch/dinner

47 Lean Management is Different Solution How to Develop Solution Lean s Management System Leaves up to the team member Specifies Traditional Management System Specifies Leaves up to the member In order to practice, we need to know what to practice and this is why Lean Leaders must specify the pattern that they want practiced.

48 THE OBJECTIVES OF STANDARDIZATION Reduce variability, increase predictability Enhance repeatability, confidence, consistency Clarify procedures Enhance communication Improve Problem Solving Set good discipline Develop awareness Establish Problem Consciousness Establish a basis for education and training Establish a baseline for performance Improve Quality, Safety, Delivery, Cost Provide the basis for Improvement

49 How to Implement Standardization 1. Clarify Job Expectations / Goals (Clarify customer expectations) 2. Visualize and break down Standardized work into Major steps (Visualize process into manageable steps) 3. Verify necessary conditions (Inputs, tools, parts, capability for each work element) 6. Process Improvement / Standardization 4. Clarify process criteria (clear specifications for each work element) 4B. Document and Share (Supervisor, staff and Related divisions) 5B. 5. Implement and Monitor (Confirm major steps meet process criteria) Environment Change Problem Occurrence

50 Toyota Continuous Improvement Culture Work Teams Create Initial Standards Learning from Past Problems Broader Problem Solving to Level Up System Continuous Improvement Work Teams Work to Standard and Detect Deviations From Standards Work Team Root Cause Problem Solving Improves Standards Work Teams Contain Disruptions to Production Underlying Assumption: Human and Technical Processes are interrelated and dynamic so initial designs are only a rough starting point which must be continuously improved by every team member. Results: High levels of engagement at all levels in the actual process leads to continuous strengthening of the system and high congruence between expectations and reality.

51 The Four Steps of JI Step 4: FOLLOW UP Action Step 1: PREPARE WORKER Plan Major Steps Key Points Check Reasons Do Step 3: TRY OUT PERFORMANCE Step 2: PRESENT OPERATION

52 Operator Names ASSEMBLY INSPECTION TOE IN ADJUSTMENT HEADLIGHT ADJUSTMENT ROLL TEST BRAKE TEST EMISSION TEST FINAL DRESS CHECK TEST WATER LEAK TEST DVT Author: J. Smith Sectionnr. 10 A Teamnr.: 1 A Date: 6/98 Name & Position E Proces s Nr. J O B N A M E Typical Flexibility Chart B Jobs Number of processe PlanAct Target (M an/job) John Jones % C 1M2J # % D F %1M2J Joe Bates 3 2 Wendy Smith 2 2 Geoff Smith 2 1 Tom King 3 2 George Whiteside 1 1 Danny Nelson 1 1 Tony Abila 1 0 Ken Anderson 1 1 John Smith (TL) 9 6 Number of people per process Plan = Knows steps (in training) Act Target (Job/Man) 1J2M Target % 1J2M 66% G EVALUATION Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Group leader H Section manager Department manager GMIO Standard Form (flexchar.xls) Plan vs. Actual Monthly = Can perform job to quality and safety but not in takt = Can perform job to quality, safety in takt without supervision = Can Train Job to job inst std = Is authorised to do repairs Evaluation 52

53 Toyota Training and Development General Manager and VP Level Business Planning and Policy Deployment Tools: Hoshin Planning & ToyotaBusiness Practices (TBP) Ma nager Level Focus on Shop Floor and Systems Improvement. Tools: Visual Factory & TBP TBP Team Leader and Group Leader Manage Standardized Work, Process Improvement and Develop Problem Solving Skills. Tools: FMDS, TBP & OJD Team Me mber Focus on Fundamental Skills & Standardized Work Tools: Skills Training, Job Instruction, Standardized Work and 5-S

54 PDCA in our Daily Work Business Planning Project Management Problem Solving/Kaizen Daily Work A GtS C P D A-3 Report A-3 Action Plans-Master Schedule Hoshin Kanri

55 Problem Solving at all Levels Policies Annual Objectives Improvement Plans Supervisors & Team Leaders Operators Cross Organizational Problem Solving Process Improvement Objectives & Budget Management Management Directed Kaizen Top Management Plant Manager & Manager Daily Problem Solving Standardized Work Kaizen 5S

56 Three Stages of Problem Solving Maintenance Kaizen Kaizen Goal Reaching Raising Maintaining New Goal Problem Solving that results in getting to the goal. Problem Solving that focuses on maintaining the goal. Problem Solving that focuses on increasing capability beyond the goal - Kaizen.

57 P D C A Linking the 8 Steps with Drive & Dedication and PDCA Concrete Actions and Processes 1. Clarify the Problem 2. Break Down the Problem 3. Target Setting 4. Root Cause Analysis 5. Develop Countermeasures 6. See Countermeasures Through 7. Monitor Both Results and Process 8. Standardize Successful Processes 10/14/2011 Drive and Dedication Customer First Always Confirm the Purpose of Your Work Ownership and Responsibility Visualization (MIERUKA) Judgment Based on Facts Think and Act Persistently Speedy Action in a Timely Manner Follow Each Process with Sincerity and Commitment Thorough Communication Involve All Stakeholders

58 What is an A3? Consulting Reporting Informing Core Communication Tool at Toyota

59 Office Products North America Strategy Objective: Realize new revenue streams via alliances, experiments and exisiting capabilities Value Stream or Major Process: Strategy Deployment Leader: Allison Phillips Updated: 12/02/ /11/2008 I. Problem statement and business case - Why are we talking about this? Problem Statement - What is the gap?: V. The target condition - What will the improved state look like? We will have a steady stream of EBIT available to help fund growth initiatives Marketing, R&D, SFC & GBD project spend has declined at a CAGR of X.X% over the past 5 years - down $X.XMM in last 12 months We will have new partnerships that extend Avery's consumer reach and Net Sales has declined at a CAGR of -X.X% over the past 5 years - $XX.XMM in last 12 months generate business revenue - ie HP, Visa, IBM Marketing project spend as % of sales has declined from avg of X.X% during to a projected X.X% for 2009 AOP We will gather new consumer insights that can be applied to our growth and Economic environment continues to limit the cash available to fund growth initiatives productivity initiatives - buying patterns, new services, etc Increased project spend funds generated by new revenue stream We need to find new ways to fund investments in Marketing, R&D, SFC & GBD to help drive Net Sales growth We will broaden our distribution channels - ie HP, Dell, Google, avery.com, etc to drive increased business revenue Business Case - What is the customer or business need?: We have assets and consumer access that are valuable but have not been monetized to their full potential Finding ways to derive more direct revenue from these existing assets can help fund growth initiatives quickly We need to develop a stream of investment income to bring Marketing, R&D, SFC & GBD funding to sufficient levels - X% of sales II. Current condition reflection and analysis - What have we learned, where are the problems, what are the causes? Existing assets not fully monetized VI. Action Plan - What must be done to implement the strategy? Functions Tactics A. Monetize consumer reach vehicles (Ehrenhalt/Do) Metrics with targets: $X.XMM EBIT B. Develop strategic alliances & affiliates (Kingsley/Ehrenhalt) Marketing Project Spend ($MM) Net Sales ($MM) Metrics with targets: $X.XMM Rev. ($1MM in AOP) ** 2009 AOP includes $2.2MM marketing productivity savings 800 C. Drive ecommerce revenue on avery.com (Maxson) Metrics with targets: $X.XMM Rev. ($XMM in AOP) MM software & template downloads 60MM targeted s 30 MM website visits 40MM packages AOP 2MM samples 2.2MM names D. Monetize S/W downloads & capabilities Metrics with targets: $X.XMM EBIT ($XXk in AOP) istockphoto initiative success opened our eyes to new revenue streams Execution was complex, disruptive to ops, & resource heavy E. Monetize patents and brands Identified new ways to increase direct to consumer sales on the web Limited number pursued due to fear of negative customer reaction (Santhanam/Ehrenhalt) Avery consumer-facing marketing communications targeted & reach many Difficult to balance competing internal & external demands for space Metrics with targets: $X.XMM EBIT Identified a range of ways to drive new revenue Two people assigned to find partnerships, develop them & execute (Dillon) USPS On-line Store, Label Universe Implementation Checkpoints Required Mktg, Legal, Benchmark best practices; rates & find Brand partners Mktg, Legal, Benchmark best practices; rates & find Brand partners Pkging,Legal, Supply Chain a.com Mktg, Legal, Brand Who When Status J.Do, CE J.Do, CE CE, TA CE, DM partners S/W Mktg, Legal, Benchmark best practices; rates & find CE, BD Brand partners BU's, Sales, S/W, Action Staples collaboration; 1 at a time label JK, DM, a.com offering and ecommerce - eval other options SB Alliance, BU's, Sales Alliance, BU's Sales Alliance, BU's, Sales, Search JK, MC, SR, KP JK, MC, RW CE, JM, BAP ASB if successful. a.com Mktg, DR, Promote "free shipping" more actively on site BAP, RP Sales a.com Mktg, Increase visibility of data available from CI DM, RW Sales, CI channel partners - esp Staples a.com Mktg, BU's, Integrate cross-sell, up-sell and unique MC, SR, Sales bundles in the shopping area of web site BAP a.com Mktg, BU's, Evaluate linking program from avery.com to BAP, RP, Sales sell branded ink cartridges RW Avery.com, Bus Dev, Legal SW Dev, Bus Dev, Legal Alliance, Fin, Contract with LMCA in Q1 to bring in potential CE Brand, Legal opportunities for assessment PDev, Fin, Brand, Assess current unused IP portfolio and RS Legal identify potential licensees; pursue HP in Q1 Consumer interactive marketing platforms completely renovated Platform fixed costs a higher % of budget & challenging in soft econ VII. Improvement Metrics - How will we measure the improvement? Multiple companies are seeking access to our database, techs, & brand Concern over gving away competitive advantages & hurting brand Portfolio Operating Metrics: Target Financial Target Summary: Revenue Re-Invest Status Portfolio Payback 100% in 12 months/break-even current yr Target Target Recap key problems and opportunities Causes to address Benefit/effort ratio Greater than 0.8 A. Monetize consumer reach vehicles 1.5 MM Selling existing products directly to consumers bears upside & some risk Parameters on what's OK and what's not aren't clear B. Develop strategic alliances & affiliates 2.0MM Many creative ways to derive revenue identified, but execution is slow Limited human resources, competing business priorities, ops complexity C. Drive ecommerce revenue on avery.com 2.5MM Avery capabilities and assets have value to consumers & 3rd parties Fear of hurting Avery brand, competitive advantage & consumer experience D. Monetize S/W downloads & capabilities 0.5 MM There are near term revenue opps, but also longer term opps Solely focusing on quick cash in 2009 could compromise opps E. Monetize patents and brands 0.5 MM III. Strategy goal statement and hypothesis - What are we planning to achieve? TOTAL: 4.5MM 2.5MM In 2009, we will find $X.XMM in incremental EBIT to reinvest in our business growth initiatives and an incremental $X.XMM in revenue by Incremental to AOP: 1.5MM 2.4MM finding new ways to monetize our brand, consumer access, digital and physical assets, and partnerships while laying the foundation for a 3-5 year pipeline of investment and revenue dollars. VIII. Requests to senior management / Follow-up on unresolved Issues - What other needs or concerns exist? IV. Rationale for updated strategy, evaluation of alternatives - Why is this the right strategy and approach? Action WHO WHEN Each initiative will be evaluated on its own merit for return on financial investment and human effort We will focus on delivering our 2009 objective, but will have a longer term line of sight We will fund our initiatives from the revenue that we bring in We assume that the appropriate resources will be made available to execute new revenue model opps We will have a bias to longer term partnerships that are compatible with our brand versus short term "opportunistic" partnerships We will be globally opportunistic, but our primary focus will be OPNA Cash flow value potential =??? Allison Phillips AOP Todd Thompson Sign-off's to Ensure Firm Commitment to Resource and Support Amy Ladwig Steve Burns Ramin Heydarpour Joe Moffa Gain alignment on appropriate level of global versus OPNA support Develop parameters/guidelines for acceptable brand and partner affiliations Brian Daly Create clear valuation targets for Avery's media assets Implementation Activities 3rd Party Sponsorships, Affiliates 3rd Party Newsletter Sponsorships, Affiliates 3rd Party Packaging In-Packs 3rd Party Advertising on avery.com 3rd Party Advertising in software HP ecommerce, Retail, Pdct, sub-logo licensing Dell.com Bundles & Q3 Staples Ret. Affiliate Marketing Program Free Shipping with minimum order Channel Intell. Lead Generation Unique Bundles & Active Cross Sell Affiliate links/rev share to non-avery products Toolbar with downloads License DesignPro engine Brand & Sub-brand Licensing Opps Patent Licensing Opps Develop parameters/guidelines for selling existing products directly to consumers via the web Ensure cross-functional resource strategy exists for execution Tim Bond 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% Marketing Project Spend as % of Sales 1.9% 2.7% 2.5% Pursue istock or similar deal Benchmark best practices; rates & find Q1 SMB mailing bundle; Q2 CE bundle; Q4 mailing bundle; Q3 Staples program Roll-out on-line postal store test more broadly; pursue Label Universe business Launch Q1 test with scrapbooking; roll out to Evaluate various options (ask.com, google, msn), choose partner, implement Renew contract with Nova, identify and pursue other possible licensees. 1.8% CE, BD BD Robert W. & David M. with Amy & Todd Todd, steering team Todd, steering team Bruce, steering team Bruce, steering team 1.4% Q2 Q2 Q2 Q2 Q2 Q1-Q4 Q1-Q4 Q1-Q4 Q1 Q1 Q1 Q2 Q2 Q1 Q3 Q1 Q2 1.8% AOP w/ $2.5MM new EBIT 1/31/2009 1/31/2009 1/31/2009 1/31/2009 1/31/2009 Establish clarity and alignment to purpose- A3 thinking and management A3 s for: Solving problems Deploying strategies Making improvements Managing projects A3 Thinking and Management Understanding Agreement Alignment Fostering effective dialogue Encouraging initiative Developing problem solvers Enabling effective execution Keys to effective A3: 1. Does the A3 tell a problem solving story, using both words and visuals? 2. Is the importance to the business and/or customer evident? 3. Has the current condition been observed directly and understood? 4. Is the A3 being discussed with colleagues, stakeholders, people involved in the process? 5. Has the problem been broken-down and analyzed to root causes using facts and data? 6. Do the countermeasures and actions address the identified root causes? 7. Have success measures been established? 59

60 Family and Community Focus Relationship with Members & The Company A Caring Company Flower Fund Grief Committee Birthday Cards

61 Family and Community Focus Relationship with Members & The Company Eliminating Social Distinctions Same Dress Code (Uniforms) Same Parking Lot Same Restrooms Same Lunch Room Open Offices

62 Inputs Teams and Work Groups are Basic Units of Toyota Organization TM TM TM TM TM TM TM TM TM TM TM TM TM TM TM TM TM TM TM TM Safety HR Team Leader Team Leader Team Leader Team Leader Customer Value Quality TPS Maintenance Engineering Group Leader Ideal Span of Support 1:5

63 Employee Involvement Teams Team Development Model Stage 1 Stage 2 Stage 3 Stage 4 Stage 5 HIGH Orientation Dissatisfaction Resolution Production Termination Productivity Morale LOW TIME Adapted from R. B. Lacoursiere, The Life Cycle of Groups

64

65 ESI PROGRAM Early Symptom Intervention T/M must go to IHS Injury Pain Discomfort ESI stage Difficulty on Process First Prevention, then ID abnormality at first opportunity

66 Two Way Communication Company Communicating to Members Members Communicating with the Company Members Communicating with each other

67 Types of Meetings and Standard Frequency and Length Management Meeting Frequency/Length Purpose Level Type TL KYK Daily/5 minutes Safety GL Huddle Daily/5 minutes KPIÕs & discussion GL Lunch Box Monthly/1 hour Identification snd PDCA of group issues with assignment and tracking Asst. Manager and Plant Manager Town Hall Monthly/1 hour State of the Department and open discussion, with tracking the countermeasures of identified Asst General Manager and General Manager VP and President Roundtable issues Lunch Box Monthly/45 mins A random selection of 5-6 team members at a time to build relationships and ID and resolve issues. Quarterly/90 minutes A random selection of all team members, with members at a time, meeting with the President for sharing of company information and open discussion to ID member issues

68 Model of Effective Two-Way Communication C o n t i n u o u s I m p r o v e m e n t R e s p e c t f o r P e o p l e 1. Goals and Gaps 4. Reflect, Review And Revisit Plan R e l a t i o n s h i p Me M u t u a l T r u s t a n d R e s p e c t 3. Monitor and Measure You 2. Cultivate Ideas

69 Types of Conflict There are three common types of conflict. 1. Intrapersonal conflict: you vs. you 2. Interpersonal conflict: you vs. me 3. Team conflicts: others vs. others

70 Conflict Handling Modes Definitions Competing - Pursues one s own concerns at the other person s expense Accommodating Neglects self to satisfy others Avoiding Does not pursue one s own or the concerns of others Collaborating Involves self in working with others to reach a satisfied solution for both parties Compromising Finds a mutually acceptable solution which partially satisfies both parties Adapted from Conflict and Conflict Management by Kenneth Thomas in The Handbook of Industrial and Organizational Psychology

71 Toyota Way Leadership Servant Leadership System of Checks and Balances Values Report Card Peer Review Process

72 Workforce Mgt Philosophy The purpose of Human Resources is to embody management, that respects people creating continuous prosperity, for the company.

73 Role of HR Fair & Consistent Policies and Practices Ensure no favoritism Maintain work discipline Consistent and Fair discipline Controlled attendance Check Action Trust Audit

74 Recognition & Corrective Action Company and supervisor recognizing quality work Trust economy vs. Entitlement Economy Company recognizing sub standard work or unfair work practices and addressing it Members having the ability to recognize sub standard performance and unfair work practices and getting it addressed (checks and balances)

75 Wage & Benefit Philosophy Support employment security Stable pay program avoid fluctuations Remain competitive within the industry Reflect overall company performance Promote & reward continuous improvement

76 Compensation Graph 12% 5% 83% Base Bonus Performance Award

77 Visual Management System A comprehensive system that aligns floor management and development activities to achieve company targets by: Aligning Hoshin shop floor activities with Hoshin goals/objectives Visually demonstrating: The management condition of the shop. Alignment of daily activities to Hoshin targets. Promoting two-way communication, creating the environment to: Address abnormal conditions through targeted problem solving. Determine needed support and resources. Develop team members.

78 Floor Management System Components Effective Shop Floor Management Focuses on building an effective visual management system to help the group achieve Hoshin targets. Team Member Skill Development Activities and tools to help develop team members capabilities to perform Standardized Work and achieve daily production goals with safety and quality.

79 Team Board-Floor Management Development System

80 Quality Section of Team Board for Floor Management Development System

81 Months Hoshin Review- PDCA Cycle Result Check Intervals Entire Company Individual Process Check Sr. Mgmt Dept Mgmt Subsection Group Individual Day Week Grasping the gap between the daily plan and actual performance

82 Fujio Cho, Chairman, Toyota Motor Former President, Toyota Motor Manufacturing, Kentucky: 3 Keys to Lean Leadership: 1. Go See. Sr. Mgmt. must spend plant floor. 2. Ask Why. Use the Why? technique daily. 3. Show Respect. Respect your people. time on the 82

83 Summary Connecting the Product and the People Value Streams Lean can only be effective with both. Lean implementation is accelerated with simultaneous development of both, saving cost. Lean is sustained and continuously improved with both, increasing the payback on investment.