Sustainable Supplier Development at Siemens: Restricted Siemens AG All rights reserved

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1 CT BE OP Lean Management & Manufacturing Olaf Kallmeyer, June 2014 Sustainable Supplier Development at Siemens:

2 Target of Target With the Siemens Production System (SPS) we successfully improve the performance of our own plants since years. Now we want help your suppliers participating from our well experienced approach. The approved approaches and methods of SPS are now provided to our suppliers with the sustainable supplier development program to support them regarding continuous and sustainable improvements within their quality and delivery performance as well as their related business processes with Siemens. Target is to increase the productivity of the holistic value chain. Improvements regarding productivity, delivery performance and quality at our suppliers Increase of delivery performance and productivity as well as reducing costs in the holistic supply chain to our customers Stabilization and improvement of level of partnership between our suppliers and Siemens Help for self-aid at our suppliers Improvement of customer satisfaction along the whole value chain Supply Chain Page 2

3 Our vision End-to-End supply chain optimization The way 1 2 We support our 3 We optimize ourselves suppliers optimizing to be a role model their performance Together with our suppliers we optimize the interfaces Orders Technical documents Supplier 2 nd tier Supplier 1 st tier Lean@Suppliers SPS Customer Lean in the Supply Chain Supply Chain Page 3

4 The scope is to eliminate waste in all material and information flow processes Waiting time Overproduction Overprocessing Defects Non value-adding wastes Transportation Movements Inventory Page 4

5 Currently the "Lean" philosophy of SPS is pulled more and more by other functions SPS is being adapted to the needs of other "functions" individually Sales Order Management Engineering Supplier Manufacturing Logistic Installation LDE SPS LSC as the Principles behind the SPS are also applying for them. Page 5

6 Is there a additional benefit by optimization of the entire value chain with "Lean"? We need a COMMON approach beyond functions Supplier Siemens Customer (order entry) Customer (delivery) if we want to optimize the entire value chain. Page 6

7 How we support our suppliers Process Time Preparation 4-8 weeks 5 days 6-9 months ongoing Implementation Value capturing & Follow up Tasks Project set up Identification of suitable candidates by Siemens procurement Meeting with supplier for project proposal Buy In Set up of Siemens team including lean experts from factories Set up of supplier team Diagnosis week Mgmt. lean training SPS screening Value Stream Mapping & Design Implementation roadmap Potential estimation Transformation Lighthouse projects Interface optimization Support of lean experts (e.g. Siemens) Sustainablility Start of Kaizen phase Training of experts and management Regular reviews and coaching by Siemens Realized potentials Sharing of benefits Monitoring Long term sustainability Definition of further steps towards lean journey Regular follow up meetings Output Agreement on common project Date for diagnosis week Commitment on roadmap and potentials Sustainable performance improvement Interface optimization (Basic) lean know how Continuous and sustainable performance improvement Responsible Siemens procurement Supplier Siemens procur., lean experts Supplier Supplier Supplier Siemens procurement Page 7

8 Process Diagnosis week Diagnosis phase Exemplary implementation roadmap 08:00 09:00 Day 1 Day 2 Day 3 Day 4 Day 5 Value stream design Set up of road map Presentation results diagnosis week Roadmap Management Training Month Participants 2-3 days Managers of the plant 10:00 11:00 Welcome & introduction Plant tour CIP Continuous Improvement Training Waste Elimination CIP Training and Workshops Employees & CIP-Assistant 12:00 13:00 14:00 15:00 16:00 17:00 18:00 Introduction SPS Mgmt. Training Lean Game SPS Screening with plant management Value stream analysis Business case calculation; Potential estimation Preparation results Agreement with plant manager on results Agreement on further proceeding Cell Configuration "Topline" Assembly 1 st Workshop Value Stream Analysis Configuration 1 st Cell Configuration 2 nd Cell Total Productive Mainten. at SMD-Line Gathering Interrupts (time + cause) Pareto-Analysis & Workshops Reduction of Breaks SMED at SMD-Line Workshops 2 weeks Operate 2 weeks Operate 2-3 days Components of LK plant "Topline" assembly "Topline" assembly Reduction of lot sizes Managers of the plant Page 8

9 Process Transformation status meeting 2. Status report in March 2011 Verantwortlichkeit Status Management Training Managers of the plant CIP Continuous Improvement Training Waste Elimination CIP Training and Workshops Employees & CIP-Assistant Employees & CIP-Assistant Cell Configuration "Topline" Assembly 1 st Workshop Value Stream Analysis Gestaltung 1. Zelle Gestaltung 2. Zelle Components of LK plant "Topline" assembly "Topline" assembly Total Productive Maintenance at SMD-Line Gathering Interrupts (time + cause) Pareto-Analysis & Workshops Reduction of Breaks SMED at SMD-Line Workshops Reduction of lot sizes Managers of the plant Coaching Option Page 9

10 Your contact if you are interested in Siemens AG CorporateTechnology CT BE OP Lean Management & Manufacturing Lean Programs Olaf Kallmeyer Otto-Hahn-Ring 6 D München Tel.: (0) Mobil: (0) Olaf.Kallmeyer@siemens.com or your contact person from procurement Page 10

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