Lessons all can learn from Lean Car Dealers

Transcription

1 Lessons all can learn from Lean Car Dealers Lean Enterprise Australia Summit, Melbourne David Brunt February 26 th & 27 th Lean Enterprise Academy

2 Objectives To introduce a practical & systematic way to apply lean principles to sales & service To structure some of the issues into a a step-by-step method 2 Lean Enterprise Academy

3 Seeing the Opportunities & Grasping the Situation 3

4 Lean Thinking Lean starts with value from the perspective of the customer Delivers value through end to end processes (Value Streams) that no one sees The aim is to get all the actions that add value to flow at the pull of customer demand Building in quality and standardising work As no one sees these processes, no one manages them Performance delivered by a management system that at its heart is characterised by two principles Respect for people and the engagement of everyone in continuous improvement Purpose, Process, People 4 Lean Enterprise Academy

5 Lean Principle # One Specify value from the standpoint of the customer Who is/are the consumer(s)? Who is/are the customer(s)? What is Value? Who decides what is value? Aim to develop a commonly agreed value specification 5 Lean Enterprise Academy

6 Exercise #1 As a customer how would you express value for the following: What do you want when you buy a car? (5 minutes) What do you want when you take it to be serviced? (5 minutes) 6 Lean Enterprise Academy

7 Value in the Eyes of the Consumer: Acquisition The right car in the right place at the right time At the right price Maintenance Fixed right first time on time At the right price Quality & Not Measured! Delivery Customer Fulfilment 7 Lean Enterprise Academy

8 Value: Extending the Concept Right First Time Ease of the Event On Time Quality & Delivery Acceptable Price Service Convenience Distance, Time, Remembering, etc. How customers are treated Information, Care, Consideration 8 Lean Enterprise Academy

9 The Kano Model Human, personal, value-adding Different aspects each time Not a replicable formula-solution The basis of real relationships! Delight But today s delighter s become tomorrow s basics!! Degrees of Customer Satisfaction Neutral performance delighter basic Dissatisfaction Absent Attribute Present 9 Lean Enterprise Academy

10 Customer Fulfilment Right First Time On Time Right First Time On Time New Car Sales Car provided to the exact specification ordered, without defects Correctly prepared including accessory fitment Cleaned to the satisfaction of the salesperson & the customer Customer has not been persuaded to take a different specification No unavailability or delay after ordering Car needs no rework prior to or after the handover Handover at the time originally promised at the time of the order After Sales All service & repairs completed, with all the necessary parts available Car cleaned to the satisfaction of the customer Car does not need to return for rectification or rework Handback at the time originally promised 10 Lean Enterprise Academy

11 What About Cost? From Selling Price = Cost + Profit To Selling Price (fixed) Cost = Profit Establish a Target Cost Selling Price Selling Price Selling Price Profit + Cost = Profit - Cost Profit Cost Time 11 Lean Enterprise Academy

12 Principles of Lean Consumption Solve the consumers problem completely Don t waste the consumer s (or the provider s) time Provide exactly what the customer wants Deliver it where it is wanted Supply it when it is wanted Continually aggregate solutions to reduce the consumers time and hassle 12 Lean Enterprise Academy

13 Introduction to Seeing Consumption as a Process Problems are hard to see & solutions are hard to imagine without a way for consumers & providers to see the current situation When doing lean transformations the first thing we do is...take a walk 13 Lean Enterprise Academy

14 Car Repair Before Lean Processes Day 1 Day 2 Day 3 Day 4 Day 5 25 min. 5 min. 50 min. 10 min. 1. Search for repaire r 2.Book Repair 3. Drive to facility 4. Queue, discuss problem 5. Drive away 6. Authorise 45 min. 7. Drive to facility 8.Queue & pay 9.Drive home 5 min. 50 min. 10 min. 45 min. 10.Book Repair Authorise to fac- Drive ility 11. Drive to facility 12. Queue, discuss problem 13. Drive away 16.Queu e & pay 17.Drive home 5 min. 15 min. 15 min. 38 min. 86 min. 20 min. 10 min. 1.Answeerve Rec- Ferry cust- car Invoice 2.Res Call 14.Valet 15. call parts eive car omer car 4. Work order 6. Inspect car 7.Go to parts 8.Estimate 10. Inform tech 11. Get parts & do work 12. Road test 13.Time job 16.Hand over Box Score Consumer Provider Value Creating time: 17 min 7% 73 min. 19.3% Necessary Non Value 142 min 58% 31 min. 8.2% Creating Time Waste 86 min 35% 274 min. 72.5% Total time: 245 min. 378 min. 5 min. 15 min. 15 min. 38 min. 86 min. 20 min. 10 min. 17.Answer erve Rec- Ferry cust- t car.invoice 18.Res Call 30.Vale 31 call parts eive car omer car 20. Work order 22.Inspect car 23.Go to parts 24.Est -imate 26. Inform tech 27. Get parts & do work 28. Road test 29. Time job 32.Hand over

15 Assessing the Current State 15

16 What are the Value Streams? 16 Lean Enterprise Academy

17 What is the Demand? 17 Lean Enterprise Academy

18 What are the Flows? 18 Lean Enterprise Academy

19 Reminder to Drop Off Lead Time = 9 Days 1 Day 1 Day Booking 5 Mins 7 Days Process Time Drop Off 10 Mins = 15 Mins Work Type 40% 20% 0% 1.Servi ce only 3.Servi ce & 5.Servi ce & 7.Servi ce/rep 9.Inte rnal 40% 20% 0% Demand 1-Class 3-Class 5-Class 7-Class Other Manufacturer Parts Warehouse Order times: VOR by Stock by 15:00 Stock Daily VOR daily Parts Inform Parts A/W Service Reception 2SA, 1 Books Book in C/T= 5 Mins Drop C/T= 10Mins Cost&Inform=10Min Invoice = 5 Mins CF = 88% Workshop Control A/W Arrival Service Reminder Appointment Cars 1-10 years old JobOrd.=420/mnth Lead Time= 7 Days Loan Car = 14 Days Collect&Del=9 Days Cust Fulfil = 59% 2 1 Time up Job Invoice Reserve C/T = 15 Mins A/W C/T = 15 Mins Part Avail=92% Additional Work (A/W) Sheet A/W Give Job C/T= 5 Mins A/W C/T= 3 Mins A/W Inf C/T=1Min Time Job C/T=10Min Handover Car 2 C/T = 10 Mins CF = 96% Car Park 8 10 Mins Min 600 Mins Max 60 Mins Typical Get Car = 5 Mins 60 Mins 5 Mins Inspect Car 7 C/T = 15 Mins A/W = 35% Dist.= 30m 15 Mins D 5 Mins Min 300 Mins Max 35 Mins Typical Carry Out Work 7 C/T = 50 Mins CF = 96% Dist.= 120m Bays = Mins 50 Mins D 5 Mins Min 120 Mins Max 40 Mins Typical 40 Mins Road Test 2 C/T = 15 Mins CF = 98% Dist.= 120m 15 Mins D 5 Mins Min 120 Mins Max 30 Mins Typical 30 Mins 1 Valet C/T = 20 Mins CF = 98% Dist.= 120m 20 Mins Car Park Mins Min 600 Mins Max 60 Mins Typical 60 Mins Drop Off to Pick Up 10 Mins Lead Time = 230 Mins Process Time = 100 Mins

20 Creating a Future State

21 Future State Questions Understand the performance of your value streams in terms of Right First Time, On Time What are the causes of failure to fulfil? What is the demand? Where can we flow the work? Where can you pull? What point can we gather information on what to do? Where do we schedule the workshop? What timeframe do we use to plan? How do we make sure work loads are levelled? What are the supporting improvements we need to ensure we reach a Future State? 21 Lean Enterprise Academy

22 Reasons for Lack of Fulfilment (Q & D) 22 Lean Enterprise Academy

23 Reminder to Drop Off Lead Time = Manufacturer Parts Warehouse Order times: VOR by Stock by 15:00 Additional Work (A/W) Sheet Car Park 6 10 Mins Min 600 Mins Max 60 Mins Typical Stock Daily VOR daily 2 Parts Reserve C/T = 15 Mins A/W C/T = 15 Mins Part Avail=92% Get Car = 5 Mins 60 Mins 5 Mins 1 Day Booking 5 Mins 7 Days Drop Off 10 Mins 9 Days 1 Day Process Time = 15 Mins Car Hard to Find No Parking Spaces Right parts not available Wait for Parts Inspect Car 7 C/T = 15 Mins A/W = 35% Dist.= 30m 15 Mins Inform Parts A/W Difficult to Park D 5 Mins Min 300 Mins Max 35 Mins Typical Incorrect Diagnosis Carry Out Work 7 A/W Delay Authorisation Parts not Available Search for Tools C/T = 50 Mins CF = 96% Dist.= 120m Bays = Mins 50 Mins Service Reception 2SA, 1 Books Book in C/T= 5 Mins Drop C/T= 10Mins Cost&Inform=10Min Invoice = 5 Mins CF = 88% Workshop Control 1 Give Job C/T= 5 Mins A/W C/T= 3 Mins A/W Inf C/T=1Min Time Job C/T=10Min Wait for Tester D 5 Mins Min 120 Mins Max 40 Mins Typical 40 Mins Delay for Authorisation Road Test 2 C/T = 15 Mins CF = 98% Dist.= 120m Delay for Authorisation 15 Mins Time up Job A/W D Wait for Valet 5 Mins Min 120 Mins Max 30 Mins Typical 30 Mins Arrival Service Reminder Appointment 1 40% 20% 0% Valet 1.Servi ce only C/T = 20 Mins CF = 98% Dist.= 120m 20 Mins Work Type 3.Servi ce & 5.Servi ce & Available Loan Cars? Invoice Incorrect Billing 7.Servi ce/rep Car Park Mins Min 600 Mins Max 60 Mins Typical 60 Mins 9.Inte rnal Queues of Customers 40% 20% 0% 1-Class Cars 1-10 years old JobOrd.=420/mnth Lead Time= 7 Days Loan Car = 14 Days Collect&Del=9 Days Cust Fulfil = 59% Handover Car 2 C/T = 10 Mins CF = 96% 10 Mins Demand 3-Class 5-Class 7-Class Other Drop Off to Pick Up Throughput Time = 340 Mins Wait Time = 230 Mins Process Time = 110 Mins

24 Predictable & Unpredictable Work 24 Lean Enterprise Academy

25 Greater Predictability by Pre-Diagnosing 25 Lean Enterprise Academy

26 Reminder to Drop Off Lead Time = Future State # 1: 3 Months 5 Days 1 Day 1 Day Booking 5 Mins 3 Days Process Time Drop Off 10 Mins = 15 Mins Work Type 40% 20% 0% 1.Servi ce only 3.Servi ce & 5.Servi ce & 7.Servi ce/rep 9.Inte rnal 40% 20% 0% Demand 1-Class 3-Class 5-Class 7-Class Other Manufacturer Parts Warehouse Order times: VOR by Stock by 15:00 Stock Daily VOR daily Stock Control Inform Parts Service Reception 2SA, 1 Books Book in C/T= 5 Mins Drop C/T= 10Mins Cost&Inform=10Min Invoice = 5 Mins CF = 88% Arrival Service Reminder Appointment Fulfilment Cars 1-10 years old JobOrd.=420/mnth Lead Time= 3 Days Loan Car = 14 Days Collect&Del=9 Days Cust Fulfil = 70% Additional Work (A/W) Sheet Car Park Mins Min 10 Mins Max 10 Mins Typical Parts Reserve C/T = 15 Mins A/W C/T = 5 Mins Part Avail=98% Get Car = 5 Mins 10 Mins 5 Mins Reduce A/W Health Check Car 2 C/T = 10 Mins A/W = 35% Dist.= 10m 10 Mins Level Appointments Appointment Slots Standard Check 5 Mins Min 300 Mins Max 35 Mins Typical Carry Out Work 7 C/T = 50 Mins CF = 96% Dist.= 40m Bays = Mins 50 Mins Workshop Control 1 Give Job C/T= 5 Mins A/W C/T= 3 Mins A/W Inf C/T=1Min Time Job C/T=10Min Standard Work F I F O 0 Mins FIFO Road Test 7 C/T = 15 Mins CF = 98% Dist.= 120m 15 Mins Time up Job F I F O 5 Mins Min 20 Mins Max 20 Mins Typical 20 Mins 1 Valet C/T = 20 Mins CF = 98% Dist.= 120m 20 Mins Invoice Car Park Mins Min 600 Mins Max 60 Mins Typical 60 Mins Handover Car 2 C/T = 10 Mins CF = 96% Drop Off to Pick Up 10 Mins Lead Time = 130 Mins Process Time = 105 Mins

27 Consumer 5 minutes 1.Book appointment Car Repair After Lean Processes 3. Book in car Future State 1 45 minutes 5 minutes 20 minutes 2. Drive to facility 5.Agree Additional 6. Drive to facility Work (A/W) 4. Drive away 25 minutes 7.Fill out paperwork 8.Drive home Consumer 7% valuecreating time Time Saved 245 minutes 100 minutes 10% valuecreating time Provider 20 minutes 1.Book appointment 2. Reserve Parts 18 minutes 3.Receive car, discuss & prediagnose 4. Prepare estimate 5. Contact customer 113 minutes 6. Plan car 7. Ferry vehicle 8. Deliver parts 9. Carry out work 10. Road Test 11. Time up job 12. Valet job 13. Prepare invoice Current State 10 minutes 14.Hand over car Future State Consumer Provider Consumer Provider Value Creating time: 17 min 7% 73 min 19% 10 min 10% 68 min 42% Necessary Non Value Creating Time 142 min 58% 31 min 8% 84 min 84% 25 min 16% Waste 86 min 35% 274 min 72% 6 min 6% 68 min 42% Total Time 245 min 378min 100min 161min Provider 19% valuecreating time 378 minutes 161 minutes 42% valuecreating time

28 Planning & Managing the Change

29 Reminder to Drop Off Lead Time = Future State # 1: 3 Months 5 Days 1 Day 1 Day Booking 5 Mins 3 Days Process Time Drop Off 10 Mins = 15 Mins Manufacturer Parts Warehouse Order times: VOR by Stock by 15:00 Stock Daily VOR daily Proactive Reminder and Customer Booking Loop Inform Parts Service Reception 2SA, 1 Books Book in C/T= 5 Mins Drop C/T= 10Mins Cost&Inform=10Min Invoice = 5 Mins CF = 88% Arrival Work Type 40% 20% 0% 1.Servi ce only 3.Servi ce & 5.Servi ce & Service Reminder 7.Servi ce/rep Appointment & Pre-diagnose 9.Inte rnal 40% 20% 0% Demand 1-Class 3-Class 5-Class 7-Class Cars 1-10 years old JobOrd.=420/mnth Lead Time= 3 Days Loan Car = 14 Days Collect&Del=9 Days Cust Fulfil = 70% Other Additional Work (A/W) Sheet Car Park Mins Min 10 Mins Max 10 Mins Typical Parts Reserve C/T = 15 Mins A/W C/T = 5 Mins Part Avail=98% Get Car = 5 Mins 10 Mins 5 Mins Customer Arrival and Pre-diagnosis Loop Physically Pre- Diagnose Car 2 C/T = 10 Mins A/W = 35% Dist.= 10m 10 Mins Appointment Slots OXOX 5 Mins Min 300 Mins Max 35 Mins Typical Carry Out Work 7 C/T = 50 Mins CF = 96% Dist.= 40m Bays = Mins 50 Mins Workshop Control 1 Daily Plan OXOX TIME Mins KEYS Give Job C/T= 5 Mins A/W C/T= 3 Mins A/W Inf C/T=1Min Time Job C/T=10Min F I F O Road Test 7 Dist.= 120m 15 Mins Time up Job F I F O Pacemaker and Physical C/T = 15 Flow Mins of the CF = 98% Car Loop 5 Mins Min 20 Mins Max 20 Mins Typical 20 Mins 1 Valet C/T = 20 Mins CF = 98% Dist.= 120m 20 Mins Invoice Customer Contact and Handover Loop Car Park Mins Min 600 Mins Max 60 Mins Typical 60 Mins Handover Car 2 C/T = 10 Mins CF = 96% Drop Off to Pick Up 10 Mins Lead Time = 235 Mins Wait Time = 130 Mins Process Time = 105 Mins

30 Date: Site Manager Value Stream Manager Site Level Objective 02/02 Dave Johnson Harry Bamford Value Stream No Loop 1 Pro active reminde r & Custom er Booking Value Stream Goals ( Deliverable ) Develop a proactive booking process Establish telephone prediagnosis Create visual capacity management process Book customers to arrival slots Target ( Metric ) 100% of cust. Level, Retention Data 100% C/A at booking Plan v Act = 5% variation Slot booking implemented Value Stream Plan: After Sales (90 Days) Weekly Schedule Site Manager D. Johnson Person Responsible Signatures Sales T. Plant Related Individuals/ Departments T. Plant SA, Adm T. Plant Tch, Wco H. Whittle Tch, Wco, SA T. Plant Tch, Wco After Sales H. Bamford Parts A. Harvey Review Schedule (Monthly) With weekly progress Reviewer DJ 30 Days Feb 28 Feb 28 Feb 28 Feb 28 Reviewer DJ 60 Days Mar 28 Mar 28 Mar 28 Mar 28 Reviewer DJ 90 Days April 28 April 28 April 28 April 28 right first time, on time, at the right price. Quality = 94% Delivery on Time = 97% CF Combined = 92% Productivity = 135% Lead Time = 4 days (no loan car or collection & delivery Customer Arrival & Pre- 2.2 Diagnosis 3 Pacemaker Physical flow of car 4 Customer Contact & Handover Develop std prediagnosis process Eliminate tech waiting for authority Develop standardised work for carry out work so cars flow Develop standardised work & rapid f back for road test Develop standardised work for valet Establish FIFO rules between road test and valet Develop pull between physical P/D & carry out work Pre-pick parts, develop pull &deliver to technicians Establish flow of work for invoicing after Road Test Establish handover slots to eliminate waiting Establish a handover area so cust find cars C/T=10 min 95% work known 18 to 0 mins 30 min cycles CF Quality = 100% CF Quality = 100% CF Quality = 100% Min = 0 cars Max = 3 cars Min = 0 cars Max = 3 cars 10 minutes to 0 minutes Invoices 100% C/A & available C/T = 10 Mins Slot levelling Eliminate waiting for customers H. Whittle Parts H. Whittle H. Bamford H. Whittle T. Plant Parts, Wco, Tch Adm Parts SA Tch Wco Sales, Parts SA, Val M. Rushton Tch Wco J.Butterworth J.Butterworth A. Harvey Tch, Wco Wco, Tch, SA, Parts Parts, Tch, Wco Wco, Tch, SA, Parts, Fi T. Plant SA J. Butterworth SA, Fi Feb 28 Feb 28 Feb 28 Feb 28 Mar 28 Mar 28 Mar 28 Mar 28 Mar 28 Mar 28 Mar 28 Mar 28 Mar 28 Mar 28 Mar 28 April 28 April 28 April Mar 28 April 28 April 28 April 28 April 28 April 28 April 28 April 28 April 28 Proposed Start Proposed Completion Actual Start Actual Completion Review (Major Milestones) Review (Major Milestones) Complete X On Target 30 Behind Target Trouble

31 Sustaining the Gains

32 Glass Wall Management Act Plan Check Do 32 Lean Enterprise Academy

33 Daily Meeting Management 33 Lean Enterprise Academy

34 Reminder to Drop Off Lead Time = Future State # 2: 6 Months 5 Days 1 Day 1 Day Booking 5 Mins 3 Days Process Time Drop Off 10 Mins = 15 Mins Work Type 40% 20% 0% 1.Servi ce only 3.Servi ce & 5.Servi ce & 7.Servi ce/rep 9.Inte rnal 40% 20% 0% Demand 1-Class 3-Class 5-Class 7-Class Other Manufacturer Parts Warehouse Order times: VOR by Stock by 15:00 Stock Daily VOR daily 2 Parts Reserve C/T = 15 Mins A/W C/T = 5 Mins Part Avail=98% Pre-Pick Parts Parts Distribution Standard Work Inform Parts 30 Min Appointment Slots Service Reception 2SA, 1 Books Book in C/T= 5 Mins Drop C/T= 10Mins Invoice = 5 Mins CF = 100% Time up Job Pro-active Reminder Arrival Further demand segment Parallel with work Service Reminder & Booking Invoice Menu Price High Fulfilment Handover Car 2 C/T = 1 Mins CF = 100% Cars 1-5 years old JobOrd.=300/mnth Lead Time= 3 Days Loan Car = N/A Collect&Del= N/A Cust Fulfil = 95% Car Park 1 10 Mins Min 10 Mins Max 10 Mins Typical Get Car = 5 Mins 10 Mins 5 Mins Reduce Space Standard Service 2 C/T = 20 Mins A/W = 2% Dist.= 10m 20 Mins F I F O 0 Mins Road Test 7 C/T = 15 Mins CF = 100% Dist.= 120m 10 Mins F I F O 5 Mins Min 10 Mins Max 10 Mins Typical 0 Mins 1 Valet C/T = 10 Mins CF = 100% Dist.= 120m 10 Mins Car Park 1 00 Mins Min 10 Mins Max 10 Mins Typical 1 Mins Drop Off to Pick Up Lead Time = 56 Mins Process Time = 40 Mins

35 Consumer 5 minutes 1.Book appointment Car Repair After Lean Processes 2. Drive to facility 3. Book in car Future State 2 25 minutes 35 minutes 25 minutes 4.Wait for car (do something VA for customer) 5.Fill out paperwork 6.Drive home Consumer 10% valuecreating time Time Saved FS1 to FS2 100 minutes 90 minutes 40% valuecreating time Provider 20 minutes 1.Book appointment 2. Reserve Parts 20 minutes 3.Receive car, discuss & standard service 20 minutes 5 minutes 4. Road Test 5. Time up job 6. Valet job 7. Prepare invoice 8.Hand over car Future State 1 Future State 2 Consumer Provider Consumer Provider Value Creating time: 10 min 10% 68 min 42% 36 min 40% 34 min 43% Necessary Non Value Creating Time 84 min 84% 25 min 16% 49 min 54% 8 min 10% Waste 6 min 6% 68 min 42% 5 min 6% 39 min 49% Total Time 100 min 161min 90min 80min Provider 42% valuecreating time 161 minutes 80 minutes 43% valuecreating time

36 Sales Funnel (New & Used) 36 Lean Enterprise Academy

37 Summary What are the main processes in your organisation? How well does each process perform, in delivering value for your customers and profitability for your organisation? What is the demand for each process? What are the vital few types of work that account for most of the throughput? How can you create stability by turning unpredictable work into predictable work? How can you flow this predictable work through your organisation, without delays, errors, rework and firefighting? What does management have to do to create this flow and then sustain it over time? 37 Lean Enterprise Academy

38 Lessons all can learn from Lean Car Dealers Lean Enterprise Australia Summit, Melbourne David Brunt February 26 th & 27 th Lean Enterprise Academy