Canada-Denmark
“Productivity” Seminar
Productivity on the shop floor/social organization of work
Protected by Danfoss copyright
Ejner Kobberø: Market Support Manager Danfoss A/S
Automatic Controls
Operations Nordborg
Key Figures
Financial
Factory turnover
552 M DKK (96 M USD)
Output
Units/year
6.400.000 pcs
Employees
Blue collars
280
White collars
55
Production
11.200 m2
Administration
1.600 m2
Space
Certificates
ISO 9001, ISO 14001, OHSAS 18001
Systems
TQM
Standardized mgmt system
ERP
SAP R3
SPC
Q – das
Maintenance
DVS
PMS
Online system
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1
10 principles for all production factories in
the Danfoss Group
Danfoss Productivity Program
This presentation is protected by Danfoss copyright and solely for the use of
Danfoss personnel. No part of it may be circulated, quoted, or reproduced for
distribution outside the Danfoss organization without prior written approval from
Danfoss Business System. This material was used by Danfoss Productivity
Program during an oral presentation; it is not a complete record of the discussion.
Protected by Danfoss copyright
10 principles for all production
factories in the Danfoss Group
Our production culture will be characterised by:
1
Creating value – all activities must create value for our customers
2
Production according to customer orders – we base all production on the actual needs of
customers, optimised production flow and a minimum of stock (in short: pull not push)
3
Production teams – we group production employees into teams, each with a team
coordinator who will facilitate an optimal production flow
4
Standard Operating Procedures (SOPs) – we standardise all processes and document
them in SOPs
5
Continuous improvements – we make continuous improvements by constantly optimising our
way of working, systematically solving problems and building competences
6
Hourly follow-up on production – we detect deviations from planned production
immediately and respond with corrective actions
7
Stretched targets – we always set stretched targets for improvement activities that are
based on: ”What if everything goes right?”
8
Follow-up on improvement activities – we ensure a maximum impact on the bottom line by
calculating the improvements in total costs and following up via KPIs (Key Performance Indicators)
9
Committed management – our leaders are visible and active in the production area and
are ambassadors for the Danfoss Productivity Program
10
Respect for people – we involve and support our employees in the change process, in
accordance with Danfoss’ values
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3
Creating value
– all activities must create value for our customers
1
We create value by removing waste:
8. Untapped human
potential
1. Overproduction
2. Waiting
3. Transport
7. Motion
4. Over-processing
5. Inventory
6. Scrap & Rework
4
Production according to customer orders – we base all production on the
actual needs of customers, optimised production flow and a minimum of stock (in
short: pull not push)
Material and Information Flow Analysis
Pull system
•
Suppliers
Weekly
Demand:
Customers
ORDERS
Daily
weekly
monthl
y
Company
weekly
confir
med
orders
Weekl
y
Deman
d:
MRP system
500
pallets
Raw
materials
22500
28500
Saw
&
Debur
r
600
Weld
&
Decarb
Available time
Available time
manual cycle time
13500
Rotaje
t
Available time
manual cycle time
10000
Paint
Available time
manual cycle time
machine cycle time
machine cycle time
machine cycle time
machine reliability
machine reliability
machine reliability
changeover time
changeover time
shared / dedicated
shared / dedicated
100
changeover time
changeover time
shared / dedicated
shared / dedicated
‘G’
Build,
Test &
Final
Assy
2000
A
1000
B
4000
C
3000
Finished
Goods
Benefits:
• Prevents overproduction
• Controls inventory
• Makes production system visual
• Drives improvement
• Synchronises processes with customer rhythm
Despa
tch
Available time
Available time
manual cycle time
machine cycle time
machine reliability
2
manual cycle time
manual cycle time
machine cycle time
machine cycle time
machine reliability
machine reliability
changeover time
changeover time
shared / dedicated
shared /
dedic
ated
26000
Schau
For longest component stream
blin
Available time
manual cycle time
machine cycle time
machine reliability
changeover time
shared / dedicated
Processing time
Manufacturing Lead time
=
Processing
Lead time
120s
28.5 d
250s
22.5 d
180s
0.6 d
1540s
77.8 d
240s
13.5 d
= 0.06%
250s
10 d
500s
2d
Push system
•
Use Material and Information Flow
Analysis as a tool to diagnose lack of
flow and design improved flow
Bad symptoms:
• Production in advance and delayed
production at the same time
• High level of WIP
Ensure optimization across the
value stream instead of local
optimization
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5
Production teams
– we group production employees into teams, each with a team coordinator who will
facilitate an optimal production flow
3
Supports organization around flows with team coordinators
Ensure respect of and adherence to standards
Allocate clear authority to change the standards
Establish necessary foundation for reaching targets
Simplify management by alignment around common targets
Establish motivational environment
Basis for capability building programmes
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6
Standard Operating Procedures (SOPs)
– we standardise all processes and document them in SOPs
4
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

Eliminates uncertainty in the process

Establishes a natural contract between
management and shop floor

Provides the right baseline to establish
targets
Provides degrees of freedom for shop floor
to identify improvements
7
Continuous improvements
– we make continuous improvements by constantly optimising our way of working,
systematically solving problems and building competence
5
Proposals to
problem tasks
are made by the
production team
Continuous reaction
and corrections (just
do it) by the
production team
according to
planned production
1
2
3
Problem tasks
are prioritized
and solved
Reasons to
problems are
removed and the
team performance
is improved
4
Systematic capture of problems and
suggestions from employees
Continuous use of Root Cause Problem
Solving to improve all processes
6. Standardize/
formalize solution 1. Identify
problem
5. Evaluate
solution
The 6 Step
Method
Eliminate the 8 waste
System
and
Method
2. Analyze
problem
4. Implement
solution
3. Find cause
and solution
Organisation
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Attitudes and
Competences
8
Hourly follow-up on production
– we detect deviations from planned production immediately
and respond with corrective actions
Område:
Dato:
Skift:
Plan
Tid:
Emne nr.
Ansvarlig:
Aktuelt
Akk. Plan
Bemanding
Akk. aktueltDifference
14:15 - 15:15
027G5670
12
12
13
13
0
15:15 - 16:15
148B7070
10
22
9
22
0
16:15 - 17:15
148B7070
8
30
7
29
-1
17:15 - 18:15
148B7070
10
40
18:15 - 19:15
168B9570
5
50
19:15 - 20:15
168B9570
10
60
20:15 - 21:15
168B9570
10
70
21:15 - 22:15
168B9570
10
80
Plan Aktuelt Kommentarer
Creates transparency for early
identifying of abnormalities from
standards and deviations from
targets
Changes problem solving modus
from reactive to proactive
Performance BD-K
Produktion
Mål
1,2
14 hours prod.time
10 hours pred. time
1
%af planlagt (90% OEE)
6
Provides foundation for root
cause elimination
Allows managers at all levels to
justify development of operations
0,8
0,6
0,4
Defect marker
Ready on Monday
morning ;)
0
03. jan.
04. jan.
05. jan.
06. jan.
07. jan.
10. jan.
11. jan.
12. jan.
13. jan.
14. jan.
17. jan.
18. jan.
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20. jan.
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24. Jan.
25. Jan.
26. Jan.
27. Jan.
28. Jan.
31. Jan.
1. feb.
2. feb.
3. feb.
4. feb.
7. feb.
8. feb.
9. feb.
10. feb.
11. feb.
14. feb.
15. feb.
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17. feb.
18. feb.
21. feb.
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25. feb.
28. feb.
1. mar.
2. mar.
3. mar.
4. mar.
7. mar.
8. mar.
9. mar.
10. mar.
11. mar.
14. mar.
15. mar.
0,2
Dato
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9
Stretched targets
– we always set stretched targets for improvement activities
that are based on: ”What if everything goes right?”
Limit analysis approach
Based on a future state (stretched
Performance
targets) - constantly set short term
activity plans and targets to drive
continuous Improvement
Limit
What if it all
goes right?
Target
Gap
Current
7
Gain
Future states to be challenged and
reviewed as a standard process
Provides the guidelines for prioritization
What can I
achieve ?
•Global vision
•Extended scope of progress
•Good perception of deviations from benchmark
Time
of work
Ensures focus and momentum of entire
organization
Supports motivation
Structural performance gain
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10
Follow-up on improvement activities
– we ensure a maximum impact on the bottom line by calculating
the improvements in total costs and following up via KPIs
(Key Performance Indicators)
Define the priorities of actions relevant
for the plant or the value stream and the
corresponding Key Performance
Indicators (KPIs)
8
Set the targets and the
associated action plans to
achieve those argets
Priorities and
KPIs definition
Targets setting and
actions plan
Creates linkage to performance
management system
Monitoring
Countermeasures
Implement the
monitoring process
of operations at all
levels of the plant
organization
Ensure a rigorous reactivity
process to develop effective
counter-measures in case of
deviations
Ensures commitment
Capitalizes realized efforts
Relates impact to present value
Ensures long-term perspective
Activities prioritised against business
case and impact
Total cost of all activities who support
Mål
Produktivitet
Realisedt 2004: 17,3 FV. per manhour.
25
Mål: Efter DPP rationaliseringer.
20
operations
15
10
5
0
52
1
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2
3
4
5
6
7
8
9
10
11
11
Committed management
– our leaders are visible and active in production and are ambassadors for the
Danfoss Productivity Program
“I will change
my behaviour if…”
“The systems
reinforce the future
state”
9
Role modelling through “Management By
Walking Around”
Capability
building
Aligned systems &
structures
“I have the skills to
behave in the new way”
Visual checks of activities, plans and
countermeasures
Management as mentors to build the
train-the-trainer organisation
Standardised reviews of targets with
focus on countermeasures not excuses
Role model slide
“I see my leaders
behaving
differently”
Role
modelling
Understanding
& commitment
Ensure sense of urgency to always
improve
Demands quick response from
“I know what I need to
change and want to do
it”
management
” If you’re looking for perfection, look in the mirror. If you find it there, expect it
elsewhere”.
Malcolm Forbes
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12
Respect for people
– we involve and support our employees in the change process, in accordance with
Danfoss’ values
A satisfied and
smooth
organization
A new and
positive
level
5
Point of
satisfaction
The new
point of
satisfaction
1
Hill of
renewal
Hill of
disowns
Threats coming
from changes in
the environment
4
2
Wood of confusion and frustration
3
Danfoss Core values





10
Our business is trust
A very safe and reliable choice


Acknowledgement of difficulty

Support change by ensuring relevant
communications, training and rewards

Support to help people understand their
new roles


Support through role modelling
Change management abilities in all
managers
Change in accordance with Danfoss´
values
Passionate about technology
Global culture, local representation
Environmentally and socially responsible
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13
Schematic flow overview – Small TXV
TU - preassembly
TR / TUC
CDC
Final assy
CDC
TR Preassy
TR
Solder
Laser
Washing
T2
Solder
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T2 –
T2 /
TUA/TUB/TC
Preassy
Final assy
Packing CDC
14
Performance management in AC-BN
KPI’s
Performance cockpit
Weekly report
Follow up meetings (shift, day, week, month, ½ year)
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15