Update on Excellence
Speaking the Same “Lean”
Language: John Deere
Manufacturing Focus on
Continuing Improvements
Throughout the Organization
Leadership and commitment within all employees.
Lea A.P. Tonkin
Guiding principles, common tools,
valuable practices, and the right
metrics — sounds like a winning
combination for a lean organization. It’s the heart of John Deere’s
manufacturing approach, one they
hope will vault the company to better overall performance in customer
service, market share, and profitability (see the box, “About John
Deere”). Members of the company’s
Power Systems group recently
shared key lean implementation
and continuous improvement (CI)
concepts integrated in an overall
strategy, during an AME workshop
in Waterloo, IA. While they did not
claim to have invented these strategies, they affirmed their drive to
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Target Volume 22, Number 2
continuously create and sustain an
environment marked by performance gains designed to serve customers and all stakeholders.
Following are concepts and
ideas reflecting the organization’s
overall excellence strategy and “lessons learned” from the Deere educa-
tional event. Presenters seconded
Jim Womack’s message of the
importance of effective senior leadership and management accountability, and the long-term commitment from all employees in this lean
quest. The company’s success rides
on this level of commitment.
In Brief
Improved customer responsiveness and a commitment to long-term, organization-wide continuous improvement are aggressive goals for any organization. John Deere’s approach is to develop, share, and effectively use their
guiding principles, common tools, valuable practices, and effective metrics —
packaged in the Deere Production System, or DPS. In this article, key elements of this continuous improvement strategy are explained.
Update on Excellence
Deere Production System:
Enterprise-wide
“We aspire to distinctively
serve customers — those linked to
the land — through a great business
as great as our products.” That’s the
John Deere strategy, recounted by
Phil Mulvey, manager of the John
Deere Engine Works in Waterloo. It
is supported through “exceptional
performance, disciplined growth,
and aligned teamwork,” he added.
Mulvey noted that the company had
culled guiding principles, best practices, tools, and training for production areas to use as they work to
achieve required performance
goals. Together, they encompass
the Deere Production System, or
DPS. (See Figure 1, “Elements of the
Deere Production System.”)
What specific performance
improvements do Deere’s manufacturing units envision from this
“package” of DPS elements? Mulvey
listed aggressive goals for: 1) giving
customers what they want when
they want it (reduced order leadtimes and greater flexibility); 2)
progress on the safety, productivity,
About John Deere
Founded in 1837, John Deere now employs 46,000 people worldwide and
does business in 160 countries. The company has Agriculture, Construction
& Forestry, Commercial & Consumer Equipment, and Power Systems divisions. Additional divisions include Financial Services, Parts & Logistics, and
Health Care. Moline, IL-based Deere has 49 plants located in 24 countries.
quality, and cost fronts; 3) reduced
complexity
in
products
and
processes; 4) better supplier relationships and material leadtimes;
and 5) improved manufacturing
process uptime. In turn, they expect
to trim operating costs and assets
needed to run the business. Add to
that increased production capacity
and asset velocity.
People need a common language and consistent communications/understanding about goals
and strategy for this plan to take
root and thrive. That’s why Deere’s
aligning its common operating philosophy (DPS) with shared best
practices, concepts, and techniques
(everything from Six Sigma to
Elements of the Deere Production System
•
•
•
•
•
•
•
•
Figure 1.
Leadership
Employee Environment
Structured Operational Process
Operations Planning
Material Logistics
Quality
Enabling Manufacturing & Technology Processes
Operational Availability.
employee involvement and lean
manufacturing efforts) through
consistent training and development, common terminology and
tools, and defined metrics. You can
do what you can understand.
Leadership
Dennis Muszalski, manager of
assembly and manufacturing for
Power Systems Waterloo operation,
offered workshop participants an
overview of critical leadership activities for competitive advantage identified at Deere. Start with vision.
Clearly define where you want to go.
That means creating and sharing
what the factory’s future desired
state will be like, how performance
will be improved, and how necessary changes (such as reducing
work-in-process [WIP] inventory,
leadtime reduction, and increased
order performance) will be accomplished. Deployment comes next.
Learn to manage implementation by
identifying gaps, assigning accountability (owners), and tracking
progress. Utilize related tools such
as value stream mapping (VSM) to
identify waste and improvement
opportunities
Visibility is a key leadership
quality. By engaging in shop floor
lean projects, participating in audits
to demonstrate the importance of
disciplined execution, and encouraging/celebrating break-through activities, they inspire employee involve41
Second Issue 2006
Update on Excellence
What Workshop Participants Learned
“I was very impressed with the top-down support for continuous improvement,” said Kristine Welker, plant manager, Wahl Clipper Corporation,
Sterling, IL, an attendee at the Deere workshop. “Having the key managers
as element owners seemed to unite them toward one common cause.
Everyone spoke the same language regarding the Deere Production System,
including the team members on the floor. I asked a 28-year veteran what he
thought of the DPS and he responded that it made his job simpler and more
consistent, and it was a big help in teaching newcomers what to do.
“Deere has aligned its site and cell objectives to the overall strategy,
which keeps everyone focused on the critical business issues,” she continued. “I applaud them for getting understanding and acceptance from the UAW
that continuous improvement is everyone’s responsibility.”
Added workshop participant Tony Praza, vice president of continuous improvement at The Dexter Company in Fairfield, IA, “Each of John
Deere’s lean leadership leaders presented their areas of responsibilities and
how they are embracing lean concepts under the DPS. Then, at the end of
the day, a question-and-answer session really pulled things together. They
discussed their challenges in implementing and sustaining a lean organization; there was a free flow of ideas and information back and forth.
Participants offered suggestions about what Deere and each of us could consider — providing good ideas and concepts as takeaways.” Praza noted that
lean concepts have encompassed excellent techniques and processes over
time (many are evolutionary rather than revolutionary). “Many companies
now realize that you can’t take your eye off the ball — sustaining and continuous improvement are critical to creating real value,” he said. “People at
Deere were willing to share their emphasis on sustaining their improvements.
It’s appreciated when a company with the stature of Deere is willing to disclose the lessons learned. It truly helps all of us on our lean journey …”
ment and successful improvement
activities.
Don’t forget about metrics,
Muszalski added. Track critical
indicators such as safety, delivery,
schedule linearity, product firstpass yield, raw and WIP inventory,
productivity, and operating return
on assets (OROA).
Employee Environment
Deere manufacturing units
target “a safe and organized workplace where all employees are
engaged in lean manufacturing
activities,” said Todd Schildroth,
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Target Volume 22, Number 2
controller at the Engine Works. This
employee environment component
of the DPS comprises safety and
ergonomics, workplace organization, and CI. Metrics range from the
safety incident rate to 5S audit
results and CI team performance.
Employee orientation and job
hazard analysis (JHA) training,
proactive ergonomics activity (prevention of problems), and regular
safety audits are in place. All
employees are trained to effectively
organize their workplaces (in
offices and on the shop floor).
In the CI arena, natural work
teams handle day-to-day problemsolving activities that are aligned
with defined goals and metrics. The
company and the UAW jointly
developed a CI process for bettering
performance in safety, quality,
delivery, and efficiency.
Structured Operational
Process
As they learned how to deal
more effectively with change and
while promoting flexibility, Deere
developed a structured operational
process. DPS enables mixed model,
homogeneous assembly; asynchronous assembly lines; subassemblies
sequenced to the final assembly line;
in-process and material kanbans;
and operators flexibly moving to the
work, according to Jeff Behan,
supervisor of industrial engineering.
Their customer demand-focused
assembly process can flow product
in a batch size of one.
Standardized
work
takes
many forms within Deere, Behan
noted. For example, task time at a
workstation is calculated for a specific work sequence and a consistent sequence of work is maintained throughout the production
volume range. Employees organize
tasks to eliminate waste and utilize
graphical work instructions.
Their visual management or
visual factory approach enables
employees to readily recognize
abnormal conditions. This effort is
supported through the use of workstation monitors, in-process kanbans, and a parts labeling and
replenishment system.
Operator
flexibility
contributes to overall smooth process
flow. Operators are trained to
operate a workstation as well as
in several adjacent workstations.
Daily production volumes determine the number of operators on
an assembly line.
Update on Excellence
The challenges of implementing changes are mastered through
a documented process for making
running changes, operator training
before a change takes place, and
establishment of an effective date
for each change. Employees also
are alerted when a change is
released.
Behan listed metrics for the
structured operational process as
production flexibility, productivity
improvements, engineering change
revisions, and process audit results.
He added that these efforts are netting significant operating improvements. For example, it took three
days to reconfigure an assembly
lineup in 2003; now it takes seconds.
Also, their homogeneous product
mix allows Deere’s build to demand
flow — any model, any time.
Operations Planning
Joe Kremer, manager of supply
management, offered an overview
of the DPS operations planning element. As noted earlier, their production schedules reflect a buildto-demand order fulfillment strategy. Synchronizing production with
demand, in turn, requires that production planning is aligned with
sales and marketing. Also, they link
master scheduling, capacity planning, and supplier capability data.
Continuous customer order
response time improvements are
the norm. They work towards
shorter manufacturing and purchased part replenishment times,
improved factory flexibility, customer leadtime reductions, and
configuring products as close to the
customer as possible.
Related metrics, in addition to
shorter customer leadtimes, are
customer forecast accuracy, schedule linearity, delivery performance,
manufacturing critical-path time
(MCT), and raw and WIP inventory.
They’ve learned how to zip product
to customers, thanks to this focus.
For example, manufacturing critical
path time reduction results include
an improvement from 58 hours
test-to-warehouse in 2001 to the
2005 results of test-to-warehouse
in 10.5 hours and assembly-towarehouse in 22 hours. Kremer
said they improved assembly
launch linearity by 29 percent from
April to November, 2005.
area.
Inbound
logistics
flow
improvement activities encompass
overseas consolidations, cross-dock
utilization, domestic ship points for
importing suppliers, etc. Progress in
the MCT area as well as raw and WIP
inventory, inventory accuracy (11
percent improvement JanuaryNovember, 2005), a 62 percent
reduction in backflush errors
February-November, 2005, and other
areas was reported by Smith.
Material Logistics
Quality
Tom Smith, manager of logistics, provided insight into material
logistics’ support. For example, “a
replenishment plan for every part”
means that an optimal replenishment method is selected from a
predetermined hierarchy of methods; sequenced deliveries driven by
schedule; visually-managed supplier kanbans; or planned inventories
driven by MRP. Improvement activities also zero in on inbound logistics and containerization, internal
logistics to the point of use, and
workstation presentation plans
such as rear-fed dedicated locations in gravity racks with light-up
and presence sensing for error
proofing, special manipulators for
awkward or heavy parts, elevating
or roll-away pedestals for returnable containers, etc.
Don’t forget the basics of
inventory integrity. Bill of material
(BOM) accuracy, shared inventory
integrity ownership, disciplined
triggering, rapid disposition of nonconforming material, and the familiar “a place for everything and
everything in its place” require
attention to detail and disciplined
execution of the processes.
Better communications, attention to quality and delivery performance, and shorter manufacturing
critical-path time (MCT) efforts bring
results in the supplier development
Mike Harper, manager of quality, cited the DPS quality activities of:
planning quality into processes
through the use of PFMEAs (Process
Failure Mode and Effect Analysis),
controlling processes, application of
error- proofing, a “no fault forward”
environment, and continuously
improving processes. CI activities,
for example, include VSM, CI Grow
Teams (natural work teams that
have quarterly goals for continuous
improvements), Six Sigma projects,
and a corrective action process.
They look for quality progress
in process first-pass yield, supplier
ppm, product and process audit
results, and other areas.
Enabling Manufacturing
Technology and Processes
Deere also seeks to leverage
technology for improved manufacturing, product design, and shop
floor execution through enabling
manufacturing technology and
processes. Paul Mason, division
engineer, said one of the critical
activities in this area is virtual and
concurrent engineering. They use
computer models for product,
process, and facility simulation.
Performing e-builds helps engineering and others to identify
potential production issues before
physical builds.
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Second Issue 2006
Update on Excellence
A manufacturing execution
system incorporates tools for delivering and capturing shop floor
information (product traceability,
operator work instructions, mistake
proofing, etc.). They incorporate
more effective technologies as
appropriate. More agile, lower-cost
manufacturing and better ROI
(return on investment) are among
their metrics. Mason noted an
example of manufacturing flexibility: a 9.0L cylinder head machining
cell achieved one-piece lot size
with zero setup.
Operational Availability
Mel LaPrell, business unit
manager, shared details on the
operational availability element of
DPS. Total Productive Maintenance
(TPM) moves equipment performance into manufacturing’s bailiwick
(treat equipment like the car you
own, not the car you rent) — it is no
longer just a maintenance issue, he
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Target Volume 22, Number 2
said. LaPrell described how manufacturing ownership extended to
supervisors as well as operators.
They now focus on overall process
effectiveness (OPE), also known as
overall equipment effectiveness
(OEE). That means attention to preventive and predictive maintenance, keeping equipment clean,
performing maintenance checks,
and notifying maintenance if something appears wrong.
Results count in this key area.
Metrics include unplanned work
orders generated, preventive maintenance routines competed, operator check sheets completed, critical
workstation OPE, and mean time
between repair (MTBR). LaPrell said
progress includes a 32 percent
reduction March-November 2005 in
“machine down” work orders.
Impact
Deere is counting on exceptional performance, growth, and
teamwork to pull off significant
improvements in customer responsiveness and long-term viability.
Will their organization-wide efforts
to package and effectively use all of
the DPS elements do the trick?
Although there is no way to accurately predict the future, their present commitment to shared continuous improvement remains strong.
Editor’s note: The assistance of John
Deere’s Dave Christensen and Denise
Clark-Burke in the development of
this article is appreciated.
Lea A.P. Tonkin, Woodstock, IL is the
editor of Target Magazine.
© 2006 AME® For information on reprints, contact:
Association for Manufacturing Excellence