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3 Breakaway Lean® Kaizen Events - The Details

Kaizen Event A

Mold equipment tooling (Injection Molding) manufacturer (High Variety - Low Volume)

• 2200 team members worldwide
• $600 Million sales
  • Kaizen Event - Order Entry and Sales Process
  • 5 day Kaizen event with 18 cross functional team members

Results:

	Metric	Results
1.	“Order to Ship” lead time	Reduced from 42 days to 7
2.	Number of tasks	Reduced from 109 to 21
3.	% of Value Added tasks	Increased from 11 to 32%
4.	Distance traveled	Reduced from 4000 feet to 180 feet
5.	Number of Process Handoffs	Reduced from 18 to 2
6.	Number of Queues	Reduced from 10 to 1
7.	Queue size	Reduced from 46 to 3

As a result, revenue increased from $1.3 million per quarter to $4.2 million with no increase in labor inputs.

Kaizen Event B

Tier 1 automotive electronics parts manufacturer

• Supplier to DCX, GM, Honda, Ford world wide
• 474 team members at the Canadian plant
• $340 Million sales
  • Kaizen Event - Engineering Change Notification Process
  • 5 day Kaizen event with 18 cross functional team members

Results:

• ECN types rationalized - Number of ECN types reduced from 6 to 4.
• ECN is approved by directly - responsible team members, with notification sent to associated personnel - Number of signatures required for ECN approval decreased by over 50%.
• “Loop is closed” by revised ECN process (refer to Team II presentation - ECN can be closed only when all applicable checklist tasks are completed) - Reduced the number of checklist tasks by an average of 40%.
• Any ECNs related to an “original” ECN will be assigned the same ECN number with a suffix (i.e. 06230,06230a, 06230b) - Enables easy tracking and linkage.

ECN Types & Approval	Original Count	Kaizen Count	Reduction in count	% Reduction
ECN Types	6	4	2	33
Approval Signatures
Type 1	28	13	15	54
Type 2	21	10	11	52
Type 3	11	2	9	82
Type 4	15	10	5	33
Type 5	19	13	6	32
Type 6	19	8	11	58
Total	113	56	57	52
Checklist Original Vs Kaizen	Original Count	Kaizen Count	Reduction in count	% Reduction
Number of Check Lists	16	14	2	13
Check list Items
Manufacturing Engineering	11	9	2	18
Quality	9	8	1	11
Test Engineering	3	2	1	33
Customs	4	0	4	100
Sales Administration	3	1	2	67
Assistant Production Manager	7	5	2	29
Buyer	11	4	7	64
Master Scheduler	11	8	3	27
Cost Accountant	3	1	2	67
Designer	4	6	-2	-50
Product Eng. Electrical	8	5	3	38
Product Eng. Mechanical	8	3	5	63
Product Eng. Software	8	4	4	50
Information Systems	4	0	4	100
Engineering Supervisor	2	1	1	50
Program Manager	14	10	4	29
Total	110	67	43	43

Kaizen Event C

Project and Scope

• Review current process for improvement opportunities and NVA elimination.
• Improve Procurement Approval Process and work flow.
• Initiate migration to electronic forms and processes.

Measures of Success:

• Increased Speed of Procurement
• Reduction in Paper Records
• Elimination of duplicate activities
• Streamline Approval Process
• Cost Savings (Forms, Labor) Time = $$
  

CURRENT MRO PURCHASES BASED ON FY2006 - $24,176,652

CDN TRANSACTIONS 4952 (Cheques)

Approx. 2000 Purchase Orders issued

Present State:

• Manual system, Purchase Reqs travel throughout the organization to various approvers
• Mgmt approval required on every order
• Large Inventory of paper documents, files etc.
• Many POs have to be typed and mailed
• Long wait times for approvals
• Numerous NVA, faxing, copying documents, filing etc.

Proposed State: (next 4-6 wks)

• Daily meeting for Mgmt Purchase Req Approvals
• No Mgmt approval required for orders less than $500
• PR can go direct to Purchasing
• Engagement of up to approx 50 additional Suppliers on Blanket Pos, no additional records required. Can be activated via phone call etc.
• AP will track spend against purchase orders
  

Future State: (10-12 wks)

• Move to electronic Purchase Req and Purchase Order
• Electronic work flow Tracking via Intranet portal
• Significant increase in speed of processing and approvals
• Elimination of all hard copy records and forms
• Full spend history and record retention capability
• To be designed in-house by IT Dept.

SCORECARD	Present State	Proposed State	Future State
Cycle Time (Days)	4.5	2	1
Value Added Time (Minutes)	32	27	15
Number of Team members	8	4	4
Number of touches	11	4	4
Number of steps	15	11	4
Inventory of orders	10	10	10
Distance traveled (Feet)	800	750	0
Value Added time	1.42%	2.81%	3.10%
Avg Processing Cost per order	$94.05	$40.30	$20.00
Annual cost for order processing	$188,107.00	$80,607.00	$40,607.00
Savings	$0.00	$107,500.00	$147,500.00

Average Number of orders per year = 2000

Number of cheques issued per year = 4990

Average salary is $25/hr