3 Breakaway Lean Kaizen Events - The Details

Kaizen Event A

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

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

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

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

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

CDN TRANSACTIONS 4952 (Cheques)

Approx. 2000 Purchase Orders issued

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.

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

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