Operational Excellence Journey - Amazon S3€¦ · Operational Excellence Journey … ... European...
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Milliken’s Operational Excellence Journey … Achieving and Sustaining Operational Excellence Phil McIntyre – Sr. Director of Business Development and Marketing Jordan Workman – Director of Client Development
Transcript of Operational Excellence Journey - Amazon S3€¦ · Operational Excellence Journey … ... European...
Milliken’s
Operational Excellence
Journey
… Achieving and SustainingOperational Excellence
Phil McIntyre – Sr. Director of Business Development and Marketing
Jordan Workman – Director of Client Development
2
Founded in 1865
Privately held
Over 48,000 products
~7,500 associates
4 Divisions: Floor Covering, Chemical, Performance
Products, Specialty Fabrics
40 Manufacturing Operations in 6 countries
Operations throughout Americas, Europe and Asia
Milliken & Company Overview
Seth Milliken Gerrish Milliken Roger Milliken
Twenty years ago we had at least 8 competitors in the U.S. with sales over a Billion dollars.
Today we have none.
our reality...
How has Milliken
survived and thrived?
our question...
1. Positioned in the right markets
2. Innovation
3. Operational Excellence
…..with Safety as the Foundation
Business Case for Change
1. Global
Competition
2. Textile Industry
under attack
“Burning Platform” Visionary Aspiration
Malcolm Baldrige National Quality Award (US)
Malcolm Baldrige National Quality Award
British Quality AwardCanadian Quality Prize
Japan Institute of Plant Maintenance
TPM Prize
ISO Registered
QS Registered
54 JIPM Awards
… in Quality
Operational Excellence
European Quality Award
Life after Awards
We were not “Sustaining the Gains”
1994
25
Benchmarking World-Class Manufacturing Practices
Study Missions to Japan
WesternManagement 40%
Daily Operations
60%Firefighting
The Bestin the World
20%Daily
Operations
Routine
20%Firefighting
Working ThroughCross-Functional Teams
60%Continuous Improvement/
Innovation
The Leadership Challenge
Product
Produced
Copier Parts Deming, TPMRicoh
Auto Parts Deming, TPMNippondenso
Electronics Deming, TPM, TPM SpecialNEC
Butyl Rubber TPMJapan Butyl
Automobiles Deming, TPMNissan
Lighting Deming, TPMToshiba
(Kanuma)
Lighting Deming, TPMToshiba (Himeji)
Air Conditioners Deming, TPM, TPM SpecialDaikin Industries
Plastic Film Deming, TPM, TPM SpecialSekisui Chemical
Textiles TPMGunze
Textiles TPMDynic
Corporation
AwardsCompany Name
Study Mission – Companies Visited
# of Companies Reporting ImprovementMeasurement
6
7
9
8
9
85%
74%
92%
32%
61%
Claims
Defects
Breakdowns
Process Reliability
ProductivityMilliken sent 120
managers on 4
Study Mission
Trips
Japan Study Mission Results 1994-1996
Safety is the foundation and the ‘Trust Component’ of our manufacturing operating system.
Milliken Hires JIPM
# of Companies Reporting ImprovementMeasurement
_
7
9
8
9
74%
92%
32%
61%
36%Safety
80%Defects
88%Breakdowns
30%Process Reliability
78%Productivity
MillikenImprovement
Milliken & Company Results
Performance System Foundations
• 100% of employees engaged in cross
functional teams (everyone is a problem-
solver)
• A structured and systematic way to work
• Highly Visual – ‘touched’ daily
• Lead from the top
• Owned by everyone
• Accept Zero-Loss Thinking
• The Foundation starts with Safety
Over
125CorporateInitiatives
Era ofPeople Excellence
1980 to 1985
1985 to 1990
Era ofProcess Excellence
1990 to 1996
Era ofBusiness Excellence
1996 to 2015
Implementation of theMilliken Performance System
1980
1985
1990
2015
Evolution of Operational Excellence
350 + Operations23 Countries
IndustriesFood ProcessingGlassSteel ManufacturingPackagingPaper Manufacturing and ConvertingConstructionChemicalsNon-WovensAnd others………
Performance Solutions by Milliken
© 2015 Milliken & Company
Our situation
We didn’t move onto initiative # 127 for 2
reasons…
1. Associate Engagement
2. Losses – we weren’t nearly as good as we
thought we were
© 2015 Milliken & Company
What is a ‘Loss’ ?
Cost
Reduction
Opportunity
The
difference
between
actual cost
&
ideal cost
Loss
Actual Cost
Total real dollars
spent to manufacture
a product.
Ideal Cost
Absolute minimum cost
required to
manufacture a product.
(theoretical cost)
© 2015 Milliken & Company
Loss Categories (Understood But Not Copied)
1. Equipment Failure2. Set-up & Adjustment3. Cutting Blade Change4. Start-up5. Minor Stoppage & Idling6. Speed 7. Defect & Rework8. Shutdown9. Management
10. Operating Motion11. Line Organization12. Logistics13. Measurement & Adjustment14. Energy 15. Die, Tool & Jig16. Yield
JIPM Losses
1. Breakdowns2. Change Over3. Start-Up and Shutdown4. Minor Stops5. PM & Cleaning Downtime6. Planning7. Material Handling8. Speed Loss9. Off-Quality10. Rework11. Waste12. Obsolescence 13. Allowances14. Inventory Variances15. Training16. Inspection & Testing17. Indirect Materials18. Purchase Price Variance/Vendor Claims19. Over/Under Spending20. Spending Not Captured
Milliken Losses
© 2015 Milliken & Company
Loss Analysis
11.7
Millions $ /
Year
Average “loss” per plant (millions) / year
Milliken & Company
Note: All
‘Losses’ are
Full Variable
175 asso/site
~ 50 mil in rev/site
Milliken & Company
reduced losses 30% on average
per plant
within the first 24 months of implementation
of the Milliken Performance System
3.5 million $ reduction per
plant
© 2015 Milliken & Company
Loss Analysis
Co
st
of
Go
od
s S
old
Fixed Cost
Raw Material
Cost
VariableCost
Zero-BasedCost Opportunity
In 1995
Losses
57%
57% of COGS (excluding
Raw Material except but
including Yield Losses)
was identified as a LOSS
Losses
31%
By 2014, we had
reduced LOSSES by
45% (from 57% of
COGS to 31%of
COGS)
LOSSES became 31% of
COGS (excluding Raw
Material except but
including Yield Losses)
was identified as a LOSS
~ 375 Mil $ taken out
of the Supply Chain
since inception
MPS and Operational Excellence
© 2011 Milliken Design, Inc.
Benefits Achieved Through Milliken Performance System
Hard Benefits (“Real Financial Results”)
• Production Labor Productivity (Revenue per Production Associate)
• Manufacturing Management Productivity (Revenue per Mfg. Mgmt. Associate)
• Asset Utilization (Invested Capital Turns: Revenue/Invested Capital)
Milliken Performance System: Hard Benefits
Production Labor Productivity
Revenue Per Production Associate (Indexed to 2004 = 100)
From 2004 to 2014: 5% Annual Productivity Improvement
Milliken Performance System: Hard Benefits
Manufacturing Management Productivity
Revenue Per Manufacturing Management Associate (Indexed to 2004 = 100)
From 2004 to 2014: 12% Annual Productivity Improvement
Milliken Performance System: Hard Benefits
Asset Utilization
Invested Capital Turns: Revenue/Invested Capital (Indexed to 2004 = 100)
From 2004 to 2014: 6% Annual Productivity Improvement
Milliken Revenue and Earnings Since 2004
Revenue
Earnings
1% CAGR
16% CAGR
MPS and Operational Excellence
© 2011 Milliken Design, Inc.
Benefits Achieved Through Milliken Performance System
Softer Benefits
• Highly Engaged Workforce
Employee Satisfaction/Morale
Minimal Management Oversight (No Off Shift Supervision)
• Ability to Focus on Innovation
Rapid Prototyping (Samples)
New Product Development Cycle Time (Product Validation)
Reallocation of Resources
© 2015 Milliken & Company
Strategic Imperatives to Implementation
The “Modeling” Approach The Model machine approach within a
Model site enables Associate Engagement
which is key to sustainability
With Safety, acts a cornerstone to
Culture Shifting
The “Zero Loss Thinking”
Analysis Challenges existing paradigms as to
‘what’s possible’
Allows for strategic resource allocation
discussions
If embraced, eliminates wastes as
opposed to reduces wastes
“Proof of Concept (ROI)” Allows for ‘intelligent design’ when
considering horizontal replication (within
the site) and vertical replication (to other
sites)
Validates successes early…step on the
gas or step on the brake !
Drives Capability Building.
