Introduction to Operational Excellence - Pauwels Consulting Academy - Kris Van Nieuwenhove

OpEx
Kris Van Nieuwenhove
An Introduction
16/02/2017

2
Before we start…
Who has ever heard or used the “word” OpEx in a
conversation?
Who knows what the acronym “OpEx” stands for ?
Who has worked already on OpEx-projects ?
Who wants an introduction in OpEx?
This will be an interactive evening.

3
Before we start…
It is appreciated if you respond on upcoming questions …
… but don’t do or take it too literally

4
OpEx: An Introduction
What the acronym “OpEx” means
Operational Excellence …. or … Operating Expenditures
Depending the context:
Operational Excellence: operations / processes
Operating Expenditures: accountancy (Capex >< Opex  copier >< paper)
The context during this introduction:
Operational Excellence: operations / processes
Who has ever d the acronym “OpEx” ?
Do you remember the search results?

5
So, who of you can tell me what OpEx stands for?
What I found on for:
“OpEx definition”: 337.000 results
“OpEx meaning”: 222.000 results
Just to prove…
…that a unique, single, definition or explanation for the acronym OpEx
doesn’t exist … anymore … in my opinion.

6
What we will handle in this session
What is OpEx and why needed ?
OpEx Tools
Example of a realized project and the tools I used in this project
(lean, six sigma, 5S,…)
Why/When OpEx does (not) work in companies – personal
experience

7
What is OpEx and why needed?

8
What is OpEx ?
[how I resume/see it]
The effort and actions that a company puts in place, trough standardized
processes, to drive its conviction to deliver towards the customer the
requested product or service at the requested moment at the lowest
production effort/cost and price the customer wants to pay for it.
In other words…

9
What is OpEx ?
[how I resume/see it in other words]
The effort and actions that a company puts in place, trough standardized
processes, to drive its conviction to deliver towards the customer the
requested product or service at the requested moment at the lowest
production effort/cost and price the customer wants to pay for it.
In other words…

10
What is OpEx ?
[how I resume/see it in other words]
The effort and actions that a company puts in place
trough standardized processes
to drive its conviction
to deliver towards the customer
the requested product or service
at the requested moment
at the lowest production effort/cost and price
the customer wants to pay for it.

11

12
OpEx is needed for:
1. Maximizing the company’s profit
2. Satisfying the customer all his needs
3. Keep the workforce happy and motivated
4. Assure EHS conditions
5. Do/deliver more than the customer expect
6. All above
What do you think?

13
OpEx is (not) needed for:
[What I observe(d) in most companies:]
1. Maximizing the company’s profit
2. Satisfying the customer all his needs
3. Keep the workforce happy and motivated
4. Assure EHS conditions
5. Do/deliver more than the customer expect
6. All above

14
OpEx is (not) needed for:
Source: 3rd Biennial PEX Network report - 2013

15
Who has heard/used/knows one of the following “OpEx-Tools”?
Lean 6σ 5S
OEE VSM
KPI dashboard balanced scorecard
SMED HER FMEA ISO Kaizen
TQM DFSS scrum
TPM GMP
PRINCE2 …
TOOLS

16
RELAX… in the time left I will only give a brief introduction on…
Lean 6σ 5S
VSM
TOOLS

17
Most common used tools in OpEx
Source: 3rd Biennial PEX Network report - 2013

18
What is 6-sigma?
Before answering this question:
Who has ever heard or used the words “6-sigma” or “DMAIC” in a
conversation?
6σ as explained on wikipedia[5] :
• Six Sigma is a set of techniques and tools for process improvement. It was introduced by engineer Bill
Smith while working at Motorola in 1986.[1][2] Jack Welch made it central to his business strategy at General
Electric in 1995.[3] Today, it is used in many industrial sectors.[4]
• It seeks to improve the quality of the output of a process by identifying and removing the causes of defects and
minimizing variability in manufacturing and business processes. It uses a set of quality management methods,
mainly empirical, statistical methods, and creates a special infrastructure of people within the organization who are
experts in these methods.
_______________________________________________________________
1. "The Inventors of Six Sigma". Archived from the original on 2005-11-06. Retrieved 2006-01-29.
2. Tennant, Geoff (2001). SIX SIGMA: SPC and TQM in Manufacturing and Services. Gower Publishing, Ltd. p. 6. ISBN 0-566-08374-4.
3. "The Evolution of Six Sigma". Retrieved 2012-03-19.
4. "six sigma".
5. https://en.wikipedia.org/wiki/Six_Sigma

19
Where does the name 6-sigma come from?
…removing the causes of defects and minimizing variability…
 Sounds like
 Statistics
Gauss Bell curve
 Standard deviation
DPMO means:
Defects
Per
Miljon
Opportunities

20
Math’s and stats in 6-sigma

21
Math’s and stats in 6-sigma
Relax: no more maths or stats tonight!

22
The 5 phases in the 6-sigma methodology
So... who has ever heard the word DMAIC already ?

23
Does this ring a bell?
D M A I C
Define Measure Analyse Improve Control
DMAIC

24
D M A I C
Define Measure Analyse Improve Control
DMAIC
Problems
&
objectives
Process &
factors of
influence
Implement
improvement
Assure that
improvement
will sustain
What do
we need
to improve?

25
6-sigma methodology: some tools

26
What levels of 6-sigma exists?

27
Example of a realized green belt project

28

29

31
What is LEAN?
Before answering the question “What is lean”:
Who has ever heard or used the word “LEAN” in a conversation?
Who thinks that LEAN and 6-sigma are more or less the same?

32
What is LEAN?
LEAN as explained on wikipedia[3] :
Lean thinking is a business methodology that aims to provide a new way to think about how to organize
human activities to deliver more benefits to society and value to individuals while eliminating waste. The
term lean thinking was coined by James P. Womack and Daniel T. Jones[1] to capture the essence of their
in-depth study of Toyota’s fabled Toyota Production System.[2] Lean thinking is a new way of thinking any
activity and seeing the waste inadvertently generated by the way the process is organized by focusing on
the concepts of:
• Value,
• Value streams,
• Flow,
• Pull,
• Perfection.
_________________________________________________________________
1. Womack, James P., Daniel, T. Jones (1996) Lean Thinking
2. Womack, James P., Daniel T. Jones, Daniel Roos (1990) The Machine That Changed The World
3. https://en.wikipedia.org/wiki/Lean_thinking

33
What is LEAN?
LEAN:
… how to organize human activities to deliver more benefits to
society and value to individuals while eliminating waste…

34
What is LEAN?
LEAN:

35
LEAN versus 6-Sigma
Question:
Who thinks that LEAN and 6-sigma are more or less the same?

36
LEAN versus 6-Sigma
6-sigma: …removing the causes of defects and minimizing variability…
LEAN: … how to organize human activities to deliver more benefits to
Lean and 6-sigma are not equal or opposite
They are complementary

37
…Human activities…eliminating waste… How?
Before eliminating the waste you must be able to know and to see
the waste. [ever heard of “TIMWOOD”?]
To know and to see the waste, you have to walk the flow.
[ever heard of “gemba”?]
To walk the flow you have to know the flow.
[ever heard of “value stream mapping”?]

38
Definition of Waste:
“ Anything other than the minimum amount of Equipment,
Material, Parts, Space and Operator time which are absolutely
essential to add value to the product.”
Taiichi Ohno defined seven categories of waste…
“To eliminate them, you have to be able to recognize them!”
Resources of Waste
Taiichi Ohno[1] (大野耐一 Ōno Taiichi?, February 29, 1912 – May 28, 1990) was
a Japanese industrial engineer and businessman. He is considered to be the father of
the Toyota Production System, which became Lean Manufacturing in the U.S. He devised
the seven wastes (or muda in Japanese) as part of this system. He wrote several books
about the system, including Toyota Production System: Beyond Large-Scale Production.
1. https://en.wikipedia.org/wiki/Taiichi_Ohno

39
Resources of Waste
Do you know the 7 categories Taiichi Ohno defined ?
• Transport T
• Inventory I
• Motion M
• Waiting W
• Overwork O
• Over processing O
• Defects D
Often companies add an extra form of waste: R Resources
So as a reminder for the 7 or 8 forms of waste one can think on
Mr. TIMWOOD or R. TIMWOOD

40
Processing that goes beyond the customer requirement
(Question the need for every step in a process!!!)
Resources of Waste: OVERPROCESSING

41
What is it?
► Adding more features to the product or requiring
more process steps than the customer would
be willing to pay for
Typical examples:
► Excessive checking/documentation work
► XYZ-approval signatures
Why does it happen?
► Tasks are not simplified
► Operations are not understood
► Lack of awareness about cost implications
► No questioning attitude
Resources of Waste: OVERPROCESSING

42
Waiting for parts or machine to finish.
Waiting during set-up
Resources of Waste: WAITING

43
What is it?
Any period of inactivity for paid resources
Waiting for parts, machines, material, approval…
Typical examples:
Waiting for a decision
Waiting for tubes
Waiting for raw materials
Waiting at quality/environmental controller
Operator not active when the machine is running
Why does it happen?
Unbalanced operations (Formulation / Filling / Inspection / …)
Low effectiveness and high machine downtime
Shared equipment (Lift truck, …)
Resources of Waste: WAITING

44
Unnecessary movements which can be avoided by reorganization of workflow.
(Motion = person)
Resources of Waste: MOTION

45
Why is this thief starting at the bottom?
Can this be also another form of (timwood) waste?

46
What is it?
Motion that doesn’t add value to the process
Unnecessary stretching, bending, walking,
climbing
Typical examples:
Large distances walked during setup
Operator searching for tools
Production manager’s office in administration
Why does it happen?
Poor workstation configuration
Cluttered work areas
Work imbalanced
Visual factory, 5S not implemented
Standardized work not implemented

47
BEFORE
AFTER

48
Resources of Waste: TRANSPORT
Unnecessary transports which can be avoided by reorganization of workflow.
Attention: Transport = Goods / product Motion = person

49
MOVE IT OVER
THERE UNTIL WE
NEED IT
What is it?
Unnecessary movement of parts and equipment
A major cause of damage and deterioration!
Typical examples:
Intermediate stocks
Storage far away from production unit
Double handling, as a result of rework or checking
Why does it happen?
Unnecessary inventories
Poor workshop layout
Warehouse off-site
Long distances from operation to operation
Rework / return loop

50

51
Resources of Waste: INVENTORY

52
What is it?
Holding and creating excessive material
Increases lead times and costs money
(working capital, additional cost if change
occurs, needs more handling, lighting, heating…)
Typical examples:
Raw material stocks
Finished goods stocks
Intermediate stocks
Blocked orders
Why does it happen?
Bad forecasting / excessive production (currently not requested now)
To hide deficiencies in the production process by creating buffer stocks
Just-in-case, to feel safe, because of unreliable processes [often in maintenance
(spare parts of old (obsolete / unused) equipment)]
Bad production planning
Visual factory not in use to control
Small lots are too costly

53

54
Too much, too soon
Does anybody
even want
these??
Does it matter?
PAGE 54
Resources of Waste: OVERPRODUCTION

55
What is it?
Making or ordering more than required
by the next process
Making or ordering sooner than required
by the next process
Increases the risk of obsolete material
Typical examples:
Grouping of orders
Filling up free capacity
Why does it happen?
Labor and overhead metrics driving utilization of people and equipment
Emotions: Concerns, fears, feeling comfortable having stock, having done
something, etc.
(unstable) Production schedule & push production

56

57
What is it?
Defects and mistakes requiring fixing and replacing
Typical examples:
(Inspection) loss
Rejected products
Customer complaints
Why does it happen?
Procedures not being followed correctly
Few Error Proofing devices in use
Standardized work not in place
Repair operations seen as part of the process [sometimes non-engaged co-workers]
Poor, slow quality feedback
Defects are normal…
Correcting defects is done by somebody else
Resources of Waste: DEFECTS

58
Resources of Waste: DEFECTS

59
Which waste is the worst one?
Why???
Overprocessing
Waiting
Motion
Transportation
Inventory
Overproduction
Defects & Errors
Resources of Waste

60
“OVERPRODUCTION”
Or producing “too much” or “too soon”.
Why?
It initiates and drives all the other sources of waste.
Resources of Waste

61
If you want to know more about LEAN
One of the many reference books for lean:
“Lean thinking - Banish the waste and create wealth
in your corporation”, James P. Womack, Daniel T.
Jones - 2003
Interested in more on LEAN ?

62
Resources of Waste: GEMBA
What did you take away from these 2 explanations of GEMBA?

63
What is GEMBA?
What did you take away from these 2 explanations of GEMBA?
place = where value is created
People / co-workers
Go and WALK
See issues
Ask questions
Difficult to get done a gemba-walk
by the (upper-)management
Gemba Principle = easy…
… doing it = not always that easy or well
done
SEE the PROCESS with your OWN eyes
Treat co-workers with respect and don’t
judge them on (current) way of working
Be straight and direct to the (upper)
management

64
VSM: Value Stream Mapping
By Adrian Grycuk - Own work, CC BY-SA 3.0 pl, https://commons.wikimedia.org/w/index.php?curid=50054053

65
By DanielPenfield - Own work, CC BY-SA 3.0, https://commons.wikimedia.org/w/index.php?curid=28553995

66
If you want to know more about VSM
One of the many reference books for VSM:
“Learning to See”, Mike Rother, John Shook - 2003

67

69
What is 5S ?
Basics for having a standardized and organized workplace.
It comes form Japan and was developed to help with JIT manufacturing:
Seiri (整理) : Sort
Seiton (整頓) : Set in Order
Seisō (清掃) : Shine
Seiketsu (清潔) : Standardize
Shitsuke (躾) : Sustain

70
BEFORE AFTER
Red tag area
5S a real life example…

71

72
BEFORE AFTER

73
B
E
F
O
R
E
A
F
T
E
R

74
If you want to know more about VSM
One of the many reference books for 5S:
“5 Pillars of the visual Workplace”, Hiroyuki Hirano -
1995

75
OpEx means behavior, mindset and discipline  leadership
OpEx touches all the levels in a company: from MD to co-workers
Bringing OpEx into a company often demands a (big) culture change,
especially with poor knowledge and/or leadership
Educating everybody in all the tools needs time and patience, trial and
error  often a contradiction towards making profit
If the company’s leadership team has no faith and doesn’t drive the
change: FAIL will be the result
A good culture change model (for bringing opex):
See/read “Leading Changes” from prof. dr. J. Kotter
Why / when OpEx does (not) work in some companies

76
To Conclude
What is OpEx ?
The effort and actions that a company
puts in place
trough standardized processes
to drive its conviction
to deliver towards the customer
the requested product or service,
at the requested moment,
at the lowest production effort/cost
and price the customer wants to pay for it.
This means that OpEx…
Is not a “department”
Is not “one person or function”
Is business-area independent
Is company-size independent
… Needs “OpEx-minded” leadership /
management / co-workers
… Is more than only “using the tools”
… Is customer driven
… Is a company journey / mindset
… Is a never ending story

77
If you ever need advice or a leading hand in your project – please contact us
Kris Van Nieuwenhove
ConsultantPharm a Services
M: +32 495 63 15 27
W : www.pauwelsconsulting.com
Ghent-Brussels -Basel - Lyon -Lille – Frankfurt
Thank you

Introduction to Operational Excellence - Pauwels Consulting Academy - Kris Van Nieuwenhove

Recommandé

Recommandé

Contenu connexe

Tendances

Tendances (20)

En vedette

En vedette (16)

Similaire à Introduction to Operational Excellence - Pauwels Consulting Academy - Kris Van Nieuwenhove

Similaire à Introduction to Operational Excellence - Pauwels Consulting Academy - Kris Van Nieuwenhove (20)

Dernier

Dernier (20)

Introduction to Operational Excellence - Pauwels Consulting Academy - Kris Van Nieuwenhove