World Class manufacturing

1. Prepared by Özcan ÇAVUŞOĞLU

2. 1. Meaning & Scope
2. Criteria
3. How a WCM is Achieved ?
4. Characteristics of World-Class
Organizations
5. How to Make an Organization
World-Class?
6. World-Class Manufacturing:
What it takes?
7. Implementing WCM
8. Contrasting Mass Production &
WCM
9. The Grades for WCM
10. WCM Checklist
11. Types of Operation Which
Creates a WCM Units
12. Just In Time (JIT)
Manufacturing
13. JIT Improvements to
Manufacturing
14. CONWIP Control
15. Factors Which Can Make a
WCM
16. Some Other Factors
17. Conclusion: Control of
Operation
CASE: Fiat

4.  It refers to the practice followed in a
manufacturing organizations, in order to
consistently deliver exceptional performance,
frequently in excess of expectations.
 World Class Manufacturers are those that
demonstrate industry best practice.

5. There are two overriding
criteria when using this
checklist to judge whether
your company can be
regarded as World Class
1) How does the company
compare with its best
competition?
2) Has the company
increased its score since
last year?

6.  Develop the awareness of the need to make the
transition to World Class Manufacturing
 Develop the ability to search for relevant tools and to
apply them effectively
 Monitor progress so that an improvement program can
be systematically utilized.

7. 1. Customer service.
2. Quality control and assurance.
3. Research and development/ new product development
4. Acquiring new technologies
5. Innovation
6. Team-based approach (adopting and using effectively)
7. Best practices (study and use of)
8. Manpower planning
9. Environmentally sound practices
10. Business partnerships and alliances
11. Reengineering of processes
12. Mergers and acquisitions
13. Outsourcing and contracting
14. Reliance on consulting services
15. Political lobbying

8. 1. Worker productivity (improvement)
2. Employee training and development
3. Open communication between management and employees
4. Employee benefits and perquisites
5. Codes of workplace conduct
6. Conflict resolution
7. Employee satisfaction
8. Flextime arrangements
9. Management-employee-union relations
10. Child care

9. 1. Competitive analysis strategies (cost efficiencies in operations,
speed to market, research and development supremacy, zero
defects, real-time order management etc.)
2. Production and supply chain (collaborative planning, forecasting
and replenishment, collaborative manufacturing and product design,
supplier-managed inventory etc.)
3. Customization strategies (building to order, customized mass
production, global sourcing and manufacturing, etc.)
4. Electronic commerce strategies (supply management, Internet
ordering, status and availability tracking by Internet)
5. Compensation systems (product profitability, inventory levels,
manufactured/delivered costs per unit, worker productivity, employee
retention rates, etc.)
6. World-Class Manufacturing: What it
takes?

10. Success
Factors
WCM Tools Measurement Indicators
1. Cost control Just-in-time logistics,
quality at source and
supply chain management
tools
· Inventory holdings
· Absence of defects and rework
· Cost of incoming materials
2. Quality Statistical Process Control,
fool-proofing to prevent
errors, Pareto analysis of
types and causes of
production defects
· Customer return rates
· Internal reject, rework & scrap
rates
· Supplier quality Performance
3. External
flexibility
Just-in-time logistics,
quality at source and
supply chain management
tools
· Time from customer order to
delivery
· Delivery frequency & reliability
to customers
· Delivery frequency and

11. Success
Factors
WCM Tools Measurement Indicators
4. Internal
flexibility
Cellular layouts, single unit
flow, production pulling,
Kanban signaling system,
single-minute exchange of
dies for rapid machine changeover,
supply chain
management
· Machine changeover times
· Batch and lot sizes
· Inventory levels
· Throughput time through factory
· Machine utilization levels
5. Capacity
to change
(Human
resource
development)
• Multi-tasking,
• Multi skilling,
• Quality circles,
• Kaizen groups,
• Training,
• Incentive schemes.
· Numeracy and literacy levels
· Labor/management turnover levels
· Absenteeism rates
· Training expenditure and types of
training
· Employee development
· Suggestion schemes/continuous
improvement
6. Innovation
capacity
Concurrent engineering,
new product development
techniques
· R&D expenditure
· Proportion of sales from
new products

12. Critical Control
Points
Mass Production World Class
Manufacturing
Logistics · Large batch
production
· Just-in-case
inventories
Specialized
machinery
· Single unit flow production
· Just-in-time inventories
· Flexible machinery and
rapid machine changeover
Quality · End of line inspection
· Reworking of defects
· Quality-at-source at each
part of production process
Work organisation · Division of labor
between skilled and
unskilled workers
· Specialized R&D and
product development
· Multi-tasking and multi
skilling
· Continuous improvement in
green areas as well as
specialized staff
8. Contrasting Mass Production & WCM

13.  "W“ - World class
 "X“ - Very good but not quite
world class – (country class)
 "Y“ - Better than many – (city
class)
 "Z“ - Poor – (village class)

14. Q1) Do you have a 99% or better level of
customer service (or product availability)?
Grade Criteria
W 99% or better customer service level (on time in full
or availability).
X 95% up to 99% customer service.
Y 90% up to 95% customer service.
Z Below 90% customer service.

15. Q2) Does everyone in the company know who the key
customers are and what differentiates the company’s
products and services from the competition?
Grade Criteria
W Everyone knows key customers through a new
employee induction scheme and regular updates,
meetings, notices etc.
X Most people know key customers.
Y Managers know key customers.
Z Customers known mainly on a "need to know" basis.
10. WCM Checklist

16. Q3) Do all staff who are in contact with customers
have the authority and empowerment to resolve
customer problems?Grade Criteria
W A person answers telephone calls within 4 rings and takes
responsibility to deal with the call either immediately or by
getting back to the caller within 24 hours. Similar
standards are used for e-mail and written complaints.
X A person answers telephone calls and takes responsibility
to deal with the call either immediately or by getting back
to the caller within 5 days. Similar standards are used for
e-mail and written complaints.
Y Customer problems are dealt with as soon as possible.
Z Many customer problems are outstanding or not
satisfactorily resolved.
10. WCM Checklist

17. Grad
e
Criteria question
W At least 75% of your shipments to customers controlled
by Kanban or vendor managed inventory (i.e. shipped /
delivered based on customer usage) or you are able
and willing to make Kanban shipments if requested.
X Some but less than 75% of shipments under Kanban
control or you are probably able to make Kanban
shipments if requested.
Y You may be able to make Kanban shipments if
requested.
Z You would not make shipments under Kanban control.
Q4) Do Kanban control your supply chain?
10. WCM Checklist

18. 11. Types of Operation Which Creates a WCM Units
The Kanban Control Concept
Kanban control
means that the
authority to make
or move an item is
based on that
item's usage
unless there has
been a properly
approved and
strictly limited
deviation
Kanban control.
Movement of parts
shown in blue,
circulation of
Kanban in red.
Machines are
shown as circles
and buffers as
triangles. The last
buffer is the
finished goods (FG)
The Kanban
messages can take
the form of an e-
mail, fax, card,
empty container or
require you to visit
their plant to
replenish their stock
of your products
(usually referred to
as vendor managed

19. Just in Time manufacturing is a systems approach to developing
and operating a manufacturing system. We will take an example
of banking process:
In short, JIT means making what the market wants, when it
wants it. JIT has been found to be so effective that it increases
productivity, work performance and product quality, while
saving costs
12. Just In Time (JIT) Manufacturing

20. 13. JIT Improvements to Manufacturing
Tim
e
In Summary, JIT
Systems requires
Changes in:
 System Design
 Organization
Attitudes and
Structures
 External
Relationships
 New Management
Priorities

21. CONWIP stands for
Constant Work-In-Process,
and designates a control
strategy that limits the total
number of parts allowed
into the system at the
same time
CONWIP control. Movement
of parts shown in blue,
circulation of release
authorizations in green.
14. CONWIP Control
Once the parts are released, they
are processed as quickly as
possible until they wind up in the
last buffer as finished goods. One
way to view this is that the
system is enveloped in a single
Kanban cell: Once the consumer
removes a part from the finished
goods inventory, the first
machine in the chain is
authorized to load another part.

22. 15. Factors Which Can Make a WCM

23. 16. Some Other Factors

24. Before commencing implementation of control systems
there are always five beneficial things to do which will make
any method of control easier to implement and make the
system work better operationally
(Generally world class manufacturing businesses have
done these things)
 Reduce time wasted in setting and reduce
set up times
 Form Natural Groups (cells)
 Reduce throughput times
 Postpone product mutation
 Remove the trivial many, to focus on the vital
few

27.  We have started a program designed to achieve the standards of excellence
associated with World Class Manufacturing (WCM) policies: a company
organization methodology that leads to excellence of the entire production
process through the continuous improvement of all performances and the
contribution of all company employees, at every level.
 Our manufacturing facilities use the Fiat Advanced Production System
(FAPS),an integrated model that optimizes production and logistic
processes.
 The program was launched two years ago but the plants of Tychy in Poland,
Melfi in Italy and Bursa in Turkey have already attained a competitive rating
according to World Class Manufacturing criteria

28. 2.2. WORLD CLASS MANUFACTURINGWORLD CLASS MANUFACTURING
World Class Manufacturing principles apply to all aspects of plant organization,
from the quality system to maintenance, from cost control to logistics, in a
perspective of continuous improvement.
World Class Manufacturing (WCM) in fact was born of the collaboration
between Fiat and the best European and Japanese experts, with the aim to
enhance the production standard to a recognized world standard.
The system is based on a systematic reduction of all types of loss and waste
through the contribution of everyone and the rigorous use of methods and
standards.

29. 2.2. WORLD CLASS MANUFACTURINGWORLD CLASS MANUFACTURING
 The system is based on a systematic reduction of all types of loss and waste through
the contribution of everyone and the rigorous use of methods and standards.
 Care for the Environment is one of the pillars of the system, encompassing all the
people, regulations and rules of conduct making up our Environmental Management
System (EMS).
 This is the management tool that will enable us to determine, reduce and control the
environmental impact of our manufacturing facilities, knowing that every activity has
repercussions on the environment.
 The system specifies a number of actions geared to the reduction of the
environmental impact of manufacturing activities, both in order to ensure
compliance with the applicable regulations and in order to prevent the waste of
energy and natural resources

30. 3. TOFAŞ3. TOFAŞ
Tofaş has been the best of the world in manufacturing, now it
will set a model for Chrysler’s world beside Fiat’s.
(18.11.2009)
Tofaş who has been producing Fiat branded passenger cars and
commercial vehicles for 41 years in Turkey with the cooperation of Fiat
S.P.A and Koç Holding and who has manufactured its 3 millionth vehicle in
2009 has received the “Silver Level” (World Class Manufacturing) award, it
has achieved in WCM, with a ceremony, organized in Turkey.
Being the first production center that has achieved “Silver” level in “World
Class Manufacturing” in Fiat’s world, Tofaş’s Bursa factory has been
chosen as the factory who has “the highest quality and who makes the
safest manufacturing” after the last audit, carried out by WCM teams last
week.

31. 3. TOFAŞ3. TOFAŞ
Tofaş has been the best of the world in manufacturing, now it will
set a model for Chrysler’s world beside Fiat’s. (18.11.2009)
Fiat Group’s CMO (Chief Manufacturing Officer) who has come to Turkey for the
ceremony on Tofaş’s being chosen as the best factory; Stefan Ketter explained,
“Making R&D and manufacturing of important models like Fiat Fiorino, Linea
and Doblo, Tofaş’s place in the Fiat’s world as is very strong without any
dispute.
Tofaş’s success globally is a true example of discipline, quality and success in
this period when Fiat and Chrysler factories are in common action in terms of
production in world’s class”.

32. World Class Manufacturing
Stefan Ketter
Lingotto - November 8 & 9, 2006

33. WCM Focus
All Employees
Waste and Losses
Standards and Methods
Lingotto - November 8 & 9, 2006 2

34. Structure/Objectives
Workplace
Organization
Quality Maintenance Logistic
Method
& std.
Focus
Target
Total Industrial
Engineering
Productivity
zero
waste
Total Quality Total Productive
Just in Time
Control Maintenance
Quality Technical Service
Improvement Efficiency Level
zero zero zero
defects breakdowns inventory
Values People involvement, value creation, customer satisfaction
Lingotto - November 8 & 9, 2006 3

35. WCM Principles
1. World Class Safety is the foundation of World Class
Performance
2. WCM Leaders have a passion for standards
3. In a World Class Company the voice of the customer can be
heard in the plant
4. WCM does not accept losses of any kind (The goal is
always Zero: accidents, service & quality defects, inventory,
breakdowns)
5. A rigorous application of WCM methods guarantees the
elimination of losses
Lingotto - November 8 & 9, 2006 4

36. WCM Principles
6. In a World Class plant all abnormalities are immediately
visible (Dust & contamination free, tracking, control charts …)
7. WCM takes place in the workplace, not in the office
8. WCM is most effectively learnt by practicing the techniques
with the plant teams
9. The power of WCM comes from the involvement of people
10. World Class companies create the energy of a crisis in the
face of continued success
Lingotto - November 8 & 9, 2006 5

37. Main Actual Activities
2005A 2006E 2007E
WCM Basics / Safety
Training / Leadership / Organisation
Cost Deployment
Investments & Fix Plants
Labour efficiency / Capacity Utilization
Environment / Ergonomy
Maintenance Process
Quality Process Improvement
Logistic Process Time
Lingotto - November 8 & 9, 2006 6

38. Actual Best Results/WCM Audit
Workplace
Organization Quality Maintenance Logistic
Methodologies
1 Safety New approach
2 Cost Deployment 100 % plants
3 Focused Improvement 147 events
4 Work Place Organization 7 model areas
5 A.M.: Autonomous Maintenance 58 model areas
6 P.M.: Professional Maintenance 34 model areas
7 Quality Control 10 model areas
8 Production Logistic System 4 model areas
9 Early Equipment Management First exercises
10 People development/qualification New approach
11 Environment New approach
100%
Lingotto - November 8 & 9, 2006 7

39. Model Area: Tychy/Poland
People Involvement: Proposals/Employee/Year
4,5
Target = 4
4,0
3,5
3,0
2,5
Implementation
2,0
1,5
1,0
0,5
0,0
Jan Feb Mar Apr May Jun Jul Aug Sep
rate 50%
Oct Nov Dec
Lingotto - November 8 & 9, 2006 8

40. Model Area: Melfi
Quality: Electric Check Defects - Grande Punto
- 50%
Lingotto - November 8 & 9, 2006 9

41. Model Area: Melfi
Productivity: Hours per Vehicle - Grande Punto
-12%
in 8 months
Lingotto - November 8 & 9, 2006 10

42. Average Hours/Vehicle
Vs. Benchmark (Harbour Report)
- 20%*
Segment Ranking
A Leadership
B Leadership
C Top 5
D Top 10
LCV Leadership
2006E 2010E
* As result of new vehicle introduction
Lingotto - November 8 & 9, 2006 11

43. Labour Productivity Target (Italy/Poland)
100%
Technical efficiency
Losses
Operation
- 30%Waste/Rework
Line Balancing
- 50%
Non Value Added
• Logistic layout
• Time Optimization
Losses
Operation
Range
Actual 2010E
Lingotto - November 8 & 9, 2006 12

44. Towards World Class Manufacturing
100
90
80
70
60
50
40
30
Competitive
Level
Horizontal
expansion
Consolidation /
Autonomous
Improvement
20
10
0
Knowledge
creation
Model areas
2006E
1 3 5 7 9 11
2007E
13 15 17 19 21 23 25
Saving: > €500mn
2008E 2009E 2010E
27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67
months form program launch
Lingotto - November 8 & 9, 2006 13

45. WCM - Extension towards Suppliers
Cost Quality Maintenance Logistic
€
Q M L
SUPPLIER
World Class Manufacturing integration/extension
throughout Supplier Process Engineers
Lingotto - November 8 & 9, 2006 14

46. WCM - A Corporative Approach
WCM
Implementation,
Auditing and
Best Practice Sharing
Lingotto - November 8 & 9, 2006 15