Process Improvement Basics Why, How, Tools & Approach, Case Study Learn how to double your profits in simple steps...

1. Process Improvement
Basics
Armstrong
Future Perfect

2. Agenda
• Process Improvement (5W 2H)
• Perspectives
• Program v/s Culture
• Lifecycle of Process Improvement Drive
• Criteria for Success (6 ‘C’s)
• Common Tools & Approach
• Case Studies
• What’s Next
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3. Definition, Need, Location, Ownership, Timing, Tools & Approach
PROCESS IMPROVEMENT (5W 2H)
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4. Process Improvement (5W 2H)
Definition, Need, Location, Ownership, Timing, Tools & Approach
Making things better, not just fighting fires or managing crises
• What A way of looking at how we can do our work better
• Why Better Safety, Lesser wastage of resources, More competitive
• Where Not only shop floor / workshop but throughout the organization
• Who Management, Staff, Workmen, Process Improvement Leader
• When NOW
• How Communicate Vision, Equip with the right tools, Manage Change
• How Much Continuous & Gradual Improvement, Stabilize and Sustain
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5. Process Improvement
Making a Case
Cost to
Customer
•New Product
New •Higher S.P.
Profit Profit •Premium
Cost to
Increase the Profit
Cost to
Customer Company
a) Increase Cost to Customer
Profit
Cost to
Customer
Cost to
•Process Imp.
Company •Waste Redn
Profit
New •Alternates
Profit
Cost to
Company
b) Decrease Cost to Company
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6. Process Improvement
Making a Case
High
Process Improvement
Alternate Source
Wastage Reduction
Degree of Control*
Alternate Site
Cost Implementation
Low High
New Product
Unique Product
Higher Selling Price Charging Premium
Low
* On acceptability by Market
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7. Process Improvement
Where’s the Money, Honey?
• Let’s assume a case of a company 100Cr company earning a 5% profit i.e.
5Cr per annum. They want to double the profit.
• Traditional strategy is to double the revenue i.e. 200Cr to generate 5% i.e.
10Cr = 2 x 5Cr.
• But this also means, they have to incur cost to double company’s
capability.
• Another strategy is to target 10-30% of the company’s revenue being
spent on generating waste.
• Improving the processes by 10% would earn (10% of 95Cr) 9.5Cr of extra
profit, without extra headcount or additional capital in many cases.
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8. Management, Staff, Process Improvement Leader
PERSPECTIVES
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9. Perspectives
Management, Staff, Process Improvement Leader
Process Improvement How do I drive PI?
can generate more How many belts?
money for me? How to bridge the gap?
Process Improvement Leader
Just another Initiative.
Not going to work
Management / Owner here…Nothing for me!
Workmen / Staff
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10. Should we drive it as a program or try to imbibe as a culture?
PROGRAM V/S CULTURE
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11. Program v/s Culture
Should we drive it as a program or try to imbibe as a culture?
• Program: A program provides impulsive moment in the
organization which is important to communicate change and gain
initial success. One time initiative. Need continuous push.
• Culture: A state of organization where values, processes and people
are aligned with the methodology in whatever they do. It gives the
initiative the required acceptability and sustainability.
• “Process Improvements need to be driven into culture of an
organization. Then it will enable us to continuously seek
improvement in whatever we do. Right from design stage to
procurement, planning, manufacturing, dispatch, sales, service and
marketing, it will be a common thread and language of a Learning
Organization” …Armstrong
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12. Understand  Implement Engrain
LIFECYCLE OF PROCESS IMPROVEMENT
DRIVE
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13. Lifecycle of process Improvement drive
Understand  Implement Engrain
Understand Implement Engrain
• Aim • Plan • Change
• Consult • Do • Raise
• Learn • Check • Sustain
• Teach • Act • Challenge
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14. Commitment, Communication, Consultation, Cost, Consistency, Challenge
CRITERIA FOR SUCCESS (6 ‘C’S)
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15. Criteria for Success (6 ‘C’s)
Commitment, Communication, Consultation, Cost, Consistency, Challenge
Commitment Communicate
Management must commit to The drive, goals and program
the process improvement drive. must be communicated and
Clarify priorities and goals. cascaded till bottom of pyramid
Consultation Cost
Internally with employees to Sow something to reap in future
manage change and involve Invest in tools & training people
Externally with experts to drive Rewards & Recognition drive
Consistency Challenge
Drive it continuously and with Challenge Status-quo & improve
steady rigor. Take a step every Don’t limit your
day however small it may be. challenges, challenge your
limits. Sustain the Change
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16. Lean, Six Sigma, IE
COMMON TOOLS & APPROACH
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17. Common tools & approach
Lean, Six Sigma, IE
• Lean Thinking
– Attacking waste, VSM, 5s, Flow, Pull, Kaizen, VF
• Six Sigma
– Attacking variability, DMAIC Approach, C&E diagram, 5Why
• TQM
– PDCA (Plan-Do –Check-Act)
• Industrial Engineering (IE)
– Time, Motion Study, BPR, Facility Mapping etc.
• Waste Management
– Seven waste framework, w-VSM, CONC analysis
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18. Bicycle Manufacturing Plant
CASE STUDIES
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19. Bicycle Manufacturing Plant
Layout
Customer Counter
Assembly
Painting
QA
Storage
Planning
Casting
Fork Lift
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20. Bicycle Manufacturing Plant
Decision Variables
Customer Counter Planning RM Storage Casting Assembly Painting
Check in FG, If N 
If Quality meets standards
Customer FG Storage QA
Rejection Storage If Quality not acceptable
Station / Object Decision Variable
Customer Counter Move
QA Move, Sell Station
Casting Move, Configuration (Smart Mode / FIFO), QA@Source (Y/N)
Fork Lift Sell, Batch Setting (Min. how many items to be moved at a time)
Planning Move, Schedule (Forecast/Current Demand), PM (Y/N)
Storage Move
Painting Move, Batch Setting, QA@Source (Y/N)
Assembly Move, QA@Source (Y/N)
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21. Bicycle Manufacturing Plant
Simulations
Changes Made… Results…
• Casting: Smart mode, QA@Source • Earning increased by 27%
• PM, Assembly QA@Source • Earning increased by 4.6%, Defects
reduced by 7%
• Layout changes • Earning increased by 8.4%
• Painting: Batch setting=1, • Earning increased by 8.6%
QA@Source
Almost 50% increase in Earning and Profit
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22. Building Case for Action, Gap Analysis, Plan, Engage
WHAT’S NEXT
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23. What’s Next
Building Case for Action, Gap Analysis, Plan, Engage
• Building Case for Action
– Aim at Stars, At least you’ll land on the Moon
– Set yourself targets e.g. 20% cost reduction, 30% waste reduction
• Do a Gap Analysis
– As-Is v/s To-Be state modeling
• Plan
– Make a 5 years Road Map with desired targets and timelines
– Map all required programs and tools
• Engage
– Identify and allocate projects to employees
– Continuously review and re-invest
– Manage change and participate
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24. Armstrong Solutions – Future Perfect
Keeping you ahead of Competition, Cost pressure and Change
For more details, please write to us at: contact@armstrong-solutions.com
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