NEWSLETTER Arête

Vol 24 October 2019

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Arête Vol 24.0

Dear reader, we are delighted to

bring you yet another edition of

Arête. We have endeavoured to

make each edition of Arête as fresh

and content rich as possible. This

time around we have added new

case studies and knowledge

nuggets, which we’re sure you will

find intriguing and enlightening.

Please feel free to share your

thoughts and views by writing to us at

knowledge@ssa-solutions.com.

Happy reading!

Case 1: Throughput improvement in a Heavy Engg. Company

Knowledge Nugget: Change vs. Transformation

Knowledge Nugget: Gemba Walk

Chairman's desk

Lean Tip: Philosophy of LEAN – by Mr. NC Narayanan

Case Study 2: Value Engineering in FMEG company in India

News 1: SSA graduates Process Excellence Advisors in Oman

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6

1

4

5

3

News 2: SSA International launches Transformation journey for an Electrical Engineering company in Oman 8

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News 3: SSA International kicks off LEAN project at the largest Fertilizer company in Oman 9

Chairman's desk

have taken the opportunity to share my experience & views on ‘Change and Transformation’ in the

Knowledge Nugget section & ‘Philosophy of LEAN’ in the Lean Tips section. We have launched a new

‘Knowledge Nugget Video Series’ for our subscribers and we plan to cover topics related to business

improvement. The first one in this series – Gemba walk – has been published and we are sharing a link to

the video in Knowledge Nugget section. In the News section, we present our team graduating Process

Excellence Advisors at major utilities company in Oman.

I take this opportunity to wish all our readers a very Happy and safe Diwali! Wish you a happy reading and,

as always, I welcome your feedback!

Dear Reader,

Welcome to a new edition of Arête! In this edition we share two insightful case studies:

The first one presents a prestigious project which SSA undertook at a well-known Heavy

Engineering company. The other case study highlights a Value Engineering assignment

which is currently in its last stage at a leading FMEG company in India. In this edition, I

Business Case: ABC Ltd. is a leading manufacturer and supplier of critical industrial equipment – both in India and abroad. Lately, the efficiency of a weld overlay shop, common to all manufacturing projects, had become a cause of concern and was directly affecting the on-time delivery of projects. SSA was approached with this problem and a project to improve the throughput and productivity of the feeder shop was taken up.

Actions Taken: After a detailed time study of the processes, certain key problem areas were identified, and several solutions were designed to tackle each of these pain areas.

Goals: • Improving the overall throughput and productivity of the feeder shop through

a series of measures.

Case Study 1: Throughput improvement in a Heavy Engg. Company

Situation – deep dive

Each project in this heavy engineering industry has many processes and departments involved and the timeline of such project runs into several years. Many such projects run simultaneously and the weld overlay shop is a feeder shop that is common to majority of these projects. Of late, the weld overlay shop had become a bottle neck with it having direct impact on the on-time delivery. This in turn attracts penalties and affects the profitability of project. It became imperative to improve the overall efficiency and workflow of the weld overlay shop and ensure that it caters to the overall project plans of all the projects. A detailed time study of the weld overlay process was done over a period of 11 days and the processes/stations were observed for cumulative duration of over 300 hours.

Situation – deep dive

26.7%

19.2% 18.2%

12.6%

6.6% 4.6%

2.9% 2.9% 1.8% 1.8% 0.8% 0.8% 0.4% 0.2% 0.2% 0.1% 0%

5%

10%

15%

20%

25%

30%

0

10

20

30

40

50

60

70

80

90

Time (hrs) Percentage

Overall waiting was observed due to:

► Improper Scheduling

► Lack of on-time availability of Full Kit

items

It was observed that a large amount of time (over 19%) was lost with station remaining idle and waiting for one of the several items necessary for the overlay process

Actions Taken:

1. Planning and Scheduling Given the high mix, low volume nature of the heavy engineering industry, almost every product undergoing the process had a different configuration and process requirements. As a result, it was difficult to estimate the process time and create a schedule for processing. SSA developed a highly customizable scheduling tool for the shopfloor team:

A snapshot of Gantt Chart for few stations as an output of scheduling tool

Actions Taken:

2. Full – Kit Availability – Look Ahead Planning All the necessary hard and soft full-kit items required to perform an overlay were identified. After deciding the schedule for each month, it was suggested that a Full-kit meeting be held in order to ensure availability of all the hard and soft full-kit items. On a broad level, hard full-kit items included: • Fixtures and resources • Consumables

And soft-kit items included: • Online-drawings • Consumable, weld procedure specification, seam details, etc.

Actions Taken: 3. Layout Improvement

In the existing layout, machine placement was not done based on the flow of the job and grouping was done based on type of equipment. A new layout was designed based on the flow of processing steps to be performed on a job. This layout facilitated a unidirectional flow of a component in the overlay shop from one side to the other with minimum possible material handling

Actions Taken: 4. Defect Reduction

Certain procedural changes were taken by the team based on the experience and feasibility. Particular non-favourable weld processes were eliminated completely and some were restricted, whereas the application of favourable processes was extended to wherever possible. This alone gave the following results: Along with this certain Poka Yoke elements were identified to counter defect and have better control over the following weld parameters:

• Pre-heat temperature • Shielding Gas

• Voltage • Current

Summary of Throughput Improvement Enablers:

Station wise load plan helped the team in better management of welders & supporting resources

Contractors now have much more visibility regarding allocation of manpower & resources

Scheduling plan helps to improve fulfilment of Setup related requirements & Full kit preparation

Review and revision of plan at Scheduling level helps to manage the project related priority at the feeder shop

Layout improvements help to have better visibility on shop floor with minimum possible material handling

Initiatives for defect reduction have resulted in improved FTR % and thus less amount of time is spent in Repair and Rework

Knowledge Nugget: Change vs. Transformation

Having spent 30 years in corporate leadership positions and 20 years in global consulting, my biggest take away is the challenge to transform leadership mind set!

For some unknown reason, I took up my ‘Life’s work’ as ‘Transformation Management’ and privileged to part take in many transformations during my career in industry as well in consulting last 50 years.

I had the privilege to work with few amazing transformation leaders such as Mr. TK. Balaji, MD of Lucas TVS where I spent my formative years of 17 years supporting him to realise his vision of becoming a Deming Award winning company. I dedicated a chapter for him in my book “Pragmatic Leadership” (McGraw Hill Education) as he built a world class institution from scratch. All my transformation skills are dedicated to him as I learned a key principle from him: ‘A transformation catalyst should be passionate about his mission’

Many times when I face huge resistance to change, I used to wonder whether I took a wrong profession! Later when I see people like Buddha or Sadguru who have a ‘Seva’ mindset to take up a bigger transformation, why should I not have a similar mindset. This approach removes my anxiety to change people! In this frame of mind I found more effective disposition to stay with my path.

- N.C.

Situation: ABC is an India-based fan manufacturing company. Owing to profit leakages and high operating cost, ABC had engaged SSA to bring about a transformation in the company’s operations and optimize manufacturing cost while enhancing customer experience with the products.

Problem Statement: During discussions, one of the key areas which came up was the material cost of products. It was observed that their best-selling product accounted to about 60% of their sales. Optimizing its cost would yield significant savings.

Goals: • Optimize material and operational cost of product. • Enhancing or Maintaining current performance of the product.

Case Study 2: Value Engineering in FMEG company in India

Situation – deep dive

From discussions with the marketing, manufacturing and operational teams, as also Market Survey for the product and Diagnostic performed by SSA, the following points were realised: Products were overdesigned. Being overdesigned, products required more material to manufacture; resulting in

high material cost per unit Electrical components were not optimized to achieve desired performance. Tolerances for specification of raw materials(RM) received from vendors were high,

which resulted to increased machining of RM. Material handling system were sub-standard, unsafe, which led to high defects in

electrical components.

Actions Taken

Market Analysis Customer Survey Competitor Analysis Benchmarking Brainstorming and

Idea Generation

Feasibility analysis of Ideas

Phase wise prioritization of

Ideas Initial testing of

Ideas

Drill down to Ideas with favourable

performance results

DOE of Ideas with Favourable results

Horizontal testing for other models

Small pilot batch production

Larger pilot batch production

Cost benefit evaluation

Improvements ideas scale up

Benefits from Covers Design Improvements Minimum potential saving from design

changes amounts to roughly INR 12 million annually

Benefits from Electrical configuration improvements Potential saving from the overall

electronical modification amounts to about 14 million INR annually

Thus, total potential savings amounts to INR 26 million per annum.

Results Achieved and Benefits

Increase Cash Flow

Reduce Operational

Cost

Reduce Material

Cost

Lean Tip: Philosophy of LEAN – by Mr. NC Narayanan

Leaders want to know what Lean is & how it can improve profitability? The Chairman of a large group once asked me, “NC, can you explain to me what’s Lean in 2 minutes?” Here is what I answered him:

Lean is a religion and not a tool!

Only when an enterprise knows what value it delivers to their customers for which he/she pays, it survives.

The Value Stream is the business model that delivers value and we have many choices to design it without complexity.

When the whole team is aligned, it delivers value at optimum cost and becomes competitive.

Any activity that does not deliver value is a ‘MUDA’ (Japanese for waste).

Lean is a never-ending effort to eliminate ‘MUDA’.

Hence, Lean is an excellent vehicle to drive profitable growth of any business.

Knowledge Nugget: Gemba Walk

Naveen Narayanan, MD – SSA International, talks about Gemba walk in his new Knowledge Nugget video series.

News 1: SSA graduates Process Excellence Advisors in Oman

SSA graduated the first batch of Process Excellence Advisor for a prestigious client in Oman. This is one of the Lean ‘Train-the-Trainer’ initiatives at the utilities company. These advisors will then be deployed to coach fresh personnel and handhold them in improvement projects.

This is part of a large-scale Lean deployment program in the utilities sector and a key step towards internalizing the program.

News 2: SSA International launches Transformation journey for an Electrical Engineering company in Oman SSA International launched a Transformation initiative for a well known Electrical Engineering company in Oman with the objective of improving profitability and competitiveness. 35 leaders attended the launch marked by a ‘Profit Leadership’ workshop facilitated by Mr. N.C. Narayanan and Mr. Naveen Narayanan.

News 3: SSA International kicks off LEAN project at the largest Fertilizer company in Oman

Mr. Naveen Narayanan (MD, SSA International LLC) conducting Kick-off session for a LEAN project at the largest Fertilizer manufacturing company in Oman.

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