Case Study: Lean Implementation at Siemens’ Kalwa Plant Essay

1.0 EXECUTIVE SUMMARY & COMPANY BACKGROUNDBriefly, in this case we glimpse on Kalwa Planet- mho in India which ameliorate itself from a tralatitious out eminence to die hard prudence grammatical construction. The for the first time atomic estimate 16 use storage started on may 1st, 1955 in a sm all told place on Mumbai with 10 employees and with very simple equipments. Their of import business is fixing damaged switch boards and early(a) fabrication jobs which approximately of their comp adeptnts were imported and small number of them produced inside work graze. In 2009 second political party in India consolidate its placerather than onward this factory equipped with the nigh modern machinery and testing facilities and 40 percentage of the India Siemens worked in Kalwa factory, non only they agitate their role during these long clipping from a simple congregation site to the medium voltage switchboards (M1) manufacturer ,medium voltage indoor and outdoor v acuum circuit breakers (MC) producer , gas insulated switcher (M2-GIS)producer in support of the chief(prenominal) confederation , just too they amend their position in the market , now the accomp nigh(preno bital) has 5 factories in Mumbai , Nasik , Calcutta ,Aurangabad and Goa , cd0 employees and 11 sales hitices, 300 dealers . Further much their corporation is second Siemens factories outside of Germ both after Brazil branch. Siemens mitigate its products in 4 separates 1-industry 2-energy 3-healthcargon 4-consumer products in India and all of the world and our case party manufactured low variety and high variety products which belong to office distribution segment, energy division. Siemens union in India competed with ABB, Areva, Schneider electrics on the early(a) hand Kalwa products exported to Bangladesh, Sri Lanka, Nepal, Bhutan, Maldives, Oman, Qatar and etc.In 2009, 60 to 65 percent of The plugboard Factory (WSWB) ara allocated to manufacturing dining tables (M1) and IVCBs (MC) and remain sgait remains for manufacturing OVCB (MC) and M2 products. This company had 400 individualnel (blue and white collar) and employees worked in 2 working shifts and one additive shift (if necessary). Manufacture cycle straddle planning and logisticinitially , SOE (sales station engineering science) was the first segment in M1 which had some duties like forge manufacturing , surgical procedure planning ,testing and quality package and dispatch commercial , incoming revue and stores. Local customers ordered to the regional sales group and marketing group up focused on export orders. Every order that transferred to the SOE marked and entered to the factory. entirely the orders mustiness passed two exemplifys 1-Design and engineering stage , 2-order planning and execution stage. by and by an order received by marketing section, then SEO prep ard an engineering drawing with cooperation with sales colleagues and customer (to cover cust omer involves), these drawing prepaid in 2 stage A and B , in stage A they grow all info except wiring plot which completed in section B .after passing these twolevels they direct their drawing to the customer to approve and then send it to the manufacturing. During these make fores SEO consulted them to avoid any non example customer collectment if all the level passed correctly the documents were passed to the manufacturing division. expert Order Processing incision (TOP) received orders and recorded it in to the merchandise planning database consort to their sentences then delivery committee tested to estimated the delivery date to the customer. Every order requisite two exhibit of raw materials (equipments) 1-electrical , 2- automatic ,the bloom staff wrote the necessary equipments in a list that called (BOM) bill of materials list . The BOM sent by enterprise pick planning software (ERP) to the material planning department, mechanical equipments were come th roughed inside of the company and electrical needed to order to the supplier.Then procurement cycle started near equipments rel readiness to the shop according to the requirement. The exits manufacturing system had many error, waste and inefficiencies in shop news report and logistic (they wasted long condemnation and semiprecious raw materials and sometimes the manufactured gameboards wasted because of weak layout design) , on the separate hand on 2006 customer demands increased around 75 percent and directors need to enhance their manufacturing parade efficiency to reduce their costs and respond sooner to the customer demand .in October 2006 Siemens AG sent a letter regarding the slaying of angle of inclination steering in Kalwa company and mentioned they excitement to improve Kalwa factory like the new(prenominal) branches during the world . They expected this instruction execution go forth enhance companys capacity to triple during atomic number 23 or vi years.Le an focal point slaying stepThe race management squad visited Siemens site in Turkey which managed in tilt management methods then consultant added to the police squad up pieces , one of the most important duties for managers and team member is to clarify how much this execution of instrument is snappy for the company to hold its market share and all the someonenel had a critical role to earn this goal , thus managers started the Lean management abut with brain storming among all the company sections , they asked which points make waste during laborprocess ? They wanted to know and top any waste of time and raw material during merchandise draw. However, changing the working methods which many person work with it for many years has some resentment among different groups.the listing team decided to divide their changes to 1-layout 2-support system 3- trafficker management 4- ethnic changes , which these changes caused to improve the Kalwa company efficiency. Lean tea m had conflux with personnel department of sections that had more errors after wobble executing, team members tried to chance upon out problems and seek to solve the issue.2.0 wonder 1Has Siemens Kalwa set been effective in achieving name implementation? In our opinion, Siemens Kalwa Plant has been affective in achieving scarper implementation. The main contributing factors for an effective controversy implementation for Siemens Kalwa Plant are as follows 1. Top management provide a very ethical support and clear direction a. Lead by Global Head, Mr Gewaldb. Siemens Kalwa Plant General Manager, Mr Khandekarc. Mr Khandekar, demonstrating walk the talk by showing his lading by closely involved in the implementation activity to hold back the role players understood the objectives2. assume planning in recording the as is process and to be process d. 6 months of touch legal opinion and feasibility domain on Vacuum Circuit Breaker (VCB) vivacious product disceptatio n processes3. Lean objectives and target was communicated clearly to the whole team in Kalwa plant e. Introduction of Gewald to the shop pedestal proletarians and office employees to clearly communicate the opening night and the black market implementation objectives f. Clearly communicate that listing implementation to be advanced to only manufacture of panels and VCB. g. Provide clear reason on w herefore the two (manufacture of panels and VCB) waschosen4. Formation of Implementation team to operationalize and monitor h. Siemens Kalwa Plant General Manager, Mr Khandekar as the head for both the panels and VCB implementation team i. Supported by Mr Vedak for VCBj. Working group from cross functional team managers and executives5. Site visit to learn from a real animation execute implementation k. 2-3 team members and Mr Vedak visited black market plant Maruti l. Kandekar and Vedak visited Siemens Switchboard in Turkey6. Appointment of consultant to answer on the tend i mplementation m. The consultant provide tangible potential drop benefitsi. Increased productivity of laboursii. reducing in Inventory Leveliii. Improve space utilizationn. cognition sharing and best practice based on real life tend implementation from other industries7. Organization are highly connected and motivated in implementing race o. Group leaders support the workers maintaining the pace of the line p. Khandekar and his management team forget attend the splashboard clash to resolve issues q. By the actions of 7.a and 7.b, the employee realizes the splendour of the initiative and start to commit themselves in making it a achievement r. With befitting training, the employee feels engage and motivated to guarantee the initiatives is a success The 7 contributing factors above enable Siemens Kalwa plant to effectively implement the changes required below 1. Layout changesa. Assembly line introducedb. Work station based on orderc. Fixed takt time2. Support System changes d. Introducing Dashboard for issue escalatione. A fix time to discuss the escalated issue. The and mandatory for the f. Training to match the employee has the decline aptitude-sets 3. Vendor Managementg. equal to(p) to adopted Just In Time (JIT) supplies delivery h. Able to embrace Pull Philosophy4. Cultural changesi. Team belongingnessj. Uniform dress-code afterward 12 months of implementing slender, Siemens Kalwa Plant achieved its 3 main objectives for implementing Lean processes bases on the followings business outcome 1. Panel throughput time on the shop floor had reduced by approximately by 30 per cent 2. archetypical Pass Yield (FPY) had increased by approximately by 40 per cent 3. Worker productivity had increased approximately by 30 per cent Siemens Kalwa plant should further refine and improve the improved processes/functions or to include other processes/functions which not part of the original range of mountains to be part of the controversy implementation. Siem ens Kalwa plant should look into implementing extend to the remaining processes/functions as shown below 1. Design department processes/functions2. Engineering department processes/functions3. Vendor and supplier manufacturing processes/functionsThe approach above combine with the adherence to lean principles and lean steps should tally lean implementation is sustainable.3.0QUESTION 2How was the organizations change process managed?Actually this company had different sections which needed to change during lean management theory for example shop floor , design and engineering departments, vender and suppliers all of these sections work in traditional methods .on the other these company use two different kinds of resources 1- mechanical , 2-electical which mechanical components exist in the company warehouse. But electrical components demand to order and buy from suppliers, this company manufacture in mass customization method. As a matter of factchanges had started with cooperat ion between Mr.Kulkarni with corporate strategy department to find out feasible switchboard part for implementation lean management in process , on the other hand management renewal occurred Mr. Kulkarni was promoted to director of Medium voltage Division and Mr. Khandekar raised to general manager for WSWB factory . Following, Mr. Gewald worldwide person in charge of lean pouch in the Siemens Switch Boards arrived at the Kalwa factory , and manager introduced him to the shop floor workers and office employees and they decided to implement lean management in the VCB company too .In the first step Vedak and some members of the team had a trip to the lean plant of Maruti and they could understood benefits of lean management at the same time some Ameri merchant ship consultants arrived to the Kalwa factory to assemble with them in lean management process implementation. Initially consultants had a meeting with manager and excuseed for him benefits of lean management like increase p roductivity, reduction in inventory levels and improve space utilization. In 2008 khandekar and Vedak visited Siemens site in Turkey and surprised of implement lean management results in company efficiency. Managers needed to restructure layout and process to implement lean management .obviously errors, inefficiencies and wastes were not clear before implementation, during this process managers asked both department idea to achieve efficient centerings and reduce next impact between personnel. Kalwa Company needs this process because total demands enhanced for their panels. Company must changed exist traditional layout in operating sections that needed unity among workers and supervisors.They decided to exploit workers with rewards if they entrust catch the enough production periodical. They decided to prepare six work stations along their five assembly lines and they make this process flexible to use leader worker team to help the other assembly line (if necessary). As a Mathe r of fact, its necessary to change support system for new layout, managers used a board at the startle of every assembly line which describe who are person in charges? Production features and their quantity? And necessary raw materials this board called dashboard and help to the company to find out the mis sprout or failing points during the process. Seriously, suppliers were one of the most vital parts for their JIT and lean management. Lean companies need the correct part in a correct time because they do not have inventory any more. In the beginning there were many inconsistency between companys operational section and suppliers which cause to direct meeting between lean team members with them and team members describe that it is possible this methods make unnecessary cost for you but in long time this method will improve company production quantity and improve your selling. Mr. khandekar decided to gathered every line member (engineers , workers , etc ) as a team to improve t heir organization culture , for sense of smell team belonging he decided to take 30 min for their pray and sport activity daily.3.0 QUESTION 3What granting immunity did Khandekar face in implementing the change and why?Lean is consider one of the most important success factor in an organization strategy as one of its main focus is to diminish impediments to the production line in order to ensure smooth process flow by eliminating waste. As noted in the article, time waste was evident throughout the department in the value set up and this requires major changes to the process flow. Since this would involve leeway to the process flow and directly impact the way employees had been performing their parturiency for years, it has created resentment from various groups of employees. Eventually, most of the departments involved are becoming justificatory of their own approach and the way they do their work.At the beginning of every line there were dashboards installed throughout the shop floor, SOE and right to the dispatch section. The shop engineers and workers will post all issues that occurred on the line including the names of the mass involved. The errors uncovered from various departments thru lean system which are overlooked previously has formed strong resentment among the workers oddly for those who werent at ease in admitting their mistakes. This has leads to workers blaming severally other which ended out with heated arguments among the departments. Furthermore, the structure change within the team, high human intervention in team activities and lack of synchronization between departments has contributed to high numbers of errors. One of the main reasons that contributed to this resistance isbecause the workers view the lean system as just another(prenominal) initiative from the management.Furthermore, the workers bonuses were solely dependent on the lines productivity. In the event where throughput of the line is hampered due to issues, workers productivity as well as their salary will be affected as they need to clench until the issue is resolve and might need to extend their working hours. Therefore, the break was unacceptable and was compounded by the labour union.Vendor management is considered one of the toughest issues and it posed major challenges for Kalwa plant. All this while, vendors were so used to supplying in batches the required materials and goods for a large numbers of orders by a definite date. Thus majority of the vendors could maximize the cost advantages due to supplying materials in come out. However, with lean implementation, the material is only required once the individual panel came on the production line since there is no longstanding needs for materials to be delivered by batch or by customers order. The change had a vast impact to suppliers where vendors were required to be constantly reminded of the new exhibition and to deliver the goods the following day which impede their profits sin ce they could no longer exploit the economies of scale.Additionally, the new set up has as well as leave an impact to the material planning group as they need to arrange order for individual panels constantly instead of ordering in mint and require to be in constant contact with the suppliers to ensure the material is delivered on time.5.0QUESTION 4How did Khandekar handle the resistant to change?The company faces several challenges disrespect the benefits of successful implementation were attractive. The challenges among others include restructuring the organization, getting the staff to accept the lean implementation and handling the resistance from internal and external stakeholders. One of the way Khandekar handle the resistance to change is byorganizing meeting to explain to the employees the importance of adopting lean to cater the growing demand for panels. This lean was apply at the shop floor which withal requires the supporting department to adopt the lean implementat ion which includes layout changes, changes in the support system, changes in vendor management and cultural challenges. As for the layout change, the group leader plays a role to support the workers in maintaining the pace of the line. The workers will press an and on precipitate which would then light up another add on lamp in the manufacturing departments office in the event there is an issue with regards to the material or drawings. The TOP material planning or the equipment group would meet the worker to discuss the issue and subsequently the light would be switch off upon the issue is settled. Khandekar also attend meeting with a few other head of departments to discuss on the issues involve as well as those individual staff names which is listed on the dashboard.The meeting which is conducted every good afternoon 2 pm for an half an hour provides the basis for managers to identify number of panels manufactured for the day, how the line is progressing and identify the issues t hat hampered the lines progress. During the meeting, the issues are in stages addressed the individual staffs involved were required to solve the issue by performing 6hkooa root cause analysis. Khandekar also face challenges to implement the lean as the vendors face problem to supply materials as and when required when the several(prenominal) panel come on line as previously the materials were supplied in batches as per the agreed timeline. Hence, to overcome this issue, the lean team visits the vendors and presents the benefit of lean program. For short term, it was decided that vendors will manufacture the material in bulk but delivery of the materials as required by the line. Khandekar also introduce joint prayer and exercise session at each assembly line at the beginning of every shift. This concept was also introduced to the personnel in office. All the members involved in the lean project were assumption a T-shirt with lean logo which represents the team attempt which was posterior introduced to the workers besides to the office staff and management. Khandekar also introduce key surgical procedure indicators and the workers performance bonuses are determine based on the agreed panel produced, i.e. six panels per day per line. The abovementioned solutions were identify and implemented by Khandekar to handle the resistance to change tosuccessfully implement the lean at Siemens Kalwa Plant.6.0QUESTION 5How was the lean implementation shootd in the new set-up? When Siemens AG (headquarters) decided to implement lean manufacturing in the Kalwa factory, few initial steps were taken to ensure a proper foundation in terms of knowledge and determineing of lean manufacturing is first build in the Kalwa factory. Mr.Gewald, international head for spearheading lean project was brought in to the Kalwa factory to educate the top management level on what lean manufacturing is all about and how it can improve and benefit the factory. One of first few actions tha t Mr.Gewald took was to form a lean implementation team with Mr. Khandekar as the project leader and Mr.Vedak as the lean manager. Mr.Gewald with the help of consultants from United States held few meetings with the management to explain the potential benefits of the implementation. Through brainstorming and awareness sessions, the consultant team also gave origination on the successful lean implementation in other companies specially at Toyota. Apart from that, Mr. Khandekar and Mr.Vedak also had a series of factory visits to companies which have completed the implementation of lean manufacturing. The main purpose of all this meetings, innovation and visits were to create the managements confidence and prove how the implementation will be beneficial. Creating the belief and confidence of the management is essential in ensuring the success of the implementation.Once the lean team has been formed and the essence of lean manufacturing has been structured in them, the team starts t he implementation process. Figure 1 show the implementation process.Observations & Analysis of Current process flow Identify Waste welkin Identify Changes and Implementation Monitoring PerformancesKey Activities* Process Mapping to understand how the current process works* Current process flow map is derived from the process routine activity.Key Activities* From the derived process flow chart, waste or non value added works are identified.* Through brain storming, the ways and message to make this process efficient are discussed. Key Activities* From the analysis, changes are identified and the implementation process begins. The changes will cover- a) Layout changesb) Changes in support systemc) Changers in vendor managementd) Cultural changes.Key Activities* The monitoring KPIs were defined.* A monitoring team was formed to document, analyses and report on these KPIs.Figure 1 Implementation process of lean manufacturing.As mentioned in question one, lean manufacturing by princip le is the elimination of waste or non-value added works. As such, Mr.Khandekar and the lean team realized that they need to restructure both the layout and the process itself to legislate non-value added works. Rather than blindly doing the implementation process, the team first did process mapping for the existing process to understand how it works. In the process mapping stage, the lean team held discussion with the entire department in the value chain regarding their process flow. The outcome of this activity was process flow chart. Next, the lean team analyzed the process flow chart to identify all non-value added in the flow. A brainstorming session was done with all the related in-person to decide the changes that need to be made to make the process more efficient. At this stage the lean team also held meetings withall the employees to explain what lean manufacturing is all about and why it is important for them to adopt lean in their workplace. This was an important action by the lean team as there were signs of resentment and scepticism among the employees. From the first two stages of the implementation process, changes that are required to eliminate waste were identified. The changes are as below-Layout ChangesThe lean team realized that physical structure of the layout needed to be changed, as there were wastage in terms of workers movement and the flow of the product or material. For the layout changes, the assembly line concept was adopted. Assembly lines with workstations were formed. The time per workstation was fixed and their work content was adjusted. An efficient flow of the products and worker movement were also considered in the new layout. Apart from that a communication system between worker level and the executive level was also created to improve response time. Changes in support systemApart from layout changes, lean team also made changes in support system for the production line. The main idea here is to introduce ownership concep t to the production line whereby the owner has to be answerable to all problem that arise under his ownership. Dashboards were introduced at the beginning of each assembly line. Any issues in the production line will be highlight in the board with name of the related personal. Meetings will be held on daily bases to oversee all the issues. The dashboard also will display daily out of each assembly line to show progress in each line. Apart from that skill assessment of the employees and top management were also done unceasingly to identify skill gaps and appropriate training are arranged. Change in Vendor Management.Implementing lean manufacturing in the Kalwa factory alone would not be sufficient to eliminate waste. With vendors continuously supplying material or part in bulk orders, wastage of storage or inventory space occurs in the factory. With the availability of extra material or parts, manufacturing mistake will go unnoticed. As such, vendor management was also needed to bech anged. The main idea here is to have the right quantity of parts available at the right time with the right quality. Vendor will have to supply each order quantity accordingly rather that supplying in batch. Because of some difficult faced with the vendors, short term and long term plans were made. vast term plans are to implement lean principle at the vendors end. As for short term plans are the implementation of drag philosophy of the lean system whereby vendors will manufacture material in bulk but deliver it to factory as needed by the line. This is to reduce storage and inventory space in the factory. Occurs of manufacturing mistake or defects will come to the knowledge of the line managers or supervisors.Cultural ChangesActivities such as joint prayers and exercise session were introduced to instil a sense of team belongingness among employees. Apart for that uniform dress code are also introduced for the lean implementation member to send the message of team effort to all w orkers and management staff.Once all the changes have been implemented according to the plan, the next important step that was taken is to monitor the effectiveness of the changes. With the help of Mr.Gewald, the monitoring KPIs were defined to analyze the effectiveness of lean system on the overall performance of the factory. A monitoring team was formed to continuously document, analyze and report on these KPIs to the Siemens AG (headquarters) on monthly bases. To summary, we can say several key actions have been taken to institutionalize the lean implementation in the new set-up of the Kalwa Factory. i) Before implementation process was started, a proper foundation was built in the company by educating the top management on the lean principles. ii) A sound implementation plan was made by the lean team by first, analyzing the existing process to identify inefficiencies. Then determine ways and means to improve them. iii) The lean team continued to educate all employees from staff level to worker level to ensure all of them understood the lean principles. iv) straitlaced monitoring was done to know the effectiveness of all the changes made. v) Mr.Khandekar and his team also continuously come up with creative solutions for problem such as resentment and worker issues.What more does Khandekar need to do so that the changes are not reversed? There are several actions that Mr.Khandekar can take to make sure that the changes are not reversed.i) around-the-clock training on lean principles.People tend to fear things they dont understand and in the case of Kalwa plant, it is proven to be true. When lean implementation was first announced to all Kalwas employees, there were signs of resentment and scepticism among the employees. This adventureed because employees didnt understand what is lean, why the management wanted to implemented it and what benefit do they and the company get. Proper training must be provided to all the employees to ensure their understanding of lean principles. The implemented changes can only last if the employees willing to work according to the changes and this can only be achieved through understanding. The lean principles must also be integrated in to the companys training programs for new employees. Continuous assessment must also be done to measure the level of understanding of the employees especially workers as it is eternally difficult to reach them because of their education background. An establishment of lean culture among all the employees in the company is important to ensure the sustainability of all the implemented changes.ii) Proper documentation.Proper documentation must be made regarding all the implemented changes. This is important because there is a possibility that a future return can unintentionally reverse the change made now. Believe me this tends to happen more often than not in the manufacturing line. As such proper documentation can function as reference to future employees especially e ngineers when they are making some improvement. Changes made in the method of working must also be documented as work standard as it can function as training tool for workers.iii) unbroken Auditing.Regular auditing is important to ensure that all the changes in terms of process flow and work standard are followed accordingly. Regular audit must also be done to all related supplier and vendors to ensure their compliancewith the lean principles.iv) Continuous Monitoring & Improvement.Lean manufacturing is designed in such a way that it will not leave any room for problems and mistakes to hide if it is implemented correctly. As such implementation of lean manufacturing will force all wastage, problem and mistakes to surface. The monitoring team must be assign to continuously monitor for such case and appropriate action must be taken to solve or improve. Continuous sustainability can only be achieved if improvements are carried out continuously by capable people truly understand the wa y of lean.