World Class Manufacturing

Stefan Ketter

Lingotto - November 8 & 9, 2006

WCM Focus

All Employees

Waste and Losses

Standards and Methods

Lingotto - November 8 & 9, 2006 2

Structure/Objectives

Deployment

Workplace
Cost

Quality Maintenance Logistic

Organization

Total Industrial Total Quality Total Productive

Method Just in Time
Engineering Control Maintenance
& std.

Quality Technical Service

Focus Productivity Efficiency Level
Improvement

zero zero zero zero

Target
waste defects breakdowns inventory

Values People involvement, value creation, customer satisfaction

Lingotto - November 8 & 9, 2006 3

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

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

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

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
Audit
5 A.M.: Autonomous Maintenance 58 model areas
6
Coinvolgimento
P.M.: Professional Maintenance
Sicurezza
34 model areas
7 Quality Control 10 modelLeadership
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

Model Area: Tychy/Poland

People Involvement: Proposals/Employee/Year

4,5
Target = 4
4,0

3,5

3,0

2,5
Implementation
2,0 rate 50%
1,5

1,0

0,5

0,0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Lingotto - November 8 & 9, 2006 8

Model Area: Melfi

Quality: Electric Check Defects – Grande Punto

- 50%
%

Apr-06

Aug-06
Sep-05

Oct-05

Nov-05

Dec-05

Jan-06

Feb-06

Mar-06

May-06

Jun-06

lug '06

Sep-06

Oct-'06E
Lingotto - November 8 & 9, 2006 9
Model Area: Melfi

Productivity: Hours per Vehicle – Grande Punto

-12%
in 8 months

Lingotto - November 8 & 9, 2006 10

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

Labour Productivity Target (Italy/Poland)

100%
Technical efficiency
- 30% Losses
Losses Waste/Rework
Range
Line Balancing
Range

- 50%
Non Value Added
• Logistic layout
• Time Optimization

Operation
Operation

Actual 2010E

Lingotto - November 8 & 9, 2006 12

 Towards World Class Manufacturing
100

gold
90

Plants
Competitive

All
80 Consolidation /
Level
Autonomous

silver
70 Improvement

All Plants

bronze
60 Horizontal
audit result %

expansion
50

40
EU Plants

30
Knowledge
Saving: > €500mn
20 creation
Model areas
10
2006E 2007E 2008E 2009E 2010E
0
1 3 5 7 9 11 13 15 17 19 21 23 25 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

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

WCM – A Corporative Approach

WCM

Implementation,
Auditing and
Best Practice Sharing

Lingotto - November 8 & 9, 2006 15