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Developing & Leading a

mature lean organisation
Strategy Actions Results Standards

“The way we do things at Autoliv”

Copyright Autoliv Inc., All Rights Reserved

Technology
Complete Safety System Supplier
Vision System
Inflatable Curtain
Passenger Airbag

Rear Side Airbags
Pedestrian Protection

Seatbelt Systems

Pelvis & Thorax
Side Airbag
Night Vision System
Anti-Whiplash System
Electronic Control Unit (ECU)
Driver Airbag
Steering Wheel
Anti Sliding Airbag
Other Important Products:
Child Seats Knee Airbag
Active Seatbelts
Driver Assist Radar
APS/Lean Summit/2010
Satellite Sensor Copyright Autoliv Inc., All Rights Reserved

Autoliv in Brief
Autoliv in Brief

 Sales and technology leader
 Sales: US $6.5 billion Japan
North
 Fortune 500 company America 11% RoW
 Sales to all major vehicle 24% 12%
manufacturers
 ~80 facilities in 29 vehicle
producing countries
 All facilities have deployed Autoliv’s
lean system, APS.
53%
 13 technical centers in 9 countries and
21 crash test tracks
Europe
 ~38,000 associates and 3,600
in R,D&E

APS/Lean Summit/2010 Copyright Autoliv Inc., All Rights Reserved

Autoliv in Brief
Autoliv in the World

EUROPE
• Estonia
Canada
• France
• Germany
• Hungary
USA • Italy
• Poland Japan
• Romania China
• Russia Korea
• Spain Tunisia India Taiwan
Mexico • Sweden
• Turkey
Philippines
• UK
Thailand
Malaysia
Brazil Indonesia

Australia

South Africa

APS/Lean Summit/2010 Copyright Autoliv Inc., All Rights Reserved

Our Belief

“It is not the strongest of
the species that survives,
nor the most intelligent,
but the one most
responsive to change.”
Charles Darwin

APS/Lean Summit/2010 Copyright Autoliv Inc., All Rights Reserved

Autoliv Production System Introduction Copyright Autoliv Inc.. All Rights Reserved .

. All Rights Reserved . to improve:  Profitability  Competitiveness  Satisfaction (Shareholders.Autoliv Production System The Autoliv Production System (APS) is the formalization of the Autoliv business culture based on the Toyota Production System (TPS) to help every single Autoliv plant grow towards excellence. Employees & Society) Who will benefit from implementation of APS:  Customers  Company/Shareholders  Employees  Society APS/Lean Summit/2010 Copyright Autoliv Inc. Customers. With APS each Autoliv plant is working towards the same vision.

Shortest Leadtime Product Manufacturing Supply through shortening the production flow by eliminating waste Development Network Just in Time “The right part Culture CULTURE Built-in Quality Lean at the right time Lean Thinking Lean in the right amount” Accounting Organisation • Manual /Automatic Line Stop Pre-Conditions : • Labor-Machine Separation • Error Proofing • Continious Flow • Visual Control • Pull Systems Flexible. don’t blame ! Team work 5S Standards Muda elimination TPM APS/Lean Summit/2010 Copyright Autoliv Inc.Creating APS  APS was created based on TPS and LEAN concepts  and launched to all Autoliv facilities during 2001-2002. All Rights Reserved . Lowest Cost.. Capable. TPS LEAN QCD Lean Lean Lean Best Quality. Lean Lean Lean • Takt Time Highly Motivated People Information Quality Distribution • Level Production Management Management Customer Services Operational Stability Standardized Work Robust Products & Processes Total Productive Maintenance Supplier Involvement The New Generation of Manufacturing Companies APS make use of less resources of everything Profitability Competitiveness Satisfaction Just in time Employee involvement Quality first Leveling & Capacity Safety & Ergonomy Quality assurance Continuous flow Flexibility & Motivation Pull system Discipline to standards Quality methods Takt time Continuous improvement Frequent deliveries Process & Result Six Sigma Line concepts Don’t judge.

Assurance Pull System Discipline to Stds Quality Takt Time Cont Improvement Methods Freq Deliveries Process & Result Six Line Concepts Don't Blame/Judge Sigma Team MUDA 5S Standards T..M.P. Work Elimination APS/Lean Summit/2010 Copyright Autoliv Inc. APS HOUSE Autol iv Profitability Competitiveness Satisfaction Just In Employee Quality Time Involvement First Leveling Safety/ Ergonomy Quality Continuous Flow Flexibility & Motiv. All Rights Reserved PRIVATE PROPRIETARY .

. Copyright Autoliv Inc.APS is the world’s best practice way of doing our job. All Rights Reserved .

.Policy Deployment at Autoliv Copyright Autoliv Inc. All Rights Reserved .

All Rights Reserved ..How do we get everyone working towards our strategies every day?  Do people know what we want?  Do people care?  How do we know they are working on important improvements first?  How do we get buy in?  How can we follow up without smothering? APS/Lean Summit/2010 Copyright Autoliv Inc.

APS/Lean Summit/2010 Copyright Autoliv Inc.. Policy Deployment The Compass The compass is a very useful tool if we are lost or not sure which direction to go. All Rights Reserved . Take any compass and it will point in the same direction.  Would it be useful to a business to have all it’s employees putting their efforts to move the company in the same direction?  Policy Deployment is the tool that helps the employees to see the company plan direction. True North.

All Rights Reserved .Autoliv Global Policy Deployment  Annually Autoliv Globally uses Policy Deployment to drive the following key indicators.  Quality  Cost Reduction  APS Deployment (Lean)  Test Centre Efficiency  Operations Efficiency  Financial Reporting (Time & Accuracy of Forecast) APS/Lean Summit/2010 Copyright Autoliv Inc..

. All Rights Reserved .Policy Deployment at Autoliv How the Policy Deployment is created Copyright Autoliv Inc.

All Rights Reserved ..Policy Deployment Process Overview Company Level Develop Prioritise Define 5-year current Shared Plan period Ownership Department Level Senior Department Management Department Drafts KPIs reviews and finalises Policy and Priorities agrees on Deployment Input shared targets and presents it Sub-Department Level Each level decides Submits Draft how it can support Policy achievement of level Deployment for Input above to meet approval. Department KPIs APS/Lean Summit/2010 Copyright Autoliv Inc.

All Rights Reserved ..Policy Deployment Process Overview Company Level Develop Prioritise Define 5-year current Shared Plan period Ownership Department Level Senior Department Management Department Drafts KPIs reviews and finalises Policy and Priorities agrees on Deployment Input shared targets and presents it Sub-Department Level Each level decides Submits Draft how it can support Policy achievement of level Deployment for Input above to meet approval. Department KPIs APS/Lean Summit/2010 Copyright Autoliv Inc.

Manager Policy Deploy. Staff Policy Deploy.Policy Deployment Process Overview Company Plan Reporting Target Setting Senior Manager Policy Deployment Deploy. APS/Lean Summit/2010 Copyright Autoliv Inc. Target Agreement Dept. All Rights Reserved ..

All Rights Reserved ..Example of Dept level Policy Deployment. APS/Lean Summit/2010 Copyright Autoliv Inc.

Policy Deployment Process Overview Company Level Develop Prioritise Define 5-year current Shared Plan period Ownership Department Level Senior Department Management Department Drafts KPIs reviews and finalises Policy and Priorities agrees on Deployment Input shared targets and presents it Sub-Department Level Each level decides Submits Draft how it can support Policy achievement of level Deployment for Input above to meet approval. Department KPIs APS/Lean Summit/2010 Copyright Autoliv Inc.. All Rights Reserved .

APS/Lean Summit/2010 Copyright Autoliv Inc.. All Rights Reserved .

APS/Lean Summit/2010 Copyright Autoliv Inc. All Rights Reserved ..

. All Rights Reserved .APS/Lean Summit/2010 Copyright Autoliv Inc.

Review Frequency  Updated Monthly  Monthly review of Department Level Policy Deployments  6monthly review of Individual Staff Deployments by Managers  Linkage to Pay reviews.  Manufacturing Department internal review Weekly.. All Rights Reserved . Regular review with Managers.  All Policy Deployments for Departments and Work Groups displayed. APS/Lean Summit/2010 Copyright Autoliv Inc.

All Rights Reserved .Visual Displays in work areas. Office Factory APS/Lean Summit/2010 Copyright Autoliv Inc..

Visual Displays in work areas. APS/Lean Summit/2010 Work Platforms Copyright Autoliv Inc. All Rights Reserved ..

 Allow all employees to see where their tasks contribute to the company plan.  Aid Communication up and down the Organisation  Facilitate Employee input to company plans  Reduce Direct Supervision time  Empower Self Directed work teams with common goals..  Provide clarity to all Staff  Link Department Plans to Company Plan  Link Individual targets to Department & Company Plans.  Move Decision Making to lower organisational levels.  Encourages Planning for Continuous Improvement APS/Lean Summit/2010 Copyright Autoliv Inc.  Standardise target Format  Monthly Scoring/Planning to aid self direction & Performance Review  One Page Target Report to be Displayed in Work Area.Policy Deployment Objective  Get everyone to understand the Company plan direction. All Rights Reserved .

All Rights Reserved ..People at Autoliv OK team! Employee Involvement Copyright Autoliv Inc.

. All Rights Reserved . Safety/ Ergonomics Satisfying Work Communicate. Flexibility & Motivation Communicate! Discipline to Standards Continuous Improvement Process & Result Flexible & Motivated Don't Blame/Judge Employees Employee Valued Employees Development APS/Lean Summit/2010 Copyright Autoliv Inc.Flexibility & Motivation Employee Involvement Communicate.

.Training Doing Training Doing Training Doing  Our strategy us to train then apply learning straight away. The trained become the trainers. All Rights Reserved .  Training is cascaded.  Training is a key element of all improvement workshops APS/Lean Summit/2010 Copyright Autoliv Inc.

All Rights Reserved .  Reduction in noise and waste between employees and functions.. APS/Lean Summit/2010 Copyright Autoliv Inc.Self Directed Work Teams  Bringing multi-discipline and multi-functional people together.  Shared Goals and share understanding.  Speeds up communication and improvement.  Empowers all levels of organisation.

 Use close out of workshops as recognition opportunity. APS/Lean Summit/2010 Copyright Autoliv Inc.Celebrate  Celebrate all improvement large and small. All Rights Reserved .  Encourage and reward initiative.  Mix formal and informal opportunities to praise and teach..

Improvement at Autoliv Continuous Improvement Copyright Autoliv Inc.. All Rights Reserved .

All Rights Reserved .Workshops  Cross Functional Teams  Specific improvement Objective  Learning Opportunity  APS/Lean Summit/2010 Copyright Autoliv Inc..

. APS/Lean Summit/2010 Copyright Autoliv Inc.Waste Elimination  Fundamental behind all activity  Autoliv identifies 7 types of waste  All employees trained to spot each type of waste. All Rights Reserved .

simpler.  Everyone can see problems. All Rights Reserved .5S – Improvement Foundation  Everything has a place and is in its place. waste and improvement areas  Powerful knowledge – make workplace safer. cleaner & clearer APS/Lean Summit/2010 Copyright Autoliv Inc..

Autoliv Global Policy Deployment .Quality Driven through 4 Streams Eliminate bad designs Eliminate bad components Eliminate bad manufacturing Eliminate non- conforming products ZERO DEFECTS Autoliv Product Autoliv Autoliv Autoliv Development System Supplier Manual Production System Quality System (ASM) (APS) (AQS) (APDS) APS/Lean Summit/2010 Copyright Autoliv Inc. All Rights Reserved ..

0) APS/Lean Summit/2010 Copyright Autoliv Inc. All Rights Reserved .. Quality Global Customer Reject Index Index (2004=1.

. All Rights Reserved .Waste has no where to hide at Autoliv Visual Management Copyright Autoliv Inc.

All Rights Reserved ..Material System Overview HEIJUNKA Kanbans sent 3 x per day Customer d ay per 3 x 3 x Each Box Taken pe releases a Kanban rd ay Kanbans to line every 20mins same qty each time Finished Goods Buffer Completed product sent to Store every Material Flow 20mins Information Flow LINE APS/Lean Summit/2010 Copyright Autoliv Inc.

Minus 1 operator from Cell • Green means running to Takt time. • Red means running too slow take action.Visual Management . APS/Lean Summit/2010 Copyright Autoliv Inc.. • Blue means tell management. OK.Line Queue • Yellow Means Running too fast. Serious issue may lead to missed supply to Customer. All Rights Reserved .

. APS/Lean Summit/2010 Copyright Autoliv Inc. All Rights Reserved .Visual Management  Manager or Employee can easily see current condition.

 Reaction to condition must be clear.Visual Management  Only have signals for what is important. Responsibility must also be clear. All Rights Reserved ..  Area leader must discuss chart with team regularly.  There is a displayed action plan to improve.  Ensure the team understands the chart.  Display who us responsible to update. If you measure and chart ensure the following –  Desired condition or target is shown.  Don’t be afraid to stop measuring and displaying if there is no value.  Avoid Signal Clutter APS/Lean Summit/2010 Copyright Autoliv Inc.

Standards & Discipline at Autoliv Standards and Discipline Copyright Autoliv Inc. All Rights Reserved ..

Standards & Discipline  Always update the standard when an improvement is made. All Rights Reserved . APS/Lean Summit/2010 Copyright Autoliv Inc. design etc..  Ensure PDCA discipline in everything –  meetings  workshops  quality improvements  Safety alerts and investigations  testing .

. All Rights Reserved .) Continuous are the “wedge” Improvement that keeps us from sliding back Sta nd a rd s APS/Lean Summit/2010 Copyright Autoliv Inc. procedures. Role of Standards in Continuous Improvement  How to implement ? Standards (documented work instructions. etc.

. All Rights Reserved . Discipline to Stds  In short we have Chaos Cont Improvement Process & Result Don't Blame/Judge APS/Lean Summit/2010 Copyright Autoliv Inc. Discipline to Standards  What is the result when we do not follow Standard?  Waste increases  Quality Problems Employee  Cost increases Involvement  No way to see what´s normal or Safety/ Ergonomy abnormal Flexibility & Motiv.

.The solution is at the workplace at Autoliv Key Lessons Copyright Autoliv Inc. All Rights Reserved .

Key Lessons  Go to the workplace to find the answer  5S is the platform for improvement and Visual Management  Management must demonstrate commitment. All Rights Reserved .  Business Plan Deployment is at the core of the Autoliv Improvement Culture  Plan Do Check Act runs through all processes  Celebrate all improvements large and small  Without Standards and Discipline there is only failure and chaos  Passion Persistence Publicity APS/Lean Summit/2010 Copyright Autoliv Inc.. daily.

. Autoliv Every year.000 lives The The Worldwide Worldwide leader leader in in Automotive Automotive Safety Safety Systems Systems APS/Lean Summit/2010 Copyright Autoliv Inc. All Rights Reserved . Autoliv’s products save over 20.