How to Prepare the New SEA Quarterly Report

How to Preparethe New SEA

Quarterly Report

November 2008

Accelerating Supply Chain Performance

Breakout LeaderJeff Hawley

Director, Project Management

L5 Performance Systems

11/20/08 SEA 2007 All Rights Reserved

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AgendaOverview of the quarterly report process

Who to involve in the quarterly report process

How to collect metrics for the quarterly report – importance of

metric definitions

Developing the Annual Improvement Plan

How to write report comments

What is the examiner looking for?

Things that will cause a rejection

What to do if the report is rejected

The appeals process


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Overview

Involve the right people

Make sure everyone knows why this is

important

Establish data collection and review

Establish a definite schedule

Develop the annual improvement plan

Write the report comments


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Who to Involve?

Process Champions

Process Owners

Administrator


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How to Collect Metrics


Definitions


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Certification Business Results4.1.1 Inventory Turns – What is your organization’s monthly history in inventory turns?

4.1.2 Sales/Employee – What is your organization’s monthly history in sales per employee?

4.1.3 On-Time Delivery – What is your organization’s monthly history in on-time delivery?

4.1.4 Parts per Million – What is the organization’s monthly history in parts per million defects?

(organizations using Defects per Million Opportunities may present this instead)

4.1.5 Process Maturity 3 and above – What is the organization’s quarterly history in processes

achieving Level 3 process maturity or above?

4.2.1 Defects per Million Opportunities – What is the organization’s monthly history in defects

per million opportunities?

4.3.1 Rolled Yield – What is your organization’s monthly history in rolled yield?

4.3.2 Cpk - What is your organization’s monthly history in Cpk?

Note - Reference the current quarterly report format and definitions for these metrics -http://www.seaonline.org/docs/SEAQuarterlyReport.doc


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Annual Improvement Plan


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Writing Report Comments

XXXXXXXX XXXX




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Examination Policies

We wish to ensure that suppliers who are

engaged are making a significant investment in

improvement that shows in their performance

We wish to distinguish suppliers who are

improving from those who are not

We wish to compare performance to plans

created by that supplier

We wish to see some progress in at least 2 out

of 4 quarters with no significant backsliding


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What is the Examiner Looking For?

Roadmap Related

Data vs. Anecdote

Plan vs. Results

Incremental Improvement vs. Massive

Attacks

Improvement as S.O.P.


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What Causes a Report Rejection

Incompletion

No linkage to improvement plan

Disorganized - hard to interpret

Lack of progress on metrics


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What Happens on Rejections

If past deadline, review feedback and correct

procedures for next report

If before deadline, contact SEA and commit

to corrected report before deadline

If you believe the decision is incorrect, file an

intention to appeal with SEA


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Supplier Quarterly ReportAppeal Process

Supplier quarterly report is

evaluated by SEA

and is rejected

SEA has checklist of

evaluation points

and notifies supplier in

writing of rejection and

reasons for rejection attaching

checklist form

Supplier notifies Outreach

Comm. co chairs of

intent to appeal rejection

within 7 days of receipt

of rejection

Outreach Comm. co chairs

mail appeal form template

to supplier within 5

days of supplier intent to

appeal notice

Supplier completes appeal

template and mails back to

Outreach co chairs within

7 days

Outreach co chairs add

rejection appeal to

Agenda of

Outreach Comm.

meeting

Outreach Comm. discuss appeal using

SEA rejection documentation and supplier

appeal form. Discussion Is

facilitated by Outreach co chairs

with SEA evaluator in attendance

(for discussion only)

Vote - Appeal is granted only

by consensus of entire

Outreach Comm. in

attendance for

regular meeting

Supplier is notified

within 5 days by

Outreach co chairs of

either acceptance or denial

of appeal

Note: Outreach Committee must overrule rejections within 30 days or the decision will stand


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Supplier Nam e : XXXX Report Date: October 20, 2008

Contact Name: XXXX Contact Phone Number: XXXX

Email Address: XXXX DUNS Number: XXXX

Reporting Period Q1 Q2 Q3 Q4 F i s c a l Year Starting Month: January

SEA Certification Level Pre-Certification Stage1 Stage 2 Stage 3

Business Results Q1 Q2 Q3 Q4

On-time Delivery 81.6% 81.3% 90.4%

Inventory Turns 4.0 4.24 4.15

Sales per Employee $24,441 $26,803 $27,287

DPMO PPM 3,532 2,613 3,871

Processes at Level 3 or above 16 23 25

Annual Improvement Plan % Complete 24% 55% 75%

Development Hours calculations on next page

Hours completed: 13,781

Percent available hours: 3.69 Breakdown: L&C 3,805 WFD 5,436 OE 4,348 VS 192

Sample Q4 Report

Leadership And Culture 1.0Champion for Leadership Track: XXXX 1.1.1 Process Owner: XXXX Master Trainer: XXXX Comments: The 2009 Strategic Business Statement (SBS) was locally approved and submitted to corporate mid-August. Management formally presented the SBS to corporate in meetings late-August and received approval in September to prepare formalized budget submissions based on their subsequent approval of the company’s SBS. These meetings were attended by the company’s President/CEO (1), Group Vice-Presidents (3), company Operating Officers (2), and Corporate Executives, including the CEO (5). 2009 Budget numbers were submitted early September. The process owner reports this process at PMM level 4. 1.1.2 Process Owner: XXXX Master Trainer: XXXX Comments: Members of the Executive Lean Audit team have allowed middle manager to participate in the monthly audits of departments for lean progress. This has helped to expand the vision and focus of these managers beyond their own areas and best practices are better communicated. During this reporting period one more senior manager achieved the SEA leader certification. This brings the percentage to 44% of the Kirkhill senior managers certified on the SEA LES, with at least one certified champion on each lean model track. This process is at PMM level 3. 1.1.3 Process Owner: XXXX Master Trainer: XXXX Comments: Monthly performance reviews (July, Aug, and Sept.) against the Flight Plan business objectives were held with the participation of the 14 senior managers. We are now incorporating updated Flight Plan Goals consistent with the recent SBS and Budget for the annual Off-site meeting in November. The process owner reports this process at PMM level 3. 1.1.4 Process Owner: XXXX Master Trainer: XXXX Comments: The monthly plant-wide lean management audits for the quarter were conducted by rotating senior managers as scheduled by the Lean Steering Committee. Audit results were distributed and posted on the company intranet and glass walls. This process is at PMM level 3. 1.1.5 Process Owner: XXXX Master Trainer: XXXX Comments: The 2008 priority training plan is on schedule. The process semi-annual review was initiated, together with the Strategic Planning process and the results will be the basis for the 2009 priority training plan and the talent review gap assessment. This process is at PMM level 3. 1.2.1 Process Owner: XXXX Master Trainer: XXXX Comments: (Stage 2 key process) Department level specific financial reports were issued on a monthly basis (July, Aug., and Sept.) to support the achievement of the flight plan balanced scorecard and the alignment of the continuous improvement activities. The process owner reports this process is a PMM level 3. 1.2.2 Process Owner: XXXX Master Trainer: XXXX Comments: Company values and mission statement have been included in the new hire/promotion orientation of all senior managers. The process owner reports this process at PMM level 3. 1.2.3 Process Owner: XXXX Master Trainer: XXXX Comments: The process worksheet and work instructions are documented. The Certified Master Trainer (CMT) is finishing training materials to standardize the process. There are 3 major commodity suppliers currently engaged on supply-chain integration and inventory reduction activities. This process is at PMM level 2 with activities underway to achieve PMM level 3 by year end.


Workforce Development 2.0Champion for Workforce Track: XXXX 2.1.1 P rocess Owner: XXXX Master Trainer: XXXX Comments: The 17 Certified Master Trainers continued to work with the

Subject Matter Experts to expand the work instructions and standarization for the selected managed processes. The full-time master trainer and the lean manager completed the updated lean 101 training module which incorporates the introduction of EMG-LES tools box and the SEA lean model. This process is at PMM level 3.

2.2.1 P rocess Owner: XXXX Master Trainer: XXXX Comments: The second group of strategic projects (10) completed the first 3 projects in accordance with the Site Planing Master Plan to improve company-wide product flow. The process owner reports this process at PMM level 3.

2.2.2 P rocess Owner: XXXX Master Trainer: XXXX Comments: (Stage 2 Key process) The process owner reports this process is at PMM level 2 with activities under way to achieve PMM level 3 by year end.


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Operational Excellence 3.0Champion for Operational Track: XXXX 3.1.1 Process Owner: XXXX Master Trainer: XXXX Comments: During this period, three major kaizen events were held

between July – Sept: i) QA-Receiving Inspection Process reduced material travel distance from 467 ft to 76 ft, work area floor space reduction from 403 sq-ft to158 sq-ft, and one less receiving inspector. ii) A new flow cell design for the splicing products was achieved with 30% less floor space and a headcount reduction from 5 operators to 3 operators, and iii) Purchasing introduced a new e-purchase order system that will reduce by 80% the paper usage for this process.

3.1.2 Process Owner: XXXX Master Trainer: XXXX Comments: The monthly department audits at all five business units continue to sustain work area orderliness. The average 6S score across the company improved for the 25 manufacturing groups to 6.37 and for the 11 administration departments to 7.58 (scale 1 – 10). This process is at PMM level 3.

3.1.3 Process Owner: XXXX Master Trainer: XXXX Comments: The splicing VSM indicated the need to reduce the press #8 and #9 change over times to improve cell flow. The external set-up time was reduced from 50 min to 20 min to be under the required TAKT time. This process is at PMM level 3.

3.1.4 Process Owner: XXXX Master Trainer: XXXX Comments: Process owner reported an inventory accuracy improvement from 97.61% (Q2) to 98.13% for his reporting period. This process is at PMM level 3.

3.1.5 Process Owner: XXXX Master Trainer: XXXX Comments: The "Production Control & Logistics Work Orders Held" (those held due to documentation issues) trend was reduced, improving the on-time delivery from 81.3% to 90.4%. The process owner reports this process at PMM level 3.

3.2.1 Process Owner: XXXX Master Trainer: XXXX Comments: (Stage-two key process) The process owner reports this process currently at PMM level 2 with activities underway to achieve PMM level 3 by year end.

3.2.2 Process Owner: XXXX Master Trainer: XXXX Comments: (Stage-two key process) The process owner reports this process at PMM level 2 with work instruction and training material completed. A kaizen event is planned for Q4 to establish a pilot cell that incorporates mixed model level scheduling and Demand Flow Techiniques. Activities are underway to achieve PMM level 3 by year end.

3.2.3 Process Owner: XXXX Master Trainer: XXXX Comments: (Stage-two key process) The process owner reports this process at PMM level 2 with work instructions completed and activities under way to achieve PMM level 3 by year end.

3.2.4 Process Owner: XXXX Master Trainer: XXXX Comments: (Stage-two key process) The process owner reports this process at PMM level 2 with work instructions completed. Activities are to standardize the process are underway to achieve PMM Level 3 by year end.


Value Stream (VS) ProcessesValue Stream (VS) Processes Please describe activities completed to define, stabilize, or improve during this reporting period. Identify champion, process owners, and master trainers for this value stream.

Champion for Value Stream: XXXX Process: XXXX Process Owner: XXXX Master Trainer: XXXX Comments: Objective: Reduce lead time from 11 days to 5 days. The recently implemented sequential scheduling system has proven to be effective to deliver 97% of all work orders withing the 5 days required lead time. ProcessXXXX Process Owner: XXXX Master Trainer: XXXX Comments: Objective: Reduce lead time from 10 days to 1 day. Silicon compounds kanban for frequent runners continued to sustain the targeted lead time of 1 day (previously 10 days) with a leveled scheduling system to replenish the compounds supermarket. *Only use the black entry spaces you need – there is no requirement for any set number of process owners

Value Stream (VS) Processes Please describe activities completed to define, stabilize, or improve during this reporting period. Identify champion, process owners, and master trainers for this value stream.

Champion for Value Stream: XXXX Process: External Supply Chain Integration Process Owner: XXXX Master Trainer: XXXX Comments: Objective: Integrate major silicone compounds supplier to reduce inventory. The supply chain integration initiative for select silicon compounds with our major supplier has reduced our compound inventory by 61 %.


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Improvement Plan

Goals

Near-Term (12 mos.) Medium-Term (12-24 mos.) Long-Term (24+ mos.)

1. S u s t ain PMM level 3 or higher on all eleven (11) Stage-One key processes and five (5) managed processes to be ready for the 2008 surveillance audit.

2. A c h i eve ‘08 kaizen event targets:

a) 8 major events (5-day).

b) 60 minor events (1-3 days)

3. D e v e l o p an in-house JSCT certified training staff of:

a) One full-time Certified Master Trainer (CMT).

b) 24 Master Trainer’s employees.

4. Reduce lead-time by 50% on New Product Introduction (NPI) value stream.

Engage two key suppliers on Supply Chain Integration activities and/or upstream VSM streamlining activities.6.

1. M a t u r e all nine (9) Stage-Two key processes to PMM level 3.

2. D e v e l o p 20 managed processes to PMM level 3.

3. A c h i eve ‘09 kaizen event targets:

a) 12 major events (5-day).

b) 100 minor events (1-3 days)

4. F u r t h e r reduce lead-time on New Product Introduction by 20%.

5. Reduce by 25% the quoted production lead-time on 8 value streams.

6. Expand in-house JSCT certified training staff to 45 Master Trainers.

7. Engage five key suppliers on Supply Chain Integration activities and/or upstream VSM streamlining activities.

8. Improve DPMO metric to a 4.5 sigma level with an effective utilization of the 6- certified Black-Belts and Green-Belts employees.

(4.5 < 1,350 DPMO)

1. M a t u r e all eight (8) Stage-Three key processes to PMM level 3.

2. I n c r e a s e to 50 managed processes at PMM level 3.

3. Engage top 10 key suppliers on Supply Chain Integration activities and/or upstream VSM streamlining activities.

4. Improve DPMO metric to a 5 sigma level by developing a certified Master Black-Belt as the 6- program manager. (5 < 230 DPMO)

Improvement Plan


Measures Q1 Q2 Q3 Q4 On-time Delivery 76% 78% 80% 82%

Inventory Turns 3.8 3.9 4.0 4.2

Sales per Employee (Quarterly) 23K 25K 26K 27K

DPMO PPM < 4,000 < 4,000 < 3,500 < 3,500

Processes at Level 3 or above 18 20 22 25

Improvement Plan % Complete 25% 50% 75% 100%

Improvements in SEA MeasuresTargets


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Roadmap Process Group ObjectivesLeadership and Culture (L&C)

• Sustain PPM Level 3 or higher on all eleven (11) Stage-One key processes • Achieve PPM Level 3 on Stage Two L&C key processes. • Successful deployment of SBS process • Successful integration of XXXX into SEA methodology and EMG Lean Syst e m s

Workforce Development (WFD)

• Develop an in-house Job Skills Cross Training (JSCT) certified training staff including - One full-time Certified Master Trainer (CMT) - 24 Master Trainer employees • Target of 40 hours of training per shop employee, 100 hours per exempt employee. • Achieve PPM Level 3 on Stage-Two WFD key processes.

Operational Excellence (OE)

• Conduct 8 major kaizen events and 60 minor kaizen events. • Achieve PPM Level 3 on Stage-Two OE key processes. • Achieve greater than 27K sales per employee • Improve on-time delivery to better than 82% overall, better than 98% for key accounts.

Value Streams (VS)

• Conduct 2 major Kaizens events per month • Achieve Level 3 Process Maturity on managed processes (7) • Reduce lead-time by 50% on New Product Introduction (NPI) value stream. • Engage two key suppliers on Supply Chain Integration activities • >82% overall on-time delivery • < 3,500 DPMO


Thank You


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How to Prepare the New SEA Quarterly Report

Documents

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