McAree Engineering Ltd.

~The Journey Towards Lean ~

November 2016

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Business Structure

Agri Bulk

Storage Fabricated

Parts

Sheet

Metal

Projects/

New Products

4 Lines of Business

Projects

R&D

5 – 200 tonne Cab components

Agri equipment Cut, Fold

Punch

What am I going to tell you about this morning

• McAree Engineering – Background and my role

• Lean

• The projects we worked on

• The benefits to the business

• Key Learning / Lessons

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Who are we? McAree Engineering Ltd. was founded in 1946, celebrating 70 years in business this year.

Origins are in the agricultural sector, which led to the development of the award winning range of V-Mac Silo‟s.

Over the last 5 years business has developed by;

– Identifying new engineering opportunities;

– Focusing on providing outstanding service to customers and

– Providing a solutions based approach to meeting customers needs.

100+ team operating one of Ireland‟s most modern laser cutting and sheet metal fabrication facilities over two sites in Monaghan.

What is Lean?

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REDUCTION of TIME,

MONEY & EFFORT

The McAree Journey

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Project Issue Systems Leadership Behaviour Results Sheet Metal

Material Flow

Inefficient flow of

material through the

shop floor

Structured problem

solving in teams

Visual Management

Work place layout

organisation (5S)

Process Mapping

Kaizen Teams

Utilise a central planning

system, visible to all.

Clear communication

around orders / priorities

Managed Shift changeovers

Communication skills

around the visual planning

board.

Systems dictate next

process steps as

opposed to local

knowledge

Team based approach

across shifts

Clearly defined

process

Throughput improved

from 60T per week to

75T per week with

limited extra

resources.

Predictable, visual

work order

management

Silo Material

Flow

Improve quality

levels to a number

of key account

customers.

Development of system

BOMs

Mapped process to

develop optimum material

availability

Kitting material to point of

use.

Material “ordered” from

sheet metal Dept.

Closer communication with

Sales, and agreement of

specifications.

Visual Updates of

Production Status, allowed

supervisor up skilling to

manage material demands

Requirement agreed

before production

commences

Don‟t start until

material is released

Visual Planning

system used to drive

material requirements

16 men =>13 Units,

now 21 men => 21

Units

Financial

Reporting Pack -

KPIs

Limited regular

financial data being

generated for

Management Team

Mapped reporting

structure

Developed month end

routines

Developed systems for

generating data

Develop a set of KPI, and

basic headline financial data

to help manage the

business

Financial Data tracked

against targets and

budgets

“What is measured... is

Managed”

With a subsequent

change in personnel

this has been

significantly developed

with all financial data

shared with the

Management team and

Dept. Managers

Summary of projects

Project Issue Systems Leadership Behaviour Results Combi-lift

Quality Gate

Improve quality

levels to that of a

tier 1 strategic

supplier.

Quality standards

Quality performance

Quality gap analysis

Structured problem

solving in teams

Visual Management

Work place layout *

organisation( 5S)

2 shift process over 5 days

a week involving 2 shift

leaders and 1 production

manager.

Communication skills

around the visual

management board.

Capability to talk about

performance and generate

actions.

Introduction of the voice of

the customer (VOC) on to

the shop floor.

Dialogue with shift

people.

Holding individuals

accountable for quality

not right first time.

Getting involved in

quality solutions.

The normal result for

Right First Time is now

accepted as 100%

We now have a formal

response system,

where we immediately

contain the issue, and

then instigate the

corrective actions

Sheet Metal

Quality Gate

Improve quality

levels to a number

of key account

customers.

Replicate Combi-lift

approach.

Mapped process to get

optimum quality position

of QG for customer.

Heat map of customer

quality problems.

Voice of customer (VOC)

identified at kitting area

prior to dispatch.

Restructure of quality

function established a

Quality Manager and a

Continuous Improvement

change agent.

Based on learning from the

1st QG a greater focus on

coaching the supervisors in

the area by the new quality

function leaders.

Key individuals

identified for coaching

at the visual stand-up

boards.

Issues and actions

exposed and captured

against specific

individuals.

Challenging people for

capability and

accountability.

Issues are now

captured and reported,

and we instigate a

Corrective Action

“Find a problem, Fix it,

Stop it coming back”

External quality was

previously approx 90%

although not

consistently

measured. Now at

98%

Internal quality was

not previous measured

but now runs at 96%

Exposure of defects

allows us the

opportunity to fix the

issue / process before

it gets to the customer

Summary of projects

Project Issue Systems Leadership Behaviour Results Abcon Order

Management

Increasing sales

were becoming

difficult to manage

Mapped the process from

raw material to customer

dispatch.

Reduction in the no. of

steps to process the order.

Internal capability built

around a purchased part

sub-contract process to

remove administration and

reduce lead time.

Simplification of the process

and exploitation of the

company sage system

allowed easier

communication of customer

demand.

Production leader and supply

chain manager on one page

at all times.

SC manager able to

communicate to customer

production status.

Standards established

and new order

management driving

improved

performance.

Visual Traceability

System for Order

progress

OTIF delivery figure

improved by over 50%.

This figure is currently

about 80%, but was

under 40%. Low score

is primarily due to very

short lead time

demands

Abcon

production layout

Increasing sales

was causing

material and

information flow

issues on the shop

floor

Shop floor flow layout

introduced.

Kanban „pull‟ management

on purchased parts steady

runner material.

Organisation of shop floor

and material facilitated a

leadership restructure to

allow skilled supervisor to

concentrate on more

bespoke work.

All operators trained in

5S to facilitate work

place organisation and

cell ownership.

5S fab/weld bench

developed.

On floor production

lead time was halved

Significant less time

chasing material for

managers

Sheet Metal

Order Readiness

The quality of

production

information was

causing issues on

the shop floor and

late delivery to the

customer

Engineering change

process mapped around

the order and quotation

management process.

Functional map

established to expose

current state and wastes.

New process agreed using

the project charter

approach and stage &

gate reviews.

Order category system

introduced.

Roles and responsibility

confirmed in relation to

customer management,

quotation lead time readiness

and production change

readiness.

Production manager taking

greater ownership of order

delivery as he was involved

in the improvement process

through stage & gates.

Metric introduced on

to the shop floor to

capture the level of

readiness.

95% plus target

accuracy expected

from new standard

and people held

accountable to it.

Sheet Metal Order

Readiness (SHOR)

improved from <85% to

over 95%

Summary of projects

The Quality Gate Project

.

The Quality Gate process is an integral part of our

business and is being implemented to drive a zero-defect

culture in McAree Engineering Ltd.

In basic terms, the Quality Gate is a quality control plan

detailing inspection and validation tests that are carried out

at key points within our processes. Unlike quality control

the Quality Gate challenges the business to get to the root

cause of chronic problems and fix them permanently.

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Customer‟s poor quality

What is a Quality Gate?

•A planned location in a production process that is

integral to the Value Stream.

•Quality Gates are visually distinguishable from

other production workstations.

•Quality Gates are integral to defect detection,

isolation, diagnosis, containment and prevention.

•Quality Gates are planned according to production

risks, internal and external product quality data,

and best testing conditions.

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A Quality Gate must have visual „Standards‟

QG check list

QG standard work

QG standard work

5S area standard

QG process audit

chart

5S audit chart

A Quality Gate must have visual „Performance‟

RFT daily data sheet Product drawing with pareto

quality defects

Product drawing with pareto

quality defects

Daily defects chart

Daily defects chart

A Quality Gate must fix problems

Customer quality chart

Pareto defect categories

chart

Communication & feedback

Quality alert sheets

Daily Defects per Unit chart

Defect category description

A structured team approach to solving problems

Define the Problem

Measure the Problem

Analyse the Problem

What is the Root Cause

Improve with solutions

Control the solution

A Quality Gate location is planned!

Quality Gates satisfy your customers

Benefits to our Business ?

Silo Output at 21 units p/w (peak measure) – 16 men =>13 Units, now 21 men => 21 Units

– Improved efficiency of 23% versus 2013 = €120k

Sheet Metal Output increased by 25% with no

additional resources – From 60 tonne p/w to 75 tonne p/w with capacity for more.

– Theoretical labour saving of over €150k (5 men)

Turnover and Profit at record levels

We share delivery and performance data with

customers

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Benefits to our Business? (Cont‟d 2/2)

Visual Management Information with QG – we

have since completed another for Sheet Metal and

plan 2 more......

Recognise the value in formal Continuous

Improvement Projects

Significant upskilling of resources

Data driven decisions – “What gets measured gets

managed”

Confidence to keep going forward, and apply lean

techniques to other processes within the business

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Benefits to our Business? (Cont‟d 2/2)

Visual Management Information with QG – we

have since completed another for Sheet Metal and

plan 2 more......

Recognise the value in formal Continuous

Improvement Projects

Significant upskilling of resources

Data driven decisions – “What gets measured gets

managed”

Confidence to keep going forward, and apply lean

techniques to other processes within the business

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The Key Messages / Lessons

Absolute buy in from management and a

strong internal champion(s)

Voice of Customer – Internal and External

Continuous Process – takes time

It is not just a manufacturing “thing”

Make a good start – then build momentum

Some people will resist, some will change,

move around or beyond those that don‟t

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Questions…..

Contact : Darren Greenan

Email : darrengreenan@vfecto.com

Phone : 086-8152850

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