Process Improvement Out With The Old And In With The New...•Lets start with: –Calibrating...
Transcript of Process Improvement Out With The Old And In With The New...•Lets start with: –Calibrating...
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Process Improvement— Out With The
Old And In With The New
Speaker: Todd Creasy
1-2:30pm, Friday 7th March 2014
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New ways are fought…..everywhere!
From Pixar’s “A Bug’s Life”
• Short video clip from “A Bug’s Life”
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Abstract
• The traditions, methods, and approach the
quarry industry grew up with no longer give us
the results we want and need in our “New
Normal” business climate.
• Costs are higher, safety and compliance
standards are significantly more stringent, and
the market volumes required to cover costs and
deliver profits are coasting along at roughly half
the levels we enjoyed during the boom-
expansion era.
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Abstract (cont’d)
• This presentation will look at the technical,
economic, and human functional dynamics that
must be addressed to make process
improvement succeed in delivering
organizational safety and profit objectives in the
“New Normal.”
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Learning Objectives
1. Implement profitable integrated process
improvement strategies in your day-to-day
operations.
2. Understand the limits of 6-Sigma and Lean
methodology as they apply to aggregate quarry
operations.
3. Build a process improvement team with
management and associates working together
to form a true team dynamic.
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US Aggregates Market Volume
367
340
325
330
335
340
345
350
355
360
365
370
Q3 - 2013 Q3 - 2012
US Crushed Stone – Million Metric Tons Comparison
8% increase
279
256
240
245
250
255
260
265
270
275
280
285
Q3 - 2013 Q3 - 2012
US Construction Sand & Gravel Million Metric Tons Comparison
9% increase
http://www.pitandquarry.com/crushed-stone-sand-and-gravel-consumption-increase
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2014 Aggregates Business Ratings
Forecast
Source: http://www.aggman.com/2014-aggregates-business-ratings-forecast/
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US Sand and gravel revenue (2012)
Forecasters are predicting positive
growth – but declining positive growth.
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The “New Normal”
• Federal Government shut-downs
• Pressure from government federal and state budgetary
forces
• “With three years of sustained growth, it is exciting to
imagine this as the start of a boom. The verdict,
unfortunately, is out as many factors can impact this rise
in construction, including impending changes in Federal
Reserve policies, fluid macro economic conditions and
more”. – AggMan Jan 2, 2014
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The “New Normal”
Diesel Price Fluctuations
4.8%
44.5%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
50.0%
Before 2004 After 2004
$.03/Gal. Jump in Diesel Fuel
1.4%
21.6%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
Before 2004 After 2004
$0.05/Gal. Jump in Diesel Fuel
0.2%
3.6%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
Before 2004 After 2004
.10/Gal. Jump in Diesel Fuel
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Fluid Workforce 2012 vs. 2013
The “New Normal”
Source: http://www.aggman.com/fluid-workforce-continued-in-2013/ /
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Quotes from Leaders in our
Industry…
“…and public works construction, including highways, they
see down 5%. (McGraw-Hill’s) concern is federal focus on
deficit reduction is going to make highway funding more
difficult as we move into '14. – Don James – Vulcan Materials – Q3 2013 Earnings Call Transcript
“….and while the annual sales growth in North America
is anticipated to be only 4.3 percent, the lowest of any
(global) region, it is still positive growth”. – Freedonia
Group – Pit & Quarry Jan 2014
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So these times are tough?
Lets recall 1981…
• Jack Welch took over as CEO of GE in 1981.
• He had to deal with…..
• Good management is about leading change
7.5%
7.7%
7.0%
7.5%
8.0%
1980-1981 2012-2013
Unemployment
11.9%
1.5%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
1981 2013
Inflation Rates
17.5%
3.9%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
1981 2013
Interest Rates
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CEO Change Leadership
Regarded as “the
generation’s greatest
CEO”, Jack Welch
trumpeted Six Sigma
philosophies and
methodologies as one of
the keys to GE’s success.
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How did GE Perform?
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GE's Stock Close During Welch's Reign
Close
Linear (Close)
Stock Splits
Six Sigma
Applied
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From Jack Welch In his own words….
Video clip of Jack
Welch speaking about
Six Sigma
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Short History of Improvement
Attempts
It was reported that King
Henry VIII in 1574
observed and marveled
at the Venice Arsenal
build a small, but
complete galley ship in
less than 1 week using
continuous flow
processes.
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Short history… (2 of 5)
Benjamin Franklin in the 18th century
established principles regarding waste and
excess inventory.
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Short history… (3 of 5)
In the 18th century, Eli
Whitney developed
“interchangeable parts”
for his cotton gin.
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Short history… (4 of 5)
In the early 20th
century, Frederic W
Taylor established the
ideas of “standardized
work” and “best
practices” among
businesses and
organizations. It is now
called “Taylorism”.
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Short history… (5 of 5)
Henry Ford revolutionized
production with:
• “mass production”
• Incorporated continuous
process flow (“the
assembly line”)
• reduced inventory
• interchangeable parts
• standardized work
stations
•best practices
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Origins of Productivity Improvement
Short video clip of Ford’s early days
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Very short history of “lean” (1 of 2)
Taiichi Ohno, production manager
for Toyota, determined after
visiting the Ford “Rouge” plant
that Ford’s mass production
system would not work in Japan.
They needed something more
customer focused, flexible, nimble
and efficient due to the costs of
materials in Japan. He got the idea
from a “Piggly Wiggly”…..
They called it the
“Toyota Production
System” or TPS for
short.
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History of Lean… (2 of 2)
Professors from MIT studying automotive
production techniques in the US and Japan
noticed some unusual aspects to the Toyota
model. They noticed:
•it needed less effort to design, make and
service their products;
•required less investment to achieve
production capacity;
•produced products with fewer defects;
•used fewer suppliers;
•performed in less time with less inventory
In other words, the system was kinda…..lean.
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Enough already….
…what is “Lean” then?
Lean (also called the Toyota Production System) was developed by Taiichi Ohno to do primarily two things:
– Drive out waste (“muda”) in all it’s forms. Waste is defined as unnecessary time, activities, scrap and any other resources
– Improve “flow” of production and ultimately satisfy the customer/consumer.
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History of Six Sigma…
•World War II
•Statistics and the A-
Bomb
•Joseph Juran (left) and
Edward Deming (right)
•Statistical process
control and quality
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What is Six Sigma then?
Developed by Americans Edwards Deming and
Joseph Juran and practiced widely in Japan after
WWII. It’s aims are to:
– Reduce the number of product defects to near zero
– Remove production variation and thereby improving
predictability, manageability and quality
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Lean and Six Sigma’s Theme?
Measure, Analyze, Improve… (Measure,
Analyze, Improve… Measure, Analyze, Improve…)
A picture of ant on “A Bug’s Life”
We’re going to start simple with: •Measurement tool calibration
•5S
•Kanban
And get more sophisticated with: •Quarry Phases
•Cycle times
•Capacity Charts
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Human functional dynamics of
process improvement
• Selling the idea.
– Very hard to argue with improving safety
– Get buy-in from stakeholders (e.g. unions)
• Lets start with:
– Calibrating weighbridge and loader scales
– “5s” – sort, straighten, shine, standardize and sustain
– “Kanban” – order what you need before you need it to
keep from disrupting operations
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Calibration – “Sell What You Ship!”
Be sure your measuring devices are accurate.
Calibrate often and correctly to ensure you
receive every $1 you’re working hard to earn.
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DOES THIS AREA LOOK LIKE THIS TODAY?
All On-site Improvement Begins
with…safety! Being organized and clean
supports a strong safety culture.
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Kanban systems for stock
replenishment
• Re-order point is when the disks get down to the
red tag. The tag has the part number and re-
order amount. .
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Stop over using and paying for
expedited shipping fees!
Screen cloths are set in individual
racks with a visual indicator
of 6 as the maximum volume. When
each cloth is used the tag
is flipped over. When it gets down to
2, this becomes the re-order trigger
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5-S – “Before”
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DOES THIS AREA LOOK LIKE THIS TODAY?
5-S – “After”
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This crusher score a “B”(85 points)
….why not an “A” (100 points)?
Trip
Hazard.
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Improvement Methodologies
• Six Sigma – seeks to reduce variation
and improve quality
• Lean – seeks to remove any of the
seven forms of waste and improve
flow
• Theory of Constraints – seeks to increase
production flow by removal of process
“bottlenecks”
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Synergy Opportunities?
Theory of
Constraints “TOC”
?
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Synergy Opportunities?
Theory of
Constraints “TOC”
? “6TOC”
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Now….we’ll get a little more
sophisticated
“Quarry Phases”
Haul Roads to
Primary
Secondary to
Stockpiles
PHASE I PHASE II PHASE III
Load out to
Ticketing
PHASE IV – Preventive Maintenance
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6Sigma “Capabilities Chart”
What is a capabilities chart? It’s a tool used to help
determine where a bottleneck (or constraint) is in
your crushing circuit (or system).
1540
550 566
0
200
400
600
800
1000
1200
1400
1600
1800
Loader TPH Trucking TPH Crushing TPH
To
ns p
er
ho
ur
Six Sigma Capacities Chart
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Cycle Time
• What is a cycle time? – It’s the time it takes for the haul truck to
dump his load, return to the loader, get loaded, return to the hopper and dump his load again.
• There are four parts to a cycle time 1. Time to load
2. Travel time to the jaw
3. Dump Time
4. Empty Return Time
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How is loader time in the pit used?
Load Area Activity of Wheel Loader
Preparing to Load
17 %
Loading Truck
54 %
Non-Loading
Activities
30 %
Clean Floor
3 %
Predig Pile
8 %
Remove Oversize
17 %
Maintain Floor
2 %
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“Time to Load”
Standard Operating Procedure LOAD TIME
– Defined as: Time it takes for the pit loader to load a truck
– Start Time: When Loader tilts bucket for first load
– Stop Time: When Loader Sounds Horn
– Other Data to Capture: # of buckets per truck
– # of tire rotations when loading (tires need to be painted)
Video clip of
loader and
haul truck
loading
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“Travel Time To Jaw”
Standard Operating Procedure TRAVEL TIME TO JAW
– Defined as: Time takes for a truck to leave the pit and be positioned to dump at the Jaw
– Start Time: When horn Sounds that truck is able to move
– Stop Time: When tires come to a rest against the block at the jaw
– Other Data to Capture: Who is the driver
– Any obstructions/vehicles that slow the process
– Any other observations about differences between trucks
Video clip of
haul truck
headed to
crusher
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“Dump Time”
Standard Operating Procedure DUMP TIME:
– Defined as: Time it takes for truck to dump load into the primary
– Start Time: When wheels of truck hit the bumper block to stop
– Stop Time: When wheels start to roll from block
– Other Data to Capture: What truck/driver is dumping
– Notations whether the truck is having to wait for anything.
Video clip of
loader dumping
into crusher
bin
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“Empty Return Time”
Standard Operating Procedure RETURN EMPTY TIME:
– Defined as: Time from dumping at the primary to return to the pit and be ready for the loader to dump it’s first load
– Start Time: When wheels move from block at the primary
– Stop time: When loader tilts bucket for first load
– Other Data to Capture: What truck/driver
– Obstructions during travel
– Things that appear to cause slowdowns
Video clip of
haul truck
dumping load
and leaving
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Line-ups and “bunching” are all
signs of “bottlenecks” and its
costing you $$$$$$$$$$$$$$$$$$$$
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Does all this matter?
(small example)
• Two drivers – Bill and Tim; posted below are their cycle times by part; assume each drives a 65 ton haul truck and carries approximately 62 tons on each haul. What is the difference in tons per hour for each driver?
• Bill – Time to load avg. = 2.14; Travel time to jaw avg. = 4.13; Dump time avg. = .34; Empty return time avg. = 3.12
• Tim – Time to load avg. = 2.18; Travel time to jaw avg. = 4.50; Dump time avg. = .31; Empty return time avg. = 4.00
• TPH for Bill _________________ ?
• TPH for Tim ________________ ?
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Now….we’ll get a little more
sophisticated
“Quarry Phases”
Haul Roads to
Primary
Secondary to
Stockpiles
PHASE I PHASE II PHASE III
Load out to
Ticketing
PHASE IV – Preventive Maintenance
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Map your operation
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2"C&R7's 57's
5's
Surge Pile
Primary
Crusher
Screen
Tower
“Deduster”
Wash
PlantSecondary
Crusher
Cone
Crusher
Screw
Bin
Indicates capacity measure
analysis
Control
House
Gallatin
Quarry
Phase II
Plant
Schematic
NEW
BELT
SCALE
Indicates new belt scales installed by
May 12th; SOP for maintenance
established
MAP
YOUR
QUARRY!
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BELT SCALES
Some belts had them…..and some
did not.
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Improvement begins with measuring
your current performance.
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Building a process improvement
team
• Who
– Plant manager must own the improvement initiative.
It’s his baby.
– Best practice employees must train others to their
same level of expertise. Teach them the “tricks of the
trade”. Coach them to better performance.
• Roles
– Everyone is a learner. There are no “forever experts”.
If you don’t know if an idea will work or not – “pilot it”.
• Define objectives
– What are the daily, weekly and monthly goals? Report
progress toward such.
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Not all operators are the same
• Identify ‘A’ operators
• Assist ‘B’ and ‘C’ operators
– (In cab feedback from loader scales –
need this data from Simon)
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Human: Communication
• Communicate KPI’s – Daily, weekly & monthly
targets for Safety, Delivery, Cost & Quality
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Human: Communication
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How to implement process
improvement strategies (part 1)
Start small and simple:
• Calibrate your weighbridge at least quarterly Sell everything
you load. Establish an SOP for such and audit.
• Calibrate loader scales daily before operations begin –
avoid over/under loading – both of which negatively impact
productivity. Audit these activities.
• Begin with 5S organizing and Kanban inventory system
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How to implement process
improvement strategies (part 2)
Continue to stay simple…
• Use tire management systems for proper inflation – saves
gas, tire wear and improves productivity.
• Clear all haul roads of boulders and any materials that can
cause tire malfunction as necessary but at per shift.
• An inexpensive way to get a few more tons on each truck is
to install side-boards. Be careful so as to not overload the
truck which could lead to equipment malfunction.
• Be sure to enforce driving patterns within quarry by
mounting signage as to “left-hand” or “right-hand” driving
patterns. This helps with visitors, corporate personnel,
inspectors, etc. to ensure a safe environment and help
prevent productivity issues.
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How to implement process
improvement strategies (part 3)
• “Right-of-way” – establish right of way rules for loaded trucks,
empty trucks, water trucks and visitors.
• In between loads, have the pit-loader “wind-row” large
boulders for the rock hammer in a location that doesn’t
impede production.
• Label stock piles in yard for easy identification for customer
trucks.
• Plan stock yard so as to lesson queues at the scale-house
and improve productivity; install “automated ticketing”
• Blasting – the most inexpensive place to crush rock is in the
blast. Are you getting to coarse material or material too fine?
Work with your blasting professional on various shot patterns
to hone in on your quarry’s “sweet spot” for blasting
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Limits of 6-Sigma and Lean
methodology
• This requires measurement, analysis and piloting.
“Flying by the seat of the pants” or “rules of thumb” often
prove damaging to the effort and projects.
• There are very few “quick fixes”.
• Employee behaviours will NOT change overnight – it
takes coaching, training and patience.
• It takes constant attention by senior management to
prove that this isn’t a “flavour of the month”
• Sustaining the good results is often the most difficult yet
the most important. It requires an employee
communication system to be continuously profitable.
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Questions?