Operational Excellence

Illustrated in the context of improving delivery performance at a contract manufacturer

June 21, 2011

Dan Dodd

2

Operational Excellence – Two Keys

5

24 month Demand, Supply, & Inventory

plans

ManagementBusiness Review

DemandReview

SupplyReview

ProductReview

Finance IRReview

Start(Begin Month)

MRP

• Executive led• One plan aligned

with financials

Doing the Routine Routinely

Sales & Operations Planning

Modern operational excellence is 75% lean and 25% S&OP in terms of effort/focus, but

S&OP comes first because it sets the direction

An Example From My Experience

My resume – the delivery improvement example is highlighted Early Stage Ventures (Synvasive and TranS1) Corporate Operations Excellence (Cooper

Industries) Contract Manufacturing (Accellent – 120

person $30M Star Guide factory) Internal Consulting (Bell Labs) Consulting (PB Farradyne)

The issue: transforming the factory from a laggard to a leader in delivery performance

The Situation & the Changes

Before Process After

Production meetings focused on late orders that needed to ship that day

S&OP Looked several months forward, keeping orders to the schedule

Orders pushed to the floor irregularly, and too many

Lean (ConWIP) Half the number of orders on the floor – clear priorities

Long raw material lead times

Lean Increased number of parts on kanban ten-fold

Changes in people, processes, and systems

End Result

Factory went from ~#9 out of 10 in division in delivery performance to #1 or #2 From missing 5-40 orders a month (out of ~

200 orders/month) To some months with no late orders

Inventory turns and quality improved Revenues doubled Margins improved Promotions all around