2013 Investor Day

Lean Sigma at General Cable

The Journey of Continuous Improvement

Mark Thackeray
Senior Vice President North American Operations
Leader of Global Manufacturing Council

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 Lean – What is it?

• A passionate belief that any work process can be simplified

• A continuous improvement methodology that promotes engagement from all using a common toolset
• An approach that surfaces problems (opportunities) as a means to optimizing “value”
• Continuous drive to identify and eliminate waste

Conveyance
Transport

Over
Inventory
Production

Talent
Waiting Motion

Extra
Defects
Processing

8 Types of Muda (Waste) 2

 Understanding the DNA of Lean – General Cable Approach

• It’s a journey – 14 years and going

• Not every decision made right the first time
• Commitment for the longer term; traditional financial scrutiny can mislead
• Imitating lean is not easy
– It’s a system (not just tools & practice)
– Practitioners preferred over academics
– Creativity in application often separates success from failure
• Sustained benefit comes from culture change – anyone can read
the book!
“An understanding of the basic principles of
[Lean] systems is necessary if we are to apply
them correctly. It is also risky to implement
the system by merely copying superficial
techniques. Failure is a likely outcome.”
Shigeo Shingo “A Study of the Toyota Production System”

3
Lean Manufacturing – 2 Key Objectives

Make Continuous Improvement a Disrupt 50 years of

requirement of everyone's job traditional wire making habits

A1 A1 A1 I I I
7%
A1 A1 A1 I I
J
WIP WIP
J

WIP J
A2 A2 A2

93% D D
WIP
RM

• Expand Continuous Improvement from • Isolate & Remove Process Muda

engineering (7%) to the shop floor (93%) • Common Toolset, Language & Principles
• Engage Operators • Shift “Value” on Commodity Business away from price
• Operator Led & Empowered Teams • Differentiate with Service, Quality, Agility while relentlessly
• Change the Culture pursuing “low-cost” producer status

4
Lean – The Basics

Experiential Learning Introduction of The Lean Toolbox

• Kaizen - Continuous Improvement • Demand Triggers
• TAKT Time • Continuous Flow
• Theory Of Constraints • Visual Control
• Single Piece Flow • 5S Techniques
• Setup Reduction • Pull Systems
• TPM • Kanban Signals
• Mistake Proofing - Poka Yoke
• Cellularization
• Problem Solving Methods
• Process / Value Stream Mapping

Discipline of Standard work Value Stream mapping

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With Lean - new “rocks” (opportunities) are exposed

SIPOC & House of Quality

Gage name: Mechanical Bond Meter

Date of study :
Mechanical Bond Meter GR&R Reported by :
Tolerance:
Misc:

Components of Variation Response By Part No.

100 14
%Contribution
13
%Study Var
12

Percent
11
50
10
9
8
0 7
Gage R&R Repeat Reprod Part-to-Part Part No. 60.0096 80.2132 80.2142

R Chart by Operator Response By Operator

Bob Dias Manny Matt 14
UCL=2.317

Sample Range
2 13
12
11
1 R=0.9 10
9
8
0 LCL=0
7
0 Oper Bob Dias Manny Matt

Xbar Chart by Operator Operator*Part No. Interaction

14 Bob Dias Manny Matt 13.5
Operator
13 Bob

Sample Mean
12.5
12 Dias
UCL=11.92

Average
11.5 Manny
11 Mean=11.00
10.5 Matt
10 LCL=10.08
9 9.5
8 8.5
7 7.5
0 Part No. 60.0096 80.2132 80.2142

Six Sigma & DMAIC Approach

Requiring Complementary tools and process improvement methods… Our LeanSigma

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And new Process Capability potential emerged

• Adopted DMAIC Approach

 Design
 Measure
 Analyze
 Improve
 Control
• Analyzed Process Capability to understand
variation from expected outcome
• Pinpointed immediate areas of over/under LSL $ USL
usage
• Targeted reduced process variation where
impactful
• Shifted process control to operators &
eliminated tampering (Responding to
expected variation)
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Outcomes achieved ARE significant

(over time)

Production Cost Savings (% COGS) Cumulative production cost out – 20%

4 Targeted areas of cost reductions
3
Labor,
7%
2

1 Other
Materials, 25%
Metals, 53%
0
Overhead
-1 (F+V) , 15%
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

-2
Perf. Productivity Eco. Headwind Net Performance

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 Diverse & Broad-based approach to cost
competitiveness
• Economic headwind offset before 1st dollar of cost
reduction claimed
• Projects target every cost category in our expanded
supply chain Master Blackbelt
Teaching BB; $1MM
• Lots of “Singles & Doubles” versus a few Home savings, ≥ 5 projects
Runs… for example:
• 2012 results borne of: DFSS
Blackbelt
5 days, DMADV process
• > 2100 individual projects 3 weeks; advanced LS tools;
1 LeanSigma project
• Focused on scrap, usage and direct
materials Lean Facilitator
3 days; Develop Facilitators to
• Baked into each facility’s business roll out Lean 1 Greenbelt
objectives (bottom up vs. top down) 2 weeks; intermediate LS tools;
1 LeanSigma project
• 80% of savings are non-capital driven
• Top 100 projects deliver 50% of the plan Champion
1 day; Overview of DMAIC,
• LeanSigma councils constantly updating LS program & Coaching etc Lean Technician
5 days; intermediate Lean tools; 1
“hopper” of ideas Kaizen Event or Lean project
• Accomplished via an Army of Problem solvers
Intro to 6σ
• 5 master Blackbelts 1 day; Overview of Six Sigma
Introduction to Lean
• 83 Blackbelts Basics
1 day; Overview of Lean Basics
• 221 Greenbelts
• 416 Lean Techs

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 Global Councils Accelerate Best Practice Sharing

• Global Manufacturing 1 of 7 Councils

• Responds to “pull” for accelerating LeanSigma journey in all regions
• Forum to identify, resource and execute on ideas measured in $M
• Compound cost reductions
• Polyethylene cross-linking technology
• Strand Design optimization (metals usage)

Overall
Layer
Diameter

Coextrusion Technology Optimized Lay length Shaped Conductors

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Global Councils Accelerate Best Practice Sharing

• Global Manufacturing 1 of 7 Councils

• Responds to “pull” for accelerating LeanSigma journey in all regions
• Forum to identify resource and execute on ideas measured in $M
• Compound Cost Reduction
• Polyethylene x-linking Technology
• Strand Design optimization (metals usage)
• Global Symposiums on selected Process/Product Technology
• Building Wire – best in class production methods
• Aluminum Wire mills – compare & contrast
• SWAT Team Approach – Acquisition or other “target rich” sites
• Production output 2x w/o capital investment
• Scrap reductions
• Total labor efficiency improvements

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 Global Council Accelerate Best Practice Sharing

• Global Manufacturing 1 of 6 Councils

• Responds to “pull” for accelerating LeanSigma journey in all regions
• Forum to identify resource and execute on ideas measured in $M
• Compound Cost Reduction
• Polyethylene x-linking Technology
• Strand Design optimization (metals usage)
• Global Symposiums on selected Process/Product Technology
• Building Wire – best in class production methods
• Aluminum Wire mills – compare & contrast
• SWAT Team Approach – Acquisition or other target rich sites
• Production output 2x w/o capital investment
• Scrap reductions
• Total labor efficiency improvements
• Portal Based forum promotes Peer to Peer Interaction across all global facilities
• Best Practice Sharing (Search and Language translation capability)
• “Ask the expert” blog formats
• Wire & Cable University
• Global Asset sharing

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Evolution of our Journey...
Lean Thinking extended throughout the organization and
across the Supply Chain
Sales & Marketing
Supply Chain
Engineering / R&D

FACTORY FOCUS
Transportation
Suppliers Distribution

Customers

Administration
IT
Accounting
Human Resources 13