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EARLY MANAGEMENT

PILLAR REFERENCE GUIDE FOR

FOCUSED
IMPROVEMENT

VERSION 7.0
December 5, 2017
FOCUSED IMPROVEMENT

TABLE OF CONTENTS

DOCUMENT CONTROL .................................................................................................. 3


INTRODUCTION TO THE DOCUMENT ............................................................................ 4
TARGET AUDIENCE ............................................................................................................................................................. 4
OBJECTIVE ......................................................................................................................................................................... 4
PILLAR MISSION ................................................................................................................................................................. 4
PILLAR OBJECTIVES ............................................................................................................................................................ 5

PILLAR METHODOLOGY................................................................................................. 8
FI PILLAR STEPS ..........................................................................................................................................................................8
IDENTIFICATION, PRIORITIZATION, & ASSIGNMENT OF IMPROVEMENT ACTIVITIES - IPA .....................................................10
ENHANCED LOSS TREE ANALYSIS (eLTA) .................................................................................................................................13
GO-SEE THINK DO ....................................................................................................................................................................16
DMAIC ......................................................................................................................................................................................17
SINGLE MINUTE EXCHANGE OF DIES (SMED) ..........................................................................................................................23

ADDITIONAL INFORMATION........................................................................................ 25
PILLAR MEASURES ...................................................................................................................................................................25
PILLAR IMPLEMENTATION .......................................................................................................................................................25

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DOCUMENT CONTROL

Date of Version comments / changes


Updated by Version Status of
update made
(Author name) # document
(dd/mm/yyyy) (section numbers and description)
Fernanda Updated Reference Guide
01/10/2012 4.0 Superseded
Rocha (version PowerPoint)
Ingrid
Panzera/ Release document in MS Word
Fernanda format.
17/10/2013 5.0 Superseded
Rocha/ This version replaces all previous
Francisco versions.
Barboza
Release document in MS Word
Dominador
format.
30/10/2015 Balangue/John 5.1 Superseded
This version replaces all previous
Orr
versions.
Alejandro Paz/
Mohamed
Nasr/
This version replaces all previous
24/03/2017 Dominador 6.0 Superseded
version
Balangue/
Magnus
Lundgren
Inclusion of eLTA
Minor Changes in Methodology
selection.
Change in Pillar Measures.
Alejandro Paz/ General simplification of the
Marilisa document. 7.0
15/11/2017 Released
Varani/ Alignment with new NCE
Fabio Kuhn Continuous Improvement Guide
for Manufacturing.

This version replaces all previous


versions.

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INTRODUCTION TO THE DOCUMENT

TARGET AUDIENCE
The target audience for this document includes:

 FI Pillar leaders and members, including Factory Controller as part of Pillar;


 NCE Manager;
 Heads of T&P Functions and Factory Managers.

The purpose of this document is to provide guidance on FI Pillar implementation in Manufacturing and
specifically as a reference in Technical and Production areas considering the contribution of the Factory
and T&P Function to Value Chain results.

OBJECTIVE
This document describes the methodology and tools necessary for FI pillar implementation.

PILLAR MISSION
The mission of the FI Pillar is to enable our people to analyze data, identify relevant problems /
opportunities and solve them effectively to achieve business & functional objectives.

With a focus on Manufacturing, the FI Pillar mission enables our people to analyze data, identify, prioritize,
and solve relevant losses / opportunities effectively so as to support the “Going for Zero” Journey in the
five dimensions of Manufacturing Excellence.

In this journey, the key enabler should be loss reduction with a direct impact on Total Delivery Cost
reduction. By definition, “loss/waste” is anything taking place, which does not deliver value to the
consumer/customer or, does not transform the product.

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PILLAR OBJECTIVES
Pillar Activities
Playing the role of “Navigator”, FI Pillar can support Factory Leadership
Team, Local Leadership Team and Working Groups in providing
analysis & insight backed up by supporting data, when developing their
loss elimination plans to achieve ZERO across all five dimensions of
Manufacturing Excellence and contribute to achieving Business and
Function objectives.

FI Pillar should develop Factory competencies and give support on


different activities:

 Build a Going for Zero plan to translate the Factory strategy into improvement initiatives and
measurable objectives for the next years, assuring alignment with the Business Strategy while giving
visibility to the Factory’s contribution to how it is and has been achieved. In this process, it needs to be
ensured that the Factory Leadership Team drives and owns the improvement agenda.
 Coach Factory and Local Leadership Teams in the identification and prioritization of improvement
activities in the short/medium-term, using as inputs data analysis related to losses and opportunities.
 Guide Factory and Local Leadership Teams in identifying the correct methodology to be used to
eliminate a specific loss. In case of Problem-Solving activities, challenge if project complexity is being
addressed with the appropriate tool(s) and/or with the involvement of the appropriate Pillar(s).
 Assist Factory and Local Leadership Teams in defining Competency Building Plans for Problem-
Solving methodologies and in identifying and closing gaps that could impact the achievement of
results.
 Assist Local Leadership Teams to ensure that all improvements deliver sustainable results by
embedding new practices into Factory standards and related routines. Note: Standard Routines
methodology (SDCA) is supported by Goal Alignment Pillar.
 Ensure project sponsors clearly understand their roles before, during, and after improvement projects,
and have put solid governance routines in place with regular updates and follow-ups on project status.

Competency Development
The FI Pillar should build required competency to enable Factory & Local Leadership Teams to create
autonomy in:

 Loss/opportunities identification, quantification and their link with the cost. This includes:

o Usage of available data and information from Factory systems;


o Implementation of specific data collection processes to understand and deploy losses, and to
promote a better understanding of the link between losses;
o Data analysis in order to capture the real information behind the numbers, so as to support
decision making when identifying, prioritizing, and assigning improvement activities.

 Effective Execution of Problem Solving Projects and delivering them OTIF. This includes support to:

o Project Leader and Coaches for GSTD, SMED and DMAIC methodologies application;
o Project Sponsors (usually Factory and Local Leadership Team members) who allocate
resources, time and competencies to the Project teams to assure results can be achieved OTIF.

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FI implementation synchronization with other Pillars in Manufacturing Continuous Improvement


Cycle
The FI Pillar should:

 Create autonomy in Factory and Local Leadership Teams and then Working Groups in loss prevention
activities, i.e.:
o Understand Loss/Opportunities & develop & deploy an integrated loss elimination plan;
o Ensure effective execution of improvement activities by leveraging Problem Solving and SMED
Competencies;
 Coach on different level of problem complexity with the appropriate methodology, according to other
Pillar’s maturity level (example: Q and SHE);
 Encourage sharing and replication of best practices in order to achieve faster results across the lines;
 Work closely with other Pillars to gain basic understanding on the use and benefits of other NCE
methodologies to address the losses with the appropriate tools - e.g. Standard Routines (SDCA),
Breakdown Analysis (BDA), Risk Prediction, Quality Matrixes, Maintenance Routines, Activity and
Flow Mappings, etc.

In the following table the high level synchronization of FI with the Maturity Level and other Pillar’s steps
are explained:

Leadership Stable Reliable Flexible Agile


Engagement Manufacturing Manufacturing Operations Operations
LEVEL 1 LEVEL 2 LEVEL 3 LEVEL 4 LEVEL 5
Leaders start to grow teams,
Factory and Local leadership teams become High
grow talent and inspire Factory leadership teams actively contribute to the High
LDV people, by establishing
Performing Teams
Performing Organization
that grow teams, grow talent and inspire people
Leadership @ shopfloor

Establish SDCA PCDA for


GA FLT &LLT
High performing teams, SDCA PDCA across the factory High performing organization, SDCA PDCA cross functional

Loss understanding
Competencies to reduce
Loss understanding and and basic problem solving Autonomy in loss prevention
sporadic and chronic losses Full autonomy in loss prevention
FI basic problem solving for for WGs. Examples of
are increasing according to
and problem solving
and problem solving execution
FLT & LLT Problem Solving on Chronic execution is increasing
priorities
losses.

Operational competency Abnormalities and risk


E&T focus identification competencies
Technical competencies Process competencies Flow and pull competencies

Ensure manufacturing
AM compliance
STEP 1 STEP 2 STEP 3 STEP 4 STEP 5 STEP 6 STEP 7

Create Stability Create Flow Internal Pull Connect externally Pull Planning
Connect with the business
LVS (CCVP, IBO)
VSD
Lean office competency

PM Maintenance Foundations STEP 1 STEP 2 STEP 3 STEP 4 STEP 5 STEP 6

Develop quality functional


Integrate quality continuous Embed ownership for Reach zero defect and streamline
Q Ensure quality compliance
improvements
autonomy beyond quality
quality at all levels quality processes
department

SHE Ensure SHE compliance STEP 0 STEP 1 STEP 2 STEP 3 STEP 4 STEP 5

Establish Yearly Cycle (Step


Perform Yearly Cycle Perform Yearly Cycle
Ensure engineering Preparation for EM Pillar 1,2,3,4,5,6)
EM compliance launch 30% of projects
75% of projects 95% of projects
deliver Vertical Start-Up deliver Vertical Start-Up
deliver Vertical Start-Up

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In the first level of implementation (Leadership Engagement), FI should support in identifying and
prioritizing improvement activities according to the OMP process; and to build competencies to execute
Basic Problem Solving and SMED projects. In this stage, the focus is on Factory and Local Leadership
Teams and there should be strong cooperation with the GA Pillar.

When the level of maturity increases there is an evolution in 2 directions:

 Create autonomy in the organization at all levels in loss understanding and in executing SMED projects
and activities on Sporadic losses (GSTD and DMAIC WB competencies);
 Build competencies to address Chronic losses (Advances Problem Solving methodologies, i.e. DMAIC
YB, GB, BB).

In the following table, some more details are added to explain the expected evolution of FI according to
NCE maturity Levels on the main areas:
Leadership Stable Reliable Flexible Agile
Maturity
Levels

Engagement Manufacturing Manufacturing Operations Operations


Level 1 Level 2 Level 3 Level 4 Level 5

Loss
Loss Understanding

understanding
Some WGs are WGs are fully
Loss Loss competencies (IPA
autonomous in autonomous in
Understanding Understanding + eLTA + loss
identifying and identifying and
(IPA + eLTA) with (IPA + eLTA) intelligence)
proposing proposing
focus on Factory involves WGs spread in the WGs
activities to activities to
and Local LT. (loss intelligence). according to NCE
prevent losses. prevent losses.
Implementation
Plan.

Problem Solving
Sporadic Losses and SMED

activities on
GSTD Several examples
Sporadic losses
SMED and competencies of SMED, WB and
(in particular
Problem Solving spread in the WG GSTD projects WG members are
GSTD) carried on
activities carried according to NCE carried on by WG autonomous in
by WG members.
out by Factory and Implementation members. running GSTD,
SMED and
Local LT on Plan. Examples of Examples of WB and SMED
Problem Solving
Sporadic losses SMED and WB different Maturity projects.
Coaches
(GSTD + WB). projects carried on levels of SMED on
developed at
by WG members. the lines.
Factory and Local
LT level.

Chronic losses are


Development Plan identified and
First examples of Competency Evident reduction
Chronic Losses

on competencies there are the


Problem Solving Development on of Chronic Losses
to execute competencies in
projects (YB, GB, Advanced addressed using
Advanced place to reduce
BB) on Chronic Problem Solving is Advanced
Problem Solving them using
losses, according ongoing and Problem Solving
projects on Advanced
to the losses/ aligned with the tools (YB, GB,
Chronic losses is Problem Solving
opportunities. priorities. BB).
present. competencies (YB,
GB, BB).
Factory LT = Factory Leadership Team; Local LT = Local Leadership Team; WGs = Working Groups

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PILLAR METHODOLOGY

FI PILLAR STEPS
The Focused Improvement method is composed of a repeating cycle of three steps:

1. Use data analysis to identify relevant problems / opportunities and define improvement activities that
impact Business Objectives;
2. Enable effective problem-solving in order to deliver On-Time, In-Full results;
3. Ensure improvements are sustained by updating Standards and related routines (SDCA).

It is recommended that the FI Cycle be run at least twice a year, in alignment with OMP/QOR cycles.

This is to enable Factory and Local Leadership Teams to have:

 common agreement on the key activities to achieve Factory objectives;


 commitment on required, competent resources to ensure effective execution of improvement activities.

In this process, FI Pillar provides training and coaching on the tools to identify losses and opportunities,
and to execute improvement activities with the correct application of methodology. In some cases – in
particular in the first level of Maturity when competencies are not yet developed in Factory and Local
Leadership Teams – FI’s active contribution can be key to delivering expected results. According to
Maturity evolution, the effectiveness of the Pillar is shown by their ability to build competencies and then
autonomy in the organization, to understand losses and execute SMED and Problem Solving Projects.

The responsibility for executing and tracking improvement activities including resource allocation is with
Factory and Local Leadership Teams. In this scenario, Factory and Local Leadership Teams must
evaluate if allocated resources (people, competencies, time) are focused enough to deliver expected
project results according to the committed time, in order to contribute to business targets.

Governance routines for improvement activities/projects should be set up by sponsors and process owners
at the appropriate time and levels integrated into existing Operational Reviews. In general, all
improvements and modifications proposed by Problem-Solving teams should rigorously follow the
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Management of Change Process as described in St-21.114. In each FI Pillar step-specific methodologies


and tools are used. For examplel:

1. Step 1 uses IPA and eLTA as a quantitative approach to deploy losses/opportunities and to identify
priorities and improvement activities. The process is part of the OMP and is supported by data
analysis. When dealing with costs, eLTA must be integrated with IPA which provides the link
between costs and losses.

2. In Step 2 FI supports projects dealing with GSTD, SMED and DMAIC methodologies. During the
execution, FI can raise the need to use different NCE tools to tackle the losses. In this case, FI
works closely with other Pillars to assure the application of methodology effectively.

3. Step 3 leverages Standard Routines (SDCA) to prevent the loss to reoccur and to sustain results
on a long-term basis. Other NCE standard/ tools (examples: centerline, CILs, Preventive
Maintenance, Jidoka, Standardised Work, 5S …) have to be created or improved and used in
collaboration with other Pillars to sustain the improvements.

In the following chapters, FI Pillar methodologies and tools are explained with more details.

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IDENTIFICATION, PRIORITIZATION, & ASSIGNMENT OF IMPROVEMENT ACTIVITIES - IPA


Methodology Identification, Prioritization, and Assignment of improvement activities (IPA)
Introduced in Step 1. It should be applied according to FI Cycle or in line with the OMP results (IPA
can be updated / reviewed as frequently as the need arises, according to PDCA cycle).
The quality of IPA output is strictly dependent on the accuracy and reliability of data
collected on the lines. It is therefore important to validate the quality and the meaning of
data collected together with shop floor people on the Gemba.
The feedback from shop floor will confirm the focus and help in identifying the most
appropriate approach to tackle the loss/opportunity.
All identified improvement activities should be put in a solid plan (Going for Zero Strategy)
and assessed if it will help Function / Market to deliver expected results On Time In Full.
The IPA process should be carried out at both Factory and Local Leadership Team level.
The level of detail should reflect Leadership Team’s actionability and responsibility of the
KPI under deployment. This would allow the alignment of the activities at all levels and
the possibility to highlight contribution of each department to the overall Factory result.
Why / Purpose IPA provides robust data analysis to identify improvement opportunities in a structured
way to prioritize activities and assign resources. Within the reality of limited resources
and competing priorities, it will strengthen the OMP process and it will help to achieve
Function/ Factory objectives.
Process The IPA methodology establishes how many improvement activities are needed to
Description achieve a given target based on the quantitative contribution and deadline of each
improvement activity.

During the OMP step 2, it is necessary to “understand current situation”. In this step, IPA
supports OMP providing an overview of specific KPIs and trend of the last periods. In this
moment, the gap between the “current situation” and the target cascaded is highlighted.
Then, in OMP step 4 (“P” of PDCA cycle), IPA process goes through the deployment of
the main contributors to the KPIs to improve. The main contributors represent the factors
that are having positive or negative impacts on the KPIs. On these factors, improvement
activities must be identified.
Identified improvement activities must be prioritized according to impact on KPI and effort
to deliver the project. It is recommended to have a holistic view of all the improvement
activities during prioritization process so that it is possible to identify opportunities to
merge working groups & launch less projects but with same impact on different KPIs.
According to the methodology to be used, project should be assigned to a leader with the
appropriate competency level. If needed, a coach should be appointed to guarantee the
project will deliver results in the expected timing.
If the listed improvement activities are confirmed to achieve the targets, the projects are
embedded into OMP (Factory or Local Leadership Team, according to the responsibility)
and then tracked and reviewed according to PDCA Cycle (see GA Reference Guide). If
not, project identification should be reviewed.

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Who applies Factory and Local Leadership Teams with the support of FI Pillar. This IPA
competency will be developed and cascaded by Market / Function / Factory
FI Pillar Leaders based on maturity level.
Deliverables  Prioritised improvement activities aligned with Function / Factory
objectives, with specific contributions, target definitions and deadlines
to be executed according to the timeline approved by project sponsors.
 Solid plan for the next year embedded into OMP, according to Step 4
in the OMP process
 Evidence of the contribution of NCE activities to the Function / Factory
results and common understanding of the Pillar involvement in
supporting the improvement activities and therefore in delivering
results
 Project leaders, coaches and sponsors with the appropriate
competency assigned to improvement activities
 Development needs identified and fed into Factory Development Plan
and Competency Building Plan
 Benefits estimated for all the analysed KPIs, among the different
dimensions of the Manufacturing Excellence
Tools  Data Analysis like Time Series Plot and Pareto Chart, Competency
Matrix, Development Plan, Going for Zero Tool

Related measures Factory KPIs and PPIs

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IPA and Going for Zero Strategy


IPA methodology is meant to produce detailed improvement activities for short/medium term. When
dealing within the OMP horizon, it is important to have a more strategic view on long-term initiatives this
is to fulfil T&P Roadmaps and the Factory’s Going for Zero Journey.

The Going for Zero Strategy uses the IPA process on a medium/long-term horizon to support the
generation of an integrated plan where all Factory initiatives are listed, together with estimate of the future
Factory contribution to business objectives. This should include the NCE Implementation Plan,
Industrialization Projects and other improvement activities.

When going through the OMP review, activities listed in the Going for Zero strategy, specific targets,
proposed resource allocation, and timing must be reviewed at the relevant level of detail using the IPA
process.

Going for Zero tool can be used to support in consolidating medium/long-term activities and can help in
quantifying the contribution of each activity, so as to verify if future targets can be achieved.

In summary:

 Going For Zero Journey is the vision of the results to be achieved, and related targets;
 Going For Zero Strategy is the high-level and long-term plan with activities to reach the targets set in
the Journey;
 OMP is the process through which the Journey and the strategy are reviewed, shared, and visualized;
 IPA is the process to support OMP steps in the identification of activities to put in the plan (one year
or more, according to the Journey horizon);
 Going For Zero Tool is the excel file for calculations that will be used to validate the possibility to
achieve the Journey through the Strategy.

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ENHANCED LOSS TREE ANALYSIS (eLTA)


Methodology enhanced Loss Tree Analysis (eLTA)
Introduced in Step 1. It should be applied according to FI Cycle or in line with the OMP results.

Why / eLTA is the tool to be used to:


Purpose  link costs and losses;
 have the full understanding of losses in terms of origin, relation and total cost;
 improve the way losses are prioritized based on the impact on the Function/Business.
With the eLTA the cooperation between FI, F&C and Leadership Teams is reinforced,
leveraging a common language and process.
eLTA enables the benchmarking across Factories and Category.

Process With IPA it is possible to stratify any kind of quantitative measure for the contributors
Description (factors) that can affect the KPI. For example:
 Asset Intensity  stratification of lost machine hours;
 Consumer Complaints  stratification of complaints or defects;
 Delivery (MSA or CFR)  stratification of missed Cases.
When deploying cost KPIs (i.e.: Total Delivery Cost, Cost of Production, Conversion Cost,
Zero Loss Material Variance, …) it is important to understand the total cost and how much
of that is used to perform the process and how much is a loss that must be
reduced/eliminated to have a positive impact on the business. For example: the total usage
(and cost) of Raw and Pack Material in a Factory includes Zero Loss quantity needed to
produce (i.e. having as an output a product compliant with specifications) and the losses
recorded during the production. It is key to understand how much of the total value is a
loss and can be tackled with improvement activities. Otherwise, the risk is to deploy the
main contributor only because of the highest total value and not because of the highest
loss. In this scenario, eLTA is the tool to be used to valuate losses and to link them with
costs.

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As a general process guideline:

 Factory Controller provides the costs of the Factory at line level (Globe Resource and
related Cost Center). The costs should include at least Raw and Pack Usage costs,
variable manufacturing costs and maintenance costs.
 In case other elements of the manufacturing cost have a significant impact on the
overall Cost of Production, Factory Controller should provide more details about those
cost areas, to allow the further stratification and loss understanding. Example: if the
Factory is renting an external warehouse to stock packaging materials, it would be
relevant to map the cost and then think about the appropriate improvement activities
that the Factory can put in place to avoid the need of this external area. In this case
further analysis could be supported not only by data elaboration itself, but by activity
mappings of material flows, supported by LVS Pillar.
 With the support of FI Pillar and the Factory Controller, Factory and Local Leadership
Teams collect, analyze, and understand losses and connect them with Factory costs.
 Then, based on agreed priority areas (i.e. main
impact on Factory and Business results), Local
Leadership Teams go deeper into the analysis
using:
 available historical data and stratification
criteria;
 further data collection at shop floor level as
needed;

The aim of this further analysis is to understand and quantify the link between losses. This
is the so called “loss intelligence”. With this, it is possible to identify the appropriate tool to
be used for a faster loss reduction. The tools can be linked to different Pillars, who can
support the execution of the improvement activities with training and coaching.

Each loss is defined and categorized, as well as the way it should be valued. Each loss is
connected with specific area of the cost. Example: a breakdown on a line is composed by
different cost elements:
 maintenance labor hours for the technician who worked on the line;
 production labor, i.e. the crew on the line waiting for the machine to restart;
 energy used to keep switched on a machine that is not producing;
 spare parts.

If material waste has been generated during maintenance


intervention, the value of this consequent loss should be
added to the others, because it is originated by the
breakdown.
The recombination of the information coming from the loss
intelligence enables the quantification of the total cost of a
loss. In this example, the total cost of breakdown is given
by the sum of the direct and indirect elements.
 If applicable, for every machine or process it should
be defined the level of “technological loss”. A
technological loss is a loss determined by the design
of equipment/ processes or inherent properties of
materials, related to physical, mechanical, electronic,
or chemical characteristics.
The reduction of this kind of loss may require modification, redesign or replacement of
equipment, processes or materials and there could be the need to involve owner of the

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specific technology or process (e.g. Nestlé Product Technology Centers) to define the
appropriate solution.
 The full responsibility of all operational losses stays within the Factory, but the
prioritization process is enhanced by quantifying separately both “recoverable” and
“technological” losses.
 eLTA enables the full loss understanding, providing more elements to prioritize losses
(link with cost and technological contribution). This helps in supporting the decision-
making on loss reduction activities with highest impact on Business results. Those
activities must be listed together with the ones coming from the IPA deployed on the
other Factory KPIs (example: Q and SHE losses …), so having an integrated
prioritization and resource allocation. The following steps are as described in the IPA
process.
 eLTA provides a picture of something that has already happened. In many cases, it is
strongly recommended to put in place specific measures at the appropriate level to
monitor the loss evolution, avoiding having to wait for the next cycle to see if losses
are decreasing.

Who applies Factory Leadership Team, Local Leadership Team, Factory Controller, FI Pillar.
Involvement of Local Leadership Teams and WGs is based on maturity level. The support
to eLTA implementation is a shared responsibility between Factory Controller and FI Pillar.
Deliverables  Map of the Factory Costs, together with the visibility of losses and opportunities
 Understanding of the link between losses
 List of improvement activities to support Factory cost reduction, as part of the IPA
process
Tools eLTA, Data Analysis tools as Pareto Chart and Time Series plot

Related Total Delivery Cost, Conversion Cost, Zero Loss Material Variance
Measures

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GO-SEE THINK DO
Methodology Go-See Think Do (GSTD)

Introduced in “Leadership Engagement” Level and deployed from Factory and Local Leadership Teams
to Working Groups. Go-See Think Do is a simple 3 step basic-problem-solving
methodology that can be applied when an issue is identified.
Why / Embed a problem-solving mind-set across the Factory to solve daily sporadic losses and
Purpose learn from them.
Process Go-See Think Do is the simplest and most widely used problem-solving methodology
Description which can be applied when a sporadic loss appears (e.g. a gap on a measure) with
unknown root cause. The methodology starts by understanding the problem, analysing the
possible factors, finding root causes, agreeing on the countermeasure and the definitive
solutions and finally implementing and standardising the improvements across the
involved people who are going to apply it.

Root Causes can be classified in 4 categories, the so-called “4Ms”, according to the factor
which generated the problem:
 Machine: a lack of performance in the machine/component;
 Material: a defect in material used for the process;
 Method: a standard is missing or is difficult to understand or to apply;
 Man: lack of competency to apply the method/standard-
Who applies Project leader trained in GSTD with support of coaches for the methodology application.
According to the maturity level, GSTD is firstly applied by Factory and Local Leadership
Team members and then by the Working Group members.

Deliverables  Results On Time In Full (for example: Cost reduction, SHE, Quality and Capacity
Improvement benefits)
 Standards and related routines updated (SDCA; for example: CILs, centerlining, SOP,
Standardized Work …)
 Competencies, both on the methodology and on the process
Tools  Fishbone and 5 Whys to identify the root causes
 Action plan
 OPLs
Related API/PPI affected by the problem.
Measures

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DMAIC
Methodology Define, Measure, Analyze, Improve, Control (DMAIC)
Introduced in Step 2
Why / Have a common and structured way to understand the process and solve low to high
Purpose complexity problems within the appropriate time linked with the business needs.
Process DMAIC provides a systematic and structured 5-Phase problem-solving approach based on
Description 3 key principles:
 logical and rigorous project-management;
 solutions and decisions are made based on facts and data;
 teamwork, coaching, and engagement.
In the Define phase, the project team takes the input from IPA (target, timing, resources)
and translates them into a structured plan to assure the execution OTIF of each phase.
In the Measure phase, data is collected to understand the problem and the factors that may
generate them. In this phase, data reliability and data analysis are key for project success.
In the Analyze phase, possible factors are translated into root causes verified on the
GEMBA.
In the Improve phase, the action plan to solve the root causes is executed and its
effectiveness verified against the project measure. In this phase the project target should
be reached.
In the Control phase, results are sustained leveraging the Standard Routine methodology
(SDCA), focusing on increasing the competencies in all the people involved in the process.

Who applies Project leader trained in DMAIC with the support of:
 DMAIC coaches for the methodology application
 Project Sponsors for the execution of the improvement activities and for
resource allocation
Team members should be selected according to the nature of problem, including
all the relevant people who can support the process understanding.
Outputs  Results On Time In Full (for example: Cost reduction, SHE, Quality and
Capacity Improvement benefits)
 Standards and related routines updated (SDCA; for example: CILs,
centerlining, SOP, Standardized Work …)
 Competencies, both on the methodology and on the process

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Tools DMAIC methodology can tackle different level of problem complexity. The levels –
from the low to the high complexity - are named as:
 White Belt
 Yellow Belt
 Green Belt
 Black Belt
The tools used in the DMAIC projects are related to the complexity of the problem
to solve. Any way, in each level some general tools are present:
 Competency Matrix for the Project team
 Project Plan
 Process map
 Data Analysis tools, like Time Series Plot and Pareto charts
 Fishbone and 5 Whys to identify the root causes
 Action plan
 OPLs
When the level of complexity increases, application of statistical tools and related
competencies are needed to understand process variation, sources of variation
and impact to the output of the process. Examples: Control Charts, Regression,
Hypothesis Test, FMEA. In the following table further details are provided:
Tools White Belt Yellow Belt Green Belt Black Belt
 Is / Is not  VOC  SIPOC  Trends and
 Time series plot  CTQ  Communication plan seasonality
 Financial/ SHE/ Quality  Descriptive analysis  Data reliability (operational  Kano
benefits evaluation  Control charts definition, Gage R&R)  Sampling plan
 Competency matrix (I-MR,xbar-R)  Control charts (p, np, c, u,  Design of
 Project time line  Process Capability and xbar-s) experiments – Full
 Data collection plan Performance  Hypothesis Tests and Fractional
 Pareto charts  Tree diagram (Chi-Square / T test) Factorials / EVOP
 Process map  Affinity diagram  Confidence interval  Data transformation
 Focused problem statement  Prioritisation matrix  Scatter Plot (Normal)
(5W1H)  OCAP – Out of Control  Matrix of correlation  Response Surface
 Brainstorming Plan  Simple regression Analysis  Statistical modelling
 Cause and effects diagram  Prioritisation (ANOVA, Multiple
 5 Whys  Planning tools linear regression)
 Action plan (5W2H)  FMEA
 Impact x Effort matrix
 Standards
 OPL – One Point Lesson

Related PPI/KPI affected by the problem, usually identified during the IPA process and
measures then translated – if needed - into the project measure during the Define phase.

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Problem-solving competencies and the need for belt levels


In the early stages of maturity, most of the problems can be tackled with basic problem solving
competencies (GSTD and WB, creating standards and restoring the basic conditions). However
proceeding with the level of maturity, high impact improvement opportunities can be identified and more
complex tools may be needed. Moreover, some projects have a cross functional scope, requiring Project
and Stakeholders Management Competencies to coordinate the team and the activities in an effective
way. This is why different level of competencies are need: YB, GB and BB.

A project leader with level 4 in the competency matrix for a specific belt level is a “certified belt”. A certified
belt is an individual who has fulfilled all the requirements of Nestlé belt certification, managed by FI Pillar.

Development of problem-solving competencies (GSTD and DMAIC) should be planned as part of Factory
development plan and competence building plan among the functions and the Local Leadership Teams. The
FI Pillar should support Factory and Local Leadership Teams in understanding how many problem solvers
and coaches are needed to assure:

 the execution of the short and medium term plans;


 the creation of autonomy in Problem Solving Execution at WGs level.

Methodology Assignment
During the IPA process, it is important to assign the right methodology to the improvement projects,
considering all the activities and not only the ones using problem-solving methodologies.

When assigning the appropriate methodology, in order to enable the best use of resources, it is
recommended to challenge if:

 The current NCE Implementation Plan (including SDCA) is solid enough to support loss reduction;
 Impacts from Industrialization Projects are identified and included into IPA.

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 Effective validated solutions1 can be replicated from one area to another or can be applied basing on
past experience (“Just Do It” approach);
 Projects on changeover time reduction are addresses through SMED methodology.

If the improvement initiatives are still not enough to reach the targets, in case losses with unknown root
causes are identified, there is the need to launch Problem Solving Projects and – as a consequence - to
identify the appropriate methodology to apply. Key factors to be considered are:

 Project and Stakeholders management needs, related with the eventual cross functional scope of the
project;
 Complexity of factors (number of processes and variables involved);
 Origin of the loss, i.e. chronic losses (dealing with process variation) or sporadic losses.

Chronic Losses are the effect of identical


phenomena occurring with “common cause”
variation. Sometimes they are considered “latent”,
so much so that they are difficult to detect. In many
cases, they represent the sum of the interaction
between different factors: that is why root causes
could be difficult to be identified.
Sporadic Losses are the effect of phenomena
occurring when some changes in 4Ms condition
happen and there is a deviation from the usual
level. Usually the cause-effect relations are
relatively clear and – when alteration factors are
identified – the main actions are represented by restore basic conditions.
The following decision tree provides reference on how to assign the different methodologies:

1“Validated solutions” means that data and facts have demonstrated the solution is effective to reduce the loss in a sustainable
way. It means that root causes where analysed and understood. With the evolution of NCE maturity level, all those “Just Do It”
activities will become part of the loss prevention activities reflected into the NCE Implementation Plan.
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When dealing with sporadic losses, it is recommended to start addressing the problem using GSTD tool
first if not successful, follow the white belt DMAIC.

The following table provides additional guidelines. The complexity level of the causes (problem deals with
process variation and number of variables influencing the output) plays a more important role in the
definition of the methodology than the scope of the project.

This classification is indicative and a project can be classified differently, depending on the context. The
final classification needs to be validated by the FI Pillar leader and Process Owner according to their
experience.

Accelerating Problem-Solving
When executing projects, it is important to lead the completion of each phase or steps of the project to
accelerate the delivery of sustainable results on-time and in-full.

“Accelerating Problem Solving” is a pragmatic way to reduce the duration of problem solving projects by:

 assigning competent resources;


 effectively planning and organizing activities.

The key elements of the accelerating problem-solving approach are:

 Project Scope is specific, focused and built on eLTA and IPA loss understanding. This will enable:

o Shorter time needed to complete the steps and phases;


o Small teams with a focused and clear objective.

 Allocated time for team members are aligned with the effort need to deliver expected results;
 Project leader competences are in place or under development by the coach with a clear plan.

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Sustainable results
 Once the solution has been validated, it has to be communicated to the involved people that has to
follow and maintain the conditions through the standards. It has to be delivered to the LLT for the
monitoring and ensuring the execution. The long-term action have to be followed into the WOR or
MOR.

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SINGLE MINUTE EXCHANGE OF DIES (SMED)


Methodology Single Minute Exchange of Dies (SMED)
Introduced in Step 2
This method provides the tools to reduce equipment changeover time, sustaining the
Why / implementation of pull production.
Purpose The essence of SMED is to eliminate or reduce the time of activities carried out during
changeover.
Process The methodology is composed by five steps:
Description  Step 1: the project team takes the input from IPA (target, timing, resources) and
translate them into a structured project plan to assure the execution OTIF of each step.
In this step, is it important to verify/confirm if an improvement on the planned stoppage
will have a positive effect on other losses (example: adjustment at the restart after
changeover and related material wasted during adjustment);
 Step 2: register changeover duration and the activities and movements carried out
during the planned stoppage
 Step 3: Analyze changeover activities and movements, identifying opportunities to
o Execute activities that can be performed when the machine is running with no
impact on process, people and changeover time (transform internal activities
to external activities)
o Eliminate or reduce the time for the remaining activities
 Step 4: Implement improvement plan & test effectiveness of solutions against target;
 Step 5: Sustain the results through the Standard Routine methodology (SDCA),
focusing on increasing competencies in all people involved in the planned stoppage.

SMED can be applied, with different level of detail, several times on the same changeover.
In the first application, the focus is the creation of the standard, with an eye on process
parameters, preparation activities and operators movements. In the subsequent
application, the improvement can deal with the creation of special tools and then small or
large investments.

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Who applies Project leader trained in SMED with the support of:

 SMED coaches for the methodology application;


 Project Sponsors for the execution of the activities and for resource allocation.

Team members should be selected according to people involved in the planned activity
(example: production operators and /or maintenance technicians). SHE and Q
representatives should be included for the evaluation of the risks during the register of the
current situation and before the implementation of solutions (as also stated in St-21.114).
Outputs  Results (for example: Cost reduction, SHE, Quality and Capacity Improvement,
production flexibility, Stock reduction, increase in Freshness …);
 Standards and related routines updated (SDCA; i.e.: Standardized Work as the
outcome of SMED Step 5);
 Competencies, both on the methodology and on the planned activity.
Tools  Competency Matrix for the Project team
 Project Plan
 Spaghetti Diagram
 Data Analysis tools, like time series plot and Pareto charts
 Internal/External activities analysis
 ECRS (Eliminate, Combine, Reduce, Simplify)
 Action plan
 OPLs

Related
Planned Stoppages, Asset Intensity, Changeover duration
Measures

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ADDITIONAL INFORMATION
PILLAR MEASURES
The factory teams will perform the cascading of measure from the factory leadership team level up to the
line team level (following the GA – Performance Measure Development practice). This will include PPI and
API wherever will be needed to support the business need (KPI).

The factory leadership team understands which are the relevant indicators to select, when to monitor them
(frequency: QOR, MOR, DOR, etc.), and by whom those have to be monitored (FLT, LLT, WG).

As for the other Pillars, the link between FI Pillar activities and APIs/PPIs/KPIs in the Factory is very strong.
It can be seen in different areas:

 When using IPA and eLTA methodology, FI Pillar supports Factory and Local Leadership Teams in
breaking down and stratifying all the KPIs set as priorities in the OMP.
 When applying GSTD and DMAIC methodology, the success criteria for the project it is related with
the problem the project is dealing with. For example, the PPI can be focused on defects, machine
stoppages, deliveries or energy consumption. In this case, it is important to identify:

o the relevant review where the measure can be discussed during the execution of the project;
o the responsibilities in implementing and supporting the new or updated Standard Routines after
the closure of the project.

 When applying SMED methodology, the success criteria for the project it is related with changeover
time reduction. At the end of the project, the SMED team will set the SDCA for the new or updated
standards. The new Standard Routines will be embedded in the APIs and PPIs present at line and
Local Leadership team level.

PILLAR IMPLEMENTATION
For more information on how to set up the Pillar, please refer to the document “Organization Structure for
Manufacturing”, where further details are present on:

 Pillar Implementation Plan


 Pillar Governance Measures
 Pillar Routines and Reviews

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