Lean Implementation At Siemens Kalwa Plant

CASE ANALYSIS

Siemens Introduction
First workshop, 1955
Started with 10 employees 55% subsidiary of Siemens AG Germany in 2009 Factories in Kalwa, Nasik, Calcutta, Aurangabad and Goa Reached upto 4000 employees, 11 sales offices, 23 representatives, 300 dealers, 5 factories and e-offices

Siemens Introduction Contd

Became the second largest of Siemens manufacturing operations outside Germany
Four major divisions: Industry, Energy, Healthcare and Consumer products Kalwa Works: Medium Voltage division, sole manufacturer Switchboard: second largest MV factory outside Germany

Current Operations
Sales Team Marketing Team

Sales Order Engineering

Engineering Cycle

Manufacturing Cycle

Current Operations cont...

Manufacturing Cycle Technical Order Processing List of electrical Equipment BOM Material Planning

Equipment Procurement

Execution

Need for a change

Batch Processing dampened inefficiencies
Errors had a ripple effect on overall manufacturing chain Increasing amounts of scrap Increased customer orders: need to utilize full capacity Need for improvement in labor productivity, lower inventory levels & higher throughput

Need for a change

In October 2006 : Proposal to implement Lean systems
In October 2007 : Gewald, Global head of lean projects arrived at Kalwa and marked the official beginning of the project. The lean team was set and decided to implement for Panels and VCBs units.

THE LEAN PROGRAM

Benefits of Implementation
Increased productivity of labor
Reduction in inventory levels and associated costs Improved space utilization
These Benefits promised to result in

Higher throughput of panels

Increased profits for the factory

Implementation Process
Restructuring of both the Layout and the Processes
The current process flow chart Brainstorming the ways & means to make process more efficient But changes in processes comes at its own cost The resentment of people working on existing process for years

CHANGES IMPLEMENTED

Implementing Lean in the shop floor meant the supporting departments also need to adopt lean methodologies
Layout changes Changes in support system Changes in vendor management Cultural changes

LAYOUT CHANGES
5 Assembly lines were formed
Each line had 6 assembly workstations Takt time (time per workstation was fixed at 1 hour)

CHANGES IN THE SUPPORT SYSTEM

Installation of dashboards at the beginning of every line
Issues were posted by workers and shop engineers on the dash boards

These issues were discussed on daily basis to improve the throughput and conflicts between departments and workers
Also root cause of the problem was determined and solutions to avoid them in future were noted Gaps in skills were identified by skill assessment test

CHANGES IN VENDOR MANAGEMENT

On time delivery with ensured quality.
Vendors usually supplied materials in batches And with the implementation of lean they are no longer required by batch or customer order Challenge for both suppliers and the material planning team Vendors were presented with the benefits of the program

Short term solution Suppliers can manufacture in Bulk and the company will use Pull philosophy, i.e. to pull material when needed

CULTURAL CHANGES
Joint prayer and exercise sessions for each assembly line at the beginning of every shift.
Instill a sense of Team Belongingness

All the members were given a T-shirt imprinted with Lean logo as a uniform
sends message of team Effort

The Resentment
Resentment among people from different department: blame game started

The lean team hosted discussions for issues related to :

Structure of team Team activities more mechanical

Lack of coordination between the departments

Errors in design drawings

Resentment existed as employees believed it is another project by management

Issues with Workers

Bonus was linked to productivity : union wanted daily production to be five panels per day per line but management wanted eight
Workers classified as : productive and non productive
The pace of working quickly and relaxing was now not possible

The Redesign Project

Another major boost for lean implementation was the Redesign Project
Objective: Product that could reduce the variations in existing product and reduce the overall cost

Slow phasing out of its old product and shift entirely to new product
Product was introduced on the lean line itself. Lean line had to handle both kinds of products

Monitoring Performance
Switchboard management continue to report KPIs to the Siemens AG on monthly basis.

In just one year, KPI sheets showed improvements

Throughput time on shop floor reduced by 30%

Workers productivity increased by 30%

The lean project ended in Oct 2008 as it had intended to be a one year project.

Thank You