ABN Amro Customer Excellence Masterclass

ABN AMRO Customer Excellence Masterclass

The Philips Excellence Continuous Improvement Approach and award winning practices

Royal Philips29th June 2016

2 Copyright © Royal PhilipsSTRICTLY CONFIDENTIAL – DO NOT USE OR REPRODUCE WITHOUT WRITTEN PERMISSION

Founded in 1891HQ in

Amsterdam NL

Brand Value > $10BnSales of circa.

€21Bn

Green Product Sales > €11Bn

Circa. 108K Employees

R&D Investment of €1.6Bn

Present in over 100 Countries

About Philips


We started with understanding the ‘Why’ of Lean

Toyota doubled its market share from 2000 to 2010 and became no. 1 car manufacturer a number of times from 2009 onwards

Honeywell have outperformed the S&P 500 Index by over 100% over the last 10 years using the Honeywell Operating System (HOS) as a major driver of their Business

Porsche, starting in the early 1990s, used a Lean Enterprise Strategy (End-to-End) as a basis of its turnaround strategy and became the most profitable car company in the world

Danaher has grown profitably by almost 20% every year for the past 20 years, using a CI based Business System (Share Price growth of 2,909%)

Moved from a ‘factory based’ CI approach to a Business wide people system: 289% Share Price increase over 10 years (June 2003 – June 2013)


We focussed on Lean thinking, rather than Lean Tools, and have driven a principle driven transformation

Principle Driven

System Driven

Tool Driven

Embedding principles into culture



Structuring tools into a systems context

Using specific methods to create point solutions


The Continuous Improvement Curriculum is designed to provide our Employees with the appropriate level of competence and behavioural change.

The Central Theme of our Programme is the Certification of 100% of our People in Lean Thinking


Lean Solutions

(e.g. Healthcare or Lighting installations)

LeanInnovation

(e.g., IT, R&D, UpstreamMarketing, etc.)

Lean Office

(e.g. Markets, Finance, HRCustomer Service, etc.)

LeanSupply

(e.g. Factories, Warehousing,Distribution, Suppliers, etc.)

Nat

ure

of

acti

vity

Value Stream

Pro

ject

Re

pet

itiv

e

Physical Virtual

We have created a Lean Excellence Model to Transform our whole Enterprise


We are utilising the Fundamental Lean Tools, combined with Lean Thinking, to transform our business


We are ‘Leading with Lean’ at every level of our Organisation

© Philip Holt

Team: Matt Peters, Efthymios Tsamis, Frank Kouwenberg, Manuela Voorn

June 2016

Operational ExcellenceLetter of Credit process


Letter of Credit process poorly executed leading to substantial risk

Market Leader Africa: “A very problematic Letters of Credit process for years that has a major impact and poses a significant risk for Accounts Receivables”

25% expired LC

38% late shipments

Lead-time between 3-24 months

Philips get its money too late or never!

Customer receives products too late!

AR under risk per year:

54 M USD

Jan 2015

Slow responsiveness to our customer and sales

Review of LC: 35%<=2d

Backlog of 3 weeks equivalent to 6,5M USD

Customer frustration

&

bad Philips reputation

Escalations: >20%


Overall Goal & Objectives

‘Turn our Letters of Credit into a secure and reliable financial instrument for the customer as well as Philips. The customer receives the goods on time and Philips is paid on time and for the correct amount in all cases. ‘

>90% Clean Documents

Nr of Escalations: 0%

AR under risk: 54 M USD

Nr of Escalations: >20%

TargetJan 2015

AR under risk: 18 M USD69% Clean Documents

Customer receives goods in time: 71% Customer receives goods in time: 95%

End to endAlignment

between all stakeholders

Holistic approach

Fast: Before 2016


Value Stream design supported by Standard Work

77 One Point Lessons 22 Work Flow Cycles47 Standard Work

Process Description Future State VSM

Operational Exc

Applied 9 Lean in Office principles by Duggan.

Rapid maturing

> 100 revisions of process description in 1st

month.

Standardization

Steps: owner, activities, process time and lead-time

Flow

52 Steps reduced to 29 steps. Many exceptions captured.

? (L/C Desk)

Aproach Philips bank for confirmation of

quotation

PT=?min%C&A=?%

? (Philips bank)

Make bid

PT=?min%C&A=?%

? (L/C Desk)

Select best bid

PT=?min%C&A=?%

? (CFC OM)

Send SO/Pro-forma and guidelines to

Distributor. Inform RBS.

PT=?min%C&A=?%

? (Customer)

Approach Customers Bank to issue L/C

PT=?min%C&A=?%

? (Customer Bank)

Issue draft-L/C

PT=?min%C&A=?%

? (Customer)

Receive & Communicate draft-L/

C to CFC OM (sometimes Sales)

PT=?min%C&A=?%

? (Customer Bank)

Inform RBS about draft-L/C

PT=?min%C&A=?%

? (CFC OM)

Inform RBS about draft-L/C

PT=?min%C&A=?%

? (RBS)

Coordinate review of draft-L/C

PT=?min%C&A=?%

? (L/C desk)

Review draft-L/C

PT=?min%C&A=?%

? (CFC OM)

Review draft-L/C

PT=?min%C&A=?%

? (K&N)

Review draft-L/C

PT=?min%C&A=?%

? (RBS)

Consolidate review & communicate to CFC

OM

PT=?min%C&A=?%

? (CFC OM)

Contact & Inform Customer

PT=?min%C&A=?%

? (Customer)

Request amendment at Customer Bank

PT=?min%C&A=?%

? (Customer Bank)

Amend final-L/C to confirming Philips

bank

PT=?min%C&A=?%

? (Confirming PhilipsBank)

Contact RBS

PT=?min%C&A=?%

? (RBS)

Check amendments in L/C & share with L/C desk / CFC OM / K&N

PT=?min%C&A=?%

? (CFC OM)

Initiate delivery to customer

PT=?min%C&A=?%

? (K&N)

Prepare shipping and draft documentation. Legalize. Send docs to

RBS

PT=?min%C&A=?%

? (RBS)

Check draft documentation

PT=?min%C&A=?%

? (RBS)

Forward final documentation to

customer bank

PT=?min%C&A=?%

? (Customer Bank)

Check final documentation

PT=?min%C&A=?%

? (Customer Bank)

Release final documentation

PT=?min%C&A=?%

? (Customer)

Clear goods at customs

PT=?min%C&A=?%

? (Customer)

Resolve refused documents by

Customer & Cust bank & RBS / confirming

bank & L/C desk

PT=?min%C&A=?%

? (Sales)

Inform CFC Om and L/C desk about draft-L/C

PT=?min%C&A=?%

? (RBS)

Coordinate review of final-L/C

PT=?min%C&A=?%

? (L/C desk)

Review final-L/C

PT=?min%C&A=?%

? (CFC OM)

Review final-L/C

PT=?min%C&A=?%

? (K&N)

Review final-L/C

PT=?min%C&A=?%

? (RBS)

Consolidate review & communicate to CFC

OM

PT=?min%C&A=?%

? (CFC OM)

Contact & Inform Customer

PT=?min%C&A=?%

? (Customer)

Request amendment at Customer Bank

PT=?min%C&A=?%

? (Customer Bank)

Issue final-L/C and send to confirming

bank

PT=?min%C&A=?%

? (L/C Desk)


quotation

PT=?min%C&A=?%

? (L/C Desk)


quotation

PT=?min%C&A=?%

? (Philips bank)

Make bid

PT=?min%C&A=?%

? (L/C Desk)

Select best bid

PT=?min%C&A=?%

? (Philips bank)

Make bid

PT=?min%C&A=?%

? (L/C Desk)

Select best bid

PT=?min%C&A=?%

RBS xls

? (Other Bank)

Check and validate documents & forward

to Customer Bank

PT=?min%C&A=?%

? (Multi functions)

Approve in EST/Sofon

PT=?min%C&A=?%

? (Sales)

Sales Mandate

PT=?min%C&A=?%

? (CFC OM)

Send SO/Pro-forma and guidelines to End

Customer.

PT=?min%C&A=?%

? (Customer Bank)

Payment to be made to Philips

PT=?min%C&A=?%

? (Customer Bank)

Receipt of payment by Philips

PT=?min%C&A=?%

email SAP

? (Sales)

Sales Initiation with customer

PT=?min%C&A=?%

? (Sales)

Perform credit risk assessment

PT=?min%C&A=?%

? (Sales)

Discuss LC terms and conditions

PT=?min%C&A=?%

? (Sales)

Update (master) contracts

PT=?min%C&A=?%

Current StateValue Stream Map


Implementation of Process Building Blocks

Kanban Tool

Opening Guidelines

Priorities

Train Users Daily Mgt & Reporting Transparency

Standard Work 3C

Monthly Standing Meeting

Leader Standard

Work

Standard Work

Weekly Standing Meeting

TaktWork Flow

CyclesPlanning

Interface Banks

Data migration

Reporting Database

Physical Document

Flow

Quality Feedback

LoopsArchiving

6SSharePointKamishibai Skill MatrixRole

DescriptionsInterface Markets

Quality

Mgt System

Virtual Visual Board

Physical Location

Visual BoardDaily routine Accounts

ReceivablesKaizenDiscipline


Guaranteed Turn around Time

Applied advanced Lean in Office principlesFIFO lanes and CONWIP

Topsheets

Color coding

Trays & Lanes


How to get full Transparency?

Kanban Board Kanban Card

Standardized steps

• Standard Work: standardized steps• Kanban Board & Cards• Super simple to use


Capacity

Managing workload and capacity

• Workload & Backlog visibility• Plan B/C for over and under capacity• Capacity Levelling for fair distribution

Capacity Levelling

Plan B and C

Loading per person

Loading per process step


Setting and managing priorities

Priorities Section Daily Tracking of Priorities

• Full Pipeline Visibility every morning• Identify priorities that need to be addressed first• Handouts for follow up

Visibility

• Allocate priorities to people• Work Flow Cycles for recurring activities• Daily Pitch Run to monitor progress and to stay on track

Action Kanban

Work Flow

Cycles

Handouts


Performance Charts

Managing the Performance?

3Cs per column

Performance Section

Root causes

• Full visibility on performance and trends• Root causes analyses and countermeasures via 3C• Identify 1st improvement priorities

435 3C’s82% solved


How to collaborate with Markets? How to instantly connect with everybody?

Virtual participation

• Virtual Visual Board• Virtual Participation• Standardized collaboration with Markets

Daily status updates for each Market

All reports on the Virtual Visual Board

Accessible to allkey stakeholders


Aug 2015

From stormy weather to clear sky in 5 months

Feb 2016

Dec 2015

Workload & Backlog


A revolutionary and robust improvement!

We pulled forward 18 M USD for Philips by

collecting payments earlier

100% Clean Documents

Nr of Escalations: 0%

AR under risk: 54 M USD

Nr of Escalations: >20%

Feb / Apr / May 2016Jan 2015

AR under risk: 0 M USD69% Clean Documents

Customer receives goods in time: 71% Customer receives goods in time: 100%

Final Yield: 0% Final Yield: 50%

Review of LC within 2d: 33%

Average Lead-time: 7months

Review of LC within 1d: 52%

Average Lead-time: 4,9months(Target 4 months)

We made our internal and external customers happy!


Peter VeltmanGroup Continuous Improvement

& Six Sigma LeaderPhilips

Philip HoltHead of Operational Excellence

Accounting OperationsPhilips

LinkedIn: Philip HoltWebsite: leadingwithlean.com

Twitter: @LeanMaster1LinkedIn: Peter Veltman

Thank you!

https://www.linkedin.com/in/philipholt

http://www.leadingwithlean.com/

https://twitter.com/LeanMaster1

https://www.linkedin.com/in/peter-veltman-415b683

ABN Amro Customer Excellence Masterclass

Business

Transcript of ABN Amro Customer Excellence Masterclass