Do you have what it takes to change?

Patricia HatemSolutions 2.0 Conference

November 18, 2009

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ohnsonDiversey: Strong Position in a Fragmented Industry2008 JD 10K Sales: $3.4B

EMA51.3%

LATAM7.2%

Japan9.0%

APAC7.1%

North America25.1%

Other0.3%

Market Position: #1 or #2 EverywhereShared leadership in EMA #1 in AsiaNarrow lead in LATAM #2 in NA; #1 in Building Care

Selling into 175 countries

10,800 employees Average tenure: 15 years 6,500 in customer-facing roles

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ohnsonDiversey: Wide range of products and services to meet customers’ needs

Services

Equipment Tools

General Cleaners

Degreasers

Sanitizers

Disinfectants

Warewashing

Hand Care

Air Fresheners

Dosing & DispensingScrubber/DriersVacuumsSweepersDisc PolishersFoam Generators

Food and Beverage water use auditing

Food safety procedures, protocols, training and consultation

e-Business solutions

Green cleaning procedures

Application training

Expert witness

Microfiber SystemsMultifunctional

TrolleysCleaning Utensils

and Systems

Finishes

Sealers

Strippers

Fabric Care

Products

Track Treatment

CIP/OPC

Membrane Cleaning

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Goals of this workshop:• Relay what I learned while Championing a Lean

implementation

• Have you think about the same issues within your organization

• Have you document actions for addressing those issues

Though this presentation will focus on my recent experience implementing Lean within a manufacturing facility, these issues are universal. They must be managed before any process improvement will be successful in any work environment.

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JD history with Process Improvement has been a bumpy road, full of starts and stops…

• 2001 – Six Sigma “trial”. Trained 1 Black Belt and 3 Green Belts.

• 2002 – Integration of newly formed JohnsonDiversey takes priority, Six Sigma put on hold.

• 2004 – Lean chosen as primary improvement methodology.

• Q2 2005 – Trained 17 employees (global representation) as Lean Leaders.

• Q3 2005 – company’s performance not on-par with expectations, substantial restructuring plan announced. Lean put on hold, except in Supply Chain. Corporate Lean group disbanded. I moved to plant manager role at our largest volume facility.

• Q1 2006 – 2 Lean Leaders assigned to largest manufacturing facility.

• May 2006 – Begin training 13 additional Supply Chain Lean Leaders

• Present – Lean only active within manufacturing facilities. Kicking off Six Sigma training to select employees to work on a few pilot projects.

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Starting in 2005, we successfully utilized the Lean tools to improve operations at our largest facility:

• 30% OEE improvement

• Unit Fill Rate improvements to 97% to >99%

• Insourced 15% additional volume

• Moved to Pull scheduling, lowering finished good inventory by 20%

Usage of the Lean tools is the easy part. The hard part is all the infrastructure that needs to be in place to enable the changes.

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Key components of successful, sustainable change

• Alignment accomplished through communication and understanding how it will impact the workforce

• The right team driving change

• Clear, visible commitment

• Consistent, constant communication

• Discipline in all processes

• Focus on the biggest problems

• Aligned Reward and Recognition system

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Do we have to change, and will it affect me?

Our situation:

• Restructuring communicated, but lack of understanding how it would impact the facility and the workforce

• Lack of alignment with previous reward structureQuestions for you:

• What have you done to communicate the need for change?

• How has the impact to the employee been communicated?

• How does your current reward structure align with improvement needs?

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Aligned goals for everyoneActual

16 2006 Q1 Q2 Q3 Q4Plant or team metric

Speed

OEE - L 263 Signature Players 65 66 66 67 68

OEE - L269 We Know JAC 45 46 48 51 52

Schedule Compliance % Entire Plant 80% 82% 84% 86% 88%

Daily average of A items on backorder Entire Plant NA 1 3 3 1

Quality

Rejected Batches Agitators 13/year 2 2 2 2

RFT Entire Plant 98.5% 98.5% 98.5% 98.6% 98.6%

Cost

Temporary Labor Entire Plant $1,100,00/yr 251 295 201 151

$5 million plan Entire Plant $1,300,000/yr 600 600 650 750

Overtime Entire Plant 577/yr 68 159 116 87

People

Housekeeping/SBV score Individual Team 86.00% 87.00% 88.00% 89.00% 90.00%

OSHA recordables Entire Plant 5/yr 1 or less 1 or less 1 or less 1 or less

PHASED TARGETS 2007

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Do we have to change, and will it affect me?

Lessons learned:

• Clear vision constantly communicated

• Utilize visual metrics, but don’t have too many

• Educate all employees on Lean: take them to other sites, share Lean success stories, conduct training. They should not be afraid.

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We win as a team, and we lose as a team

Our situation:

• dysfunctional staff, some without required skill sets

• staff misinterpreted process improvement

Questions for you:

• Have you analyzed the attitude and skills of your staff to ensure they are capable of driving change?

• What do you need to do to get the right skill sets in place? Can the skills be trained, or do you need to hire?

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We win as a team, and we lose as a teamLessons learned:

• If you had to recruit someone for the job, would you recruit the person who you currently have in that position?

• Change is not for the faint of heart. Some people are change agents, and some are maintainers.

• Recommended book: “The Five Dysfunctions of a Team.”

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Words are cheap, show your commitment

See next 3 slides

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My Plant Manager officeWe MUST be role models!

BAD - BEFORE GOOD - AFTER

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To show management commitment, our first 5S efforts were focused in the office supply areas.

Before After

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Our VP of Operations showed his commitment by actively participating in a week-long Kaizen event, focused on our largest

cost savings opportunity.

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Words are cheap, show your commitment

Questions for you:

• What signs has your management group given to show their commitment?

• How has that commitment been communicated to the employees?

Lessons learned:

• Actions speak louder than words

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I don’t understand because nobody every told me..

Our situation:

• PAINFUL meetings with lack of clear objectives (weekly staff, disruptive quarterly, sporadic team)

• lack of staff speaking with one voice “because Pat said so”

• lack of visibility to basic plant status

Questions for you:

• What are your formal communication methods and are they productive?

• Does your management communicate a consistent message?

• Is basic status available through visual metrics?

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Critical information from weekly staff meeting is posted

Level 3 Communication Chart Date:_04/01/09

Attendance: Brad Brian Chris Christa Dave Jeff Maritza Maureen Randy Ryan

1. Safety 4. Planning

Housekeeping Audit - Confirm it has been completed 176,750 cases @ 90% schedule adherenceUTI - Bill of Lading Accuracy = 95%Project Chariot and Project Inlaw are on the horizonSchedule is light over the next two weeksCombine production on Gallon Lines?

2. Quality 5. Processing

No verified customer complaints 0 minutes waiting for productDropped boxes on the palitizer have improved 0 rejected batchesLooking at an audit of our corrugated suppliers 6 waste trucks21 pallets were called back from Big Box 100% first time qualityMidwest Engineering is on-site working with dropped box issue New Tank being installed on 04/06; Water test by 4/18

Discussed Premia - Polymer & Raw changesPan clean - ETA

3. Continuous Improvement 6. Packaging

Review of 267 observation results with Line Lead and Shift Lead 269 - 51% / 50%268 - 59.4% / 47%266 - 45% / 46%267 - 36% / 42%263 - 63% / 67%Training on palletizer (04/02); UTI checking components for 269; Meetingwith quality to review paperwork; Issue with slip sheet quality; Hi-flow taptest with water (TBD); Plant Metrics

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Visual metrics

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I don’t understand because nobody every told me..

Lessons learned:

• Develop regular (e.g. daily team, weekly staff, monthly all-employee), productive meetings with clear purpose, accountabilities, responsibilities, etc.

• Set clear communication expectations for your management team.

• Post relevant information. This is particularly necessary for multi-shift operations.

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Since I can come into work late, I’m pretty sure I won’t get in trouble for anything

Our situation:

• worker who was on “double secret probation” ignored rules

• Inconsistent enforcement of rules

Questions for you:

• What are your attendance and safety rules?

• How have they been communicated?

• How are employees held consistently accountable?

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Since I can come into work late, I’m pretty sure I won’t get in trouble for anything

Lessons learned:

• Rules must be clearly defined and communicated

• Management staff must work in a united fashion, holding operators accountable consistently. Requires regular communication.

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Why can’t you see what needs fixing?Our situation:

• Began working on label storage, not a pain point

• Lean readiness survey clearly indicated Planning was our worst process

Questions for you:

• What method has been used to determine your primary pain points?

• Where are those issues listed on your implementation plan?

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Part of the fix to our biggest problem

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Why can’t you see what needs fixing?

Lessons learned:

• ASK your employees what the biggest problem is, and focus on that.

• Have an impartial 3rd party conduct an assessment. This can be done by other internal resources, it doesn’t have to be expensive.

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We need to celebrate our success and have some fun!

Our situation:

• We hadn’t had as many things to celebrate, so we really didn’t know how!

• Lack of a process caused us to miss opportunities to celebrate, or celebrate too late

• Lack of recognition

Questions for you:

• How do you know when you’ve had a good day and a reason to celebrate?

• Is there a clearly laid out reward and recognition system?

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Recognition of the team’s efforts

• Line 263/268 - What we are proud of: – Camera Innovation – EEE is working on this now and

we should have it installed in Q3– Install of the FoxJet OLA – with new rail system.– New corrugated is running on the line.– New in-line / off-line weight scales installed and

working.

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We need to celebrate our success and have some fun!

Lessons learned:

• ASK your employees what they’d like

• Recognition is as important as rewards

• Set up the system prior to hitting the improvement goals

• Be consistent and personally involved

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What were those key points?

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AlignmentActual

16 2006 Q1 Q2 Q3 Q4Plant or team metric

Speed

OEE - L 263 Signature Players 65 66 66 67 68

OEE - L269 We Know JAC 45 46 48 51 52

Schedule Compliance % Entire Plant 80% 82% 84% 86% 88%

Daily average of A items on backorder Entire Plant NA 1 3 3 1

Quality

Rejected Batches Agitators 13/year 2 2 2 2

RFT Entire Plant 98.5% 98.5% 98.5% 98.6% 98.6%

Cost

Temporary Labor Entire Plant $1,100,00/yr 251 295 201 151

$5 million plan Entire Plant $1,300,000/yr 600 600 650 750

Overtime Entire Plant 577/yr 68 159 116 87

People

Housekeeping/SBV score Individual Team 86.00% 87.00% 88.00% 89.00% 90.00%

OSHA recordables Entire Plant 5/yr 1 or less 1 or less 1 or less 1 or less

PHASED TARGETS 2007

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The right team

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Clear commitment

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Consistent, constant communication

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Consistent discipline

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Focus on the biggest problems

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Rewards and Recognition• What we are proud of:

– Camera Innovation – EEE is working on this now and we should have it installed in Q3

– Install of the FoxJet OLA – with new rail system.

– New corrugated is running on the line.– New in-line / off-line weight scales

installed and working.

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Questions?

Please feel free to contact me at Patricia.Hatem@JohnsonDiversey.com

pahatem@gmail.com