Lonza OE Deployment Case Study
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The document discusses Lonza's global deployment of Operational Excellence (OE). Key points include: - Lonza implemented OE globally to consistently meet customer requirements through continuous improvement. - Their approach included standardized elements like training programs and assessments, while allowing local customization. - Their deployment in China focused on building lean fundamentals for new businesses and applying advanced tools in mature sites. - Through projects, training programs, and assessments, they improved processes, engaged employees, and achieved significant financial benefits.
Lonza OE Deployment Case Study
- 1. Lonza Operational Excellence (OE) DeploymentDeployment Successful Operational Excellence Deployment Case Study
- 2. Key Takeaways • An appreciation of – a complete successful OE deployment with the key elements & success factors – globally standardized & locally customized OE approaches for both new and mature businessesapproaches for both new and mature businesses – three core processes of OE deployment • OE culture building • OE capability development • OE project management & execution (translated into ROI, tangible financial benefits) 2
- 3. Presentation Content • Lonza Global OE deployment • Greenfield implementation of Lonza (China) OE deployment – Life Science Ingredients (LSI), Lonza Custom Manufacturing (LCM)Lonza Custom Manufacturing (LCM) • Summary & Conclusion 3
- 4. Presentation Content • Lonza Global OE deployment • Greenfield implementation of Lonza (China) OE deployment – Life Science Ingredients (LSI), Lonza Custom Manufacturing (LCM)Lonza Custom Manufacturing (LCM) • Summary & Conclusion 4
- 5. Lonza Company Overall Strategy In clearly defined life-science markets, we focus on customers’ We offer technology solutions based on biological and chemical platforms We deliver Operational Excellence in innovation, 1 2 3 TechnologyandInnovation Safety&Health Environment&Energy OUR VISION We strive to be the leading supplier using science and technology to improve quality of life OUR MISSION We work with passion, using advanced technologies to transform life science into new possibilities for our customers OUR VALUES Influential, Enterprising, Connected External Partnerships R&D and manufacturing needs, as well as end- consumer needs. chemical platforms and end-use applications within these platforms. leadership, operations and all processes which are valued by our customers. TechnologyandInnovation Safety&Health Environment&Energy Consumers Patients Customers 5
- 6. Why Lonza Global OE Deployment? To be the best at what we do for customers & being better than ourcustomers & being better than our competitors is our right to exist! 6
- 7. Our Vision: “Finding the lowest cost way of consistently meeting customer requirements” Our Mission: Lonza Global OE Deployment Accountability & Recognition Our Mission: Lonza Operational Excellence aims to Enable the organization to grow a continuous improvement culture by engaging, empowering, teaching & coaching people to find the lowest cost way to continuously achieve customer satisfaction using lean principles to reduce waste, improve effectiveness, efficiency and generate flow. Annual Targets Training & Mentoring Quick Wins Collaboration & Communication 7
- 8. Lonza OE Globally Standardized Elements • Every site must fully aligned to company overall strategy - delivering Operational Excellence in innovation, leadership, operations and all processes which are valued by our customers • Engagement of external consultancy expertise – Green Belt training program, etc. • Lonza Excellence Program utilizing Lonza Excellence Assessment 8
- 9. Presentation Content • Lonza Global OE deployment • Greenfield implementation of Lonza (China) OE deployment – Life Science Ingredients (LSI), Lonza Custom Manufacturing (LCM)Lonza Custom Manufacturing (LCM) • Summary & Conclusion 3
- 10. Presentation Content • Lonza Global OE deployment • Greenfield implementation of Lonza (China) OE deployment – Life Science Ingredients (LSI), Lonza Custom Manufacturing (LCM)Lonza Custom Manufacturing (LCM) • Summary & Conclusion 3
- 11. Presentation Content • Lonza Global OE deployment • Greenfield implementation of Lonza (China) OE deployment – Life Science Ingredients (LSI), Lonza Custom Manufacturing (LCM)Lonza Custom Manufacturing (LCM) • Summary & Conclusion 3
- 12. Presentation Content • Lonza Global OE deployment • Greenfield implementation of Lonza (China) OE deployment – Life Science Ingredients (LSI), Lonza Custom Manufacturing (LCM)Lonza Custom Manufacturing (LCM) • Summary & Conclusion 3
- 13. So, What is OE? Improvement Journey towards Excellence Improvement usually means doing something that we have never done before ~ Shigeo Shingo 13
- 14. Presentation Content • Lonza Global OE deployment • Greenfield implementation of Lonza (China) OE deployment – Life Science Ingredients (LSI), Lonza Custom Manufacturing (LCM)Lonza Custom Manufacturing (LCM) • Summary & Conclusion 14
- 15. Results & Outcomes • Achieved a total of 1000Mil JPY (10Mil USD) bottom-line savings • Lonza OE maturity improved to System (Silver) level Greenfield implementation of Lonza (China) OE deployment level • Nurtured and developed next level of leaders – 50+ (5%) managers/supervisors, – 400+ (35%) supervisors/senior engineers and – 1000+ (90%) employees in different levels of problem solving capabilities 15
- 16. Beginning of Lonza China (4 Sites) OE Deployment • Triggered in the summer of 2008 due to a new LCM investment in China Guangzhou, Nansha • A Team of 4 was formed to support both LSI and LCM • Started with building lean fundamentals Greenfield implementation of Lonza (China) OE deployment • Started with building lean fundamentals – Workplace Organization (5S, Visual Management), – Kaizen system setup and – Management Yellow Belt training • Lonza Excellence Assessment baselining • Conducted 1st wave of Green Belt Program 16
- 17. Presentation Content • Lonza Global OE deployment • Greenfield implementation of Lonza (China) OE deployment – Life Science Ingredients (LSI), Lonza Custom Manufacturing (LCM)Lonza Custom Manufacturing (LCM) • Summary & Conclusion 4
- 18. Presentation Content • Lonza Global OE deployment • Greenfield implementation of Lonza (China) OE deployment – Life Science Ingredients (LSI), Lonza Custom Manufacturing (LCM)Lonza Custom Manufacturing (LCM) • Summary & Conclusion 4
- 19. Lonza OE Deployment House PerformancePerformance CustomerCustomer SHE Delivery CostQuality Innovation ValueBusiness: Process: Management& Capability Building(LEA) Greenfield implementation of Lonza (China) OE deployment LonzaOE/CI DeliverSignificant Business enabling & support BluB/YB/GB Program Kaizen system Key theme workshops Best practice sharing Annual Excellence Contribution Award PeoplePeople Attraction Development & Training Retention Purpose/Vision/StrategyPurpose/Vision/Strategy Project Execution Project Management& Execution OECapability Building OECulture Building(LEA) 19 Promote&DevelopLonza Culture DeliverSignificantFinancialBenefits
- 20. Lonza Excellence Assessment (LEA) PerformancePerformance CustomerCustomer SHE Delivery CostQuality Innovation ValueBusiness: Process: Management& Capability (LEA) Greenfield implementation of Lonza (China) OE deployment LonzaOE/CI DeliverSignificant Business enabling & support BluB/YB/GB Program Kaizen system Key theme workshops Best practice sharing Annual Excellence Contribution Award PeoplePeople Attraction Development & Training Retention Purpose/Vision/StrategyPurpose/Vision/Strategy Project Execution Project Management& Execution OECapability Building OECulture Building(LEA) 20 Promote&DevelopLonza Culture DeliverSignificantFinancialBenefits
- 21. Lonza Excellence Assessment Level BRONZE (41% - 60%) (12 – 24 months) SILVER (61% - 80%) (12 – 18 months) GOLD (> 80%) (12 – 18 months) Evidence of tools in use Evidence of systems in use Evidence of Principles are widely understood Existence of some static ideas Many good effective, efficient Systems Clear & ingrained understanding Greenfield implementation of Lonza (China) OE deployment A significant amount of appropriate tools and techniques application Structured use of human and technical resources Systems linked to strategic priorities Systematic improvement across supply/value chain Improved business performance Widespread involvement and empowerment Strategic focus on high value added processes Sustained business success Scoring adopted from Shingo Prize requirements 21
- 22. LEA Improvement Focus LSI LCM Continual strengthening of fundamentals such as 5S, Visual Mgmt, Standardized work Advanced lean tools & techniques such as SMED, VSM, TPM, etc. Focus improvement projects using Process design, standardization & Greenfield implementation of Lonza (China) OE deployment Focus improvement projects using DMAIC methodology Process design, standardization & management utilizing PDCA Mainly tangible financial results (Cost) Other output KPIs (Safety, Quality, Delivery) Kaizen System, Best practice sharing, Annual Excellence Contribution Award 22
- 23. Lonza Company Overall Strategy In clearly defined life-science markets, we focus on customers’ We offer technology solutions based on biological and chemical platforms We deliver Operational Excellence in innovation, 1 2 3 TechnologyandInnovation Safety&Health Environment&Energy OUR VISION We strive to be the leading supplier using science and technology to improve quality of life OUR MISSION We work with passion, using advanced technologies to transform life science into new possibilities for our customers OUR VALUES Influential, Enterprising, Connected External Partnerships R&D and manufacturing needs, as well as end- consumer needs. chemical platforms and end-use applications within these platforms. leadership, operations and all processes which are valued by our customers. TechnologyandInnovation Safety&Health Environment&Energy Consumers Patients Customers 5
- 24. Lonza Excellence Assessment Results Greenfield implementation of Lonza (China) OE deployment 60.161.0 67.5 70.0 60.0 70.0 80.0 90.0 100.0 LEAScore(%) Lonza Excellence Assessment (LEA): Lonza China 24 6.2 20.0 29.5 38.0 42.4 51.1 6.9 26.4 42.0 51.0 0.0 10.0 20.0 30.0 40.0 50.0 Apr-09 (Baseline) Nov-09 May-10 Dec-10 Jun-11 Apr-12 Dec-12 Dec-13 LEAScore(%) Time of AssessmentLSI Actual LCMC Actual LSI Plan LCMC Plan * Note that 2 different LEA tools were used for LSI and LCMC before 2012 and an improved standardised LEA tool is used in 2012 where a new baseline was established
- 25. Lonza Excellence Academy PerformancePerformance CustomerCustomer SHE Delivery CostQuality Innovation ValueBusiness: Process: Management& Building(LEA) Capability Greenfield implementation of Lonza (China) OE deployment LonzaOE/CI DeliverSignificant Business enabling & support BluB/YB/GB Program Kaizen system Key theme workshops Best practice sharing Annual Excellence Contribution Award PeoplePeople Attraction Development & Training Retention Purpose/Vision/StrategyPurpose/Vision/Strategy Project Execution Project Management& Execution OECulture Building(LEA) OECapability Building 25 Promote&DevelopLonza Culture DeliverSignificantFinancialBenefits
- 26. Lonza Excellence Academy Philosophy • Train and develop all levels of employees with appropriate skills & competencies • Increase capability used to solve larger, more complex problems & projects Greenfield implementation of Lonza (China) OE deployment complex problems & projects • Structured tiered layer of coaching support to the levels above • Recognise and value the expertise of our people Lean, entrepreneurial and learning organization 26
- 27. Lonza Excellence Academy Thinking Tell the people how to do it Develop solutions together with the employees Line Managers Lonza Excellence ThinkingTraditional Thinking Top-down Customer FocusOrientation Greenfield implementation of Lonza (China) OE deployment Far away from the daily work Functional view Process view Integrated in the daily work Everybody solves problems Brush them under the carpet Problem Solving Problems Decisions Procedures Specialists solve problems Chance for improvements 27
- 28. Blue Belt All employees – Basic Scientific Problem Solving Workplace Organization (5S, Visual Management), Standard Work, Kaizen system, Root Cause Analysis Yellow Belt Shift leaders, Supervisor & above Tiered Accountability Process, SMED, Leaders’ Standard Work, Process Mgmt, Project Mgmt Developing and recognizing all levels 1000+ (~90%) 400+ (~35%) Lonza Excellence Academy Framework Greenfield implementation of Lonza (China) OE deployment Standard Work, Process Mgmt, Project Mgmt Green Belts Managers Hoshin Planning - BU (Strategy Deployment) Black Belt Experts VSM, TPM Coaching support to the levels above Increased capability to solve larger, more complex problems & projects recognizing all levels of employees with appropriate skills & competencies 50+ (~5%) 4 (~0.5%) 28
- 29. Lonza OE Project Management PerformancePerformance CustomerCustomer SHE Delivery CostQuality Innovation ValueBusiness: Process: Capability Management& Building(LEA) Greenfield implementation of Lonza (China) OE deployment LonzaOE/CI DeliverSignificant Business enabling & support BluB/YB/GB Program Kaizen system Key theme workshops Best practice sharing Annual Excellence Contribution Award PeoplePeople Attraction Development & Training Retention Purpose/Vision/StrategyPurpose/Vision/Strategy OECapability Building Project Execution Project Management& Execution OECulture Building(LEA) 29 Promote&DevelopLonza Culture DeliverSignificantFinancialBenefits
- 30. LonzaOEProjectsCategorization Financial Impact High Green Belt projects Improvement projects 3 depts) 6 months Black Belt projects Large Improvement projects High complexity (>3 depts) Complete within 6-12 months Low complexity (within 1 dept) >30KUSD/Y >100KUSD/Y >200KUSD/Y GreenfieldimplementationofLonza(China)OEdeployment 30Input/Resources(Time,cost) HighLow Low Green Belt projects Mid-s-ze Improvement projects Mid complexity (1-3 Complete within 3-6 months Black Belt projects Large Improvement projects High complexity (>3 Complete within 6 Yellow Belt projects Small Improvement projects Low complexity (within 1 dept) Complete within 1-2 months Donottouch 30 ~25 10to15 1to2
- 31. Lonza OE Project Management • OE team responsible for the overall portfolio of projects management • Typical periodic, monthly key milestones review session with sponsors, • Regular coaching session with project leaders during project execution • Selected Yellow Belt projects Greenfield implementation of Lonza (China) OE deployment – Financially impactful projects within a department • Green Belt projects – Supply/Value Chain projects cutting across a couple of departments • Black Belt projects/program – Hoshin Planning – VSM – TPM • Annually, focus on selected 20 to 30 YB, 10-15 GB and 1-2 BB projects 31
- 32. Lonza OE Project Management • Improvement projects from all areas of operations and Supply Chain - Planning, Manufacturing, Maintenance, QC, QA, Logistics, etc. – Overall value chain lead time reduction – Planning forecast accuracy improvement, Greenfield implementation of Lonza (China) OE deployment – Planning forecast accuracy improvement, – Manufacturing cost savings in yield improvement, product quality improvement, key raw materials and energy reductions – Maintenance cost reduction in Plant availability improvement, spare parts, consumables, Changeover time reduction – QC & QA productivity improvement – Logistics cost reduction in inventory optimization, transportation cost Total savings of 3Mil USD annually for 3 consecutive years ROI of 750KUSD (75Mil JPY) per Black Belt per year 32
- 33. Presentation Content • Lonza Global OE deployment • Greenfield implementation of Lonza (China) OE deployment – Life Science Ingredients (LSI), Lonza Custom Manufacturing (LCM)Lonza Custom Manufacturing (LCM) • Summary & Conclusion 33
- 34. Lonza OE Customized Approach Summary LSI (Mature) LCM (New) Continual focus on Lonza Excellence Assessment. Focus of LEA topics is different Continual strengthening of fundamentals such as 5S, Visual Mgmt, Standardized work Application of advanced lean tools & techniques such as SMED, TPM, VSM, etc. Focus more on Blue, Yellow & Green Belt Focus more on specific key lean 34 Focus more on Blue, Yellow & Green Belt trainings Focus more on specific key lean techniques such as Leaders’ Standard Work, Process Mgmt, Hoshin planning through Kaizen events & workshops Full engagement of middle and shopfloor employees in Kaizen suggestions and improvement projects Very selective engagement of employees in OE projects that gave maximum returns, mainly managers and supervisors Focus more on financial savings through improvement projects targeting at specific problems such as overall Cost, Quality, plant availability Focus more on standardizing process using PDCA, Tiered accountability process, and further process optimization. Other output KPIs (Safety, Quality, Delivery)
- 35. Why Lonza Global OE Deployment? To be the best at what we do for customers & being better than ourcustomers & being better than our competitors is our right to exist! 6
- 36. Lonza China OE Results • Lonza Excellence Assessment representing Lonza OE maturity level improved from <10% to > 60%, achieved Silver level • Lonza Excellence Academy nurtured & developed next level of leaders – 4 Black Belts 20.0 29.5 38.0 42.4 51.1 60.1 26.4 42.0 51.0 61.0 67.5 70.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 90.0 100.0 LEAScore(%) Lonza Excellence Assessment (LEA): Lonza China – 4 Black Belts – 50+ (5%) managers/supervisors, – 400+ (35%) supervisors/senior engineers and – 1000+ (90%) employees in different levels of problem solving capabilities • Achieved a total of 1000Mil JPY (10Mil USD) bottom-line savings through OE improvement projects 6.2 6.9 0.0 10.0 Apr-09 (Baseline) Nov-09 May-10 Dec-10 Jun-11 Apr-12 Dec-12 Dec-13 Time of AssessmentLSI Actual LCMC Actual LSI Plan LCMC Plan * Note that 2 different LEA tools were used for LSI and LCMC before 2012 and an improved standardised LEA tool is used in 2012 where a new baseline was established 36 Blue Belt All employees – Basic Scientific Problem Solving Workplace Organization (5S, Visual Management), Standard Work, Kaizen system, Root Cause Analysis Yellow Belt Shift leaders, Supervisor & above Tiered Accountability Process, SMED, Leaders’ Standard Work, Green Belts Coaching support to the levels above Increased capability to solve larger, more complex problems & projects Developing and recognizing all levels of employees with appropriate skills & competencies 1000+ (~90%) 400+ (~35%) 50+ (~5%) 4 (~0.5%)
- 37. Lonza China OE Value PerformancePerformance CustomerCustomer SHE Delivery CostQuality Innovation ValueBusiness: Process: Management& Capability LonzaOE/CI DeliverSignificant Achieved a total of 1000Mil JPY (10Mil USD) bottom-line savings From 2009-2012, Lonza OE maturity level increased from < 10% to > 60% Building(LEA) 37 Business enabling & support BluB/YB/GB Program Kaizen system Key theme workshops Best practice sharing Annual Excellence Contribution Award PeoplePeople Attraction Development & Training Retention Purpose/Vision/StrategyPurpose/Vision/Strategy Project Execution Project Management& Execution OECapability Building Promote&DevelopLonza Culture DeliverSignificantFinancialBenefits OECulture Building(LEA)
- 38. Operational Excellence is an Improvement Journey ... ... not a Destination And the Journey continues… 38
- 39. Thank You!
- 40. Lonza Operational Excellence (OE) DeploymentDeployment Successful Operational Excellence Deployment Case Study