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21st International Conference of the TOC Practitioners Alliance - TOCPA www.tocpractice.com
11 November 2015, UK
The Royal Mint 11th November 2015
21ST TOCPA CONFERENCE 1
TOCPA CONFERENCE 11TH NOVEMBER 2015
Cash Flow: transforming the UK’s oldest manufacturing company”
The Royal Mint 11th November 2015
21ST TOCPA CONFERENCE
BACKGROUND TO THE ROYAL MINT • 1100 years old; the oldest manufacturing operation in the U.K. and possibly the third oldest in the world. • Move from London to Llantrisant for decimalisation • 38 acre site, 760 employees (900 with agency) • Exclusivity on UK coinage • Manufactures coins for 60 other countries • Self-financing Trading Fund status 1975 • Vested 2009,Royal Mint Ltd, 100% Treasury-owned • 5 billion coins manufactured annually • Prior to vesting, Mint run by Civil Service as a manufacturing operation The Royal Mint 11th November 2015
21ST TOCPA CONFERENCE
THE ROYAL MINT – Three “businesses” • Circulating Coin • Commemorative Coin • Bullion
– Four Production Departments • • • •
Melting, Rolling and Blanking Annealing and Plating (Blank Processing) Coin Production (Finishing and Processing) Commemorative Coin
– Functional support • Business Services, Finance, Procurement The Royal Mint 11th November 2015
21ST TOCPA CONFERENCE
MANUFACTURING SYSTEM -HISTORICAL CONTEXT – Manufacturing units run as silos – Volume mentality (tons and millions) – Highly variable product quality – Poor inventory management – Little “through-business” visibility – Overseas delivery performance – No fixed plan- lots of expediting – 9 week lead time through the plant!!!
The Royal Mint 11th November 2015
21ST TOCPA CONFERENCE
MANUFACTURING SYSTEMHISTORICAL CONTEXT – New Senior Management Team • New mind-set, new values – Increased levels of global competition – We had a smouldering platform… – We had to win hearts and minds..
The Royal Mint 11th November 2015
21ST TOCPA CONFERENCE
OUR APPROACH
– Chief Executive support – Engage external expertise – Dedicated project team – Cross functional – Senior management included in make up – Wide spread communication – Work shops to engage whole work force..
The Royal Mint 11th November 2015
21ST TOCPA CONFERENCE 7
LAYOUT OF THE SITE – MOVING PLANT DIFFICULT
PLATING
PLATING
ANNEALING & FINISHING PLATING STRIKING ROLLING & BLANKING
DESPATCH
MELTING
The Royal Mint 11th November 2015
21ST TOCPA CONFERENCE
THE OUTCOME – Adopt a virtual pipeline approach • 4 pipelines based on material
– Protected upstream by 3 day buffer after Melting, Rolling & Blanking – Down stream processes to have 20% head room – Managed by daily review of flow – Striking omitted – press requirements change.. The Royal Mint 11th November 2015
21ST TOCPA CONFERENCE 9
THE SYSTEM & PRINCIPLES – Schedule the constraints – Upstream 3 day buffer governs Melting, Rolling & Casting. Stop when full – Smaller buffers between down stream processes to manage variation – Buffers limited in size by defined floor space – When down stream buffers are full, stop. – Manage inventory by limiting the number of containers in each pipeline – Containers colour coded to prevent cross usage.. The Royal Mint 11th November 2015
21ST TOCPA CONFERENCE 10
THE PIPELINES Schedule
RM MRB Hot End Steel Inv. MRB Cold End
3 Day Buffer
Copper Plating
3 Day Buffer
Copper Plating
Zinc Plating
Annealing
3 Day Buffer
Nickel Plating
Annealing
Finishing
3 Day Buffer
Finishing
Striking Edge Letter
Annealing
Finishing Ring Master
Packing
Buffer
Drum
Rope The Royal Mint 11th November 2015
21ST TOCPA CONFERENCE
LEAD TIME REDUCTION 9 WEEKS TO 9 DAYS
RM
MRB Hot End
RM
MRB Cold End
3 day Buffer
•
Now very predictable
•
Delivery performance greatly
Pipelines
Striking
Average Lead Time = 11.7 Days
improved •
Packing
CoPQ reduced ~50% The Royal Mint 11th November 2015
21ST TOCPA CONFERENCE
FG
THE CHALLENGES – Mix – ratio of coin versus blank changed • Down stream bottle necks created
– Plant – having 20% head room • Investment in new annealing furnaces and finishers
– Synchronizing 2 pipelines • Bi metallic products (e.g. £2)
– Sticking to our principles – easy when everything is going well! • Stopping constraints when down stream buffers full.. The Royal Mint 11th November 2015
21ST TOCPA CONFERENCE
13
WHAT HAVE WE LEARNT? – Tackle the whole system with a cross-functional team: sales, planning, production
– Don’t just look at part of the flow or one product family
– Dedicate resources to an intensive project and give them a coach
– Keep everyone informed about findings not just solutions
– Take difficult decisions and make policy changes clear (e.g. stock write-off) ..
The Royal Mint 11th November 2015
21ST TOCPA CONFERENCE
IT’S HOW WE WORK, NOT A PROJECT… – Daily flow meetings • Standard meetings to understand performance of schedule execution • Review time taken for containers to move onto next process after arrival at current process
– Day by hour boards • Measure against the standard throughput • daily meeting to resolve issues and escalate problems
– New rules and routines for sales, planning and production. • Sales and operation planning process vital to the success of new way of working..
The Royal Mint 11th November 2015
21ST TOCPA CONFERENCE
KEEP IT SIMPLE & VISUAL Flow Meetings Day by Hour
Tier Boards
The Royal Mint 11th November 2015
21ST TOCPA CONFERENCE
IT’S HOW WE THINK… (REAL QUOTES) – “We used to work in departments with lots of inventory between each one: now everyone has an end-to-end view and material keeps flowing: we think about delivery to the customer, not just what our department has produced.”
– “We spent all day expediting material because priorities were always changing: now the schedule is stable so we can concentrate on team-leading.”
– “We used to be driven by measures of volume (tonnes and millions): now we aim for delivery performance and prioritise by schedule adherence and flow rate.”
