C.H Prahallad, Corporate Quality & OPEX, 08.09.

2011

ABB Supplier Improvement Program

Open Session of the ISO General Assembly

ABB Supplier Improvement Program

CII ABB Cluster Approach
CII & ABB has a long and everlasting association
CII has always been an encouraging factor for tie-up
CII ABB Vendor Cluster Program first launched in Nashik in 2006
Since then 3 more cluster, 1 at Faridabad (2007) & 2 at Bangalore (2008 &
2010) was initiated
Handholding sessions and feedback from experts like Dr. Sarita Nagpal, Mr.
Girish, Mr. Harinder, Mr. Kulkarni, Mr. Sivakumar, Mr. Joshi & Mr. Sibasis have
helped all of us to learn and touch new highs.
Given a good platform for the vendors of ABB to represent themselves in
National level competitions

ABB Group
2011-09-26 | Slide 2

ABB Supplier Improvement Program

Cluster Approach - Formation
Suppliers selected for the cluster program based on a predefined criteria.
Cluster Program duration decided on the scope between 6 to 12 months.
Cluster program to follow definite Road Map and Project Plan
Progress shall be measured by monitoring the Key performance indicators.
Kick- off meeting conducted with Suppliers CEOs, ABB SCM Division Head
and ABB Operations managers.
Monthly Review Meeting ( MRMs) are conducted every month at the
supplier premises to review the progress .

ABB Group
2011-09-26 | Slide 3

ABB Supplier Improvement Program

Cluster Approach - Supplier selection criteria
Suppliers for this program were shortlisted based on the following criteria :
Volume of Business / Spend .
Suppliers dependability on ABB ( based on percentage of his total business)
Delivery performance.
Quality performance.
Process audit scores.
Suppliers attitude to do business with ABB.
Overall Rating by the selection team

ABB Group
2011-09-26 | Slide 4

Product Quality
SOP
Problem solving
Poka Yoke

Reliable Quality &

Delivery at low cost

Management System Quality

Shift Management
MIS - Key Indicators
Visual Factory

Good Management
Practices

Equipment Quality
Model Machine
Breakdown Reduction
SMED
Employee Quality (TEI)
3M
5S
Safety Management
Suggestion Scheme
ABB Group
2011-09-26 | Slide 5

Healthy
Equipments

Motivated
Employees

Competitiveness

ABB Supplier Improvement Program

Methodology for CII ABB Vendor Cluster Program

ABB Supplier Improvement Program

Organisation Structure: Program review mechanism
Steering Committee :
1.
2.
3.
4.

Program Owner

Country Quality & OPEX Head

Location Head
Division/ Location SCM Head
Division/ Location Quality Head

Corp. OPEX Resource

..
Location OPEX Resource
..

Program Team
1. ..
2. ..
3. ..

Supplier 1

Supplier 2

Supplier 3

Supplier 4

Supplier 5

Supplier 6

..........

ABB Group
2011-09-26 | Slide 6

ABB Supplier Improvement Program

Methodolgy - ABB OPEX 4Q
4Q Process

ABB Group
2011-09-26 | Slide 7

Q1 - Measure

Q2 - Analyze

Define opportunity.
Investigate to understand
the current state in detail.

Identify and confirm root

causes of the problem.

Q4 - Sustain

Q3 - Improve

Maintain the
improvements by
standardizing the work
methods or processes.

Develop, pilot, and

implement solutions that
eliminate root causes.

ABB Supplier Improvement Program

Methodology - Deliverables

Major Tools :

Pre-4Q 5S ( Progress to continue throughout the program)

Quadrant 1 tools:
Basic Process Mapping- SIPOC
Data collection & Charting

Red Tagging completion

Baseline KPIs measurement
Current state Process maps

Quadrant 2 tools:

Suggestion scheme is in place

Root cause analysis ready with
real root causes identified.
Outcome of 7Waste exercise.
5S Scores improved
Layout options to be ready as per
lean flow. 5S Scores improved.
SMART Action plan ready
Verify & validate improvements
Implement actions on solution plan
To be process maps implemented
Standard operating procedures
established to suit the new process.
Develop control plans.
Monitor progress sustained 5S
and share lessions learnt

Kaizen
Fishbone analysis & 5Why analysis.
Waste Identification ( 7 Wastes)

Quadrant 3 tools:

ABB Group
2011-09-26 | Slide 8

Deliverables

OPERA Opportunity storming

SMART action list

Quadrant 4 Tools:
Poka Yoke
Visual Management
Standardization tools

ABB Supplier Improvement Program

Key Indicators Of Operational Excellence: CII ABB
Vendor Cluster Program
7 PRIMARY INDICATORS :
Not Right First Time
Labor Productivity
Stock Turnover (Inventory Turn Ratio-ITR)
Delivery Schedule Achievement
Overall Equipment Effectiveness (OEE)
Value Added Per Person
Floor Space Utilization
11 SECONDARY INDICATORS :
5S
Quick

Changeover- Customer Response

Inventory Control ( Red,Grey,Green Visual Inventory)
Safety
Absenteeism
No. of suggestions per employee
Employees involved in Improvement Activities

ABB Group
2011-09-26 | Slide 9

ABB Supplier Improvement Program

Concepts and Tools used
5S & 3M
ABB Control Plan Templates
Quality Plan
4Q for Continuous Improvement Process
Lean Manufacturing Concepts (SMED, Flow Oriented Layout, Poka-yoke
etc.)
OHS Standards
Theory of Constraints (TOC)

ABB Group
2011-09-26 | Slide 10

ABB Supplier Improvement Program

Methodology: CII ABB Vendor Cluster Road map
ROAD MAP
S.
NO.

MONTH

MANUFACTURING
EXCELLENCE

TRAINING
PROGRAM

HANDHOLDING
VISIT

June10

5S&3M

VISIT - 1

July10

VISIT - 2

AUG10

Flow Mfg &

Kaizen

VISIT - 3

SEP10

VISIT - 4

OCT10

Defect
Analysis

VISIT - 5

NOV10

ABB Group
2011-09-26 | Slide 11

VISIT - 6

OUTPUT/RESULT

Employee
Involvement, Clean
and Neat
Factory ,Identification
and elimination of
Wastages, Data
collection of MIS
1S-2S, 2S ,
3M and Defect Kaizen,
Single piece flow
concept

MRM

MRM - 1

MRM - 2

MRM - 3
MRM - 4
MRM - 5

ABB Supplier Improvement Program

Methodology: CII ABB Vendor Cluster Road map
ROAD MAP
S.
NO.

MONTH

MANUFACTURING
EXCELLENCE
TRAINING
PROGRAM

HANDHOLDING
VISIT

SMED & Poka

Yoke

VISIT - 7

JAN11

FEB11

MAR11

10

APR11

VISIT - 10

11

MAY11

VISIT - 11

12

Sept11

ABB Group
2011-09-26 | Slide 12

VISIT - 8
Autonomous
Maintenance

VISIT - 9

OUTPUT/RESULT

MRM

Defect and 3M Kaizen

Reduction in changeover
time, Reduced inventory

MRM - 6

Defect and 3M Kaizen

Reduction in changeover
time, Reduced inventory
Kaizen

MRM - 7
MRM - 8
MRM - 9
MRM - 10

Graduation Ceremony

ABB Supplier Improvement Program

Kaizen Examples: CII ABB Vendor Cluster Program
Kaizen No.: MES-02

KAIZEN THEME :
Reducing Cycle Time of
Assembly for AC Plates.

KAIZEN SHEET
KAIZEN IDEA: Decided to keep it
ready before panels came to factory.

COUNTER MEASURE :
We kept readily our required AC
Plates before panels came to factory.

PROBLEM STATUS :
Assembly and Wiring of AC Plates,
Normally, we do after panels came
to factory.

TEAM: Zone-04
IDEA BY:

Mr. Somashekhar

STARTING DATE :

29.08.2010

COMPLETION.DATE :

01.09.2010

BENCH MARK:

3Hrs.

TARGET:

1Hrs.

BENEFITS

BEFORE

QUALITATIVE

AFTER

P
Q
C
D

PROBLEM ANALYSIS :
Why? Are we doing AC plates of
assembly and wiring after
panels came to factory?

Benefits :
-We have saved 2 Hrs. in Assembly
& Wiring of AC Plate Per Panel.

-2Hrs x 40Panels = 80Hrs Per Month

S
M
RESULTS :

PLAN FOR HORIIZONTAL DEPLOYMENT

3.5

ROOT CAUSE : Improper

System following.

QUANTITATIVE

HOURS

WHERE

WHO

WHEN

STATUS

2.5

1.5
1
0.5
0
Previous

Present

Zone 4,5 & 6

Somu

29.8.2010

Properly
maintained.

ABB Supplier Improvement Program

Standards used
Indian Standard : IS 15171 : Guidelines for Establishing and Implementing 5S
Concept
ISO/TS 10004:2010 : Provides guidance in defining and implementing processes to
monitor and measure customer satisfaction.

ISO/TR 10017:2003 : Guidance on statistical techniques for ISO 9001:2000

ISO 21747:2006 : Statistical methods - Process performance and capability statistics
for measured quality characteristics
ISO 11462-1:2001 : Guidelines for implementation of statistical process control (SPC)
- Part 1: Elements of SPC
ISO 11462-2:2010 : Guidelines for implementation of statistical process control (SPC)
- Part 2: Catalogue of tools and techniques

ISO/TR 22514-4:2007 : Statistical methods in process management - Capability and

performance - Part 4: Process capability estimates and performance measures
ABB Group
2011-09-26 | Slide 14

ABB Supplier Improvement Program

Standards used
ISO/TR 18532:2009 : Guidance on the application of statistical methods to quality and
to industrial standardization
ISO 3951-1:2005 : Sampling procedures for inspection by variables -- Part 1:
Specification for single sampling plans indexed by acceptance quality limit (AQL) for lot-

by-lot inspection for a single quality characteristic and a single AQL

ISO 7870-1:2007 : Control charts - Part 1: General guidelines
ISO 7966:1993 : Acceptance control charts
ISO 10014:2006 : Quality management - Guidelines for realizing financial and
economic benefits
ISO 10002:2004 : Quality management - Customer satisfaction - Guidelines for
complaints handling in organizations

ABB Group
2011-09-26 | Slide 15

ABB Supplier Improvement Program

Tangible Benefits: CII - ABB Cluster Program
Average Capacity increase by 28%
Reference ISO 21747:2006
Reference ISO/TR 22514-4:2007
Reference ISO 7870-1:2007
Average On Time Delivery increased from 72% to 95%
Reference ISO 10014:2006
Reference ISO/TS 10004:2010
Implemented Kaizens 115Nos, Identified Kaizens 195Nos
Reference ISO 10002:2004
Floor Space Saving 9000 Sq. ft. (approx.)
Reference IS 15171
Average FPY at suppliers increased from 70% to 92%
Reference ISO 3951-1:2005
ABB Group
2011-09-26 | Slide 16

ABB Supplier Improvement Program

Intangible Benefits: CII - ABB Cluster Program
Increase in Employee Morale & Suggestions
Reduction in Absenteeism
Customer Delight

ABB Group
2011-09-26 | Slide 17