Volvo production system (VPS) pre-study

1. Volvo production system (VPS) pre-study Bert Hill Volvo Technology Corp. Volvo Technology Corp.

2. VPs pre-study background • Commissioned by KTC Production on request by GIB Technology • Completed during 2005 by Volvo Technology in cooperation with IVF Industrial Research and Development Corporation • Follow-up during 2006 • BA/BU Working Group Representatives: • Volvo Trucks – Stephan Tengberg, Tanja Anakijoski • Renault Trucks – Emmanuel Louvet • Mack Trucks – Duane Pape • Volvo CE – Keith Tipping, Joakim Olsson, Monica Bellgran • Volvo Powertrain – Leif Funke, Gunnar Bäckstrand • Volvo Bus – Fredrik Hillström • Volvo Penta – David Vincent • Volvo Aero – Johan Vallhagen, Adrian Murgau Volvo Technology Corp.

3. scope • Complete an overview of production management system activities both within and (to some extent) outside Volvo • Identify best practices within the Volvo Group • Conduct a gap analysis • Develop a strategy for VPS Volvo Technology Corp.

4. Completed tasks • Completed site assessments at six plants: • Powertrain Skövde, Renault Trucks Bourg and Blainville, Volvo Bus Borås, Volvo Trucks Curitiba, Volvo Penta Vara • Gathered information via questionnaire – 57 responses • Led five local workshops • Completed four benchmarking visits: • Volvo Cars • Scania • Tritec Motors (joint venture between DaimlerChrysler and BMW) • Renault-Nissan Volvo Technology Corp.

5. findings • Overall corporate-wide development at an early stage • Scattered activities within all BA/BUs • Low level of coordination between (and even within) BA/BUs • Written drafts • Powertrain (VoPPS) • Bus (VBPP) • ”Implemented” systems • Powertrain Skövde (TPM) • VTC Curitiba • Renault Trucks • VCE Asheville and Changwon Volvo Technology Corp.

6. conclusion • A Group-wide system should be developed • Timing is right for coordination of efforts • Commonality benefits • Reduce duplication of effort • Maximize use of resources • Speak the same language • Facilitate sharing of best practices • Facilitate industrial and personnel mobility • Support Corporate GDP • Interdependencies – Powertrain/Trucks/CE/Bus/Penta • A balanced system created via ”organic growth” Volvo Technology Corp.

7. VpS Framework • Principles • Organization • Toolkit • Driving System Volvo Technology Corp.

8. VpS principles Customer Continuous improvement Just-in-time manufacturing Built-in quality Teamwork: goal-oriented teams, cross-functional work The Volvo Way Volvo Technology Corp.

9. Built-in quality • Standard instruction sheets • Quality feedback system • Error proofing (Poka-yoke) • Andon systems • Root cause analysis (e.g. 5 Why’s) Volvo Technology Corp.

10. Just-in-time PRODUCTION • Value stream mapping • Kanban • Supermarket storage • Visual buffers Volvo Technology Corp.

11. Organization VPS Academy • develop and maintain VPS • assemble a selection of tools, based on lean production principles, which can be used to achieve improvements in production • develop a training program (train-the-trainer) to disseminate VPS knowledge and provide support in choosing appropriate tools for improvement • Provide implementation assistance VPS Network • facilitate communication, coordination and commonality of VPS between different BA/BU Volvo Technology Corp.

12. Toolkit • 5S • Kaizen (continuous improvement) program • Standardized work practices • Standardized KPIs • Andon (warning lamps) • Visual management systems A common toolkit, assembled from some of the following items: • Kanban (pull system) • Six sigma • TPM • Goal-oriented teams • Value stream mapping • OEE (overall equip. efficiency) Volvo Technology Corp.

13. Driving System • Common KPIs based on VPS Principles • Audits • Common methodology • Led by VPS Academy in beginning Volvo Technology Corp.

14. Proposed implementation strategy • Steady, sustained approach • Build on best-practices • Use VPS Network as the means to achieve commonality Volvo Technology Corp.

15. Thank you for your attention Volvo Technology Corp.