International Investor Conference - Paris – Oct 2, 2008
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World Class Manufacturing
Towards excellence at Fiat Group
Stefan Ketter
Fiat Group Executive VP & Chief Manufacturing Officer
International Investor Conference - Paris – Oct 2, 2008
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Structure & Objectives
International Investor Conference - Paris – Oct 2, 2008
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WCM - 20 Pillars in a 7 steps approach
Base
Preventive
Base
Proactive
International Investor Conference - Paris – Oct 2, 2008
Preventive
Proactive
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WCM Principles
1.
World Class Safety is the foundation of World Class
Performance
2.
WCM Leaders have a passion for high standards
3.
In a World Class Company the voice of the customer is heard
in the plant
4.
Under WCM, no inefficiencies of any kind are acceptable
(goal is always Zero: accidents, service & quality defects,
inventory, breakdowns)
5.
A rigorous application of WCM methods guarantees the
elimination of inefficiencies
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WCM Principles
6.
In a World Class plant all abnormalities are immediately visible
(dust & contamination free, tracking, control charts…)
7.
WCM takes place in the workplace, not in the office
8.
WCM is most effectively learnt by practicing the techniques
with the teams in the plant
9.
The power of WCM comes from the involvement of people
10. World Class companies create crisis-level energy even in the
presence of continued success
International Investor Conference - Paris – Oct 2, 2008
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WCM Focus
All Employees
Waste and Inefficiencies
Standards and Methods
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Key Elements
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An Integrated and Systematic Approach
Fiat
Advanced
Production
System
International Investor Conference - Paris – Oct 2, 2008
Roadmap
8
Extension Towards Suppliers
Cost
Quality
Maintenance
Logistics
€
Q
M
L
SUPPLIER
Involvement in WCM program of ~100 suppliers by end 2010
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Expansion
150 Group plants worldwide
= WCM launched first at Fiat Group
Automobiles (FGA) in 2005
= Strong Group commitment for all other
Group businesses (CNH, Iveco, FPT
Powertrain Technologies & Magneti
Marelli) since 2006
„ 76 Group plants already involved in WCM
program (124 expected by end 2009)
= Achievements: 9 plants now at “Bronze”
level
Italy
„
Cassino (FGA)
„
Melfi (FGA)
„
Sevel (FGA)
„
Termini Imerese (FGA)
„
Pratola Serra (FPT)
„
Verrone (FPT)
Brazil
„
Betim (FGA)
Poland
„
International Investor Conference - Paris – Oct 2, 2008
Tychy (FGA)
Turkey
„
Bursa (FGA)
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WCM at CNH
Cost
Zedelgem
Antwerp
Grand Island
= 20 plants intensively involved
(accounting for ~90% of costs
in WCM perimeter)
Modena
Racine
New Holland
Jesi
Saskatoon
Basildon
Fargo
San Mauro
Curitiba
= Focus on short term productivity
improvements involving Fiat
WCM experts
Wichita
Lecce
Plock
Imola
Burlington
St. Valentin
Belo Horizonte
Croix
= ~2,000 improvement projects
already in place
Calhoun
Benson
Tracy
Goodfield
Coex
NHM
Dublin
Belleville
Piracicaba
Berlin
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Main achievements
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Cost Deployment & Projects
Group-wide
Cost Deployment
International Investor Conference - Paris – Oct 2, 2008
Number of Projects
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Labor Productivity
FGA plants in Italy & Poland
Transformation cost = 100%
- 30%
Technical efficiency
Inefficiencies
Waste / Rework
vs. ‘06 level
- 20 %
Line balancing
Range
Range
- 50%
vs. ‘06 level
- 25 %
Non Value Added
• Logistics layout
• Time optimization
Operation
2006
Sep ‘08
International Investor Conference - Paris – Oct 2, 2008
2010E
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Safety
Suzzara plant (Iveco)
Fatal
-85%
60
Severe
%
Injuries
Jun ‘07
Dec ‘07
May ‘08
Jun ‘07
Dec ‘07
May ‘08
First Aid
Near Misses
+300%
Unsafe Conditions
Unsafe Acts
Q2 ‘07
Q1 ‘08
Unsafe Acts
Unsafe Conditions
Near Misses
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Cost deployment & Maintenance
Sevel plant (FGA)
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Professional Maintenance
Sevel plant (FGA)
Data Collection for Breakdowns
Countermeasures for Breakdowns
OEE Stratification – Impact of Breakdowns
on Machine Availability
OEE
Availability
Performance
Quality
+ 15% Overall Equipment Effectiveness
Gen
Feb
Mar
Apr
May
Giu
Jul
Sept
Oct
International Investor Conference - Paris – Oct 2, 2008
gen-08
feb-08
mar-08
apr-08
mag-08
giu-08
lug-08
ago-08
17
set-08
ott-08
Quality Control
Light Commercial Vehicle plant (FGA)
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Removal of Non Value-Added Operations
Melfi plant (FGA)
Value Added
28
%
2006
Sep '08
More than 60% time saved for the operation
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Logistics
Sevel plant (FGA)
81% savings on material, packaging, transports, containers
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Technology Standards
FGA
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Environment
FPT plant
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WCM Academy
Classroom
Simulation
Study mission
On the job
Classroom
Manufacturing Training System
Visits to competitors
Trainer support
Self training
Model factory
Visits to Fiat plants
In-plant projects
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Manufacturing Training System
Definition of
training needs
Definition/
assessment of
instructors
Communication
plan
Create training
areas
Training &
certification of
instructors
Training &
certification of
line workforce
= Increasing safety awareness &
developing responsibility at all
levels, removing unsafe acts &
unsafe conditions
= Developing & consolidating skills
= Improving quality & removing
re-works
= Developing proactive attitude in
manufacturing workforce
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International Benchmarking
Study Missions
= Accessing and benchmarking best-in-class competitors
„
Visits to World Class factories (Toyota, Komatsu, Denso...)
„
About 80 Fiat people involved in benchmarking activities in 2008
= Targeting to develop top-class manufacturing processes (logistics, quality...)
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Spotlight on
Giambattista Vico plant
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Giambattista Vico plant
Crash Program
• Upgrade G. Vico plant to competitive
performance levels
• Extraordinary 2-month temporary
shutdown
Crisis-level energy to
produce success
• Over €100mn investment
•
Refurbishing/relocation of production
equipment
•
Re-engineering material workflows
•
Workplace re-qualification
• Extensive training
•
All employees
•
Focus on WCM methods and tools
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Giambattista Vico plant
Education & On-the-Job Training
Phase 1 “Trainers”
Training
“internal trainers”
Phase 2 “Employees”
Training through
“internal trainers”
TUTORSHIP
266 Leaders
International Investor Conference - Paris – Oct 2, 2008
About 7,000 employees
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Giambattista Vico plant
Education & On-the-Job Training
• 5,600 tons of unnecessary
material removed from the
production areas
• 16,000 quick kaizen resulting
from employee suggestions
• More than 900 major kaizen
implemented
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Giambattista Vico plant
Re-engineering
• Moved door equipment in
body shop
• Reduced working stations
in assembly line
• Finishing area closed
• Reduced logistics areas
• New metrology room
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Giambattista Vico plant
Re-engineering in the Assembly Shop
Number of workplaces (before) 213
Number of workplaces (before) 216
Number of workplaces (after) 149
Number of workplaces (after) 145
International Investor Conference - Paris – Oct 2, 2008
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Giambattista Vico plant
Re-engineering in the Assembly Shop
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Giambattista Vico plant
Achievements
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Giambattista Vico plant
Communication Plan
= For both families and employees
„ Letters and DVDs from Plant
Manager
„ Meetings with all Plant
employees
„ Medical Center
= Pomigliano and the Institutions
„ Municipalities, meetings with the
mayors and national media
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“Lean Production” Implementation vs. Competition
Source:
Annual Harbour report (2006 & 2007)
Company projections (2008 & 2010)
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WCM Roadmap
gold
100
40
30
Knowledge
creation
10 plants
50
76 plants
9 plants at
bronze level
60
EU Plants
Audit result %
70
silver
Consolidation /
Autonomous
Improvement
bronze
80
All
Plants
90
Savings: > €500mn
20
Model areas
10
2006
0
1
3
5
7
2007
2008
2009E
2010E
9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67
Months from program launch
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Safe Harbor Statement
Certain information included in this document is forward looking and is subject to important risks and
uncertainties that could cause actual results to differ materially. The Company's businesses include its
automotive, automotive-related and other sectors, and its outlook is predominantly based on its
interpretation of what it considers to be the key economic factors affecting these businesses.
Forward-looking statements with regard to the Group's businesses involve a number of important
factors that are subject to change, including: the many interrelated factors that affect consumer
confidence and worldwide demand for automotive and automotive-related products; factors affecting
the agricultural business including commodities prices, weather, and governmental farm programs;
general economic conditions in each of the Group's markets; legislation, particularly that relating to
automotive-related issues, agriculture, the environment, trade and commerce and infrastructure
development; actions of competitors in the various industries in which the Group competes;
production difficulties, including capacity and supply constraints and excess inventory levels; labor
relations; interest rates and currency exchange rates; political and civil unrest; and other risks and
uncertainties. Any forward-looking statements contained in this document are referred to the current
date and, therefore, any of the assumptions underlying this document or any of the circumstances or
data mentioned in this document may change. Fiat S.p.A. expressly disclaims and does not assume
any liability in connection with any inaccuracies in any of these forward-looking statements or in
connection with any use by any third party of such forward-looking statements. This document does
not represent investment advice or a recommendation for the purchase or sale of financial products
and/or of any kind of financial services. Finally, this document does not represent an investment
solicitation in Italy, pursuant to Section 1, letter (t) of Legislative Decree no. 58 of February 24, 1998,
or in any other country or state.
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Contacts
Fiat Investor Relations team
Marco Auriemma
phone:
+39-011-006-3290 Vice President
Vincenzo Torrisi
Federico Donati
Roberta Roccati
phone:
phone:
phone:
+39-011-006-2749
+39-011-006-2756
+39-011-006-2709
fax:
email:
+39-011-006-3796
[email protected]
website:
www.fiatgroup.com
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