Quality Trucks by Quality People

Company Vision

Our culture is extremely important to everyone here at Leyland Trucks and plays a key role in keeping us at the forefront of our industry. At Leyland 'Quality Trucks Designed and Built by Quality People' is not just a catchy saying, its reality.

Effective communication is crucial to our culture and is made easier by our uncomplicated organisation structure. We have very short communication lines through which all personnel are easily accessible and can react to issues within minutes of a call.

There are five cornerstones at the heart of our culture which we call Team Enterprise; this simply means "the way things are done around here".

Our Company Vision outlines the five cornerstones of the business as:

TEAM BUILDING

LEARNING

INVOLVEMENT

EMPOWERMENT

INNOV A TION

Once an individual joins our Company, following a rigorous assessment and recruitment process, the cornerstones will feature in all aspects of their employment. In real terms this means:

TEAM BUILDING

Our own experience tells us that teams of people working supportively and effectively together will achieve much more than groups of individuals. For this reason the team is the basic building block of the organisation and features heavily in our everyday working lives. We hold periodic exercises where groups of individuals from one area of the Company, or from many, get together off-site, and work to complete challenge which helps them to understand how effective team working can be. That is then put into practice back in the workplace where every employee is a member of at least one team.

LEARNING

We aim to train and develop everyone in the business to their fullest potential in order to perform to the highest possible standards. All employees' initial training needs are established during a robust induction and then reviewed regularly under the Personal Development Plan (PDP) system.

These training needs are collated into the Company Training Plan and met by the most appropriate methods, ranging from on-the-job training, secondments, projects, external courses etc. Training matrices are kept updated on all team boards which graphically display the talents and skills of each team, recognising the adaptability and multi-skilled nature required of our operating environment.

INVOLVEMENT

All employees here at Leyland are encouraged to be involved in our business in some way; this is normally through continuous improvement activity where we can make use of the knowledge and skills that we all possess to bring about constructive change.

We place a high value on engaging our employees and take any opportunity we can to say 'Thank-You'. We hold regular events to recognise involvement and give feedback for both team based activity, projects etc. and for individual involvement such as raising improvement ideas. These events are designed to give special thanks to those involved and to ensure that we all understand the important role that we play in keeping us on our continuous improvement journey.

EMPOWERMENT

We encourage and authorise our employees to take the initiative to improve operations, reduce costs, improve product quality and customer service.

Through the process of empowerment, we created environment where individuals engage in learning processes in which they created and share knowledge, tools and techniques in order to change and improve the quality of their contribution in support of the Company objectives.

Our empowered workforce not only manage and adapt to change, they also contribute to and generate changes in their working environment.

INNOVATION

This is the key to our continuing and future success. By working together using our creative minds, we have the capability to tackle both day- to-day and future business issues and bring about effective change which helps us to stay ahead of the competition. Generating new ideas or changing working practices is the norm here at Leyland as we are encouraged to think creatively about how we might change the way we do things today and visualise how they might be done tomorrow.

We operate many structured initiatives such as Cost Management Programmes (CMP) or 'Vehicle Cost Down' exercises in which our employees and suppliers alike get involved to review the product and consider improvements.

A quick visit to our factory would be sufficient to see numerous examples of innovation in action, such as the world leading chassis robotic paint process; numerous assembly process changes that improve build efficiency; and the use of technology and ergonomic

manipulators within production which are designed to make the build process as easy and safe as possible.

"Quality, Innovation and Technology run through the veins of the Company; we are all engaged to ensure we sustain a continuous improvement growth."

3) Driving Continuous Improvement

Value Stream Mapping

Value Stream Mapping is vital in eliminating waste from the business by streamlining work processes, cutting lead-times, reducing costs and increasing quality.

We ask a team of employees to map the current state of a process from customer requirements through to delivery, including all steps, both value-added (VA) and non- value-added (NVA). Then they develop a vision of the 'future state' which acts as a blueprint when designing improvements.

This vision often represents a significant change compared to the way the Company currently operates. The team then develop an implementation strategy using this blueprint, to turn the vision into a reality.

The most urgent needs will be prioritised, and implementation will typically be accomplished in a very short time frame with appropriate resources applied.

HIKE

The High Impact Kaizen Event (HIKE) allows us to achieve spectacular improvements very quickly.

A dedicated team of 10-12 people spends up to four weeks looking for and then implementing improvement opportunities in a particular area of the business.

A recent HIKE in the Vehicle Finishing (VF) area produced a 20% reduction in truck assembly hours as well as consequential improvements in quality and inventory turns.

In every HIKE, or other improvement project, we are looking to increase the amount of value-added activity (something the customer expects to pay for) and reduce the waste (what the customer does not want to pay for).

Visioneering

One unique tool that we use successfully is the Visioneering model. This is a model of the factory which allows us to replicate future ideas and projects in such a way that we can see their impact on the whole factory. Coupled with close up photography we get a real impression of the opportunities and risks that our ideas represent.

"These ideas are the lifeblood of Leyland Trucks' future. Open-mindedness, creativity and thinking outside the box allow us to identify a whole world of possibilities."

Structured Problem Solving

All product defects - or potential defects - as defined by PACCAR standards, whether found during or at the end of the assembly process, are subject to the Red Alert process. This is a robust problem solving system used first to contain and then to resolve product quality issues within the factory.

Using a team-based problem solving approach, the first objective is to ensure that no product exhibiting this type of defect can escape the factory to the customer. When this containment is achieved, the team move to understanding the root cause of the defects and, using a Failure Mode Effect Analysis (FMEA) approach, to eliminating or at least mitigating the risk of a reoccurrence of the defect. Our target is to complete second phase within 10 days from the identification of the issue

Lean And Six Sigma

Our continuous improvement activity is based around the principles of 'Lean', removing the fat or waste from processes, and Six Sigma, an analytical approach to the reduction or elimination of the sources of process variation. 'Lean' uses simple tools to analyse and improve processes. Six Sigma allows for more detailed analysis on more complex projects.

The fundamental aim of these activities is to identify which elements add value and remove the waste that makes up other aspects of the process.

What is Waste? One example is...

"Assembling components to our trucks is value added, moving those components around the production area is non-value added, i.e. waste."

Benchmarking

"If we stand still, the world moves around us."

At Leyland Trucks we recognise this is no less true in the world of business. If we stand still our competitors will simply move on past us. To avoid this ever becoming reality, we have to move faster than the competition. But what does 'move' mean? It means to change, to improve, and to innovate. It also means to remove the things that block our path to progress, remove what we don't need, or in other words eliminate the waste.

We achieve this by constantly looking at how we do things today, comparing them with the best of the world, in our sister factories and by benchmarking world class activities in other industries. This pursuit of new ideas is a key strength of Leyland Trucks.

Every Little Counts

Leyland Trucks has seen numerous innovative transformations in recent years, all of which have contributed toward achieving and maintaining our 'World Class' status.

Changes invariably start life as an individual or team improvement idea. Those ideas are collated and managed through the Every Little Counts (ELC) employee idea generation

process that provides the means to input, implement and deliver feedback on employee suggestions.

We are all experts in our field of operation and are therefore well placed to identify where improvements can be made, but we also have valuable opinions on other aspects outside of our routine and can offer up those opinions, as a second set of eyes which often sees things differently.

There are no boundaries to the subject of ideas; the only requirement is that they must aim to bring about an improvement.

4) Manufacturing Excellence

Leading Edge Production

Whilst our assembly plant is amongst the most modern in Europe, it is continually evolving through innovation. An example of this is the robotic chassis paint process. This use of leading edge technology involves a great deal of innovation and strategy, with our ITD, Engineering and Production functions combining to provide the capability to paint a wide and complex range of vehicles robotically.

We constantly challenge our facility set-up to ensure we get optimal efficiency and that the assembly process is safe and simple. We use technology solutions like Radio Frequency (RF), advanced ergonomic manipulators to aid lifting and movement of parts as well as gyroscopic mice to enable operators to interact with Programming equipment without leaving the workstation.

Multi-skilled resource

Assembly Operations is a core business process and is split between two Business Units (BU); these are Frame Line and Vehicle Finishing. Combined they are responsible for the assembly of all vehicles with stringent quality, delivery and efficiency requirements. Each BU consists of a number of teams allocated to stages through the build process. Each team consists of approximately

15-20 operators and a Key Operator who champions the team's continuous improvement activities and promotes awareness of how these activities relate to Company Key Performance Indicators (KPI's).

Operators are trained to the highest level to carry out their assignments. Multi-skilling of operators, both within the team and from team to team, enables maximum flexibility of a key resource within the business.

Advanced Planning

As vehicles progress around the track, the Enterprise Resource Planning System (ERP) constantly monitors their position, the parts required, their locations and current stock levels. It then automatically calculates where and when parts need to be replenished and sends movement instructions to Material Handlers. ERP calculates the 'Just-in-Time'

delivery requirements so that major components are supplied as late as possible and in the correct assembly sequence.

Each week, the total daily and weekly parts requirements for the production programme are re-calculated taking into account all new customer orders. After comparing these with current stock quantities, a schedule of parts is generated and sent to suppliers electronically; accurately detailing our needs for the next 12 months.

As vehicles approach the track, ERP automatically generates build documents (Broadcasts) that specify the parts and assembly operations required to build the vehicle. There are many different broadcast types for a vehicle, which are all automatically triggered at different points in the process and provided in sequence in the specific assembly areas.

The broadcast is constructed and integrated within a vehicle specific quality document called the Vehicle Quality Record (VQR).

As the vehicle progresses through the build process, critical to quality and safety features are confirmed by individual sign-offs via the VQR which is then retained to form a traceable record of confirmed build quality.

Workload Management

Whilst our assembly processes are flexible, creating a sequence that maximises efficiency is vital. Four weeks from build, vehicles are placed in a build sequence by the 'state of the art' Advanced Planning and Scheduling (APS) system. This considers product mix factors to place vehicles into an optimal sequence and provides detailed analysis of the workload impact of the queue on all areas of assembly.

We focus on ensuring that work requirements on individuals are equally balanced within teams, and that each team is balanced within the overall production BU. Although the track speed runs at a constant rate, APS provides the capability to vary the amount of time employees spend on individual vehicles to allow more time on the more complex vehicle.

Mistake Proof Production

During the planning and design of vehicle assembly processes, consideration is always given to the quality of the end product. In order to reduce the likelihood of assembly errors during production, we use the principles of 'Mistake Proofing', which is a concept that essentially involves designing assembly processes to either reduce or eliminate the possibility of quality defects.

The Mistake Proof assembly systems in place range from processes designed to reduce the likelihood of human error, through to systems which mechanically prevent the release of a defective assembly via 'No Faults Forward' procedures. The aim as always is to deliver a vehicle of the highest quality to the customer.

Housekeeping

Housekeeping is the responsibility of all employees and is the subject of continuous auditing to ensure that our high standards are achieved and maintained.

Clear, clean and simple layout of working areas helps us to achieve good housekeeping. Standardisation of team stations and material locations within assembly, workstations within office areas and journey/notice boards across the Company ensure that we can maintain the standard easily.

Over the years good housekeeping has become a fundamental part of our working lives and made this plant into a clean, safe and agreeable place in which to work.

Team Maintenance

Well maintained and efficient production equipment is key to ensuring the overall heartbeat of the production process. A critical element within the maintenance function is the concept of 'Team Maintenance', which ensures that elements of the maintenance programme are managed by the people, who are closest to the equipment, i.e. assembly operators who use it on a daily basis.

Operators are empowered and trained to inspect, report (and in some cases repair) routine elements of the equipment. This results in a significant improvement in the Overall Equipment Effectiveness (OEE) of production equipment, and an early warning of potential equipment failure before it happens.

Material Handling

One-touch material movement from transport vehicle to line-side is essential to support Plant efficiency and maintain inventory integrity. To improve the number of one-touch actions, we use a daily measure called 'Partbeat' that identifies the percentage of material taken directly to the point of fit or line-side kitting store.

Dedicated stillages and packaging increase the Partbeat percentage as does the ERP- driven Goods Receipt function by highlighting the prioritization of parts to be moved. All material movements are made using RF barcode technology to improve material accuracy and handling efficiency. To reduce operator movement on the line, we use kitted build packs to ensure that the right parts are immediately available to the operator without wasting time picking parts.

Supplier Standards

Our drive for quality and continuous improvement does not stop at the factory gates; it also extends to our relationships and expectations from suppliers.

Any suppliers to Leyland need to demonstrate quality controls to the high standards that we set ourselves. They need to have, or be working towards TS16949 accreditation and

not only be fully conversant with Production Parts Approval Process (PPAP) but also be accomplished practitioners.

This improvement quality drive supports the PACCAR 50 Parts Per Million (PPM) reject rate initiative. Our Supplier Quality department works closely with suppliers to establish an improvement 'glide-path' to achieve the required reject rate goal.

TS16949 provides the foundation for achieving customer satisfaction and places strong emphasis on establishing, measuring and achieving improvement; it also specifies the requirement for enhanced supplier development and supplier performance monitoring.

PPAP is another pro-active cornerstone of quality improvement. It provides a structured and robust means of approving parts and ensuring supplier's processes are capable of providing conforming parts time after time.

Final Quality Validation

At the end of assembly, all vehicles are subjected to a simulated road test within bespoke dynamometer (Dyno) booths, in which performance is assessed according to vehicle types and specification. Mandatory functional checks are carried out on the braking systems and once complete, all vehicles are passed to sales.

5% of completed vehicles are randomly selected and inspected to PACCAR standards by highly trained auditors. This involves an in-depth review of system functionality, conformance and aesthetics.

Defects are categorised based upon their severity and fed back on a real time basis to Production. Root cause is identified for each issue and process design changes are introduced in order to ensure that the same defect does not recur.

Task 1

a) Review of Leyland's Advanced Manufacturing System and in particular its philosophy relating to 'Quality Trucks by Quality People' and 'Driving Continuous Improvement' respectively.

b) Using 'Manufacturing Excellence' as your reference, list and briefly describe each system or process as related to the manufacturing of Leyland trucks and identify and describe any mentioned performance tools and measures.

c) Briefly describe and discuss Leyland Trucks approach to environmental issues i.e. it's principles, it's environmental policy and key areas on which its policy focuses

a) Choose one element of 'Driving Continuous Improvement' at Leyland Trucks, a brief presentation describing it, to present to the class groupSUBMIT WITH ASSESSMENTb) Conduct a brainstorming session to generate a range of innovative ideas in relation to improving performance and sustainability in any aspect of the Leyland Trucks Advanced Manufacturing System e.g. waste and recycling; energy conservation; water quality; air quality (refer brainstorming template BELOW. You will be formed into small groups to complete exercise. The Assessor Observation Report will outline the Criteria you will be assessed on

Step 1: Define the problem/issue
What ideas/actions can be implemented at Leyland Trucks in order to ensure continued conservation of energy by ensuring that energy is used efficiently, energy waste is minimized and best practice energy conservation is always used.
Step 2: Generate ideas
Step 3: Arrange ideas into categories/themes

Step 4: Select most appropriate theme with its ideas and analyse results/effects
Step 5: Rank in order of suitability and select most appropriate solution to implement to find enduring solution to the problem

Step 6: Monitor and follow-up implementation

Step 7: Identify who the stakeholders (internal and external to the organisation) may be who need to be considered and with whom ideas for continuous improvement should be discussed