Speaking the Same “Lean”Language: John DeereManufacturing Focus onContinuing ImprovementsThroughout the Organization

Leadership and commitment within all employees.

Lea A.P. Tonkin

Guiding principles, common tools,valuable practices, and the rightmetrics — sounds like a winningcombination for a lean organiza-tion. It’s the heart of John Deere’smanufacturing approach, one theyhope will vault the company to bet-ter overall performance in customerservice, market share, and prof-itability (see the box, “About JohnDeere”). Members of the company’sPower Systems group recentlyshared key lean implementationand continuous improvement (CI)concepts integrated in an overallstrategy, during an AME workshopin Waterloo, IA. While they did notclaim to have invented these strate-gies, they affirmed their drive to

continuously create and sustain anenvironment marked by perform-ance gains designed to serve cus-tomers and all stakeholders.

Following are concepts andideas reflecting the organization’soverall excellence strategy and “les-sons learned” from the Deere educa-

tional event. Presenters secondedJim Womack’s message of theimportance of effective senior lead-ership and management accounta-bility, and the long-term commit-ment from all employees in this leanquest. The company’s success rideson this level of commitment.

In BriefImproved customer responsiveness and a commitment to long-term, organi-zation-wide continuous improvement are aggressive goals for any organiza-tion. John Deere’s approach is to develop, share, and effectively use theirguiding principles, common tools, valuable practices, and effective metrics —packaged in the Deere Production System, or DPS. In this article, key ele-ments of this continuous improvement strategy are explained.

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Update on Excellence

Deere Production System:Enterprise-wide

“We aspire to distinctivelyserve customers — those linked tothe land — through a great businessas great as our products.” That’s theJohn Deere strategy, recounted byPhil Mulvey, manager of the JohnDeere Engine Works in Waterloo. Itis supported through “exceptionalperformance, disciplined growth,and aligned teamwork,” he added.Mulvey noted that the company hadculled guiding principles, best prac-tices, tools, and training for produc-tion areas to use as they work toachieve required performancegoals. Together, they encompassthe Deere Production System, orDPS. (See Figure 1, “Elements of theDeere Production System.”)

What specific performanceimprovements do Deere’s manufac-turing units envision from this“package” of DPS elements? Mulveylisted aggressive goals for: 1) givingcustomers what they want whenthey want it (reduced order lead-times and greater flexibility); 2)progress on the safety, productivity,

quality, and cost fronts; 3) reducedcomplexity in products andprocesses; 4) better supplier rela-tionships and material leadtimes;and 5) improved manufacturingprocess uptime. In turn, they expectto trim operating costs and assetsneeded to run the business. Add tothat increased production capacityand asset velocity.

People need a common lan-guage and consistent communica-tions/understanding about goalsand strategy for this plan to takeroot and thrive. That’s why Deere’saligning its common operating phi-losophy (DPS) with shared bestpractices, concepts, and techniques(everything from Six Sigma to

employee involvement and leanmanufacturing efforts) throughconsistent training and develop-ment, common terminology andtools, and defined metrics. You cando what you can understand.

Leadership

Dennis Muszalski, manager ofassembly and manufacturing forPower Systems Waterloo operation,offered workshop participants anoverview of critical leadership activ-ities for competitive advantage iden-tified at Deere. Start with vision.Clearly define where you want to go.That means creating and sharingwhat the factory’s future desiredstate will be like, how performancewill be improved, and how neces-sary changes (such as reducingwork-in-process [WIP] inventory,leadtime reduction, and increasedorder performance) will be accom-plished. Deployment comes next.Learn to manage implementation byidentifying gaps, assigning account-ability (owners), and trackingprogress. Utilize related tools suchas value stream mapping (VSM) toidentify waste and improvementopportunities

Visibility is a key leadershipquality. By engaging in shop floorlean projects, participating in auditsto demonstrate the importance ofdisciplined execution, and encourag-ing/celebrating break-through activ-ities, they inspire employee involve-

Elements of the Deere Production System

• Leadership• Employee Environment• Structured Operational Process• Operations Planning• Material Logistics• Quality• Enabling Manufacturing & Technology Processes• Operational Availability.

Figure 1.

About John DeereFounded in 1837, John Deere now employs 46,000 people worldwide anddoes business in 160 countries. The company has Agriculture, Construction& Forestry, Commercial & Consumer Equipment, and Power Systems divi-sions. Additional divisions include Financial Services, Parts & Logistics, andHealth Care. Moline, IL-based Deere has 49 plants located in 24 countries.

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Update on Excellence

ment and successful improvementactivities.

Don’t forget about metrics,Muszalski added. Track criticalindicators such as safety, delivery,schedule linearity, product first-pass yield, raw and WIP inventory,productivity, and operating returnon assets (OROA).

Employee Environment

Deere manufacturing unitstarget “a safe and organized work-place where all employees areengaged in lean manufacturingactivities,” said Todd Schildroth,

controller at the Engine Works. Thisemployee environment componentof the DPS comprises safety andergonomics, workplace organiza-tion, and CI. Metrics range from thesafety incident rate to 5S auditresults and CI team performance.

Employee orientation and jobhazard analysis (JHA) training,proactive ergonomics activity (pre-vention of problems), and regularsafety audits are in place. Allemployees are trained to effectivelyorganize their workplaces (inoffices and on the shop floor).

In the CI arena, natural work

teams handle day-to-day problem-solving activities that are alignedwith defined goals and metrics. Thecompany and the UAW jointlydeveloped a CI process for betteringperformance in safety, quality,delivery, and efficiency.

Structured OperationalProcess

As they learned how to dealmore effectively with change andwhile promoting flexibility, Deeredeveloped a structured operationalprocess. DPS enables mixed model,homogeneous assembly; asynchro-nous assembly lines; subassembliessequenced to the final assembly line;in-process and material kanbans;and operators flexibly moving to thework, according to Jeff Behan,supervisor of industrial engineering.Their customer demand-focusedassembly process can flow productin a batch size of one.

Standardized work takesmany forms within Deere, Behannoted. For example, task time at aworkstation is calculated for a spe-cific work sequence and a consis-tent sequence of work is main-tained throughout the productionvolume range. Employees organizetasks to eliminate waste and utilizegraphical work instructions.

Their visual management orvisual factory approach enablesemployees to readily recognizeabnormal conditions. This effort issupported through the use of work-station monitors, in-process kan-bans, and a parts labeling andreplenishment system.

Operator flexibility con-tributes to overall smooth processflow. Operators are trained tooperate a workstation as well asin several adjacent workstations.Daily production volumes deter-mine the number of operators onan assembly line.

What Workshop Participants Learned “I was very impressed with the top-down support for continuous improve-ment,” said Kristine Welker, plant manager, Wahl Clipper Corporation,Sterling, IL, an attendee at the Deere workshop. “Having the key managersas element owners seemed to unite them toward one common cause.Everyone spoke the same language regarding the Deere Production System,including the team members on the floor. I asked a 28-year veteran what hethought of the DPS and he responded that it made his job simpler and moreconsistent, and it was a big help in teaching newcomers what to do.

“Deere has aligned its site and cell objectives to the overall strategy,which keeps everyone focused on the critical business issues,” she contin-ued. “I applaud them for getting understanding and acceptance from the UAWthat continuous improvement is everyone’s responsibility.”

Added workshop participant Tony Praza, vice president of continu-ous improvement at The Dexter Company in Fairfield, IA, “Each of JohnDeere’s lean leadership leaders presented their areas of responsibilities andhow they are embracing lean concepts under the DPS. Then, at the end ofthe day, a question-and-answer session really pulled things together. Theydiscussed their challenges in implementing and sustaining a lean organiza-tion; there was a free flow of ideas and information back and forth.Participants offered suggestions about what Deere and each of us could con-sider — providing good ideas and concepts as takeaways.” Praza noted thatlean concepts have encompassed excellent techniques and processes overtime (many are evolutionary rather than revolutionary). “Many companiesnow realize that you can’t take your eye off the ball — sustaining and contin-uous improvement are critical to creating real value,” he said. “People atDeere were willing to share their emphasis on sustaining their improvements.It’s appreciated when a company with the stature of Deere is willing to dis-close the lessons learned. It truly helps all of us on our lean journey …”

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The challenges of implement-ing changes are mastered througha documented process for makingrunning changes, operator trainingbefore a change takes place, andestablishment of an effective datefor each change. Employees alsoare alerted when a change isreleased.

Behan listed metrics for thestructured operational process asproduction flexibility, productivityimprovements, engineering changerevisions, and process audit results.He added that these efforts are net-ting significant operating improve-ments. For example, it took threedays to reconfigure an assemblylineup in 2003; now it takes seconds.Also, their homogeneous productmix allows Deere’s build to demandflow — any model, any time.

Operations Planning

Joe Kremer, manager of supplymanagement, offered an overviewof the DPS operations planning ele-ment. As noted earlier, their pro-duction schedules reflect a build-to-demand order fulfillment strate-gy. Synchronizing production withdemand, in turn, requires that pro-duction planning is aligned withsales and marketing. Also, they linkmaster scheduling, capacity plan-ning, and supplier capability data.

Continuous customer orderresponse time improvements arethe norm. They work towardsshorter manufacturing and pur-chased part replenishment times,improved factory flexibility, cus-tomer leadtime reductions, andconfiguring products as close to thecustomer as possible.

Related metrics, in addition toshorter customer leadtimes, arecustomer forecast accuracy, sched-ule linearity, delivery performance,manufacturing critical-path time(MCT), and raw and WIP inventory.

They’ve learned how to zip productto customers, thanks to this focus.For example, manufacturing criticalpath time reduction results includean improvement from 58 hourstest-to-warehouse in 2001 to the2005 results of test-to-warehousein 10.5 hours and assembly-to-warehouse in 22 hours. Kremersaid they improved assemblylaunch linearity by 29 percent fromApril to November, 2005.

Material Logistics

Tom Smith, manager of logis-tics, provided insight into materiallogistics’ support. For example, “areplenishment plan for every part”means that an optimal replenish-ment method is selected from apredetermined hierarchy of meth-ods; sequenced deliveries driven byschedule; visually-managed suppli-er kanbans; or planned inventoriesdriven by MRP. Improvement activ-ities also zero in on inbound logis-tics and containerization, internallogistics to the point of use, andworkstation presentation planssuch as rear-fed dedicated loca-tions in gravity racks with light-upand presence sensing for errorproofing, special manipulators forawkward or heavy parts, elevatingor roll-away pedestals for return-able containers, etc.

Don’t forget the basics ofinventory integrity. Bill of material(BOM) accuracy, shared inventoryintegrity ownership, disciplinedtriggering, rapid disposition of non-conforming material, and the famil-iar “a place for everything andeverything in its place” requireattention to detail and disciplinedexecution of the processes.

Better communications, atten-tion to quality and delivery perform-ance, and shorter manufacturingcritical-path time (MCT) efforts bringresults in the supplier development

area. Inbound logistics flowimprovement activities encompassoverseas consolidations, cross-dockutilization, domestic ship points forimporting suppliers, etc. Progress inthe MCT area as well as raw and WIPinventory, inventory accuracy (11percent improvement January-November, 2005), a 62 percentreduction in backflush errorsFebruary-November, 2005, and otherareas was reported by Smith.

Quality

Mike Harper, manager of quali-ty, cited the DPS quality activities of:planning quality into processesthrough the use of PFMEAs (ProcessFailure Mode and Effect Analysis),controlling processes, application oferror- proofing, a “no fault forward”environment, and continuouslyimproving processes. CI activities,for example, include VSM, CI GrowTeams (natural work teams thathave quarterly goals for continuousimprovements), Six Sigma projects,and a corrective action process.

They look for quality progressin process first-pass yield, supplierppm, product and process auditresults, and other areas.

Enabling ManufacturingTechnology and Processes

Deere also seeks to leveragetechnology for improved manufac-turing, product design, and shopfloor execution through enablingmanufacturing technology andprocesses. Paul Mason, divisionengineer, said one of the criticalactivities in this area is virtual andconcurrent engineering. They usecomputer models for product,process, and facility simulation.Performing e-builds helps engi-neering and others to identifypotential production issues beforephysical builds.

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A manufacturing executionsystem incorporates tools for deliv-ering and capturing shop floorinformation (product traceability,operator work instructions, mistakeproofing, etc.). They incorporatemore effective technologies asappropriate. More agile, lower-costmanufacturing and better ROI(return on investment) are amongtheir metrics. Mason noted anexample of manufacturing flexibili-ty: a 9.0L cylinder head machiningcell achieved one-piece lot sizewith zero setup.

Operational Availability

Mel LaPrell, business unitmanager, shared details on theoperational availability element ofDPS. Total Productive Maintenance(TPM) moves equipment perform-ance into manufacturing’s bailiwick(treat equipment like the car youown, not the car you rent) — it is nolonger just a maintenance issue, he

said. LaPrell described how manu-facturing ownership extended tosupervisors as well as operators.They now focus on overall processeffectiveness (OPE), also known asoverall equipment effectiveness(OEE). That means attention to pre-ventive and predictive mainte-nance, keeping equipment clean,performing maintenance checks,and notifying maintenance if some-thing appears wrong.

Results count in this key area.Metrics include unplanned workorders generated, preventive main-tenance routines competed, opera-tor check sheets completed, criticalworkstation OPE, and mean timebetween repair (MTBR). LaPrell saidprogress includes a 32 percentreduction March-November 2005 in“machine down” work orders.

Impact

Deere is counting on excep-tional performance, growth, and

teamwork to pull off significantimprovements in customer respon-siveness and long-term viability.Will their organization-wide effortsto package and effectively use all ofthe DPS elements do the trick?Although there is no way to accu-rately predict the future, their pres-ent commitment to shared continu-ous improvement remains strong.

Editor’s note: The assistance of JohnDeere’s Dave Christensen and DeniseClark-Burke in the development ofthis article is appreciated.

Lea A.P. Tonkin, Woodstock, IL is theeditor of Target Magazine.

Update on Excellence

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