A story about Manufacturing and Visteon - Part 1 So here we are part of the Visteon Corporation.

It has been four years since we became an independent company. I don't know if you remember, but when we became independent, there was a lot of publicity. There were celebrations at all the Visteon sites - some sites seemed to enjoy it more that others! I remember watching live broadcast scenes on TV. People in Brazil dancing and singing, people in the USA cheering, and in the UK people looking very glum! There was a lot of attention in the world of finance too. There always is when a new company is released onto the stock market. So straight away people started asking, "who is Visteon?", and "what do they do?" and "will they make a profit?" As a company we had to start answering these questions. But one question took a while to answer. "What do they do?" meant that we had to describe how we do our business, Sales, Finance, Production etc. So the leaders in manufacturing got people from all parts of manufacturing in Visteon to get together and define how we should run our factories. And so it came to pass that we got something called "VMOS" which describes the way we are supposed to run our production facilities. So there we have it. VMOS was with us. And we said OK we work to VMOS. Until something else comes along! Then we started asking "How does this affect me?", and "what do I have to do now?" Well maybe a look back in history will help us with what we need to do next.... Back in 1926, Henry Ford published his famous book "Today and tomorrow". He described a number of concepts which make production efficient. One quote speaks to standardising: "Today's Standardisation... is the necessary foundation on which tomorrows improvements will be based." With Henry Ford's ideas, production of cars rose dramatically, and other companies copied the concepts used by Ford. Ford was not alone in wanting to improve production methods. In the early 1900s the Japanese were up against stiff competition from Britain in production of cloth. Sakichi Toyoda, founder of the Toyota group, invented a loom in 1902 which stopped when a thread broke. This allowed Japanese companies to produce high quality cloth with no waste and with fewer attendant operators. Meanwhile the British manufacturers struggled with poor quality and high material costs. Japanese cloth manufacture soon outperformed that of Britain, where the industry declined. The concept of stopping production when there was a problem became key to the Toyota Production System. In the 1930s, Sakichis son Kiichiro Stephen Burford 11/07/2012 Page 1

took charge of the newly formed Toyota car production business. Kiichiro decided to visit the USA to learn from car production there, and copied many aspects, but adapted them to the small batch production which was required in Japan. After the Second World War, there were severe financial constraints on Japanese companies. That meant that only small batches of cars could be made, and until they were sold, there was no money to make more cars. This led Kiichiro Toyoda to create a "just in time" system which proved to be very good for cash flow. In the 1956, Taichi Ohno, an Executive of Toyota made a visit to the USA, again to collect "best practices" which they could copy. When in a supermarket they noticed that if there was a problem at the checkout, the checkout person would press a button and a light, (lantern, or ANDON in Japanese) would come on. Immediately a supervisor came to help the checkout person. They noticed that immediately a tin of beans was taken from the shelves, they would be replaced by employees stacking the shelves. Toyota adopted these concepts, and over time, adapted these concepts to the production of cars. Taichi Ohno then documented the way the company works and this became the Toyota Production System. Only 26 pages long it shows how simple the Toyota way is. Yet to get the philosophy of Toyota typically takes people much longer. By 1974 all the major Toyota factories had adopted the Toyota Production System. Then Toyota went to work on its suppliers. The amount of activity in improving productivity in Japan attracted interest from the west. Jim Womack and Dan Jones went to Japan to study Toyota in the 80's. They were surprised at the level of productivity they found. The book "The machine that changed the world" was released by Womack, Jones and Roos in 1990. It acted as a wake up call to industry in the west. Many people seemed to use the book looking for a quick fix to become productive and make profit. We must remember that Toyota have been working on this for 100 years. And they copied what they know from the west! What we see is a repeating pattern. Companies adopt some parts of the system, like KANBAN, or Synchronous material flow, or just in time. But without a complete system, the individual tools fail to make an impact.

Stephen Burford

11/07/2012

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What we need is a way to define the goals, whether they are for profit, or quality, or new business. Then we need to choose projects and tools which will make delivering goals easier. Wouldn't that be neat? So this is why we are here today. To make some sense of the task we face and the tools we have to help us. We have a system to work to in Visteon. We have a Manufacturing Operating System. VMOS is the process which helps us to choose projects and tools which make delivering our objectives a little bit easier. If we live our manufacturing work life in the framework of VMOS it can make our lives easier and more effective, and direct us towards a more competitive and profitable future. A story about Manufacturing and Visteon - Part 2 What it could be like? How will things look when we fully adopt the VMOS ways? When we go into the factory it would look like a Visteon Factory. At first we are not sure why, it just feels like a Visteon factory. But then we notice that people have taken care with the colour and style of the surroundings. They are in the Visteon Brand style. If we were a Visteon customer we would be in no doubt that we are in a Visteon Factory. If we look a round, it takes only a few minutes to locate information. The information we find tells us the status of the products in production. We can see if the production is on time, and if there are any problems with production. If there are problems we can see what they are and what is being done to contain and fix them. We can see the flow of material in the plant. We can see when material must be replaced or removed. So can material handlers. They work to a standard pattern of material flow yet they seek to improve the effectiveness of their time. The pattern of work in production is being done in a repeated fashion, same way every time. We can see which end items are being produced, and when a changeover is due. Changeovers are smooth and are conducted without disruption. People are seeking to make the work more efficient, there is real evidence of operators sharing their ideas to improve. Not all tools and equipment are exactly in place, but we can see this, and we can be sure that these will be replaced by the end of the shift. Stephen Burford 11/07/2012 Page 3

We can see the checks which operators make to keep tools and equipment in perfect condition. Machines and equipment are running efficiently there is some visual clue to the effort which is used to check machines and equipment will stay running. Plans for improvement activities are posted in an area where they can be worked with. Work assignments and responsible people are clearly shown. Mentoring is a regular activity which allows people to develop their skills and effectiveness. The results of this activity are shown in measurable improvements in Safety, Delivery, Quality and Cost. We feel proud to work in a factory which runs so efficiently and is always improving. We are confident of our future and proud of the products we make. We are happy to build a future for ourselves and our colleagues, and we are prepared to work hard to keep what we have. We will work hard because our colleagues rely on us, and we know that they work hard for us. None of our competitors has a chance of being as good as we are.

Stephen Burford

11/07/2012

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