Autoliv Lean

Developing & Leading a
mature lean organisation

Strategy Actions Results Standards
The way we do things at Autoliv
Copyright Autoliv Inc., All Rights Reserved

Technology
Complete Safety System Supplier
Vision System
Inflatable Curtain
Passenger Airbag
Rear Side Airbags

Pedestrian Protection
Seatbelt Systems
Pelvis & Thorax

Side Airbag
Night Vision System
Anti-Whiplash System
Electronic Control Unit (ECU)
Driver Airbag
Steering Wheel
Anti Sliding Airbag
Other Important Products:
Child Seats Knee Airbag
Active Seatbelts
Driver Assist Radar
APS/Lean Summit/2010
Satellite Sensor Copyright Autoliv Inc., All Rights Reserved
Autoliv in Brief
Autoliv in Brief
Sales and technology leader

Sales: US $6.5 billion Japan
North
Fortune 500 company America 11% RoW
Sales to all major vehicle 24% 12%
manufacturers
~80 facilities in 29 vehicle
producing countries
All facilities have deployed Autolivs
lean system, APS.
53%
13 technical centers in 9 countries and
21 crash test tracks
Europe
~38,000 associates and 3,600
in R,D&E
APS/Lean Summit/2010 Copyright Autoliv Inc., All Rights Reserved

Autoliv in Brief
Autoliv in the World
EUROPE
Estonia
Canada
France
Germany
Hungary
USA Italy
Poland Japan
Romania China
Russia Korea
Spain Tunisia India Taiwan
Mexico Sweden
Turkey
Philippines
UK
Thailand
Malaysia
Brazil Indonesia
Australia
South Africa

Our Belief
It is not the strongest of

the species that survives,
nor the most intelligent,
but the one most
responsive to change.
Charles Darwin

Autoliv Production System
Introduction

Autoliv Production System
The Autoliv Production System (APS)
is the formalization of the Autoliv
business culture based on the Toyota
Production System (TPS) to help every
single Autoliv plant grow towards
excellence.
With APS each Autoliv plant is working

towards the same vision, to improve:
Profitability
Competitiveness
Satisfaction (Shareholders, Customers,
Employees & Society)
Who will benefit from implementation

of APS:
Customers
Company/Shareholders
Employees
Society
Creating APS
APS was created based on TPS and LEAN concepts
and launched to all Autoliv facilities during 2001-2002.
TPS LEAN
QCD Lean Lean Lean
Best Quality, Lowest Cost, Shortest Leadtime Product Manufacturing Supply
through shortening the production flow by eliminating waste Development Network
Just in Time
The right part
Culture
CULTURE Built-in Quality Lean
at the right time Lean Thinking Lean
in the right amount Accounting Organisation
Manual /Automatic Line
Stop
Pre-Conditions : Labor-Machine Separation
Error Proofing
Continious Flow Visual Control
Pull Systems Flexible, Capable,
Lean Lean Lean
Takt Time Highly Motivated
People Information Quality Distribution
Level Production
Management Management Customer Services
Operational Stability
Standardized Work Robust Products & Processes
Total Productive Maintenance Supplier Involvement The New Generation of Manufacturing Companies
APS
make use of less resources of everything
Profitability
Competitiveness
Satisfaction
Just in time Employee involvement Quality first

Leveling & Capacity Safety & Ergonomy
Quality assurance
Continuous flow Flexibility & Motivation
Pull system Discipline to standards

Quality methods
Takt time Continuous improvement
Frequent deliveries Process & Result

Six Sigma
Line concepts Dont judge, dont blame !
Team work 5S Standards Muda elimination TPM

APS HOUSE
Autol
iv
Profitability
Competitiveness
Satisfaction
Just In Employee Quality
Time Involvement First
Leveling Safety/ Ergonomy Quality
Continuous Flow Flexibility & Motiv. Assurance
Pull System Discipline to Stds Quality

Takt Time Cont Improvement Methods
Freq Deliveries Process & Result Six

Line Concepts Don't Blame/Judge Sigma
Team MUDA
5S Standards T.P.M.
Work Elimination

PRIVATE PROPRIETARY
APS is the worlds best
practice way of doing our job.

Policy Deployment at Autoliv

How do we get everyone working towards our
strategies every day?
Do people know what

we want?
Do people care?
How do we know they
are working on
important improvements
first?
How do we get buy in?
How can we follow up
without smothering?

Policy Deployment
The Compass
The compass is a very useful tool if we

are lost or not sure which direction to go.
Take any compass and it will point in the
same direction. True North.
Would it be useful to a business to have all its employees

putting their efforts to move the company in the same
direction?
Policy Deployment is the tool that helps the employees to
see the company plan direction.

Autoliv Global Policy Deployment
Annually Autoliv Globally uses Policy Deployment to drive the

following key indicators.
Quality
Cost Reduction
APS Deployment (Lean)
Test Centre Efficiency
Operations Efficiency
Financial Reporting (Time & Accuracy of Forecast)

Policy Deployment at Autoliv
How the Policy Deployment is created

Policy Deployment Process Overview
Company Level
Develop Prioritise Define
5-year current Shared
Plan period Ownership
Department Level
Senior
Department Management Department
Drafts KPIs reviews and finalises Policy
and Priorities agrees on Deployment
Input shared targets and presents it
Sub-Department Level
Each level decides Submits Draft
how it can support Policy
achievement of level Deployment for
Input above to meet approval.
Department KPIs
Company Level
Department Level
Senior
Department KPIs
Company
Plan
Reporting
Target Setting
Senior
Manager
Policy Deployment
Deploy.
Target Agreement
Dept.
Manager
Policy
Deploy.
Staff
Policy
Deploy.

Example of Dept level Policy Deployment.

Company Level
Department Level
Senior
Department KPIs
Review Frequency
Updated Monthly
Monthly review of Department Level Policy Deployments
6monthly review of Individual Staff Deployments by Managers
Linkage to Pay reviews.
Manufacturing Department internal review Weekly.
All Policy Deployments for Departments and Work Groups
displayed. Regular review with Managers.

Visual Displays in work areas.
Office Factory

Visual Displays in work areas.
APS/Lean Summit/2010
Work Platforms
Policy Deployment Objective
Get everyone to understand the Company plan direction.
Allow all employees to see where their tasks contribute to the company plan.
Provide clarity to all Staff
Link Department Plans to Company Plan
Link Individual targets to Department & Company Plans.
Standardise target Format
Monthly Scoring/Planning to aid self direction & Performance Review
One Page Target Report to be Displayed in Work Area.
Aid Communication up and down the Organisation
Facilitate Employee input to company plans
Reduce Direct Supervision time
Empower Self Directed work teams with common goals.
Move Decision Making to lower organisational levels.
Encourages Planning for Continuous Improvement

People at Autoliv
OK team!
Employee Involvement

Flexibility & Motivation
Employee
Involvement
Communicate,
Safety/ Ergonomics Satisfying Work
Communicate,
Flexibility & Motivation Communicate!
Discipline to Standards
Continuous Improvement
Process & Result Flexible &

Motivated
Don't Blame/Judge
Employees
Employee Valued Employees

Development

Training Doing Training Doing Training Doing
Our strategy us to train then apply learning straight away.
Training is cascaded. The trained become the trainers.
Training is a key element of all improvement workshops

Self Directed Work Teams
Bringing multi-discipline and multi-functional people together.
Speeds up communication and improvement.
Shared Goals and share understanding.
Empowers all levels of organisation.
Reduction in noise and waste between employees and functions.

Celebrate
Celebrate all improvement large and small.
Use close out of workshops as recognition opportunity.
Encourage and reward initiative.
Mix formal and informal opportunities to praise and teach.

Improvement at Autoliv
Continuous Improvement

Workshops
Cross Functional Teams
Specific improvement Objective
Learning Opportunity

Waste Elimination
Fundamental behind all activity

Autoliv identifies 7 types of waste
All employees trained to spot each type of waste.

5S Improvement Foundation
Everything has a place and is in its place.

Everyone can see problems, waste and improvement areas
Powerful knowledge
make workplace safer, simpler, cleaner & clearer

Autoliv Global Policy Deployment - Quality
Driven through 4 Streams
Eliminate bad
designs Eliminate bad
components Eliminate bad
manufacturing Eliminate non-
conforming products
ZERO
DEFECTS
Autoliv Product Autoliv Autoliv Autoliv

Development System Supplier Manual Production System Quality System
(ASM) (APS) (AQS)
(APDS)

Quality
Global Customer Reject Index
Index (2004=1.0)

Waste has no where to hide at Autoliv
Visual Management

Material System Overview
HEIJUNKA
Kanbans sent
3 x per day
Customer
d ay
per
3 x
3
x
Each Box Taken

pe
releases a Kanban
rd
ay
Kanbans to line
every 20mins same
qty each time
Finished Goods Buffer
Completed product
sent to Store every
Material Flow 20mins
Information Flow LINE

Visual Management - Line Queue
Yellow Means Running too fast. Minus 1 operator from

Cell
Green means running to Takt time. OK.
Red means running too slow take action.
Blue means tell management. Serious issue may lead to
missed supply to Customer.
Visual Management
Manager or Employee can easily see current condition.

Visual Management
Only have signals for what is important.
Reaction to condition must be clear. Responsibility must also be clear.
If you measure and chart ensure the following
Desired condition or target is shown.
There is a displayed action plan to improve.
Display who us responsible to update.
Ensure the team understands the chart.
Area leader must discuss chart with team regularly.
Dont be afraid to stop measuring and displaying if there is no value.
Avoid Signal Clutter

Standards & Discipline at Autoliv
Standards and Discipline

Standards & Discipline
Always update the standard when an improvement is made.
Ensure PDCA discipline in everything
meetings
workshops
quality improvements
Safety alerts and investigations
testing , design etc.

Role of Standards in Continuous
Improvement
How to implement ?
Standards
(documented work
instructions,
procedures, etc.) Continuous
are the wedge Improvement
that keeps us from
sliding back
Sta
nd a rd
s

Discipline to Standards
What is the result when we do
not follow Standard?
Waste increases
Quality Problems
Employee
Cost increases Involvement
No way to see whats normal or Safety/ Ergonomy
abnormal Flexibility & Motiv.
Discipline to Stds
In short we have Chaos Cont Improvement
Process & Result
Don't Blame/Judge

The solution is at the workplace at Autoliv
Key Lessons

Key Lessons
Go to the workplace to find the answer
5S is the platform for improvement and Visual Management
Management must demonstrate commitment, daily.
Business Plan Deployment is at the core of the Autoliv Improvement Culture
Plan Do Check Act runs through all processes
Celebrate all improvements large and small
Without Standards and Discipline there is only failure and chaos
Passion Persistence Publicity

Autoliv
Every year, Autolivs products
save over 20,000 lives
The
The Worldwide
Worldwide leader
leader in
in Automotive
Automotive Safety
Safety Systems
Systems

Autoliv Lean

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Developing & Leading a

mature lean organisation

The way we do things at Autoliv

Copyright Autoliv Inc., All Rights Reserved

Rear Side Airbags

Pelvis & Thorax

Sales and technology leader

APS/Lean Summit/2010 Copyright Autoliv Inc., All Rights Reserved

APS/Lean Summit/2010 Copyright Autoliv Inc., All Rights Reserved

It is not the strongest of

APS/Lean Summit/2010 Copyright Autoliv Inc., All Rights Reserved

Copyright Autoliv Inc., All Rights Reserved

With APS each Autoliv plant is working

Who will benefit from implementation

Just in time Employee involvement Quality first

Pull system Discipline to standards

Frequent deliveries Process & Result

Team work 5S Standards Muda elimination TPM

APS/Lean Summit/2010 Copyright Autoliv Inc., All Rights Reserved

Pull System Discipline to Stds Quality

Freq Deliveries Process & Result Six

APS/Lean Summit/2010 Copyright Autoliv Inc., All Rights Reserved

Copyright Autoliv Inc., All Rights Reserved

Copyright Autoliv Inc., All Rights Reserved

Do people know what

APS/Lean Summit/2010 Copyright Autoliv Inc., All Rights Reserved

The compass is a very useful tool if we

Would it be useful to a business to have all its employees

APS/Lean Summit/2010 Copyright Autoliv Inc., All Rights Reserved

Annually Autoliv Globally uses Policy Deployment to drive the

APS/Lean Summit/2010 Copyright Autoliv Inc., All Rights Reserved

How the Policy Deployment is created

Copyright Autoliv Inc., All Rights Reserved

APS/Lean Summit/2010 Copyright Autoliv Inc., All Rights Reserved

APS/Lean Summit/2010 Copyright Autoliv Inc., All Rights Reserved

APS/Lean Summit/2010 Copyright Autoliv Inc., All Rights Reserved

APS/Lean Summit/2010 Copyright Autoliv Inc., All Rights Reserved

APS/Lean Summit/2010 Copyright Autoliv Inc., All Rights Reserved

Copyright Autoliv Inc., All Rights Reserved

Process & Result Flexible &

Employee Valued Employees

APS/Lean Summit/2010 Copyright Autoliv Inc., All Rights Reserved

APS/Lean Summit/2010 Copyright Autoliv Inc., All Rights Reserved

APS/Lean Summit/2010 Copyright Autoliv Inc., All Rights Reserved

APS/Lean Summit/2010 Copyright Autoliv Inc., All Rights Reserved

Copyright Autoliv Inc., All Rights Reserved

APS/Lean Summit/2010 Copyright Autoliv Inc., All Rights Reserved

Fundamental behind all activity

APS/Lean Summit/2010 Copyright Autoliv Inc., All Rights Reserved

Everything has a place and is in its place.

APS/Lean Summit/2010 Copyright Autoliv Inc., All Rights Reserved

Autoliv Product Autoliv Autoliv Autoliv

APS/Lean Summit/2010 Copyright Autoliv Inc., All Rights Reserved

APS/Lean Summit/2010 Copyright Autoliv Inc., All Rights Reserved

Copyright Autoliv Inc., All Rights Reserved

Each Box Taken

Information Flow LINE

Yellow Means Running too fast. Minus 1 operator from

APS/Lean Summit/2010 Copyright Autoliv Inc., All Rights Reserved

Avoid Signal Clutter

APS/Lean Summit/2010 Copyright Autoliv Inc., All Rights Reserved

Standards and Discipline

Copyright Autoliv Inc., All Rights Reserved

APS/Lean Summit/2010 Copyright Autoliv Inc., All Rights Reserved