lean and agile approaches to manufacturing and process improvement dr peter ball centre for...
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LEAN and AGILEapproaches to manufacturing
and process improvement
Dr Peter Ball
Centre for Strategic Manufacturing
www.dmem.strath.ac.uk/csm/p.d.ball@strath.ac.uk
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A Lean and Agile Manufacturing
What are they? What are the benefits? How to do it? Case studies Sources of further information
Lean Thinking roots in Toyota Philosophy
Doing it all for the Customer Levelled production Pull system Continuous-flow production Takt time Multi-skilling TQM TPM Poka Yoke SPC Standardised work Kaizen
workcentre
workcentre
K K
store
replacement batches
kanbans withdraw & process
Item Qnty Day 1 Day 2 Day 5Runner 100 20 20 20
Repeater 27 7 7Stranger 5 5
Load 132 27 27 25Cap’ty 135 27 27 27
Uncompetitive Competitive
Competitor
Continuous improvementSelf
Present change
Co
mp
etit
iven
ess
Time
time
Upper action limit
Upper warning limit
aver
age
action?
What is Lean Manufacturing?
Builds on roots but with specific focus on:
Lead time reduction Regular production New products
Flexibility improvement
Variability reduction
Cost reduction
Lean Characteristics & Benefits
Characteristics Benefits (higher …)
Customer DrivenCustomer Driven
Profit DrivenProfit Driven
Team BasedTeam Based
Fewer PlayersFewer Players
Devolved responsibilityDevolved responsibility
Customer SatisfactionCustomer Satisfaction
ProfitabilityProfitability
Greater ControlGreater Control
Improving business performance
Increase turnover Sell more Charge more
Reduce cost Reduce direct material cost Improve production efficiency/effectiveness Increase the rate of adding value
Time based competitiveness - some rules
0.05 to 5 Value actually added between 0.05% - 5% of total time
Source: survey of industry (by Boston Consulting Group?)
3 / 3 Why no value being added:
Waiting for completion of batchesWaiting for physical / intellectual reworkWaiting for management decision
3 x 2 Lean competitors enjoy x3 avg growth rate, x2 profit margin
1/4 - 2 - 20 For every quartering of total time, productivity doubles,
costs reduce by 20%
What is World Class Manufacturing?
Being the best
Being the lowestcost producer
Delighting thecustomer?
Schonberger’sagenda?
What is World Class Manufacturing?
Product quality right first time, every time
Product quality right first time, every time
Reduction of waste in the manufacturing
system
Reduction of waste in the manufacturing
system
Flexibility & control to satisfy customer on
time, every time
Flexibility & control to satisfy customer on
time, every time
Managing through people, teams and aligning all to goals
Managing through people, teams and aligning all to goals
How to go lean
Objective Method
Understand customers and what value they want
Setting the direction, targets and checking
results1
Define the internal value stream
An internal framework for delivering value2
Eliminate waste, make info & products flow, pulled by
customer needs
Appropriate method to make necessary change3
Extend the definition of value outside your
company
Externalise the value focus to the whole value stream4
Continually aim for perfection
Strive for perfection in the product and in all
processes and systems5
Cornerstone of Lean Manufacturing
Value stream mapping Construct process map of the value stream
Avoid using existing maps, may be out of date or have misconceptions
Analyse the process mapFocus on customerIdentify value-added and non-value-added activities
Calculate the value-add ratio Reduce and eliminate wasteful steps
(several value streams exist in a value chain,
e.g. key product line to key customer)
Many mapping tools (process activity, supply chain response, quality filter, etc.)
Many mapping tools (process activity, supply chain response, quality filter, etc.)
Conduct all improvements in context of value-add ratio
Demand amplification mapping
Many tools exist including demand amplification mapping
Concerned with batching and response time
Spreadsheet example from IOM publication shows effect
Capability of processes and the dangers
Need to establish capability in all processes Need capable machines Need capable suppliers etc.
Danger is that you can base lean on poor foundations Focus on assembly area when machine shop is not capable Focus on production processes when supplier is not capable
Need to be careful with available literature, can assume You have sales and operations planning You have capable machines etc.
If your production planning function was likely to produce infeasible plans occasionally would
you trust them?!
If your production planning function was likely to produce infeasible plans occasionally would
you trust them?!
See roots of leanthinking slide
Capability / variance
Variation of output of a process can give rise to defects internally and/or passed onto customer
Aim to reduce process variation to increase reliability of a process
This is the foundations of Six Sigma methodology …
Nominal
Upperspecificationlimit
Lowerspecification
limit
±3±6
Defects 1350 parts per million
Defects 0.001 ppm
Six Sigma
A complete methodology for improving the business or simply a process reliability concept?
Key to Motorola, GE and other businesses at all levels
Executive visionExecutive vision
Assess & kickoffAssess & kickoff
Deploy strategyDeploy strategy
MeasurementMeasurement
AnalysisAnalysis
ImprovementImprovement
ControlControl
Select champions …
Train and set up structure …
Map, id critical input/output variables …
Determine variance …
Design of experiments …
Use control charts …
Project implem
entation
Agile – a step on from lean?
Roots of agile in America defence industry – developing the ability to react and reorganise to successful equipment bids
Lean and agile have common components See “Lean Thinking Roots” slide (quality, reliability,
improvement, etc) But lean is process focused, agile is boundary focused
Ability to thrive in constant, unpredictable changeKey attributes of agile
Customer value focus (solutions not products) Flexibility to adapt to fundamental market changes
Not simply changes in product mix Competing from multiple fronts, possibly virtually Organisational knowledge, including ability to adapt IT
systems to support new processes
Different views on lean -vs- agile
TraditionalTraditional LeanLean AgileAgile
The journey
LeanLean AgileAgile
Make to stockLow variety
Mass, repetitive“Cost minimiser”
Make/Engineer to order, High variety, Service culture
“Product Innovator”?“Customer intimate”?
A spectrum of companies
ComplementaryStock
(to decouple)
LeanLean AgileAgileMaterialsuppliers
customer
Make to forecast Make to order
Upstream variation Downstream variation
Establishing Foundations for Lean, Agile …
Need the classic pre-requisites for any programme Strategy Commitment Objectives Communication Empowerment Establish framework Activity plan, cost, time and execution Measurement and evaluation system
Culturechange
Use ofchampion
Key to Lean Manufacture is measurement
Need clear, objective focus on value
Example: OEE (Overall Equipment Effectiveness) A composite measure of the ability of a process to carry out
value adding activity OEE = % availability x % output achieved x % perfect
output If change to a process increases OEE it is worthwhile
Actual Available Production TimeTheoretical time minus planned downtime and shutdownsThis is the realistic best available production time (100%)
Planned DowntimePM, Shutdowns, Holidays
Machine Running TimeActual production hours minus downtimesThis is possible production if 100% performance
Unplanned LossesBreakdowns, HR, Set-up time
Availability
Net Operating TimeMachine speed against theoretical speedThis is the possible output if 100% quality
Speed lossesIdling, minor stopages performance
Performance
Useful Production TimeMaterial in minus product outThis is the real output
Quality Losses, adjustments, Set-up waste
Quality
OEE
OEE Example Calculation
PerformanceG. Total dozens produced = 3869 dozenH. Balanced Speed (180 BPM=0.067) = 0.067I. Performance (HxG / Ex100) = 85%
QualityJ. Rejects during operating time = 20 dozenK. Rate of quality products (G-J / Gx100) = 99%
Overall Equipment EffectivenessOEE (F x I x K / 10000) = 52%
Loading TimeA. Working Time = 525 minsB . Line Off Time = 30 minsC. Loading Time (A-B) = 495 mins
Line Off Time Lunch break 30 mins Asset Care 0 mins
AvailabilityD. Downtime = 190 minsE. Operating Time (C-D) = 305 minsF. Availability (E divided by C x 100) = 62%
DowntimeStart up 30 minsShut down 20 minsBreakdown 40 minsChangeovers 90 minsMaterials Supply 10 mins
Cost benefit analysis
Costs Benefits (higher …)
InvestigationInvestigation
ImplementationImplementation
Project specificProject specific
Customer SatisfactionCustomer Satisfaction
ProfitabilityProfitability
Greater ControlGreater Control
Summary
Strategy that encompasses business [profit] objectives and customer order winning [and maintaining] criteria
Achieve short-term, KPI-driven improvements consistent with strategy
Plan and act for sustainable change
Example: Rolled metal manufacture (batch)
Major initiative to remove waste Significant formal education and training Targeted specific product stream From supplier to customer Mapped out processes and established measures
Result Major quality improvements, 60% drop customer complaints Other significant financial benefits
Short / long term EVA moved negative to neutral
(EVA=Economic Value Add -> sustainable investment)
Openness of data systems!
Example: Bottled water (process)
Phase 1 Education and training of teams Use of DTI funding via TCS Programme (tcd.co.uk) Full integration of sales, purchasing, manufacturing Improved management information system (Soft) greater teamwork, responsiveness From 80% to 100% peak season stock cover Sales up 30%, same headcount
Phase 2 (underway) Production processes focus Introducing OEE Focus on waste CI, include quick changeovers Ambitious, achievable targets Self-managed work teams
DEPALLETISER
TOPSTAR/DUBUITT
RINSER
FILLER
CAPPER
LABELLER
OCME (S/wrapper)
HANDLE APPLICATOR
PALLETISER
STRETCHWRAPPER
CASE SEALER
CASE ERECTOR
CASE PACKER
FIL
LIN
G H
ALL
BO
TT
LIN
G H
AL
L
Example: Whisky bottling (process)
Use of OEE as key measure
Specific focus on bottling lines Low OEE
Start / stopBreakdowns
Introduced asset care5S Sort, Straighten, Sweep, Standardise, Self disciplineQuick changeoversReliability centred maintenance
Asset care programme brought £0.5m savings in 6 months
Useful sources of informationwww.competitiveSCOTLAND.com
Seminars, resources & discussion for Scottish manufacturing
Centre for Strategic Manufacturing web site dmem.strath.ac.uk/csm/ (this presentation, resources, lean courses)
James Womack & Daniel Jones, Lean Thinking: Banish Waste and Create Wealth in your Corporation (Simon & Schuster, 1996)
John Bicheno, The Lean Toolbox, 2nd edn (Picsie Books, 2000) http://www.picsie.co.uk/ (£10?)
Peter Hines & David Taylor, Going Lean: a guide to implementation (Lean Enterprise Research Centre, Cardiff Business School, 2000)
Institute of Operations Management (IOM) Papers and courses on Lean, Agile, etc, see iomnet.org.uk Seminars (e.g. Recently: Lean at Boots, 5S at Ratheon)
Pande, Neuman, Cavanagh, R.R. 2000 "The Six Sigma Way”, McGraw-Hill ISBN 0-07-135806-4 (£20) For knowing about it without actually dealing with the detail
Breyfogle 1999 "Implementing Six Sigma - Smarter Solutions Using Statistical Methods" Wiley-Interscience ISBN 0-471-29659-7 (£60) Good for detail if you actually want to implement it
Agile http://www.agility.co.uk/ or internet search for “agile” (care with “agility”!)
LEAN and AGILEapproaches to manufacturing
and process improvement
Dr Peter Ball
Centre for Strategic Manufacturingp.d.ball@strath.ac.uk
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These slides can be downloaded from:www.dmem.strath.ac.uk/csm/
Rebbit!
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