introduction to lean manufacturing achieving world-class organizationalresults

INTRODUCTION TO INTRODUCTION TO LEAN MANUFACTURINGLEAN MANUFACTURING

Achieving World-ClassAchieving World-Class

OrganizationalOrganizational

ResultsResults

Introduction To LeanIntroduction To Lean

WHAT IS LEAN MANUFACTURING?

Lean Manufacturing can be defined as: "A systematic approach to identifying and

eliminating waste (non-value-added activities)

through continuous improvement by flowing the product through flow processes based on a signal

from the customer."


What is Lean Manufacturing?What is Lean Manufacturing?

Lean manufacturing is the process of analyzing the flow of information Lean manufacturing is the process of analyzing the flow of information and materials in an environment and continuously improving the process and materials in an environment and continuously improving the process to achieve enhanced value for the enterprise.to achieve enhanced value for the enterprise.

It uses the building blocks of: standardized work, workplace It uses the building blocks of: standardized work, workplace organization, visual controls, effective plant layout, quality at the source, organization, visual controls, effective plant layout, quality at the source, batch reduction, teams, customer demand-based manufacturing, point-batch reduction, teams, customer demand-based manufacturing, point-of-use storage, quick changeover, one-piece flow, cellular manufacturing, of-use storage, quick changeover, one-piece flow, cellular manufacturing, and Takt time.and Takt time.

Lean manufacturing also applies the modern elements and technologies Lean manufacturing also applies the modern elements and technologies of scrap reduction, process improvements in machining and tool selection of scrap reduction, process improvements in machining and tool selection as well as material selection, set-up reduction, Just-In-Time, Kaizan, as well as material selection, set-up reduction, Just-In-Time, Kaizan, world class manufacturing, synchronous manufacturing, and inventory world class manufacturing, synchronous manufacturing, and inventory management.management.


CUSTOMER FOCUS

A lean manufacturing enterprise thinks more about its customers (internal & external)

than it does about running machines fast to absorb labor and overhead.

Ensuring Internal and External customer input and feedback assures quality and customer satisfaction,

Introduction To LeanIntroduction To LeanFOCUS ON WASTE

The aim of Lean Manufacturing is the elimination of waste in every area of the organization

including •Customer relations (Sales)

•Accounting• Product design

• Supplier Networks•Quality

•HR•Safety

•Manufacturing•Engineering

.


LEAN GOALS

Goal is to IMPROVE EVERY PROCESS WITHIN AN ORGANIZATION REQUIRING:

•Less human effort•Less materials•Less inventory

•Less time•Less space

To become highly responsive to customer demand while producing top quality

products in the most efficient and economical manner possible


In 1945, Toyoda challenged Taiichi Ohno to In 1945, Toyoda challenged Taiichi Ohno to learn how to compete with US Automakers not learn how to compete with US Automakers not on building large volumes of similar models, on building large volumes of similar models, but many models in low volume.but many models in low volume.

Ohno was given 3 years to develop a system to Ohno was given 3 years to develop a system to achieve this goal.achieve this goal.


Ohno went to the US and studied Ford mass assembly Ohno went to the US and studied Ford mass assembly processes at the Rouge River Plant.processes at the Rouge River Plant.

Ohno learned a lot from this experience, but felt Ford Ohno learned a lot from this experience, but felt Ford stopped short of a better system.stopped short of a better system.

Ohno also studied the supermarket concept of Ohno also studied the supermarket concept of ordering and replenishing stock by a signal system. ordering and replenishing stock by a signal system. This resulted in Ohno applying the KANBAN This resulted in Ohno applying the KANBAN concept to the system he would develop.concept to the system he would develop.


It took Ohno over 20 years to develop the system It took Ohno over 20 years to develop the system that became known as The Toyota Production that became known as The Toyota Production System (TPS)System (TPS)

It took until the 1974 Oil Crisis before outsiders It took until the 1974 Oil Crisis before outsiders and others in Japan really took notice of the and others in Japan really took notice of the TPS system that Ohno built and the way it was TPS system that Ohno built and the way it was allowing Toyota to compete when others were allowing Toyota to compete when others were faltering.faltering.


Typical use of automation which results in running parts faster and faster but result in increased inventory as downstream cells cannot use the

product as fast as the upstream equipment is producing the parts. Increases inventory which is waste


Lean Manufacturing came to the US with Lean Manufacturing came to the US with James Womack’s Book, “ The Machine That James Womack’s Book, “ The Machine That Changed The World” in 1990.Changed The World” in 1990.

Focused on Toyota Production System Focused on Toyota Production System Concepts and Why Toyota was able to so Concepts and Why Toyota was able to so successful over US Auto Manufacturers.successful over US Auto Manufacturers.


Glossary of Lean Manufacturing TermsGlossary of Lean Manufacturing Terms

Following is a short list of terms often used in explaining lean manufacturing Following is a short list of terms often used in explaining lean manufacturing techniques.techniques.

Cellular ManufacturingCellular Manufacturing - linking of manual and machine operations into the most - linking of manual and machine operations into the most efficient combination to maximize value-added activities while minimizing waste. efficient combination to maximize value-added activities while minimizing waste. A cell layout is typically U-shaped and utilizes one-piece flow.A cell layout is typically U-shaped and utilizes one-piece flow.

Kanban SystemKanban System - a pull system that uses color-coded cards attached to parts or - a pull system that uses color-coded cards attached to parts or part containers to regulate the upstream production and delivery flow.part containers to regulate the upstream production and delivery flow.

Lean ManufacturingLean Manufacturing - the process of analyzing the flow of information and - the process of analyzing the flow of information and materials in a manufacturing environment and continuously improving the process materials in a manufacturing environment and continuously improving the process to achieve enhanced value to the customer.to achieve enhanced value to the customer.

Non-Value AddedNon-Value Added - Any activity that does not add market form or function or is - Any activity that does not add market form or function or is not necessary. (These activities should be eliminated, simplified, reduced or not necessary. (These activities should be eliminated, simplified, reduced or integrated.)integrated.)


Pull SystemPull System - method of controlling the flow of resources by replacing - method of controlling the flow of resources by replacing only what has been consumed. A pull system relies on customer demand.only what has been consumed. A pull system relies on customer demand.

Push SystemPush System - resources are provided to the consumer based on forecasts - resources are provided to the consumer based on forecasts or schedules. (Lean manufacturing encourages the elimination of push or schedules. (Lean manufacturing encourages the elimination of push systems.)systems.)

Takt TimeTakt Time - customer demand rate. Takt time sets the pace of production - customer demand rate. Takt time sets the pace of production to match the rate of customer demand and becomes the heartbeat of any to match the rate of customer demand and becomes the heartbeat of any lean system. It is calculated by taking the work time available and dividing lean system. It is calculated by taking the work time available and dividing it by the number of units sold.it by the number of units sold.

Value AddedValue Added - Any activity that increases the market form or function of - Any activity that increases the market form or function of the product or service. (These are things the customer is willing to pay for.) the product or service. (These are things the customer is willing to pay for.)

Introduction To LeanIntroduction To Lean Most waste is invisible. Nor is elimination easyMost waste is invisible. Nor is elimination easy . A set of techniques that . A set of techniques that

identify and eliminate waste has evolved into identify and eliminate waste has evolved into "Lean Manufacturing.""Lean Manufacturing."

Cellular ManufacturingCellular Manufacturing Takt TimeTakt Time KanbanKanban Setup ReductionSetup Reduction ImplementingImplementing KaizenKaizen Group TechnologyGroup Technology Small and frequentSmall and frequent Lot SizingLot Sizing

Introduction to LeanIntroduction to Lean

Transforming small manufacturers to high performance requires that they address

TOOLS ASSOCIATED WITH LEAN


Understand the Current State

Start

Introduction To LeanIntroduction To LeanPresent State Value Stream Map

Introduction To LeanIntroduction To LeanFuture State Value Stream Map

Introduction To LeanIntroduction To LeanImprove processes (manufacturing; engineering; HR; Safety; Quality; Sales; Accounting) by looking at building “cells” of operations that are small complete factories of their own instead of moving products, materials and information by large lots throughout a large facility or office- Quick response Processing results

Introduction To LeanIntroduction To Lean A work cell is a work unit larger than an individual A work cell is a work unit larger than an individual

machine or workstation but smaller than the usual machine or workstation but smaller than the usual department. Typically, it has 3-12 people and 5-15 department. Typically, it has 3-12 people and 5-15 workstations in a compact arrangement.workstations in a compact arrangement.

An ideal cell manufactures a narrow range of highly An ideal cell manufactures a narrow range of highly similar products/information/procdesses. similar products/information/procdesses. Such an Such an ideal cell is self-contained with all necessary ideal cell is self-contained with all necessary equipment and resources.equipment and resources.

Cellular layouts organize departments around a Cellular layouts organize departments around a product/information/process or a narrow range of product/information/process or a narrow range of similar products.similar products. Materials sit in an initial queue Materials sit in an initial queue when they enter the cell.when they enter the cell.


Once processing begins, they move directly from Once processing begins, they move directly from process to process (or sit in mini-queues). The result process to process (or sit in mini-queues). The result is is very fast throughput.very fast throughput.

Communication is easy since every person is close to Communication is easy since every person is close to the others. This improves quality and coordination. the others. This improves quality and coordination. Proximity and a common mission enhance teamwork.Proximity and a common mission enhance teamwork.

Simplicity is an underlying themeSimplicity is an underlying theme throughout cellular throughout cellular designdesign. Notice the simplicity of . Notice the simplicity of material/information/process flow. Simpler material/information/process flow. Simpler Scheduling, supervision and many other elements Scheduling, supervision and many other elements also reflect this underlying simplicity.also reflect this underlying simplicity.


This complicated flow becomes a much improves and simpler flow between areas that are adding value

Introduction To LeanIntroduction To LeanKey Element Functional Cellular

Inter-department Moves Many Few

Travel Distance 500'-4000' 100'-400'

Route Structure Variable Fixed

Queues 12-30 3-5

Throughput Time Weeks Hours

Response Time Weeks Hours

Inventory Turns 3-10 15-60

Supervision Difficult Easy

Teamwork Inhibits Enhances

Quality Feedback Days Minutes

Skill Range Narrow Broad

Scheduling Complex Simple

Equipment Utilization 85%-95% 70%-80


An ExampleAn Example A firm that assembles air-handling products faced high A firm that assembles air-handling products faced high

inventories and erratic delivery. They originally assembled inventories and erratic delivery. They originally assembled units on a traditional line. Long setups and logistics required units on a traditional line. Long setups and logistics required long production runs. Often, they pulled products from long production runs. Often, they pulled products from finished goods and rebuilt them for custom orders.finished goods and rebuilt them for custom orders.

Twelve small (1-3 person) assembly work cells that were Twelve small (1-3 person) assembly work cells that were always set up and ready. People worked in different cells each always set up and ready. People worked in different cells each day and assembled to customer order. Finished Goods day and assembled to customer order. Finished Goods Inventory dropped by 96%. Lead-time was 24 hours. Inventory dropped by 96%. Lead-time was 24 hours. Productivity improved by 20%-30%.Productivity improved by 20%-30%.

Introduction To LeanIntroduction To LeanTraditional

ManufacturingLean

Manufacturing

Scheduling Forecast - push Customer Order - pull

Production Stock Customer Order

Lead Time Long Short

Batch Size Large - Batch & Queue Small - Continuous Flow

Inspection Sampling - by inspectors 100% - at source by workers

Layout Functional Product Flow

Empowerment Low High

Inventory Turns Low - <7 turns High - 10+

Flexibility Low High

COGS High and Rising Lower and Decreasing


Continuous Improvement Firm (CIF) versus Mass Production (MP) firm

Issues MP CIF

Strategic advantage Large volume of homogenous output

Production flexibility

Workforce Narrow specialization Multi-skilled

Output based on Forecasted demand Real demand

Productivity success factors

Quality of management; its ability to plan and to direct the implementation of those plans

The ability of the entire work force, not just management, to constantly improve both the product and the processes whereby it is produced

ISSUEOLD INDUSTRIAL

ECONOMYNEW ECONOMY

Economic Development Steady and linear, quite predictable

Volatile - extremely fast change, sudden downturns, and chaotic - the direction of the changes is not perfectly clear4

Market changes Slow and linear Fast and unpredictable

Economy Supplier-driven Customer-driven

Lifecycle of Products and Technologies

Long Short

Key Economy Drivers Large industrial firms Innovative firms

Scope of Competition Local Global hyper-competition

Competition: Name of the Game

Size: The big eats the small Speed

Marketing: Name of the Game

Mass marketing Differentiation


DEFINITION OF WASTE

Essentially, "waste" is anything that the customer is not willing to pay for.


8 TYPES OF WASTE8 TYPES OF WASTE TRANSPORTATION TRANSPORTATION WASTED MOTIONS WASTED MOTIONS EXCESS INVENTORY EXCESS INVENTORY WAIT TIME WAIT TIME SCRAP OR REWORKSCRAP OR REWORK OVER-PROCESSINGOVER-PROCESSING OVER-PRODUCTIONOVER-PRODUCTION UNDERUTILIZED HUMAN RESOURCES.UNDERUTILIZED HUMAN RESOURCES.

Waste In OrganizationsWaste In Organizationsis Usually Disguised as:is Usually Disguised as:

Lost Time/Injury Lost Time/Injury AccidentsAccidents

Scrap/ReworkScrap/Rework Machine SetupsMachine Setups Machine DowntimeMachine Downtime 33rdrd Party Inspection Party Inspection

CalibrationsCalibrations Inventory StorageInventory Storage Counting InventoryCounting Inventory Supplier Lead-timesSupplier Lead-times Product TestProduct Test Profit ReductionsProfit Reductions Falling Market Falling Market

ShareShare

Waste In the Office Is Disguised AsWaste In the Office Is Disguised As Administrative WasteAdministrative Waste

Conflicting Department Goals – not everyone on the same pageConflicting Department Goals – not everyone on the same page Traditional Accounting Methods – rewarding people for creating Traditional Accounting Methods – rewarding people for creating

waste, for example; inventorywaste, for example; inventory Poor Product Design – designs which do not include the needs of Poor Product Design – designs which do not include the needs of

the internal and external customersthe internal and external customers Long Order Processing TimeLong Order Processing Time Searching, Hunting, Looking – for files, orders, invoices, reports, Searching, Hunting, Looking – for files, orders, invoices, reports,

memos etc.memos etc. Waiting Time – waiting for batched paperwork, instructions, Waiting Time – waiting for batched paperwork, instructions,

supervision etc.supervision etc. Purchasing Reorders, TransactionsPurchasing Reorders, Transactions AuthorizationsAuthorizations

Introduction To LeanIntroduction To LeanWhat Types of Waste Do You Have in Your

Facility?

Eliminating WasteEliminating Waste

Improves our ability to Improves our ability to

provide customer satisfaction, provide customer satisfaction,

while reducing our overall while reducing our overall costs!costs!


Overproduction Overproduction

To produce more than is sold or produce it before To produce more than is sold or produce it before it is needed. it is needed.

It is visible as storage of material.It is visible as storage of material. Overproduction means making more than is: Overproduction means making more than is:

- Required by the next process- Required by the next process

- Making earlier than is required by the next process, - Making earlier than is required by the next process, or or

- Making faster than is required by the next process. - Making faster than is required by the next process.


Causes for Over Production Causes for Over Production Just-in-case logic Just-in-case logic Misuse of automation Misuse of automation Long process setup Long process setup Unleveled scheduling Unleveled scheduling Unbalanced work load Unbalanced work load Over engineered Over engineered Redundant inspections Redundant inspections


WAIT TIMEWAIT TIME

Any time that is non-value added where the Any time that is non-value added where the operator must stop producing good parts and operator must stop producing good parts and wait for: materials; instructions; Team Leader; wait for: materials; instructions; Team Leader; equipment downtime. equipment downtime.


Causes of Wait Time Waste Causes of Wait Time Waste

Unbalanced work load Unbalanced work load Unplanned maintenance Unplanned maintenance Long process set-up times Long process set-up times Misuses of automation Misuses of automation Upstream quality problems Upstream quality problems Unleveled scheduling Unleveled scheduling Poor CommunicationPoor Communication


Inventory or Work in Process (WIP) WasteInventory or Work in Process (WIP) Waste

Represents the material between operations Represents the material between operations due to large lot production or processes with due to large lot production or processes with long cycle times long cycle times

One of the most frequent types of waste and One of the most frequent types of waste and one of the most expensive to haveone of the most expensive to have


Causes of Excess InventoryCauses of Excess Inventory

Compensating for inefficiencies and unexpected problems Compensating for inefficiencies and unexpected problems Product complexity Product complexity Unleveled scheduling Unleveled scheduling Poor market forecast Poor market forecast Unbalanced workload Unbalanced workload Unreliable shipments by suppliers Unreliable shipments by suppliers Misunderstood communications Misunderstood communications Reward systems Reward systems


Over Processing WasteOver Processing Waste

Doing more processing to the parts than the customer Doing more processing to the parts than the customer really requiresreally requires

.. Over processing waste can be minimized by asking why a Over processing waste can be minimized by asking why a

specific processing step is needed and why a specific product specific processing step is needed and why a specific product is produced. is produced.

All unnecessary processing steps should be eliminated. All unnecessary processing steps should be eliminated.


Causes for Over Processing WasteCauses for Over Processing Waste

Product changes without process changes Product changes without process changes Just-in-case logic Just-in-case logic True customer requirements undefined True customer requirements undefined Over processing to accommodate expected downtime Over processing to accommodate expected downtime Lack of communicationLack of communication Redundant approvals Redundant approvals Extra copies/excessive information Extra copies/excessive information


Transportation WasteTransportation Waste

Excess Material Handling either to production Excess Material Handling either to production area or within production areas. area or within production areas.

Does not add any value to the product. Instead Does not add any value to the product. Instead of improving the transportation, it should be of improving the transportation, it should be minimized or eliminated (e.g. forming cells)minimized or eliminated (e.g. forming cells)


Causes of Transportation WasteCauses of Transportation Waste

Poor plant layout Poor plant layout Poor understanding of the process flow for Poor understanding of the process flow for

production production Large batch sizes, long lead times, and large Large batch sizes, long lead times, and large

storage areas storage areas


WASTED MOTIONSWASTED MOTIONS

Any movement that does not add value.Any movement that does not add value.

Examples: looking for tools; walking many Examples: looking for tools; walking many steps to get parts or place parts into finished steps to get parts or place parts into finished goods; more movements than necessary to goods; more movements than necessary to perform an operation. perform an operation.


Causes of Motion WasteCauses of Motion Waste

Poor people/machine effectiveness Poor people/machine effectiveness Inconsistent work methods Inconsistent work methods Failure to take ergonomic issues into considerationFailure to take ergonomic issues into consideration Poor facility or cell layout Poor facility or cell layout Poor workplace organization and housekeeping Poor workplace organization and housekeeping Extra "busy" movements while waiting Extra "busy" movements while waiting


SCRAP OR REWORKSCRAP OR REWORK

Requires additional resources and time to Requires additional resources and time to correct defects before shipping or replace parts correct defects before shipping or replace parts that are scrapped due to defects. that are scrapped due to defects.


Causes of Scrap or ReworkCauses of Scrap or Rework

Little or no process control Little or no process control Poor quality standards or inconsistent quality Poor quality standards or inconsistent quality

standardsstandards Lack of or little planned equipment preventive Lack of or little planned equipment preventive

maintenance maintenance Inadequate education/training/work instructions Inadequate education/training/work instructions Product design (Process cannot produce to quality)Product design (Process cannot produce to quality) Customer needs not understood Customer needs not understood


UNDER-UTILIZED HUMAN UNDER-UTILIZED HUMAN RESOURCESRESOURCES

The lack of involvement and participation of The lack of involvement and participation of the employees in improving operations; the employees in improving operations; quality and safety. quality and safety.


Causes of People WasteCauses of People Waste

Old guard thinking, politics, the business culture Old guard thinking, politics, the business culture Poor hiring practices Poor hiring practices Low or no investment in training Low or no investment in training Low pay, high turnover strategy Low pay, high turnover strategy Management thinking it has to “drive” everything Management thinking it has to “drive” everything

instead of involving those who know the process the instead of involving those who know the process the bestbest


SOME BASIC ELEMENTS OF LEAN •Elimination of waste •Equipment reliability •Process capability•Continuous flow •Material flows one part at a time •Less inventory required throughout the production process, raw material, WIP, and finished goods Defect reduction •Lead time reduction •Error proofing

Introduction To LeanIntroduction To Lean Stop the Line quality system Kanban systems Standard work Visual management In station process control Level production Takt Time Quick Changeover Teamwork Point of use storage

Introduction To LeanIntroduction To Lean KAIZEN

The definition of Kaizen is "improvement" and particularly------"Continuous Improvement"-- slow, incremental but constant

Small-scale improvements are easier and faster. The risks are lower because they generally have limited effect.

However, the accumulated effect is often greater than a single large improvement


Takt Time Takt Time

The desired time between units of production and The desired time between units of production and output, synchronized to customer demand.output, synchronized to customer demand.

The concept carries backward through a process stream. The concept carries backward through a process stream. Ideally, every step synchronizes with the final output.Ideally, every step synchronizes with the final output. Takt Time is fundamental to Lean Manufacturing.Takt Time is fundamental to Lean Manufacturing.


Takt time is useful for lean cells Takt time is useful for lean cells These are typical of These are typical of the work cells at Toyota and what most people think the work cells at Toyota and what most people think of when they picture a cell. of when they picture a cell.

Such cells have: Such cells have: Minimal SetupsMinimal Setups A Single RoutingA Single Routing Identical Work Times for All ProductsIdentical Work Times for All Products Job-shops and other low-volume, high-variety Job-shops and other low-volume, high-variety

operations can also use cellular manufacturing, operations can also use cellular manufacturing, it's just a bit more complicatedit's just a bit more complicated


Small lot production (ideally one piece) is an Small lot production (ideally one piece) is an important component of any Lean strategy.important component of any Lean strategy.

Lot size directly affects inventory and schedulingLot size directly affects inventory and scheduling

The larger the lot size the more time, materials, The larger the lot size the more time, materials, money, inventory, lead time, scrap is produced money, inventory, lead time, scrap is produced and lead time and scheduling is extended. and lead time and scheduling is extended.


Batching has an even greater effect on inventory. This chart shows the minimum inventory on hand downstream of the work center. A lot size of 20 units generates an average inventory of 15 units. A lot size of 200 generates an average inventory of 93 units with wide fluctuations. This is a 600% increase! Actual inventory would be much larger than shown here because of the uncertainty of fluctuations, the difficulty of correcting a stock out and the need for coping with other contingencies.


The chart above shows the effect of large and small lots on one particular work center's production. A green line shows daily demand from the customer. It averages 50 units/day and does not vary more than about 20%. The black line shows the actual production if units are made in lots of 20 or about 0.4 days of demand. With this small lot size, required production tracks demand and even smoothes the demand a bit. Output is quite linear.


A lot size of 200 units is about 4.0 days of demand. The purple line A lot size of 200 units is about 4.0 days of demand. The purple line shows production requirements. shows production requirements. Here there are large, intermittent Here there are large, intermittent swings between 200 units and 0 units-- very non-linear. swings between 200 units and 0 units-- very non-linear. This kind of pattern complicates scheduling, precludes the use of This kind of pattern complicates scheduling, precludes the use of kanban and generates large inventories. kanban and generates large inventories. The slightest glitch can The slightest glitch can cause stock outscause stock outs

Introduction To LeanIntroduction To LeanLeaders must lead! Everyone must be involved without exception! Lean applies to the office and shop floor and it “paves the approach” necessary for all other improvements which are the long-term hope for a company’s survival.

““You will achieve the level of excellence You will achieve the level of excellence that you demonstrate you want to that you demonstrate you want to achieve.”achieve.”

DupontDupont

introduction to lean manufacturing achieving world-class organizationalresults

Documents

lean manufacturing enterprise

aim of lean manufacturing

cellular manufacturing

synchronous manufacturing

lean goalsgoal

world class manufacturing

signal system

tps system