lean manufacturing - barclays corporate bank

FS 57537

www.bourton.co.uk © Bourton Group 2009Barclays 05/2010

Lean Manufacturing -Barclays Corporate Bank

Keith Bissett

Chairman

Bourton Group

• Introductions

• Philosophy and principles of Lean

• History of Lean

• The key tools and methodologies- including exercise and examples

– Plan Do Check Act cycle

– 7 wastes

– 5s

– Standard work

– Visual Management

– Value streams

• ‘Killer questions’ to ask manufacturers to test their lean credentials

• Sectoral differences and jargon

• Q&A

www.bourton.co.uk © Bourton Group 2009page 2Barclays 05/2010

Presentation today

The Aim is to provide you with an overview of Lean

www.bourton.co.uk © Bourton Group 2009

Some of our clients

Barclays 05/2010

nationalgrid

page 3

http://www.aylesford-newsprint.co.uk/default.asp

www.bourton.co.uk © Bourton Group 2009

Experience

Construction and infrastructure

Banking and finance

Defence and aerospace

Manufacturing

"Our experience working with Bourton has been excellent.”

HR Director, MOD Agency

“We’re already talking to our suppliers about the Bourton Group. You can’t fault them.”Vice President HSEQ, Wellstream International

“They were totally focused on customers and improving service whilst reducing costs.”

Head of Operations, Corporate Bank

“Their consultancy was extremely pragmatic.”

CI Manager, Carillion

Barclays 05/2010 page 4


What we do

• Scoping and Diagnosis• Setting Direction• Management and Stakeholder

Engagement

page 5


What we do

• Strategic Process Design• Lean Sigma Projects• Rapid Improvement Events• Work Team Continuous

Improvement

page 6


What we do

• Developing Leaders for Change• Developing Teams• Training for Lean Sigma• Skills transfer• Diffusion Strategy

page 7


What we do

• Programme Governance• Planning and Reporting• Benefits Tracking• Knowledge Transfer• Communication• Knowledge Management

page 8

• Lean is a way of thinking

• Lean is a way of doing more with less – less human effort, less equipment, less materials, less time and less space

• Lean aims to come closer and closer to providing customers with what meets their needs

• At the heart of Lean are flexible, motivated team members continuously solving problems

What is Lean?

Barclays 05/2010 page 9 www.bourton.co.uk © Bourton Group 2009

Lean Enterprise is . . .

Out of shape? Cost-cut thin? Lean and fit?

Lean Enterprise – strong at delivering the right service at minimum cost


What does Lean Mean?

Principles now adopted world-wide in a variety of industries and professions

PULL

FLOW

VALUE STREAM

CUSTOMER VALUE

Understanding and agreeing exactly what your customer needs

Understanding all your processes

Pulling value through the chain

Smoothing the flow

Continuing to attack wastePERFECTION


Involvement

Flexible, motivated employees continually seeking a better way

QualityImmediately respond to

abnormalities

Prevent recurrence to achieve

Zero defects

Customer Focused

JITJust what is needed

Just the amount needed

Just when needed

via

Flow

Takt

Pull

FoundationDisciplined predictable processes relentlessly improved through

elimination of waste

House of Lean


What does Lean look like?

• Single items or small batches of work keep flowing, synchronised to delivery requirements

• Error prevention rather than checking

• Minimise work in progress, queues and delays

• Working to the beat of customer demand

• People work in self-managed teams to deliver a first class service

• Active involvement of everyone in the improvement process

• Focus on process not functions

The overriding principle is to focus on adding value and removing wasteBarclays 05/2010 page 13 www.bourton.co.uk © Bourton Group 2009

How Lean impacts the bottom line

• Do More…

─ World class customer service

─ Improved quality

─ Higher process velocity

─ Improved working environment

• With Less…

─ Equipment

─ Space

─ Human effort

─ Inventory

─ Time

• Through the relentless elimination of wasteBarclays 05/2010 page 14 www.bourton.co.uk © Bourton Group 2009

From craft production to mass production

• 1890s

─ Standard parts replace individually fitted parts

• 1900s

─ Henry Ford builds scale never seen before

• 1910s

─ Assembly lines run with unskilled people in specialised job roles-

─ Industrial engineers design every last detail of work

─ But…….The $5 day bored workers become

rich bored workers


From mass production…

• 1920s

Ford: any colour, as long as it’s black

• 1930s

You have a choice from General Motors – based on complicated forecasts and big batches

• 1950s

Mass production worldwide. Lower cost of goods, but waste becoming evident


… To Lean production

1940s

Eiji Toyoda visits Ford. Impressed with scale and flow, but sees the waste

1950s onwards

Toyota develops the “way” and the production system

1990s

“Lean” coined to describe Toyota. Worldwide publicity through books and visits. Toyota makes no secrets of its system


The Ball Game


Some of the Basic Tools

• Plan-Do-Check-Act (PDCA) – the improvement cycle that underpins Lean implementation

• The 7 wastes – the cornerstone of Lean implementation

• 5S – creating a productive and safe workplace, where abnormalities are

made visible and corrected

• Visual management – simple communication of the state of the process (e.g. what needs to be done, how things are going)

• Standardisation – doing things the same every time in the least waste way

• Takt Time – the process heartbeat to customers need

• ‘Pull’ not ‘push’ – value to the customer (e.g. the use of Kanban)

• Kaizen – the philosophy of continuous improvementBarclays 05/2010 page 19 www.bourton.co.uk © Bourton Group 2009

Attacking Waste –The Plan Do Check Act (PDCA) Improvement Cycle

The outputs from each step become the inputs for the next step.There are tools and techniques to help at each point

• Implement the change (keeping a record as you go)

• Monitor the effectiveness of your solution(s)

• If successful, capture the new standard.

• If not, re-visit root cause.

A structured method for selecting, analysing and solving problems….

• Identify the problem

• Measure the problem

• Develop solution(s)

Do

Act

Check

Plan


So what is Waste?

Non Value Added (Waste)

Non Value Added(but necessary)

Value Added activity

Capacity = value work + waste

• Is this activity something that the customer would be ‘willing to pay’ for?• Does this activity change the form or function of the product or service?• Any activity that does not add value is waste and only adds cost to the

process

Any activity that does not add value from the perspective of the customer can be defined as Waste


T ransportation

I nventory

M otion

W aiting

O verproduction

O verprocessing

D efects

Identifying Wastes – the 7 Wastes


OPERATIONAL LEAD TIME

Wasted Time and Activity

Core Process Value

Excessive Motion(Walking to Next Task, etc.)

Defective Products(Identifying, Handling, Fixing)

UnneededProcessing Time

Waiting(Often Result of

Unbalanced Tasks)

Transportation(Moving units or

Information)

ExcessiveInventories

Overproduction

> 90% of any process is wasted time or activity.

Identifying and Eliminating Waste

Reduce waste to “added value”


A methodology for achieving a consistently tidy, safe and productive environment

The 5S Process

SORTIdentify necessary items and remove unnecessary

ones.

Locate items where they are needed and limit amount stored.

STRAIGHTEN

SWEEP

Eliminate dirt, dust and scrap. Make workplace shine.

SUSTAIN

Make 5S a strong habit. Make problems appear and solve them.

STANDARDISEWork to standards, wear safety equipment.

5S

2

5 4

31


How will you as a business benefit from 5S?

• Reduced waste making work easier

• Improved safety

• Improved maintenance

• Higher quality

• Foundation for process improvement

How will individuals benefit from 5S?

• Pride in the workplace

• Internal and external customers will notice

• Achieving results with the team

What can 5s give us?


An Example: Tool Store (Pre 5S)


An Example: Tool Store (Post 5S)


To standardise a method is to choose out of the many methods the best

one, and use it. Standardisation means nothing unless it means

standardising upward.

Today’s standardisation, instead of being a barricade against

improvement, is the necessary foundation on which tomorrow’s

improvement will be based.

If you think of “standardisation” as the best that you know today, but

which is to be improved tomorrow – you get somewhere. But if you think

of standards as confining, then progress stops.”

Henry Ford, 1926

Today & Tomorrow

Henry Ford – Standards


Standardised Work is…

The current best known, least waste, combination of people and equipment…

…utilising the minimum amount of labour, space, inventory, and equipment.


StandardWork InProgress

Takt Time

WorkSequence

12

3

45

Standardised Work

3 elements of Standardised Work

No return trip, no waste

Begin

End


Visual Controls – Key Points

• Displayed where everyone can see them

• Information reflecting current conditions

• The current situation, good or bad, at a glance

• The reason for the result compared to prediction

• What countermeasures/actions are required

Visual Control MUST be simple and easily understood


Limbo Bar Example For Kanbans

Limbo bars display visually “How Much Is Ok?”


Do not use Computers Unless you Have to


Coded Scrap Hoppers


Colour Coded Dies


What is a Value Stream?

The flow of information, resources and materials that produce the ‘goods and services’ that are of value to customers.

Includes value-adding and non-value added activities


Fitter requisitions part

Team leader signs req.

Send req. to procurement.

Procurement raise order

Order telephoned to supplier

Supplier enters order to system

System prints pick note for stores

Return dely note for entry to system

Manager allocates pick sheets

Stores pick and pack for delivery

Deliver to site by van (sign for dely)

Fitter collects part

Fitter repairs equipment!

Enter D Note to system

System produces consolidated invoice

Book part into system

Inform fitter part is available

30 sec 2.5 min 6 min 4 min 30 sec 3 min 2 min1 hr

1 min 10 min 1 hr 1 min 1 min 15 min 10 min

1 min1 min1 hr

9 hr1 hr2 hr

0 hr9 hr

1 hr9 hr

0 hr1 hr

0 hr1 hr

1 hr9 hr

1 hr9 hr

Month end

1 hr4 hr

1 hr4 hr

1 hr9 hr

1 hr4 hr

1 hr9 hr

1 hr2 hr

Make-up of part cost to supplier also contains waste

Time waste 49 minutes

Cost waste £ 16.33

Part cost £ 42.70

Queue time 10 - 72 hours

Current State Mapping Example


Fitter requisitions part

Team leader signs req.

Send req. to procurement.

Procuremnt raise order

Order telephoned to supplier

Supplier enters order to system

System prints pick note for stores

Return dely note for entry to system

Manager allocates pick sheets

Stores pick and pack for delivery

Deliver to site by van (sign for dely)

Fitter collects part

Fitter repairs equipment!

Enter D Note to system

System produces consolidated invoice

Book part into system

Inform fitter part is available

30 sec 2.5 min 6 min 4 min 30 sec 3 min 2 min1 hr

1 min 10 min 1 hr 1 min 1 min 15 min 10 min

1 min1 min1 hr

9 hr1 hr2 hr

0 hr9 hr

1 hr9 hr

0 hr1 hr

0 hr1 hr

1 hr9 hr

1 hr9 hr

Month end

1 hr4 hr

1 hr4 hr

1 hr9 hr

1 hr4 hr

1 hr9 hr

1 hr2 hr

Make-up of part cost to supplier also contains waste

Can fitter be issued with P Card valid at spares supplier?

Can van deliver direct to fitter?

Can invoice be provided through P Card system?

Some Value Stream Improvements


Process Flow Map

Invoice query processF

ina

nce

Op

era

tio

ns

Tas

k F

orc

eC

red

it C

on

tro

l

Attempt to

answer

Raise

query

Create

Qdb entry

Classify

query

Attempt to

answer

Generate

spreadsheet

by user

Create

Footprint &

allocate

Send to ops

agents

Make changes

on IMMP

Close on

Footprint &

send back

Decide on

action

Raise credit on

IMMP

Approve credit

Authorise

credit

Pass credit to

SAP

Print & send

credit

Understand

questionCall from

customer

Customer

credited

83% of activities are waste. 138

days avg E2E time

72% dealt

with in CC

Write up notes

on SAP


Example of Process Flow Map


5 Why’sWhat is it?

This is a simple technique to help identify the root causes of a problem. Using the question ‘Why?’ five times (or more if necessary) it encourages people to probe below the surface to the underlying reasons for a problem existing.

What can it be used for?

During team-based problem-solving this technique helps to measure the extent of a problem by identifying root causes and influential factors. It can be used for the same purposes as a fishbone diagram.

Example PROBLEM

WHY

WHY

WHY

WHY

WHY

Operator slipped

Oil on floor

Machine leaking oil

Bearing leaking

Bearing cage broken

No preventative maintenance


Sustainable Improvement – requires a solid foundation

You should ask killer questions about each step

The 7 wastes (how many can you spot?)

5 S (does the place look tidy and organised?)

Visual management (do the information boards look up to date and tell you what’s happening?)

Standardised working (is there evidence of ‘one best way’)

Enhanced performance


Realising Benefits

The Oxford English Dictionary defines Benefit as:1. Advantage or profit. 2. A payment made by the state or an insurance scheme to someone entitled to

receive it, e.g. an unemployed person. 3. A public performance to raise money for a charity.

What’s in it for me and respect for individuals

Highest satisfaction

of needs

Total elimination of waste (Speed,

Precision and Cost)

COMPANY

CUSTOMER

EMPLOYEECOMPANY

CUSTOMER

EMPLOYEE

This will mean different things to different people


We can Categorise Benefits in different ways

Category Breakdown

Yield Type Cashable vs. Non-Cashable

Beneficiary Focused Customer vs. Employer vs. Employee

Specific Source Efficiency; Service; Quality; Time etc

How definable the Benefit is Tangible vs. Non-Tangible

How would you categorise these specific benefits?:• Reduced Lead-time to supply a given Service• Improved material yield• Fewer Customer Complaints• Better Employee Perception• Reduced Risk of Failure to deliver

What do you think your clients want from Lean?Barclays 05/2010 page 44 www.bourton.co.uk © Bourton Group 2009

Checklist for Improvement Events

Phase Benefit Focus Benefit Use Tools Available

Diagnostic High level, order of magnitude, often opinion based

Support identification of potential improvement opportunities

• Ease-Benefit Matrix•Basic Data collection•Benchmarking• Customer Feedback

Scoping More specific, types of benefit identified.Scale of benefit potential estimated

•Help to Scope event•Define type of Intervention• Focus the Team•Go vs. No-Go decision

•Basic Data Tools•Quad of Aims•Observation & Discussion

Current State Analysis

Specific definition of Waste based on real data & observation

•Baseline Current Performance

•Data analysis tools•Value Stream Mapping•Observation & recording

Future State Development

Specific Benefits identified by type with forecasts of when they will be realised

• Show success of the exercise• Justify any expense

•Benefits tracking spreadsheet• Comparison of predicted

future performance with Baseline

Implementation Realisation of forecast benefits

• Show that benefits are being realised

•Drive process owner to realise improvements

• Predicted Benefits built into Budgets & Objectives

•On-going performance Measurement


Sectoral differences in manufacturingSector Characteristics Measures Killer Questions

Automotive (supply)

High level of integration with customer. Dedicated linesShould be Lean!

PPMSchedule adherence (OTIF)CI / cost reduction activityOEE

•How many line stoppers have you caused?

•What’s your warranty costs?•What’s your Stockturn?•How are your people ‘doing CI’

Aerospace Complex bills of materialLevels of Customisation High levels of design cost per unit

• Schedule adherence•Quality metrics•Design cycle time• Lead time to delivery

•How many of your programmes are overrunning?

•What’s your Stockturn?• Which suppliers are late?

Food Flat Bills of materials High numbers of SKU’s (packaging based)Low WIP, but high raw materials and finished goods stock

•OTIF•Quality- PPM•OEE• Yield

•What stock outs have you had for key clients?

• Customer visit reports?•Biggest causes of downtime?

Process Similar to food •As above plus Safety measures

Contract High design cost per unit Scope creep from original tender

• Schedule adherence• Cost / revenue tracking

•How effective is your supply chain?

•Design hours actual vs budget?


“The greatest wasteis the waste we do

not see”

Shingo


lean manufacturing - barclays corporate bank

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