Lean Manufacturing Lean Manufacturing TakeawaysTakeaways

SCLC / ECC Spring SCLC / ECC Spring MeetingMeeting

April 26April 26thth, 2007, 2007

WasteEliminated

Lean constitutes a philosophy / culture of how to satisfy customers’ increasing demands for

greater value.

An ideal value-creation process exists whenthe fewest number of steps are properlysequenced and made to continually flow.

Remember what Lean is?Remember what Lean is?

PRODUCTSHIPMENT

CUSTOMERORDER

Lean is a philosophy which shortens the time line between the customer order and the

shipment by eliminating waste.

Time

Business as Usual

Lean Manufacturing

PRODUCTSHIPMENT

CUSTOMERORDER

Time (Shorter)

Waste

Waste

Basic Lean tools you will Basic Lean tools you will need…need…

Kanban

5S’s and Visual

Factory

Pull

Standardized Work

Process

TAKTtime

Error Proofing

Value stream mapping

Total Productive

Maintenance

Implementing Lean - LeadershipImplementing Lean - Leadership

An An inspiredinspired leader at the top is required, leader at the top is required, somebody who takes responsibility for change.somebody who takes responsibility for change.

Operating managers need continual education Operating managers need continual education and assessment to assure no backsliding.and assessment to assure no backsliding.

Change agent has to fully understand Lean Change agent has to fully understand Lean ThinkingThinking..

Remove the anchor draggers early. Small Remove the anchor draggers early. Small groups who simply can not accept new ideas.groups who simply can not accept new ideas.

Make sure Upper Management drives the Make sure Upper Management drives the initiative. (Top Down approach is essential).initiative. (Top Down approach is essential).

No cookie cutter approach; needs to take into No cookie cutter approach; needs to take into account current culture, resources, etc.account current culture, resources, etc.

Look upstream and downstream. Include Look upstream and downstream. Include entire organization (at some point in time).entire organization (at some point in time).

Emphasize that lean is a process, don’t try to Emphasize that lean is a process, don’t try to jump to an end solution. Focus on culture, not jump to an end solution. Focus on culture, not tools.tools.

Listen to consultant’s ideas and adapt them to Listen to consultant’s ideas and adapt them to your needs. Don’t follow all recipes exactly as your needs. Don’t follow all recipes exactly as presented.presented.

Implementing Lean - Implementing Lean - OrganizationOrganization

A plan for lean is like a 1 year forecast. So A plan for lean is like a 1 year forecast. So the process needs frequent modification.the process needs frequent modification.

Adapt tools as needed. Don’t force the use of Adapt tools as needed. Don’t force the use of a tool if there is no need.a tool if there is no need.

Create a Lean accounting system (ABC is of Create a Lean accounting system (ABC is of great help) around value stream costing. You great help) around value stream costing. You still need financial accounting for GAAP still need financial accounting for GAAP requirements.requirements.

Adjust metrics to support new culture.Adjust metrics to support new culture.

Implementing Lean - Implementing Lean - OrganizationOrganization

Focus on matching execution & resources to Focus on matching execution & resources to capabilities. Careful with taking in too much.capabilities. Careful with taking in too much.

Mapping processes raise awareness about Mapping processes raise awareness about current states and spark new ideas to improve.current states and spark new ideas to improve.

Involve & inform all the stakeholders from the Involve & inform all the stakeholders from the bottom up.bottom up.

Make small incremental changes constantly Make small incremental changes constantly rather than one time change. rather than one time change.

Communicate the plan with clarity to all Communicate the plan with clarity to all employees.employees.

Implementing Lean - ExecutionImplementing Lean - Execution

Focus on results (key metrics)…Focus on results (key metrics)… Get data for the last 5 years.Get data for the last 5 years. Benchmark your plant against the best plants Benchmark your plant against the best plants

worldwide.worldwide. Compare your results against your own history.Compare your results against your own history.

If there is no perceived urgent need, people If there is no perceived urgent need, people will not perceive the need to change and will will not perceive the need to change and will not change.not change.

Create scorecard to measure baseline metrics.Create scorecard to measure baseline metrics.

Set goals and Set goals and time framestime frames for success criteria. for success criteria.

Implementing Lean – Goal Implementing Lean – Goal SettingSetting

Have a communication strategy that includes:Have a communication strategy that includes: Mechanism to keep everyone informed.Mechanism to keep everyone informed. Mechanism to handle improvement ideas.Mechanism to handle improvement ideas.

Establish Roles and Responsibilities clearly. Establish Roles and Responsibilities clearly. Audit the compliance of the roles and responsibilities.Audit the compliance of the roles and responsibilities.

Teams must have authority and resources to Teams must have authority and resources to exist.exist.

Establish PBL process for teams to structure Establish PBL process for teams to structure proper meetings, to set accountability and focus proper meetings, to set accountability and focus on metrics.on metrics.

When designing work groups, try to have small When designing work groups, try to have small teams.teams.

Implementing Lean – PeopleImplementing Lean – People

Certify your staff on Lean Management Certify your staff on Lean Management techniques, prior to implementation.techniques, prior to implementation.

Spread lean techniques through intensive Spread lean techniques through intensive training across staff level.training across staff level.

Cross train employees before implementation Cross train employees before implementation of module.of module.

Train personnel on “soft skills” prior to the Train personnel on “soft skills” prior to the start of the pilot.start of the pilot.

Implementing Lean – TrainingImplementing Lean – Training

Have a well defined group compensation Have a well defined group compensation system in place before implementation.system in place before implementation.

Pay system has to achieve behavioral changes Pay system has to achieve behavioral changes that impact bottom line business results.that impact bottom line business results.

Manage new pay system.Manage new pay system.

Include indirects in your compensation Include indirects in your compensation scheme.scheme.

Set non-monetary reward systems as well.Set non-monetary reward systems as well.

Implementing Lean – Implementing Lean – CompensationCompensation

What you want to measure…What you want to measure… Productivity Productivity

Units produced per day per employee (all Units produced per day per employee (all employees in the building).employees in the building).

Throughput Time (Dock to Dock)Throughput Time (Dock to Dock) Time (in days or hours) it takes for units to Time (in days or hours) it takes for units to

move from first dock (receiving raw materials) move from first dock (receiving raw materials) to the last dock (finished goods shipping area).to the last dock (finished goods shipping area).

Total Cost / unitTotal Cost / unit Must include all costs in the garment. Must include all costs in the garment.

Overhead, variable cost, labor, materials, etc.Overhead, variable cost, labor, materials, etc.

What you want to measure…What you want to measure…

WIP Cost for the systemWIP Cost for the system Number of units inside the process times the value of the Number of units inside the process times the value of the

materials in the process.materials in the process.

First time throughFirst time through Quality level at each step accumulated across all Quality level at each step accumulated across all

steps. % of the total that make it to the end with no steps. % of the total that make it to the end with no re-work.re-work.

Productive time, Non-productive time, Productive time, Non-productive time, Waiting timeWaiting time Start by removing non-productive time into waiting Start by removing non-productive time into waiting

time. It then moves from waiting to productive time.time. It then moves from waiting to productive time.

Lean Pilot ResultsLean Pilot Results

Productivity 25 pr/person 40 pr/person 60% Improvement

Quality 4.6% defects at final audit

2.1% defects at final audit

58% less defects

Space 102 sq. ft. per person

36 sq. ft. per person

64% less sq. ft. per person

WIP 4 units of WIP per unit

produced.

0.3 units of WIP per unit

produced

13 times less units in inventory

Lead Time 3.7 days 0.27 days 93% reduction

Absenteeism 3.2% daily 2.1% daily 33% reduction

Variation in Process (Daily Schedule

attainment)

+/- 45% variation (Daily Schedule

attainment)

+/- 10% variation

(Daily Schedule attainment)

88% more reliable process (Daily Schedule attainment)

BEFORE PILOT IMPACT

Lean Improvements by teamLean Improvements by team

ProductivityProductivity

Before: 33 operators

After: 27 operators

PDCA: Implementation of Lean ToolsPDCA: Implementation of Lean Tools

Associates received an award because of their participationin a PDCA targeted at reducing the defects in Seatseam

Lean Improvements by teamLean Improvements by team

Evidence of Progress toward Evidence of Progress toward LeanLean

Increased capacityIncreased capacity Higher inventory turnsHigher inventory turns More available floor spaceMore available floor space Improved workplace organizationImproved workplace organization Improved quality: reduced scrap / re-Improved quality: reduced scrap / re-

workwork Reduced inventories: raw, WIP, FGReduced inventories: raw, WIP, FG Reduced lead timesReduced lead times Greater gross marginGreater gross margin Improved participation & moraleImproved participation & morale

Lean resourcesLean resources

www.lean.orgwww.lean.org www.productivityinc.comwww.productivityinc.com www.productivitypress.comwww.productivitypress.com www.leanadvisors.comwww.leanadvisors.com