2015 John P. Shewchuk Lean Manufacturing Course Notes 1 - 1

1. INTRODUCTION TO LEAN MANUFACTURING

(from Schey, J., Introduction to ManufacturingProcesses, 2nd. Ed., McGraw-Hill, 1987)

Manufacturing vital source of wealth for almost all industrialized nations.

High level of manufacturing activity high standard of living.

20- 30% of GNP.

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High manufacturing capacity ability to survive war. American Civil War: North. WWII: America and Russia.

Importance of manufacturing to a countrys prosperity, survival cannot be overestimated.

Throughout history, various approaches to manufacturing have propelled nations to manufacturing preeminence. Latest of these: lean manufacturing.

To fully understand lean manufacturing, necessary to understand its historical origins.

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1.1 EARLY MANUFACTURING

4000 BC 1700s: hand-made items (copper, gold, brass). highly-skilled craftsmen, crude tools.

= ?

Mid-1700s: Division of Labor (Adam Smith).

divide work into tasks.

each worker specializes in a separate task.

human and animal energy.

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1760 1830: Industrial Revolution (England). first machine tools.

steam engine (James Watt).

Factory system organization based upon division of labor.

1798: Interchangeable Parts (USA).

muskets (Eli Whitney),1798.

-

prerequisite of mass production.

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i) Scientific Management (Taylor) Separate planning from production. Single best way time/motion studies. Assign jobs (short, repetitive tasks) to workers. Workers do assigned jobs: no input.

1800 1920: Second Industrial Revolution

While Taylorism often viewed negatively, many of Taylors pioneering ideas remain in use today:

T M S

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ii) Mass Production (Ford)

Early 1900s: automobiles via craft production.

Extremely expensive, months to produce.

Each car unique in design and construction (no interchangeable parts).

Fords goal: automobile that was easy to manufacture, repair, and affordable.

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Fords first steps:i)

ii)

Allowed interchangeable parts on a large scale.

New machining practices -machining of pre-hardened parts.

Next steps:- Reduce quantity of parts, simplify assembly

process (engine block casting, glass).- Have parts delivered directly to work areas.

Result:

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Finally, Ford had a revolutionary idea: workers remain stationary, work moves past them.

The moving assembly line linked independent processes, improved stability, further increased throughput.

Greatly decreased time, effort needed to produce avehicle. Vast quantities now possible at low cost.

This revolutionary system was called ?

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Fords first success: Model T.

- 1908 1926.

- 15,000,000 vehicles!

Trouble keeping profits down!

- 1908-1920: real cost of an automobile reduced by almost 70%.

- Doubled assembly line worker wage (to $5/day).

- In one year, refunded $50 to each customer.

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Fords contribution to American industry and manufacturing cannot be overstated. He is largely responsible for America becoming the worlds leading manufacturer, wealthiest country.

- Model T: created $7B of wages and income. At that time, this was more than the estimated combined wealth of 35 of the 48 states!

Revolutionized not only manufacturing, but also society in general. A M

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1920 1970s: Rise of Mass Productioni)Management and Accounting (Sloan - GM)

profit centers Focus on management and accounting.

ii) Union Movement Mass production = mindless, dehumanizing work. Unrest led to labor agreements between UAW

and the Big Three in late 1930s. Result: job classifications, seniority-based

compensation, and ultimately two camps:

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1.2 SHORTCOMINGS OF MASS PRODUCTION

Despite their success, mass production facilities inherently plagued with several problems:

i) Excessively large, inflexible equipment Economies of scale.

ii) Excessive inventories and flow times

Expensive equipment keep it busy! L

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iii) Worker Alienation Mindless, repetitive work job dissatisfaction,

frequent absenteeism, high employee turnover.

Little/no management support (US vs. THEM).

Shop floor viewed as drudgery, last job choice.

iv) Poor Quality Emphasis on throughput.

Production vs. inspection workers (unions). P

Final inspection, repair departments.

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1.3 A NEW BEGINNING

Post-WW II: Japans economy in shambles.

consumer spending nearly non-existent.

many companies in financial distress.

credit restricted, so borrowing difficult.

Lean manufacturing started with one company:

Toyotas top management given the monumental task of catching up with the US auto industry in 3 years.

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At that time, Toyota similar to Ford (mass production). Fords system designed for

large, stable market; minimum diversity. ample materials and resources available. capital to invest in large, high-volume machinery.

None of these conditions, however, existed in Japan! Small, diverse market.

1950:

Limited materials and resources. Negligible capital.

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Result: mass production was not working (and would not work) for Toyota.

Something different needed for Toyota to catch up with US auto industry.

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1.4 THE TOYOTA PRODUCTION SYSTEM

1950: Eiji Toyoda, a young Toyota engineer, visits Fords immense Rouge plant. Studies the facility in great detail.

After returning to Japan, Eiji and his production assistant, Taiichi Ohno, reach two pivotal conclusions:

M I

Ohno then charged with coming up with a new system of production for Toyota.

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Around same time, Toyota flirting with bankruptcy.

In desperation, Toyotas president, Koichiro Toyoda, proposed firing a quarter of the workforce. But Toyota had a strong union (due to American-instituted labor laws passed in 1946) which opposed.

After much negotiation, compromise reached: Proposed terminations accepted. Koichiro Toyoda resigned as Toyotas president. Remaining employees received two guarantees:

i)

ii) Pay strongly tied to seniority, bonuses based upon company profitability.

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Groundbreaking agreement, with deep implications:

No firing of workers workers now a fixed cost. Should thus base system on people.

Seniority-based pay workers not likely to leave. Toyota could thus rest assured that investment in worker skills, training, etc., would pay off.

B

Us vs. Them mentality replaced with one of cooperation, involvement, and mutual benefit.

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Ohno thus based his system on ?

Problems remaining: limited supplies and capital.

Limited materials make things right the first time, reduce waste in all processes.

L

To make this possible, Ohnos workers invented machines for which changeovers could be done very quickly.

Limited capital no dedicated equipment. Each machine: many different parts, in relatively small quantities.

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Faster changeovers reduced batch sizes. Led to Reduced flow times

Improved flexibility (can moreeasily produce different products).

Improved quality (defects detected earlier, fewer items affected).

Focus on workers, making things right the first time, and use of inexpensive, flexible equipment laid foundation for the Toyota Production System.

Ohno spent thirty more years refining TPS: Toyota became one of worlds greatest manufacturing firms.

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1.5 FROM TOYOTA PRODUCTION SYSTEM TO LEAN MANUFACTURING

Following success of TPS at Toyota, next step was to have Toyotas suppliers adopt the system.

O

1969: Ohno establishes the Production Research office to work with Toyotas largest suppliers.

End of the 1970s: TPS in use throughout Toyotas supply chain.

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This led to increased visibility/interest in the system by Japanese and non-Japanese companies alike.

Doubts, however, that system could work outside Japan.

1980s: Toyota brought TPS to the US via a joint venture with GM called New United Motor Manufacturing Incorporated (NUMMI).

Converted an old plant in Fremont, CA to TPS.

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Following implementation of TPS, absenteeism dropped to 2%, plant broke all GM records for cost, quality, and delivery.

Fremont plant had been closed for several years.

Prior to closing, had been the worst GM plant worldwide.

lowest quality scores, absenteeism over 20%, frequent strikes.

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Facility remained a model of successful TPS implementation in America for decades.

2009: Pontiac Vibe production discontinued.

Toyota and GM could not find a suitable replacement product.

J

Following NUMMI, interest in TPS grew in the US.

Companies slowly started adopting the methods in their facilities during the mid-1980s.

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1984: MIT began 5-year, $5M study of the global auto-mobile industry (International Motor Vehicle Program). best-selling book The Machine That

Changed The World (Womack et al., 1990).

Major finding: Toyotas manufacturing system so radically different from mass production that it should be recognized as a totally new kind of manufacturing.

Vastly superior to mass production in terms of quality, productivity, and customer response.

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Most distinguishing feature of the new approach: used less of everything as compared to mass production (Womack et al., 1990):

half the human effort in the factory, half themanufacturing space, half the investment in tools, half the engineering hours to develop a new productin half the time. Also, it requires keeping far lessthan half the needed inventory on site.

As a result, the term lean manufacturing was coined.

MIT study results further spread interest in the Toyota Production System, i.e., lean manufacturing.

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Today, there are a great many successful lean implementations in the US and abroad.

A great many more firms have yet to take the lean journey, however.

As with Ford and mass production, Toyota must be recognized as developing a new manufacturing paradigm that changed (is changing) the world.

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Additional References

Dennis, P., Lean Production Simplified, Productivity Press, New York, NY, 2002.

Levinson, William A., Henry Fords Lean Vision, Productivity Press, New York, NY, 2002.

Liker, Jeffrey K., Becoming Lean: Inside Stories of US Manufacturers, Productivity Press, Portland, OR, 1998.

Womack, James P., Jones, Daniel T., and Roos, D., The Machine That Changed The World, Macmillan/Rawson Associates, 1990.

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1982: Ford Motor Company executives visit Japan auto manufacturers, to learn about Japanese quality and improvement methods:

BIRTH OF LEAN: TOYOTA, or FORD??

One Japanese executive referred repeatedly to the book. When Ford executives asked about the book, he responded Its Henry Fords book, of course your companys book.

(Book: Henry Fords Today and Tomorrow, 1926).

Source: Stuelpnagel, T.R. 1993, Deja-Vu: TQM Returns to Detroit and Elsewhere. Quality Progress (September), 91-95.

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Norman Bodek, former president of Productivity Inc., in his forward to a reprint of Henry Fords Today and Tomorrow:

BIRTH OF LEAN: TOYOTA, or FORD??

I was first introduced to the concepts of just-in-time (JIT) and the Toyota production system in 1980. Subsequently, I had the opportunity to witness its actual application at Toyota on one of our numerous Japanese study missions. There I met Mr. Taiichi Ohno, the system's creator. When bombarded with questions from our group on what inspired his thinking, he just laughed and said he learned it all from Henry Ford's book.