using lean thinking to increase productivity in …ontracksconsulting.com/downloads/lean...

Using Lean Thinking to Increase Productivity in

Maintenance and Warehousing ActivitiesPresenter: Jason Sadovia

www.ontracksconsulting.com

November 25, 2009

For Audio:

Phone: 1-888-296-6500

Code:738859#

Agenda


• What is Lean?

• What are the benefits to Lean?

• How is Lean applied?

• Example: warehouse/inventory improvement

• Question & Answer Period

For Audio: Dial 1-888-296-6500 and enter code738859#

What is Lean?


• A Lean Enterprise essentially eliminates waste throughout the business

• Waste costs resources and adds no value to the customers

• Lean principles are used to create precise customer value with

– Less human effort

– Less space

– Less capital

– Less time


“Lean is a systematic approach to identifying and eliminating waste trough

continuous improvement, flowing the product at the pull of the customer in

pursuit of perfection”

A history of Lean



1900 2008

1950 - 1985

Taichii Ono & Shigeo Shingo

Toyota Production System

Just in time

Stockless production

1900 - 1910

Frederick Taylor

Standardized work

Time study

1910 - 1920

Henry Ford

Assembly line

Flow lines

Manufacturing strategy

1940 - 1950

Edwards Deming

TPM

SPC

1990

James Womack

The Machine That Changed the World

Source: http://www.lean.org/

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http://images.google.ca/imgres?imgurl=http://deming.eng.clemson.edu/pub/tqmbbs/misc/deming.jpg&imgrefurl=http://deming.eng.clemson.edu/pub/tqmbbs/misc/&h=682&w=538&sz=22&hl=en&start=1&tbnid=Riyv8PpGKRg7gM:&tbnh=139&tbnw=110&prev=/images?q=edwards+deming&gbv=2&svnum=10&hl=en

http://images.google.ca/imgres?imgurl=http://www.evolvingexcellence.com/blog/images/10_womack_2.jpg&imgrefurl=http://www.evolvingexcellence.com/blog/leadership/&h=280&w=200&sz=7&hl=en&start=8&tbnid=gg6HS402Pw-2fM:&tbnh=114&tbnw=81&prev=/images?q=james+womack&gbv=2&svnum=10&hl=en&sa=G

http://images.google.ca/imgres?imgurl=http://www.strategosinc.com/images/Shingo.jpg&imgrefurl=http://www.strategosinc.com/toyota_corporate_culture.htm&h=74&w=62&sz=2&hl=en&start=2&tbnid=5cuCvRRXVYInoM:&tbnh=71&tbnw=59&prev=/images?q=Taiichi+Ohno+&+Shigeo+Shingo&gbv=2&svnum=10&hl=en&sa=X

http://images.google.ca/imgres?imgurl=http://www.toyotageorgetown.com/images/tps/TPS_03_Ohno.jpg&imgrefurl=http://www.toyotageorgetown.com/history.asp&h=150&w=126&sz=6&hl=en&start=2&tbnid=ynUSxmWzdFLIUM:&tbnh=96&tbnw=81&prev=/images?q=Taiichi+Ohno&gbv=2&svnum=10&hl=en&sa=G

Lean principles


Identify Customer Value

•Product or service customer desires delivered at the right time and cost

Document the Value Stream

• Identify the actions needed from product conception to delivery

Make it Flow

•Move away from mass production and focus on moving individual products through the value stream

Create Pull System

•Give customers what they need, when they need it

Continuously Improve

•There is always room for improvement


The 7 (or 8) Wastes


Over-Production

Waiting

InventoryMotion

Transportation

Defects

Over-ProcessingWaiting for…• Faxes• System to come up• Customer response• A handed-off file to come back

• Searching for files / handling paperwork• Gathering information• Extra key strokes• Handoffs

• Repeated manual entry of data• Use of inappropriate software• Use of outdated forms• Excessive approvals

• Data entry errors• Pricing/rate error• Missing information

• Open projects• E-mails unread• Office supplies• Unused records in database

• Retrieving or storing files• Going to get signatures• Going to copy machine or fax

• More information than customer needs• Creating reports no one reads• Making extra copies

Human Intellect• Underutilized


Lean tools…a sample


Lean

Kaizen

Standardized

work

Value

Stream

Mapping

KanbanCellular

Architecture

Balanced

flow

5S Visual Management


What are the benefits to Lean?


Increase in productivity

Improved flexibility in reacting to changes

High quality & reliability

Reduce defects

Reduce inventory costs

Reduced cycle time

Lower inventories

Reduction in order processing errors

Reduction of paperwork

Reduced staffing demands

Lead time reduction

Reduce floor space utilization


The Lean secret


• Most material in a process spends 95% most of its time waiting… waiting for someone to add value to it or waiting in finished goods inventory

• One of the reasons cost is reduced by lead time reduction is that slow processes are expensive processes

•These processes often see discounts, quality issues, large inventories

•These costs are often called the cost of poor quality (COPQ)

• COPQ is often two to four times that of direct labour and are caused by long process lead times and variability

Operating

Profit

8%

Labour

8%

Operating

Expense

21%

Material

37%Process

Overhead

and Quality

26%


How to implement Lean?


Project Selection

•Business Metrics: Quality/Cost/ Service

•Team Selection

Baseline Metrics

•VOC (Voice of the Customer)

•VSM (Value Stream Mapping)

•Pareto diagram

•Ishikawa (Fish Bone diagram)

Process Improvement

•Kaizen

•5S – Spaghetti diagram

•Heijunka (job levelling)

•Gemba (“the place where the value is added”)

Implement

•Poka-Yoke (Mistake Proofing)

•Visual Management

•Kanban

Standardize

•Standard Work

•Continuous Improvement


Case Study – warehouse/inventory


• Automotive parts re-manufacturer

• 28 global sites

• Implemented Lean to great success

• Focus on some of the inventory successes

Lean Assessment Initial Results

7

9.5

16.5

16.5

17

17.5

22.5

22.5

23

23.5

23.5

24.5

26

28.5

29.5

31

31.5

33.5

33.5

35

39

Tractech Warren

Alliance

Liberty

AB HD Motors

AB LD Motors

Dallas Engine Master

Franklin-engine

AB HD Alt

Church St Reed City

Peru

Kaleva Gen. Delphi

Gateway

Powrbilt, Mansfield

LCI

American Way

WTI Summerville

Franklin-IFS

Patterson (cs144)

Chantilly

DRM

WW Mexico

Required minimum - 31

45 is target




• Actions taken:• Movement of material only on replenishment basis • Delivery to Plant daily• A raw inventory Supermarket• No intermediate storage between operator and Supermarket• Timed, kitted delivery to operator’s parts presentation device

@ least every hour


BEFORE



• Supermarket of raw material


First in

first out

Strike Zone

unload



• Tugger equipment and parts “kitting”


Small Lots

“Strike” Zone lifts

Returnable containers



• Sample of results:• Inventory reduction of $3.8 M• Inventory Turns increased from 20 to 26• Warehouse space decreased from 64,000 ft2 to 51,800 ft2


$3,000,000

$3,500,000

$4,000,000

$4,500,000

$5,000,000

$5,500,000

4/6

/2001

4/1

3/2

001

4/2

0/2

001

4/2

7/2

001

5/4

/2001

5/1

1/2

001

5/1

8/2

001

5/2

5/2

001

6/1

/2001

6/8

/2001

6/1

5/2

001

6/2

2/2

001

6/2

9/2

001

7/6

/2001

7/1

3/2

001

7/2

0/2

001

7/2

7/2

001

8/3

/2001

8/1

0/2

001

8/1

7/2

001

WIP Inventory

2584

2369

1964 2028

1747

1990

29932905

29602905 2875

2690

28252775

2625

27302663

2580

1000

1500

2000

2500

3000

3500

Jan-01

Feb

-01

Mar-01

Ap

r-01

Ma-01

Jun

-01

Jul-01

Au

g-01

Sep

-01

Oct-01

No

v-01

Dec-01

INV

EN

TO

RY

CO

ST ACTUAL

FORECAST

Inventory Holding Cost

Different kinds of Lean – same objective


Lean Maintenance

Lean Office

Improve efficiencySaves costs

Simplify complex processRetains the knowledge within the organization

Effectiveness (what) and efficiency (how)Eliminating wasteful motionStandardize work routines

Lean Manufacturing

Eliminating all waste in manufacturing processes and aligning production with customer demand or consumption

Lean SourcingCoordination of the efforts between

Purchasing, Supply chain and the Operations in order to identify additional opportunities

Less Time

Less Space

Less Human efforts

Less

Capital

Objectives


Keys to Lean success


• Prepare and motivate people • Employee involvement • Share information and manage expectations • Identify and empower champions, particularly operations

managers • Atmosphere of experimentation • Installing and realistic performance measures, evaluation, and

reward systems • The need to execute pilot projects prior to rolling culture out

across the organization


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