1 employ improvement initiatives lean enterprise 101: a short course
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1 Employ Improvement Initiatives
Lean Enterprise 101: A Short CourseLean Enterprise 101: A Short Course
2 Employ Improvement Initiatives
Lean Enterprise OverviewLean Enterprise Overview
Lean Enterprise: An Integral component of Operational Excellence where the Lean Principles are applied to the entire company, and external value chain -- Customers and Suppliers
Why Lean and Why Now?
• Lean is not new, Toyota has been doing over 40 years
• Integral part of an Operational Excellence strategic plan
• Customers are asking for it, some are forcing it
Purpose of this Lean Module?
• Describe Lean Enterprise fundamentals & principles
• Understand basic Lean Enterprise tools
• Outline the elements of a Lean Enterprise system
• Provide a basis for Lean Enterprise implementation
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History of Lean Thinking History of Lean Thinking
Toyota Production SystemOHNO
Craft
Eli WhitneyInter-changeable
Parts
Taylor / GilbrethScientific
Management
US Supermarkets
DemingQuality Management
System
ToyodaJidoka
Assembly Lines
Waste Elimination
Vertical Integration
Synchronization
Ford
SMED Shingo
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• Improve Processes for:– Increased Market Share
– Profitability
– Cash Flow
– Competitive Advantage
– Future Growth in an Ever Changing Market
Lean Enterprise FundamentalsLean Enterprise Fundamentals
Why go “Lean”?Why go “Lean”?
Benefits of a Lean Enterprise: Bigger return on Participative Pay Program Easier completion of daily tasks Better communication Improved morale Easier to schedule work Less clutter in workplace Right parts available when you need them
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The activity of creating processes which are highly responsive and flexible to customer demand requirements. The central concept of Lean is the identification and elimination of all forms of waste.
1) Specify value in the eyes of the customer
2) Identify value stream and eliminate waste
3) Make value flow at pull of the customer
4) Involve & empower employees
5) Continuously improve in pursuit of perfection
Lean Enterprise FundamentalsLean Enterprise Fundamentals
What is the essence of “Lean”?What is the essence of “Lean”?
Lean PrinciplesLean Principles
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Changing Market RealityChanging Market Reality
Cost + Profit = Selling Price
Selling Price - Cost = Profit
We Made the We Made the Numbers!Numbers!
But at What Cost?But at What Cost?
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A Powerful MarriageA Powerful Marriage
• Waste elimination• Flow, Flow, Flow• Pull of the customer
• Variation reduction• Scrap / rework elimination• Process control
SpeedSpeed AccuracyAccuracy++
Lean ExpertsLean Experts Black BeltsBlack Belts
Successful Integration and Deploymentwill Yield Dramatic Improvements
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The Lean Enterprise HouseThe Lean Enterprise House
Customer• VOC• Takt• QFD
JustIn
Time
BuiltIn
QualityQuality Systems• Autonomation• Mistake-proofing
People• Policy Deployment• HP Teams
• Values• Org development
• Steering Committee• Design Teams
• Kaizen• Multi-process
• Safety• Process improvement• Ergonomics
Materials Systems• Production Smoothing• Flow / Pull
• Line Design• Kanban• SMED• P-O-U
Stability• Six Sigma• Visual Controls• Standard Work• DFM• TPM
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Identify and Link the Value Chain Identify and Link the Value Chain
Engineering
Suppliers
Production
Test
Support
Customer
Administration
The pieces of the chain are already there.
Supplier Engineering Production Test
Administration Materials Support
Customer Customer
Make each process efficient and effective, linking those processes into an interdependent chain focused on flow and creating value for the customer.
Materials
F L O W
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CUSTOMER
VALUE
Information Stream
Market& Sales
Design SuppliersManu-
facturingAssy Test
Material Flow
The Value StreamThe Value Stream
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Value Added Activity An activity that Changes the size, shape, fit , form, or function of material or information (done right the 1st time) to meet customerrequirements.
Non-Value Added ActivityAll other activities that take time or resources or does not satisfy customer requirements
Defining ValueDefining Value
Value Added
Required Waste
Pure WasteIdle!
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Develop the Ability:
• To Recognize and Identify Waste
• To Have the Courage to Call It Waste
• To Have the Desire to Eliminate It
• Eliminate the Waste
• Understand That Waste Simply – Raises CostRaises Cost
– Produces No Corresponding BenefitProduces No Corresponding Benefit
– Threatens All of Our JobsThreatens All of Our Jobs
Lean Mission StatementLean Mission Statement
You can’t Eliminate What You Can’t FindYou can’t Eliminate What You Can’t Find
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Waste Of:• Defects• Overproduction• Transportation• Waiting• Inspection (mass) • Motion• Processing (Too Much)
Ask “Why?” Five Times to Fix it so it never comes back!
The Seven WastesThe Seven Wastes
The largest and most difficult waste to find is
time... and one can never get it back ... - Henry Ford
If we eliminate these wastes…If we eliminate these wastes…We can increase output and shrink lead timeWe can increase output and shrink lead time
D.O.T. W.I.M.P.
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“Conceptual Grasp” of Lean“Conceptual Grasp” of Lean
CADENCE:
The measure or beat of movement.
SYNCHRONIZE:To cause to operate with exact coincidence in time and rate.
BALANCE:Arrange so that one set of elements exactly equals another.
FLOW:A smooth uninterrupted movement.
FLEXIBILITY: Ready capability to adapt to new, different or changing requirements.
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Takt TimeTakt Time
Available Time Customer Demand
TAKT Time =
Example - Product demand = 2000 units per month or 100 units per day
Available work time per day = 6.5 hours or 390 min’s per day
TAKT time = 390 min’s100 units
= 3.9 min’s/unit
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Shingo ModelShingo Model
Operations
Operations
Proc
esse
s
Proc
esse
s
Space & Time
Analyze Separately, Solve Together
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THE ACTIVITY OF THE PRODUCT:– As a percent of total product thru-put time, what is the measure of actual value added
time?
THE ACTIVITY OF THE OPERATOR:– As a percent of the total available work time, what is the measure of actual value added
time?
THE FLEXIBILITY OF THE OPERATION:– What is the time “required to change-over”
-Machine Setup -Level of Cross Training
-Process Changeover -Ease of Operation
THE METHOD OF MEASURING PERFORMANCE:– What are the current set of problems?– What are the vital operating statistic of the operation?
CONCENTRATE ON THE FUNDAMENTALS!CONCENTRATE ON THE FUNDAMENTALS!
Dissect the Current ConditionDissect the Current Condition
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Total Thru-put Time
What are the four things the PRODUCT can be doing?What are the four things the PRODUCT can be doing?
50 - 80% of the Gain in Lean is WASTE elimination!
Activity Of The ProductActivity Of The Product
Storage
Transport
Inspect
Process
Which Element(s) Adds Value?Which Element(s) Adds Value?
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Example - Activity of the Product
Distribution of Total Time
Value added processeing time
29%
Inspection/Test1%
Non value added processeing time
15% Transportation22%
Storage 33%
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Full Work Analysis
The Key to Sustaining the Gains
Building Blocks of Standard Work
Activity of the PeopleActivity of the People
Pure Waste
Required Waste
Value Added
Which Element(s) Adds Value?Which Element(s) Adds Value?
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Which Activities Add Value?Which Activities Add Value?
Adding ValueAdding Value
If not value-added, then what type of waste is it?If not value-added, then what type of waste is it?
• Work waiting for other work to be batch processed
• Work in the in-basket / stockroom
• Company specified testing / sign off
• Loading work in a test fixture or chamber to be processed
• Moving from one operation to another operation
• Customer specified testing
• Cleaning parts before processing
• Waiting for previous parts to finish
• Inspecting a part after an operation
Value Added: Customer Cares Changes the thing CORRECT THE FIRST TIME!
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Will Lean Help You? Will Lean Help You? S
tore
s Value Added Steps
Non Value Added Steps
DAY 0 DAY 76
Elapsed Time =76 Days
Value Added2 Days
Total Activity = 4.5 Days
Non-Value Added2.5 Days
Wait or Queue Steps(“White Space”)
How do I get rid of the
white space?
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DefinitionsDefinitions
Lead Time
It is the total elapsed time from when a customer places an order to the time the customer receives that order.
Throughput Time
The total amount of time it takes for a process to complete one product or service.
Cycle Time
The total amount of clock time required to complete one part - including walking, load/unload, inspect, etc. and return to start.
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Spaghetti ChartSpaghetti ChartO
ut
to S
tam
pin
g/st
ores
Widgets: Line 3
Balance
HandFinish
J&L
Lathe
SlantNC Lathe
Hone
Puma NC Lathe MazakHand Lathe
Kellenberger Shaudt ODGrind Monarch
HandLathe
ID Grinder
Out toCurvics
In fromCurvics
InspPre-Assy
Out to Processes In From Processes
In From Processes
Start HereIn fromZeiss (Loop 2)
Out to Processes
Loop 3 FlowOutside Processes
Spaghetti Chart Instructions Obtain current layout of area Draw sequence of the process as the product
travels through the process Note WIP quantities at each process step Note loopbacks and lack of sequential flow
1
16
24
0
15
1
4
8
0
164
4
8
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Lean Cell Design - Product FlowLean Cell Design - Product Flow
New Layout for Parts and Tools
RM Raw Material Deliveredvia Kanban Signal
FGUse Cell Pulls
via Kanban Signal
P-O-UHardware
MaterialFlow
P-O-USupermarket
P-O-UTooling
Test FGMach 4
RawMach 1
Mach 3
Mach 2
Product Flow
Cell Example - Product Flow
Flow fits product familyAll processes within cell
Point-of-use details Only specialty tools in crib Tools/equipment point-of-use
Cell Design Enables Product Flow.
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1. Identify Work Content as Internal and External Activity
2. Convert Internal to External Activity
3. Eliminate or Reduce all Remaining Activity
Ext Int Ext
Ext Int Ext
Ext Int
Shingo’s SMED (Single Minute Exchange of Dies)
Quick Set-up = FlexibilityQuick Set-up = Flexibility
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• Preparation and Organization
• Mounting and removing tools, dies, fixtures, components, load programs
• Centering, locating, dimensioning, alignment
• Trial runs, tweaking, tuning, and adjustments
Elements of SetupElements of Setup
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• It is a proactive, team approach for maintenance
• It is the responsibility of everyone, not just the
maintenance department
• Ensures safety and effective operation of equipment
• Keeps equipment from breaking down
• Planned repairs rather planned failure
• Prevents deterioration and prolongs the life cycle of the
equipment
How Does TPM Differ FromRegular Maintenance?
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Purpose
Create a consistent method to measure how
safely and efficiently high quality low cost
products can be manufactured
Goal
Arrange people, materials, and capital within a
facility so that waste is eliminated
Standardized OperationsStandardized Operations
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Build in a Quality PlanBuild in a Quality Plan
Will SPC be used on line and where?
Has a FMEA been performed on Process?
Are Countermeasures in place for line stops?
Is the quality system linked through the value stream?
Does the Process conform to all governing procedures?
Have all Documentation Updates to change process been performed?
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Lean Material ReplenishmentLean Material Replenishment
All the activity associated with the replenishment system is non-value added (waste) since it does not physically transform, convert or change the shape or functionality of the product to meet customer requirements.
Target for improvement should be to eliminate or streamline each activity associated with the replenishment system, while retaining or developing the ability to obtain what is needed, when needed, in the amount needed.
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Hybrid Material SolutionsHybrid Material Solutions
MRP without Kanban
•All push no Pull
• all system planning assumes execution as planned
• the only consumption-based pull in for unplanned usage
Kanban without MRP
•All Pull no Push
• hard to pull from long lead time suppliers or batch processes
• hard to manage calculations of Kanban when demand changes
• System designed with historical data may not fit unknown future
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Kanban / MRP IntegrationKanban / MRP Integration
Forecast
Ship
Production Planning
DemandManagement
Master Scheduling
On OrderPurchasing
BOM’s
Routings
Suppliers
Warehouse POU Stores
Final Assy
POU Stores
Sub Assy
Rough Cut Capacity Planning
Current Inventory MRP
MRP Planning
Kanban Pull
Pull Signal
Pull Signal
Pull Signal
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Do you ever . . .Do you ever . . .
• Help somebody find or return a tool?
• Wonder which document is the latest?
• Lose your pen on your desk or bench?
• Spend time looking for something just filed?
• Wonder how others do this process?
• Fill in for peers and wonder how they set up tests?
• Wonder how you are doing on group goals?
• Wonder what your priorities are?
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The use of signs, measurements, pacing devices, real-time visual / audible feedback via counters, signals, cards (KANBAN), color-coding, speakers, alarms, clean and orderly, downtime clocks, facilities and other aids to allow for...
The easy difference between…
Normal (LEAN & GOOD) conditions
AND Abnormal (WASTEFUL & HARMFUL) conditions
Abnormalities are made obvious and ugly so as to compel correction through effective counter measures
Good Visual Control Allows Problems No Place To HideGood Visual Control Allows Problems No Place To Hide
Visual Management SystemVisual Management System
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The Five S’sThe Five S’s
PurposeMethodology for creating and maintaining an organized, clean high performance workplace.
ComponentsSort
Get rid of what is not needed.
Storage Arrange and Identify for ease of use.
Shine Clean Daily. Clean up what’s left
Standardize Eliminate cause, Standard methods.
Sustain Set discipline, plan, schedule
Areas of Concern Operators Materials Machines Methods Information
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Displays and ControlsDisplays and Controls
Visual Displays:Communicate important information, but do not control what people or machines do.
Make up the first two levels of the pyramid.
Visual Controls:Communicate information so that activities are performed according to standards.
Make up the top four levels of the pyramid.
Visual displays and controls create a common visual language in the workplace
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Levels of the Visual BusinessLevels of the Visual Business
WORKPLACE ORGANIZATION
Share Information
Share Standards at the Site
Build Standards into the Workplace
Warn about Abnormalities (Build in alarms)
Stop Abnormalities (Prevent defects from moving on)
Prevent Abnormalities (Error-Proof)
1
2
3
4
5
6
Sort, Store, Shine, Standardize, and Sustain5S Workplace Organization
Visua
l Con
trol
Visua
l Dis
play
Safety
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Top Management
Middle Management
Supervisors
Workers
Tactical
Strategic
LeanLean
By Involving People…By Involving People…
We Empower People to Grow the BusinessWe Empower People to Grow the Business
NEW REALITY WITH TEI
Total Employee InvolvementTotal Employee Involvement
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Lean PrinciplesLean Principles
1) Specify value in the eyes of the customer
2) Identify value stream and eliminate waste
3) Make value flow at pull of the customer
4) Involve & empower employees
5) Continuously improve in pursuit of perfection
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Identify the source of current problem set
- Parts - Process
- People - Design
Develop a rolling “top 10” action list:– Segregate and classify identified problems
• easy, moderate, difficult• we control, we do not control• low, medium, and high cost• low, medium, and high benefit
– Identify 10 problems that must be corrected in the next 90 days
Sustaining PerformanceSustaining Performance
Monitoring the vital statistics– Daily and hourly scheduled quantities– Daily and hourly output quantities– Daily assigned direct and indirect labor– Daily attend direct and indirect labor– Daily overtime hours allowed– Average labor content per unit– Daily planned and actual cycle time– Planned and actual throughput time– Daily line stop minutes– Daily % defect free pieces
How do we create a Management System that Sustains How do we create a Management System that Sustains Continuous Improvement? (Refer to “SQS”…)Continuous Improvement? (Refer to “SQS”…)