an introduction to lean manufacturing

8/14/2019 An introduction to Lean Manufacturing

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An Introduction toLEAN MANUFACTURING


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History of Manufacturing

CRAFT Made customer specific

Each product is unique

Variable quality / expensive

MASS Interchangeable - Whitney

Division of labor Fredrick Taylor

Assembly lines & low variety Ford

LEAN High Variety

Small batches

Six Sigma Quality


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What is LEAN? Rock to Art

Lean is the elimination of anything notabsolutely required to deliver a quality

product or service, on time, to our customers

LEAN is a fundamentally different business

logic LEAN is based on eliminating unnecessary

actions

LEAN links value activity in a continuoussequence

Only a small fraction of total time and effortin an organization adds value for endcustomer


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Why LEAN?

Severe Competitions in all walks of business Firms face reduction in margins to keep the

market share Every little saving will improve the economy

Time for every available resource to performthe best

Operation Cost reduction is critical to oursurvival

Profits = Price Cost (price dictatedby themarket and cost incurredby us)

Cost = Activities involved (VA + NVA)


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LEANSome myths

LEAN is a factory thing LEAN will not work here

We tried it, it is another Kaizen event

5S is all about cleaning up your office or

workstation

We are different, it cant apply to our

business

Its an excuse to take our jobs away

Zero Inventory


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Mass Production vs. Lean Production

Rich management based on

visual control systems

maintained by all

employees

Poor management based on

abstract reports generated by

and for managers

Information

Management

Based on long-termrelations

Based on priceExternalRelations

Team based operations and

flat hierarchies

Individualism and military-

style bureaucracy

Organization

By vision and broadparticipation

By Executive command andcoercion

Leadership

Makes what customerswant with zero defects,

when they want it and only

the quantities they order

Makes what engineers wantin large quantities at

statistically accepted quality

levels. Dispose of inventory

at fire-sale prices

CustomerSatisfaction

Lean ProductionMass Production


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Mass Production vs. Lean Production

Team-based model, with

input from customers &

concurrent development

of product and process

design

Isolated genius model with

little input from customers

and little respect for

production realities

Design &

Engineering

Equipment management

by production &

engineering

By SpecialistsMaintenance

& Quality

Human scale machines,

cell-type layout, multi-skill, one-piece flow, zero

inventories

Large-scale machines,

functional layout, minimalskills, long production runs,

massive inventories

Production

Harmonious culture ofinvolvement based on

human resources & long

term relations

Of Loyalty & obedience;sub-culture of alienation and

labor strife

Culture

Lean ProductionMass Production


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LEAN Business System

Value Stream

Management

Cross

functional

Teams

Standard

Production

System

Supply Chain

Policy

Deployment

Common

Goals

Tools aligned to needExtended

Enterprise

Shared Vision


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LEAN & its Tools


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LEAN System - Benefits

The Hard Ones (typical)

15% growth in 1 year

12% Productivity increment in 1 year

20% Space saving in 1 year 90% On Time Delivery in Full

28% Throughputs Lead time reductions

Improved Supplier performance Improved Customer Quality

Progressive MUDA Elimination


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LEAN System - Benefits

The Soft Ones Flexible structures assigned to business goals

Roles & Responsibilities assigned to business

goals

Process driven culture

Visual demonstration of achievements

Increased employee ability and morale

Visual abnormal situations

Focused application of resources for best return

Believable prediction of results


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LEAN Principles

Specify what creates value fromcustomers perspective

Identify all steps across the whole valuestream

Make those actions that create theValueflowat thepullof customer

Involve and empowerEmployees

Strive forperfection by continuallyeliminating the successive layers ofwaste.


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What is Value?

Value is what the customer wants, whenthey want it in the expected quantity andquality

To establish the customers wants,employ the QFD (Quality functionaldeployment) technique

To analyze the customers wants, useKANO model


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KANO Model

Classify Characteristics as Basic,Performance and Delighter

Ask Two questions

3.What if the characteristic is present?4.What if the characteristic is absent?

If 1=neutral, & 2=bad it is basic

If 1=good & 2=neutral, it is delighter If the answer is it depends, it is performance


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Value

5%Manual

availability

10%Revise Manuals

5%Updates10%Locate Repair

10%Respond to

inquires

5%Respond to letters

20%Locate Repair15%Answer Hotline

60%Hotline support60%Produce Manuals

Value to Customer in %Resource %Activities

RealityPerception


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Define Values in the Eyes of

Customer

What Product / Service? What attributes / Features?

What Quality Levels?

What Delivery?

Rate

Response time expectations

Are we measuring it? If yes, How?


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What to measure? % On time delivery to customers

Do we meet what we promise ourcustomers?

Cycle time & Throughput

Quality RTY (rolled throughput yield), TDU(total defects per unit)

Productivity (Units produced / man-hour)

Work In Progress Inventory

Purchased Inventory

Quality, Delivery, shortage frequency ofpurchased items

Annual Inventory turns

Finished Goods inventory

Floor Space consumption (total sq ft xRs/Sqft)

0

20

4060

80

100

120

1st Qtr 2nd Qtr 3rd Qtr 4th Qtr

0

20

40

60

80

Quality Cost Delivery

Measure

What matters

To customers


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Value Adding Activity

Activities within the company or supplychain for which the customer would be

happy to pay for

An activity that changes the size, shape,

fit, form or function of material or

information as to satisfy customersdemands and requirements


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Non-Value Adding Activity

Activities that do not contributing directlyto satisfying customers requirements

Activities that consume resources but donot meet the customers demands or

requirements

Necessary Non-value adding: NVA that

are necessary under present operating

system & will take time to eliminate


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Value Stream

Information Flow

Sales &

MktgDesign

Order

Entry &

PPC

Operation Finance

Material Flow

CustomerV

alue


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Value Stream

The entire set of activities that requires todesign, produce and deliver a product

Design Purchase Manufacturing Quality Finance Sales

ContinuousIm

provement

HR

DevelopmentStrategic Management / Policy Deployment

Order Fulfillment

Sales Acquisition

New Product Development

Technology Plant & Equipment


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Why Use Value Stream Mapping?

Helps us Visualize Flow Helps us see waste, more importantly, the

sources of waste

Ties together Lean thinking principles

Forms the basis of an implementation plan

Shows relationship between material and

information flow

Enables us standardize operations and

paves for continuous improvement


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Sample Map of Value Stream

Customer

M - 2

C/T - 10s

C/O - 30m

D/T - 10%

Q - 6%

M - 1

C/T - 30s

C/O - 5m

D/T - 3%

Q - 16%

M -4

C/T - 30s

C/O - 30m

D/T - 14%

Q - 11%

M - 2

C/T - 10s

C/O - 90m

D/T - 18%

Q - 7%Shipping

PackingTesting

Subassy

Machine

2x/day

2x/week

4 days3 days6 days

4 days

10 days

8 days

800/day

Supplier

1000/day

Note: Value Adding time is 70 secs

Inventory is 23 days!


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Process Activity Mapping - GOJO

10110AssyNOScanning machine

86400AssyNDParts waiting / curing

AssyNPack the parts in poly-bag

8112AssyYOStamp assembly

8114AssyNOPrepare for Assembly

8110AssyYOSpring assembly in spout

86400AssyNPack the pump body in bags

212AssyYOInsert ball in the pump body

AssyNTPlace the part in machine

345600AssyNDParts waiting

MoldingNTPack the parts

1MoldingNInspect the parts

1MoldingYORemove part from machine

Cycle timePeople

Time in

secsDistanceLocationVAFLOWActivities


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WASTE

Any activity that absorbs resources butdoes not create value

Waste is so often in front of us that wealways do not see it!

Most of our processing is a waste and it isan ongoing process to remove waste fromeach layer as to reach perfection


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OHNOS SEVEN WASTES

WASTE IMPORT MUDA ofWaiting (material)

MUDA ofInventory

MUDA ofMotion (man)

MUDA ofProcessing

MUDA ofOver Production

MUDA ofRe-work / Reject

MUDA ofTransportation


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EIGHTH WASTE

Untapped Resources (Brainpower)

People are told to do & notasked to think Problems are overlooked & opportunities

missed

People lose motivation at work Management spends time dealing with

day-to-day affairs in lieu of focusing on

longer-term issues


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Sources of Waste

Layout (distance)Long setup time

Incapable processes

Poor maintenance

Poor working methods

Lack of training

Lack of adherence

Ineffective schedulingPoor supervisory skills

Inconsistent

performance measures

Functional organizationExcessive controls

No back-up / cross

training

Unbalanced workloadNo decision rules

No visual control

Supplier quality

Lack of workplace

organization


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ValueFlowatPULLof customer

Four Key Elements of making ValueFlow:

TAKT FLOW

PULL

IMPROVE

Continuous Improvement in pursuit ofperfection!


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TAKT Time

The Available operating time to satisfycustomer demands

Establishes the pace, beat or cadence of

the process

Takt time is used to balance the various

loads and identify the bottlenecks in the

process

Net Available time per day inseconds

TAKT Time = -------------------------------------------------

Customer demand per day in pieces


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FLOW Product or service does not stop once it is

launched

No de-tours, no back-flows, no waiting

Interruptions to in-flow work process are

drastically minimized Vigorously respond to flow stoppages with

dedicated approach

When information and material flows in opposite

directions, the third flow CASH FLOW starts

pouring in


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PULL Work does not move until there is a need

from the next process step

Make only what is wanted; when it iswanted

Compare the volatility in orders withvolatility in demand

Inventories needed to support a given

level of sales (KANBAN)Organizations are to be structured so

customer can pull the value from theproducer


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Impact of One Piece Flow

Op #1

10 min

Op #2

10 min

Op #3

10 min

200 Piece Batch One-Piece Flow

Cycle Time 100 hours 30 min

WIP 600 3

1pc/30min

Op #1

30 min

Op #2

30 min

Op #3

30 min3pcs/30min

Batch Flow

One piece flow


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Batch Flow & One-piece Flow

A

A

A

A

B

B

B

B

C D

C

C

C

D

D

D

A

A

A

A

B

B

B

B

C D

C

C

C

D

D

D

000

00

000

00

000

00

000

00

A B C D A B C D000

00

5

10

15

20

000

00

000

0

000

00

0

0

0 0

0

0

00

000

Different Process

Process time = 1unit / 1min


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The Process & Situation

6 min 4 min 4 min 3 min

Were getting 2.5 parts/man-hour; we need

3.0 parts/man-hour.

Total time to produce one (1) part = 6+3+4+3 = 16 min

Total man time to produce one part = 6 x 4 = 24 min

Efficiency = 67%


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First Improvement

Total time to produce one (1) part = 6+3+4+3 = 16 min

Total man-time to produce one part = 6 x 3 = 18 min

Productivity = 80 parts / 3 people = 3.33/man-hour (33% gain)

Efficiency = 89%

but were still working overtime!



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Productivity = # Parts e.g., 2.5/man hr

Man Hours

Capacity = Time available e.g., 80/shift

6 min

Realization of Takt Time



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Second Improvement

Supports 2 lines & can

operate 24 hours/day

Capacity = 240/day,

allocated per line/product

Requires no additional

support personnel

Material transport

simplified

Parts fall off the line

Capacity = 120/shift

Efficiency = 10/12 = 83%

Plant 1 Plant 2


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Perfection

Continuously monitor, evaluate andassess the process

Every incremental improvement uncovers

the future flow of speed

Eliminating wasted steps and defects

Reducing inventories and volatility

Cutting management time devoted to fire-fighting and negotiating

The whole enterprise must pursue not its

competitors but perfection


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Three Main Pillars of LEAN

The management ofprocesses and an

integrated logistics flow

The management ofrelationships with

employees, teams and suppliers

The management ofchange from

traditional mass production


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Fundamental Objective of LEAN

thinking Shift the focal plane of management to

differentiate Value from Waste

Start with primary actions affecting each

product, rather than organizations,

technologies and assets


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Input: Organizational attributes of

LEAN

Integrated One-piece

flow Small batches

JIT made

Low inventories

Defect Prevention

Level Scheduling

Production pulled By customer

Not pushed to suit machine

loading

Team based work

organization Multi-skilled

Few indirect staff

Active involvement Root cause analysis

Eliminate NVA & Variability

Close Supply ChainIntegration

Partnership not adversarial


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Overall Summary

LEAN is not just manufacturing

LEAN is no quick-fix it has a long history

of success

As the onion is peeled, LEAN is ongoing

as priorities change

LEAN is the foundation of competitiveness


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LEAN Road Map

Adapt LEAN

Decision to

Pursue

LEAN

Pilot LEAN

Implement

ation

Develop

LEAN

Structure

Focus on

Value Stream

Focus on

Continual

Improvement

Create

Implementation

plan

Implement

LEAN

projects

CommitmentTo LEAN

an introduction to lean manufacturing

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