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Orlando, Dec 06, 07 2018
Lean Thinking for
Process Productivity
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Agenda
1. Introduction.
2. Vision and Strategies. Action thru Processes
3. Lean Manufacturing Lean Thinking
4. Value and Waste. 7 + 1 Wastes
5. Problem Solving & Improvement Tools
6. Measuring Performance
7. Summary
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Strategic Planning
Mission Vision
ESPT
Strategies
• Processes
• Customers
• Values
• VS1
• VS2
• VS3
…… VSn
• SMART Objectives
•Action Plans
• PROCESSES
Performance Indicators System
SMART Objectives
PROCESSES
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Processes, Customers & Quality
OK ?
Inputs
Resources
Environment
(ESPT)
ResultsCustomers
NO
YES
Adjust
Quality
(Improve)
Processes
(ACTION)
PROCESSES
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What is LEAN?
• “Lean is the elimination of anything not absolutely required to deliver a quality product or service, on time, to our customers”
• LEAN is based on eliminating unnecessary actions
• LEAN links value activity in a continuous sequence
• “Only a small fraction of total time and effort in an organization adds value for end customer”
• Practice & Commitment Lean Thinking Culture
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Why LEAN?
• Severe Competitions in all areas 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 perform the best
• Operation Cost reduction is critical to survive
• Profits = Price – Cost (price dictated by the market and
cost incurred by us)
• Cost = Activities involved (VA + NVA)
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LEAN Principles
1. Specify what creates value from customers’ perspective
2. Adapt all steps across the whole value stream
3. Make those actions that create the Value FLOW at the pull of customer
4. Involve and empower Employees
5. Strive for perfection by continually eliminating the successive layers of waste.
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What is Value?
• Value is what the customer wants; when they want it, in the expected quantity and quality they want
• Establish the “customers’ wants”, ask as much as needed to include all aspects
• Analyze the “customers’ wants”, define priorities and relative weights
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Define Values in the Eyes of Customer
• What Product / Service?
• What attributes / Features?
• What Quality Levels?
• What Delivery?
oRate
oResponse time expectations
• Which is more important ?
Are we measuring it? If yes, What and How?
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Value Adding Activity
• Activities within the company or supply
chain 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 customers’
demands and requirements
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Non-Value Adding Activity
• Activities that do not contributing directly to
satisfying customers’ requirements
• Activities that consume resources but do
not 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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WASTE
• “Any activity that absorbs resources but does not create value…”
• “Waste is so often in front of us that we always do not see it!”
• “Most of our processing is a waste and it is an ongoing process to remove waste from each layer as to reach perfection”
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OHNO’S SEVEN WASTES
WASTE IMPORT
• Waiting (material or people)
• Inventory
• Motion (man)
• Processing
• Over Production
• Re-work / Reject
• Transportation
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EIGHTH WASTE
• Untapped Resources (Brainpower)
• People are told to do & not asked to think
• Problems are overlooked & opportunities
missed
• People lose motivation at work. (Leadership)
• Management spends too much time dealing
with day-to-day affairs instead of focusing on
longer-term issues (Important vs Urgent)
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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 scheduling
Poor supervisory skills
Inconsistent measure of
performance
Functional organization
Excessive controls
No back-up / cross
training
Unbalanced workload
No decision rules
No visual control
Supplier quality
Lack of workplace
organization
Bottlenecks
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Process Improvement KSS
STOP
No more Wrong Doing
Start
Changes
Keepand
Improve
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Use the RIGHT
TOOLS
Depending on the Type of WASTE
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A place for everything … and everything in its place !
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Demand Rhythm : TAKT Time
• The Available operating time to satisfy customer
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 in seconds
TAKT Time = -------------------------------------------------
Customer demand per day in pieces
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Balance: HEIJUNKA & TAKT
A D ECB
2 min. TAKT Time
Production Step
A D ECB
2 min.TAKT Time
Cycle Time
Cycle TimeAvoid Bottleneck,
Combine ?
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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/d
ay
2x/w
ee
k
4 days3 days6 days
4 days
10 days
8 days
800/day
Supplier
1000/dayNote: Value Adding time is 70 secs
Inventory moving is 23 days!
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FLOW Design – Lay Out – One Piece
• Product or service does not stop once it is
launched
• No “de-tours”, “no back-flows”, “no waiting”
• Interruptions to in-flow work process must be
avoided
“When information and material flow in opposite
directions, the third flow – CASH FLOW starts
pouring in”
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Single Minute Exchange of Dies (SMED) Quick Changeover (QCO)
1. Do Product Changes as Quick as Possible
2. Product Mix and Sequence Scheduling
3. Be ready with all “External” operations. Those not requiring line to stop. Minimize “Internal”
4. Use Material Handling Devices to reduce Set Up
5. Prepare Ingredients and Packaging in advance
6. Standardize all Changeover Operations
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Other Tools
• Cause – Effect Diagram
• Total Productive Maintenance
• Poka-Yoke. Mistake Proof. Andon
• Kanban / Constant Flow of Work In Process
• Job Standards. Procedures
• Reduce Constraints. Bottlenecks
CAUSA C
CAUSA BCAUSA A
SUBCAUSA
MINICAUSA SUBCAUSA
MINICAUSA
CAUSA D
PROBLEMA(EFECTO)
CAUSA C
CAUSA BCAUSA A
SUBCAUSA
MINICAUSA SUBCAUSA
MINICAUSA
CAUSA D
PROBLEMA(EFECTO)
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Seek Perfection
• Continuously monitor, evaluate and assess
the process
• Eliminating wasted steps and defects
• Reducing inventories and volatility
• Cutting management time devoted to fire-
fighting and negotiating. Planning
“The whole enterprise must pursue not its
competitors but perfection”
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What to measure?
• % On time delivery to customers
• Do we meet what we promise our customers? (Y / N)
• Cycle Time & Throughput
• Quality – RTY (rolled throughput yield), TDU (total defects per unit)
• Productivity – (Units produced / pers-hour)
• Work In Process Inventory (Units)
• Quality, Delivery, shortage frequency of purchased items
• Annual Inventory turns
• Finished Goods inventory
• Floor Space consumption (used cu. ft. / available cu. ft.)
0
20
40
60
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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¿What
Customer
Requires?
Measure and
Improvement
¿What to use
to measure?
¿Which is
the Target?
Performance Indicators Cycle
Customer
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OEE – Overall Equipment
Effectiveness
OEE = Availability * Performance * Quality
OEE = 0,75 * 0,70 * 0,96 = 0,50 = 50%
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Cost Reduction
Sales
Price
Production
Cost1
2
3
1
2
3
Price = Cost + Benefit
Some Benefit Bigger Benefit
1 2 3
Measure Production Cost ( $ / Pound )
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There is only One Place
where Success come
before WORK, it is …
at DICTIONARY !!
LEAN Message