If Lean is the Solution…

What is the problem?

by

Jacob Austad

In this Keynote

Purpose

• To talk about key things that make Lean work

• Remembering there is more to Lean than tools

Process

• Looking back at the legacy

• Talk about measures• What we can do to make sure we understand the problem

• Examples on how to make sure everyone is on-board

Pay Off

• Input on how to make sure we understand the problem

• The basics on keep getting ideas and test theories

• Thinking as a leader rather than a manager

Looking back - a way to learn?

Toyota Automobile Department set up to manufacture automobiles

1933 1935

Prototype Model A1 passenger car completed

1948

Deming first time in Japan

1950

Ohno begins work on Toyota Production System

Lectures of waste being the prime source of quality issues

1996 1999

Womack and Jones Lean Thinking

From TPS to TMS

FromTPStoTMSFromTPStoTMS

Decoding the DNA of the Toyota Production System

Learning to See(Rother and Shook)

What did we learn?

• We heard about Ohno’s cycle

• The Lean tools• House of Lean• 5 Lean principles• 7 Wastes• Value Stream Mapping• 5S• SMED• Standard Work• One piece flow• Kanban• Etc.

Ability to help solve the problem bringing forward ideas and theories to be tested

What problem are you trying to solve?

How do you know this is the problem?

Two ways to see problems- or only one real?

The traditional way

• Purpose• Did we make the numbers – the

budget?

• Monthly report• A long process to establish (lead time)

• Painting a positive picture

• Data shown in tables

• Managing by spread sheet

• Problem solving based on old data

The Lean way

• Purpose• Looking at trends

• Focus on predictability and managing variation

• Daily Operation Review• How well did we do yesterday?

• What to accomplish today? – how ?

• Weekly Operation Review• Operators and leadership looking at

the coming week – what did we learn?

• Problem solving based on live data – using PDSA

Creating an overview is step 1- the story of why is all you need to know

Fluctuations in demand should be understood. Sometimes fluctuations in demand are created by sales practices.

Inventory is an effect of the organization’s practices. Any attempt to steer inventory levels (e.g., setting targets for how much inventory is acceptable) will most likely drive inventory up (e.g., increase WIP, increase raw material inventory, etc.). An End-2-End view is needed and this might include changing the products or services provided by the business.

Demand Capacity Inventory

Learning about these vital elements will, on a conceptual and principles basis, reveal how well any organization is fulfilling customer demand and, as a result, being

profitable

The Lean Measures- The vital three

Demand Profile • Purpose

• Tosevaria onover me

• Studycontrolledvs.uncontrolleddemand

• Spottrends

• Makingsurewedon’toverreacttocommoncauses

• Tounderstanddemandweshouldask…• Fromwhichchanneldowereceivethedemand?

• Whattypeofdemanddowereceive?

• Orders

• Claims

• Complaints

• RFQ

• Etc.

DemandProfile

(How)doyoucontrolthedemandonyoursystem?

Process Quality

• Purpose• LearnaboutRightFirstTime

(RFT)

• Getinforma onifourprocessisincontrol

• Arewedoingwhatweplannedtodo?

• Doweu lizeourcapacitydoingtherightthingsorarewedoingthingsright?

• Ques on:• Whatwouldyouconsider

asaacceptableprocessquality?

• Whatisyourcurrent(real)level?

Controlleddemandvs.UncontrolledDemand

Step%1% Step%2% Step%x%Step%3%

Backflow%

Input%

Input%–%Backflow%Input% X%

Process%%Quality%

=% Input%–%Backflow%Input% X% Input%–%Backflow%

Input% X%Input%–%Backflow%

Input% =% %"

Input:%How%much%input%does%the%step%receive%from%previous%step?%Backflow:"How%much%is%sent%back%or%needs%rework?%

• Purpose• Toseeifoursystemis

capabletodeliveraccordingtocustomerexpecta onsandwithapredictableperformance• Nogaming–realcustomerexperiencedlead meend-2-end

• Noaverages–measureeachorderinthesequencetheyaredelivered

• Ques on:• Doyoumeasurelead me

tothedateyoupromiseddeliveryorthedatethecustomeroriginallywantedtheFGdelivered?

“Allwearedoingislookingata melinefromthepointwereceiveandordertowecollectthecash….”

Lea / Throughput me d n

Not everything of importance can be measuredDeming

A good education can’t be measured, but one could see if the child does his homework

The question is: how can we incorporate the relevant measures in the daily routines?

Demand Profile• Purpose

• To se variation over time

• Study controlled vs. uncontrolled demand

• Spot trends

• Making sure we don’t over react to common causes

• To understand demand we should ask…• From which channel do we

receive the demand?

• What type of demand do we receive?

• Orders

• Claims

• Complaints

• RFQ

• Etc.

Demand Profile

(How) do you control the demand on your system?

Process Quality

• Purpose• Learn about Right First Time

(RFT)

• Get information if our process is in control

• Are we doing what we planned to do?

• Do we utilize our capacity doing the right things or are we doing things right?

• Question:• What would you consider

as a acceptable process quality?

• What is your current (real) level?

Controlled demand vs. Uncontrolled Demand

Step1 Step2 StepxStep3

Backflow

Input

Input–BackflowInput X

ProcessQuality

= Input–BackflowInput X Input–Backflow

Input XInput–Backflow

Input = %

Input:Howmuchinputdoesthestepreceivefrompreviousstep?Backflow:Howmuchissentbackorneedsrework?

• Purpose• To see if our system is

capable to deliver according to customer expectations and with a predictable performance• No gaming – real

customer experienced lead time end-2-end

• No averages – measure each order in the sequence they are delivered

• Question:• Do you measure lead time

to the date you promised delivery or the date the customer originally wanted the FG delivered?

“All we are doing is looking at a timeline from the point we receive and order to wecollect the cash….”

Lea / Throughput timedn

Wrap up

• We need to go back the Sheward and Deming• Keep our childhood curiosity – asking why and why not!

• Test our assumptions and theories in small scale –learning from the experiment

• Remember PDSA is much stronger than PDCA

• Change the focus from what and how to why!

• After all

It’s better to roughly right than precisely wrong!

Mail: jacob@leanteam.dk

Phone: +45 2614 8245

Contact info

www.leanteam.dk