Lean Principles Application in Bosch Thermotechnology in Aveiro MAZE Warehouse. Abstract

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1 Lean Principles Application in Bosch Thermotechnology in Aveiro MAZE Warehouse Francisco Casegas, Instituto Superior Técnico, University of Lisbon October 2016 Abstract Bosch Thermotechnology, in Aveiro, is one of the companies that is investing in new process management methodologies to improve its internal processes by increasing the productivity and reducing costs. One of these methodologies is the VSDiA tool which allows production support processes mapping. This methodology was used to map and improve one of the existing processes in the factory s maintenance support warehouse (MAZE). The process chosen was called PPE and office material requisition and the main goals were to reduce the MAZE s occupancy rate and to improve the clients level of satisfaction. This process was chosen because it presented a high improvement potential as well as a high occupancy rate. (21%) To reduce the occupancy rate four solutions were designed: A Supermarket car; a milk-run delivery; a kiosk for safety clothing; and vending machines for gloves. It was estimated that with the introduction of these four solutions, the reduction in occupancy rate for MAZE would be of 13% which would translate in a 61% reduction in the process time. While doing this work, two of the solutions were implemented (the supermarket car and the milk run delivery). During these implementations, performance indicators were followed to check the stability of the new process. For both solutions stability was achieved and a reduction of process time of 19% for MAZE was confirmed, as well as the generalized improvement of the clients level of satisfaction. Keywords: Lean; TPS; VSDiA; MAZE; EPIS; Office Material 1. Introduction Nowadays, the high competitiveness and demand of the global markets obliges companies to search new ways of increasing their productivity and reducing their costs. One of the ways that companies are finding to achieve these goals is the use of models for production processes management. These models allow the increase of productivity, where sometimes there is even no need for any investments which means that companies increase the response capacity to their clients needs in terms of production volume, as well as the flexibility in the definition of the final product price. One of the companies that has been using these new models for process management is Bosch, more specifically, Bosch s Thermotechnology division which is world leader in the development and production of Water Heating systems. Bosch Thermotechnology is responsible for worldwide renowned brands such as Vulcano, Junkers and Buderus. Bosch produces a wide variety of products such as heating boilers, heat pumps or water heaters. The case study chosen for this work was the Maintenance warehouse (MAZE) located in Bosch s Thermotechnology factory in Aveiro, Portugal. This work was done during an internship from February to October The chosen system in not a production system, it is a production support system. It was analyzed through Lean philosophy principles that have been a strong factor for the companies to maintain their competitiveness. Not being a production system, the range of Lean tools that can be used for the analysis 1

2 of MAZE processes is restricted. To combat this factor, Bosch developed recently a Lean tool focused on non-production systems called VSDiA, (Value Stream Design in Indirect Areas). This tool has been chosen for non-production systems analysis within Bosch group factories. This tool is based on the widely known tool VSM (Visual Stream Mapping). Internally the tool has been widely praised for its simplicity and transparency. The main goals for this work were to increase MAZE s capacity to answer its clients needs and to improve their level of satisfaction. 2. Historical Background That name that people hear the most when it comes to the origin of production lines is Henry Ford, but many years before he was born, there were already traces of structures thinking regarding production systems. [1]. It was the case of the Venice arsenal ship construction in the 15 th century. Other examples followed like Eli Whitney s musket manufacturing during the 18 th century [2], but the first scientific studies on this area appeared with Fredrick Taylor in late 19 th century that culminated with the publication of ( The Principles of Scientific Management ) and a new management model called Taylorism [3]. 2.1 Toyota Production System TPS is a system that consists in management practices and philosophies that run the production and logistics of Toyota Company. This system was developed by the engineer Yaiichi Ohno, by Toyota s founder Sakishi Toyoda and his son Kiichiro Toyoda. The main TPS goals are [4]: -Remove Overloads (muri) Search for flexible processes -Remove inconsistencies (mura) Search for smooth processes -Eliminate waste (muda) Detailing the third concept, there are 7 types of waste (7 mudas) according to TPS [4]: -Overproduction Production of a bigger number of products than necessary or faster than necessary -Assessment Material waiting to be worked or delivered -Transport Unnecessary material transportation -Processing Tasks that do not add value to the final product -Waiting time Time in which machines or operators are waiting for tasks/operations -Product Defects Products with defects cause variability or rework -Motions Unnecessary Operator or material motions 3 Lean Management The first time that Lean concept appeared in history was in a scientific publication by John Kraftik in 1988 called "Triumph of the Lean Production System" during his master thesis presentation in MIT [5]. His studies were continued by the International Motor Vehicle Program (IMVP) in MIT where the publication The Machine That Changed the World by Womack, Jones and Roos appeared. This publication concentrated on the definition of tools and methodologies for waste elimination in a production system [6]. The main goals of Lean production systems change from author to author. While some argue that Lean methodology should have the internal company processes as a main focus [7], others defend that Lean methodology must have as the main focus the company clients. Despite this, there are some goals that are generally accepted [6]: Improve the product quality Eliminate waste Reduce activity times 2

3 Reduce production costs To accomplish the goals previously described, the Lean philosophy used a variety of principles supported by a range of tools to eliminate waste through Kaizen (concept descried on chapter 4) [8]. There are 5 principles used in Lean philosophy implementation [9]: 1. Identify the product value through the client point of view 2. Map the product s value chain elimination non added value activities 3. Create a continuous production flux with added value activities 4. Produce as little as the necessities of the clients Pull Production 5. Search for process perfection by elimination all the process waste 4 Kaizen One of the Lean Methodology Pillars is the Kaizen philosophy (Japanese word for improvement ). This philosophy promotes the continuous improvement in all sectors of activity. This concept was presented by the Japanese Masaaki Imai in 1986 and proliferated quickly along the occident countries due to the results obtained in Japanese companies [10]. Kaizen philosophy is based in 6 principles [11]: - Consistent Processes bring desired results -See for yourself to understand the current situation -Speak with data and manage based on facts -Apply measures to contain and correct the problems root causes -Work as a team -Kaizen is applied to everyone There is a concept very connected with the Kaizen Philosophy which is the PDCA cycle that means Plan, Do, Act and Check. This cycle is an interactive management process that determines how someone should proceed in a continuous improvement process [12]. This concept was created by William Deming based on Shewhart cycle presented in [13]. 5 Lean Tools 5.1 VSDiA VSDiA (Value Stream Design in Indirect Areas) is a tool created by the Bosch Group that is based on the VSM tool, although they are not comparable since VSDiA is adapted to non-production systems. VSDiA like VSM has as its main function the value stream mapping through information flux mapping where multiple intervenient exist. The main goals of this tool are: - Improve efficiency and quality of the analyzed process - Standardize processes and interfaces - Integrate Lean principles in support areas The Structure of VSDiA is composed by 3 techniques: - Swimlane Diagram - 10 Lean Principles - Phase Structure The four phases of in VSDiA Analysis are: -Preparation In this phase, brainstorming should be done to discuss ideas about the problem to analyze and whether VSDiA tool is appropriate for the analysis. -Value Stream Analysis In this phase, an area of analysis should be defined and its actual state should be designed using the Swimlane Diagram. Most urgent measures should be defined as well 3

4 -Value Stream Design In this phase, the approach to problem solving should be based on the Lean Ten principles. The short and long term Vision for the process should be designed -Implementation In this last phase, new standards should be defined to implement the defined measures and they should be tested 6. MAZE The MAZE warehouse, German acronym for Maschinen Zubehör und Ersatzteile (Machine accessories and Spare Parts) is relatively a small warehouse that supports the necessities regarding spare parts of the Maintenance department of the Aveiro factory to carry out corrective and preventive maintenance interventions. MAZE collaborators are divided in 2 shifts and are coordinated by a supervisor that has as his functions: leading the team, giving support to the daily problems and material planning. There is a daily meeting where the supervisor and its collaborators meet during shift change to exchange relevant information. 6.1 Task assessment The first task done in situ was the assessment of the tasks performed by MAZE collaborators and the respective time consumed to do it. A 20-hour observation was performed and the times for each task were measured. The following chart represents the tasks identified during the observation. Figure 1 - Task Assessment The main processes observed were the reception for all the clients, the Material Reception, Reservation and Reparation for the Maintenance department and the Office material/personal Protection Equipment process. 7. Diagnosis 7.1. Choice of process to analyze After the MAZE tasks assessment described point 6.1, the definition of the process to analyze was done by doing a classification of the processes identified with 2 parameters: Improvement potential and Occupation percentage. The process to analyze should have high potential and high occupancy rate. Regarding the occupancy rate, the value defined for a high percentage was 10%. Regarding the improvement potential, a superficial analysis of the processes was done. It was defined that the only processes that meet these 2 requirements are the PPE and Office material processes. Since they are very similar, they we re treated as one single process for further analysis 4

5 7.2. Swimlane Diagram After choosing the PPE and Office material process to analyze further, the process tasks were designed using the Swimlane Diagram. The Diagram is shown on annex 1 Doing a first visual analysis to the diagram, it can be observed that: - MAZE in the intervenient with the biggest volume of tasks - The MAZE and Client tasks are done mainly in series - The tasks done by the other intervenients are done mostly in parallel - Some MAZE tasks depend only on the client and the others depend on everyone else but the client - The process has a big number of tasks so it should be divided in sub processes for a simpler analysis Regarding the classification of each task as Added Value, Support or Waste it can be concluded that: - Most of the tasks are classified as waste - Only MAZE Supervisor and the provider have added value tasks - MAZE is the intervenient with the highest percentage of waste tasks Regarding the flashes represented on the diagram it can be concluded that: -Every flash identified belongs to MAZE or the client -MAZE is the intervenient with the biggest number of flashes -A big percentage of the tasks contain a flash Every flash identified represent waste and can be related with the 7 types of waste (7 muda): Overprocessing Flashes 1, 2, 4, 6, 7, 9 e 11 Wait Time - Flash 6 Product Defects 1-3, 10, 12 Motions Flashes 5, Time Study To proceed to the task time calculation, a time study was done using timing technique, allowing to compute the process time. For every task, at least 10 timing measures were done. It was defined that the ratio between standard deviation and the task mean time should be lower than 10% (additional measures were applied until this value was guaranteed). Being a process with a big number of activities, it was decided to divide (the process) it in 3 sub processes for a simpler presentation of the computations The first sub process was called Requisition of PPE and office material and is composed by the tasks M1- M5 and C1 to C5. These are the tasks that depend only on MAZE/Client. The second sub process was called Reception of PPE and office material and is composed of tasks M6-M12. The third sub Process was called Extra MAZE/Client Process and for this sub process no study time was made since these intervenients are not part of the target defined at the beginning of this work. The following table shows the sub process time for the 2 sub processes studied Table 1 - Total Process Times Nº Sub process MAZE Client 1.1* PPE Requisitions 174s s 1.2* Office Material and Gloves requisition 134s s 2 PPE and Office Material reception 229s 0 1 In this (support) process Product defects are considered to be information flux defects 5

6 The conclusions taken with the time study performed were: Most of the tasks studied, the initial 10 stop-watch measures were enough to achieve a ratio Standard deviation mean time under 10%. That means that this process has no significance variance. The longest sub process for MAZE is the Reception sub process mainly due to the duration of tasks M10 and M11 For the client the requisition sub process is mainly influenced by the motion and wait time to and at MAZE (task C2-C4 and the transition between task C2-C3) The sub process 1 time for the client is significantly greater that the respective time for MAZE The time of the process computation is not clear enough to determine the best analysis area within this process The next step taken was the computation of the annual occupancy rate of MAZE with this process. To compute this value, the sub process times were multiplied by the number of times it occurred in 2015 (data taken from informatics registries) and divided by the time worked by MAZE collaborators. This value was given by equation 1. Occupancy Percentage MAZE = t MAZE sp1 + t MAZE sp = = 28% (1) t MAZE This equation shows that the time spend by MAZE with the requisition sub process (684.6h ->21%) is significantly greater than with the reception process ( >7%) which means that probably the best sub process to design solutions is the requisition of PPE/Office material. To be sure about this choice, further analysis was done. 7.4 Effort and Benefit Matrix After the Swimlane diagram was designed and the time study performed, an analysis to evaluate the flashes identified in the Swimlane diagram was done. It was used an Effort vs benefit matrix to study which sub process contained the biggest number of flashes and the biggest ratio Benefit/effort (best process to design solution). For the matrix construction a qualitative and comparative classification was given to every flash identified previously. This classification can be observed on the following figure. Figure 2 - Benefit vs Effort Matrix Observing the Swimlane diagram and the benefit effort matrix, some conclusions can be taken: -The sub process with the biggest number of flashes is the requisition process. -The flashes that represent a higher ratio Benefit/Effort belong to the requisitions sub process. This analysis, in conjunction with the time study, point to the requisitions sub process being the best process to study improvement solutions, so this was the chosen process. The main flashes chosen to mitigate were: -Flash 1 Optimization of the requisition of material by the client and if possible find a solution that provides the client the opportunity to the requisition during the nonproductive time. 6

7 -Flash 2 e 3 Automation of the Plafond Verification, providing the elimination of these tasks immediately -Flash 4 With the elimination of this task, the material will arrive quicker to the client and will save some storage space in MAZE. -Flash 5, 6 e 7 Elimination of the motion time and the respective waiting time at MAZE. This implies that the client s reception time will be eliminated too. 7.5 Diagnosis Conclusions The main conclusion taken with this diagnosis were: -The best MAZE process to design improvement solutions may be the PPE and Office material Process -The problems that the process contains were identified and explained through a list of flashes -Due to the fact that the process design contained a big number of tasks, it was decided to divide the process in 3 sub processes for a simpler analysis -The time study indicates that this process occupies 28% of the year occupancy of MAZE collaborators. This time is divided by 21% for the requisitions sub process and 7% for the reception sub process -Due to its big number of flashes and the high occupancy rate it was given priority to the PPE/Office Material requisition sub process for the improvement solutions design 8. Solutions To improve the requisitions sub process 4 solutions were though. The first solution was the creation of a supermarket car that gives the productive areas clients the opportunity to pick up the requested material 24h/day with no need to depend on MAZE s opening time. The second solution was the integration of a material delivery service on an already existing milk-run route for the clients outside the plant building (bigger motion times to MAZE). This gives the clients the opportunity to request and receive material without exiting the workplace. The third solution was the design of an interactive kiosk for Safety Equipment requisition. With this solution, every collaborator can request safety equipment at any time without the need to ask the supervisor to do it. The fourth and last solution was the acquisition of vending machines for gloves, making them available 24/7 to collaborators, to answer their needs) The gains expected for each solution are described in table 2. Table 2 Gains expected for each solution By Analyzing this table, we are able to conclude that with these solutions: 7

8 - Every flash is eliminated - Every department is targeted The following table shows the impact estimated with the implementation of these 4 solutions regarding the reduction of occupancy (biggest advantage of these solutions) for MAZE. Table 3 - Reduction of occupancy rate for each solution Solution MAZE Client* Supermarket Car 2.4% Milk-Run Delivery 0.6% Kiosk for Safety Clothing 7.7% Vending Machines 2.1% Total 12.8% With the previous table some conclusion can be taken: -The solution that provides the biggest occupancy reduction for MAZE as well as for the client is the kiosk for safety clothing -With the implementation of the 4 solutions, the reduction of occupancy estimated for MAZE is 13% which represents a reduction of 61% of the process time. -With the implementation of the 4 solutions, the reduction of occupancy estimated for the client is 0.56 FTE which means that adding every clients time saved with these solutions can save 56% of one client 8.1 Implementation When this work was concluded only two of the 4 solutions designed were implemented (the supermarket car and the milk-run route). To study the stability of these solution several performance indicators (number of motion to MAZE, Pick-up material time, etc.) were followed during one week. For the followed indicators, it was verified that every indicator was within the defined range of positive stability and one of the indicators was even better than the initial prediction although it was not sufficient to change significantly the expected gain. These results show that the implementation of these solutions was successful. Regarding MAZE, the effect of the gains obtained were almost immediate since it was observed a bigger flexibility to answer the client demands not only the target clients of these solutions but also the clients in general. Regarding the clients, it was observed an improvement on the satisfaction level through the positive feedback received which gives good perspectives for the implementation of the remaining solutions. It was also observed that the clients were very motivated with the improvements achieved and the frequent resistance to change, present in some companies, was not present here. 9. Conclusions The mains goals of this work were the improvement of the response capacity from MAZE to its clients as well as the improvement of the clients satisfaction level. With the reduction of capacity percentage obtained with the implementation of the improvement solutions, the response capacity was improved greatly and the clients satisfaction also improved, fact confirmed by the positive feedback obtained regarding the new process. 8

9 The VSDiA tool was extremely useful for the mapping of the analyzed process and its characteristics were confirmed as the Swimlane diagram was a very simple and transparent way to map the process, the level of detail desired was achieved and every design solution was made with the help of the MAZE collaborators and its clients. During the implementation of the solutions designed, a great openness to change was verified on both sides (Client and MAZE) and the company s direction and administration were always involved through regular project status presentations. References [1] Lean Enterprise Institute, [Online]. Available: [2] Lean Manufacturing Tools, Lean Manufacturing History, [Online]. Available: [3] F. W. Taylor, The Principles of Scientific Management, Harper & Brothers, [4] T. Ohno, Toyota Productin System: Beyond Large-Scale Production, [5] J. F. Kraftik, Triumph of the Lean Production System, Sloan Management Review, vol. 30, pp , [6] J. P. Womack, D. Roos and T. D. Jones, The Machine that Changed the World, [7] J. Liker, The Toyota Way, [8] P. E. Network, 12 Essential Lean concepts and tools, [Online]. Available: essential-lean-concepts-and-tools. [9] L. E. Institute, Principles of Lean, [Online]. Available: [10] I. Masaaki, Kaizen: The Key to Japan's Competitive Success, Random House, [11] K. Institute, O que é Kaizen?, [Online]. Available: [12] W. Deming, Elementary Principles of the Statistical Control of Quality, JUSE, [13] W. Shewhart, Statistical Method from the Viewpoint of Quality Control, [14] Toyota Motor Corporation, The Toyota Production System - Leaner Manufacturing for Greener Planet,

10 Annexes A1 Swimlane Diagram 10