GE2250 Understand Global Project for Business and Engineering Professionals. Lean Project Management. Instructor: Jiayu Chen Ph.D.

Transcription

1 GE2250 Understand Global Project for Business and Engineering Professionals Lean Project Management Instructor: Jiayu Chen Ph.D.

2 INTRODUCTION Assignment Policy Team Project Team arrangement Final Project 1. Visit 2. Use the filter to find out Industry = Computer, Office Equipment 3. Use some tools in Jiayu Chen, Ph.D. 2

3 COURSE STRUCTURE L6. Scope and Risk Management for Global Project Culture Organization L2. Cross-culture Collaboration L3. Organizational Structures New Challenges L8. Supply Chain Management L10. Lean Project Management L11. Mergers and Acquisitions L5. Project Planning, Control and Crashing L4. Project Cost Estimation and Budgeting Global Team L9 Leadership and Team Building L12 Virtual Environment and Global Team Project Management Triangle Strategic Management Jiayu Chen, Ph.D. 3

4 Lean Project Management Jiayu Chen, Ph.D. 4

5 LEAN An introduction Four Principles Lean Management - Get Lean in 90 Seconds Author: fourprinciples URL: Jiayu Chen, Ph.D. 5

6 LEAN An introduction 1 Definition Reinforce the effectiveness of project management by emphasizing on iterative discovery, problem solving, value delivery, and eliminating wasteful tasks, resulting in improved quality, reduced total elapsed project time and reduced project costs. 2 Lean is the relentless pursuit of adding value for the customer, waste elimination, and continuous improvement from a standard at the point of activity by everyone, everywhere, everyday! 3 Lean is the production of goods using less of everything compared to traditional mass production: less waste, human effort, manufacturing space, investment in tools, inventory, and engineering time to develop a new product. Jiayu Chen, Ph.D. 6

7 LEAN An introduction Ford lined up fabrication steps in process sequence wherever possible using special-purpose machines and go/no-go gauges to fabricate and assemble the components going into the vehicle within a few minutes, and deliver perfectly fitting components directly to line-side. Henry Ford Flow production with standard work and moving conveyance. Moving assembly line Jiayu Chen, Ph.D. 7

8 LEAN An introduction The problem with Ford s system was not the flow: The system is able to turn the inventories of the entire company every few days, but it is unable to to provide variety. Every machine in the Ford Motor Company worked on a single part number, and there were essentially no changeovers. Other automakers responded to the need for many models, but with production systems whose design and fabrication steps regressed toward process areas with much longer throughput times. fabrication shops were populated with larger and larger machines that ran faster and faster, but continually increasing throughput times and inventories except in the rare case like engine machining lines where all of the process steps could be linked and automated. The time lags between process steps and the complex part routings required even more sophisticated information management systems culminating in computerized Materials Requirements Planning(MRP) systems. Jiayu Chen, Ph.D. 8

9 LEAN An introduction Toyoda believes a series of simple innovations might make it more possible to provide both continuity in process flow and a wide variety in product offerings. They therefore revisited Ford s original thinking, and invented the Toyota Production System. Kiichiro Toyoda The Toyota system shifted the focus of the manufacturing engineer from individual machines and their utilization, to the flow of the product through the total process. Toyota concluded that by (a) right-sizing machines for the actual volume needed, (b) introducing self-monitoring machines to ensure quality, (c) lining the machines up in process sequence, (d) pioneering quick setups so each machine could make small volumes of many part numbers, and (e) having each process step notify the previous step of its current needs for materials, it would be possible to obtain low cost, high variety, high quality, and very rapid throughput times to respond to changing customer desires. Jiayu Chen, Ph.D. 9

10 LEAN An introduction The thought process of lean was thoroughly described in the book The Machine That Changed the World (1990) by James P. Womack, Daniel Roos, and Daniel T. Jones. In a subsequent volume, Lean Thinking (1996), James P. Womack and Daniel T. Jones distilled these lean principles even further to five: Specify the value desired by the customer Identify the value stream for each product providing that value and challenge all of the wasted steps (generally nine out of ten) currently necessary to provide it Make the product flow continuously through the remaining value-added steps Introduce pull between all steps where continuous flow is possible Manage toward perfection so that the number of steps and the amount of time and information needed to serve the customer continually falls Jiayu Chen, Ph.D. 10

11 LEAN An introduction Lean project management, or more specifically, Lean Manufacturing is sometimes called the Toyota Production System (TPS) because Toyota Motor Company s Eiji Toyoda and Taiichui Ohno are given credit for its approach and innovations Taiichi Ohno and Eiji Toyoda developed the Toyota Production System between 1948 and 1975 Eiji Toyoda Taiichui Ohno Jiayu Chen, Ph.D. 11

12 LEAN TPS The Toyota Production System (TPS) is an integrated socio-technical system, developed by Toyota, that comprises its management philosophy and practices. The TPS organizes manufacturing and logistics for the automobile manufacturer, including interaction with suppliers and customers. The elimination of waste has come to dominate the thinking of many when they look at the effects of the TPS because it is the most familiar of the three to implement. In the TPS many initiatives are triggered by inconsistency or over-run reduction which drives out waste without specific focus on its reduction. Waste of over production (largest waste) Waste of time on hand (waiting) Waste of transportation Waste of processing itself Waste of stock at hand Waste of movement Waste of making defective products Jiayu Chen, Ph.D. 12

13 LEAN TPS Since the Toyota Production System requires that activities, connections, and flow paths have built-in tests to signal problems automatically, gaps become immediately evident. Results of the TPS are improvements in reliability, flexibility, safety, and efficiency and lead to increase in market share and profitability. Work shall be completely specified as to content, sequence, timing, and outcome Every customer-supplier connection, both internal and external, must be direct and specify personnel, methods, timing, and quantity of goods or services provided Product and service flows must be simple and direct goods and services are directed to a specific person or machine Any improvement in the system must be made in accordance with the scientific method at the lowest possible level in the organization Jiayu Chen, Ph.D. 13

14 LEAN Lean Thinking Value Value is what the customer wants What they are willing to pay for (or endears you to them if you are not charging them) What you are trying to produce Information that is used to create value For example, information that helps you decide what your customer needs Value Stream The flow from beginning to end of creating the value Often cuts across companies, virtually always cuts across organizations It should look at the sequence of steps that transform the original idea into value in the customers hands Jiayu Chen, Ph.D. 14

15 LEAN Identifying Waste Review Value Stream The sequence of activities that create project deliverables What activities can be deleted? Streamlined? Beefed up? Where are the bottlenecks? Is there excessive wait-time? Ask your team They know! Can you justify each activity and deliverable? Too Much Includes non-value added information or tasks Have to filter out the noise Impedes efficiency, creativity and innovation Too Less Missing Important tasks or information Error-prone Causes confusion, delays and wasted work Jiayu Chen, Ph.D. 15

16 LEAN Lean Thinking Lean focuses on creating value for the customer. This means eliminating, or at least reducing, everything else. In order to do this, Lean leader Toyota identified three key areas to address: muda, mura and muri. Organizations that implement, but often fail to sustain Lean systems, usually only concentrate on muda. Muda 無駄 (Wastes) Mura 斑 (Unevenness) Muri 無理 (Overburden) Jiayu Chen, Ph.D. 16

17 LEAN Lean Thinking Muda 無駄 Identifying and eliminating waste is fundamental to a Lean organization. However, on its own it is rarely sufficient. Improved customer focus and productivity gains lead to leaner operations, which in turn help to expose further waste and quality problems in the system. The systematic attack on waste is also a systematic assault on the factors underlying poor quality and fundamental management problems. Waste is anything that does not add value to the customer. As a guide, seven wastes were identified by Shigeo Shingo as part of the Toyota Production System. Jiayu Chen, Ph.D. 17

18 LEAN Lean Thinking Mura 斑 Mura translates as unevenness or variability. This may well have led to a debate about whether Lean (reducing waste) or Six Sigma (reducing unevenness) was better. In many cases you will find that the muda is being caused by the mura. The variability of demand is caused by the way sales people are rewarded. This in turn causes a long lead time. Hence, always look for mura as well as muda. Jiayu Chen, Ph.D. 18

19 LEAN Lean Thinking Muri 無理 Muri in Japanese means "unreasonableness; impossible; beyond one's power; too difficult; by force; perforce; forcibly; compulsorily; excessiveness; immoderation. Muri can be avoided through standardized work. To achieve this a standard condition or output must be defined to assure effective judgment of quality. Every process and function must be reduced to its simplest elements for examination and later recombination. The process must then be standardized to achieve the standard condition. Jiayu Chen, Ph.D. 19

20 LEAN Lean Thinking Scenario What we hear What is means Longer term result 1 We have saved 25% of direct labor costs as we have made a quarter of our shop floor staff in the cell redundant. We have unwittingly disengaged our workforce and almost certainly removed the opportunity for future successful improvement. Lean has become synonymous with job cuts and has created shop floor opposition. 2 We have saved 25% of direct labor costs from the shop floor cell as we have moved these people somewhere else. In most cases this means that there has been no real cost savings as somewhere else does not imply increasing output. Firms fail to realize real benefits from the application of lean thinking as they focus on savings that are all too often unreal. 3 We have reinvested the 25% of people who were freed up in new business in another area where new work has been brought in to the business. The benefit of the freed-up people has been multiplied by getting them to work on new business with their free labor. A multiplier effect is produced when waste removing and value creating processes work in tandem that greatly enhances the benefits and results in profitable growth. Jiayu Chen, Ph.D. 20

21 LEAN Principles Lean Principles Precisely specify the value of each project Identify the value stream for each project Allow value to flow without interruptions Let the customer pull value from the project team Continuously pursue perfection Jiayu Chen, Ph.D. 21

22 LEAN Strategies Leveling Kanban 5S Single Minute Exchange of Dies Cellular Manufacturing Jiayu Chen, Ph.D. 22

23 LEAN Strategies: Leveling Leveling - Heijunka Heijunka means sequencing or smoothing of production. It is defined as the distribution of production volume and mix evenly over time. The objective is to absorb sudden fluctuations in market demand by producing several different models in small batches on the same line. The practice of Heijunka also allows muda to be eliminated by making it easier to standardize work. Good sequencing practice reduces the need for line side labor. Jiayu Chen, Ph.D. 23

24 LEAN Strategies: Leveling Leveling - Heijunka Traditional Production A traditional production process focuses on manufacturing in large-sized lots. The idea is to manufacture the maximum number of products in one lot. Leveled Production A lean production process focuses on producing as the latest market demand. Jiayu Chen, Ph.D. 24

25 LEAN Strategies: Leveling Benefit of leveling The most specific advantage has to be the flexibility that this system invokes within the company, ensuring that the customer can get exactly what they want, at a specific time that they need it. This ensures that the customer is kept satisfied and therefore ensures the longer-term financial stability of the company. Therefore, the correct implementation of the system provides predictability by leveling demand, flexibility by decreasing changeover time and stability by averaging production volume and type over the long term. Flexibility to make what the customer wants when they want it Reduced risk of unsold goods Balanced use of labor and machines Smoothed demand on the upstream processes and suppliers Jiayu Chen, Ph.D. 25

26 LEAN Strategies: Kanban Kanban KANBAN: A system that uses replenishment signals to simplify management. Signals (usually cards) hold product details (what to make, when to make it, how much to make, and where to send it). Cards stay attached to a bin that holds the product. When bin is empty, it is returned to the start of the assembly line for replenishment. Full bins are returned to the customer, and the cycle continues. Jiayu Chen, Ph.D. 26

27 LEAN Strategies: Kanban Kanban is a signal to start an action. This action can be a material or product need. It could be even a visual sign for assistance or information request. Basically is a way to communicate between processes and it helps to establish the "pull" system. By using the Kanban it is possible to control and stabilize the "work in progress" (WIP) by avoiding one of the seven wastes (overproduction). The Kanban is useful if you have to communicate between distant processes. If you eliminate the distance you do not need Kanban and you have the continuous flow. What is important to underline is that the signal is always visual and with standard procedures. Jiayu Chen, Ph.D. 27

28 LEAN Strategies: 5S s 5S s 5S s is a strategy for creating a well organized, smoothly flowing manufacturing process Jiayu Chen, Ph.D. 28

29 LEAN Strategies: 5S s Before After Jiayu Chen, Ph.D. 29

30 LEAN Strategies: 5S s Benefits of 5S Increases organization and efficiency Avoids wasted motion Increases safety Eliminates unnecessary inventory Offers improvements at an inexpensive cost Drawbacks of 5S If not fully implemented, may result in Five S Store things Stick to the rules Superficially clean Switch to new fixtures Serve reluctantly Can not be considered an end goal must be part of a continuous improvement movement. Jiayu Chen, Ph.D. 30

31 LEAN Strategies: SMED Single-Minute Exchange of Die (SMED) SMED is one of the many lean production methods for reducing waste in a manufacturing process. It provides a rapid and efficient way of converting a manufacturing process from running the current product to running the next product. This rapid changeover is key to reducing production lot sizes and thereby improving flow. Changeover time Lot size Process time per item Operation time Ratio 8 hours min 5.8 min 480% 8 hours 1,000 1 min 1.48 min 48% 8 hours 10,000 1 min min 4.8% (*Source from Wikipedia) Jiayu Chen, Ph.D. 31

32 LEAN Strategies: SMED (A) ensure that external setup actions are performed while the machine is still running; (B) separate external and internal setup actions, ensure that the parts all function and implement efficient ways of transporting the die and other parts; (C) convert internal setup actions to external; (D) improve all setup actions; Internal activities are those that can only be performed when the process is stopped; External activities can be done while the last batch is being produced, or once the next batch has started. Jiayu Chen, Ph.D. 32

33 LEAN Strategies: SMED External elements of work can be completed while the machine is still running - e.g. get the next tool, get all your clamps, get lifting equipment in place, put equipment away, etc. Internal elements of work can only be done while the machine is stopped - e.g. change the tool, adjust the machine depth, sharpen a tool (which requires the machine to be stopped), etc. Jiayu Chen, Ph.D. 33

34 LEAN Strategies: SMED Parallel operations using multiple operators By taking the 'actual' operations and making them into a network which contains the dependencies it is possible to optimize task attribution and further optimize setup time. Issues of effective communication between the operators must be managed to ensure safety is assured where potentially noisy or visually obstructive conditions occur. Jiayu Chen, Ph.D. 34

35 LEAN Strategies: SMED New batch of parts arrives Change over tools for the batch Set offsets for new tools Load NC program Validate Run parts Load part onto machine Cycle start and wait Unload and visually inspect (adjust if necessary) Jiayu Chen, Ph.D. 35

36 LEAN Strategies: SMED 1. Observe the current methodology. 2. Separate the INTERNAL and EXTERNAL activities. 3. Convert Internal activities into External Activities. 4. Streamline the remaining internal activities. 5. Streamline the External activities. 6. Document procedure and actions. 7. Do it all again. Jiayu Chen, Ph.D. 36

37 LEAN Strategies: SMED SMED and Lean SMED needs to be treated as a constant improvement program Setup times can not be minimized overnight Continuous evaluation and exploration of further improvements is absolutely necessary Benefits of SMED Increases throughput by reducing setup times Eliminates setup errors Increases safety Reduces the cost of setups Reduces waiting times and inventory buildups Decreases the required skill level of the operators Jiayu Chen, Ph.D. 37

38 LEAN Strategies: Cellular Manufacturing Cellular Manufacturing Cellular Manufacturing is a lean method of producing similar products using cells, or groups of team members, workstations, or equipment, to facilitate operations by eliminating setup and unneeded costs between operations. Cells might be designed for a specific process, part, or a complete product. They are favorable for single-piece and one-touch production methods and in the office or the factory. Cellular design often uses group technology, which studies a large number of components and separates them into groups with like characteristics, sometimes with a computer's help, and which requires the coding of classifications of parts and operations. Regardless of the cell design, the equipment in the cell are placed very near one another to save space and time. A cell supervisory computer must used to control movement between equipment pieces and the conveyor when robots or conveyors are used. Jiayu Chen, Ph.D. 38

39 LEAN Strategies: Cellular Manufacturing Functional Layout Cellular Layout Jiayu Chen, Ph.D. 39

40 LEAN Strategies: Cellular Manufacturing Benefits of Cellular Manufacturing Simplifies material flow and management Reduces interdepartmental travel Reduces throughput time Reduces lot sizes Simplifies scheduling Jiayu Chen, Ph.D. 40

41 LEAN Lean Manufacturing Advantages: Disadvantages: Increased overall productivity Reduced amount of floor space required Reduced manufacturing lead time Improved flexibility to react to changes Improved quality Difficulty involved with changing processes to implement lean principals Long term commitment required Very risky process Expect supply chain issues while changing over to lean Jiayu Chen, Ph.D. 41

42 LEAN People Issue Transition to Lean is difficult since a company must build a culture where learning and continuous improvement are the norm. Success of lean requires the full commitment and involvement of all employees and of the company s suppliers. Jiayu Chen, Ph.D. 42

43 LEAN People Issue Element Traditional Lean Improvement Communication Slow & Uncertain Fast & Positive Quality & Coordination Teamwork Inhibited Enhanced Effective Teams Motivation Negative, Extrinsic Positive, Intrinsic Strong Motivation Skill Range Narrow Broad Job Enrichment Supervision Difficult and Fragmented Easy & Localized Fewer Supervisors Jiayu Chen, Ph.D. 43

44 LEAN Customer s Benefits Element Traditional Lean Improvement Response Weeks Hours 70-90% Customization Difficult Easy Competitive Advantage Delivery Speed Weeks-Months Days 70-90% Delivery Reliability Delivery Quantities Erratic Consistent & High Up to 90% Large Shipments JIT as Required Quality Erratic Consistent & High Locks in JIT Customers Delighted Customers Jiayu Chen, Ph.D. 44

45 LEAN The house of Lean Project Management Jiayu Chen, Ph.D. 45

46 LEAN Action Plan: Project Preparation Principles of Lean Thinking Daily (short) stand up meetings Lean Approach Create an Obeya Room (project war room) Keep focus on business value Escalate sensibility to prevent waste Minimize project administration Goals: Speed up PDCA cycles Keep Strategic Alignment Team spirit, focus on collaboration and communication Shared visions and goals Put improvement ideas in action Daily directive: value creation by problem solving relieve project from redundant routines. Make decisions at the right time. Jiayu Chen, Ph.D. 46

47 LEAN Action Plan: Define Scope Principles of Lean Thinking Every project needs a SMART Business Case Focus on root causes not symptoms Lean Approach Further specify Business Case Find root causes of problems, needs or opportunities To speed up a project you must first slow down Goals Correctly specify value for customer Identify root causes by (inter) team based problem solving Jiayu Chen, Ph.D. 47

48 LEAN Action Plan: Measure and Analyze Principles of Lean Thinking Do not mistake activity for productivity Identify and eliminate waste Management by facts Empower the team Lean Approach Current State Map (Measure) - Define activities - Measure process times - Measure lead time Envision potential improvements (and select the one with most benefit) - Develop a Future state map - Set targets - Prioritise efforts Iterations Goals Define value added activities Process times Lead times Value Stream Awareness Defined approach to analyze situation (based on delivery of business value) Jiayu Chen, Ph.D. 48

49 LEAN Action Plan: Improve- Monitor and Control Improvements Principles of Lean Thinking Closed loop feedback, to measure the impact of improvements Create flow (non interrupted process) Lean Approach Fast customer requirements implementation Encourages flexibility and iterative problem solving Focus on business process improvement Goals Plan Do Check Act Problem Solving Flexibility in developing solutions Evolving benefits Lean Thinking Keep sense of urgency Jiayu Chen, Ph.D. 49

50 LEAN Strategies: Close and Action Principles of Lean Thinking Move beyond defending individual positions and ownership of ideas, Serving the greater goals of the team, organization and its customers Goals Define lessons learned Take actions to deploy lessons learned Lean Approach Consolidate lessons learned from previous stages Make adjustments to project management practices standardized work Train and reinforce Lean Principles Project is an opportunity to work on process improvement while getting the work done Manage towards perfection Jiayu Chen, Ph.D. 50

51 LEAN A Case Study Jiayu Chen, Ph.D. 51

52 LEAN A Case Study: Background Cogent Power began implementing Lean in 2003 to improve its competitiveness in the marketplace and help turn around its financial performance. Four years down the road the company has transformed its approach, with a renewed customer focus that has led to exponential sales GROWTH and a culture of continuous improvement. Jiayu Chen, Ph.D. 52

53 LEAN A Case Study: Background Cogent Power is a global electrical steel manufacturer has its head office in the UK and operates out of three major plants, in the UK, Sweden and Canada, which function as semiautonomous business units. Each operating plant has its own management structure, commercial and financial responsibilities. An internal supply chain exists where the UK plant supplies the Canadian plant with some of the raw materials for further processing and conversion. The union of the three plants occurred as a result of all being owned, or incorporated into, European Electrical Steels in European Electrical Steels (EES) Ltd resulted from a joint venture in 1991 between British Steel, which owned the UK plants, and The Canadian plant only began operation in 1970, but both the UK and Swedish plants have much longer and varied histories dating back to the 19th and 16th centuries. *Electrical steels play an essential role in the generation, transmission, distribution and use of electrical power and are one of the most important magnetic materials produced today. Jiayu Chen, Ph.D. 53

54 LEAN A Case Study: Background The challenge facing Cogent In 2003 the company was facing a number of challenges: Substantial pre-tax losses from global operations Business was losing cash from a number of its operating plants Static order book with emphasis on lower margin products. Jiayu Chen, Ph.D. 54

55 LEAN A Case Study: The Journey to Lean Jiayu Chen, Ph.D. 55

56 LEAN The Journey to Lean: 1. Strategy and alignment P Planning phase Following is an example of Cogent Power s early SWOT analysis. It is usually best done as a group so that you can discuss the items. It is easier to define the weaknesses and threats rather than the strengths and opportunities, but a well constructed SWOT can be a very useful tool for understanding situations and making decisions. Jiayu Chen, Ph.D. 56

57 LEAN The Journey to Lean: Strategy and alignment D Doing phase This is the start of deploying the policy; the idea here is to engage and involve everyone. The way that companies such as Cogent Power and Toyota do this is by a mechanism known as Catchball and Doing the Right Thing. Catchball Doing the Right Thing Jiayu Chen, Ph.D. 57

58 LEAN The Journey to Lean: Strategy and alignment C- Check phase The next steps are to perform the actions and review progress. Check entails simple connected meetings where exceptions are shared and discussed openly; back to the Lean mental models of problems being treasured as opportunities for improvement. Policy deployment is a formal process and the key to it is the review process. There are three levels of review: Level 1 Review the work done on a weekly or monthly cycle Level 2 Review the key issues on a monthly or quarterly cycle Level 3 Review the planning system as a whole on an annual or bi-annual cycle to ensure that it works for your organization. Jiayu Chen, Ph.D. 58

59 LEAN The Journey to Lean: Strategy and alignment A Act phase This is the problem solving phase and the focus here is to maintain alignment with the goals, so problems that emerge and disrupt the flow need to be addressed. Problem Solving Collective Contribution Jiayu Chen, Ph.D. 59

60 LEAN The Journey to Lean: Strategy and alignment P A D C Jiayu Chen, Ph.D. 60

61 LEAN The Journey to Lean: 2. Leadership Managers or leaders holding a bottom-up empowerment mental model might take a different approach and say You are empowered to make the decisions. This is what I want to achieve, I don t care how you go about it, as long as you deliver the results do it your way. Toyota leaders want to know enough technical details to understand the problem and appreciate the solution but their approach would be Follow me and let us figure this out together. The Lean leader style is that of a mentor, coach and active participant in problem solving. This is what engages and motivates the workforce. Jiayu Chen, Ph.D. 61

62 LEAN The Journey to Lean: 2. Leadership Leadership Strong decisive leadership with Lean experience is needed in the early phases of the program The later phases require more dispersed or adaptive leadership that takes more hands-on responsibility and leads the incremental continuous improvement Leaders must be prepared to review themselves critically, and the process, in order to push the business forward Continually develop Lean leaders at all levels, on all shifts and within all areas of the business and adopt a leading the Lean lifestyle programme Jiayu Chen, Ph.D. 62

63 LEAN The Journey to Lean: 3. Behavior and Engagement At Cogent Power people were given every chance to join in with Lean. They were given training and support but, inevitably, a few remained who were not prepared to change. These employees had to go, as they would not even be able to survive the change. In making the decision to replace them, a strong message was sent out to all employees, which signalled that the leaders were very serious about Lean. Examples of Lean behaviours include: trust, honesty, openness, consistency, respect, reflection, observation, objectivity and listening. Wasteful behaviours include: blame, ego, distrust, cynicism, sarcasm, ambiguity, subjectivity, insincerity, self-imposed barriers and negativity. Jiayu Chen, Ph.D. 63

64 LEAN The Journey to Lean: 3. Behavior and Engagement Implementation of lean behavior First, you have to believe that something is right for you, and is consistent with your own values and the perceived values of the organization. Second, you need the reassurance that the people you respect would behave in a similar fashion. Finally, you have to believe that you have the necessary skills, competency and resources to make the change possible. Then you are more likely to behave in a certain way; so beliefs and attitudes drive behaviors. Jiayu Chen, Ph.D. 64

65 LEAN The Journey to Lean: 3. Behavior and Engagement Some actions: Upgrade the toilet facilities Culture analysis Creation of Lean Centre Lean Coach Program Cogent Power embarked on a comprehensive Lean coach training and development program. This training was in theory and practice but with more emphasis on the latter. The coaches were selected mainly from inside the organization and these volunteers were chosen for their experience in manufacturing, sales, technical and engineering disciplines. The coach program offered both theoretical and hands-on tools and techniques training. The coaches were supported by the local management teams and the focus of their improvement activity was aligned with the business strategic and operational priorities. Jiayu Chen, Ph.D. 65

66 LEAN The Journey to Lean: 3. Behavior and Engagement Lean coaches play a key role in the effective deployment of the Lean program. The early pace of change often depends on the drive and experience of the coach and therefore the selection of an appropriate Lean coach team is essential. The coaches who had been deployed to help drive the program at Cogent Power became the real leaders of Lean and it was accepted that, in taking a top-down and bottom-up approach to the program, the middle managers had been neglected. Inject pace into the program by using experienced, motivated and multidiscipline people to form an internal Lean team. Encourage sharing and learning throughout the program, take every opportunity to get people together to discuss continuous improvement. Lean organizations need Lean people who are both competent and capable of pushing themselves and their teams out of the comfort zone and into the stretch zone. Jiayu Chen, Ph.D. 66

67 LEAN The Journey to Lean: 4. Processes Key Process 1 Product lifecycle management Definition Managing customer needs for new products. Designing and developing new products, bringing them to market and retiring obsolete products. 2 Order creation Winning new business with existing or new customers. 3 Order fulfilment 4 Technology, plant and equipment management 5 Human resource management 6 Strategy and policy deployment 7 Supplier integration and development 8 Continuous improvement Transforming raw materials into products that meet customer orders including taking orders, order processing, production planning, production, delivery to the customer and payment management. Developing, managing and maintaining operating equipment including IT. Developing, managing and maintaining employees, including training, recruitment and retention. The strategic management of the company, focusing on change and management of critical success factors. Integrating suppliers into other key business processes, developing new suppliers and managing supplier relationships. Continuous radical, or incremental, improvement of other key business processes. Jiayu Chen, Ph.D. 67

68 LEAN The Journey to Lean: 4. Processes Identifying waste in the order fulfilment process Big Picture Mapping Jiayu Chen, Ph.D. 68

69 LEAN The Journey to Lean: 4. Processes Jiayu Chen, Ph.D. 69

70 LEAN The Journey to Lean: 4. Processes The senior management teams of the plants reviewed the profit potential of the various value streams and, based on volumes, margin and future growth criteria, were able to select the key areas of focus for the operating teams to work on. The business imperative for one of the chosen value streams included: Improve on-time delivery Reduce space Reduce internal stock Reduce supplier stock-outs Reduce customer lead times. Jiayu Chen, Ph.D. 70

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73 LEAN The Journey to Lean: 4. Processes Adding value in the order creation process Classic seven wastes Overproduction Defects Unnecessary inventory Inappropriate processing Unnecessary motion Unnecessary transportation Waiting Renamed seven wastes Doing too much or too soon Getting it wrong or doing it twice Overloading Inappropriate processing Poor layout or routing Unnecessary/mo vement Delay Some common symptoms in order creation Generating more enquires than can be processed Not understanding what the customer actually wants (value criteria). Not getting a sale after doing all the work. Poor enquiry/conversion/retention rate of the right type for the business. Customers/enquiries/orders of the wrong type. Some salesmen having too many customers others not having enough. Too many orders of the wrong type. Where the internal process obstructs the delivery of what the customer wants or needs. Inability to maximize sales from existing customers. Unnecessary travel. Poor workstation layout. Excessive information flow with the business and between the business and the customer. Where information comes to a complete stop. Poor response time in responding to customer requests. Time taken to respond to a Request for Quotation. Jiayu Chen, Ph.D. 73

74 LEAN The Journey to Lean: 4. Processes From current state to future state The next step is to create a picture of the process once all the non-value-adding steps have been eliminated and then identify the tasks that you have to complete to realize this. From this they developed an initial ideal future state map that took out virtually all of the non-value-adding waste. To achieve this they had to make major changes, which did not happen all at once. They had to identify many projects that would form the road map to get them from the current to the ideal future state. One of the things they had to do was replace the old hierarchical, functional system with a new cross-functional team. They replaced the single Operations Manager role with four new roles; three reporting to the Operations Director and the fourth to the Commercial Director. The new roles were: Materials manager responsible for all material supplies to the whole process Two production managers each responsible for separate production processes, acting as internal customers and suppliers Order Fulfilment Manager responsible for overseeing the whole process from customer order to customer satisfaction. Jiayu Chen, Ph.D. 74

75 LEAN The Journey to Lean: 4. Processes Jiayu Chen, Ph.D. 75

76 LEAN The Journey to Lean: 4. Processes Jiayu Chen, Ph.D. 76

77 LEAN The Journey to Lean: 4. Processes Understanding the voice of the customer The Lean term, voice of the customer is an interesting concept. In practice there are two distinct components: Pre ordering where the supplier needs to listen and then demonstrate that they have heard and understood the things that are important to the customer, the value criteria Post delivery which is about the level of customer satisfaction achieved. Did the product/service offered meet expectations, exceed them or fall below them? Jiayu Chen, Ph.D. 77

78 LEAN The Journey to Lean: 4. Processes Customer Survey Cogent interviews face to face with a targeted cross section from their customers. individual value criteria ranked the values in terms of importance to the customers. measured their own performance against the customers expectations. explored the future in terms of where the market and supply chains where going. explored additional areas of value-add which they could offer their customers. asked the customers to sum up their experience of dealing with them as a supplier. The team quickly made some very interesting and exciting discoveries: Many of the things they were doing were right; they just needed to do more of them and release time from activities that were not adding value from their customers perspectives. Many of their customers wanted to have more advanced proactive partnerships. The nearer to the shop floor they conducted the interviews, the more quick wins they discovered that they were able to act on. Jiayu Chen, Ph.D. 78

79 LEAN The Journey to Lean: 4. Processes Order creation (some key points): In many businesses, sales are seen as a department rather than as a process. In reality, order creation is just like any other process in the business: order fulfilment, new product development etc. It is very often the case that sales people, who have a specific set of skills, are not always clear process thinkers. They miss out on the ability to improve performance by looking at sales as an activity through a different set of lenses. The ability to think about order creation as a process with distinct phases means that the process can be analyzed more easily to identify strengths and weaknesses. Measures and targets can be aligned across the process and, equally as important, the business can start to join up processes as part of the whole value stream that is seen through the eyes of the customer. Cogent themselves initially exhibited all of these traits and then undertook a detailed review of their order creation process that changed the face of the business. Jiayu Chen, Ph.D. 79

80 LEAN The Journey to Lean: 5. Tools and Techniques 5S workplace organization 1. Sort As managers you are saying to employees You decide what is necessary to do the job and sort out what you do, and what you do not, need. In this you are empowering people by giving them choice and responsibility to make decisions about their workstation. 2. Set in order This requires management intervention to provide the means for appropriate storage: shadow boards, bins, trolleys, tool cabinets etc. This demonstrates management commitment and involvement. 3. Shine, sweep or scrub means taking responsibility for the cleanliness of the workstation; it also requires that management acknowledge that time for cleaning is part of the working day. In this step, a regime and standards for cleaning are made. 4. Standardize is about maintaining and supporting the first three steps; this requires employee buy-in and commitment. Standards on what things are kept (S1), where they are kept (S2) and by whom, with what, when and how they are cleaned (S3) are made. At this stage visual aids for 5S audits are created. 5. Sustain or discipline; this is about making 5S a way of life and embedding it in the culture of the organization. Jiayu Chen, Ph.D. 80

81 LEAN The Journey to Lean: 5. Tools and Techniques Visual management The color coding is standard across the plant, although the individual measures may change to be appropriate to a team or department. Where the trends are negative they become a target for improvement. Improvement targets follow a standard procedure where problem solving skills are used to define the problem and suggest countermeasures. Responsibility for the action is then given to the team, who set up an improvement project. Note it is the team that takes responsibility. The business cockpits are used to monitor these and make visible all the projects at each level. The effectiveness of the system as a whole is determined by the effectiveness of each zone; teams, groups, departments and so on. Jiayu Chen, Ph.D. 81

82 LEAN The Journey to Lean: 5. Tools and Techniques Metric Description Used for Inventory turns (Stock turns) Finished goods Inventory The number of times that an organization s inventory cycles or turns over per year Number of units or days of finished good stock Monitoring holding cost. Reducing holding costs improves profitability, as long as revenue from sales is constant Inventory management Total WIP The number of units or days of work in progress Inventory management Total lead time The total time needed for an order to be processed Monitoring efficiency or lead-time Total cycle time Total time taken from start to end of a process Monitoring efficiency OTIF Schedule adherence OEE RFT Lost-time incidents Attendance Appropriate skills On-Time Delivery In Full. The number of deliveries in a cycle that were delivered on-time and in full. Internal measure of ability to hit target for quality and quantity on a day-by-day basis Overall Equipment Effectiveness is a measure of relative availability, performance and quality of plant or equipment Right First Time. The number of parts that are passed on free of defects compared with the total number of parts produced. Number of accidents or other incidents that result in an employee losing time Percentage of time that employees attended work. The reverse of absence, hence a positive measure The percentage of skills types in each work area that have an appropriate level of cover Monitoring delivery performance Monitoring internal consistency Monitoring how well equipment is running compared to the ideal plant. Important for managing bottleneck equipment Monitoring quality Monitoring health and safety Monitoring morale Monitoring alignment and morale Jiayu Chen, Ph.D. 82

83 LEAN The Journey to Lean: 5. Tools and Techniques Single Minute Exchange of Die (SMED) 1. The process started by forming a multi-disciplinary team including operators, engineers and planners. 2. They collected data on demand, machine performance, OEE trends and sequence dependencies. They videoed and timed the current state and used the videos to separate internal from external activities. 3. They mapped the current state against a timeline on large sheets of brown paper and used these to identify opportunities for improvement. SMED projects included 5S on the changeover tools and dies, changing layouts, simplifying and re-sequencing some activities as well as making any necessary engineering changes. 4. Targets for improvement were fixed and priorities established. The activities were planned and implemented in a phased process, each phase followed by checking and adjusting. 5. When the new process was finally established, standard operating procedures (SOPs) were developed and operators trained. 6. Once the SOPs are created they need to be maintained and audited to sustain the improvement. SOPs in a Lean enterprise are dynamic and set by operators consensually. They should be written by the operators in their own words and adapted with continual improvement. They should not be rigidly scripted but flexible and adaptable, and should include detailed work sequences, timing and any standard inventory or kanban requirements. Jiayu Chen, Ph.D. 83

84 LEAN The Journey to Lean: 5. Tools and Techniques Jiayu Chen, Ph.D. 84

85 LEAN The Journey to Lean: 5. Tools and Techniques Pull systems Identify customers value and value stream. Pull systems need to be aligned to strategy, supported by senior management and operated by skilled employees. Pull may not be the best strategy for all products; some products (strangers) that are made infrequently may be best left to be made to stock and replenished when needed. Runners are products or product families that have sufficient volume to be produced very frequently, typically every day. They are usually high volume, low variability. Sometimes these products justify dedicated lines. Repeaters are products or product families with intermediate volume and variety, that are made frequently but not necessarily every day, and the volumes do not justify dedicated lines. Strangers are products or product families that are made infrequently and are often highly variable. Jiayu Chen, Ph.D. 85

86 LEAN The Journey to Lean: 5. Tools and Techniques Kanban Cogent Power use kanban boards to manage internal stocks and have developed an innovative way of using technology to manage material stocks from their suppliers, and are extending it to their customers to help manage finished goods stocks. At the Canadian plant they have installed web cameras that are directed at pallet locations. The suppliers who are responsible for the supplies to these pallet locations are connected to the cameras and they can check the status of the stocks. The stocks are marked by red, amber, green levels; when the stock reaches an amber level this is the signal to prepare to produce and ship more products to replenish the stock to the green level. If stocks hit the red level the supplier has to have the stocks due for delivery, or to have notified the plant of a delivery date. The term they have used for this is Cambans. The customers can use the information to improve their forward planning and to inform Cogent Power of any changes to their demand profile. Jiayu Chen, Ph.D. 86

87 LEAN The Journey to Lean: Conclusion (*Source: Diagram based on Tom Peters concept adapted by P. Found and G. Griffiths) Jiayu Chen, Ph.D. 87

88 LEAN The Journey to Lean: Conclusion Jiayu Chen, Ph.D. 88

89 LEAN The Journey to Lean: Conclusion Jiayu Chen, Ph.D. 89

90 Thank You! Jiayu Chen, Ph.D. 90