The basic concept of waste

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1 The basic concept of waste Waste Value-adding Customer demand Value stream = all processes and work steps between withdrawal of raw material and delivery of finished good Customer satisfaction The customer defines value Waste is every consumption of resources not adding value to the product. Value-adding are all work steps improving customer satisfaction; i.e. steps for which the customer would be willing to pay for Kontinuum Lean Production Prof. Dr.-Ing. J. Metternich 1

2 The types of waste can influence and reinforce each other Overproduction Defects and rework Waiting Movement Transport Inventory Over-processing, wrong processing Overproduction is the worst waste because it causes more of the other types of waste as well Kontinuum Lean Production Prof. Dr.-Ing. J. Metternich 2

3 Waste raises costs but not the value Non-value-adding activity: - Any work or effort that creates no value VA Value-adding activity: - Directly creates value - Changing the fit, form or function of the product - Is the customer willing to pay for this activity? NVA Elements of the work Goal: Maximisation of the valueadding time share ENVA Essential non-value-adding activity: - Work that does not directly create value, but is required to perform value-adding activities Kontinuum Lean Production Prof. Dr.-Ing. J. Metternich 3

4 Achs AG: Value stream map current state (textbook example) Identify customer demand Draw the process steps Collect process data Record inventory External material and information flow Internal material and information flow Lead and cycle times Metall AG Chassis-Parts 1 per week forwarding 6 week plan Prod. scheduling 90/60/30 days preview daily order Mobile AG 18,400 parts per month 1 per week Weekly plan Customer call-off 1 per day I 5 days Casting Split process (2h/day) C/T = 30 s C/O = 1 h per 1 shift 30 s Welding Assembly 1 Assembly 2 I I I 6 4,600 VL 1 1 1,100 VL 1,200 VL 1 C/T = 40 s 3 shifts C/T = 34 s 2,400 FL 600 FL 640 FL C/O = 10 min 2x C/T = 62 s C/O = 0 per shift C/O = 0 downtime: 40 min/day 40 s 62 s I 2,700 VL 1,440 FL Shipping 5 days 7.6 days 1.9 days 2 days 4.5 days 21 days 34 s 166 s 0.02% Kontinuum Lean Production Prof. Dr.-Ing. J. Metternich 4

5 Current state the indicators to characterise your value Stream Value stream indicators Customer takt Line index time Throughput time Value adding time share = available net working hours / customer demand = customer takt OEE = customer takt inventories = value adding time / throughput time First time failures (ppm) = failures found at test / no. of tested parts 1,000,000 Customer complaints (ppm) = customer complaints / products delivered 1,000, Kontinuum Lean Production Prof. Dr.-Ing. J. Metternich 5

6 Mark the obvious fields for improvement KAIZEN flashes (textbook example) Brantford Lumber 1 x per month Implement Kanban Monthly order Cell for saw and notch? Production manager Daily priorities Weekly orders Daily schedule changes Lead time = 12 15d 10% late I I I ACME Chem. & 3 others 400 per day 1 x Daily Yard Multi-saw 5d Notching 3d Assembly 5d Shipping Staging I 60d Cycle Oper 8s time Mach 10s Changeover time = 30 min Cycle Oper 10s time Mach 20s Changeover time = 20 min Cycle time = s Changeover time = 10 min Unstable cycle time Uptime = 90% Uptime = 80% Uptime = 100% 1 shift 1 shift 1 shift 450 min available Long setup time 450 min available 450 min available Source: LEAN ENTERPRISE INSTITUTE - Lean Lexicon Kontinuum Lean Production Prof. Dr.-Ing. J. Metternich 6

7 Calculation of takt: A constantly changing takt is created by passing through customer demand directly to the production Total available time in minutes/day quantity Our Capacity Customer takt in minutes/product time Total customer demand in products/day? How the customer orders quantity time Kontinuum Lean Production Prof. Dr.-Ing. J. Metternich 7

8 To level the final production process just by volume is not enough Final process levelled just by volume levelled by volume and type Following process Following process Preceding process Storage Preceding process Storage Batch production concentrates work on different processes at different times. A revolving production schedule distributes work evenly among the process steps of the production sequence at all times. Source: Toyota Motor Company The Toyota Production System (1998), page Kontinuum Lean Production Prof. Dr.-Ing. J. Metternich 8

9 JIT does not just mean JIT delivery but also JIT production JIT does not just mean delivery "in time" JIT means production and delivery "in time" Production planning Production planning Production plan Production plan Delivery plan Delivery plan Kanban Kanban Kanban Process A Process B JIT Process A Process B JIT Stock semi-finished products Stock finished products Pull and Flow The product is delivered from the finished goods warehouse The product is delivered from the finished goods supermarket The goal of JIT from a lean perspective: continuously improve responsiveness to customer demand by linking processes closer together Kontinuum Lean Production Prof. Dr.-Ing. J. Metternich 9

10 Control effort There are three types of pull systems Definition Use FIFO items don t change their order within the FIFO system High product variety and high inventory costs Small cycle time differences Car seats Supermarket defined stock between processes, withdrawal triggers refilment High demand and low variants Gearboxes Mixed-pull FIFO and supermarket in parallel depending on an item s characteristics Items with stable demand buffered in a supermarket Specific parts: FIFO Kontinuum Lean Production Prof. Dr.-Ing. J. Metternich 10

11 Information and material flow of different pull systems T T P E P E A B A B A FIFO T T FIFO FIFO Supermarket Mixed-pull B B takes a unit from the FIFOlane A refills the FIFO-lane triggered by the empty slot Production order for B given by FIFO sequence B picks parts from the supermarket triggered by an extraction Kanban (E) A fills the empty spaces in the supermarket triggered by a production Kanban (P) Production order for A given by production Kanban Mixed-pull consists of the parallel execution of FIFO-racks and a supermarket Information and material flow are analogue to the single systems B follows A s sequence Kontinuum Lean Production Prof. Dr.-Ing. J. Metternich 11

12 Line back supply chain planning on eight levels Supplier Supplier Supplier External transport Hub External turnover External transport Dock I Internal turnover PPS Internal transport Call - off Commis - sioning Plan Line Delivery to workplace Supplier External turnover External transport Internal turnover Internal transport Delivery Call-off Workplace Kontinuum Lean Production Prof. Dr.-Ing. J. Metternich 12

13 What quality issues mean for production Not hitting the right quality is waste. The customer is not willing to pay for defects, rework and disruptions. They are simply waste. Minor quality creates variability. Missing material or defects found at the line cause re-planning and delays of customer delivery. Quality problems (if not recognised) move down along the value stream. Small quality issues can cause huge costs for rework and recalls by customers. Quality problems affect customer satisfaction. They can cause lasting damage to a company s image. Just one single polluted bottle of water can cause a dramatic breakdown of sales and turnover. Quelle: Quality Service Line, Center für industrielle Produktivität Kontinuum Lean Production Prof. Dr.-Ing. J. Metternich 13

14 Lean quality thinking on the nature of inspections The core of inspection is the comparison with standards. If there is no standard (photos, checklists, drawings, ) it is not inspection. As inspection doesn t change any product characteristic, even the most efficient inspection is nothing else than efficiently wasteful. We can inspect two ways 100%-inspection + Every unit inspected High likelihood to find every defect - High effort Expensive Sampling + Less effort Based on statistical theory Cp ppm Sigma Niveau 0, , , , σ 1,3 96 1, σ 1,4 26 1,5 6 1,6 1 1, σ X OTG - X C pk UTG min ; Defects still possible (though unlikely) and not found Kontinuum Lean Production Prof. Dr.-Ing. J. Metternich 14

15 The concept of sampling through statistical process control (SPC) means the acceptance of processes that deliver What do 66 ppm or % defects ( C pk = 1.33) mean for our daily life? every month 4 minutes polluted drinking water every week 1 unsafe landing at Frankfurt Airport every hour 105 postal items lost every year 1,320 wrong drugs given for a prescription every week 33 failed surgical interventions every year 2,100 missing heartbeats per person every hour 1,450 transactions withdrawn from wrong accounts In all of the aspects mentioned above, we expect zero defects. To achieve this, we need a zero defect approach in the underlying value adding processes! Kontinuum Lean Production Prof. Dr.-Ing. J. Metternich 15

16 We can distinguish three ways to inspect 100% depending on the distance from the origin of a mistake. Successive inspection Workers check each others work. Inspection is separated from operation. The feedback loop causes a time gap between detection and information to source. Cause Operation 1 Operation 2 Mistake Defect STOP Feedback Selfinspection Workers are responsible for finding and correcting own defects (e.g. using callipers to compare with standard) Cause Operation 1 Operation 2 Mistake Defect STOP Feedback Source inspection The causes that produce a defective condition are under control. Instead of responding to defects, mistakes are discovered at their point of origin (the operation) before they turn into defects. Cause Mistake Operation 1 Operation 2 STOP Feedback Kontinuum Lean Production Prof. Dr.-Ing. J. Metternich 16

17 Jidoka separation of man and machine work Automatic feed Automatic feed Light/sound + stop Automatic ejection Manual feed and watch machine cycle Watch machine cycle Self-monitoring machine Automation Autonomation In case of an abnormal condition: Through sensors and Poka Yoke devices the machine detects, stops autonomously, informs with lights, displays, sounds, Kontinuum Lean Production Prof. Dr.-Ing. J. Metternich 17

18 There are two interdependent improvement cycles live. The proactive cycle naturally precedes the reactive cycle. Proactive improvement Goal: Create standards and basic stability Primary lean tools: Standard work Standard Visualisation/5S Poka Yoke Secondary lean tools: PFMEA Quality matrix Reactive improvement Goal: Creating higher levels of stability and standardisation Primary Lean Tools: Poka Yoke ANDON Line KPIs Root cause problem solving The proactive cycle has the fundamentally important task of first stabilising and then standardising the process. The reactive cycle starts once a certain level of basic stability is reached Kontinuum Lean Production Prof. Dr.-Ing. J. Metternich 18

19 Two philosophies, two possible outcomes Philosophy Principle Strategy Approach Reason Effect Result Source: Liker, J.: The Toyota Way Filedbook Low unit costs Increase production by never stopping the line Control quality trough inspection and containment Correct problems off line Stopping the line prevents hitting the numbers Problems not identified, solutions not explored Added costs to correct later, quality control = policy Waste elimination Get quality right first time Stop to fix problems. Never knowingly pass defects Fixed position stop and support structure Urgency to solve problems, challenge people to think Motivation to identify and solve problems Waste and costs reduced, people and process developed Kontinuum Lean Production Prof. Dr.-Ing. J. Metternich 19

20 Definition of the term problem when do we have a problem? The term problem A problem is any situation with an (1) deviation from an expected (2) should performance with (3) unknown cause. To understand if we are faced with a problem we need to check three criteria. There must be a: should condition actual performance which deviates from the should condition cause unknown for the deviation If all three criteria apply then we have a problem! If cause is known we don t have (to solve) a problem. We just need to define a measure or take action. Source The New Rational Manager, 2006, Kepner-Tregoe, Inc Kontinuum Lean Production Prof. Dr.-Ing. J. Metternich 20

21 Process performance Standards build the baseline for continuous improvement Note: Any lean improvement activity needs to be backed up by the installation of a continuous improvement process to be successful. This is not the indication of success: This is: Standardisation + stabilisation 1. Level standard incrementally 2. Identify abnormality 3. Improve 4. Stabilise A P C D Kontinuum Lean Production Prof. Dr.-Ing. J. Metternich 21