Using Lean Thinking to Increase Productivity in Maintenance and Warehousing Activities Presenter: Jason Sadovia For Audio: Phone: 1-888-296-6500 Code:738859# November 25, 2009
Agenda What is Lean? What are the benefits to Lean? How is Lean applied? Example: warehouse/inventory improvement Question & Answer Period
What is Lean? A Lean Enterprise essentially eliminates waste throughout the business Waste costs resources and adds no value to the customers Lean principles are used to create precise customer value with Less human effort Less space Less capital Less time Lean is a systematic approach to identifying and eliminating waste trough continuous improvement, flowing the product at the pull of the customer in pursuit of perfection
A history of Lean 1900-1910 Frederick Taylor Standardized work Time study 1940-1950 Edwards Deming TPM SPC 1990 James Womack The Machine That Changed the World 1900 2008 1910-1920 Henry Ford Assembly line Flow lines Manufacturing strategy 1950-1985 Taichii Ono & Shigeo Shingo Toyota Production System Just in time Stockless production Source: http://www.lean.org/
Lean principles Identify Customer Value Product or service customer desires delivered at the right time and cost Continuously Improve There is always room for improvement Document the Value Stream Identify the actions needed from product conception to delivery Create Pull System Give customers what they need, when they need it Make it Flow Move away from mass production and focus on moving individual products through the value stream
The 7 (or 8) Wastes Transportation Retrieving or storing files Going to get signatures Going to copy machine or fax Inventory Open projects E-mails unread Office supplies Unused records in database Motion Searching for files / handling paperwork Gathering information Extra key strokes Handoffs Waiting Waiting for Faxes System to come up Customer response A handed-off file to come back Human Intellect Underutilized Over-Processing Repeated manual entry of data Use of inappropriate software Use of outdated forms Excessive approvals Over-Production More information than customer needs Creating reports no one reads Making extra copies Defects Data entry errors Pricing/rate error Missing information
Lean tools a sample Kaizen Value Stream Mapping Standardized work Kanban Lean Cellular Architecture 5S Balanced flow Visual Management
What are the benefits to Lean? Increase in productivity Improved flexibility in reacting to changes High quality & reliability Reduce defects Reduce inventory costs Reduced cycle time Lower inventories Reduction in order processing errors Reduction of paperwork Reduced staffing demands Lead time reduction Reduce floor space utilization
The Lean secret Most material in a process spends 95% most of its time waiting waiting for someone to add value to it or waiting in finished goods inventory Operating Expense 21% Operating Profit 8% One of the reasons cost is reduced by lead time reduction is that slow processes are expensive processes These processes often see discounts, quality issues, large inventories These costs are often called the cost of poor quality (COPQ) COPQ is often two to four times that of direct labour and are caused by long process lead times and variability Process Overhead and Quality 26% Labour 8% Material 37%
How to implement Lean? Project Selection Baseline Metrics Process Improvement Implement Standardize Business Metrics: Quality/Cost/ Service Team Selection VOC (Voice of the Customer) VSM (Value Stream Mapping) Pareto diagram Ishikawa (Fish Bone diagram) Kaizen 5S Spaghetti diagram Heijunka (job levelling) Gemba ( the place where the value is added ) Poka-Yoke (Mistake Proofing) Visual Management Kanban Standard Work Continuous Improvement
Case Study warehouse/inventory Automotive parts remanufacturer 28 global sites Implemented Lean to great success Focus on some of the inventory successes WW Mexico DRM Chantilly Patterson (cs144) Franklin-IFS WTI Summerville American Way LCI Powrbilt, Mansfield Gateway Kaleva Gen. Delphi Peru Church St Reed City AB HD Alt Franklin-engine Dallas Engine Master AB LD Motors AB HD Motors Liberty Alliance Tractech Warren 7 Lean Assessment Initial Results 9.5 17 16.5 16.5 17.5 23 22.5 22.5 23.5 23.5 24.5 26 28.5 29.5 31 31.5 33.5 33.5 35 39 Required minimum - 31 45 is target
Case Study warehouse/inventory Actions taken: Movement of material only on replenishment basis Delivery to Plant daily A raw inventory Supermarket No intermediate storage between operator and Supermarket Timed, kitted delivery to operator s parts presentation device @ least every hour
BEFORE
AFTER
BEFORE
AFTER
Case Study warehouse/inventory Supermarket of raw material First in first out Strike Zone unload
Case Study warehouse/inventory Tugger equipment and parts kitting Returnable containers Strike Zone lifts Small Lots
4/6/2001 4/13/2001 4/20/2001 4/27/2001 5/4/2001 5/11/2001 5/18/2001 5/25/2001 6/1/2001 6/8/2001 6/15/2001 6/22/2001 6/29/2001 7/6/2001 7/13/2001 7/20/2001 7/27/2001 8/3/2001 8/10/2001 8/17/2001 INVENTORY COST Case Study warehouse/inventory Sample of results: Inventory reduction of $3.8 M Inventory Turns increased from 20 to 26 Warehouse space decreased from 64,000 ft 2 to 51,800 ft 2 WIP Inventory Inventory Holding Cost $5,500,000 3500 $5,000,000 $4,500,000 3000 2500 2993 2905 2584 2369 2960 2905 2875 2690 2825 2775 2625 2730 2663 2580 ACTUAL FORECAST $4,000,000 2000 1964 2028 1990 $3,500,000 1747 $3,000,000 1500 1000 Dec-01 Nov-01 Oct-01 Sep-01 Aug-01 Jul-01 Jun-01 Ma-01 Apr-01 Mar-01 Feb-01 Jan-01
Different kinds of Lean same objective Lean Sourcing Lean Maintenance Lean Office Lean Manufacturing Coordination of the efforts between Purchasing, Supply chain and the Operations in order to identify additional opportunities Effectiveness (what) and efficiency (how) Eliminating wasteful motion Standardize work routines Improve efficiency Saves costs Simplify complex process Retains the knowledge within the organization Eliminating all waste in manufacturing processes and aligning production with customer demand or consumption Objectives Less Time Less Space Less Human efforts Less Capital
Keys to Lean success Prepare and motivate people Employee involvement Share information and manage expectations Identify and empower champions, particularly operations managers Atmosphere of experimentation Installing and realistic performance measures, evaluation, and reward systems The need to execute pilot projects prior to rolling culture out across the organization