LEARNING TO SEE an introduction to lean thinking 2
Why Lean? Customer satisfaction Market share Costs 3
Where did Lean come from? Henry Ford First flow production line 1960s The term Lean originated International Best Seller ~ 1996 Extended into nonmanufacturing processes 1920s Toyota Continuous flow (1 piece at a time) 1991 4
House of Lean Customer satisfaction Highest quality Shortest lead time Lower cost Just in Time (JIT) The right parts in the right place at the right time Short lead Times Low inventory levels Highly Flexible Motivated People Cross training Problem solving Learning organisation Delegation Built-in Quality Error proofing Visual control Machine efficiency Auto line stop Robust processes Standardised work Operational stability Total productive maintenance Supplier involvement 5
Lean transformation /1 1. Identify and map key business processes and value streams 6
Lean transformation /2 2. Simplify, error proof and standardise key business processes and value streams 7
Lean transformation /3 3. Deliver more, at lower cost, through robust processes and value steams 8
Lean transformation The unending search to make Shorter, Simpler, Safer the processes that add value for customers 9
Benefits More, happier customers = higher revenue Simpler, more robust processes = lower costs The following 2 slides show the commercial benefits of increased customer satisfaction 10
Customer retention after 1 yr (i.e. customer loyalty & repeat business) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 1 2 3 4 5 SCORE Very satisfied 5 Satisfied 4 Neither 3 Dissatisfied 2 Very dissatisfied 1 11 Source: Customer Centered Six Sigma, Naumann & Hoisington
80% Customer share of wallet (i.e. the amount each customer will spend) 70% 60% 50% 40% Very satisfied 5 Satisfied 4 Neither 3 Dissatisfied 2 Very dissatisfied 1 30% 20% 10% 0% 1 2 3 4 5 Score 12
The Toyota production system Taiichi Ohno 1912-1990 VP Toyota Motors The Father of the Lean Movement 13
Waste Waste opposite of value Any activity that uses the organisations resources e.g. labour, materials, machines, energy, intellectual property that does not add value for the customer at that point in time 14
Tim Wood: Master Muda Maker T i M W O O D ransportation inventory ovement aiting verproduction verprocessing efects 15
7 Wastes T i M Transportation ransportation inventory ovement Excessive movement of people, information or goods Excessive recording and subsequent transcribing of data Resulting in wasted time, effort and cost W O O D aiting overproduction verprocessing efects 16
7 Wastes T i M W O O D Inventory ransportation inventory ovement aiting overproduction verprocessing efects Excessive storage of information, forms, booklets or products, Resulting in excessive cost and poor customer service and too much of the wrong inventory on hand 17
7 Wastes T i M W O O D Movement ransportation inventory ovement aiting overproduction verprocessing efects Poor workplace organization Resulting in poor ergonomics i.e. excessive bending or stretching. Also resulting in excessive searching for frequently lost items. 18
7 Wastes Waiting Long periods of inactivity for people, information, or goods Resulting in poor flow and long lead times T i M W O O D ransportation inventory ovement aiting overproduction verprocessing efects 19
7 Wastes T i M Overproduction ransportation inventory ovement Producing goods or preparing services too much or too soon Resulting in poor flow of information or goods and excess inventory According to Ohno overproduction is the most common and worst waste of all W O O D aiting overproduction verprocessing efects 20
7 Wastes T i M W O O D Overprocessing ransportation inventory ovement aiting overproduction verprocessing efects Excessive data recording, excessive checking and rechecking Going about work processes using the wrong set of tools, procedures or systems, often when a simpler approach may be more effective Resulting in overstaffing, too much equipment and time delays 21
7 Wastes T i M W O O D Defects ransportation inventory ovement aiting overproduction verprocessing efects Frequent product quality problems or errors in paperwork, missing documentation Resulting in scrap & rework 22
Principles of Lean implementation 1. Value 2. The Value Stream 3. Flow Understand & quantify customer value Map all VA & NVA steps before you implement or change anything Remove all barriers to flow e.g. delays & defects 4. Pull Implement pull systems 5. Perfection Continue to build better and better systems 23
1. Value Value can only be defined by the customer Value is created by the producer Only meaningful when used in terms of a specific good or service, or both, which meets the customer s requirement at a specific point in time Value must be defined in terms of the whole product (enterprise flow) 24
2. Value Stream Mapping A strategic high level approach to system analysis and continuous improvement Conducted by senior management on an annual basis on key value streams The objective is to identify a coordinated suite of projects that will improve the performance of inter connected systems Suppliers Product manufacture Flow & service development Customers 25
As Is VSM Inventory Turns 10 Lead Time 23.5 days VA Time 3 mins Source: Learning to See, Rother & Shook
3. Value Flow Suppliers Product manufacture Value flow Customers Kaizen DMAIC DMAIC & service development DMAIC SMED DMAIC Kaizen DMAIC 27
EFFECTIVENESS Mistake proofing Poka-Yoke PREVENT REDUCE the risk (physically) SOUND alarms, siren, fire alarm Frequency of human response to process problems, and their relative effectiveness COLOUR red = danger, hot-spots, hi-vis jackets PLEASE CLOSE THE DOOR WRITTEN SOPs, signs, notices, manuals VERBAL instructions, training, meetings 28
Future State VSM Inventory Turns 53 Lead Time 4.5 days VA Time 3 mins Source: Learning to See, Rother & Shook
4. Pull Don t produce it until it is requested The principal of Pull is that no upstream work centre should produce a good or service until the customer down stream asks for it Signalling systems between process steps to increase productivity and lower throughput time 30
4. Pull Step 3: WCD pulls part from supermarket Step 2: Warehouse requests product from WCD Step 1: Customer order received by warehouse Work Centre C Work Centre D Warehouse Customer Order Step 6: Supermarket kanban triggers WCC to produce part Step 4: WCD supplies warehouse Step 5: Warehouse supplies customer 31
4. Pull at Boeing Video: Boeing 737 manufacture (8 mins) https://www.youtube.com/watch?v=-y0u1qux9ea See also Boeing documentary (45 mins) https://www.youtube.com/watch?v=c26y2-j5kry 32
5. Perfection Perfection is like infinity. Trying to envision it and get there is actually impossible, but the effort to do so provides inspiration and direction essential to making progress along the path. 33
5. Perfection Lean continuous improvement Current State Future State Next Future State The Ideal State? 34
Kaizen & Kaikaku Kaizen: philosophy or practices that focus upon continuous improvement of all processes Kaikaku: making fundamental and radical changes to a process or system, unlike Kaizen which is focused on incremental minor changes 35
The value chain The lean journey Exponential Process Improvement Local Vision European Vision Global Vision Strategic alliances Customer configured solutions Product & service innovation Operations, Engineering, QA Finance, HR, EHS, IT Collaborative planning with sales & marketing Supplier development Year 1 Year 2 Year 3 Year 4 Year 5 36
Lean body of knowledge Lean Enterprise Implementation Lean Enterprise Customer Value Hoshin Kanri Cross training Built in Quality People Development Value Stream Mapping Takt Time Muda The 7 Wastes 8 Step Problem Solving Kaizen Kaikaku The Lean tool box 5S Mistake Proofing/Poka Yoke FMEA Data Charting Statistical Process Control Correlation & Regression Analysis of Variance JIT & Kanban Line Balancing Demand Smoothing (Heijunka) Single Minute Exchange of Dies (SMED) Total Productive Maintenance (TPM) Overall Equipment Effectiveness (OEE) Design & Implementation of Multivariable Experiments Activity Based Costing 37
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References www.moresteam.com Liker, The Toyota Way, (McGraw-Hill Professional) ISBN-10: 0071392319, ISBN- 13: 978-0071392310 Rother & Shook, Learning to See (The Lean Enterprise Institute 1998) ISBN 0-9667843-0-8 Henderson & Larco, Lean Transformation (The Oaklea Press 2000) ISBN-0-9646601-2-1 39 39
40 Q & A