Historical Phases of Production

Lean 101 Overview

Lean Background Taiichi Ohno and Shigeo Shingo developed Lean Manufacturing at Toyota over a period of 20-30 years. Their intention was not to develop some sort of unified field theory for all manufacturing. They simply wanted to solve Toyota s specific problems of: Non-adjacent work stations Balanced and synchronized stations No inventory between stations ( inventory mirrors waste ) JIT from suppliers 2

Work Environment Product People Historical Phases of Production Pre-industrial 1890 Mass 1920 Lean 1980 Craftsmen perform all aspects of task Self-taught or apprentice-ship training Customized, nonstandard products Variation in quality Independence, discretion Variety of skills Responsibility Employees contribute minimally to total product Training for limited skills Management makes decisions Standardized, focused on volume not quality Limited skills and knowledge Repetitive, mind-numbing work Little discretion, simplified tasks Clusters of employees working in teams Extensive, continuing training Focus on internal/external customer Some discretion, group effectiveness, empowerment, team accountability, work cells Craft Production

What is Lean? 6

Lean in a Nutshell Simply stated, Lean thinking is about achieving more with less. The key lean thrust is rapid and relentless improvement. Establishing in the minds of those who are delivering the product, (manufacture and assembly), the importance of doing things better, faster, more effectively and at lower (although not always lowest) cost. 7

Defining Lean (Advanced Manufacturing) The relentless pursuit to A systematic approach to identifying and eliminating waste (non-value-added activities) through continuous improvement by flowing the *product at the pull of the customer in pursuit of perfection. Process (*) Product = Information {Service The MEP Lean Network 8

Defining Lean (Advanced Manufacturing) 9

Advanced Manufacturing = Eliminating Waste Value-Added (5%) Non-Value-Added (95%) Defects Overproduction Waiting Not Utilizing Employees (Knowledge, Transportation Inventory Motion Excess Processing Skills, Ability) 10

Types of Value Value-Added Any activity that increases the market form or function of the product or service. (These are things the customer is willing to pay for.) Non-Value-Added Any activity that does not add market form or function or is not necessary. (These activities should be eliminated, simplified, reduced, or integrated.) 11

Value and Waste Customer Value-Added: Waste to Eliminate: Anything for which the customer is willing to pay Activities which increase the value of the material or service being produced Business Value-Added: Activities that build long-term business assets Reduce financial risk Would the process of producing/selling breakdown if the task were removed? Task required by law/regulations? Anything for which the customer is not willing to pay Anything that does not support the needs of the business Anything that does not add value to the final product Waste to Reduce: Activities that are currently necessary even though they do not add value to the customer or the business... until better methods are available 12

Our experience is that organizations commit to Lean: As a cost reduction exercise To cope with specific threats to the business Quality of product or delivery problems Requirement to reduce cycle time from order-to-delivery Launching and delivering new products or services Developing best value 13

Lean Building Blocks Continuous Improvement Pull/Kanban Cellular/Flow TPM Quality at Source POUS Quick Changeover Standardized Work Batch Reduction Teams 5S System Visual Plant Layout Value Stream Mapping 14

Standardized Work Operations safely carried out with all tasks organized in the best known sequence, and using the most effective combination of these resources: People Materials Methods Machines 15

5S / Work Place Organization A safe, clean, neat arrangement of the workplace provides a specific location for everything, and eliminates anything not required. 16

Visual Controls Simple signals that provide an immediate understanding of a situation or condition. They are efficient, self-regulating, and workermanaged. Examples: Kanban cards Color-coded dies, tools, pallets Lines on the floor to delineate storage areas, walkways, work areas, etc. Andon lights 17

Plant Layout Raw Stock QC Rec. Ship Shear Stamp Screw Machine QC Brake Mill Lathe Drill Assembly Weld Grind Finish Parts Stock 18

Lean Workforce Practices Team member involvement Cross-trained and multi-skilled employees Continuous improvement philosophy Process quality, not inspection Use of participatory, team-based decision making and problem solving 19

Quick Changeover Definition: The time between the last good piece off the current run and the first good piece off the next run. Shigeo Shingo s Single Minute Exchange of Die (SMED) improvements, basic setup tasks and related time breakdowns: 20

Impact of Batch Size Reduction Batch and Queue Processing Process A Process B Process C 10 min. 10 min. 30+ min. for total order, 21+ min. for first piece 10 min. Continuous Flow Processing Process A Process B Process C 12 min. for total order, 3 min. for first part 21

Point Of Use Storage (POUS) Raw material is stored at workstation where used Works best if vendor relationship permits frequent, on-time, small shipments Simplifies physical inventory tracking, storage, and handling 22

Quality at the Source Source Inspection before passing along. Operators must be given the means to perform inspection at the source. Samples or established standards are visible. Process documentation defining quality inspection requirements. 23

Push versus Pull Systems Push System (traditional) Resources are provided to the consumer based on forecasts or schedules Pull System (Lean) A method of controlling the flow of resources by replacing only what has been consumed 24

Cellular Manufacturing Linking of manual and machine operations into the most efficient combination to maximize value-added content while minimizing waste. Punch Cut to size De-burr Package Form Sand 25

Refining the Cell: Five Step Process 1. Group products 2. Measure demands establish Takt time 3. Review work sequence 4. Combine work in balance process 5. Design cell layout 26

Transition to Flexibility Traditional Assembly Line Optimal 27

Total Productive Maintenance (TPM) Systematic approach to the elimination of the six major equipment losses: Setup and adjustment Breakdowns Idling and minor stoppages Reduced speed Startup Defects and rework Enlisting the participation of all employees to create an environment that fosters improvement efforts in safety, quality, cost, delivery, and creativity Charting or analyzing equipment performance to identify root cause of problems, and implementing sustainable improvements 28

Where do you Start? Continuous Improvement Pull/Kanban Cellular/Flow TPM POUS Quality at Source Quick Changeover Value Stream Mapping Standardized Work Batch Reduction Teams Visual 5S System Plant Layout 29

Getting Started with Value Stream Mapping A simple, visual approach to: Focusing on a product family Creating a clear picture of current material and information flow associated with that product family Identifying Lean tools and techniques that can improve flow and eliminate waste Incorporating those ideas in a new picture of how material and information should flow for that product group Creating an action plan that makes the new picture a reality for that product family 30

Information Flow Material Flow 31

Ingredients for a Lean Enterprise Culture Lean Leadership Lean Organization Lean Employee

Lean Leadership Effective communication Encourages/supports Lean methodologies Monitors progress, and provides feedback Function as Coach/Mentor & Facilitator Provides timely recognition Provide necessary resources to employees Communicates & reinforces company vision Sets standards and expectations Allows empowerment for decisions 33

Lean Organization Realization that challenges are learning opportunities Utilized & engaged workforce Energy towards Continuous Improvement Focus on the customer Provides on-going training and development 34

Lean Employee Everyone actively seeking improvements Not satisfied with status quo Recognizes that CHANGE provides opportunities Seeks on-going training Become problem solvers and experimenters Empowerment Monitors and adjusts Value Stream performance 35

Building a Lean Culture A process for mobilizing the full brainpower of EVERYONE in an organization 36

Culture Assessment How Lean is your Culture? Performance Measures Developing and sustaining a lean manufacturing enterprise is 20% technical and 80% cultural. This self-assessment is designed to help you identify cultural factors in your organization that can support lean manufacturing, and areas that need improvement to help you to sustain lean manufacturing initiatives. Place a check (? ) on the continuum to indicate the approach to each cultural factor in your company. We measure individual efficiency We measure individual performance and contributions to the organization We measure team accomplishments Communication Our company has crisis communication from the top down People are informed about what management thinks they need to know People are well informed and they freely inform others Recognition Problem solving and decision making Our people are paid for their work; that s enough recognition Our people are recognized for exceptional behaviors only Our people are recognized and praised freely at all levels Managers identify problems and solutions Everyone identifies problems; managers make decisions Everyone is involved in identifying and solving problems Conflict Teams We avoid or ignore conflict until it explodes We usually focus on blaming the person instead of correcting the process We welcome conflict as an opportunity for improvement, and a process for resolution and prevention Individual jobs are assigned by managers Managers appoint teams for special projects Cross-Functional teams are empowered to identify problems and take action Alignment Vision/Business Strategy Each person and unit in our company tries to succeed separately We function interdependently Everyone s priorities and actions are consistent with enterprise goals Our vision is known only by a select few leaders Our vision is communicated, but isn t well understood or supported Our people know how the business is performing in relation to the vision Now look at your check marks in each area. The areas in which your marks are closer to the left need improvement to help sustain your lean manufacturing initiatives. Where the check marks are more to the right, keep up the good work and strive to make sure these areas get even better. 37

Benefits of Lean Culture People become value-added problem solvers Bottom line results improve Improvements are sustained Commits to continuous improvement Good employees are retained! 39

Sustaining a Lean Transformation 40

Lean Sustainability It is inherent in human nature to get excited about anything that is new. But as time goes on, the excitement fades and exuberance seems to go. 41

Horror Stories 42

Lean Sustainability Most companies are unable to sustain the gains made during their lean journey. Less than 37% of lean improvements and training actually produce meaningful results UNLESS there has been a complete corporate culture change to Lean Thinking. It is NOT maintaining what you have, but sustaining CONTINUOUS CHANGE. Lean is a way of thinking it is a life changing event. 43

The reason that most Lean systems fail is because the western management mind set and training says We have taken all of the benefits out that we can with this Lean System so lets try another one. The leaders are users of Lean, but not believers in Lean. The workers have seen it all before and this is why they will not buy into Lean or any other systems. 44

Some guidance we get is highly prescriptive. do these things (follow the list) and everything will be okay. Like a physician with a list of top 20 Drugs. He gives the same list to every patient, regardless of symptoms. Lean Manufacturing Laundry List Cellular Manufacturing Total Quality Teams Rapid Setup (SMED) Kanban Value Stream Mapping Process Mapping Work Balancing 5-S Autonomation Poka-yoke Jidoka Elimination of waste Total Productive Maintenance Continuous flow One Piece Flow Standard work Visual management In station process control Level production Takt Time Point of use storage Kaizen Supplier Development 45

Thank you! Central Office: 8626 E. 116 th St., #200 Fishers, IN 46038 800. 877.5182 tapmep@purdue.edu Arthur Thomas 317.408.6728 awthomas@purdue.edu 47