Lean Thinking and Lean

Manufacturing

ISEN 645
FA2016

Integrate Flow Monitor &

Define Design Instantiate
& Control Remediate
FA2016 Week Core Topic / Theme Technical focus

15week 1: 29/31AUG
2: 5/7SEP
Introduction to Lean
Value
Core principles and definitions
SE; IDEF0; PS design

Schedule 3: 12/14SEP
4: 19/21SEP
Value Stream
Value Stream / Flow
VSM; 8-Step design process; IDEF3
Line balancing; Task engineering
Class3 is focused on a modeling
method called IDEF0.
5: 26/28SEP Flow JIT; Cells; SMED; Leveling

Every system that we work with as 6: 3/5OCT Flow / Control Factory Physics Principles; 3EQN/4GRAPHS
engineers has a “concept of
operations” – IDEF0 (among its 7: 10/12OCT Control Kanban; CONWIP; integrated IC & PC
many uses) is ideal for depicting a
CONOPS and the core 8: 17/19OCT Control Buffer engineering (time, capacity, inventory)
transformative processes.
9: 24/26OCT Lean supply chain Principles; Beer game
So we can leverage IDEF0 to assist
in our visualization of the essential 10: 31OCT/2NOV Lean supply chain Integration with the PS
characteristics of the PS and its
operation – whether it is in 11: 7/9NOV Perfection: Lean 6σ DMAIC VOC; SIPOC; C/E chaining
existence or whether it is simply a
notional characterization. 12: 14/16NOV Perfection: Lean 6σ DMAIC Gauge R&R; SMED; SPC
In class3 we will spend time on the
method itself – and discuss the
13: 21NOV* (MON) Perfection: Gemba Kaizen Implementation planning applied
first homework assignment.
14: 28/30NOV Culture / LPS design - Epilogue Leadership
Class4 will focus on the “Value”
principle of lean. 15: 7DEC* (WED) Project briefings Schedule and timing TBD
16: Final 9DEC 0730-0930a
 ISEN 645: Knowledge, Skills, Experiences (KSE)
Knowledge (know-what) Skill (know-how) Experience (know-why + feedback) Quizzes (20%)
Homework (30%)
In- Class
Quiz Quiz Homework Project Project (50%)
Activity
PS definition (a system of systems) 1,2  IDEF0 (SE definition, visualization, …) 1,2 X
Lean definition (history and principles) 1  VSM (material flow; CONOPS for flow and control) 3 3 X The table at the
left is depicts the
LPS definition (lean manifested in the PS) 2  Cell layout (single-piece flow is the target) 4,10 X mapping
Value 2  Cell balancing (man-machine) 4 4,10 X between the
various KSEs and
Value Stream 3  Task engineering (methods and time study) 10 X the assessments.
Flow 4  SMED – rapid changeover 9 X
This is only a
Control 5  Pull based shop floor control (kanban, CONWIP) 6 6 X draft.
Perfection and 6σ 8  Production Leveling (EPE-interval) 5 5 X
This table will
Cases 2  Scheduling (line, batch) 5 5 X likely change
Resources 6  6σ tools (DMAIC)++ 8 8 X during the
semester – since
Implementation planning 10  Factory Physics (production science) 6 6 X I will be
Change management 9  VUT (variability propagation) 6 6 modifying the
assignments as
Toyota Production System (TPS) 1,2  Little’s law (WIP = SHIP * FLOW; “F=ma” for production) 6 6 X our discussion
 WIP engineering (critical WIP definition) 7 7 proceeds.

 Buffer engineering (inventory, capacity, time) 7 7 X

 Inventory trade-off curves 6 6
 Gemba – leadership centric cultural change 9 9 X
 Kaizen and the A3 9
ISEN 645: Critical Focus Areas
• The production system [PS]
• We’d better know the scope and context of the system that we are Leaning
• Sources of waste in the production system [our targets]
• It is this system ‘audit’ that makes Lean believers
• Methods, techniques, and tools of waste accounting
• As non-technical as this sounds it is anything but
• Design principles and practices that mitigate waste and produce a Lean
production system
• Process, Queueing, simulation modeling are critical enablers in the design process
• A Culture that sustains the gains
• Lean is not a sometime thing – it is an all the time thing … it is a way of PS life

System, Waste, Design, Produce, Sustain

ISEN 645 Synopsis… Lean
principles
The theme of ISEN 645 is
lean production system
design
and
• Lean Thinking and Lean practices
Manufacturing is the title,
but the course is focused
on:
• The definition of Lean, Current or Proposed Design Lean
Lean Production system
• The core principles of lean, Production system Production System
• The application of those
principles to production
system (manufacturing and
service) design and
operation, and viability, Lean
methods,
• The methods, tools, and tools,
techniques for and
implementing lean techniques
throughout the life-cycle of
the production system. Lean PS
Engineers
 NB: If the PS is already in

The LPS Design is communicated through existence, we often leverage

IDEF0 and VSM models to also
represent the current state or

design artifacts, key among these are: ASIS in order to facilitate analysis
and design of the future state or
TOBE LPS
• LPS CONOPS: leveraging IDEF0 to solidify the PS intention, scope, nature of the core transformative
processes that are used to deliver the valued product or service – the “concept of operations”
(CONOPS) for the LPS
• VSM: Highlights the essence of flow and control associated with the transformative processes;
scorecard on the depth of the “waste” problem
• Cell design – small batch, single piece flow is performed by dedicating production lines and
resources, right-sizing, layout, task engineering, line balancing, resource assignment, instrumenting
the process for monitoring, WIP control on the front and back ends
• Work authorization and flow control – push, pull, hybrid … material handling design
• “Supermarket” design – inventory is used to decouple processes, adhere to a customer service
level, and to serve as a check on variability … Factory physics and Buffer engineering applied
• Visual status and operation management in the gemba – PS health is a matter of maonitoring and
comparing the actual behavior to that as designed. Remediation occurs via countermeasure and
kaizen. Health monitoring and issue remediation is continuous. Creativity, innovation, and holistic
employee involvement are critical.
 Prelude to Class4…
• We now focus on the 5-core Lean Principles, in turn…
• In successive weeks we examine the technical details required to employ and adhere to these principles
• For the PS engineer there are technical artifacts that are endemic to lean and to production system design – we will focus
special attention on those artifacts
• We begin with Value, aka the Voice of the Customer (VOC) – which has far reaching implications for the LPS and sets us
up for success or failure in Perfection  the Α and the Ω of the LPS (we start with the vision and drive towards that
vision)…
• There is a significant communication issue when we discuss “Value” – can either or both parties even articulate it?
• There knowledge and systems engineering to be done … what does Value mean to the customer? How does it translate into the LPS?
• Agents of the LPS must often educate or attune the customer base; we often build tools to help us elicit what is valued from the customer
• The tools of 6σ play a role; The tools of 6σ are normally targeted at variation reduction, but they have a dual purpose in helping us capture,
define, model, and cultivate a solid understanding of Value to the customer – the VOC.
• 6σ assumes that “everything” is a process, all processes can be measured, and it is desirable to identify and eliminate sources of variation
from these processes
• DMAIC is the methodology of 6σ and data-driven is the theme; we return to this later when we discuss Perfection
• It can help if we “model” the activities associated with the integration of the lean principles of value, value stream, flow,
pull, and perfection for LPS design & implementation
 Antoni Gaudí said, “Sagacity is superior to science. The word comes
from sapere which means to savor [to taste]; it refers to the fact.
Wisdom is wealth, it is a treasure; science provides us with certainty
about what we examine; it is required to keep counterfeit coins out
of the treasure.”

7SEP Lecture Plan

0: Review and insights from industry
1: Synopsis of the 5 core Principles of Lean
2: The Value Principle
3: Viewing the core principles as (IDEF0) activities to drive LPS design
4: Synopsis of some Lean Case Studies (if time, else tabled until Class5)

HW2 assigned – developing an IDEF0 to characterize the systematization of Value in the LPS design

MON 12SEP: Quiz2: Ch.6 of Lean Thinking - Lantech

We don’t have to get to perfection to see value: G.K. Chesterton said, “The poet
only asks to get his head into the heavens. It is the logician who seeks to get the
heavens into his head. And it is his head that splits.”
 Lean Thinking and Lean Manufacturing

ISEN 645 Readings

• You should be reading Lean Thinking
(minimally Part I plus ch.6)
• I listed a number of other books and
monographs that we will leverage in
the class
• The lectures in Week2 leverage
heavily from both Lean Thinking and
Lean Manufacturing
• Week3 will focus on the VSM, first
described in Learning to See
• Topics in Weeks 4-10 leverage
material and discussions from Lean
Engineering and Factory Physics
• The Lean Toolbox, as mentioned in
Week1, provides a very good
“handbook” and source for the all of
the lectures
M0:
Reviewing Lean and the Lean Production System (LPS)
 In one sentence:
What is Lean – and why Lean is the rigorous accounting for and
continuous elimination of waste in the

study it? production system.

• Core Characteristics of a Lean Production System:

• Single-piece flow v Mass, batch based production
• Customer demand Pull driven v MRP based push
• Quick change production lines v Mass produced
• Transportation only when pulled and authorized v push the pile
• Variation attacked, accounted for precisely with buffers v Overtime
• Quality issues halt the everything until resolved v inspection and rejection

• Regardless of how we characterize the Lean production system – the origin of

Lean is the found with the TPS…

• The word System will be used repeatedly – we need a working definition…

 • A collection of elements so arranged as to
Characterization of a “System” • Perform a function
• Exhibit a behavior
We’ll need a way to represent key aspects of the system in order to describe it, account for its
elements, and study it
Systems Engineering methods and techniques can provide a ‘BOM’ and ‘MRI’ of the system
The lean production system
An intentional system, predicated on planned transformative processes,
leveraging a set of (possibly scarce and/or shared) resources, resulting in
one or more clearly defined products/services
AND
Operates non-stop to eliminate all forms of leadtime and the associated
waste that the customer is not willing to pay for.
As engineers, charged with design…
• We need a set of representations and design artifacts that we can use as a proxy for the actual and future production
system
• Models, mappings, diagrams, descriptions, notes made on cocktail napkins, graffiti on box cars by unemployed but
talented engineers, tattoos, etc. … we rely on characterizations of many types to help direct our attention to particular
details of the production system
• We need models to support our inability to sense and see the whole system
• Like Kipling, we want to use our six honest serving men when characterizing the PS (what, why, when, how, where,
who)
• Iconic models such as layouts can help
• Logical equivalent models such as IDEF0 models provide a high level characterization of the production system – the
key transformations occurring in the PS and their associated constraints
• Value Stream Mappings will help us “see” the material flow and production control of the lean PS
• And there are others…

• The point is – this is design. Design of a Lean Production System. Engineering artifacts, especially models, are endemic
to design and these same artifacts constitute the essence of the associated design rationale.
• What is Lean PS design? It is the compendium of vetted design artifacts produced along with the associated design
rationale and a plan for the implementation of that design. Vetted? Proven to be repeatable and reliable in their ability
to unambiguously characterize salient facets of the production system

• When we design – it’s best to start with an exemplar for what we are attempting to achieve – that exemplar, in the
case of lean, is the Toyota Production System (TPS) 
The Toyota Production System
and why it makes a difference
• Ohno makes three key statements regarding the
TPS:
1. “The basis for the TPS is the absolute elimination of
waste.”
2. “Cost reduction is the goal.”
3. “After WWII our main concern was how to produce
high-quality goods. After 1955, the question became
how to make the exact quantity needed.”
• TPS is referred to as:
• “A Production System that is a quantity control system,
based on a foundation of quality, whose goal is cost
reduction, and the means to reduce cost is the absolute
elimination of waste.”
TPS Thinking is the basis
for Lean Thinking
Is there a methodical approach
for defining, designing, and
achieving a Lean PS?
Approach? Yes
Methodical? Yes
-in fact so many exist that we really need to establish our own based on our understanding of LPS design and
operation
Guaranteed to achieve? Your mileage may vary
How do we avoid failure?
 Understanding that real Lean is an enterprise implementation
 We can engage in change in the name of Lean – but the principles of Lean are clear – the value stream is the
context for what we are acting upon – anything short of the value stream, the whole value stream, and
nothing but the value stream will likely end in lots of work, meetings, and artifacts but little impact to the
overall PS
 The value stream cuts through every function in the enterprise – that makes it impossible to implement a
Lean Value Stream without cultural change (horizontally and vertically)
 Lean Review: At its Core…
*Five Strategies and Five Tools to Eliminate Seven Wastes
[Wilson] * [Lean math: 5 x 5 = -7]
1. Synchronize supply to the
…and a quick note on Waste – many Lean BoKs
customer
identify 8 or 10 or 14 rather than 7; it is an
2. Synchronize production internally accounting exercise and categories will be categories
3. Create flow 1. TAKT calculation
4. Establish pull-demand systems
2. The basic time study
5. Standardize and sustain 1. Transportation
3. Balancing analysis
4. Flow – “Meteor trail” – diagram 2. Waiting
We will revisit this again as
we begin a progression of 5. ASIS and TOBE VSMs 3. Overproduction
exercises to reinforce Lean 4. Defects
concepts; but it’s good to
note that this can all be 5. Inventory
done methodically and 6. Movement
rigorously – that is we can
engineer a Lean Production
7. Excess processing
System
The Lean Methodology is a characterization of what to do
and serves as a basis for planning a Lean Transformation
• Activities [to perform in order to ‘do’ Lean] – we cannot Lean without some
action. Each function or action or activity performs a transformation;
transforming inputs to outputs… so we’ll need to identify the Inputs that are
transformed into the Outputs by the transformation or function. Of course the
actions do not occur without some Resources or Mechanisms [tools, people,
technologies] for how those functions perform those transformations of input
into output. Finally we need to identify guidance that will Control the activity.
• Our characterization should allow us to drill down into more detailed actions -
decompositions
• And it helps to visualize this entire characterization
• Thus we will build an Activity Model using IDEF0 [a method for producing
activity models] to characterize this Lean methodology

In fact, we will continue to evolve and refine our characterization of this Methodology, but let’s get a start…
A draft of our Lean Methodology
IDEF0 of the LPS design and implementation process
How to read an IDEF0… IDEF0 Diagram Syntax
If in doubt about what
the system is – then
Controls model it
What controls or triggers the activity

Inputs Function or Outputs

What is being transformed
Activity The outcome of the transformation;
(Verb Phrase) and byproducts of the transformation

Note: an output can act as either

an input into another activity or it
Mechanisms can be used to control another
These are the resources that are ‘doing’ the transformation activity
From the top…
A note…
• As we progress through the course material and exercises we will revisit the
“methodology” – tune it, decompose it into the detailed activities that generate
the various artifacts, and also identify HOW we will create those artifacts using
the Lean Tools.
• Further – the IDEF0 method is useful for characterizing many functional
transformations. For example we could use IDEF0 to model the activities
performed to produce a master’s student from ISEN or the activates required to
host a football game or the activities required to produce a president or the
activities required to produce a car, boat, airplane, burrito, …
• IDEF0 is a SE method that is useful in characterizing particular facets of a system:
the key transformations (inputs to outputs), how those transformations are
controlled (controls), what is performing those transformations (mechanisms).
• Thus – when we have a production system that we need to study – it makes sense
to model that PS using a method that has been well vetted and is in the public
domain … IDEF0
The authors of LE (Black and
Phillips) describe a method for
Lean as well…
Chapter 8 overview…
 Overview
• We have looked into a pair of approaches so far, both relate their activities closely with the
five core principles that we identified
• Another approach is to identify the activities as they relate to the methods and tools of lean
– this is the approach used in LE
• Ch.8 of LE identifies 10 steps towards implementation of a lean manufacturing production
system
1. Level the demand and production workload
2. Design lean cells
3. Implement rapid cell re-configuration [SMED]
4. Integrate quality control
5. Integrate preventive maintenance
6. Integrate production control
7. Integrate inventory control
8. Integrate suppliers
9. Implement autonomation
10. Restructure the business system supporting the manufacturing production system
Level production
• Mixed-model production is an intentional varying of the production mix so that
each product model is produced more frequently and in smaller quantities
• Assuming a mixed-model production schedule we need to level the production load
so that flow occurs across all models smoothly to meet daily demand.
• Leveling means that the demand for subassemblies from cells and components
from suppliers is made equal to the daily demand for that model.
• Therefore quick changeover [“SMED”] is critical to make the takt
• Suppose we have 4-models of car production with takt = 1min/car
• Then each cell supporting the production line must feed at a rate that supports the
sequence of models being produced – so if a cell for model “A” feeds at a rate of
3min/subassy for a given model [which is higher than the overall car demand takt
rate] then that model might be sequenced [ABBCA…] on the final assembly line so
that the cell can support the overall takt rate of 1min/car
• Leveling is the process of planning and executing an even production schedule
• Overall takt is set to meet demand rate; internal takt is set to meet the leveled
mixed model production sequence schedule
• Variability in the “feeder” cells and/or suppliers must be dealt with through buffer
Design Cells
• For a MM assembly operation, cells are used to support “single-piece”
flow for the “feeder” lines [subassembly operations]
• Cells are better designed as “U” shaped to enable operator multi-
tasking and ergonomic operation. The U-shape also fosters material
handling entry and exit in many cases
• Cells are designed to manufacture groups or families of parts [using
techniques such as GT group technology].
• Multi-tasking and multi-skill workers make balancing work within the
cell easier if not unnecessary [this does not apply to balancing across
cells however, aka linked-cell manufacturing L-CMS]
• VSM can also be used for the identification and collection of processes
that are candidates for a cell
• Cells are designed to work slightly faster [cycle time] than the takt
• Fixtures, jigs, tooling are intentionally designed to work with any part
in the family the part family
• Decoupler elements may exist between process steps within a cell as
part of mistake proofing [integrated QC]
GT-Product Flow Analysis method for part
family identification…
Rapid Cell
reconfiguration
• SMED “Single-Minute Exchange
of Die” refers to a group of
techniques used to perfect
changeover of the cell for
processing differences within
the part family
• SMED is a four stage
methodology
Make one, Check one, Move on (MO, CO, MOO)

Integrate QC
• Multi-functional labor should
be utilized within cells
• Multi-functional is distinct
from multi-process or multi-
certified
• The multi-functional worker
is skilled in QC: 7-basic tools
Integrate
Preventive
Maintenance
• Routine maintenance is the
role of the cell
• Routine checklists are
invoked several times daily
• 5S is an example of the
routine processes needed to
maintain the cell
Integrate PC
• Lean integrates PC into the
design of the process
• Kanban authorizes
production and movement
We hold inventory to protect sales.

Integrate IC
• 3-basic types of inventory or stocks:
• Cycle stock - to cover the volume picked up by the customer [finished goods]
• Replenishment time = planning time + waiting time + production time + delivery time
• Cycle stock = (production rate * replenishment time) + a safety factor
• Buffer stock – to cover external variations, demand fluctuations
• Calculated based on historical demand fluctuations
• Held in addition to and independent of cycle stock
• Safety stock – to cover internal variations usually production issues
• To deal with production variations, availability, capability
• In addition to and independent of demand cycle or buffer stock

If historical records are good and the demand variance does not change with time, then Buffer and Safety stock
volumes might be calculated as 2.33σ covering 99% of those deviations [assuming the data~N()]
 Integrate suppliers
• Reduction in number; single source per subassembly if possible
• “Bumper Works [Flex-N-Gate] to Chrome Craft” type education and
relationship
• Mass production uses multiple vendors as a hedge against variation
in the pipeline
• The vendor system must be integrated into the demand pull else
inventories will be incurred at one or both locations
• This will impact the way in which contracts are developed
• In the MRO business – there are many small volume requirements using old
contract logic that assumes mass production prices. Once reality sets in the
MRO business might eventually have to start making their own parts or pay
a huge premium to the suppliers or the OEM for the small production runs
since the OEM may no longer may have tooling to support. Which brings up
the need for quick changeover… maybe AM is an answer
• Several endeavors have been started in the name of integrating
suppliers – few survive the “this is my business – tell us how many
you need and get out” wall
• GOCO? [government owned, contractor operated]
• Table 8.4 aligns prime lean with supplier lean…
 Based on LE table 8.4

Managing the Lean Production System Supplier

At the supplier site In order to blend in with the “producer” or “prime” – the prime expects the supplier to…
Kanban pull Standard container sizes that ‘fit’ the size required upstream
5S 5S to the point of looking like an extension of the PS being supplied to
Standard work in each cell Makes the production time calculable by the PS pulling demand
Morning meeting Changes are relayed, issues are dealt with immediately
Key points; process sheets Posted at each workstation; relay concerns from the “producer”
Rapid changeover Work order changes from the “prime” will occur – rapid cell reconfiguration is the norm
7 tools of quality When there are questions – maintain a portfolio of analyses to tell the story
Production behavior The rules, followed, make it obvious that the supplier cares as much or more than the prime
Essentially, using visual controls the prime could, if allowed, watch the status of orders as if it
Visual management
were part of their own production system
 Implement Autonomation

• Autonomous control of quantity and quality

• At the source
• Each worker also inspects their predecessor’s work
• MO-CO-MOO [make one, check one, move on]
• Sensors are used to shut down the process
automatically
• This brings up the need for PM on the sensors…
• Anyone have a TPMS?
 Business Process Improvement & Business Process Reengineering

Perform BPI & BPR to align w Lean

• Once the production system itself has been leaned, then
the business processes, if have not already been, are
targets for leaning
• This is critical if new products are going to be brought on
line quickly
• Platform teams concepts from the automotive industry
provide a good framework for the new production
opportunities
• Design, manufacturing, marketing, sales, finance, …
• Downsizing the business process first before leaning the
production can lead to very bad results since it is the combined
efforts of the business processes to dampen the effects of
variation on a regular basis
Summary If you are operating the PS as if the resources are scarce – you are running Lean

• 10 step methodology
• Focus is on the integration of the activity performed and the technique
of method deployed
• Centered on improving and establishing precision of Flow and Control
• What were once “tools” are assumed to be integrated into the
continuous actions of the production system including the workforce
• QC, PM, PC, and IC are considered integrated to such an extent that they
are actually innate within the Lean Production System

Ultimately Lean is the way we would operate a production system if we had to use our own money
Failure is not an option
Many are called, few are Lean
To mitigate our risk of failure – how can we gauge the maturity of the current PS?
 Wilson – Lean Manufacturing
First, tonight’s top 10 list…

1. Active in understanding
2. Willing to listen
3. Accurate is assessment
4. Engaged in the process
5. “How can I get better…”
Five precursors
to Lean…
Lonnie Wilson performs a
maturity check on the
production system about
to undergo Lean
Improvement or better
Transformation…

This begs the question:

What about a phased
approach? Whereby each
phase transitions the
production system to a
new “bundled” level of
maturity?

The next question is –

where do we start and
where is the biggest gain
likely to be?
Lean: the Ideal and the reality…
• The IDEAL form is TPS: Customer value driven, single-piece flow, “SMED”, right-sized,
production leveled cells, flow at takt, pull control, continuous waste identification and removal
• But alas, the reality is that enterprises often engage in only a fragment of the activities, principles, and
tools that we have thus far identified
• What I have referred to colloquially as “mini-Lean”
• This begs several questions:
• What is being done in the name of Lean? Superficial or legit?
• Is TPS-like Lean just a goal within which a more pragmatic phased approach is the reality?
• Regardless – what is and where is the biggest payoff? By what evidence?
• We have to realize that following the principles to the letter is difficult, they are principles: more
than suggestions but less than commandments … the reality is that we will end with a design
that is somewhere in between
• The real issue at hand is Waste: its identification, the accounting for, and removal of
• So it is critical that we have proven methods, tools, and techniques that provide us with an accounting of
the waste
• Lean is sociotechnical – making its evaluation difficult, yet research results exist…
• We need to study the waste – categories and sub categories – we need to make distinctions
• What tools apply and where? Where is the best place to head for the biggest impact?
Lean embodies an avalanche of
tools and techniques for both
quality and quantity control
What’s most important?
First, a peek under the
roof of the House of
Lean
How does industry rank the utility
of these elements within the
house of lean?
• All Lean practices are created equal, some are more
equal than others
• What do we make out of this? Is there a short cut to
Lean?
• Industry often takes a dim view of “studies” – so there
had better be a payoff either in [hard] savings or cost
avoidance [aka soft savings]
• Remember the battle cry: “remove waste”
• As inventory goes down so too [naturally] will lead time
• As inventory goes down problems become more obvious
• Findings…
Common Hard Savings
Reduction in unit cost of operations
Reduction in unit cost of production
Reduction in transaction cost
Reduction in overhead cost
Reduction in transportation cost
Reduction in manpower
Increased throughput, resulting in increased sales or revenue
Common Soft Savings
Reduction in cash flow
Reduction in need for working capital
Avoidance of capacity enhancement
Conformation to changes in the law
Increased safety in the workplace
Increased employee satisfaction
Increased customer satisfaction
Lean is far from new, but what gets the most coverage in publication…
 Ranking
the
Lean Practices
These tools and
practices were
identified using a
Delphi method
selection process
per the authors’
description…

Source:
An Integrated MCDM Method in Ranking
the Major Lean Practices Based on Four
Attributes

Seyed Mohammad Hossein Hojjati

and
Alireza Anvari
Which tools have the greatest impact on these criteria?
And another study…
What conclusions?
• As we suspected earlier just based on the “affinity” of principles,
tools, and transformations identified in the IDEF0 of our Lean
Implementation Methodology the biggest payoff hovers near those
tools that affect FLOW [at least reduce batch size and drive towards
single-piece] and CONTROL [aka PULL]
• Nothing is guaranteed
• Studies are difficult to perform, but the results appear credible
• Reduce inventory, reducing batches and driving towards single piece flow
does this
• Control flow within production keeps inventory from building up
• Leadtime is reduced if the part is not required to move with the herd
In fact, we now have at least two approaches
based on the maturity of the PS in question
Full Lean … the big 5 “mini-Lean” at the value stream
• Synchronize supply to the • Select and prepare a value stream
change agent
customer, externally • Assess the culture
• Synchronize production, • Create true north metrics
internally • Perform system wide evaluations
• Create flow • Document the ASIS VSM
• Redesign to eliminate waste
• Establish pull-demand • Document the TOBE and form kaizen
• Standardize and Sustain activities to implement
• Repeat
So as we read about and analyze cases from the
literature we should ask ourselves some key
questions…
• What wastes are being targeted and actually removed?
• To what extent did the agents address the socio aspect?
• To what extent the technical?
• What techniques? Was the resulting publication of the technique or of the results?
• How measured? Cost avoidance? Cost savings? New work enabled?
• What mechanisms were left in place to sustain?
• Transferable to like industries?
• What accounting and accountability?
• Supply chain, process, resources, information  what was the impact?
M0: Takeaways
• Lean has a clear set of principles
• Lean is based upon the TPS – nothing conceptual, the real deal
• We need models to proxy as the “patient” for which we are leaning
• Design of the Lean PS can be and has been methodized
• The methodologies have proven to be repeatable and reliable
• When failure occurs it is almost always for the same types of reasons…
• Lack of stakeholder buy in and active participation
• Not embracing lean across the enterprise
• Lack of subject matter expertise – for example, lean requires standard work – is there anyone
on the team who has performed a methods analysis and time study? Line balancing? Buffer
engineering? Cell design?
• Not understanding that the PS must have quality control before we initiate quantity control
• Flow and control is far and away the dominant lean target among practitioners
M1:
An overview of the 5-core principles of Lean
5 principles of Lean:
• Value - specify what creates value from the customer’s perspective.
• The value stream – identify all the steps along the process chain; we are transitioning from the ASIS into
the TOBE.
• Flow - make the value process flow, single-piece, continuous, without errors.
• Pull - make only what is needed by the customer (short term response to the customer’s rate of demand).
• Perfection - strive for perfection by continually attempting to produce exactly what the customer wants.
Lists have a way of implying exclusivity, the reality
is something else…
Value
The picture here may not be too far from the
reality – the intersection of the 5-core
principles of lean could be thought of as the
elusive lean sweet spot … that “PS upon a hill”

One particular intersection not to be missed is

Perfection Value
the interplay between “Value” and “Perfection”.
The voice of the customer (VOC) is translated ∞ Stream
into the “physics” of production VOC  Y = f(X).
Where the Y vector represents the PS measures
that are critical to quality, cost, performance
(CTQ, CTC, CTP) and the X vector represents the
physical variables (hopefully controllable) of
production that give rise to the Y and
subsequently satisfy the VOC. Pull
Flow
This overlap between Value and Perfection, in
part, is where Lean 6σ resides. Thus, our
(Control)
definition of value has far reaching implications
for the LPS from here to eternity
Value
 Any process that the customer would be prepared to pay for that adds value to the product.
• The customer defines the value of product in a lean supply chain.
• Value-adding activities transform the product closer to what the customer actually wants.
• An activity that does not add value is considered to be waste.

Note that this definition assumes that the product value is established – that’s is, both
the customer and the producer have a shared understanding and concur on what that
value is … many of the cases and examples in LT make this assumption out to be dubious
at best.

Thus, it is incumbent on the lean PS designer to establish this definition as

unambiguously as possible in the effort.
The value stream
• The value stream is the sequence of processes from raw material to the
customer that create value.
• The value stream can include the complete supply chain.
• Value stream mapping is an integral aspect of Lean.
• The TOBE Value Stream Map [VSM] is the blueprint for how expect our new
Lean production system to operate
• NOTE: the VSM, as mentioned previously, is an amalgam of other analyses
of the design process … more of a recording or summary of the current
state of the Lean design – the point is there is work to be done prior to
developing the VSM and a great deal of work involved in its realization.
 Typical data recorded for each process:
C/T cycle time
C/O changeover time
Uptime [on demand machine uptime]
EPE [production batch sizes]
Number of operators
Number of product variations
Pack size
Working time [minus breaks]
Scrap rate
Lean measurements ~[VA < C/T < L/T]:
Cycle time [C/T]
Value added time [VA]

From ASIS to the TOBE Lead time [L/T]

The VSM is the product of lean development effort; the “language of Lean”
It has many intermediate states
It conveys the essence of waste removal, production leadtime savings, and control
Current State or AS-IS map
Future State or TOBE VSM
 If there is a long pole in the Lean design process – this is it

Flow
• Using one piece flow by linking of all the activities and processes into the
most efficient combinations to maximize value-added content while
minimizing waste.
• The waiting time of work in progress between processes is eliminated,
hence adding value more quickly.

• Product family identification, level scheduling, cell design for single piece
flow, and quick changeover are hallmarks of the “Flow” principle in
practice
Pull
• Pull is the response to the customer’s rate of demand i.e. the actual
customer demand that drives the supply chain.
• Based on a supply chain view from downstream to upstream activities
where nothing is produced by the upstream supplier until the
downstream customer signals a need. Same logic is applied to the
production chain internally.
• Many systems rely on a different form of pull known as CONWIP
which regulates the total amount of WIP in the production system
rather than through the strict pull criteria of TPS and JIT.
• Kanban and CONWIP systems are often the concepts that implement
the pull principle in practice
Perfection
• The journey of continuous improvement.
• Producing exactly what the customer wants, exactly when, economically.
• Perfection is an aspiration, anything and everything is able to be improved.
• Culture plays a major role in whether Lean lasts [or even begins]

• Lean 6σ – within a DMAIC framework is often used to ensure that the lean production
system stays lean. Kaizen events, Gemba walks, and simply leadership visibility, interest,
and regular participation at the point of production are evidence that the PS intends to stay
lean.
But it’s good to recall the words of Eric Voegelin:

“Don't immanentize the eschaton!”

Makes for an excellent bumper sticker.

Lean: An amalgam of principles at work, all at once
• Many have identified with the fact that the principles can be difficult to distinguish from one
another when put into practice – for example as we build a VSM [ASIS or TOBE]
• The voice of the customer [one way to represent value] is represented by the takt
• The value stream depicts the essential flow of material, but so too does the flow – in fact a VS without flow is
tough to image
• In order to actuate the flow in the value stream we need pull to authorize work and control movement
• Add to that, the focus required to build a true depiction of the ASIS VSM – which is actually a depiction of
what is NOT lean and where WASTE is dominant
• An old SE adage: Some models are better known for what they leave out rather than what they have in them.
• But the most critical principle at play with the VSM – both ASIS and TOBE is the principle of communication
• Models are intended to communicate.
• The ASIS communicates issues that prevent the production system from being lean.
• The TOBE communicates the vision of a Lean production system
• If the ASIS or TOBE system characterizations require more engineering artifacts [models,
descriptions, calculations, etc] in order to communicate their intentions to others then so be it.
• Building a Lean Production System – is a design activity and we have to expect there to be design
artifacts.
• The VSM is one such artifact, but there are many others
• The end game is lean production not design… so, we want to move quickly and efficiently from
analysis through design and into implementation
M1: Takeaways
• Lean has a clear set of principles, only 5 but their impact is felt globally
throughout the LPS design
• Clearly establishing what is of value, then operationally working to deliver
that value – while maintaining the LPS itself
• We can translate the principles into their active forms and use them to
define a methodology for LPS design
• There are many methodologies for LPS design – over the course of your
career you should endeavor to define your own (internalize) – but all have
their roots in the 5-core principles of lean
• The first principle is Value – we now dive deeper into its definition and how
that definition is manifested into the LPS deign
M2:
The Lean Principle: Value
 "There is only one boss: the customer. And he can fire
everybody in the company, from the chairman on down,
simply by spending his money somewhere else."
Samuel M Walton

Value
Lean starts here …
It deserves discussion

Value  VOC  Y  X  Product/Service  Delivered to Customer

Specification of Value
 Correctly specifying value is critical in lean thinking
 Providing the wrong good or service the correct way is still waste
 Value must be defined in terms of specific products at specific prices at
specific times
 Only the ultimate customer can define value – but they often don’t know
how to do it!
 The best marketing and sales personnel realize this and leverage technology
prototypes and virtual requirements elicitation tools and techniques in an attempt to
solidify what the customer really means by value
 The specification of value is closely aligned to the concept in DMAIC – more
specifically the “Define” phase when we are documenting the Voice of the Customer
(VOC)
Value – requires a precise
definition
• The right thing
• In the right *configuration*
• At the time it is needed
• Working the way it is intended to
• For as long as it is needed

• Thus the negotiation begins…

Value fights back…
• What has long been known to the software developers is
that the customer rarely can articulate the requirements
without the analyst having to elicit the details from them
using a variety of meetings, mock-ups, prototypes, and if
necessary sock puppets
• Thus value is not as straightforward as it might seem –
there’s a due diligence exercise that must take place to
formalize the definition of value in order to make sure that
the production system is not plagued with change and
change management issues
• Delivering value costs a great deal more if we are still
making design changes to the “thing” after production has
been initiated. “I’ll know it (value) when I see it” – is often
the battle-cry.
• Lean is slightly more resilient to change since we are not
tying up mountains of capital in inventory, but value is lost if
the product traverses the value stream and is determined to
no longer be a “thing” of value
 Prof. David Shternberg

Never assume that… CSUN

• You already know what the customer wants.

• Marketing and sales people “know the customer”
• Unless they have a defined program of regularly asking the customer what they
want.
• Customer’s requirements are the same as always
• They will change over time
• We need to monitor and track
• You understand why customers do what they do.
• What drives them?
• Ask customers directly; do not assume you know
• AND – even when asking directly don’t assume that what is being communicated is
what is intended!
 Prof. David Shternberg
CSUN
Identify Your Customers
• External
• Consumers
• Distributors
• OEMs
• Internal
• Next process
• Shipping
• Management
• Inspection/audit
• Other
• Employees
• Suppliers
 Prof. David Shternberg

Ask the Customer CSUN

Ask Yourself 3 Questions

1. What do you want to know?
2. Who do you want to know it from?
3. What are you going to do with the information?

• If you cannot answer question 3, you should not bother asking

questions 1 and 2.
 Prof. David Shternberg

Ask the Customer CSUN

General Questions
• What is most important to them?
• What would ‘make their day’?
• What would utterly delight them?
• What would differentiate you from the competition?

• Use open-ended questions.

 Prof. David Shternberg

Ask the Customer CSUN

Standard Questions
• How important to you is [OTD “on time delivery”]?
• What do you mean by [OTD]?
• How do we perform on [OTD]?
• What do you do if we don’t perform?
• What impact does non-performance have on you?

• Ask for each factor of interest to you.

• Use a scale of 1 (low) to 9 (high)
 Prof. David Shternberg
Ask the Customer CSUN

Report Findings – 2x2 Grid Customer Ratings

OTD Leadtime Quality Cost

Importance to Customers

We're Better ----- They're Better

This line of reasoning leads us to the Kano model

Another requirements structuring technique…
ASQ

THE KANO MODEL OF QUALITY

The Kano Model of Customer (Consumer) Satisfaction classifies product attributes based on how they are perceived by
customers and their effect on customer satisfaction. These classifications are useful for guiding design decisions in that
they indicate when good is good enough, and when more is better. Kano product characteristics can be classified as:

•Threshold / Basic attributes

Attributes which must be present in order for the product to be successful, can be viewed as a 'price of entry'. However,
the customer will remain neutral towards the product even with improved execution of these aspects.

•One dimensional attributes (Performance / Linear)

These characteristics are directly correlated to customer satisfaction. Increased functionality or quality of execution will
result in increased customer satisfaction. Conversely, decreased functionality results in greater dissatisfaction. Product
price is often related to these attributes.

•Attractive attributes (Exciters / Delighters)

Customers get great satisfaction from a feature - and are willing to pay a price premium. However, satisfaction will not
decrease (below neutral) if the product lacks the feature. These features are often unexpected by customers and they
can be difficult to establish as needs up front. Sometimes called unknown or latent needs.
Also used in the VOC
definition.

Recall the point of the

definition phase is to get
from the VOC to what is
CTQ (critical to quality).

We want is measureable.

We want is quantifiable.

We must make sure that

the process involved in
getting there does not
become more of an
endeavor than the product
that we are making.
Kano model http://www.free-six-sigma.com/kano-model.html

example

A system’s characteristics can have degrees

of value in the eyes of the customer –
knowing the value landscape can help
when establishing the value stream. The
Kano model helps establish that “value”
landscape.
Another common requirements structuring technique…
asq.org
Quality Function Deployment (QFD) is a
structured approach to defining customer
needs or requirements and translating them
into specific plans to produce products to meet
those needs. The "voice of the customer" is the
term to describe these stated and unstated
customer needs or requirements.
QFD used throughout the lifecycle
Example
 http://asq.org/service/body-of-knowledge/tools-sipoc
“The suppliers, inputs, process,
outputs, customers (SIPOC) diagram
defines the scope of work for a team
and identifies at a high level the
SIPOC
potential gaps (deficiencies)
between what a process expects
from its suppliers and what
customers expect from the process.

A SIPOC diagram maps a process at a

high level and identifies potential
gaps between suppliers and inputs
specifications and between outputs
specifications and customers
expectations, thus defining the
scope for process improvement
activities.
Because it also identifies feedback
and feed-forward loops between
customers, suppliers, and the
process, it jump-starts the team to
begin thinking in terms of cause and
effect.”

Step 1. Name the process. (Use verbs/adjectives.)

Step 2. Indicate the start/stop, or the scope of the process. (What are the triggers that initiate and end the process?)
Step 3. Indicate the output(s) of the process. (Use nouns – what is it this process does?)
Step 4. Indicate the customer(s) of the process. (Whom does this process affect/benefit?)
Step 5. Indicate the supplier(s) of the process. (Which individuals/teams provide inputs into this process?)
Step 6. Indicate the input(s) of the process. (Use nouns – what is needed to execute this process and deliver the outputs?)
Step 7. ID the five to seven highest-level steps in the process as they exist today. (Verb/adj – how does this process operate?)
If necessary employ requirements eliciting
technologies
• Home builders routinely – “build virtual houses” for customer walkthroughs in order to
prevent change later on
• Car manufacturers allow for trial use period
• Lantech developed a set of tools to identify customer controller preferences for their
shrink wrapping machines
• PC manufacturers allow for customization of components via a virtual interface
• A travel agent who allows the customer to “walk” a virtual tour or inspect the hotel
accommodations, see the menus, visualize the taxi-ride from the airport to the hotel…

• The point is – value is often not yet in the eyes of the customer without a little support.
Thus we should expect to assist in the value definition process. Communication is a
tough business – virtualizing the product for no risk trial – mitigates the risk of
dissatisfaction later…
 Instrumenting the VOC throughout the LPS is critical, how do we get there?
VOC

Valued Y
Product/Service CTC, CTQ, CTP

X
The variables of
production

Value chain
Lean 6σ – the necessary linkage
between Value and Perfection
(an overview) – instrumenting
Value throughout the LPS
 Adapted from CM Hinckley’s framework for quality improvement

Lean and 6σ – a tale of the tape …

Lean 6σ
• Systematic removal of waste • Systematic removal of variation
• 5 Principles • DMAIC
• Cost, quality, delivery, lead time • Improved sigma level
• Lean facilitator, matrixed support, • Colored belt driven and
executive buy in supported
• Program • Project based
• SE tools • Statistical tools
• Value stream • Process variation
• 5-Whys • DOE
What we’d like to do is leverage 6σ concepts during the LPS design process to ensure
that we are able to understand and control variability in the LPS – this is “Lean 6σ”
Point of origin…
• The roots of Six Sigma as a measurement standard can be traced back to
Carl Friedrich Gauss (1777-1855) who introduced the concept of the normal
curve.
• 1920’s Walter Shewhart showed that three sigma from the mean is the point
where a process requires correction.
• Many measurement standards (Cpk, Zero Defects, etc.) since.
• The term “Six Sigma” goes to a Motorola engineer named Bill Smith.
• “Six Sigma” is a federally registered trademark of Motorola.
• It has evolved into more of a method (perhaps a system) from its humble
beginnings as a measurement
As seen by the IE BoK:
I. Lean Six Sigma
1. Customer Focused Quality
2. DPMO
3. Process Capability
4. Value Stream Mapping
5. Types of Wastes
6. Business Diagnostic
7. Lean Thinking
8. Decision Making based on Data
9. DMAIC
a. Define
b. Measure
c. Analyze
d. Improve
e. Control
10. DMADV
a. Define
b. Measure
c. Analyze
d. Design
e. Verify
11. Theory of Constraints
 From the IE BoK
And for Lean in general… D. Process Management, Analysis and Improvement
1. Process Mapping
2. Process Dynamics and Measurement
• C. Systems Design a. Little’s Law
• 1. Operations system requirements 3. Continuous Improvement of the Work Environment
a. Kaizen Teian
• 2. Product flow optimization b. Employee Involvement
• a. Facility layout and design c. Sustaining Change
• (1) See Facilities Engineering and Energy Management 4. Lean Thinking
• b. Line balancing a. Principles
• (1) See Work Systems (1) Value
(2) Value Stream
• 3. Design for specific industries
(3) Flow
• a. Product (4) Pull
• b. Process (5) Perfection
• c. Manufacturing/assembly b. Value Stream Mapping
• 4. Design for assembly c. Types of Wastes
d. A3 Project Planning and Problem-Solving
• 5. Process automation e. Strategies for Improving Flow and Implementing Pull
• 6. Group Technology (1) 5S
• 7. Multifunctional workforce optimization (2) Standard Work
(3) One-piece Flow
• 8. Setup design (4) Visual Management
• a. SMED (5) Jidoka
• b. Zero Changeover (6) Kanban
• 9. Error proofing in operations (Poka Yoke) f. Lean Management System
g. Kaizen or Rapid Process Improvement Workshops
• 10. Fixturing 5. Information technology -enabled integrated process
 DMAIC

But, the purpose of our system is to be in

business and make profit; not make a system
out of the system. We don’t want to focus
on the means rather than the ends … keep
the main thing the main thing
 From VOC to Y’s [aka CTQs]
• One reasonable way to quantify the VOC is to:
• Capture what is critical to the customer in a survey, interviews
• At this point we are translating Needs into Requirements
• Many tools can be used to assist in the classification and prioritization of these needs: Kano,
QFD, XY matrix – but what we are doing is classifying and aligning and prioritizing
• This has been done so many times that patterns exist and the resulting classifications end up
something we can catalog IAW what is Critical to Quality [CTQ]…
• The translation from VOC to CTQ is the journey from a statement that may be vague or
qualitative in nature to something we can measure in our production process

• During the analyze phase of DMAIC we move into the drivers [X’s] or causes for the
performance of the Y’s

• We then improve the X’s to impact the Y’s to impact the CTQs to impact the VOC … no
sense in asking “Why” 5-times when performing C/E chaining – the chain is already
documented and instrumented into the LPS (assuming that we follow our design)
This is an accounting exercise
finding out what is important and its relation to how we produce
• VOC – largely handled through interviews and survey
• Kano is a tool to help prioritize the VOC through a lens that distinguishes
between performance, nice to have, and expected but not articulated
• Translation to CTQ [what is measurable; libraries exist]
• SIPOC – is a mapping between our core process, the core artifacts [inputs
and outputs], and the core players [suppliers and customers]

• Having an idea of what we will measure in our production process is part of

the issue – now we must identify how we will make that measurement
reliably and repeatedly to ensure that we are attacking an effect (Y’s)
whose behavior is due to causes (X’s) in the production system and not due
to how we gather the data on those Y’s
VOC: Voice of the
Customer
We want to make the VOC quantifiable and measureable
CTQYX
• When the going gets
quantitative
• When we can
measure it and the
veracity of the data
can be vetted
• When we have a
design in place or a
benchmark to grade
against – we are
always interested in
“compared to what”
To Successfully Deploy Lean Six Sigma
 Start with the customer … listen; an develop ways to clarify the message
 Recall in Lean Thinking where the Home Builder developed a tool for involving the customers in the design process
in order to better identify what they want.

 Leadership commitment and alignment … go beyond the words … change behavior

 Create momentum for change
 Develop need, vision and plan
 Communicate, communicate, communicate
 Repeatedly execute and assess
 Develop necessary skill sets to obtain the desired future state at all levels of the organization
 Involve Everyone: Leadership, Champion, Master Black Belt, Black Belt, Green Belt, Employees
Lean Six Sigma: A Powerful Methodology (DMAIC)

Define Measure Analyze Improve Control

the process: the process gains:

what is important
to the customer: Analyze Data Ensure Solution is
Identify Root Causes Sustained
Project Selection
Team Formation
Establish Goal

the process performance measures:

how well we are doing: Prioritize root causes
Collect Data Innovate pilot solutions
Construct Process Flow Validate the improvement
Validate Measurement System
The Tools and Techniques

Define Measure Analyze Improve Control

Benchmarking Confidence Intervals Affinity Diagram DFSS Control Charts

FMEA Measurement System Brainstorming DOE Control Plan
Analysis
IPO Diagram Cause & Effect Kanban Reaction Plan
Nominal Group Diagram
Kano’s Model Mistake Proofing Run Charts
Technique
e-test
Knowledge Based Mgt PF/CE/CNX/SOP Standard Operating
Pairwise Ranking
F-test Procedures
Project Charter Standard Work
Physical Process
Fault Tree Analysis
SIPOC Model Flow Takt Time
FMEA
Quality Function Process Capability Theory of Constraints
Deployment Analysis Histogram
Total Productive
Voice of Customer Process Flow Historical Data Maintenance
Diagram Analysis
Task Appraisal / Task Visual Management
Summary Process Observation Pareto Chart
Work Cell Design
Value Stream Mapping Time Value Map Reality Tree
5S Workplace
Value Stream Regression Analysis Organization
Mapping
Scatter Diagram
Waste Analysis
t-test
Thematic Content
Analysis
Tukey End Count Test
5 Whys
DMAIC
C1 C2
identification criteria
Need for repeatable, reliable production and quality product
DMAIC method

the method
Lean production system [LPS] Define project definition
I1

A1
Without a Lean Transformation effort
the DMAIC method is a structured
Measure verified, vetted measurement data
continuous improvement program
A2

The use of 6σ engineers provides

directed actions
leadership and inertia for the effort
Analyze
analysis results
DMAIC at its core is quantitative and
A3
data driven, measureable issues leading
to measureable improvement

The IDEF0 mechanisms [6σ tools] here Improve Improved LPS

O1
are in reality applied widely across the
activities. The diagram here represents A4

a likely application scenario – but the

tools of 6σ are used where and when Control corrective actions

the engineers need them A5

VSM DOE TOC
Risk and return Regression Takt
6-sigma engineers VOC FMEA Poka-Yoke
SIPOC process models Cause Effect Diagram Kanban SOP
QFD ANOVA Cell design Run charts
6-sigma tools Pareto Gauge R&R 5-Whys 5 Ss Control charts
Measurement System Analysis
M1 M2
 In summary
• Lean P&P structure and facilitate our design
• Once in operation – striving towards the design we need a continuous
program of measurement, comparison, refinement
• The backbone of Lean 6σ is quantitative analysis; data driven improvement
• The program is better served with a cadre aboard
• Can management keep the Lean ship from dwarfing the profit goal?
• Design it, implement it, monitor it, fix it … perfect product at the takt
M2: Takeaways
• Value seems simple enough – hardly worth a paragraph much less an
entire chapter? Or is there actually much more to it?
• Value is in the head of the customer, but not always so easily
communicated
• We may need to, as engineers, help define the value with more
precision – through mock-ups, virtual prototypes, etc …
• The production system desperately needs to have a solid
understanding of value in order to put the PS in place to focus on that
value definition
M3:
LPS design principles for LPS design – framed using IDEF0
 An IDEF0 depiction of LPS design with a focus
on Value translation throughout the design

Context: LPS design life-cycle (V-VS-F-P-P)

Purpose: Highlight the integration and instrumentation of Value throughout the LPS design
Viewpoint: LPS design engineer
Q: LPS design is under continuous improvement, how can we feed this knowledge back into the design
process to establish the life-cycle nature of LPS design?
Needs and requirements are distinct concepts. Needs are Is this the only way to model these activities? Absolutely not – just a
the necessary conditions to resolve an issue but
requirements parameterize the needs and thus are a
first cut to identify what’s important in translating value from VOC
sufficient set conditions – something that we can then through to the Y and ultimately the X
engineer our LPS to produce.

What is the VOC here?

In SE – we spend a great deal of

time in definition of the
symptoms, concerns, problems,
needs, requirements, solution
concepts, … associated with a
system development effort
M3: Takeaways
• We can leverage IDEF0 to frame the core principles as activities to be
performed when designing a LPS
• We can use the purpose statement of the model to our advantage
and highlight particular types of threads that traverse the LPS design
– for example here we are interested in how Value manifests itself
throughout the LPS design. If we want to highlight the value stream,
flow, or control we can produce a different model using essentially
the same activities.
M4:
Let’s look at Lean in action – at least as described in various case studies
Case studies – a summary of various Lean implementation efforts [Wilson]
Larana
The Zeta Cell
QED Motors
First a little background
MTO v MTS
Many cases utilize the concept known as OEE – let’s get a 2-slide working definition
overview on the OEE concept so that we can read the literature and revisit in detail
later
 Make to Stock or Make to Order?
• Pure Lean with zero inventory would clearly be make to order, but
• Variability is the norm, so
• The reality is that most Lean systems are Make to Stock, and
• The size of the Stock is what is at issue…
• Buffers are the system variation absorbers and dampeners Wilson adds…

The Herding Cats Law… where

time is just another scratching
post.

Why is being in the right place

at the right time in the right
quantity and in the right
configuration so tough?
OEE was first described – as a central component of the
TPM methodology- by Seiichi Nakajima.

FYI:

OEE Primer v1…

How is the PS
performing?
Note – for the production system as a
whole we could very well rename OEE to
OSE [Overall System Effectiveness]; but
OEE is the tradition.
 OEE primer v2: OEE and the Six Losses [to be revisited]
Six loss category OEE measure Reason for loss Countermeasures
1.Changeovers •Planned Downtime
Planned downtime or
2.Planned maintenance Management
external unplanned Availability
3.Material shortages •5S Workplace Organisation
event
4.Labour shortages •ABC Planning
•Kaizen Blitz
1.Equipment failure
•ProACT
Breakdowns Availability 2.Major component failure
•Root cause analysis
3.Unplanned maintenance
•Asset Care

1.Fallen product •IFA Opportunity Analysis

2.Obstruction •5S Workplace Organisation
Minor Stops Performance
3.Blockages •Management Routines (SIC) PFD
4.Misalignment •Line Minor stop audits

1.Running lower than rated speed

•IFA Opportunity Analysis
2.Untrained operator not able to
Speed loss Performance •Line Balance Optimisation
run at nominal speed
•Management Routines (SIC)
3.Misalignment

1.Product out of specification •IFA Opportunity Analysis

Production rejects Quality 2.Damaged product •Six Sigma
3.Scrap •Error proofing

1.Product out of specification at •Planned Downtime

start of run
2.Scrap created before nominal
Rejects on start up Quality
running after changeover
3.Damaged product after planned
maintenance activity
Management
•5S Workplace Organisation
•Standard Operating
Procedures
•Precision settings
Now for some documented lean
efforts
Case definition leave a lot to the imagination – but the focus of these case study
descriptions is on the methodology in use for lean design and implementation
These case studies are discussed in Lean Manufacturing (Wilson)
 Wilson
Larana Manufacturing Start where you are
Use what you have
Do what you can
• Electrical parts, automotive part
supplier
• 9 production lines, not balanced
• No one is focused on the PS
processes

“Kermit” is the Plant Manager [PM] Conclusion: current conditions poor - not ready for Full Lean
So, Larana is in for 1.
2.
Select and prepare a value stream change agent
Assess the culture

mini-Lean
Immediate focus was OEE – to improve the quality control foundation
3.
4.
Create true north metrics
Perform system wide evaluations
5. Document the ASIS VSM OEE focus in place of these
6. Redesign to eliminate waste
7. Document the TOBE and form kaizen activities to
implement
8. Repeat [in an effort to “mature”]

After 8w:

After 24w:
Finally…
• After 24w the three lines, once
problematic, were now producing
24% more product with the same
resources
• Raw material costs dropped
• Before: progress meant improve
quality yield by ~2% per year at
Other Lean improvements:
$0.50/unit for 30,000 units/year … Work station combination and simplification
“good progress” meant ~$100,000/y Kanban control
Batch and move sizes reduced
• After: yield is 20% higher in only 6m Status boards
Material delivery made a full time priority
VSM for line # 9
 The VSM gives the “30,000 ft view” of the production process; the
The Zeta Cell details carry the real story… start at the cell and move out from
there, we must know the work. Work design. Current OEE was 61%

• Robot manufacturer
• Supplier of controller to Zeta engaged in Lean also
• No smooth flow within cell, cell thrashing, inventory build up
• First step … a basic time study [classic IE]
Time studiers to your marks, get set, …

We’ll get a little taste of

time study technique
later.

But this is no spectator

sport.

Therbligs are at play

here too. In fact we
must get the best
process in place first,
then set a standard.
Once we have a standard time to
perform the operations and we
understand the precedence
constraints, then we can balance the
work in the cell…
Movement from a 10-person cell
to a 5-person cell…

Know the work

Cell design may require elemental analysis
QED Motors… a case
• Apparently 5y into a Lean transformation already…
• 30y in motor manufacturing business
• 3500 units/month at 7days/week
• 76% on time delivery
• 14% scrap rate
• 7d production leadtime
• Immediate objectives [to be accomplished in 60d w/o line shutdown]:
• Improve capacity to make 3500 units per month [at 5d/w]
• 50% reduction in leadtime
• Implement a make to stock, pull at takt
• Reduce line rejects by 50%
• Increase on time delivery to over 95%
ASIS data…
• Stātors prepped by welding, grinding then
staged in front of four coil insertion cells
• 3-models [large, small-1, small-2] of stator for
10-motor models [Iab-IX]
• Each cell capable of making all 10 motor
models processed through electrical test
• Stators batched [24 or 48] prior to heat treat
for curing
• Finishing ops
• 3-month plan and forecast ignored by
production – used weekly update instead,
turned into a daily schedule
• Changes largely due to parts status
• Schedule change frequency concerns
 On to Lean…
Precursor to Lean score: 7.5/25
Not good after 5y in Lean, but
the PM wants a full Lean effort

Implementation strategy:
1. Synch supply to customer
2. Synch production
3. Create flow
4. Establish pull-demand
5. Standardize and sustain
 Find the takt, redesign the system to operate at takt

Synch supply to customer

• 2-shifts at 11h each; 1.25h breaks/shift
• 21.5d/month
• Production 3550 units/m  165/d
• Takt = (22.5-2.5)*60/165=7.09min
• Motor proc time same for all large stator
and small stator models
• 52% of motors are large stator
• Leveling done with 50/50 model mix
• Buffer and safety stock combined and set
at 2w for weekly pick ups and 3d for all
daily pick ups; cycle stock set at pick up
volume
Synch the
Production
• Define the work
[time study]
• Evaluate balance
chart [w/r/t takt]
• Reduce lathe cycle
time Fixes: SMED techniques to reduce
• Kaizen: changeover; shut down one
• Lathe CT was winder; model-mix production
bottleneck > takt added; increase number of large
stator cells; resulting in a new
lathe CT of 6.6min
Creating Flow: eliminated 2d delay in order
processing; re-staffed the Lace and press
operations; visual signals added [floor
markings]; intermediate test/inspect
eliminated; rework sent to rework station
 Pull-Demand
• Kaizen events used to implement pull:
• Obtain and verify daily ship lists
• Kanban internal control; material handling and
fixtures used as kanbans
• Production planning at heijunka [model-mix
leveling] board at insertion cells only
• Storehouse of stators near insertion cell
• FIFO processing lanes end-to-end
• Spaghetti diagrams for material handling reduction
• Move FG inventory
• Rearrange testing process location
• Move CNC-Lathe near curing oven
• Ran off 700units of WIP
• Reduced CNC-Lathe CT  160units/d
• SMED CNC changeover proc  11min
• Ran new configuration until buffer and safety stock
levels were corrected
 Objectives [to be accomplished in 60d w/o line shutdown]:
• Improve capacity to make 3500 units per month [at 5d/w]

Standardize and sustain… • 50% reduction in leadtime

• Implement a make to stock, pull at takt
• Reduce line rejects by 50%
• Increase on time delivery to over 95%

• 2m to achieve the results below:

What about the cases in LT?
Womack and Jones
***Lean Thinking Part I [Lean Principles]
• What examples did the authors draw from?
• Value – Doyle Wilson Homebuilder, Carl Sewell, Maynard Wiremold, Jones family
travel ‘system’ experience
• Value Stream – life-cycle of a carton of Cola at Tesco
• Flow – Doyle Wilson Homebuilder, Bicycle example – achieving single piece flow, rock
climbing – rewarding human activity, make the value stream flow single piece
• Pull – Sloane Toyota, Shahid Khan’s Bumper Works + Toyota PDC
• Perfection – FNGP [Freudenberg-NOK General Partnership]

We will discuss more about these cases throughout the course

At the point of production
Flow and Pull

More on Bumper Works…

• 20,000/month w Model-mix [4 types]
• Sensei says: Lean Pull requires 90% production up time; 10% for changeover
• 4 changeovers required to support model-mix [88min ~9% of the 960min
available]
• Takt at 0.96min
• Kanban pull control; MRP largely discarded
• Routing to Chrome Craft was added into the vale stream flow; eventually
resulting in the addition of a small [right-sized] chrome-deposition process
operation in the Flex-N-Gate facility itself
• Completed bumpers sent to Parts Redistribution Center [PRC]
At the point of storage

The Warehouse gets leaned…

• Toyota required Parts Distribution Centers [PDCs] throughout US
• PDCs were operated like warehouses
• 58d leadtime requirement: 15d order + 38d delivery [ocean] 5d at PDC to bin
• Orders based on forecasts  “created demand” waves of orders through the value
stream
• Bin-based, batch and queue logic, inefficient use of storage space
• Answer: shrink the bins, reduce the lot sizes, order more frequently, coverage for
low volume parts and high volume parts [1989]
• Reorganized the layout of the PDC to deal with categories of part types and demand
frequency history … similar to supermarket & SAM’s philosophy
• Move to precise, small order picking for small order replenishment
At the point of pull

The dealership gets Lean…

• Sloane Toyota
• 3m supply tied up in inventory [service and crash parts] at $580,000
• Weekly replenishments
• 3d LT to get parts to correct location within the dealership storage
• Wasted time incurred by entire value stream [customer, tech, service rep]
• 1995 inserted pull parts concept throughout the entire distribution system
• Borrowed organization and layout from PDC; cut bin sizes; cut parts on hand
by 25%; cut cash tied up by $290,000 [enabling new capacity]
• Same day service rates up
Muda… type1: waste that must be engineered out of the system; type2: non value add that can be eliminated immediately

• 4 replenishment loops
Bumper to Bumper Lean… • Customer triggered at
the dealership
Chrome • Macroforecasts still
Craft used to “right size”
Bumper the distribution
Works network
Toyota
PRC
• Moving towards “sell
one, ship one, make
Toyota
PDC
one” – single piece
flow
Sloane
Toyota

Old system Lead Time: 11m = 4w at BW + 2w at CC + 3d at PRC + 6m at PDC + 3m at ST

New system Lead Time: 4m = 48h at BW & CC + 3d at PRC + 2m at PDC + 1.5m at ST Capital equipment required: ~$0
Expected: 1.5m Kaizen activities are considered sunk costs
A few final points…
• The false appeal to Chaos [p.87] – when lead
times and inventory fall
• Economic activity downswings due to parts
acquired as inventories are being worked off
rather than directly through production
• Followed by the build up of new inventories But the Bumper Works case is unique in
taking advantage of discounts in raw materials its scope across the entire enterprise
system from customer need to
• Nothing has dampened this cycle to date customer delivery.
• JIT-supply outpaces JIT-manufacturing; thus No chaos here.
batch sizes are still large
Khan-gratulations are in order.
In summary…
• Pure Lean should not be the entry point goal
• Maturity matters, but implementations can be phased
• If the studies are right then, Flow and Control related lean efforts appear to have
significant payoff
• Cases studies make obvious the gains, but also the engineering required
• Inventory reduction provides immediate savings and leadtime reduction
• Buffers eat variability and they may be unavoidable, at least for now
• Waste identification and removal requires rigorous accounting
• Under the value stream façade lies some serious IE-based work to be done and
artifacts to be produced
M4: Takeaways
• Cases help us understand what went right and wrong
• Success stories make for better press – case studies documenting
failure are … well, no one likes to be negative
• Bumperworks is worth reading in detail
• Lantech is also a case worth reviewing (LT ch.6)
Synopsis of Lean thus far…
• TPS started it all and is the “gold standard”
• Lean is the child of TPS
• Five core principles are at the heart
• Lean is sociotechnical in its scope … the production system is process centric and
has a culture
• The focus is waste identification and removal – we have categories to work from
… this is an invasive accounting exercise
• For success, the Lean effort requires a systematic and methodical approach
• We introduced a methodology of principle driven activities performed by
talented engineers leveraging a number of tools and techniques-[comprising
~80% of this course]
• So, what’s the prognosis for applying Lean? Is it all or nothing?

NB: Lean, as a paradigm, clearly has its origin in Industry.

Next week…
• Quiz2: Value Principle and Value as characterized at Lantech

• The Value Stream and Flow

• Lean eventually manifests itself in flow and control
• The Value Stream Map (VSM) – characterizes the flow and control and serves as a
focal design artifact for the lean engineer to use in lean production system
implementation
• Learning to See (Rother and Shook)

• Read Lean Thinking pp.316-337 (overview of the VSM)

• Read ch.6 of LT – Lantech case study “The Simple Case”
• Think about how you might use both an IDEF0 model and the VSM to represent
the concept of lean production operations
• www.lean.org
• www.idef.com Assigned Sources leveraged
• Factory Physics [Hopp and Spearman] 3rd edition 2008
• Factory Physics for Managers [Pound, Bell, Spearman] 2014
• Lean Engineering [Black and Phillips] 2013
• Manufacturing Systems Modeling and Analysis [Curry and Feldman] 2nd edition 2011
• Lean Manufacturing [Lonnie Wilson] 2nd edition 2015
• Lean Thinking [Womack and Jones] 2003 edition
• Learning to See [Rother and Shook] v1.2 1999
• The Lean Toolbox [Bicheno and Holweg] 5th edition 2016
• Improving Production with Lean Thinking [Santos/Wysk/Torres] 2006
• Methods, Standards, and Work Design [Niebel] 12th edition 2007
• Applied Probability and Stochastic Processes [Feldman and Valdez-Flores] 2nd edition 2010
• Operations Research Models and Methods [Paul A. Jensen, Jonathan F. Bard] 2002 edition
• Principles of Operations Management [Heizer/Render] 7th edition
• Gemba Kaizen [Imai] 2nd Edition 2012