INTRODUCTION TO LEAN MANUFACTURING

Achieving World-Class Organizational Results

Introduction To Lean
WHAT IS LEAN MANUFACTURING?

Lean Manufacturing can be defined as: "A systematic approach to identifying and eliminating waste (non-value-added activities) through continuous improvement by flowing the product through flow processes based on a signal from the customer."

Introduction To Lean
What is Lean Manufacturing?

Lean manufacturing is the process of analyzing the flow of information and materials in an environment and continuously improving the process to achieve enhanced value for the enterprise.

It uses the building blocks of: standardized work, workplace organization, visual controls, effective plant layout, quality at the source, batch reduction, teams, customer demand-based manufacturing, point-of-use storage, quick changeover, one-piece flow, cellular manufacturing, and Takt time. Lean manufacturing also applies the modern elements and technologies of scrap reduction, process improvements in machining and tool selection as well as material selection, set-up reduction, JustIn-Time, Kaizan, world class manufacturing, synchronous manufacturing, and inventory management.

Introduction To Lean
CUSTOMER FOCUS A lean manufacturing enterprise thinks more about its customers (internal & external) than it does about running machines fast to absorb labor and overhead. Ensuring Internal and External customer input and feedback assures quality and customer satisfaction,

Introduction To Lean
FOCUS ON WASTE
The aim of Lean Manufacturing is the elimination of waste in every area of the organization including Customer relations (Sales) Accounting Product design Supplier Networks Quality HR Safety Manufacturing Engineering

Introduction To Lean
LEAN GOALS
Goal is to IMPROVE EVERY PROCESS WITHIN AN ORGANIZATION REQUIRING: Less human effort Less materials Less inventory Less time Less space
To become highly responsive to customer demand while producing top quality products in the most efficient and economical manner possible

Introduction To Lean
In 1945, Toyoda challenged Taiichi Ohno to learn how to compete with US Automakers not on building large volumes of similar models, but many models in low volume. Ohno was given 3 years to develop a system to achieve this goal.

Introduction To Lean

Ohno went to the US and studied Ford mass assembly processes at the Rouge River Plant. Ohno learned a lot from this experience, but felt Ford stopped short of a better system. Ohno also studied the supermarket concept of ordering and replenishing stock by a signal system. This resulted in Ohno applying the KANBAN concept to the system he would develop.

Introduction To Lean
It took Ohno over 20 years to develop the system that became known as The Toyota Production System (TPS)

It took until the 1974 Oil Crisis before outsiders and others in Japan really took notice of the TPS system that Ohno built and the way it was allowing Toyota to compete when others were faltering.

Introduction To Lean

Introduction To Lean

Typical use of automation which results in running parts faster and faster but result in increased inventory as downstream cells cannot use the product as fast as the upstream equipment is producing the parts. Increases inventory which is waste

Introduction To Lean

Lean Manufacturing came to the US with James Womacks Book, The Machine That Changed The World in 1990. Focused on Toyota Production System Concepts and Why Toyota was able to so successful over US Auto Manufacturers.

Introduction To Lean

Introduction To Lean
Glossary of Lean Manufacturing Terms

Following is a short list of terms often used in explaining lean manufacturing techniques. Cellular Manufacturing - linking of manual and machine operations into the most efficient combination to maximize value-added activities while minimizing waste. A cell layout is typically U-shaped and utilizes one-piece flow. Kanban System - a pull system that uses color-coded cards attached to parts or part containers to regulate the upstream production and delivery flow. Lean Manufacturing - the process of analyzing the flow of information and materials in a manufacturing environment and continuously improving the process to achieve enhanced value to the customer. 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.)

Introduction To Lean

Pull System - method of controlling the flow of resources by replacing only what has been consumed. A pull system relies on customer demand.
Push System - resources are provided to the consumer based on forecasts or schedules. (Lean manufacturing encourages the elimination of push systems.) Takt Time - customer demand rate. Takt time sets the pace of production to match the rate of customer demand and becomes the heartbeat of any lean system. It is calculated by taking the work time available and dividing it by the number of units sold.

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.)

Introduction To Lean

Most waste is invisible. Nor is elimination easy. A set of techniques that identify and eliminate waste has evolved into "Lean Manufacturing."

Cellular Manufacturing Takt Time Kanban Setup Reduction Implementing Kaizen Group Technology Small and frequent Lot Sizing

Introduction To Lean

Introduction to Lean
TOOLS ASSOCIATED WITH LEAN

Transforming small manufacturers to high performance requires that they address

Introduction to Lean
Start

Understand the Current State

Introduction To Lean

Introduction To Lean
Present State Value Stream Map

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Future State Value Stream Map

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Improve processes (manufacturing; engineering; HR; Safety; Quality; Sales; Accounting) by looking at building cells of operations that are small complete factories of their own instead of moving products, materials and information by large lots throughout a large facility or office- Quick response Processing results

Introduction To Lean

A work cell is a work unit larger than an individual machine or workstation but smaller than the usual department. Typically, it has 3-12 people and 5-15 workstations in a compact arrangement. An ideal cell manufactures a narrow range of highly similar products/information/procdesses. Such an ideal cell is self-contained with all necessary equipment and resources. Cellular layouts organize departments around a product/information/process or a narrow range of similar products. Materials sit in an initial queue when they enter the cell.

Introduction To Lean

Once processing begins, they move directly from process to process (or sit in mini-queues). The result is very fast throughput. Communication is easy since every person is close to the others. This improves quality and coordination. Proximity and a common mission enhance teamwork. Simplicity is an underlying theme throughout cellular design. Notice the simplicity of material/information/process flow. Simpler Scheduling, supervision and many other elements also reflect this underlying simplicity.

Introduction To Lean

This complicated flow becomes a much improves and simpler flow between areas that are adding value

Introduction To Lean
Key Element Inter-department Moves Travel Distance Route Structure Queues Throughput Time Response Time Inventory Turns Functional Many 500'-4000' Variable 12-30 Weeks Weeks 3-10 Cellular Few 100'-400' Fixed 3-5 Hours Hours 15-60

Supervision
Teamwork Quality Feedback

Difficult
Inhibits Days

Easy
Enhances Minutes

Skill Range
Scheduling Equipment Utilization

Narrow
Complex 85%-95%

Broad
Simple 70%-80

Introduction To Lean

An Example A firm that assembles air-handling products faced high inventories and erratic delivery. They originally assembled units on a traditional line. Long setups and logistics required long production runs. Often, they pulled products from finished goods and rebuilt them for custom orders. Twelve small (1-3 person) assembly work cells that were always set up and ready. People worked in different cells each day and assembled to customer order. Finished Goods Inventory dropped by 96%. Lead-time was 24 hours. Productivity improved by 20%-30%.

Introduction To Lean

Introduction To Lean
Traditional Manufacturing Scheduling Forecast - push Lean Manufacturing Customer Order - pull

Production
Lead Time

Stock
Long

Customer Order
Short

Batch Size
Inspection Layout Empowerment Inventory Turns Flexibility COGS

Large - Batch & Queue

Sampling - by inspectors Functional Low Low - <7 turns Low High and Rising

Small - Continuous Flow

100% - at source by workers Product Flow High High - 10+ High Lower and Decreasing

Introduction To Lean
Continuous Improvement Firm (CIF) versus Mass Production (MP) firm Issues Strategic advantage Workforce Output based on Productivity success factors MP CIF Large volume of Production flexibility homogenous output Narrow specialization Forecasted demand Quality of management; its ability to plan and to direct the implementation of those plans Multi-skilled Real demand The ability of the entire work force, not just management, to constantly improve both the product and the processes whereby it is produced

ISSUE

OLD INDUSTRIAL ECONOMY

NEW ECONOMY

Economic Development

Steady and linear, quite predictable

Volatile - extremely fast change, sudden downturns, and chaotic the direction of the changes is not perfectly clear4 Fast and unpredictable Customer-driven Short Innovative firms

Market changes Economy Lifecycle of Products and Technologies Key Economy Drivers

Slow and linear Supplier-driven Long Large industrial firms

Scope of Competition
Competition: Name of the Game Marketing: Name of the Game

Local
Size: The big eats the small Mass marketing

Global hyper-competition
Speed Differentiation

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Introduction To Lean

Introduction To Lean

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Introduction To Lean

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DEFINITION OF WASTE

Essentially, "waste" is anything that the customer is not willing to pay for.

Introduction To Lean
8 TYPES OF WASTE

TRANSPORTATION WASTED MOTIONS EXCESS INVENTORY WAIT TIME SCRAP OR REWORK OVER-PROCESSING OVER-PRODUCTION UNDERUTILIZED HUMAN RESOURCES.

Waste In Organizations is Usually Disguised as:

Lost Time/Injury Accidents Scrap/Rework Machine Setups Machine Downtime 3rd Party Inspection

Calibrations Inventory Storage Counting Inventory Supplier Lead-times Product Test Profit Reductions Falling Market Share

Waste In the Office Is Disguised As

Administrative Waste

Conflicting Department Goals not everyone on the same page Traditional Accounting Methods rewarding people for creating waste, for example; inventory Poor Product Design designs which do not include the needs of the internal and external customers Long Order Processing Time Searching, Hunting, Looking for files, orders, invoices, reports, memos etc. Waiting Time waiting for batched paperwork, instructions, supervision etc. Purchasing Reorders, Transactions Authorizations

Introduction To Lean What Types of Waste Do You Have in Your Facility?

Eliminating Waste

Improves our ability to provide customer satisfaction, while reducing our overall costs!

Introduction To Lean
Overproduction To produce more than is sold or produce it before it is needed. It is visible as storage of material. Overproduction means making more than is: - Required by the next process - Making earlier than is required by the next process, or - Making faster than is required by the next process.

Introduction To Lean

Causes for Over Production Just-in-case logic Misuse of automation Long process setup Unleveled scheduling Unbalanced work load Over engineered Redundant inspections

Introduction To Lean
WAIT TIME Any time that is non-value added where the operator must stop producing good parts and wait for: materials; instructions; Team Leader; equipment downtime.

Introduction To Lean
Causes of Wait Time Waste

Unbalanced work load Unplanned maintenance Long process set-up times Misuses of automation Upstream quality problems Unleveled scheduling Poor Communication

Introduction To Lean
Inventory or Work in Process (WIP) Waste Represents the material between operations due to large lot production or processes with long cycle times

One of the most frequent types of waste and one of the most expensive to have

Introduction To Lean
Causes of Excess Inventory

Compensating for inefficiencies and unexpected problems Product complexity Unleveled scheduling Poor market forecast Unbalanced workload Unreliable shipments by suppliers Misunderstood communications Reward systems

Introduction to Lean
Over Processing Waste Doing more processing to the parts than the customer really requires .
Over processing waste can be minimized by asking why a specific processing step is needed and why a specific product is produced. All unnecessary processing steps should be eliminated.

Introduction To Lean
Causes for Over Processing Waste

Product changes without process changes Just-in-case logic True customer requirements undefined Over processing to accommodate expected downtime Lack of communication Redundant approvals Extra copies/excessive information

Introduction To Lean
Transportation Waste Excess Material Handling either to production area or within production areas. Does not add any value to the product. Instead of improving the transportation, it should be minimized or eliminated (e.g. forming cells)

Introduction To Lean
Causes of Transportation Waste

Poor plant layout Poor understanding of the process flow for production Large batch sizes, long lead times, and large storage areas

Introduction To Lean
WASTED MOTIONS Any movement that does not add value. Examples: looking for tools; walking many steps to get parts or place parts into finished goods; more movements than necessary to perform an operation.

Introduction To Lean
Causes of Motion Waste

Poor people/machine effectiveness Inconsistent work methods Failure to take ergonomic issues into consideration Poor facility or cell layout Poor workplace organization and housekeeping Extra "busy" movements while waiting

Introduction To Lean
SCRAP OR REWORK Requires additional resources and time to correct defects before shipping or replace parts that are scrapped due to defects.

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Causes of Scrap or Rework

Little or no process control Poor quality standards or inconsistent quality standards Lack of or little planned equipment preventive maintenance Inadequate education/training/work instructions Product design (Process cannot produce to quality) Customer needs not understood

Introduction To Lean
UNDER-UTILIZED HUMAN RESOURCES The lack of involvement and participation of the employees in improving operations; quality and safety.

Introduction To Lean
Causes of People Waste

Old guard thinking, politics, the business culture Poor hiring practices Low or no investment in training Low pay, high turnover strategy Management thinking it has to drive everything instead of involving those who know the process the best

Introduction To Lean

Introduction To Lean
SOME BASIC ELEMENTS OF LEAN
Elimination of waste Equipment reliability Process capability Continuous flow Material flows one part at a time Less inventory required throughout the production process, raw material, WIP, and finished goods Defect reduction Lead time reduction Error proofing

Introduction To Lean

Stop the Line quality system Kanban systems Standard work Visual management In station process control Level production Takt Time Quick Changeover Teamwork Point of use storage

Introduction To Lean
KAIZEN The definition of Kaizen is "improvement" and particularly------"Continuous Improvement"-- slow, incremental but constant

Small-scale improvements are easier and faster. The risks are lower because they generally have limited effect.
However, the accumulated effect is often greater than a single large improvement

Introduction To Lean
Takt Time The desired time between units of production and output, synchronized to customer demand. The concept carries backward through a process stream. Ideally, every step synchronizes with the final output. Takt Time is fundamental to Lean Manufacturing.

Introduction To Lean
Takt time is useful for lean cells These are typical of the work cells at Toyota and what most people think of when they picture a cell. Such cells have:

Minimal Setups A Single Routing Identical Work Times for All Products Job-shops and other low-volume, high-variety operations can also use cellular manufacturing, it's just a bit more complicated

Introduction To Lean

Small lot production (ideally one piece) is an important component of any Lean strategy.

Lot size directly affects inventory and scheduling The larger the lot size the more time, materials, money, inventory, lead time, scrap is produced and lead time and scheduling is extended.

Introduction To Lean

Batching has an even greater effect on inventory. This chart shows the minimum inventory on hand downstream of the work center. A lot size of 20 units generates an average inventory of 15 units. A lot size of 200 generates an average inventory of 93 units with wide fluctuations. This is a 600% increase! Actual inventory would be much larger than shown here because of the uncertainty of fluctuations, the difficulty of correcting a stock out and the need for coping with other contingencies.

Introduction To Lean

The chart above shows the effect of large and small lots on one particular work center's production. A green line shows daily demand from the customer. It averages 50 units/day and does not vary more than about 20%. The black line shows the actual production if units are made in lots of 20 or about 0.4 days of demand. With this small lot size, required production tracks demand and even smoothes the demand a bit. Output is quite linear.

Introduction To Lean

A lot size of 200 units is about 4.0 days of demand. The purple line shows production requirements. Here there are large, intermittent swings between 200 units and 0 units-- very non-linear. This kind of pattern complicates scheduling, precludes the use of kanban and generates large inventories. The slightest glitch can cause stock outs

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Leaders must lead! Everyone must be involved without exception! Lean applies to the office and shop floor and it paves the approach necessary for all other improvements which are the long-term hope for a companys survival.
You will achieve the level of excellence that you demonstrate you want to achieve.
Dupont

Introduction To Lean

Introduction To Lean