Components of Lean Thinking

Module - 3

Lean Thinking
The Five Components:
1. Specify Value from the end customers perspective. 2. Identify the Value Stream for each product family and remove waste. 3. Make the Product Flow through the Value Stream. 4. So that customer can Pull from the producer. 5. Constantly pursue Perfection.

Value
Define Customer : clearly understand who the customer is. Define Value : Quality, schedule, target cost etc. Ask how your current products and processes dissatisfy your customers value expectations,

Price? Quality? Reliable Delivery? Rapid response to changes?

Value Stream
Lean Management is an end-to-end collection of processes that create value for the customer The value stream includes
People Tools and technologies Physical facilities Communication channels Policies and procedures

Value Stream
Identify all of the steps currently required to move products from order to delivery :
Challenge every step: why is this necessary? What does the customer think? Critically assess value addition at each step. Eliminate / minimize non-valueadded activities.

Tip : Use Value Stream Mapping Tool

Flow
LineLine-up all the steps that truly create value so they occur in rapid sequence;
Produce each product, everyday, in direct proportion to demand. Require that each step in the process be,
Capable , right every time (SIX SIGMA) Available, always able to run (TPM) Adequate, with capacity to avoid bottleneck. (right size tooling).

Flow
Flow refers to the movement of material through the plant. The material should not be stagnant at any point in time from the receiving of raw material to the shipping of finished products.

Pull
Customer should Pull value through the Value Stream;

Through lead time reduction & correct value specification, let customers get exactly what they want & exactly when they want.

Pull System
A method of controlling the flow of resources by replacing what has been consumed.

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Pull System
A method of controlling the flow of resources by replacing what has been consumed

Supplier Process

Supermarket

Customer Process

Push Vs. Pull System

Push System
Large Lots Hidden Problems Waste Poor Communication Approximation/Forecast
Make All We Can Just In Case We Need It!

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Pull System
Small Lots Visual Shop Floor Management Minimal Waste Good Communication Actual/Real Time Information
Make What the Customer Needs When Needed In the Quantity Needed!

Pull System Function

Material Flow Replenishment Signal Work Authorizations

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Final Workstation Customer

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Perfection
Continuously Pursue Perfection;
Create a clear vision.
Production ideal state. Customer Value

Make waste visible & evident. Problem Solving

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Lean Benefits
A comprehensive & patient implementation of lean leads to : Substantial reduction in
Inventories Capital employed Cost of quality

Significant improvement in
Quality Productivity On-time delivery

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Lean Journey
It is truly a never ending journey. And the further we go with the lean principles, the further they take you. Its like climbing a series of stairways through layers of clouds at each new level you reach, you become aware of a whole new level above you one that you never knew existed.
Joseph Day, CFO, Fedunburg.

Lean Thinking In Summary

Value is defined by the customer
Value Stream identified

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All waste is eliminated

Value stream has been refined so that only value added steps remain

Product flows through the manufacturing system

Single piece flow is the ultimate state

Production matches the customer pull rate

Material is pulled through the entire system

Continuous Pursuit of Perfection

Lean is not an absolute there are no rules only guidelines

Lean Measures and Concepts

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Value Added Time & Activity

Value
added is the amount by which the dollar/rupee value of a product (including raw materials and minerals) increases as it proceeds through the various stages of its processing, manufacturing and distribution.

Value added time

is time directly spent on increasing the value of a product (including raw materials and minerals) as it proceeds through the various stages of its processing, manufacturing and distribution. are those actions efficiently, effectively, and directly related to increasing the value of a product (including raw material and minerals) as it proceeds through the various stages of its processing, manufacturing and distribution.

Value added activities

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VA/NVA
VA / NVA - Process Time
Value Added Non Value Added Set Ups Queues Rework Necessary NVA Customer Specified Regulatory Technology Limitation

5% 35% In many manufacturing processes up to 95% of the process time can attribute to NVA activity. 60%

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NVA examples
Waiting for materials to be brought to production/processing work centers Time spent doing personal work on the computer and on personal phone calls Spending time searching for materials, tools, supplies, information, etc. that are not in their proper location Arriving at the work center late and leaving the work center early Maintenance employees making numerous trips to get the right repair parts and tools Attending a training session and never using/or be allowed to use the information/skills presented

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NVA examples
Knowingly producing off spec product just to make the production goal Equipment failures (computer systems to the behemoth draglines) causing idle time Bottlenecks of all sorts (mining, manufacturing, distribution, administration, etc.) that create dead time Waiting for approvals or direction from leadership Waiting for functions assistance from various support

Correcting inaccurate information provided by others (e.g., time cards, production reports, purchase requisitions, inventory levels, budgets)

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VA/NVA Exercise
Segregate the following into VA & NVA
Entering orders Waiting for parts Recording Moving WIP Testing Kitting/staging Reviewing Inspection Assembling products Counting Parts Copying reports Filling information Revise/reworking Tracking WIP Ordering Raw material Shipping to customers Fuelling delivery trucks Preparing Engineering drawings Obtaining multiple approvals Processing customer deposits Selling concert tickets Examining patients Checking Filing Insurance claims

VA
Entering orders Ordering Raw materials Shipping to customers Assembling products Preparing Engineering drawings Fuelling delivery trucks Examining patient Processing customer deposits Filling insurance claims Selling concert tickets

NVA
Reviewing Inspection Waiting for parts Recording Copying reports Counting parts Moving WIP Testing Filing information Obtaining multiple approvals Revising/Reworking Checking Tracking WIP Kitting/staging

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VA/NVA Exercise
Write your workplace VA/NVA & present.

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Lead Time
average time it takes for one unit of the thing to go through the entire process - from start to finish - including time waiting between sub-processes Also known as Throughput Time or Turnaround Time

Lead Time = Sum of all Process Lead Times +

Sum of all Queue Times between processes.

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Cycle Time
The time required to complete one cycle of an operation. Cycle time = Average WIP Unit Exit Rate If cycle time for every operation in a complete process can be reduced to equal takt time, products can be made in single-piece flow.

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Takt Time
Lean manufacturing systems work on a rhythm. Whole organization works on the rhythm provided by the customer. This rhythm is known as the TAKT time of the system. This is the ultimate pull scheduling system anyone can think about. TAKT time (Production Rate) = Net Time Available for production Customer Demand Example: If you work 8 hrs a day for 5 days a week. Demand per week is of 100Pcs.Calculate Takt Time Takt = 8 x 5 x 60 minutes / 100 Pcs = 24 minutes

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Line Balance
Line Balancing - Before

Equalizing cycle times for relatively small units of the manufacturing process. In conjunction with Takt Time Line balancing aims to balance the amount of work each person does. It helps ensure that WIP and inventory is minimized.

4 3 2 1 0 1 2 3 4 5

Current Loading(Sec/unit) Takt Time (Sec/Unit)

Line Balancing - After

2.5 2

No one overburdened, No one waiting Everyone working together in a BALANCED fashion

1.5 1 2 3 4

New Process Loading (Sec/unit) Takt Time (Sec/Unit)

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Line Balance

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Part/Unit Travel
Spaghetti diagram
Visual representation using a continuous flow line tracing the path of an item or activity through a process. The continuous flow line enables process teams to identify redundancies in the work flow and opportunities to expedite process flow. . Can you associate it with any of the 7 wastes? Transport Motion

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Standard Operations
Standard Operations is about ensuring consistency in how activities are undertaken A number of tools are available to facilitate standard operations eg On the job training, coaching & buddy systems Work Instructions Visual Aids & Controls 5S and more Jigs, Templates and more Note: It is usually only when close observation of a process is made that it becomes apparent that the activities are anything, but standard

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Overall Equipment Effectiveness(OEE)

OEE combines the effect of following: Availability It takes into account Down Time Loss Performance It takes into account Speed Loss Quality It takes into account Quality Loss

OEE = Availability Index

x Performance Index x Quality Index

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Overall Equipment Effectiveness(OEE)

Availability = Operating Time / Planned Production Time Performance = Ideal Cycle Time / (Operating Time / Total Pieces) Quality = Good Pieces / Total Pieces