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LEAN MANUFACTURING
Content:
1. Lean Manufacturing Principles
2. Productivity Measurement, Analysis and Improvement
3. Effect & Elimination of the Manufacturing 7-Wastes
LEAN MANUFACTURING
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TOYOTA BUSINESS
The company has made a profit every year over the last 25 years and has 20$-30$ billion in its
cash war chest on a consistent basis.
Toyota has for decades been the number one automaker in Japan and distance fourth behind
the big 3 automakers in North America. But in AUG 03, for the first time, Toyota sold in North
America more than one of the 3 big automakers (Chrysler).
In 2003, Toyota was on track to sell more vehicles in the US than either of the two brand
names that have led US sales for the past 100 yearsFord and Chevrolet. Camry was topselling US passenger car in 2003. Corolla was the top-selling small car in the world.
Toyota became the leader in producing luxury cars when they introduced the Lexus firstly in
1989.
Toyota invented the lean production, known inside Toyota as TPS Toyota production system.
TOYOTA BUSINESS
Toyota has the fastest product development process in the world. New cars and trucks take 12
months or less to design, while companies require typically 2 or 3 years.
Toyota automobiles have been consistently been at the top of quality rankings by JD Powers
and Associates, Consumer Reports, and others for many years.
In the small cars category (Toyota Corolla, Ford Focus/Escort, Crysler Neo, GM Cavalier), Toyota
won each of the last three years for overall reliability, as well as the prior three years, and
predicted reliability for 2003 model year.
For family sedans, the Toyota Camry beat out the Ford Taurus, the GM Malibu, and Dodge
Intrepid, wining in the last three years, the three prior years, and predicited reliability for the
2003 model year.
More than half of all Toyota used cars are singled out as recommendedfor purchase,
compared with less than 10% of the fords, 5 percent of the GMs, and none of the Chryslers.
TOYOTA BUSINESS
Toyota Lexus has dominated the J.D Powers initial quality and long-term durability rankings
for years. Toyota Lexus was again the #1 most reliable car, according to the J.D. Powers 2003
quality survey, Followed by Prosche, BMW, and Honda.
TOYOTA BUSINESS
Lean Principles
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3. Make the product flow: All obstacles that are constraining the flow of
the parts through the manufacturing processes must be removed. Lean
strive for one piece flow, which is about providing smooth flow for each
piece of product with no wastes in time, performance, and quality, in
order to deliver the product quickly to the customer.
4. Pull not push: Producing what the customer needs, and avoid over
productivity that creates the most of ever wastes in the production
processes.
5. Strive for perfection: There must be a vision for perfection.
Companies should strive to continuously improve the process rather
than being good at what they are doing.
The seven-wastes are those non-value added steps that obstacle the
flow of the stream, add cost to the product, reduce quality, and delay
the process.
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7 Wastes:
Commonly known in lean language as Muda which is a Japanese term.
It has been given a shortcut as TIMWOOD
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For example, if there is a manufacturing process consist of several processes such as cutting,
casting, assembly, handling, maintenance, inspection, and changeovers. The added value works
which involve making what the customer needs is just a few processes which are cutting, casting,
and assembly.
The others are those non-value added works that need to be removed or minimized. The seven
wastes define those non-value added in terms of transportation, inventory, motion, waiting, over
processing, over productivity, and defect. They have been given the abbreviation Timwood. The
8th waste is the underutilization of human capabilities or untapped human potential.
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Cutting process
Lathe Process
Flow
Changeover Maintenance
Downtime
Value Added
Weld
Drill
Flow
Machine Setting
Transportation
Assembly
Flow
Re Work
Absent
Wait for
Tools
Non-Value Added
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Takt Time
One of the most important calculations in lean is the takt time, which is
the rate of customer demand for group or family of products produced
by one process.
Takt time is calculated by dividing the effective operating time of a
process (for example per shift or per day) by the quantity of items
customers require from a process in that time period.
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=
(quantity customer require per shift)
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Allowances such as planned downtime, lunches, breaks, team meeting, cleanup, and planned
maintenance.
The changeovers, unplanned downtimes are those variables that need to be improved to have
the best effective operating time.
Customer demand rate= 420 pieces in a shift
Takt time= 25200/ 420= 60 seconds
Based on the available time, on average the customer is currently buying one unit every 60
seconds.
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60
50
40
30
20
10
Seconds
An unstable process
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OEE Metrics
OEE involves three metrics, described as follow:
1. Availability
this is a time metric that is usually measures as a percentage of the
operating time. Machine availability is a measure of how much time this
machine was available to run product. A machine that is busy or cant
make product is considered unavailable.
Improving the machine available time by reducing wastes and excess
motions from the process will improve:
Costs
Utilization of both operating time & resources
Time required to make a product
Overtimes
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2. Performance:
This is one of the most debate issues. It takes into account the factors
that are affecting the speed of the machines. Most of companies take
the number of pieces produced and compare it to the design, count
quality and availability, then, assume the problem is a machine speed
that has been caused by in proper maintenance.
Actually, the performance can be affected by many other factors:
1. Untrained operators
2. Bad/insufficient operation instructions
3. No instructions
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3. Quality
This is one of the greatest wastes in the process. Quality is so important
for customers, adding value to your customer is what keeps you in
business. If a process is producing a number of defected pieces, the
required working time to compensate those defects and re produce
sellable items will reduce the capacity of making a new product and will
consume more resources. Cost of producing a defected piece plus the
cost of re working it could be more than double the cost of making it
right at the first time. And if a defected product passed to the customer,
this can lead to complete business loss. It is more important to make
sellable parts rather than focus on just making high number of parts.
Reducing the defects ratio will improve the real output of the machine,
increase the capacity of making product, reduce the inspection effort,
reduce costs, and add value to your business.
Quality
Cost
Defect
Parts
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Re Work
Parts
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Find: What waste time? What slow the speed? What degrades the
quality?
Production availability & time analysis
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Operation
Losses
Value-add
Productivity time
Non-Value Add
Activities
Figure 1. Most common availability and time lost issues during the
operating time
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Performance Analysis
In many times, the primary cause of performance issues is hidden and
overlap with the availability metric.
Maintenance
issues
Operator Skills
Performance
Training Skills
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Data Management
programs like ERPs dont
provide solution or root
cause of the problem.
The reason of low
machine output
regardless of the quality
issue and availability can
be the speed of the
machine
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Quality Analysis
It is not difficult to know how many defects exist using a simple sheet to record the number of
the defected parts which cant be sold. What is not easy to know is the cause of this defect
which requires an intensive effort to understand the source of variation that is causing the
quality problem. It will be necessary to perform an in deep process analysis in order to grasp
the real situation for elimination of the root causes.
Toyota way of analyzing & solving quality problems :
1. Genchi genbutsu (Observe the real situation at the gemba)
2. Mistake-proofing (Poka Yoka)
3. Simple tool like Pareto for data analysis
4. Ask 5 whys to find the root causes.
What Six Sigma and other complex analysis tools can do?
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Equip description
Downtime hrs
(average)
frequency
Percentage
A1
Product Changeover
12.50%
A2
Maintenance downtimes
10.00%
A3
A4
Bringing tools
10%
2
2
A5
A6
Quality check
2.5
Preventive maintenance
A7
7.50%
6.25%
2.5
1
1
3%
A8
0.5
1.25%
A9
A10
Others
0.2
----
1
----
0.50%
----
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6%
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Equip
description
Cutting
Skimming
Downtime hrs
(average)
7
5
Attachment
Forming
Assembly
3.7
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frequency
Percentage
4
6
4
17.5%
12.5%
3
2
7.5%
10%
9.25%
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Pareto Analysis A problem solving tool that breaks data down into
manageable groups and identifies the greatest opportunity for return on
investment. The analysis is based on the Pareto Principle, also known as
the 80:20 Rule. Simply stated, the principle says that 20% of a
population will cause 80% of the problems associated with the
population
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14.00%
12.00%
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
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What is Gemba?
Go and See to observe the real situation.
A place where the value creating works
happen.
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Benchmarking is a tool
for quality analysis and
improvement
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1st Transportation
Transportation is about material handling. It involves all material
movements from the supplier to the customer. What creates most of
wastes in the manufacturing process is the movement of the parts
through the production processes. It adds more cost on the product,
and could affect external customers directly, causing a delay in orders
delivery.
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2nd Inventory
This is one of the greatest wastes. Inventory issues are greatly affected
by the production system. But the improper sales forecasting, and the
bad procurement planning are also reasons for inventory problems.
Reducing the inventory storing value became the main goal of any
industrial company. The just in time JIT theory and approaches like
Kanban have been utilized to serve the manufacturers demands in
reducing the inventories, and keep some buffer for emergencies.
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=
( + +
Inventory types are the raw material inventory, the work in process
WIP inventory, and the finished product inventory.
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E.g. if the cost of goods sold in the period was 1000 and the inventory
was 100, then the ITO was 1000/100 = 10 times. The ITO can as well be
expressed as throughput time (TPT). If the ITO is expressed as times a
year, then the TPT is calculated as 365/ITO days. In the example the TPT
would be 365/10 = 36.5 days. To measure the ITO for a single item, you
can simply calculate units sold/units in inventory.
Trim Master, Inc (seats supplier) for Toyota Motor Kentucky has a ITR of 135times per
month!
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Cost effects of inventory: The direct cost of the inventory carrying can
be estimated through the following parameters:
1. Return on investment ROI:
Any investment should have a return. The quicker you get this return,
and the better it will be. If money has been spent to buy some materials
needed for the production process, a quick return is good; a delay in
selling the finished product to the customer is bad. The idea is that this
investment amount could have been spent on something else, or putted
in the bank. Delay in getting the return involves the interest losses
during this period, and what is called opportunity cost. This money
could have been invested in another
profitable opportunity or project rather than being wasted on some
sluggish materials.
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2. Risk:
The risk of parts deterioration and damage varies. It depends on the
product type. If this product has an expiration date like food, or glue,
then it will be very risky to store them. Therefore, most of fast moving
consumer goods FMCG companies try to accelerate the inventory
movement and keep as minimum value as possible in their warehouses.
Furthermore, stocking too much inventories, put the business on risk if
there was a market change like change in the raw material prices or in
the currency value. There is also the risk of accidents such as fires.
At the same time, having no inventory, puts the business in another risk,
if the supplier has went down unexpectedly due to economic problem
or a nature disaster like the earth quakes in Japan, and tsunami.
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3. Material handling:
This is the cost of transporting goods. Some accountants see stocking
the inventory one time per year is economically good from the cost of
transporting view, but actually this puts the whole business in risk and
affect the profitability of the company.
4. Space:
Inventory takes much space and requires additional space renting or
buying. The space is valuable whether this space is rented or owned by
the manufacturer. The company may found itself has to re buy more
spaces for more production lines to expand their business, while there is
a lot of inventory taking much space in the factory. It is better to
minimize the inventory rather than buying more spaces to store it.
Either, those additional spaces will need more resources such as a
ventilation system, manpower, equipment, energy, and data recording
system.
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The main lean goal is to make one piece flow through the production
processes, and minimize the work in process WIP inventories. Producing
small batches is also a good idea, and will help facilitate the
transportation without using heavy equipment like forklifts. Trolley and
other light equipment are preferable for both cost and safety issues.
Minimum Wastes
Maximum Delivery Speed
Minimum WIP Inventory
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3rd Motion
This is the ergonomics. The operator needs to have his tools and parts
handed to him in exactly the right orientation to eliminate wasted
walking and handling losses.
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Tools should be
returned after use
Someone should
follow up the board
regularly to ensure
tools are available, in
good condition, and
returned after use.
Each tool should be
outlined on the
board, if one is
missed, it will be
recognized.
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4th Waiting
This is the time waste factor,
and it involves the following
activities:
Waiting for materials.
Waiting for spare parts.
Waiting for the quality
inspection process.
Waiting for services such as waiting for maintenance crafts
Waiting for quality inspectors.
Low machine performance/speed.
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Basic
Kanban or Pull System mechanism
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The
same
machine
The
same
machine
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Flexible
Pattern
Strives to dedicated
part numbers to
processes
Many variables
Easier to understand
causes of problems
Difficult to understand
causes of problems
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Cost effects of over productivity: Over productivity create the most of manufacturing wastes.
Mass productivity holds many downtime problems
Mass productivity holds many quality issues behind it.
Increase the non-value added
Longer lead time of making product
Delay in delivery to customer
Waste of money
Producing one piece or small batches will help pointing out the production obstacles quickly
and discover the root causes before problems are developed.
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Furthermore, if you are making 500 parts, and there were a problem
with the production process, a quality failure can occur with all of those
parts. Problems are hidden with the mass productivity approach; it will
be also so difficult to discover where the error is coming from. So the
root causes will remain hidden.
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With pull concept, and producing only what is needed for each process
step and between the production lines, there will be a minimum work in
process WIP inventory. If a process is went down, the downstream
process wont be able to receive parts, and the upstream process wont
be able to produce and build WIP inventory. Problems are now surface
and clear. And everyone will strive to fix downtime and prevent the
recurrence of this downtime.
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Weld
Drill
Lathe
Saw
CT=104 min
CT=76 min
CT=104 min
CT=40 min
1.7 days
WIP
0.25 days
WIP
0.75 days
WIP
Assembly
CT=40 min
CT=Cycle Time
WIP=Work In-Process
0.13 days
WIP
Lead times=3.75 days
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Weld
CT=103 min
CT=105 min
0.13 days
WIP Inventory
Min= 0
Max= 1
Assembly
CT=108 min
0.13 days
WIP Inventory
Min= 0
Max= 1
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Result of Lean
Transformation
Before
After
3.75 days
0.8 days
11
1700 ft.
1
1000 ft.
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With a team skilled operators and engineers, we can identify any steps
where errors are introduced and where they effect the rest of the
process.
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Mapping Tools:
Basic Process Mapping
The Big Picture Map
Capacity Maps
Value Stream Mapping VSM
Value and Capacity Stream Map
Swim Lanes Mapping.
SIPOC Maps.
Commonly used for:
-As a tool for problems finding and process improvement.
-Pointing out inefficient process steps non-value added.
-Allocate wastes and remove them.
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Value add
Non-value add
Value add
Value add
Non-value add
Non-value add
Process Maps.
Look for all details inside each dept, point out the wastes and improvement chances, , its the
most common map.
This is my preferred MAP, and will begin with it. Other maps can be discussed in the next
report.
Process MAP can zoom ++ for specific points and show up the wastes in wider scale.
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Data
Kaizen Phase
(Phase#2)
Implementation Plan
Do it
Evaluate
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-Scope of Business
-What is the value add to
customer?
-Measurable objectives
-Process steps
-Process flow
-Point out non-value
added & value added
-Eliminate non-value added
-Kaizen work
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Point out the value added, the pure non-value added, and the
required non-value added
Calculated and summarize the metrics
Metric
Measurement
Value added
Non-value added
Quality ratio
Lead times
hrs
Workers productivity
WIP inventory
Cost
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Actual/Current
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Best Possible
(Target)
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Parking lot
Those are the tasks that you decided to work on later.
Process
Actual/Current
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Best Possible
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Symptom/Problem Exists
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Total time
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Consider the workers who do the work every day to put, and share
their own ideas on how to improve these issues.
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Unit of
measure
Target
Days/hours
Non-value added
Value added
Improvement
Owner
No of workers
Quality ratio
WIP inventory
No of
pieces/tons
Hours/days
Delivery
Productivity
% on time
%
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A stop watch
A graph paper
A pencil
An eraser
Calculator
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Metrics are used by the senior managers to evaluate the results and
control the employee performance at the factory floor without
understanding the obstacles that need to be removed to get stable
results. Managers should act as facilitators for the improvement
process. Also metrics should be used by the employee themselves to
measure their own progress and define the requirements of the next
step.
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Machine.1
Machine.2
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Sort
Set in Order
Shine
Sustain
Standardize
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Lean Failure!
7 to 8 out of each 10 lean projects fail as companies try to treat lean as
toolkit, copying and pasting the techniques without trying to adapt the
employee culture, manage the improvement process, and develop
peoples.
Some Management Habits. What do you think about the following
approaches?
Management by Objectives
Incentives and Rewarding System
Sink or Swim Mentality
Blame Culture
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References:
Liker, J. K. (2003). Toyota way. New York: MacGraw-hill.
Liker, J. K., & Convis, G. L. (2012). Toyota way to lean leadership: Achieving and sustaining excellence through
leadership development. New York: MacGraw-hill.
Rother, M. (2009). Toyota Kata. New York: MacGraw-hill.
Ahmed, Mohammed. Hamed. (2013). Lean Transformation Guidance: Why Organizations Fail to Achieve and Sustain
Improvement with Lean Methodology. International Journal of Lean Thinking IJLT, 4(1).
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