Lean

Module 3
 Module Objectives

By completing this module, you will be able to;

Describe Lean concepts and it principles
Describe the importance value-added in the business
processes for the customer and the business.
Describe the step-by-step approach for prudent
implementation.
 The Road to Lean

1900: Craft Production

1908: Frederick Taylor Scientific Management
1908: Model T Mass Production
1940s': WW2 Japan reconstruction Deming
1950 Eiji Toyoda visit Ford River Rouge
1960 Toyota Production System
1990s Womack - Lean
 The Birth of Mass Production
1900s
Car was made by Master craft-man.
The quantity was very limited and it
was symbol of rich and wealthy.
Each car was unique and very
expansive.
1908
Frederic Winslow Taylor brought the
principles of Scientific Management that
brought significant improvement to
industrial efficiency.
Ford motor adapted the concept and
mass produce Model T for the first
time.
Millions of Model T came out of Ford
plant and made it affordable reality.
 Japan Reconstruction and Economic Struggle
1940s
After WWII, Japan went for major
reconstruction.
Toyota sales plummet and under pressured
of bankruptcy.
Deming introduced problem solving cycle,
PDCA which gave birth to Kaizen
philosophy and SGA movement in Japan.
1950s
Eiji Toyoda visited Ford River Rouge as an
effort to find a solution for nearly
bankrupt Toyota Motor.
Taichi Ohno visited Ford plant and
American supermarket.
Combining the two concepts of
conveyance production line and
supermarket, Taichi Ohno experimenting
with unconventional production system
that continuously eradicating waste
(Muda).
 The Rise of Lean
1960s
The development of infamous Toyota
Production System was through trial and
error.
Kanban system was ended failure in 1961
before it became successful in the 1967.
The initial comprehensive production system
was completed in the early 1970s.
In 1980s,Toyota recorded $billion dollar of
cash surplus with overall growth equivalent
to Japan GDP.
1990s
5 mil. study by MIT team, lead by Womack
and Jones found good manufacturing practices
in Japan especially at Toyota.
LEAN was coined to represent the good
production system observed during the study.
The Machine that Change the World was
first published to share this findings to
American automaker and the world beyond.
During that time, Toyota was half the size of
GM. Now Toyota has becoming the biggest
automaker in the world.
 Why word Lean?

Ability to do more with less and less resources.

Through relentless waste elimination lost due to rework, low yield and scrap
significantly reduced thus lower cost of production and higher margin.
Healthy cash flow and margin for the business.
Keeping the inventory level to the lowest reduces holding cost thus
healthier cash flow.
Agility and flexibility of the production toward the unpredictable
demand.
Production capability of producing various products in smaller lot size,
minimize the risk of overstocking.
Survivability even during tough time.
Toyota has survived the worst especially after WWII.
 Lean on Cost Management

As result, price As result,

need to price remains
increase, and margin
pressuring the increases.
market until Satisfying all
they manage stakeholders;
to find an customers,
alternative. employees
Cost increase due to Most company Cost reduce as result of and
increase on material, perish relentless effort to shareholders.
salary and other afterward. eliminate waste which is
resources which are within organization
beyond control. control.
 Value

Specify value from the standpoint of the end customer.

Ask how your current products and processes disappoint
your customers value expectation:
Price?
Quality?
Reliable delivery?
Rapid response to changing needs?
Fundamental definition of the product?
 Over Produced
Motion

7 Categories
Transportation
of Waste

Inventory Waiting

Correction
Over Processed
 The waste of over producing

Over produced

Produce too much of something or produce it before it is required.

To eliminate it:
Establish work flow sequence to satisfy the downstream customer.
Create work place norms and standards for each process.
Create signal devices to prevent early processing.

LSS-Lean Practitioner Training-TMO,MAHB-PS 11

 The waste of waiting

Waiting
Idle time that cause the work flow to stop includes people, paper, machine or
information.

To eliminate it:
Review and standardized required signatures to eliminate unnecessary ones.
Cross-train employees to allow work flow to continue while someone is out.
Balance the workload throughout the day so that all people are being used
optimally.
Make sure that equipment supplies are available.
LSS-Lean Practitioner Training-TMO,MAHB-PS 12
 The waste of over processing

Over processed

Processing things that the customer doesnt want therefore doesnt want to pay for.

To eliminate it:

Review the value-added steps in each process, and streamline or eliminate steps
whenever possible.
Review all signature requirements and eliminate signatures wherever possible.

LSS-Lean Practitioner Training-TMO,MAHB-PS 13

 The waste of inventory

Excessive inventory
Excess stock of anything e.g. unneeded raw material, extra supplies, unnecessary
stock of finished goods.

To eliminate it:

Produce only enough to satisfy the work requirements of your downstream

customer.
Standardize the work locations and the number of units per location.
Ensure that the work arrives at the downstream process when it is required and
does not sit there.

LSS-Lean Practitioner Training-TMO,MAHB-PS 14

 The waste of motion

Excessive motion
Any motion that is not necessary to the successful completion of an operation.

To eliminate it:

Systematic arrangement of processes based on logical sequence and keep it close;

use color codes as much as possible.
Arrange work areas of shared equipment in central locations.

LSS-Lean Practitioner Training-TMO,MAHB-PS 15

 The waste of correction / defects

Correction

Producing defectives work that needs to be redone or doing something over.

To eliminate it:
Establish standardize work procedure and forms.
Create and post job aids.
Allow sufficient time to train workers to be competent before allowing them to
work at the shop floor.

LSS-Lean Practitioner Training-TMO,MAHB-PS 16

 The waste of transport

Excessive transportation

Transporting something farther than necessary, or temporarily locating, filing,

stocking, stacking, or moving materials, people, information or paper.

To eliminate it:

Make the distance over which something is moved as short as possible.

Eliminate any temporary storage locations or stocking locations.

LSS-Lean Practitioner Training-TMO,MAHB-PS 17

 The Benefits of Waste Elimination

Eliminate Non Value Added activities

Suppliers Value Chain Consumers

Reduce Lead Time

Higher
flexibility
Less
stocks
service
Better Reduced
Complexity
Less
cost
Improved
Quality
 Lean Cost Management
Cost Cutting
Conventional cons
cutting initiative focus
on the value-added;
hard work with
insignificant return.
Initial Lean projects
focus here
LEAN Cost Management
5% LEAN helps to increase
Value-added the value-added
35%
Incidental waste
(Unavoidable waste due
existing system limitation)
..by simplifying the
system.
60% waste ..relentlessly eliminate
waste. Smart work
with significant return.
 The Vicious Cycle of Waste
Eg. Last minute order, ad-hoc
Waste exist in any processes. meeting, poor production
planning, poor process design.
Waste not only burden the
It all started with the
people of the process but also UNEVENNESS in the
the customer. business processes
The key to Lean is total
elimination of the 7 deadliest
waste (Muda).
Use commonsense to spot and
eradicate waste continuously.

Eg. Operator and machine that OVERSTRAINED man

work beyond natural
capacity and capability. and machine day by day

after a while, the man

unintentionally created WASTE to
create better work environment.
 Focus on the 3 Ms
Battling muda does not
accurately represent all that
Lean is about.
The true Lean works to
eliminate three types of
interrelated waste: muda,
mura and muri.
Muda:
Activity that consumes resources
especially human effort but add
no-value to the customer.
Muri:
Pushing a machine, process or
person beyond natural limits.
Mura:
Uneven workflow or workload
that limits sufficient planning.
Second Pillar Leans learning building block

Best in quality-Lowest cost-Shortest lead time

First Pillar
Best in safety-High morale
Just-In-Time People & Teamwork Jidoka
One-piece flow (Build in Quality)
Takt Automatic stop
Continuous flow Kaizen Andon
SMED Poka yoke
Pull system Built in Quality
The foundation

Waste elimination
(Kanban)
Heijunka (Stable process)
Standardized work
5S work place management
 5 Simple Principles toward Lean

1. Specify value from the standpoint of end customer.

2. Identify the value stream for each product family.
3. Make the product flow.
4. So the customer can pull.
5. As you manage toward perfection.
 In Summary

Lean is about creating healthy business and sustainable

culture that relentlessly eliminating the 7 waste.
It continuously managing 3 interrelated waste namely Mura,
Muri and Muda.
Lean specify value from ultimate customer standpoint and
work all the way back through the processes separate value
to non-value activities. The non-value activities are then
remove or minimize via continuous improvement of Kaizen.