Professional Documents
Culture Documents
Management
MSE507
Lean Manufacturing
Chapter 5
Perfection
The Incremental Path
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Repeat Kaizens – FNGP Ligonier,
Indiana Factory, 1992-1994
Feb April May Nov Jan Jan Aug
1992* 1992 1992 1992 1993 1994 1995
Number of
21 18 15 12 6 3 3
operators
Space utilized
2,300 2,000 1,850 1,662 1,360 1,200 1,200
(Sq-Ft)
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Kaizen vs. Kaikaku
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Example - Kaizen and Kaikaku in Action
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What About the Cost?
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The Incremental Path
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Continuous Radical and Incremental
Improvement
To pursue perfection, every organization needs to use both
kaizen and kaikaku.
Every step in the value stream can be improved in isolation to
good effect.
If you are spending significant amounts of
capital to improve specific activities, you are
usually pursuing perfection the wrong way…
To effectively pursue both incremental and radical improvement,
two final lean techniques are needed to be used by value
stream managers:
• Apply the four lean principles of: value specification, value
identification, flow, and pull.
• Decide which forms of muda to attack first (type one or type two)
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The Picture of Perfection
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The Picture of Perfection
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Focusing Energy to Banish Muda
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Focusing Energy to Banish Muda
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Example – Eaton Aerospace Goal Card
Vital Few Goals for 2004
Aerospace Operations Actuation Systems Division Los Angeles Department/Work Group
Growth
Capture New Aftermarket Business of $12.0M Grow the business in targeted areas in support of the $10M in new business wins
Establish a Repair/Overhaul Presence in Asia Aerospace overall goals. Win applicable portions of the 7E7
Win 7E7 Hydraulics System Capture new A/M business of $2.3m Capture new A/M business of $1.5M
Grow our business 1.5x the Aerospace industry Win applicable portions of the 7E7 Achieve Sales plan of $99.9m
growth rate Strategic pricing deployment – take government Achieve 40% Gross Margin on Government Spares
Be strategic in our pricing providing high value to spares to 40% GM
our customers Achieve Sales plan of $192.9m
Meet acquisition target
Business Excellence and Cost Reduction
Achieve 95% on-time delivery to customer Drive a culture of Continuous Improvement so that we Achieve 95% On-Time-Delivery
Develop an integrated Aerospace Quality System deliver exceptional results for our customers and Improve Productivity 5%
focus and improve our DPPM by 10% Eaton Aerospace Achieve $3.5 million in Cost Out
Improve productivity & efficiency of our operations Productivity improvement of 4% Improve Average Repair and PRO TAT to 25 Days
by 5% Improve Lean Enterprise to 3.0 Achieve DPPM of 3400
Achieve $30M of cost reductions through strategic Improve quality performance 10% Lean Score 3.0
sourcing, lean manufacturing and improved Strategic Sourcing of $800k Achieve PROLaunch score 18
processes
Cultural and Organizational Development
Build organizational capability by completing 100% Drive culture change for Actuation systems so that we Achieve EHS Score of 3.0
of our “personal development actions” re considered “best in class” within Eaton Aerospace Improve Employee Engagement Score 10%
Improve employee engagement by completing and by our Customers Organization Capability Assessment Actions Complete
100% of our action items from the Employee Improve Organizational Capability through Implement APEX to Upgrade Goal Deployment
Satisfaction Survey staffing and execution of OCA and APEX Develop customer focus metrics
Make safe work practices, processes and behaviors personal development activities
a focus for 2004 and reduce recordable accidents Drop TCIR by 20% implementing EHS
by 20% Improve Employee Engagement scores by 10% if
below Eaton Top 25%
Voice of Customer data improved by 50%
Financial/Performance
Grow revenue from $740M to $777M Meet Profit plan for Actuation Systems, including
Reduce Working Capital Usage improved profitability and working capital
- DOH from 107 to 93.9 performance.
- DSO from 50 to 47.8 CFROGC to 31% DOH 119.8
- DPO from 24.3 to 26.7 DOH to 111 days DSO 49.3
DSO to 46 days DPO 28.6
DPO to 31 days Operating Margin 11.4%
OP Margin to 14.3% CFROGC 20.3%
Smashing Inertia to Get Started
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Homework Assignment
Questions:
1. Describe the five steps of Lean Thinking. How are they
being deployed to achieve continuous improvement?
2. You are documenting a Current State Value Stream Map for
a business for the first time
• Which types of waste are likely to be present?
• Which will be the top three types of waste that you are likely
to be first address? Explain your selection
Read Learning to See Parts I, II and III
• Start to Page 1-56
Homework
Describe the five steps of Lean Thinking. How are they being
deployed to achieve continuous improvement?
You are evaluating a Current State Value Stream Map that was
done for the first time.
• Which types of waste are likely to be present?
• Rank the top three types of waste that are likely to be first to be
addressed and which would be last, and explain why you think
they will be in that order.
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Questions? Comments?
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