Lean Class

A systematic approach to identifying and eliminating waste through continuous improvement, flowing the product at the pull of the
customer in pursuit of perfection.
National Institute of Standards and Technology NIST
What is Lean?
Business as usual
Customer order Lead-time
Total time to complete tasks in a process
Waste Product/Service provided
Lean
Customer order Waste Product/Service provided Lead-time (shorter)
Lean is the systematic elimination of waste to reduce lead time
More value to the customer and the company, with less of everything that negatively impacts profits
Lean Business Systems
Balance between Lean Manufacturing and Lean Services
Lean is NOT meant to eliminate people, but to use them more wisely
50%
75-80%
60%
50%
50%
Industry Week Jan 25, 2006 Webinar
-Identify and eliminate waste -Reduce costs -Improve quality -Generate new profit -Improve delivery & customer satisfaction -Empower employees to make improvements
Names - Lean
Toyota Production System
TPS (Thinking People System)

Just-in-time Continuous Improvement World Class Manufacturing Stockless Production Demand Flow Waste Elimination
Who historically uses a pull system?
Who historically uses a pull system
Dont make burger until they are ordered
Dont make a sandwich until they are ordered
Lean Enterprise
Operates more profitably by manufacturing or providing services in response to customer demand rather than market forecast
Do not manufacture what has not been sold and replenish only what has been used
Pull System
Nothing is produced until it is needed
Customer takes 1 Company makes 1
Value Add
1. Does this task add a form or feature to the product or service?
2. Would the customer be willing to pay extra or prefer us over the competition if he/she knew we were doing this task?
3. Done right the first time.
--------------------------------4. Does the task enable a competitive advantage (reduced price, faster delivery, fewer defects)
3 Categories relating to Value Add 1) Value Added 2) Non Value Add, but required 3) Non Value Add Waste
Non Value Added, but required

Activities that add do not add value to the customers product or service, but are required 1) Tasks required by law or regulations 2) Task reduces financial risk 3) Task supports financial reporting requirements 4) The process would break down if this task were removed
Examples
Non Value - Added

Activities that add do not add value to the customers product or service Waste Form of waste
counting, handling, moving, waiting, transporting, searching
As seen through your customers eyes
Other examples
Waste
Waste
Muda = waste = Non-value added activities
History of Lean
Henry Ford integrated entire production process

Michigan 1913 flow production Limitation very limited variety
Toyota Production System Revised Fords ideas for production flow + variety
Henry Ford integrated entire production process

Michigan 1913 flow production Limitation very limited variety
Toyota Production System Revised Fords ideas for production flow + variety
Toyota Production System

low cost high variety high quality very rapid throughput
so that Toyota could respond to changing customer desires
Toyota Production System Toyoda family

Sakichi Toyoda inventor and industrialist (1867 1930) - textile industry - invented automated looms (jidoka) - financed automobile manufacturing company, 1936

Kiichiro Toyoda 1894 1952, the son of Sakichi, greater interest in engines than looms father encouraged him in auto industry created the Toyota Motor Corp. studied Ford for 1 year in U.S. 1936 (JIT) Resigned in 1948

Eiji Toyoda, 1913 - a nephew of Sakichi Toyoda & cousin of Kiichiro - joined automotive company in 1936 - when Kiichiro resigned Eiji became head of Toyota - responsible for bringing Toyota to profitability and world wide prominence - resigned in 1994 Kiichiro Eiji
Eiji Toyoda visited Fords plant at Dearborn, Michigan during the early 1950s. Toyota had been in the business of the manufacture of cars for 13 years and had only produced just over 2,500 automobiles. The Ford plant in contrast manufactured 8,000 vehicles a day. Toyoda decided to adopt US automobile mass production methods.
Taiichi Ohno
Shigeo Shingo
Credited Ford & Supermarkets Creator of TPS Father of Kanban
Assembly Manager Toyota, 1940/50s Verging on bankruptcy
Quality consultant hired by Toyota SMED Shingo Prize Model Died 1990
1975 Ex VP Toyota
Retired 1980s Died 1990
Has any of your companies won the Shingo Prize?
Shingo Prize
Shigeo Shingo Shingo Prize for Excellence in Lean Manufacturing 1988 2 Categories 1. Business - large or small businesses, U.S., Canada, Mexico Demonstrate excellence in manufacturing practices which translate into excellent customer satisfaction and business results world class 2. Research Promote new knowledge and understanding of manufacturing and business improvement methods, systems, and processes
www.shingoprize.org
Business Week refers to Shingo Prize as the Nobel Prize of Manufacturing
Edward Deming, 1900 -1993

1950s taught Japanese managers that improving quality will reduce expenses while increasing productivity and market share
Cost & quality
In 1990 James Womack wrote a book called
"The Machine That Changed The World"

Significant performance gap between Japanese and Western auto manufacturers
Lean because Japanese methods used less Human effort Capital investment Facilities Inventories Time
Lean Manufacturing
Lean Enterprise
Operational Excellence
Just in Time
Takt time 1-piece flow Pull
TPS
5S
Visual Control
Kanban
Production Preparation Process - 3p
Jidoka
Quality built in Poka yoke 5 Whys
SMED
TPM
Creative Idea Suggestion System
Standard Work
House represents stability
Heijunka Stabilized leveled production
Kaizen
Lean Elements
8 Wastes (DOWNTIME): Defects, Overproduction, Waiting, Non-Utilized Talent, Transportation, Inventory, Motion, Extra Processing Takt Time: Available work time per day / customer demand per day Value Stream Mapping: Assess current state, roadmap for improving to future state Poka Yoke: Error proofing
5 S: Sort, Straighten, Shine, Standardize, Sustain Visual Control : Andon, Display Boards
SMED: Single minute exchange of dies completing external setup during run, reduce wastes in internal setups
Lean Elements
Standard Work: Training and work balancing
Kanban: pull signal denoting what to make, when to make it, where it should go, standard lots
Theory of Constraints: One bottleneck for process, can only go as fast as slowest process
TPM: Total Predictive (Proactive) Maintenance
Jidoka: Automation with a human touch
Heijunka: Mixed-Leveled Production
Lean Elements
Kaizen: Continuous Improvement QRM: Quick Response Manufacturing 3Ps: Production Preparation Process 5 Whys: Get to root cause 6Ms: Manpower, Machinery, Material, Method, Metrics, Management (Mother Nature) MES : Manufacturing Execution System
The 7/8 Types of Waste

Defects Overproduction Waiting Non-utilized talent T ransportation I nventory Motion E xtra processing
The Eight Types of Waste

5% Value Add
35% necessary non-value 60% add no value at all

Which is the deadliest waste?

When solve overproduction use assets for faster customer orders

Defects not done to specs the first time, scrap Overproduction ahead of demand Waiting idle operators (inactivity) Non-utilized talent not using employee knowledge T ransportation unnecessary movement Work I nventory- excess, requires space Motion ergonomically unsound, poor layout People E xtra processing more effort than is required,
difficult to see and uncover
Overproduction in Service
Producing reports no one reads or needs Making extra copies of documents Sending the same document via paper, email, fax Entering the same info on multiple documents
Waiting in Service
Waiting for people signatures approvals information
Finish it, file it, or throw it away
Motion in Service
Searching for computer files on your desktop Searching for paper files Hand carrying paper work to another process
Inventory
Files awaiting task completion Purchasing excessive office supplies Obsolete files Obsolete office equipment
Reduce to 3 operators in U-shaped cell less wasted motion IN (raw materials)
Station 2
Station 1
Station 3 OUT (finished goods)
Station 4
Station 5
Ideal layout the line for continuous flow (U shaped or C-shaped)
Takt time
GoalProduce to demand
is used to synchronize the pace of production with pace of sales
What is the word origin of takt time?
Takt German word for musical meter Came to Japan in the 1930s when the Japanese were learning aircraft production from German Aerospace engineers
Pronounce tact
Takt time
GoalProduce to demand
Work time available/time period Takt time = Customer demand/time period
Dont skip calculating takt time always determine a viable takt time
Takt time =
Example:
Work time available/day

Customer demand/day
Customer demand 480 spark plugs/day
Production line operates 960 minutes/day
Takt time = ?
Customer demand 480 spark plugs/day Production line operates 960 minutes/day
Takt time =
960 minutes/day 480 spark plugs/day
Takt time is 2 minutes The company will need to make a spark plug every 2 minutes to match customer demand.
Takt time =
Work time available/time Customer demand/time
Example
Customers want 2 new contracts written /month
Takt time =
Work time available/month Customer demand/month
Customers want 2 new contracts written /month
Takt time =
1 month
2/month
Takt time is 2 weeks (twice a month) or .5 or or every 15 days
Takt time =
Example:

Customer demand/day
Customer requested 360 products per day Our company has one 8-hour shift There is a 30 min lunch & two 15-minute breaks out of the 8 hour shift What is total work time available per day?
Takt time =
Example:

Customer demand/day
Customer requested 360 products per day Our company has one 8-hour shift There is a 30 min lunch & two 15-minute breaks out of the 8 hour shift What is total work time available per day? 8 hrs * 60 min = 480 min 480 min 30 min lunch - 30 min breaks = 420 min
What is takt time?
Example: Customer requested 360 products per day Our company has one 8-hour shift There is an unpaid lunch & two 15-minute breaks/day
Takt time =
Work time available/day Customer demand/day

420 minutes 360
1.17 min =
70 seconds Heartbeat of demand
70 seconds Heartbeat of demand
If we produce faster Overproduction
If we produce slower wont meet our customer demand
(Gift for competition)
Value Stream Mapping
Famous saying, If you dont know where you are going, any road will get you there. Creating the value stream map is 1st key step to determine where you are going in Lean
Pacemaker sets the pace

A step in our value stream where we can prevent overproduction Every activity upstream from the pacemaker produces to a precise replenishment signal from the next downstream process Processing downstream from the pacemaker occurs in continuous flow
Control production at this point Pacemaker
Pacemaker is most downstream continuous flow process (usually final assembly)

What does this symbol mean?
What does this symbol mean?

What is the difference between a pacemaker and a bottleneck?
Pacemaker
Pacemaker set the pace
Bottleneck constrains downstream processes due to lack of capacity
Pack out Quantity
Number of items a customer wants packed in a container for shipping
Shipping packing holds how many items
Other examples of pack out quantity
Example from service sector?
Pitch
Amount of work released at the pacemaker takt time * pack out quantity = Pitch 30 sec * 10 pieces = 300 seconds or 5 minutes Every 5 minutes gives pacemaker instructions to produce 1 pack
Pacemaker
Pitch
Amount of work released at the pacemaker takt time * pack out quantity = Pitch
Shipping pack - 12 products/packing
1 product produced/ per minute Takt time
Pacemaker
What is the pitch?
Pitch increment
Amount of time - pacemaker takt time * pack out quantity = Pitch
12 * 1 = 12 minutes
1 product produced/ per minute Takt time
Shipping pack - 12 products/packing
Pacemaker
Every 12 minutes pacemaker gives instructions to produce 1 pack
FIFO
First in first out
FISH First in Still Here
Head Count
Total Cycle time
Takt Time = Headcount
1,293 person seconds 345 seconds
= 3.74 people
Process Cycle Efficiency
Value-add time (PCE) Process Cycle Efficiency = Total lead time
PCE < 10% indicates the process has a lot of non-value add waste
Process Cycle Efficiencies
Application
Typical PCE
World Class PCE
Continuous Manufacturing
5%
30%
Service
10%
50%
Lean process is over 20% PCE
Value Stream
The actions currently required to bring a product or service to the customer
Suppliers
Company
Customer
Total Value Stream
Lean tool that graphically illustrates the beginning-to-end production path of a product or service.
Supplier
Customer
Process 1
Process 2
Process 3
Value Stream Mapping - 2 Maps
Current State As is
Future State
Appears complex, but its construction is relatively easy if taken in logical steps
Top Information flow
Lower Material or service flow

Important to see linkage between information and product/service flow
Value Stream Mapping Structured flowcharting method No one right way to do a value stream map
Upstream Near the Raw materials
Downstream Near the customer
Value Stream Mapping - Advantages 1. See big picture complete flow 2. Identify SOURCE (root cause) of waste 3. Very effective in providing focus & motivation 4. COMMUNICATION 5. Blueprint for ideas 6. Change management tool
Any other advantages?
Diane Johnson, 2005
Value Stream Mapping - Limitations 1. Over-hyped not a silver bullet Not a panacea for management to claim they are lean
Caution:
It takes more than a hammer to build a lean house. Dont view the Value Stream Map as a miracle tool.
Value Stream Mapping - Limitations 1. Over-hyped not a silver bullet 2. Value stream mapping analyzes the physical system, not the people side
Caution:
Companies are complex socio-technical systems that require an integrated approach Lean requires teamwork to succeed
Value Stream Mapping - Limitations 3. Requires training on symbols and mapping
Lightnin g Burst
Control Center
How often Data Box _______ ____
Symbols are not intuitive, we will learn tonight
Lets Begin.
Step 1a Select the product of service that you want to map & improve Wherever there is a product or a service for a customer there is a value stream. The challenge lies in seeing it.
Product or service family discussion
Examples of the product or service to map

Tire
Patient
Red dot
Letter
Insurance form
Staple ourselves to the product/service & record what happens as it travels
Step 1b Identify and understand the customer requirements of your product or service
Remember our lean goal is not only internal optimization meet the customers needs
Step 2 Select your team (7-8) Educate and train them
Have line managers lead the team, so it sends a message that value stream mapping is a key skill for line managers
At least 2-3 experienced with the product or service steps 1 support 1 customer or next function 1 supplier
What is your recommendation regarding management involvement?
Step 3 The team does a walk thru of the production floor or the office
This is NOT a tour, not a spectator sport

Your team is taking on the role of the customer to find what goes into your product or service
Option: first quick walk, then go back for detail
Goal of walk thru

Path of one product or service Simply identify and capture a complex situation so we can improve it
Step 3 The team does a walk thru The team needs
a) Pencil & paper (eraser)
b) Stop watch
c) Comfortable shoes
Resist temptation to use computer initially, the point is NOT the map, but the stream
Software for Value Stream Mapping
iGrafx
eVSMTM
Lean-Modeler
Visio
You can create a GREAT map, but follow-through is more important

Favorites
Walk Thru
DO NOT divide the value stream into segments and assign segments to subsets of the group The whole team should walk the entire system Otherwise, no one will understand the whole stream
Walk Thru Start at the end

Go to the end of the gemba (the production floor, the hospital floor, the call center)
When you find the point where your product or service is shipped to the customer,
Start mapping backwards
Walk Thru
Information
Production or Service Flow

Material
Personally follow the a) material flow and b) information flow Keep good notes describing the process As Is (Reality)
Record each step, talking with everyone involved
Dont have to wait for a 5-hour process to complete Dont have to pull up a chair & wait for our stapled item As long as the process is repeatable, you can continue on with a new part that has just completed that step
Questions to ask:
1) Does product or service provide the value required by the customer, or is it what the company wants to produce? Improving efficiency wont help if the product offering is off target 2) At each step, ask (as the customer) Am I willing to pay for this? No customer wants to pay for storage, transportation, rework The majority of effort in the value stream is waste
Questions to ask:
3) Determine what percentage is value added Value Add What the customer is willing to pay for Steps that transform the product or service
Value Add
1. Does this task add a form or feature to the product or service?
2. Would the customer be willing to pay extra or prefer us over the competition if he/she knew we were doing this task?
3. Done right the first time.
--------------------------------4. Does the task enable a competitive advantage (reduced price, faster delivery, fewer defects)
Non Value - Added

Activities that add do not add value to the customers product or service Waste Form of waste
counting, handling, moving, waiting, transporting, searching
As seen through your customers eyes
Other examples
Questions to ask on walk thru:

4) Can the customer pull this product or service Can the customer get just what they want, when they want it without your company maintaining a large inventory for just in case Taiichi Ohno (TPS) famous quote
the more inventory you have on hand, the less likely you are to have the one item your customer actually wants.

5) Is the performance of this value stream improving? Are wasted steps being continually removed? Are the operators moving toward perfection?

6) How does each step know what to work on next Who is doing the pulling? If the operators are unsure, dig deeper red flag. Overproduction can be driven by faulty info flow
7) Are we seeing inventory in queues waiting
Station
Work
Minutes
Inspection Minutes
Delay
Minutes
Walking
Minutes
Other
Minutes
NOTES
1 2 3 4 5
15 20 15 25 20
5 5 5 5 10
7 10 5 0 5
5 10 5 15 10
0 7 5 20 5
Part missing
TOTAL
95
30
27
45
37
Team needs to reduce Non value Add = Muda = Red
Team has done the walk thru Ready to begin drawing the Value Stream Map Let each team member or 2-3 team members draft their own version first and then compare Cuts down on group think
Value Stream Mapping Practical steps Next compare and build a more accurate map Use post-it notes for the consensus version, so can easily rearrange
Value Stream Mapping Practical steps
Review the map with all employees who work in the VSM
Customer Demand 25 per day
Shipping 25 shipped per day
Supermarket Looks like check out lanes in a supermarket 1) Customer demand varies widely 2) Product is small & cheap to store
Supermarket is not a stagnant inventory, which would be a triangle. It is controlled by customer pull. When the customer pulls one, message sent upstream to replace it.
Prevents over production
= Stagnant inventory
Opens to the left side, which faces the supplying process The supermarket belongs to the supplying process and is used to schedule that process
Shipping
Shipping
Finished goods Supermarket
Previous step - Quality test

Final Test
Shipping
Operator
Finished goods Supermarket
In this step 1 person checks the product for quality in a 5 minute test Cycle time of 5 minutes for this step of the process
Cycle time = 5 min or 300 seconds

Cycle time - time required to complete one cycle of an operation The time it takes an operator to complete the work elements before repeating them with another product or service C/T = 5 min or 300 seconds
Typically in VSM use seconds as time unit to make the VSM more usable Which is easier 1.25 minutes or 75 seconds?
Cycle time for office

Administrative processes 10 seconds computer entry 5 days create a proposal
Changeover time = 20 minutes C/O = 20
Final Test
Other products are also tested in the last Quality Check point A 20 minute changeover is required to test other products
Up time (UT) = 95%
Final Test
The testing equipment sometimes has calibration issues so the testing machine has an uptime of 95%
First pass yield = 99%
Final Test
The product passes the test 99% of the time
FPY=99%
First Pass Yield = FPY First Time Thru = FTT
Customer 25 per day
Final Test
Shipping
Operator
C/T = 300 C/0 = 20 UT = 95% FPY = 99%
Data box
List of common process data C/T Cycle time C/O Changeover time Uptime
Production Batch sizes

# of Operators # of Product variations Pack size Working time (minus breaks)
Scrap rate
Push Product is pushed into the process , regardless of downstream demand - creates inventory and overproduction.
Customer 25 per day
Push
Assembly Final Test Shipping
C/T = 300 C/0 = 20 UT = 95% FPY = 99% Pile of inventory waiting for test standard symbol for Inv
What is typical inventory for the service sector?
Paper work
Calls on hold
Customer 25 per day
Cut Raw material inventory

C/T = 360 C/0 = 0 UT = 95% FPY = 98%
Assembly
Final Test
Shipping
C/T = 600 C/0 = 10 UT = 95% FPY = 98%
C/T = 300 C/0 = 20 UT = 95% FPY = 99%
Customer 25 per day
Cut
Assembly
Final Test
Shipping
Non value Add
C/T = 360 C/0 = 0 UT = 95% FPY = 98%
C/T = 600 C/0 = 10 UT = 95% FPY = 98%
C/T = 300 C/0 = 20 UT = 95% FPY = 99%
2Days 6 min
.5Day 10 min
.5Day 5 min
.5Day
Value Add
Customer 25 per day
Cut
Assembly
Final Test
Shipping
Non value Add
C/T = 360 C/0 = 0 UT = 95% FPY = 98%
C/T = 600 C/0 = 10 UT = 95% FPY = 98%
C/T = 300 C/0 = 20 UT = 95% FPY = 99% Total Lead Time .5Day 3.5 Days Processing Time 21 min
2Days 6 min
.5Day 10 min
.5Day 5 min
Value Add
Total Lead Time 3.5 Days Processing Time 21 min
3.5 * 8 * 60 = 1680 minutes
21/1680 = .01 or 1% Value Add 99% of lead time is waste.
What is this ratio named?
Process Cycle Efficiency
Value-add time (PCE) Process Cycle Efficiency = Total lead time
PCE < 10% indicates the process has a lot of non-value add waste
Process Cycle Efficiencies
Application
Typical PCE
World Class PCE
Continuous Manufacturing
5%
30%
Service
10%
50%
Lean process is over 20% PCE
Customer Supplier 25 per day
Cut
Assembly
Final Test
Shipping
C/T = 360 C/0 = 0 UT = 95% FPY = 98%
C/T = 600 C/0 = 10 UT = 95% FPY = 98%
2Days 6 min
.5Day 10 min
.5Day 5 min
Supplier
Information Flow
Customer 25 per day
Cut
Assembly
Final Test
Shipping
Materials Flow
2Days
C/T = 360 C/0 = 0 UT = 95% FPY = 98%
C/T = 600 C/0 = 10 UT = 95% FPY = 98%
.5Day 6 min 10 min
.5Day 5 min
Why is information flow critical

Info released to the work floor can cause all types of waste
Supplier
Information Flow (rt to left)
Customer 25 per day
Cut
Assembly
Final Test
Shipping
C/T = 360 C/0 = 0 UT = 95% FPY = 98%
C/T = 600 C/0 = 10 UT = 95% FPY = 98%
2Days 6 min
.5Day 10 min
.5Day 5 min
Materials Flow
Production Control
(MRP)
Weekly Schedule
Production schedules flow to each process
Information flow in services is typically informal
Production Control
(MRP)
Weekly Schedule
Go see scheduling Production supervisor goes to the operation to see how much inventory is present to adjust the work schedule
Supplier
Monthly forecast
Weekly order
Production Control
(MRP)
30-day forecast Daily order Customer
Weekly Schedule
Supplier
Monthly forecast
Weekly order
Production Control
(MRP)
30-day forecast Daily order
Customer 25 per day
Weekly Schedule
Shipping Cut
C/T = 360 C/0 = 0 UT = 95% FPY = 98%
Assembly
C/T = 600 C/0 = 10 UT = 95% FPY = 98%
Final Test
2Days 6 min
.5Day 10 min
.5Day 5 min
Supplier
Monthly forecast
Weekly order
Production Control
(MRP)
30-day forecast Daily order
Customer 25 per day
Weekly Schedule
Shipping Cut Burst Targets for improvement 2Days 6 min

C/T = 360 C/0 = 0 UT = 95% FPY = 98%
Assembly
C/T = 600 C/0 = 10 UT = 95% FPY = 98%
Final Test
.5Day 10 min
.5Day 5 min
Current State
Future State Map

Dont wait until your Current State Map is perfect It will never be. Want your future state map to produce product or services based on the rate of sales (Takt time) If you build faster, you build inventory
Supplier
Monthly forecast
Production Control
(MRP)
Kanban
Weekly Schedule
Shipping
Cut
C/T = 360 C/0 = 0 UT = 97% FPY = 98%
Assembly
C/T = 400 C/0 = 10 UT = 97% FPY = 98%
4 hours 6 min
1hour 10 min
1 hour
Future State
Response to Takt time
Future State
Expect extensive discussion Discuss feasibility of various options Goal not to decide every detail of future design Establish general feasibility
Doctor Hospital
Health Insurance Claim Processing Insurance Company Database Treated patient
Billings to Ins Co.
Receipt
2 min
Verify Claim
2 days
10 min
Calculate payment
2 days
1 min
Print & Mail check

6 days
2 days
1 min
14 min
Value Stream Manager

Who is in charge of the value stream of the product/service?
Value streams typically extend across organizational boundaries
How many organizations have?
Value Stream Manager Definition
Person responsible for.

a) b) c) d) e) f) g) increasing the ratio of Value Add to Non-Value Eliminating waste in the full chain Ensure meeting or exceeding customer requirements Creating a value stream map current & future Create & implement plan to achieve future state Lead change, reports to top person Responsible for cost, quality and delivery
Without VSM you will see isolated pockets of improvement
Value Stream Manager Skills

a) b) c) d) e) f) g) h) i) j) k) Leadership skills Convince and Motivate people Makes decisions based on data, not just opinion Open to ideas from employees for improvement Understand the working culture Communicate with Sr. Management Create a sense of urgency Interact with customers and suppliers See the big picture focus on system wins Knowledge of Lean techniques Line person, not staff
Propose this position to your company & you in it!
Value Stream Manager & executive support

1) Value stream manager will need a high visibility of sr. level support to be successful. Needs to report to the top dog 2) Other managers need to know VSM has authority to make changes 3) Sr. Mgmt provides air cover during major changes so VSM doesnt get broadsided 4) Sr. Mgmt should expect results 5) Sr. mgmt should encourage VSM to take risks
Product Family
We need to draw a Value Stream Map for every product or service
In some companies very simple

Few products or services
But, some of you may have hundreds of thousands
Product Family
Definition of Product family Group of products that pass through similar processing steps & common equipment
Product Family VSM 1 family
Downstream Steps and Equipment

1 A B X X X 2 X X X X X X X X X X 3 X X X X X X X X X X X X X X 4 5 X X X X X X X X X X X X X 6 7
Products
C D E F G H
Customer
Downstream steps closest to the customer most important to determine product family Products become differentiated to customer requirements in downstream steps Upstream processes serve multiple product lines
Work backwards from the customer

1 A B 2 3 4 5* 6* 7*
Products
C D E F G H
Customer
Product Family
Identify common steps (shared processes)
1 A B X X 2 X X X X X X X X X X 3 X X X X X X X X X X X X 4 5 X X X X X X X X X X X X X 6 7
Products
C D E F G H
May find some surprises products thought totally different similar steps
Dont get bogged down in discussion on product families Keep it simple, set a time limit on the discussion Creating a product family matrix creates no value for the customer until we enhance the VSM
Pull vs. Push

Traditional company push process produce according to a schedule or plan Product or service created regardless of demand Creates an environment of Muda
WIP like congested traffic
Too many cars (congestion) slows up the trip Fewer cars (WIP) speeds up the trip (the process)
Value Stream Manager

Who is in charge of the value stream of the product/service?
Value streams typically extend across organizational boundaries
How many organizations have?
Value Stream Manager Definition
Person responsible for.

a) b) c) d) e) f) g) increasing the ratio of Value Add to Non-Value Eliminating waste in the full chain Ensure meeting or exceeding customer requirements Creating a value stream map current & future Create & implement plan to achieve future state Lead change, reports to top person Responsible for cost, quality and delivery
Without VSM you will see isolated pockets of improvement
Value Stream Manager Skills

a) b) c) d) e) f) g) h) i) j) k) Leadership skills Convince and Motivate people Makes decisions based on data, not just opinion Open to ideas from employees for improvement Understand the working culture Communicate with Sr. Management Create a sense of urgency Interact with customers and suppliers See the big picture focus on system wins Knowledge of Lean techniques Line person, not staff
Propose this position to your company & you in it!
Value Stream Manager & executive support

1) Value stream manager will need a high visibility of sr. level support to be successful. Needs to report to the top dog 2) Other managers need to know VSM has authority to make changes 3) Sr. Mgmt provides air cover during major changes so VSM doesnt get broadsided 4) Sr. Mgmt should expect results 5) Sr. mgmt should encourage VSM to take risks
Product Family
We need to draw a Value Stream Map for every product or service
In some companies very simple

Few products or services
But, some of you may have hundreds of thousands
Product Family
Definition of Product family Group of products that pass through similar processing steps & common equipment
Product Family VSM 1 family

1 A B X X X 2 X X X X X X X X X X 3 X X X X X X X X X X X X X X 4 5 X X X X X X X X X X X X X 6 7
Products
C D E F G H
Customer
Downstream steps closest to the customer most important to determine product family Products become differentiated to customer requirements in downstream steps Upstream processes serve multiple product lines
Work backwards from the customer

1 A B 2 3 4 5* 6* 7*
Products
C D E F G H
Customer
Product Family
Identify common steps (shared processes)
1 A B X X 2 X X X X X X X X X X 3 X X X X X X X X X X X X 4 5 X X X X X X X X X X X X X 6 7
Products
C D E F G H
May find some surprises products thought totally different similar steps
Dont get bogged down in discussion on product families Keep it simple, set a time limit on the discussion Creating a product family matrix creates no value for the customer until we enhance the VSM
Poka Yoke Japanese term

Poka - inadvertent errors Yokeru avoid
Translation - Mistake proofing

Originally baka yoke in Japan
(providing protection from crazy or foolish people)
Shigeo Shingo at Toyota
Shigeo Shingo
Quality consultant hired by Toyota

SMED & Poka Yoke Shingo Prize Model 1988 promote Lean Died 1990
Shigeo Shingo
Errors will not turn into defects if feedback and action take place at the error stage
Building in quality for zero defects

Technique so that an operation cannot be performed incorrectly OR makes a mistake obvious at a glance so that the error does not turn into a defect for the customer
Assembly requires two springs Worker counts out 2 springs and places in a container - before If one spring remains in the container when the assembly is complete, the operator can correct immediately
Cost of counting out 2 springs is minimal

Corrective action
Self check vs. successive checks by next process Self check always preferred
Who should develop poka yoke ideas?
Who should develop poka yoke ideas? Everyone ..This concept utilizes empowerment of all employees
Poka-Yoke / Mistake-Proofing
Guide pins manufacturing
Poka-Yoke / Mistake-Proofing
Counters Drill counter 6
Medical
Over 100 deaths in 1997- 1999 from wheelchairs rolling away from the person
A mistake-proofing device that locks the wheelchair when no one is sitting in it. An unlocking lever on the handle allows the wheelchair to be moved when empty
Services - Library
Prevent removal of books that have not been checked out Sensor and scanner
Jetway
Switch in the jetway which stops it an inch away from the planes fuselage
Garage Doors
Two safety features that prevent people or pets from being injured (1) a contact safety reverse feature - opens door if touches a person or object, (2) an infrared beam across doorway - door reverse automatically if a person or pet pass through the beam
ATMs new generation
Swipe card vs. insert card

Card never leaves hand wont forget card
Touch screen register

Ringing up sales in a fast food restaurant Servers simply press buttons Computer tracks price lists
Mistake-proofing device to insure that the ignition key is in the on position before allowing the driver to shift out of park. The keys cannot be removed until the car is in park
Dryer shuts itself off when door is opened to prevent injuries
Service Sector
Drivers License
Queue lines Motor Vehicle Registration everyone served fairly
Highlight key areas where errors occur
Poka Yoke
Poka Yoke for Surgery

Mark which arm is having surgery
Sources of Human Error

Lack of knowledge, skills Subconscious actions forget Conscious actions mistakes Sensory overload increases chance for error
Physical difficulty exhaustion

Distractions external (noises) & internal (daydreaming) Loss of memory Drugs, alcohol, fatigue Loss of emotional control fear, anger
Visual Management
Environment where it is easy for everyone to 'see' the current status of the process or 'system' and the visual gives immediate information to the individuals to understand 'how the operation is doing Dont have to ask questions Obvious
Visual Examples
Displays information and data Production throughput
Controls control or guide Workplace safety Color codes prevent mistakes Shadow board
Caution!!!
Hard Hat Area
Audio Signals
Sound warnings before machine starts
Visual Workplace
Andon Board lighted overhead display
Gives status of production system Alerts team to emerging problems
Example for service?
What is 5S + 1
5 S - Method of creating a clean and orderly workplace that exposes waste and errors Elements of a 5S program Sort Straighten/Store (Set in order) Shine Standardize Sustain/Self Discipline Safety (+1)
1. SORT
Eliminate/remove everything not required for the current work, keeping only the bare essentials. The better you do, the less of the rest
2. STRAIGHTEN 3. SHINE
Arrange items in a way that they are easily visible and accessible.
Clean everything and find ways to keep it clean. Examine equipment
4. STANDARDIZE
Create rules by which the first 3 Ss are maintained. Good for training
5. SUSTAIN
6. Safety
Order is important
Keep 5S activities from unraveling commitment/self discipline
5S
Take Before and After pictures
5S
Take Before and After pictures
Sorting Criteria
Frequency of Use
Action
Never
Throw Away or red tag
Once a year
Place in Storage
< once a month
Store in office
Once a week
Store in general work area
> Once a week
Keep at work station
Red Tag
Train employees Create red tag area (with dates) Label all unnecessary items with a red tag Sell or discard red tagged items regularly
Red TagExample
RED TAG
Todays Date: Item Name: ID #:
Quantity:
Reason Tagged:
Unnecessary___ Defective___ Not Urgent___ Other________
Frequency of Use: Disposition: Contact Person:
5 S +1
Typical to start with 5 S +1 in manufacturing
Dont start with 5 S + 1 in service not enough return
5 S +1 - Benefits
Improves Quality Decreases Cost Increases safety Improves the customer experience Everyone can participate Waste is made visible Easier for employees to get the job done right
5S implementation
1 2 3 4 5 6 7
Organize the program committee for 5S Develop a plan for each S Publicize the program Provide training and education to employees Select a day when everyone is involved Evaluate the results Take corrective action
Set up reduction
Quick changeover
SMED
Increasing diversity of products and services, smaller batch size, lower WIP inventory
Need more set ups or changeovers
Changing Tire
Changing a tire typically takes between 10-20 minutes
Changing Tire
Pit crew can change 4 tires in a few seconds during an auto race -They are prepared -They have right tools -Tires only have one bolt -Continuous training
They are in fierce competition, Are we?????
Changeover Set up reduction

When a piece of equipment has to stop producing in order to be fitted for producing a different item For example, the installation of a different processing tool in a metal working machine, a different color paint in a painting system, loading different software, and so on.

Changeover an airplane between flights in < 30 minutes Airlines make their money when their planes are in the air They do not make money waiting at the gate
Southwest Airlines
Call center staff changeover between shifts
Hospital staffing new shift
Quick changeovers
Ability to changeover from producing item A to item B with minimum loss in time Increasingly customer want an order size of one, Lead time of right now, with the low price expected in large volume production
Single Minute Exchange of Dies (SMED)

SMED refers to techniques for performing setup operations in under ten minutes Total elapsed time from last piece produced of the current job to first acceptable part of new job

1. Videotape entire setup operation (every detail) 2. Ask personnel to talk about what they do 3. Study the time and motions involved in each step
Simple camcorder and tripod - Okay

Steven Spielberg not necessary

4. Each detail is listed 5. Each detail assigned to 1 of 4 categories
A. Eliminate is it necessary B. Externalize do it before or after changeover C. Simplify tire one bolt (bolts are enemies) D. No change
6. Develop action plan & assign responsibility 7. New SOP & maintain standards
Set up time
Internal activities done while machine is down External activities done while machine is running
Move more activities here to reduce downtime
Move more activities here to reduce downtime
External to Changeover
Internal to Changeover
Define your activities in Changeover P (Preparation) R (Replacement) L (Locating) A (Adjusting)

E Eliminate step M Move C Convert R Reduce O - Orchestrate
Internal to Changeover
WIP Work in Process

Product or service waiting to be worked on (in queue) in various stages of completion
Items waiting BETWEEN the processing steps
Things in Progress
WIP
Name some WIP in service
Service Work in Process
Reports waiting on a desk Emails waiting to be read Sales orders waiting to be filled Checks to be processed Phone calls to return
Lead time
Product/Service provided
Ring to ring
Shorten lead time by removing waste
Business as usual
Customer order
Waste Product/Service provided
Lead-time
Lean
Can respond quicker to changes in customer demand Greater agility
Customer order Waste
Product/Service provided Lead-time (shorter)
Lead time & WIP

Too much WIP lengthens Lead time
Product/Service provided
Lean
If control WIP Shorten lead time
Customer order
False assumption
Process Lead time
Pushing excess work into process clogs the process & dramatically increases lead time
Correct
Process Lead time

Speed up the process by reducing WIP
WIP like congested traffic
Too many cars (congestion) slows up the trip Fewer cars (WIP) speeds up the trip (the process)
Counterintuitive
We speed up process time by controlling and usually slowing the release of work into the process
Littles Law (Mathematician)

Amount of Work-in-Process
Lead time =
Average Completion Rate
Tells us how long it will take a product or service to be completed by counting WIP and average completion rates. If WIP large, lead time is long
Can solve for any part of the equation

Lead time =
Customer wants 3-day turnaround on orders We can produce 50 products or services per day
How much WIP can we have?

Lead time =
Amount of Work-in-Process Average Completion Rate
3 days =
X
50/day
150 = WIP
Customer wants 3-day turnaround on orders We can produce 50 products or services per day
How much WIP can we have? 150 products or services

Lead time =
? days =
X
50/day
200 = WIP
Now what is turnaround for the customer

Lead time =
4 days =
X
50/day
200 = WIP
Miss customer requirement of 3 days

Lead time =
Customer wants 5-day lead time We have 10 products or service in the queue (WIP)
What will be our completion rate need to be to meet the order?

Lead time =
5 days =
10
x
2=x
Customer wants 5-day turnaround on orders

We have 10 products or service in the queue (WIP) Average completion rate? 2 products or services/ day

Lead time =
We have 50 products in process We can produce 5 products or services per day Our customer wants a 4-day turnaround
Can we meet our customer requirement?

Lead time =
10 days =
50
5/day
We cannot meet our customer requirement of 4 days

Lead time =
20 5/day
10 days =
50
5/day 4 days =
Change to 20 products or services in process We can meet customers need
Counterintuitive
We speed up process time by controlling and usually slowing the release of work into the process
Goal in lean is to have a process make only what the next process needs, when it needs it We are trying to link all processes from the customer back to raw materials in a smooth flow with -the shortest lead time -the highest quality -the lowest cost.
Batch processing
Batch is considered convenient for the company, but not for the customer Batch makes a company less agile/flexible in the marketplace Mass production thinking says that the more and faster you produce, the cheaper it will be to produce.
This is only true from a direct-cost-per item based on traditional cost accounting practices.
Continuous Flow
Each process (in the office or plant setting) makes or completes only the one piece that the next process needs, and the batch size is one Each item is passed immediately from one process step to the next without any stagnation No inventory, no waste
Other names for continuous flow?
Continuous Flow
One piece flow Single piece flow Make one, move one
Other names for continuous flow?
Batch Processing
Process A 10 minutes Process B 10 minutes Process C 10 minutes
Lead time 30 min for total order, 21 minutes for 1st piece
Batch Processing
Process A 10 minutes Process B 10 minutes Process C 10 minutes
Lead time 30 min for total order, 21 minutes for 1st piece
Continuous Flow Processing

A
A B
12 min for total, 3 min for 1st piece
One piece flow vs Batch Processing Batch processing builds in delays

No items can move on to the next process until all items have been completed The larger the batch lot, the longer the items sit and wait between processes
Lead time between customer order and delivery is lengthened
Arrangement of people, machines, materials and methods such that processing steps are adjacent and in sequential order so that parts can be processed The purpose of a cell is to achieve and maintain efficient continuous flow. Easy reach
Cell
Station 3
Station 2
Station 1
Station 4
Station 5
Station 6
One piece not always possible but ideal target
What are some benefits of one-piece processing?
Raw Materials
Finished Goods
Benefits of One piece processing or one piece flow #1 Reduces Work in Process (WIP) & Lead time
Customer order
Lead time
Benefits of One piece processing or one piece flow
#2 Reduces inventory cost less storage, less obsolescence

Cash is freed up when inventory is reduced The money to move, store and manage inventory is saved
Benefit of One piece processing or one piece flow # 3 Improves quality every worker is an inspector, each piece is looked at
Benefits of one piece processing or one piece flow # 4 Improves business flexibility respond to last minute changes in customers order
Benefits of One piece processing or one piece flow #5 Improves safety - moving large pallets not necessary reduce forklift accidents (20,000 serious injuries/yr)
Benefits of One piece processing or one piece flow # 6 Improves morale cross training, team work, authority to stop a line, find solution rather than blame Culture shifts from one of finding blame to finding solution
T E A W
ogether veryone chieves
M more
O
R K
Standard Work Standard Operations
Documented guide for employees
Basis for training, performance monitoring, continuous improvement, less injuries
Impact of Standardized Work
Many companies report that Standardized Work is the Lean initiative that had the To To To To
biggest impact
produce better quality products & services make the work flow smoother make the training process more productive allow employees to see waste
Standard work is everywhere
What is standard work for a chef?
What is standard work for a chef?
Recipe
What is standard work for a coach?
What is standard work for a coach?
Play book
Need to standardize
Many manufacturers point to individual variability as the leading factor in.
a) production time issues b) injuries
Standard Work (also called Standardized Work)
is one of the most important building blocks of a Lean Enterprise

Standard Work --- the most effective combination of manpower, material, and machinery - foundation of daily improvement.
By creating a repeatable process with defined steps, times, and layout, - lower cost and higher quality is guaranteed
Standardized Work
Creates clarity in the workplace
Clearly define each step Clearly defines responsibility Clearly defines tools/information to use
Companies using their Intranet to share procedures, diagrams, photos
Standard work is the systematic determination/documentation of work steps in a process
Objective: To communicate to the employee how the

job should be performed
Through scientific analysis of the operation, we eliminate variability and inefficiency
Standard
Best way of doing things You examine the way the person with the highest skill does something & document that process for others
Standard work
Most successful standards have 1) drawings, illustrations, pictures to illustrate the sequence of tasks, 2) created with worker participation Step 2
Step 1
Standard work depends on the close examination of.

Ergonomic and safety issues Quality issues Productivity Cost benefits
Standards at Toyota
Unit of excellence that employees should strive for part of daily operations Very simple documents that can be used during a process that can be added to with employee ideas (dynamic) Toyota has a standard on -how to greet people visiting the company -how to answer the phone -how to process an invoice
Standards at Toyota
At Toyota there are two things that are part of everyone's job. 1) follow Standard Work 2) find a better way to do your job
Buffer inventory
Goods held to deal with variation in customer demand
Sometimes called safety stock Buffer stock protect customer if change in demand Safety stock protect company from problems in process
Kanban (Kn bn)

Kanban is a communication system for controlling production or withdrawal (instruction card) Uses cards or tickets as visual signals to trigger the flow of materials Prevents worst waste.
Kanban (Kn bn)

Product & supplies are only ordered When the Kanban card says to do so
NOT to production schedule

Only when the card is pulled
Kanban icons
Tells an upstream process the type & quantity to make
Kanban post
Number of parts to be removed and supplied downstream
Production Kanban
Trigger production when a minimum quantity is reached Also called triangle kanban
Signal Kanban
Withdrawal Kanban
Kanban
Foundation of the Pull system
Kanban Japanese word for visible card or record Developed by Taiichi Ohno at Toyota Ensures each process only produces the amount of product that will be actually used in the next step Ideally, the quantity authorized by kanban in minimal - ideally one
Kanban
-Card stock in vinyl envelopes (may use bar code) -Metal plates -Colored balls -Electronic signals
Cards move with the goods
Kanban
Part name Part number External supplier Internal supplying process Pack-out quantity Storage address Consuming process address
Office Kanban
Office supplies are kanbaned to reduce transport and motion
You would say that the kanban method is most closely associate with
A. The elimination of non-value added activities B. The development of a value stream map C. Making problems visible in the process D. The control of material flow
Supplier
Monthly forecast
Production Control
(MRP)
Kanban
Weekly Schedule
Shipping
Cut
C/T = 360 C/0 = 0 UT = 99% FPY = 98%
Assembly
C/T = 600 C/0 = 10 UT = 100% FPY = 98%
4 hours 6 min
1hour 10 min
1 hour
Water Spider or Runner Move along the surface of water dedicated material handler
Delivers parts to various cells within the value stream The runner (water spider) allows the line to run at the planned pace
Water Spider or Runner Attributes
Can do much more than deliver materials
Circulates between operations Designated/standard route Picks up kanbans, tooling, components, finished products Delivers to appropriate place Reports problems immediately
Water Spider or Runner Attributes
1) 2) 3) 4) 5)
Trained in lean production Good communicator reports abnormalities Understands pitch & takt time Efficient and precise Proactive problem solving
Operator Cycle Time (Current)

TAKT TIME 60 sec.
60 55 50 45 40 35 30 25 20 15 10 5 0
Sub-Assembly.
Welding
Operators
Assembly
Operator Cycle Time (Future)

TAKT TIME 60 sec.
60 55 50 45 40 35 30 25 20 15 10 5 0
Sub-Assembly
Assy
Welding
Assembly
Operators
Balancing in the Service Sector

TAKT TIME 45 min. 60 55 50 45 40 35 30 25 20 15 10 5 0
Pull cust record Credit report Create quote Quote & customer Update record
Balancing in the Service Sector

TAKT TIME 45 min. 60 55 50 45 40 35 30 25 20 15 10 5 0 Reallocate and evenly balance work load under takt time
Utilize people in other value stream areas
Theory of Constraints
Profit improvement
Every organization has at least one constraint limits profit potential Manufacturing, sales, service
Who is often associated with the Theory of Constraints? A. Toyota B. Womack C. Ohno D. Goldratt Book The Goal
Business linked set of processes that transform inputs into sales
Only as strong a its weakest link
Goldratt process to strengthen the weakest link
Focus on the weakest link in a process or bottleneck
Often the constraint is the slowest part of the process
Make flow through bottleneck equal to market demand
Capacity
Capacity
Capacity
Constraints
Theory of Constraints 1. Identify (can be policy) 2. Exploit the rate of the constraint 3. Subordinate (adjust) other steps to match rate 4. If necessary, elevate revision of constraint
5. Repeat these steps with a new constraint
Exploit get as much use out of as possible (help it operate at its potential)
Three measurements that drive change, or Increase profit through TOC
1. Throughput 2. Inventory
3. Operating Expense
Focus on all 3
1. Throughput
All the $ coming into the company Rate of sales
2. Inventory
$ tied up in the company

facilities, equipment, raw materials, work in process, finished goods
Inventory many costs

Capital tied up in inventory Loss of interest on that capital Loss due to material handling damage Increased labor costs for material handling Increased space and storage
$ spent turning Inventory into Throughput

Money going out of the company
Direct labor, supplies, depreciation of assets
Focus on all three
1. Throughput 2. Inventory
interrelated
If we change one, it will change the one or more of the others
Maximize Throughput *
while
Minimizing Inventory & Operating Expenses
What is the greatest limit on Throughput?
Sales
Maximize Throughput
While
Minimizing Inventory & Operating Expenses
What is the limit on Throughput? Customer pull/market size
Sales
Squad of soldiers marching single file
Lead time
If each soldier moves as quickly as possible, the lead time lengthens
Goldratts analogy - troop
Lead time
Slower soldier falls behind holding up others behind System constraint is the slowest soldier Goldratts analogy - troop
This soldier sets the drum beat for the entire squad
Pacemaker
Connect the lead to the slowest constraint The process has been slowed down to the rate of the constraint, subordinate/adjust Adjusted the rate of the process to the slowest link
Goal of Theory of Constraints

If we can change and enhance the most critical organizational processes, the company will see tremendous benefits.
In the theory of constraints, the subordinate step refers to A. A listing of sub-processes
B. Reducing the rate for some processes

C. The portion of the process flow chart that depends on the main flow D. The less important product or service stream E. None of the above
Question from The Certified Six Sigma Black Belt
Six Sigma Theory Approach

Reduce variation
Lean
Elliminate waste 1. Identify value 2. Value stream 3. Flow 4. Pull 5. Perfection Flow focus Reduced flow time Data analysis not valued
TOC
Manage constraints 1. ID constraint 2. Exploit 3. Subordinate 4. Elevate 5. Repeat Constraint Throughput Minimal input from employees
1. Define 2. Measure 3. Analyze 4. Improve 5. Control Problem focus Uniform quality Processes Improved Independently No system focus
Focus Effect Criticisms
All structured problem solving
Which to choose?
Culture eats strategy for Breakfast
If your organization values analytical data. Willing to invest in structure to support quality
Six Sigma
If your organization values visual change and want quick results
Lean
If your organization values a systems approach. Management driven - not as participative
Theory of constraints
TPM Total Productive Maintenance

Team based activity Continuous improvement
Who is on this TPM team in a manufacturing setting?

Team based activity Production engineers Maintenance staff Line foreman Operators
Who is on this TPM team in a manufacturing setting

3 GOALS
-Maximize OEE -System of comprehensive maintenance -Involve departments that plan, use and maintain equipment
History of TPM
Nippondenso, first company to introduce plant wide preventive maintenance in 1960 As Nippondenso became more automated, needed more and more maintenance workers Management decided routine maintenance operators
Autonomous maintenance - TPM
Operators had freedom to act independently
Operators
Maintenance
This separation is found in many companies
Operators
Maintenance
TPM Mindset of Operator runs, Maintenance fixes is gone
History of TPM
Preventive maintenance grew to productive maintenance Nippondenso awarded prize for developing TPM Nippondenso 1st company to obtain TPM certification
Maintenance policies
1. Corrective/reactive wait until failure ** 2. Preventive regular maintenance attention 3. Predictive study and assess timeline for equipment attention 4. Maintenance Prevention Improve design to eliminate maintenance
** eliminate
TPM medical science of machines
Also service sector!
TPM
1. 2. 3. 4. 5. 6. 7.
PC Cleaning and Inspection workshops Inventory of hardware and software Areas of high dust, given keyboard covers Preventative maintenance schedule Post computer inspection guidelines in all work areas Email PC users schedule of maintenance tasks Routine defragmentation

Preventative health care for machines
Medical Science of Machines

Structured approach to ensure every piece of equipment is always able to perform required tasks so production is not interrupted
Implement per machine 2 hours Implement Company wide 1 to 2 years
OEE Overall Equipment Effectiveness
Metric measures 3 aspects of equipment performance 1. Availability 2. Performance Efficiency 3. Quality rate
Measure of how well your companys capital assets are used
Also shows the effect of equipment related losses
Use this figure to motivate employees to make improvements

Track the following 7 types of equipment loss 1) Downtime due to machine breakdown 2) Time required for setup and adjustment 3) Time or cycles lost to inefficient setup 4) Time or cycles lost to tooling 5) Time or cycles lost to work stoppages 6) Operating at less-than-ideal speeds 7) Producing defective products/rework/repair
What is our benchmark for OEE?
85% for each piece of equipment
Why dont we target 100%
100% leaves no time for . a) planned maintenance b) running slower or less to avoid overproduction c) To synchronize with other pieces of equipment
OEE = equipment availability * performance efficiency * quality
OEE = A * PE * Q
Net available time minus all other downtime such as breakdowns, setup time, and maintenance
Operating time Equipment availability =
Net available time
Total scheduled time minus contractually required downtime such as paid lunches and breaks

a) Normal cycle time b) Best cycle time achieved c) Estimate from similar process
All parts produced regardless of quality
Total parts run * ideal cycle time Performance efficiency =
Operating time
Calculated previously 4650 minutes
85%
89.9%
Number of rejected, reworks, or scrapped
Quality =
Total parts run total defects
Total parts run
OEE = equipment availability * performance efficiency * quality 84.5% * 89.9% * 96.5%
OEE = 73.3%
Do not compare OEE results for non-identical machines or processes Compare with the same machine at different times
Heijunka
(hey June kah)
Level or balance the type (variety) and quantity (volume) of production over a fixed period of time
Cross functional team use if variation in customer demand
Heijunka
Converts even uneven Customer Pull into even predictable & stable manufacturing Levels both volume and product mix
Highly variable production schedules - stressful
Production Leveling
Week 1 Demand 4500 Week 1 4-week leveling 4,200
2
3 4 5 6 7 8 9 10 11 12
3500
4600 4200 3500 4800 3300 4000 3900 4800 4200 4700
4,200
4,200 4,200 3,900 3,900 3,900 3,900 4,400 4,400 4,400 4,400
16,800 / 4 = 4,200
3 4 5 6
15,600 / 4 = 3,900
7 8 9 10 11
17,600 / 4 = 4,400
12
Look for patterns of demand
Pure Lean (JIT)

Produce to customer demand
Production Leveling
Meet customer demand over a given period of level production
Reduce/eliminate finished goods inventory
Small buffer inventory to meet variation in demand
Varying work schedules
Predictable/leveled work schedules
Production & Supply Variability if varying customer demand
More stability production and supplier
Risk of more overtime if demand fluctuates
Less likelihood of overtime
Takt time is the heart beat of Lean implementation
Heijunka is the deep breathing exercise of Lean that brings stability and calm to the process
Heijunka Box (leveling box)
Manufacturing
Office
Like a mailbox for work required and the runner/water spider is the mail carrier
Heijunka Box
7:00 7:20 7:40 8:00 8:20 8:40 9:00 9:20
Model A
Pitch 20 min
Columns time intervals
Model B
Pitch 10 min
Model C
Pitch 40 min
Rows types of product
Model D
Pitch 20 min
Model E
Pitch 20 min
Pitch = takt time x pack out quantity
Lean Lexicon: source
Instruction card to produce
Heijunka Box
7:00 7:20 7:40 8:00 8:20 8:40 9:00 9:20
Model A
Pitch 20 min
Model B
Pitch 10 min
Model C
Pitch 40 min
Model D
Pitch 20 min
Model E
Pitch 20 min
Heijunka Box
7:00 7:20 7:40 8:00 8:20 8:40 9:00 9:20
Model A
Pitch 20 min
Model B
Pitch 10 min
Model C
Pitch 40 min
Model D
Pitch 20 min
Model E
Pitch 20 min
How many cards in each slot for Model B
Heijunka Box
7:00 7:20 7:40 8:00 8:20 8:40 9:00 9:20
Model A
Pitch 20 min
A B B
A B B
A B B
A B B
A B B
A
B B
A B B
A B B
Model B
Pitch 10 min
Model C
Pitch 40 min
Model D
Pitch 20 min
Model E
Pitch 20 min
Heijunka Box
7:00 7:20 7:40 8:00 8:20 8:40 9:00 9:20
Model A
Pitch 20 min
A B B C
A B B
A B B C
A B B
A B B C
A
B B
A B B C
A B B
Model B
Pitch 10 min
Model C
Pitch 40 min
Model D
Pitch 20 min
Model E
Pitch 20 min
Jidoka:
Building in quality
Automation with the human touch

Autonomation (Autonomous + Automation) Automation with human intelligence
Autonomous Freedom to act independently
Jidoka: Necessary improvements made by directing attention to the stopped equipment and the worker who stopped the operation. The jidohka system puts faith in the worker as a thinker and allows all workers the right to stop the line on which they are working
Jidoka:
Building in quality
Goal to achieve appropriate level of automation 1) 2) 3) 4) Detect problem immediately Halt production Corrective action taken with little down time Prevents defects from being passed on
Jidoka:
Building in quality
How do we do it? Small cross function team with Poka Yoke experience Look for opportunity to incorporate mistake proofing devices (ideally for the machine)
Jidoka
Manual feed
watch machine automatic process
Self-monitoring machine
Toyoda family textile loom stopped automatically
Production Preparation Process (3Ps)

A disciplined method new products or significant redesign
Production Preparation Process

Cross functional team manufacturing, engineering, maintenance all participate Develops alternatives for each step (keeping in mind Lean from the initial point)
Mock up the process to test -experimentation -work out the flaws
Associated with kaizen thinking

Results -Cost savings -Faster product development

Principles
1) Based on VOC 2) Quality is built in 3) Production system designed to meet takt
4) 5) 6) 7)
Production system designed to meet lead time Production system designed to meet cost targets Based on Toyota Production System Simultaneous product/process development
5 Whys
Keep asking Why is this happening? Rule of thumb 5
Focuses team on causes rather than symptoms, especially the root cause
If you dont ask the right questions, you dont get the right answers Asking questions is the ABC of diagnosis
362
Kaizen (Good change)

Continuous incremental improvement by everyone Japan all aspects of life Small improvements over time lead to large business value
Kaizen is long term, but probably more famous for kaizen blitz
Kaizen (Good change)

Willingness to solve problems at the source
Firefighting inefficiency Prevention of waste
Move from firefighting to teaching everyone that preventing waste is their responsibility
Masaaki Imai
In 1985 Imai, labeled Japans productivity movement Kaizen, and brought it to the U.S. through the publication:
KAIZEN: The Key to Japans Competitive Success.
Kaizen
Focus on the process Improvement of the process is key to success Quality is the highest priority
Problems are solved with data
Process
Suppliers Inputs
1. 2. 3. 4. 5.
Outputs
Customer
Kaizen
People oriented
Kaizen mindset
1) not a single day should go by without some kind of improvement being made somewhere in the company
Kaizen mindset
2) customer-driven strategy for improvement - any management activity should eventually lead to increased customer satisfaction 3) quality first, not profit first - an enterprise can prosper only if customers who purchase its products or services are satisfied
Industry Week, Jan 24, 2006 focused on external value system of capital markets Vs. internal value system that focused on continuous improvement and customers
Kaizen mindset
4) recognition that any corporation has problems and establishing a corporate culture where everyone can freely admit these problems and suggest improvement
5) problem solving is seen as cross-functional systemic and collaborative approach
Kaizen mindset
6) emphasis on process - establishing a way of thinking oriented at improving processes, and a management system that supports and acknowledges people's process-oriented efforts for improvement
Process Suppliers Inputs

1. 2. 3. 4. 5.
Outputs
Customer
Kaizen
The next step of the process is your customer
Always provide the next step with good parts or information
Process Suppliers Inputs

1. 2. 3. 4. 5.
Outputs
Customer
Top Management Middle Management Supervisors
System-wide Innovation Kaizen
(localized innovation)
Workers
Maintenance of operations
Innovation drastic improvements in process Kaizen small continuous improvements Maintenance maintaining current standards Job functions as perceived by Japanese managers
Companies throughout Japan have a practice called the managers walk,

manager walks through their area at the same time each day A theme is selected for each walk, asks questions around the theme and shares information This is a powerful process for learning and sharing information
Kaizen environment - results

Manager - they are not coming to my door saying we have a problem. Instead, they are knocking on my door and saying this is how we fixed this problem..
Kaizen Event or Blitz or Kaikaku

Focused short term project to improve a process Kaikaku radical/revolutionary change Often used as an introduction to Lean See quick results Shift paradigms
Kaizen Event or Blitz

Focused short term project to improve a process Typical Kaizen events starting points 1) Work cell implementation 2) Setup reduction (SMED) 3) 5S
Kaizen Event or Blitz

Focused short term project to improve a process
How do we select them?
1) 2) 3) 4) 5)
Value Stream mapping Employee suggestions Line managers request High visibility Self contained
Other methods?
Customer issues and opportunities Business strategy Goals and objectives Priorities
Prioritized by Management team
Kaizen projects
Gain
Benefit
Low
Low
Medium
High
Effort
Medium
Pain
High
Novices to Lean implementation should attend Introduction To Lean first to familiarize themselves with the basic concepts and principles of lean before attending Kaizen Workshop
Kaizen Blitz - teamwork Intensive method carried out over 3-5-10 days with a cross-functional team of 5-10 individuals High energy High creativity Momentum
Secret of Kaizen Values people & creativity over capital
Plan Kaizen Event 2-4 weeks
M
Kaizen Workshop 3-5 days
A I C
Follow up 3-4 weeks
Kaizen Event
Discovery
Day 1 Define Kaizen Specific Value Stream Problem Problem Statement
Get Crazy
Day 2
Just Did it
Day 3
Get Bugs Out

Day 4
Sustain & Celebrate

Day 5
Analyze Problem
Test best solutions
Refine
Presentation Plan to sustain Celebration
Observe
Data
Kaizen Blitz
Rapid Teach Do Style People have little time to think of reasons for delay
Intensity and urgency overcomes intellectual resistance to a new paradigm
Kaizen Event
Dont include management as a participant in first several employees not free to experiment with boss Later include management to show support 1/3 outside customers, suppliers 1/3 management (?) 1/3 immediate team/operators
Engineering and maintenance must be available to the team
Preparation prior
Review past events learn
Let HR know Baseline information -Customer requirements -Layouts -Flow charts -Procedures -Value Stream Mapping
See message board for Cold Spring Granite preparation document
Preparation prior
Supplies tape measures, stopwatch, carts, safety equipment, cleaning supplies, gloves, coveralls flip charts, post it notes overheads
Newspaper
Daily update on team activities for others in the company
Dos Kaizen Events 1) 2) 3) 4) 5) Limit the scope Get expert help for 1st several Give team freedom to make mistakes Train team Measurable results
Donts Kaizen Events 1) 2) 3) 4) 5) Choose an unstable process Allow management to take over Reinvent the process use what works Limit kaizen to shop floor use everywhere Use Kaizen as only means of continuous improvement
Shallow roots of new change require constant watering Senior management constant reinforcement
Environment for Kaizen

1) Training Toyota everyone is trained 2) Lay-off policy employees cannot lose jobs due to lean initiatives Displaced employees are put in the continuous improvement office until they are brought back into a function 3) Metrics Recognize all measurable improvement not just selected 4) Team involvement not about liking, but mutual respect 5) Empowerment
Dangers
1) Blitz training is superficial Lean training takes months to years Need sound underlying strategy 2) Goldratt states, A system of local optimums is not an optimum system Islands of productivity
Dangers
1) Blitz training is superficial Lean training takes months to years Need sound underlying strategy 2) Goldratt states, A system of local optimums is not an optimum system Islands of productivity 3) Over reliance on Kaizen events to become Lean
Is 99.9% Good Enough?

10271 pieces of mail lost per day 1264 planes crashing at Ohare per year 288 babies dropped per year
Is 99.9% Good Enough?

Current airline safety 7-8 Sigma Baggage 2 sigma 3 Sigma 2 words wrong per page of novel 4 Sigma 1 word wrong per every 30 pages of novel 5 Sigma 1 word wrong per set of encyclopedias 6 Sigma 1 word wrong in a library Reduce input variation to have stable repeatable process for the customer
Lean Manufacturing and MES Correlation
MES Role in Lean Manufacturing Data Acquisition to Establish Metrics

ERP
Real Time Data for Early Contingency Implementation Data Integration for Full Analysis Capability Bottleneck Analysis Via Planning and Scheduling 4M Visibility and Analysis Lean Manufacturing Process Adherance Facilitation of 6 Sigma Programs at an Accelerated Rate
Process Control Systems MES
Fishbone Diagram For Root Cause Analysis
Manpower
Machinery
Material
Statement of Problem
Method
Metrics
Management
Fishbone Diagram For Root Cause Analysis
Manpower
Machinery
Material Defects
Lack of Training Statement of Problem Poor Processes Method Metrics Management Lack of Empowerment
Lean Elements and Tools

6 M Analysis
Manpower Machinery Material
Manpower Machinery Material Method Methods Metrics Management (Mother Nature)
Metrics
Management

6 M Analysis
Manpower
Training Job rotation Empowerment Work procedures
Manpower Machinery Material Statement of Problem
Machinery
Method
Metrics
Management
Uptime Proactively maintained New equipment when necessary

6 M Analysis
Material
Defects (incoming) Scrap (within the system)
Methods
Method
Metrics
Management
Necessary processes Effectiveness and efficiency

6 M Analysis
Metrics
Constant collection and improvement on data Action plans developed to improve data
Management
Sponsor Empower Foster Culture
Method
Metrics
Management
Where to Start? Tactical Implementation

Initiation
Assessment Project Selection Requirements Justification Sponsor Charter and SOW Project Manager (Lean Champion) Communicate Training
Planning
Scope Schedule Budget WBS Network Map Team Roles Risks Quality Metrics Communicate
Execution
Implement Plan Team Dynamics Communicate
Control
Monitor Improve Contingencies Communicate
Closure
Review
Archive Celebrate
Where to Start? Strategic Integration

Safety, Quality, Cost, Delivery, Morale, Environment
CEO
Management
Management
Management
Supervisor
Supervisor
Supervisor
Supervisor
Associate
Associate
Initiation
Planning
Execution
Control
Closure
Where to Start?
Be mindful of the Cs to avoid failed projects
Commitment Culture Communication Completion Complacency WHY ARE THESE IMPORTANT?
Lean Enterprise Institute Survey 2006
Implementation Words of Advice

Pick small projects with small implementation costs 5S, Waste Walks, Value Stream Mapping Build on momentum Kaizen teams, suggestion programs Dont be afraid to push the envelop
Project management fundamentals

Plan, Plan, Plan

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A systematic approach to identifying and eliminating waste through continuous improvement, flowing the product at the pull of the

customer in pursuit of perfection.

National Institute of Standards and Technology NIST

Waste Product/Service provided

Lean is the systematic elimination of waste to reduce lead time

Lean Business Systems

Balance between Lean Manufacturing and Lean Services

Industry Week Jan 25, 2006 Webinar

TPS (Thinking People System)

Who historically uses a pull system?

Who historically uses a pull system

Dont make burger until they are ordered

Dont make a sandwich until they are ordered

Customer takes 1 Company makes 1

Non Value Added, but required

Non Value - Added

Muda = waste = Non-value added activities

Henry Ford integrated entire production process

Henry Ford integrated entire production process

Toyota Production System

so that Toyota could respond to changing customer desires

Toyota Production System Toyoda family

Toyota Production System Toyoda family

Toyota Production System Toyoda family

Credited Ford & Supermarkets Creator of TPS Father of Kanban

Assembly Manager Toyota, 1940/50s Verging on bankruptcy

Has any of your companies won the Shingo Prize?

Edward Deming, 1900 -1993

Cost & quality

In 1990 James Womack wrote a book called

"The Machine That Changed The World"

Creative Idea Suggestion System

Heijunka Stabilized leveled production

TPM: Total Predictive (Proactive) Maintenance

Jidoka: Automation with a human touch

Heijunka: Mixed-Leveled Production

The 7/8 Types of Waste

The Eight Types of Waste

The Eight Types of Waste

The Eight Types of Waste

The Eight Types of Waste

Finish it, file it, or throw it away

Reduce to 3 operators in U-shaped cell less wasted motion IN (raw materials)

Station 3 OUT (finished goods)

Ideal layout the line for continuous flow (U shaped or C-shaped)

is used to synchronize the pace of production with pace of sales

What is the word origin of takt time?

Work time available/time period Takt time = Customer demand/time period

Work time available/day

Customer demand 480 spark plugs/day

Production line operates 960 minutes/day

960 minutes/day 480 spark plugs/day

Work time available/time Customer demand/time

Customers want 2 new contracts written /month

Work time available/month Customer demand/month

Customers want 2 new contracts written /month

Takt time is 2 weeks (twice a month) or .5 or or every 15 days

Work time available/day

Work time available/day

What is takt time?

Work time available/day Customer demand/day

70 seconds Heartbeat of demand

70 seconds Heartbeat of demand

How often Data Box ___