WHAT IS LEAN MANUFACTURING?

A Lean Overview

TOPICS
Lean History 101 Lean Defined & Key Concepts The Lean Techniques The Leanest of the Lean Report Card of Lean in the U.S.A.

Future of Lean
Universities and Lean

NOTABLE QUOTE

The Toyota system is not opposed to the Ford system. Rather, it is a progressive enhancement--a system geared to the Japanese market that massproduces in small lots with minimum stocks. Shigeo Shingo

MANY NAMES, BUT THE SAME CONCEPT

Toyota Production System Pull Manufacturing Just-In-Time World Class Manufacturing Lean Manufacturing JIT/TQC/EI/TPM Short Cycle Manufacturing One-Piece-Flow Cellular Manufacturing Demand Flow Manufacturing Stockless Production Focused Flow Manufacturing

Agility
Group Technology

Value Adding Manufacturing

Time Based Management

Synchronous Flow Manufacturing End-Lining Operations Continuous Flow Manufacturing

Lean Defined & Key Concepts

LEAN IS NOT

A cookie cutter approach to improvement.

Companies must apply the appropriate Lean principles for their industry and specific company situation.

Something that a company does once.

Lean is NOT an end point; it is a never ending improvement process. Lean is a journey.

DEFINING LEAN
A systematic approach to identifying and eliminating waste (non-value-added activities) through continuous improvement by flowing the product at the pull of the customer in pursuit of perfection --The MEP Lean Network

ANOTHER DEFINITION
A manufacturing philosophy that shortens the time line between the customer order and the shipment by eliminating waste (non-value-adding activities).

KEY CONCEPTS
Waste Reduction Lead Time Reduction

Variation Reduction
Product Flow Pull of the Customer

Continuous Improvement

VALUE ADDED

Value is added any time we physically change our product towards what the customer is buying.
If we are not adding value, we are adding cost or waste. Lean Manufacturing drives the systematic elimination of waste.
Value-Added Time : Minutes Time in Plant : Weeks

ORDER

CASH

KEY QUESTION Are my customers willing to pay for this ????

Value added
LEAN = ELIMINATING THE WASTES

5%

Non-value added

Overproduction Defects Non-value added processing Waiting Underutilized people Excess motion Transportation Excess inventory

Typically 95% of Total Lead Time is Non-Value Added!!!

INVENTORY HIDES PROBLEMS

Raw Material
Poor Long Set-ups

Inventory Level
Plant Layout Scrap Downtime

Finished Product

Long Supplier Lead-times

Process Imbalances

Lack of Training

Poor Tooling

Unlinked Schedules

No Unclear Poor Improper Standardization Specifications Housekeeping Reward System

REDUCING INVENTORY WITHOUT SOLVING PROBLEMS

Raw Material
Poor Long Set-ups

Finished Product

Inventory Level
Process Imbalances

Plant Layout

Scrap

Downtime

Long Supplier Lead-times

Lack of Training

Poor Tooling

Unlinked Schedules

No Unclear Poor Improper Standardization Specifications Housekeeping Reward System

LEAN THINKING: VALUE-ADDING ANALYSIS

Look at the service(s) that you provide. Review each activity.

Is the activity adding value?

If YES
Is this the best way to do it?

If NO
Can it be eliminated? If not, can it be

reduced?

NOTES: Be sure to include all the wasteful activities that occur occasionally. Remember Value is defined by the CUSTOMER.

VARIATION
BREAKING THE COST BARRIER
A Proven Approach to Managing and Implementing Lean Manufacturing
By Stephen A. Ruffa and Michael J. Perozziello (recipient of the 2001 Shingo Prize for Excellence in Manufacturing Research)

Stephen A. Ruffa
BS in Aerospace Engineering in 1982 from University of Maryland, College Park
MS in Technology Management in 1995, UMUC

A study of the commercial and military aircraft industry sponsored by the Joint Strike Fighter organization

Push

Pull

PUSH SYSTEM
Information Flow
WIP Supplier Raw Matl WIP Fin. Goods

Process A

Process B

Process C

Customer

Part Flow Execution - Parts completed to schedule without any downstream considerations Replenishment - Based on projected demand (forecasts) Shop Floor Control - System, transactions, paperwork Problems - Hidden Reaction to changes and problems - Through system - rescheduling Linkage - Operations are NOT physically linked

KANBAN Kanban = Signal

Signals when to do work Signals what work to do Signals when not to do work Controls inventory

Kanban signaling device, kanban, can be cards, carts, golf balls, marked-off spaces (kanban squares), etc.

PULL SYSTEM
Information Flow

Kanban Locations

Supplier

Raw Matl

Process A

Process B

Process C

Fin. Goods

Customer

Part Flow Execution - Parts produced upstream as signaled from the downstream operation or customer Replenishment - Based on consumption Shop Floor Control - Automatic - visible

Problems - Exposed - creates urgency

Reaction to changes and problems - Immediate - on-line and visible Linkage - Operations ARE physically linked

PULL SYSTEM
Information Flow

Kanban Locations

Supplier

Raw Matl

Process A

Process B

Process C

Customer

Part Flow

Make to Order and Engineer to Order Shops, by definition, operate by PULL since nothing is produced until an order from the customer is received.

The Lean Techniques

LEAN BUILDING BLOCKS

A systematic approach to identifying and eliminating waste (non-value-added activities) through continuous improvement by flowing the product at the pull of the customer in pursuit of perfection --The MEP Lean Network

Continuous Improvement
Pull/Kanban Plant Layout 5S System Cellular/Flow Quick Changeover Quality at Source TPM POUS Value Stream Mapping

Batch Reduction Standardized Work Visual Systems

Teams/Employee Involvement

FUNCTIONAL DEPARTMENTS AND CELLS

FUNCTIONAL

CELL

IMPACT OF BATCH SIZE REDUCTION

Batch & Queue Processing
Process Process Process

A
10 minutes

C
10 minutes

10 minutes

Lead Time: 30+ minutes for total order 21+ minutes for first piece

Continuous Flow Processing

ProcessProcessProcess

12 min. for total order 3 min. for first part

CELL ADVANTAGES OVER FUNCTIONAL DEPARTMENT

1. 2. 3. 4. 5. 6. 7. 8. 9. Shorter Lead Time Improved Quality - Quicker problem identification Improved Quality - Less potential rework or scrap Less Material Handling Improved Coordination Reduced Inventory Departmental conflicts eliminated Simplified Scheduling Less Space Required

Functional

Cellular

Percent of time of changeover

Preparation, after-process adjustment, checking, return to storage of parts, tools, fixtures, move materials Removing parts, blades, jigs, etc.; mounting same for next lot, move materials. Machine setting, measurements

30%

50%
15%

5%

Making trial pieces and adjusting

KEY BENEFITS OF REDUCING SETUP TIMES

1. 2. 3. 4. 5. 6. Shorter Lead Times Decreased Inventory Increased Capacity Improved Flexibility Improved Accuracy/Quality Improved Responsiveness to Customers
Document
Lean Basics SMED

Standardize

Analyze

Implement

VISUAL CONTROLS
Simple signals that provide an immediate understanding of a situation or condition. Examples: Shadow boards for tools, supplies, and safety equipment Color coding Lines on the floor to delineate storage areas, walk ways, work areas, etc. Marks to indicate correct machine settings Andon lights Kanban cards

VISUAL MEASUREMENT

POKA-YOKE

Mistake Proofing
Minimizing the opportunities for mistakes to occur. When mistakes do occur, preventing mistakes from becoming defects.

THE 5 Ss
Sort (Seiri) - Perform Sort Through and Sort Out, by placing a red tag on all unneeded items and moving them to a temporary holding area. Within a predetermined time the red tag items are disposed, sold, moved or given away. Set in Order (Seiton) - Identify the best location for remaining items, relocate out of place items, set inventory limits, and install temporary location indicators. Shine (Seiso) - Clean everything, inside and out. Standardize (Seiketsu) - Create the rules for maintaining and controlling the first 3Ss and use visual controls. Sustain (Shitsuke) - Ensure adherence to the 5S standards through communication, training, and self-discipline.

The Leanest of the Lean Toyota

Four-year Study of the Toyota Production System
Decoding the DNA of the Toyota Production System by Steven Spear and H. Kent Bowen, Harvard Business Review, September-October 1999

LEAN BUILDING BLOCKS

A systematic approach to identifying and eliminating waste (non-value-added activities) through continuous improvement by flowing the product at the pull of the customer in pursuit of perfection --The MEP Lean Network

Continuous Improvement
Pull/Kanban Plant Layout 5S System Cellular/Flow Quick Changeover Quality at Source TPM POUS Value Stream Mapping

Batch Reduction Standardized Work Visual Systems

Teams/Employee Involvement

DECODING THE DNA OF TOYOTA

The tacit knowledge that underlies the Toyota Production System can be captured in four basic rules. These rules guide the design, operation, and improvement of every activity, connection, and pathway for every product and service. The rules are as follows: 1. All work shall be highly specified as to content, sequence, timing, outcome. and

2. Every customer-supplier connection must be direct, and there must be an unambiguous yes-or-no way to send requests and receive responses.

3. The pathway for every product and service must be simple and direct.
1. Any improvement must be made in accordance with the scientific method, under the guidance of a teacher, at the lowest possible level in the organization.

Decoding the DNA of the Toyota Production System by Steven Spear and H. Kent Bowen, Harvard Business Review, September-October 1999

Report Card
20+ Years of Lean in the U.S.A.

THE GOOD NEWS

Percentage of Benefits Achieved
0 25 50 75 100

Lead Time Reduction Productivity Increase WIP Reduction

Quality
Flexibility

Improvement

Skill Enhancement

Visual Mgmnt

Space Utilization

ADDITIONAL BENEFITS

Simplified Scheduling Less Transactions Less Variation, More Predictability Forecasts Become More Accurate Quicker Response To Design Changes Quicker Market Response Problems Are Visible Product Team Organization - Eliminates
Departmental Conflicts Facilitates Cross Training Facilitates Alternate Pay Schemes (Pay For Skills) Increased Sales

THE BAD NEWS?

Im not a defeatist or pessimistic but I think were still in the early days with regard to figuring out how to do this lean stuff
James Womack President of the Lean Enterprise Institute

Future of Lean

THE FUTURE OF LEAN

1. Lean is here to stay due to its Customer orientation. 2. There will be more Lean activity in the areas of Office Lean, and creating flow in pure Job Shop and Engineer to Order environments. 3. The Silver Bullet mentality will be abandoned by more companies, and replaced with a renewed focus on the Lean fundamentals and the development of a true Continuous Improvement System.

4. 3 above will be accelerated as more Lean versus Lean competitive battles emerge.
5. Hopefully, Lean will become more evident in University curriculums. (Refer to next section on Universities and Lean.)

Universities and Lean

MIT

The Machine That Changed The World: The Story of Lean Production, 1990, by James P. Womack, Daniel T. Jones, and Daniel Roos

MITs Center for Technology, Policy and Industrial Development (created in 1985)

Leaders for Manufacturing (LFM) Program System Design and Management (SDM) Program

LFM and SDM are graduate and research programs sponsored by MITs Sloan School of Management, the School of Engineering, and over 20 Industry Partners

Lean Aerospace Initiative (LAI)

UNIVERSITY OF KENTUCKY

Center for Robotics and Manufacturing Systems Lean Manufacturing Program

Manufacturing Systems Engineering Masters Degree Concentration Area Lean Manufacturing

Toyota Fellows Program Lean education combined with semester-long internship at a Toyota facility

UNIVERSITY OF WISCONSIN

Center for Quick Response Manufacturing (QRM) Manufacturing Systems Engineering Program
Director Rajan Suri, Professor of Industrial Engineering

Author of Quick Response Manufacturing: A Companywide Approach to Reducing Lead Times (Productivity Press, 1998)
Developed the POLCA (Paired-cell Overlapping Loops of Cards with Authorization) Material Control and Replenishment System

Lean Keys to Success

KEYS TO SUCCESS Prepare and Motivate People

Widespread orientation to CI, quality, training and recruiting workers with appropriate skills Create common understanding of need to change to lean

Employee Involvement
Push decision making and system development down to the lowest levels Trained and truly empowered people

Share information and manage expectations Identify & empower champions, particularly operations managers
Remove roadblocks (i.e., people, layout, systems) Make it both directive yet empowering

RECOMMENDED READINGS

World Class Manufacturing: The Next Decade by Richard Schonberger World Class Manufacturing: The Lessons of Simplicity Applied by Richard Schonberger Lets Fix It! Overcoming the Crisis in Manufacturing by Richard Schonberger The Machine That Changed the World by James P. Womack and Daniel T. Jones Lean Thinking by James P. Womack and Daniel T. Jones Becoming Lean by Jeffrey Liker Lean Transformation by Bruce A. Henderson and Jorge L. Larco The Goal by Eli Goldratt

The Race by Eli Goldratt

The New Manufacturing Challenge: Techniques For Continuous Improvement by Kiyoshi Suzaki

RECOMMENDED READINGS

The Human Side of Just-In-Time: How To Make The Techniques Really Work by Charlene B. Adair-Heeley Fast Track to Waste-Free Manufacturing by John W. Davis Visual Systems by Gwendolyn D. Galsworth A Revolution in Manufacturing: The SMED System by Shigeo Shingo Quick Changeover for Operators:THE SMED SYSTEM created by The Productivity Press Development Team SET-UP TIME REDUCTION by Jerry W. Claunch Kaizen For Quick Changeover by Kenichi Sekine and Keisuke Arai

Performance Measurement for World Class Manufacturing by Brian H. Maskell

Breaking The Cost Barrier by Stephen A. Ruffa and Michael J. Perozziello

Implementation Process

SOME INITIAL KEY POINTS

Lean is a continuous process an ongoing journey where the rewards get greater and greater.

Theres more than one way to get to where you want to be be flexible and make it work for you.

LEAN IMPLEMENTATION PROCESS

1. Opportunity Identification Organizational Assessment 2. Solution Design Develop Improvement Blueprint 3. Implementation Do it 4. Continuous Improvement Do it

Gather baseline measures Identify high impact areas

Obtain lean concepts training Map the value stream - current & future Analyze gaps Create implementation plan

Create crossfunctional implementation teams Obtain specific lean training Create model area

Document improvements throughout journey Measure, measure, measure What gets measured gets done! Evaluate support systems alignment Return to Stage 1 Never stop

Roll out through the organization

Tools MEP Lean Enterprise Diagnostic tool World Class by Principles (WCP) assessment matrix and international benchmarking tool Tools Tools Training - Principles of Lean Manufacturing Value Stream Mapping Training Cellular/Flow Manufacturing, Pull/Kanban, Setup Reduction, 5S, TPM Train/Do/Train/Do Approach

VALUE STREAM MAPPING

A simple, visual approach:
Focusing on a product family Creating a clear picture of current material and information flow associated with that product family Identifying lean tools and techniques that can improve flow and eliminate waste Incorporating those ideas in a new picture of how material and information should flow for that product group Creating an action plan that makes the new picture a reality for that product family

A e S cm tam in C rren S p g u t tate M ap

6-w eek F recast o M ig ich an S teel C . o W eekly F ax

P d ctio ro u n Cn l o tro M P R
D aily O er rd

90/60/30 d ay F recasts o

S tate S treet A ssem ly b 18,400 p cs/m o -12,400 L -6,400 R T ray = 20 p ieces 2 sh ifts

500 ft co ils

920 p cs/d ay

W eekly S ed le ch u

Tu . + es Th rs u

D aily S ip h S ed le ch u

1x D aily

S tam in p g

S W #1 . eld

S W #2 . eld

A ssem ly 1 b

A ssem ly 2 b

S ip in h p g

I
C ils o 5d ays

200 T
1

I
4600L 2400R 7.6 d s ay 1 C /T=39 sec. C =10 m . /O in U tim p e=100% 1

I
1100L 600R 1.8 d s ay 1 C /T=46 sec. C =10 m . /O in U tim p e=80% 1

I
1600L 850R 2.7 d s ay 1 C /T62 sec. C =0 /O U tim p e=100% 1

I
1200L 640R 2d s ay 1 C /T=40 sec. C =0 /O U tim p e=100% 1

I
2700L 1440R 4.5 d s ay

C /T=1 seco d n C =1 ho r /O u U tim p e=85% 1

P du ro ctio n e 4.5 d ays Lead tim =23.6 days V eA d alu d ed =188 sec. Tim e A eS cm tam in p g S teerin B g rackets C rren S u t tate (D te) a

5d ays 1s econ d

7.6 d ays 39 s econ ds

1.8 d ays 46 s econ ds

2.7 d ays 62 s econ ds

2d ays 40 s econ ds

ALIGNMENT
All systems must be in alignment with Lean Principles, especially rewards, recognition, pay and performance measurement systems. Otherwise, ORGANIZATIONAL HYPOCRISY will doom your Lean plans to failure.

Change

BARRIERS TO IMPROVEMENT

If we all know we need to improve, the question becomes: why dont we?

SUCCESSFUL CHANGE

Involvement leads to Ownership which leads to Commitment which leads to Success.

Case Studies

LANTECH
Product - Stretch Wrapping Machines - $10,000 - $50,000 machines, usually customized - 4 basic types of machines Manufacturing Approach Prior to 1992 - Batches of 10 - 15 machines of a type Improvement Attempts From 1989-1992 1. Reorganize into profit centers for standards and specials 2. TQM 3. Teams 4. Max-Flex - build inventories of major components 5. Information Technology Summary of Failures Lantech failed to change the FLOW of product. TQM, and Teams are two key building blocks of Lean Manufacturing, but they must work in conjunction with Product Flow Improvements.

LANTECH

Conversion to Lean in Manufacturing 1. Formed teams to look at product flows. 2. Disbanded the production departments. Created 4 product cells; a cell for each type of machine. 3. One Piece Flow BATCH-AND-QUEUE/1991 FLOW/1995 Development time for a New Product Family 3-4 years 1 year Employee hours per machine 160 80 Manufacturing space per machine 100 square feet 55 square feet Delivered defects per machine 8 .8 Dollar value of in-process and finished goods inventory* $2.6 million $1.9 million Production throughput time 16 weeks 14 hours-5 days Product delivery lead time 4-20 weeks 1-4 weeks * Note that sales doubled during this period.
If Lantechs traditional sales-to-inventory ratio had held constant, $5.2 million in inventory would have been needed to support 1995 sales volume.

Product delivery lead time is the period customers must wait before their product can be delivered. In 1991,
most of this time was in-process time in the production system. In 1995 most of this time was wait time for a

LANTECH PRODUCTION FLOW

Batch-and-queue

Lean

Based on Chap. 6 of Lean Thinking : Banish Waste And Create Wealth In Your Corporation by Womack and Jones

LANTECH ORDER FLOW

Old Order Flow

Lean Order Flow

Based on Chap. 6 of Lean Thinking : Banish Waste And Create Wealth In Your Corporation by Womack and Jones

LANTECH PRODUCT DEVELOPMENT

Old Product Development

Lean Product Development

Co-located, Dedicated Product Teams

Based on Chap. 6 of Lean Thinking : Banish Waste And Create Wealth In Your Corporation by James P. Womack and Daniel T. Jones

MACHINE BUILD ASSEMBLY CELL

Batch-and-queue Assembly Order for 10 machines - Transfer batch=10 Component storage - Stockroom No defined flow or assembly area

Assembly Cell Transfer Batch=1 Point of Use Storage Flow path defined Machine transfer via carts

INJECTION MOLDER / ASSEMBLER

Original Functional Layout

INJECTION MOLDER / ASSEMBLER

Improved Flows - Product Group #1

NOTES 6 Cells Warehouse removed from process Controlled amount of buffer Color coding per cell Parts boxed for shipment in cell Molding Final Inspection eliminated

METRICS Flow Distance reduced from 280 to 34 Lead-time (molding through packaging) reduced from 9 days to 5 hours Lead-time (including all WIP) reduced from 9 days to 2.5 days 65% WIP reduction 14% Reject reduction Transactions Reduced 67%+

INJECTION MOLDER / ASSEMBLER

Are the following support functions affected???

Production Scheduling Human Resources Legal & Compliance Equipment & Product Design/Engr.

Supervision/Management
Quality Assurance Maintenance

Accounting & Finance

Marketing/Strategy Purchasing

INJECTION MOLDER / ASSEMBLER

Improved Flows - Product Group #2

Equipment not moved Warehouse removed from process Push/Pull Kanban System Carts & totes are kanban signals Color coding per line Equipment relocation planned for future

Improved Flows Manual & Semi-Automatic Assembly

Cellular processing designed-in for New Products

Summary

LEAN THINKING
1. Specify Value - Value must be defined from the standpoint of the final customer.

2. Identify the Value Stream - The entire set of activities needed to design and produce a product must be thoroughly understood and mapped out. 3. Flow - The product must move along the value stream without interruption. It must flow.
4. Pull - Organizations must be structured so the customer can pull value from the producer. 5. Perfection - The whole enterprise must pursue not its competitors, but rather perfection.
From Lean Thinking : Banish Waste And Create Wealth In Your Corporation by James P.

KEY POINTS
1. Understand that Lean is a broad system strategy, but successful implementation is in the details.
1. Minimize Variation Excel in the fundamentals. 1. Align all systems to support your Lean strategy.

1. Involve workforce in the change process. And, something else to keep in mind:
Lean solutions are usually no/low cost.

A LEAN ACTION PLAN

Increase Lean awareness throughout the organization.
(e.g. day Principles of Lean Manufacturing or 1 day Workshop, LE101: Principles of Lean Manufacturing with Simulation.)

Start using a Lean/Continuous Improvement Framework

(e.g. World Class by Principles Assessment/Benchmarking Matrix, Baldrige Criteria, Industry Week Best Plants Criteria).

Create a Product Family Matrix

Map the Value Stream for a product family, and determine the long and variable lead time areas.
Attack a high impact area, use the Train/Do/Train/Do approach Create a Model area, and use the Value Analysis Process throughout

FINAL THOUGHTS

LEAN
In short, it is a business risk not to consider it.
Move with a sense of urgency and remember what George S. Patton said,

A good plan violently executed NOW is better than a perfect plan next week