Lean manufacturing
Outline
Competitive Challenges Putting Companies on a Lean Diet
The Lean Tools
Get on the Scale! the Need to Measure Some Examples and Results
Achieving Operational Excellence
Right Products and Services
Customer Focus
Make what we sell not Sell what we make
Innovation
Achieving Operational Excellence
Right Products and Services
High Quality
Customer Satisfaction
Centered on the Target Reduced Variability
Both Products and Services
Relentless Pursuit of Improvement
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Achieving Operational Excellence
Right Products and Services Necessary But Not Sufficient
High Quality
Achieving Operational Excellence
Right Products and Services Necessary But Not Sufficient
High Quality
On-Time Delivery Short Lead Times Flexibility Increased Reliability Customization Low Cost/Reduce Waste Based on Continuous Improvement & A Lean Manufacturing Philosophy
World Class Operational Execution
Perceived Value:
The Ultimate Measure of a Lean Company
Perceived Value = What the Customer Receives The Cost
Why Does It Matter? Because the Companys Life Expectancy Depends on it!!!
Perceived Value: The Ultimate Measure of a Lean Company
In the Eyes of the Customer
PV=
The Right Products and Services
High Quality
Delivery
Cost
The Motivation for Becoming Lean
The New Economics: Old Way : Price = Cost + Profit Margin
We set the price to assure the desired profit
Now: options. How do we make a profit?
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Price - Cost = Profit Price is fixed (or falling) customers have many
Most Companies Are Too Fat
Need to Reduce Costs
How? without decimating our team members without skimping on maintenance and quality without weakening the company in the long run.
Must eliminate/reduce waste increase yield
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The 8 Sources of Waste
The Bad Carbs
1.
2. 3. 4. 5. 6.
7. 8.
Overproduction Excess Inventory Defects/Re-Work Non Value Added Processing Idle (Waiting) Time Non Value Added Motions (people and machines) Non Value Added Conveyance of Materials Waste of Peoples Talents and Time
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Putting Companies on a Lean
Lean focuses on eliminating waste in processes Lean is about expanding capacity by reducing costs and shortening cycle times between order and delivery Lean is about understanding what is important to the customer Lean is not about eliminating people
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Toyota Production System TPS
The Beginning of Lean Manufacturing
Tiachi Ohno Toyota U.S. Beginning New United Motor Manufacturing, Inc. NUMMI Freemont California
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The Basic Lean Tools
Continuous Improvement
Pull/Kanban Root Cause Standardized Work Cellular/Flow VAM TPM
Quick Changeover
Kaizen Value Stream Mapping
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Batch Reduction
5S/ Visual Control
6-Sigma
Theory of Constraints
Lean Tool: Value Stream Mapping
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Value Stream Mapping
Identify Problems/Issues
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Lean Tool: Root Cause Analysis -
USUAL APPROACH
Problem Identified
Firefighting!
Immediate Containment Action Implemented Find someone to blame!
Problem reoccurs elsewhere!
PREFERRED APPROACH
Problem Identified
Immediate Containment Action Implemented
Defined Root Cause Analysis Process
Solutions validated with data
Solutions are applied across company and never return! 19
Root Cause Example Identify Problem
Project Is behind Schedule Wont Finish on Time
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Immediate Action
Additional resources applied to help get the project team back on schedule
No new projects started until Root Cause Analysis completed
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Root Cause
Didnt complete project on time
Why?
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Cause and Effect Diagram
Procedures Personnel
Lack of worker knowledge Poor project plan Poor project mgmt skills Lack of resources
Didnt complete project on time
Inadequate computer programs
Poor documentation
Inadequate computer system
Materials
Equipment
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Cause and Effect
Procedures Personnel
Lack of worker knowledge Poor project plan Poor project mgmt skills Lack of resources
Didnt complete project on time
Inadequate computer programs
Poor documentation
Inadequate computer system
Materials
Equipment
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Root Cause
Didnt complete project on time
Resources unavailable when needed
Why?
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Didnt complete project on time
Resources unavailable when needed
Took too long to hire Project Manager
Why?
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Didnt complete project on time
Resources unavailable when needed
Took too long to hire Project Manager
Lack of specifics given to Human Resources Dept
Why?
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Didnt complete project on time
Resources unavailable when needed
Took too long to hire Project Manager
Lack of specifics given to Human Resources Dept
No formal process for submitting job opening
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Corrective Action
Permanent Hired another project manager to meet needs of next project team Preventive - Developed checklist form with HR for submitting job openings in the future
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Lean Tool: 5S
Sort (Seri) determine which equipment is necessary and which is not Straighten (Seiton) have the necessary equipment in reach and in the right place Shine (Seiso) - clean Standardize (Seiketsu) maintain the above 3 S Sustain (Sitsuke) mental discipline and readiness
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Why 5S?
To eliminate the wastes that result from uncontrolled processes. To gain control on equipment, material & inventory placement and position. Apply Control Techniques to Eliminate Erosion of Improvements. Standardize Improvements for Maintenance of Critical Process Parameters. 31
After 5S
Clear, shiny aisles Color-coded areas Slogans & banners No work in process
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Lean Tool: Poka yoke
Mistake-proofing systems Does not rely on operators catching mistakes Inexpensive Point of Origin inspection
Quick feedback 100% of the time
Be more careful is not effective
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Everyday Poke yoke Examples
3.5 inch diskettes cannot be inserted unless diskette is oriented correctly.
Fueling area of car has three error-proofing devices: 1. insert keeps leaded-fuel nozzle from being inserted 2. tether does not allow loss of gas cap 3. gas cap has ratchet to signal proper tightness and prevent overtightening. New lawn mowers are required to have a safety bar on the handle that must be pulled back in order to start the engine. If you let go of the safety bar, the mower blade stops in 3 seconds or less.
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3 Rules of POKA YOKE
Dont wait for the perfect POKA YOKE. Do it now!
If your POKA YOKE idea has better than 50% chance to succeedDo it!
Do it now.improve later!
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Lean Tool: Kaizen Events and the Kaizen Blitz
Identify the customer Deming Cycle Plan identify what to change and how to do it Current state Future state Implementation plan Do execute the improvement Check ensure the improvement works Act future and ongoing improvements Repeat
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Kaizen Blitz - Agenda
Day 1: Setting the scene Meet the team, training Day 2: Observe the current process Flowchart, identify waste, identify root causes Day 3: Develop the future state process Brainstorm and flowchart (typically the longest day!) Day 4: Implement the new process Plan, communicate, implement, modify Day 5: Report and analyze Performance vs expectations
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Use Visual Story Boards
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Identify the Current State
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Identify VA, NVA-R, and NVA
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Brainstorm and Analyze
Kaizen team brainstorming to develop new process Post improvement ideas on map or by category Workflow Technology People / Organization Procedures Develop detailed future state map New workflow Value Add and Non-Value Add Cycle times Identify Kaizen bursts (immediate radical change)
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Develop the Future State
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Lean Implementation Examples at Welco Lumber Company
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Potential Kaizen Objectives
Improve Quality
Improve Cycle Time Reduce Costs
Increase Yield
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Kaizen Methodology at Welco
Analyze Operation Identify Opportunity
5-Nov-03 Thru 21-Nov-03 Head Rig Log Study Baseline Log # 1 2 3 4 5 6 7 8 9 Operator Sid Sid Sid Sid Sid Sid Sid Sid Sid Large/Small Correct Cut Log (Yes or No) Error Category Log Size Welco Value Potential Value Potential Gain 15 Large No Excessive Log Breakdown $59.00 $65.97 $6.97 17 Large No Excessive Log Breakdown $79.27 $85.33 $6.06 11 Small Yes No Error $35.40 $35.40 $0.00 11 Small No Off Center Cant $31.61 $35.40 $3.79 14 Large No Reduced Value Cut $47.67 $58.86 $11.19 17 Large Yes No Error $85.33 $85.33 $0.00 8 Small Yes No Error $16.22 $16.22 $0.00 11 Small Yes No Error $35.40 $35.40 $0.00 9 Small Yes No Error $21.54 $21.54 $0.00
Collect Baseline Data Brainstorm Changes/ Improvements Collect Follow-Up Data/ Analyze Improvement Results Make Changes
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Horizontal In-feed Project Overview
Purpose: The purpose of the Baker snipe test is to reduce the annual cost associated with board snipe. Two tests will be conducted to gain information necessary to estimate the snipe cost: 1. Harp Test 2. Snipe Volume Test
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Proposed Change to Horizontal In-feed Process
Run Slabs 1 at a time rather than side-by-side
Process Change Only No New Equipment
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Horizontal In-feed Results
30-Min Snipe Test # 2 - B
Number Of Boards With Test # Total Boards Snipe 1 416 18 2 397 17 3 284 13 4 412 18 5 294 17 Total - 1803 83
% Mis-Manufactured 4.33% 4.28% 4.58% 4.37% 5.78% 4.60%
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Dollar Cost Savings
Snipe Test #2-B
Ave. # Boards 721 5,770 1,442,400 Ave. # Snipe Boards After Change Hour 33 Day 266 Year 66,400 Before Change 105 837 209,148
Hour Day Year
Estimated Annual Savings = $86,000 - $120,000
Estimated $16,507.04.00 Potential Gain Per Year Per Shift
Snipe Test # 2 - B was conducted with the baker operator instructed to run one slab at a time.
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PPROPORTION OF SNIPE
0.1 0.02 0.04 0.06 0.08 0.12 0
1 6 11 16 21 26 31 36 41 46 51 56 61 66 71 76 81 86 91 96 101 106 111 116 121 126 131 136 141 146 151 156 161 166 171 176 181 186 191 196 201 206 211 216 221 226
SAMPLE # DAYSHIFT SNIPE P CHART
Holding the Gain
Average Snipe Rate = 2 %
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231 236 241
Head Rig Project
Objective: Increasing Recovery/Value
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Baseline Data Collection
3 Operators 6 Hours Video 362 logs (all diameters)
View the Head Rig Saw
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Baseline Data
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Beck Group Log Breakdown Rules Based on Optimizing Log Recovery and
Value of Finished Product
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Potential For Improvement
Welco Log Breakdown Decisions Based on Past Training
Versus The Beck Group Optimal Breakdown Rules
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Improvement Opportunities Baseline Data
Potential Value % Optimal Cut Welco Realized Value Potential Gain Mean Gain Per Log Cut Mean Gain Per Hour
2 6 inch $15.80 50% $13.13 $2.67 $1.34 $0.45 9 7 inch
$100.17
33%
$91.89
$8.28
$0.92
$1.38
49 8 inch
$810.74
49%
$768.74
$42.00
$0.86
$7.00
62 9 inch
$1,335.48
47%
$1,249.02
$88.46
$1.40
$14.74
73 10 inch
$2,107.38
56%
$2,007.24
$100.14
$1.37
$16.69
362 Logs
65 11 inch
$2,301.00
66%
$2,210.20
$90.80
$1.40
$15.13
40 12 inch
$1,672.02
50%
$1,594.60
$77.42
$1.94
$12.90
26 13 inch
$1,262.04
31%
$1,115.81
$146.23
$5.62
$24.37
14 14 inch
$824.04
21%
$720.63
$103.41
$7.39
$17.24
22 >14 inch
$1,804.68
41%
$1,726.95
$77.73
$3.53
$12.96
Total =
$12,233.35
50%
$11,498.21
$735.14
$2.03
$122.52
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Improvement Opportunities
Head Rig Analysis Hours Per Shift Shifts Per Week Weeks Per Year Logs Per Hour 8 10 52 70 Total Logs 560 5600 291200 Per Shift Per Week Per Year
Log Diameter Percentage Mean Potential Gain Per Log Gain Per Hour Gain Per Shift Gain Per Week Gain Per Year 6 inch 0.7 $1.34 $0.65 $5 $52 $2,721 7 inch 2 $0.69 $0.97 $8 $77 $4,019 8 inch 12 $0.68 $5.73 $46 $459 $23,849 9 inch 15 $1.24 $13.07 $105 $1,045 $54,360 10 inch 20 $1.21 $16.89 $135 $1,352 $70,280 11 inch 20 $1.40 $19.63 $157 $1,570 $81,665 12 inch 13 $1.72 $15.64 $125 $1,251 $65,069 13 inch 7 $4.57 $22.39 $179 $1,791 $93,144 14 inch 5 $7.17 $25.10 $201 $2,008 $104,406 >14 inch 5.3 $3.91 $14.51 $116 $1,160 $60,345 Total -All Logs $1.93 $134.58 $1,077 $10,767 $559,859
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How to Achieve The Gains?
Know the Beck Group Rules Operator Training Use the Beck Group Rules Laser Lights Other ???
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Analyze Changes
Video Data Collection and Analysis Assess Progress Hold the Gains
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Results After Kaizen Project
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Final Section of Kaizen Report to Welco Management
Project Cost:
The projected gains from this head rig project were the result of the process improvement efforts of a team of people at Welco of Idaho including, the head rig operators, relief operator, maintenance staff, supervisors the management team. In addition to the time spent by the team, the capital costs associated with the improvements have been:
Two laser lights One Mirror
$1,600 $ 70
Thus, on an annual basis, Welco stands to gain between $300,000 and $500,000 in profit based on a total capital expenditure of less that $2,000!
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Lean Tool: Quick Changeover at Boise Cascade Corporation Traditional Approach
Produce to Order 1000 units Set Up Order 1000 Run 3000 units Set Up Order 3000 Run
Problem: Up-time rate too low - throughput down - setup times too long
Their answer to Improve Efficiency 10,000 Set Up Order Run Set Up Order 10,000 Run to inventory
9,000
to inventory
7,000
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The Lean Paradigm
Adopt this approach toward reducing setup times
Time in Seconds 240 250 200 150 100 50 0 1950 1960 1970 1980 1990 2000 2004 49 35 30 22 TIME FOR A NASCAR PIT CREW TO CHANGE 4 TIRES AND ADD 22 GALLONS OF GAS
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63 Source:NASCAR, USA Today
Lean Tool: Quick Changeover Methodology
Identify internal and external steps Convert internal steps to external Improve all aspects of the setup operation Abolish setup
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Boise Cascade - Becoming Lean Reduce Setup Times
Produce to Order (After Lean Implementation) 1000
Set Up
3000
Set Up
500
Set Up
Run
Run
Run
(Before Lean)
1000 units
Set Up Order
1000
Run
3000 units
Set Up Order
3000
Run
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Quick Changeover Results
Company T Manufacturing1 S Metals1
Machine 80t single shot press 100t single shot press
Before improvement 4 hours 0 mins 40 mins
After improvement 4 mins 18 sec 2 mins 26 sec
Redn 98% 94%
H Press1
TT Industries1 Expanded Metal Co. S Engineering AM Bottlers E Finishing
30t single shot press
50 oz injection moulding m/c 46 lath press Machining Centre Bottling plant Paint Plant
50 mins
1 hour 10 mins 4 hours 30 mins 139 minutes 32 mins 43 secs 56 mins 26 secs
48 sec
7 mins 36 sec 11 mins (note: NOT SMED) 59 mins 29 secs 23 mins 33 secs 23 mins 12 secs
98%
89% 96% 57% * 28% * 59% *
Ref 1: Modern Approaches to manufacturing improvement the Shingo System, Shigeo Shingo, ISBN: 091529964x 66 After one SMED exercise
Lean Tool: Reduce Non-Value Adding Time
Value-Adding Activities Activities that accomplish something the customer is willing to pay for. Non Value-Adding Activities Everything Else (such as Inspection
Re-work Material Movement
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Value Added Analysis
Total Cycle Time 95% Non Value-Adding 5%
Value Adding
Traditional Response: Focus on value-Adding Steps
2%
98% Non Value-Adding 50%
Value-Adding Response: Focus on Non-value Adding Steps
Non Value Adding
Value Adding
50%
Value Adding
Lead Time Reduced Non Value-Adding Time Reduced
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Naval Air Depot Jacksonville, FL
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Right
Get the Company On the Scale
Impediment to Success; Measuring the Wrong Things
People do how they are measured.
Dave Packard -- HP
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Implement Appropriate Measures
Customer Focused
On-Time Delivery Defects Customer Satisfaction
Drivers of Competitive Operations
Production Focused
Throughput WIP FGI Rework/Product Waste
Cycle Time Value Added Ratio Changeover Times
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Process Focused
Implementing Lean
Gain Top Management Buy In and Support Perform overall company assessment tied to company strategic, operational, and marketing plans Develop strategic lean deployment plan Integrate customized training with lean to improve specific skill sets, leverage training resources
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More Implementation Steps
Team Building, Communications, Problem Solving, Change Management, Lean Manufacturing Tools
Conduct Kaizen blitz high impact events
5S, Manufacturing Cell, Set-Up Reductions, Inventory Reductions, Work Standardization
Use an enterprise wide approach to help Transform a Companys culture and the way they do business.
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Some Lean Results
Oregon Cutting Systems Iomega - Utah Bernoulli Drives 1987 Output Per Hour Up 55% Lead Time from 21 days to 1 day 21.4 days
Zip Drives 1999
.75 days
Surface Mount Process cycle time from 2.5 weeks to 1 hour Lockheed Defect Rate Reduced 80% Rework Down 91% Lead Time Down by 95% Pager Lead Time from 16 weeks to 28 minutes 75
Motorola
More Results
Company Product Order-to-Finish Old New
General Electric
Hewlett-Packard
Circuit Breakers
Elect. Test Equip.
3 wks
4 wks
3 days
5 days
Brunswick
Matsushita
Fishing Reels
3 wks
1 wk
2 hrs
Washing Machines 360 hrs
Harley-Davidson
Motorcycles
1 yr
3 days
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Lean vs. Traditional Manufacturing
Half the hours of engineering effort Half the product development time Half the investment in machinery, tools and equipment Half the hours of human effort in the factory Half the defects in the finished product Half the factory space for the same output A tenth or less of in-process inventories
Source: The Machine that Changed the World, Womack, Jones, and Roos, 1990.
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Barriers to Lean
Implementing Lean Can Be Difficult Because it is Counterintuitive from a Traditional Paradigm:
Buying multiple small machines rather than one big machine that offers economies of scale. Shutting down equipment when maximum inventory levels are reached rather than running flat out. Using standards to continuously improve. There are some basic steps but the how-to varies from organization to organization Requires an assessment of the company in order to map out the strategy
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There is no step-by-step cook book
Company culture plays a big part in the how-to
Lean Is A Journey
The Journey never ends Toyota estimates it is only 50% waste-free There is much room for Improvement It is time to begin.
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