THE LEAN MANUFACTURING HANDBOOK

By Tom Epply Fourth Edition

For more information contact:

Continental Inc.
1524 Jackson Street Anderson, IN 46016 765.778.9999 765.622.0697 800.8SKILLS www.continentalinc.com

Illustrations: Rick Barker Copyright 2000 by Continental Inc. All rights reserved.
Note: All other product names and services identified throughout this book are trademarks or registered trademarks of their respective companies. They are used throughout this booklet in editorial fashion only and for the benefit of such companies. No such use, or the use of any trade name, is intended to convey endorsement or other affiliation with the book.

THE PURPOSE OF THIS BOOKLET

This booklet about Lean Manufacturing was written in terms simple enough for anyone to understand and is intended for anyone wanting to find out more about Lean. It is meant for engineers, purchasing agents, company clerks, newspaper reporters, teachers, or anyone else. It is by no means a complete text on Lean, but does include an addendum that will point the way to further Lean knowledge for anyone who is interested. Resources for Lean training and support are included in the booklet and where appropriate, Continentals Lean services are outlined. Lean is a large area of expertise, and no booklet could possibly cover it all. But it is my hope you will gain an understanding of Lean principals and be motivated to find out even more about this quiet revolution that is transforming worldwide manufacturing.

What is Lean Manufacturing?

Lean Manufacturing is a manufacturing system and philosophy that was originally developed by Toyota and is now used by many manufacturers throughout the world. At Toyota the system is referred to as the Toyota Production System. Other manufacturers have adapted the system to meet their own needs and assigned a proprietary name to it, such as Delphi Automotives Delphi Manufacturing System. Therefore the term Lean Manufacturing is a more generic term and refers to the general principals and further developments of Lean. The term Lean is very apt because in Lean Manufacturing the emphasis is to cut out the fat or waste in the manufacturing process. Waste is defined as anything that does not add value to the customer. It could also be defined as anything for which the customer is unwilling to pay. For example, you order a shirt to be custom made, it may take 6 weeks. However, the actual time the tailors or seamstresses are working on the shirt is only 5 hours. The rest of the time is taken up by such things as material ordering, waiting between processes and inefficient shipping practices. This extra time does not add value the customer. As Lean Manufacturing principals are applied to the shirt-making process, one would see a reduction in delivery time from 6 to 5 to 4 weeks and even less. The ideal shirt-making operation would be streamlined to give the customer, what they want, when they want it at the lowest possible cost within the least amount of time. Though they may not call it Lean, the Eyeglasses in About an Hour companies have applied many Lean

Why do you say add value to the customer vs. add value to the product?
These are two different things. For example, a custom made shirt may be made more valuable by adding extra stitching, using top of the line fabric and adding a monogram. All these things add value to the product in terms of quality and the longevity of the product. However, if the customer just wants a basic shirt that fits well and that will last about two years, then these things do not add value to him. He will not be willing to pay a premium to have a more valuable product and the added extras are actually a form of waste. Another example of this would be UPS Ground vs. FedEx overnight. In Indiana one can ship UPS Ground to Michigan, and it will arrive 90% of the time next day for about $3 or $4. FedEx offers an upgraded product of 100% next day delivery to Michigan. You can even select a 10:30 am delivery time. The price of this service is closer to $10, over twice the cost of the UPS Ground. Obviously, the FedEx product has more. However, in many instances, the customer does not require a 100% guarantee and is only willing to pay for a 90% probability of next day delivery. So, unless the customer puts value on a 100% delivery guarantee he will be unwilling to pay the extra cost.

principals to their operation. What used to take weeks is now done is about an hour, adding value to the customer. It is no surprise that these operations have opened up all over the country. What was once thought of as impossible speed of delivery is now commonplace. Applying Lean Manufacturing gives manufactures these types of results on a routine basis.

Is speed of delivery the main benefit of Lean?

Improved speed of delivery is only one of the benefits of Lean. Lean deals with the reduction or elimination of many types of waste with lowest cost and customer defined quality as driving forces. In Lean technology identifying and eliminating waste is so important that it even has its own terminology. In Lean, waste is called MUDA, which comes from the Japanese term for waste.

Lean identifies seven types of waste:

1) Over-Production Obviously product that cannot be sold or has to be dumped at a reduced price is wasteful. Also producing product before the customer requires it requires the part to be stored and ties up money in inventory.

2) Inventory Excess inventory ties up a great deal of cash, which is wasteful. Stockpiling inventory between processes is wasteful.

3) Conveyance Unneccessarily moving a part during the production process is wasteful. It can also cause damage to the part, which creates wasteful rework.

4) Correction Having to re-work parrts because of manufacturing errors is a large source of waste. Additionally, sorting and inspecting parts is wasteful and can be eliminated by error proofing (designing your processes so the product can only be produced one way, the correct way every time).

5) Motion Unneccessary or awkward operator motions put undue stress on the body and cause waste. Improvement in this area should result in reduced injury and workmans compensation claims.

6) Processing Unclear customer requiremens cause the manufacturer to add unneccessary processes, which add cost to the product.

7) Waiting The operator being idle between operations is wasteful. It is acceptable for the machine to wait on the operator, but it is unacceptable for the operator to wait on the machine.

By eliminating waste you can do more with less:

Less capital equipment Less floor space Less operator effort Less direct labor Less indirect labor Less inventory Less lead time

Seeing and eliminating waste in the work environment requires a major shift in ones understanding as to what is waste. The old school definition of waste is usually described as scrap and rework. True implementation of a Lean Manufacturing System requires a change in your definition of waste to anything that does not add value to the customer. Once you have changed your thinking, you will see opportunity after opportunity for eliminating waste

How does Lean Manufacturing differ from traditional manufacturing?

Traditional manufacturing is often called mass production or batch and queue (waiting in line) production. In traditional manufacturing, similar processes are grouped together (paint, welding, fabrication, etc.) and large batches of a part are processed and held in a queue waiting for the next process. In this system a batch of parts are put through Process A and set aside. They are moved to the next area where Process B is done to the batch. The parts wait in a pile for the next process. Eventually they are shifted to another area where Process C is completed on the batch. This batch and queue process continues until the part is completed and shipped.

Batch and Queue Traditional Manufacturing

At any given time there may be hundreds or even thousands of parts in various stages of production. If we were to track a given part through its production, we would see the part was in production for maybe 48 hours from start to finish. The actual time it was being processed, or value was being added to it, was only 8 minutes. The rest of the time was spent waiting for the next process, or moving the part from Process A to Process B. Another problem with the batch and queue system is when a defect occurs in Process B, but is not discovered until Process C or later. If there are 500 parts in the batch affected by the defect, they all must be scrapped or reworked. This can add up to a great deal of waste. Lean differs from traditional batch and queue manufacturing because the system strives for a ONE PIECE FLOW.
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One Piece Flow means just what it says. One part is put through Process A and immediately handed off to Process B. Process B is completed on the part and it is given to Process C, which is completed and so on. Ideally there is no batch or buildup of parts at any given point in the process. The part does not wait for the next process. Ideally the workload is balanced so each operator is doing his fair share of the work. This is called operator balancing. The whole operation is set up so Process A is next to Process B, which is located as close as possible to Process C and so on. This is usually done in a U configuration, which is called a production cell. Therefore, the part does not have to travel long distances throughout the plant to get to the next process. Of course this is in an ideal state and one must still contend with large equipment such as ovens or paint processes, which cannot be easily moved. The emphasis of Lean is for a one-pieceflow process that covers the least amount of floor space possible.

One Piece Flow Lean Manufacturing Note the ease of producing with one, two or three operators.
If we were to track a given part through the Lean Manufacturing cycle, we would see that a part that takes 8 minutes to be produced would take only about 9 or 10 minutes to process from start to finish. The number of parts in process would drop from hundreds (or even thousands) to single or double digits, depending on the number and complexity of the processes. As you can easily see, the savings in inventory alone would be significant. In a perfect world the number of pieces in the flow is equal to the number of operations. Example: Your production flow goes from OP(operation) 10 to OP 20, etc. through OP 150. You have fifteen total operations and the ideal WIP (Work in process inventory or number of parts in the assembly cycle) would be 15.

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If this is your case you have one-piece flow. If you have multi pieces between each operation, you have batch or traditional manufacturing. In Lean, one strives for one-piece flow and continually improves the operation until it is achieved.

McDonalds vs. Wendys

A simple example of Traditional Manufacturing vs. One Piece Flow is the production lines at McDonalds vs. Wendys. When you arrive at McDonalds, you will see stacks of sandwiches stacked in the chutes behind the front counter. These have been made in batches and are ready to deliver to the customer. This system works as long as there are sufficient customers who demand the types of burgers that are prepared and waiting before the burgers get cold or dried out. (One has to wonder what McDonalds standard is on this). However, if you ask for your burger with no pickles or fries with no salt, you may be in for a long wait. This is a good example I want a burger of traditional with no pickles manufacturing.

and fries with no salt.

Conversely, when you go to Wendys for a hamburger, you will not see stacks of product waiting for customers. When you place your order, the cashier announces it to the food preparers, who then build your burger to order. If you ask for no pickles and extra onions, you will receive it in the same amount of time it takes for you to get a standard burger. This is one-piece flow. You will see similar systems in place at Taco Bell and Arbys.

I want a burger with no pickles and fries with no salt.

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What Does Just In Time mean?

Just in time refers to producing and delivering goods in the amount required when the customer requires it and not before. An example of just in time delivery would be the new service of purchasing dog food over the Internet. The dog food is delivered to your home via UPS. A person with two dogs that each eat a can of dog food a day would need 14 cans of dog food a week. If the dog food comes in cases of 24, they would have dog food shipped every 12 days or so. This may be adjusted somewhat to allow for weekends and shipping delays. This system would allow for an adequate supply of dog food without tying up too much money or space with excess dog food. Of course daily delivery of dog food would be closer to an ideal state of just in time, but would be too costly in shipping charges. The optimum delivery of dog food would be determined by need and shipping costs. One could purchase a years supply of dog food (roughly 30 cases) to save on shipping costs, but this would tie up money and a good portion of the garage on storage. As absurd as this sounds, many manufacturers devote large portions of their facilities to raw materials storage or storage for finished goods. This adds up to a great deal of waste in inventory and space costs. Another example of waste that is the opposite of just-in-time principles, is the production practice of traditional manufacturing. Traditional manufacturing plants often produce all they can of a given product for the marketplace so as to never let the equipment be idle. These goods need to be warehoused or shipped out to a customer who may not be ready for them. If more is produced than can be sold, the products will be sold at a deep discount (often a loss) or simply scrapped. This can add up to an enormous amount of waste.

How does a plant produce Just-In-Time?

In Lean Manufacturing, the manufacturer only produces what the customer wants, when they want it. A key element of Lean is to produce to TAKT time. TAKT time is a German word for pace or rhythm. The pace is determined by a simple calculation of the number TAKT Time Calculation of parts required by the customer divided by the production time Parts required per day = 1080 available. Production minutes per day = 540 For example: your customer wants 1080 parts per day. You are working one shift of 10 hours. 540 + 1080= 0.5 minutes (30 seconds) = TAKT Time

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When you subtract lunchtime and breaks, you arrive at a time of 9 hours of actual time that work can be done. Convert 9 hours to minutes by multiplying 9 times 60 minutes to get 540 minutes. If you take 1080 parts and divide by 540 minutes you discover you need a part made every minute or 30 seconds. So your pace or TAKT time is 30 seconds. Your TAKT time will drive your production process and flow. You will want to develop your processes to produce one piece every 30 seconds. You will also want to make it flexible enough so you can adjust the processes as the TAKT time goes up or down depending on customer requirements. This is done by adding or subtracting operators, adding or subtracting shifts or even adding a duplicate line if the customer demand increases significantly. This is often a much more cost effect way of manufacturing verses high priced, high volume equipment.

How was Lean Manufacturing developed?

The concept of lean was first developed by the Toyota executive TAIICHI OHNO (1912-1990). Mr. Ohno first identified the seven types of MUDA (waste). The two areas that had the greatest affect on Mr. Ohnos beliefs were the studying of the Model T Ford (1913) continuous flow in final assembly and his love of the American supermarket. In 1913 Mr. Ford designed the Model T Assembly Line so all the processes were in the same sequence as the build. Prior to this all like processes (stamping, welding, etc.) were grouped together creating batch manufacturing. While in the United States Mr. Ohno realized the American Supermarket

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stocking and restocking methods were far superior to the methods used in heavy industry. Mr. Ohnos Lean ideas were first put into practice immediately after World War II in Japan. In the early 80s, several Japanese manufacturers built plants in the US and operated then with Lean principles. The success of these plants proved Lean was not just a Japanese cultural phenomenon, but could be successful outside Japan.

Does anyone Own Lean Manufacturing?

Not only does no one own Lean, but the company that has been the most successful, Toyota Motor Manufacturing, is willing to share, in detail, their success story with all parties; even their competition. You can schedule a visit to Toyotas Manufacturing Facility in Georgetown, KY and they will conduct a tour with a oneday information seminar. The first half of the seminar includes an overview of Lean and how Lean is applied. The second half is a panel discussion consisting of both group and team leaders and team members. In both sessions, all questions are openly discussed and answered. There are also several universities who do an excellent job in teaching Lean Manufacturing. Highly recommended are: University of Michigan University of Kentucky University of Dayton

In addition to the above, there are many books on Lean and a non-profit organization to promote Lean called the Lean Enterprise Institute. To learn more about the Lean Enterprise, visit their web site at www.lean.org.

What can Lean Manufacturing do for me?

Lean can give your company a competitive advantage. Lean Manufacturing principles can help you reduce your manufacturing lead time; improve the quality of your products and reduce your new product development time. All of these will be of direct benefit to both you and your customer. What if your competitor(s) implement Lean and you dont? In evaluating the advantages of Lean Manufacturing you should compare your company to the best in class of other companies. How does your company rate compared to World Class Lean Organizations?

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Metrics Manufacturing Lead Time Delivered Quality Delivery Performance Inventory Turns Manufacturing Space New Product Development Skilled Trades Response Production: Skilled Trade Ratio Change over time

World Class <1 Day 3 PPM 99 + % >50 Many Companies Target 365 (one/Day) 35-50% Less than Mass Producers 6 months less than Mass Producers <2 minutes >20:1 <TAKT Time

Your Company ? ? ? ? ? ? ? ? ?

How does Lean Manufacturing save me money?

Lean Manufacturing can save you money in a variety of ways. When moving from batch production towards one-piece flow, the savings can be realized by increasing your inventory turns and reducing your Work In Process (WIP) inventory. With the money saved you can: Reinvest to grow the business Reduce the debt Add to the bottom line profit Moving towards one-piece flow will also increase your quality level resulting in increased profit. One-piece flow will help you uncover any defects while the problem is relatively small. A reduction in the amount of floor space required will also save you money. Lean Manufacturing can often lead to a floor space reduction of 35-50%. This additional area can be used to expand your business and maybe even save the need for a plant expansion.

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With Lean Manufacturing you only produce to meet your customers requirements (when they want it, in the quantity they want). When this becomes your mindset, you will be able to meet these requirements with less capital equipment, reducing your investment. See Addendum #2 for examples of actual results others have achieved.

How would Lean Manufacturing change my operation?

The first change occurs when you learn to see your organization in a new way. Once you see what are there, areas of waste become apparent and a plan for change soon follows. Every plan is different, but the common factors are eliminating the seven types of waste.

How do I learn to see my organization?

To see your organization means to understand the processes and flows of your product from incoming raw material to shipped final goods. The best way to see is to do Value Stream Mapping. Value Stream Mapping (VSM) involves diagramming every process required to produce your product or service in a step-by-step block diagram form. Complete door-to-door flow is covered from receiving raw materials through each manufacturing process to shipping final product. Companies are often surprised to see their flow looks like a bowl of spaghetti, with the product being transferred all around the plant to be processed. Often a simple rearrangement of operations can bring surprising results. Once you VSM your current state, you VSM your future or proposed state. This is the point where you move your operation from a traditional batch and queue manufacturing line to a one-piece flow lean cell.

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How do I learn how to do Value Stream Mapping?

The book Learning to See by Mike Rother and John Shook was written as a handbook for Value Stream Mapping. You can purchase this book from the Lean Enterprise (www.lean.org). Continental Design and Engineering offers a 2 day Lean Workshops at your site, which teaches Value Stream Mapping along with mapping a production line in your plant. (see page __) Then we help you apply Lean principles to work out your future state and develop your Lean plan.

Once I have a plan for Lean, how do I implement it?

Once you have completed the future state of your VSM on paper, you need to see your plan in the physical universe. Just as manufacturers make full size mock-ups of their newly designed product before they are put into production, you need to make a mock-up of your newly designed Lean Cell. This is commonly done with inexpensive materials such as Styrofoam sheets, PVC pipe and chicken wire. Its not pretty, but it gets the job done.

Typical Styrofoam mock-ups

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Building a life-size, 3D model of your Lean cell allows you to see improvements you would never see on paper. You can easily make changes before you build or buy expensive equipment. An additional benefit of your 3D Styrofoam mock-up is the actual operators can have input in the design of the cell. They will make many suggestions that will improve the operation. The implementation of the cell always goes better if the operators have input and ownership of its creation. For many reasons, it is well worth the time to build 3D mock-ups of your Lean cells.

Who should build the 3D mock-ups?

Some companies have their staff engineers build the mock-ups. Other companies have their design houses build them. At Continental, we often build the mock-ups for our customers using experienced Lean designers and engineers working side by side with our customers engineering staff and plant operators.

How do I get started in Lean Manufacturing?

First you need to get yourself educated in Lean Manufacturing. You have started by reading this booklet. Now you need to read Lean Thinking by James Womack and Dan Jones. Some companies make this required reading for all of their technical and management staff. Once you start implementing Lean in your company there are two books that you will need as textbooks: Learning to See By Mike Rother & John Shook Lean Enterprise Institute 1999 5S For Operators Adapted from Hiroyuki Hirano Productivity Press 1996 Additional books and other resources for training are listed in the addendum of this booklet. Continental Inc. offers a 2 day hands-on workshop in your facility whereby we combine basic training on Lean while at the same time applying these principles to one of your operations. This includes Value Stream Mapping of the operation. The result is you and your staff understands the basics of

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Lean and have a well worked out plan to apply these principals to one of your lines. You may also want to attend Lean conferences or training held by the Lean Enterprise or the Society of Automotive Engineers (see www.sae.org). You can also start an organization of manufacturers in your area to share ideas and information. In Indiana, we have started the Midwest Lean Alliance for this purpose. This Alliance meets three or four times a year at a members facility. For more information see the address in the addendum.

We highly recommend you visit Toyota in Georgetown, KY. Their address and phone number are also listed in the addendum.

Once I understand Lean, how do I get the ball rolling?

In some companies, the thrust to go Lean comes from the top of the organization. This is usually the most successful. However, we have worked with several companies that have implemented Lean from the production floor. This works well in companies that give a great deal of authority and autonomy to their production supervisors. The person who decides to implement Lean and is the major force in this implementation is called the Change Agent. The Change Agent is key to getting Lean implemented since the normal course of action is to continue what has always been done in the past. The Change Agent must get beyond the normal and usual to effect the dramatic shift in operations that Lean requires. However, once others see the equally dramatic results of Lean, they get on the bandwagon and the whole Lean conversion becomes much easier.

Will you be the Change Agent?

Do we need outside help to get Lean?

Once the decision to go Lean is made, companies often employ a Sensai, which is a Japanese term for teacher. The best way to find a competent Sensai is to get a referral from a company in your area that has successfully implemented Lean. Some companies do not like to hire outside consultants or trainers, but prefer to train their own staff or hire an experienced Lean Professional to hold the role of Sensai. Continental offers both training and technical staffing to help companies in these endeavors.

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After we understand Lean and have lined up some help to go Lean, what is our next step?
To make such a major change in your operation, there must be a motivating factor such as threat of lost business or cost pressure. This motivating factor is called a crisis. An example of a crisis would be a demand for a 3% price decrease from your customer that would make you unprofitable. Another crisis would be threat of losing the business to a foreign competitor.

A crisis motivates you and your staff to rethink the business and creates a situation that demands change. Without a crisis, things normally run as they always have run and change is looked upon as a bad thing. If there is no immediate crisis then you must create a crisis.

How do I create a crisis?

There are several ways to create one. Example #1 Benchmark your competition. By doing this you will surely find areas that they do better than you. Use Lean to leapfrog your competition. Example #2 List a new customer that you would like to acquire, but has higher demands than your current customers. A customer is currently using Lean Manufacturing principals would be a good target for this crisis. Use this created crisis as the impetus to implementing Lean in your plant.

Once we have identified or created a crisis, what is next?

Next, you need to map your Value Stream as defined above. Some companies start by Value Stream Mapping the entire plant. Others pick one manufacturing line

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and map that. Whichever one you do, it is vital to not skip this step. If you have mapped the whole plant you now need to pick what looks to be the most fruitful area for change and get started. For example, if you made 6 different parts in your plant and part #3 has extremely high rework, you know you would make a major impact by starting there with Lean. The Value Stream Map will point you to the highest area of MUDA (waste). Simply start implementing Lean there. To summarize five-step process to becoming Lean which are fully outlined and detailed in the book Lean Thinking are: 1. 2. 3. 4. 5. Find a Change Agent Find a Sensei Seize (or create) a crisis Map the entire Value System Pick something important and get started

Is There Certification Associated with Lean Manufacturing?

The Society of Automotive Engineers (SAE) has established SAE J4000 in which they will train, test and certify individuals as first and second party assessors. The purpose of J4000 survey is to establish an objective benchmark of ones current state in pursuit of Lean Operations. The content strategically isolates areas of business into (6) six categories: 1. 2. 3. 4. 5. 6. Planning & policy Training Suppler Finances Management Quality

It will identify strengths/weaknesses within the value stream of company operations, as well as provide a positive tool for comparison & contrast between supplier and customer. It will also help to open areas of communications, meanwhile establishing action items, target dates and individual responsibilities. The ultimate goal is continuous improvement involving all areas of business. SAE J4000 is on its way to becoming to Lean Manufacturing what TS16949 and ISO9000 has become to quality.

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To become certified as an assessor requires a four day training session. Two days are spent on management application track and two days on an operation application track. After successfully completing the seminar and passing the required test, the individual will be a certified assessor. Continental Inc. provides certified assessors for their clients. For more information contact: Performance Review Institute (an affiliate of SAE) 161 Thornhill Road Warrendale, PA 15086 Phone 724-772-1616 Fax: 724-772-1699 www.pri.sae.org

Can you tell me more about the Lean Implementation Workshop you offer?
Continental offers a two and one half day workshop to help our customers develop Lean Manufacturing practices. 1st One of your assembly processes is selected, such as a specific product family or an assembly area. 2nd Continental takes your group step by step through Lean Manufacturing basics with application to the specific area selected. 3rd Continental helps you develop a plan to take this process from current state to a true lean process.

TYPICAL AGENDA
FIRST DAY SECOND DAY Introduction/Sign-in Sheet Machine Balance Chart Skills Assessment/Results Operator Balance Chart 5s/7 Types of Waste Equipment Design Establish TAKT time Material Flow Value Stream Mapping-Raw material Pitch/Containerization to finish material to finish product (Mass vs. Lean) THIRD DAY (HALF DAY) Plant Layout Future State Getting Started Evaluation

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WORKSHOP DELIVERABLES:

Participants will have a good grasp of Lean principles and the tools required for its implementation. Hands on experience with a real-world Lean project. A written description and plan of the future state (New Lean Manufacturing Cell) with enough detail to immediately begin implementation.

See Addendum #2 for actual results others have achieved in the workshops.

How expensive is it to implement Lean Manufacturing?

Since the whole emphasis of Lean is to do more with less, the transformation to Lean is not a costly one. One obvious cost is Lean training and/or consulting. However, once you start to implement Lean, your savings will quickly cover those costs. The equipment used in a Lean cell is usually much simpler than todays overautomated manufacturing lines, saving money. Often old equipment can be redeployed for a small cost. Sometimes new equipment must be designed and built, but this should only be done if the result is a significant savings. In short, if you are not saving significantly more than you are spending on Lean, then you are not doing Lean. Lean eliminates waste, thereby saving money. You simply cannot implement Lean without saving money.

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While the implementation of Lean Manufacturing is not a costly journey in terms of money, it does require a long-term commitment in terms of time and effort. Once you start the Lean journey in your organization, it will be 12-18 months or more before you complete the transformation. Even then you are not done, because part of Lean is to continuously improve your processes for the total life cycle of the product.

What are the major barriers to implementing Lean Manufacturing?

The one major barrier is starting Lean Manufacturing without top management total understanding and support. There will be times you will take one step backwards in order to go two steps forward. Without this total top management support the skeptics may want to cancel all activities and call it, Just another program. Lean Manufacturing is not a program, but instead is a continuous never ending journey. In order to get the confidence of the entire organization it is important your first activity be a winner. Pick an activity with both high visibility and an excellent chance for success. Once you get your first Success Story, it will be easier to go onto the next area.

The final question Why Lean?

To best answer this question we will quote from James P. Womack and Daniel T. Jones from their book Lean Thinking: Lean thinking can dramatically boost productivitydoubling to quadrupling it, depending on the activitywhile dramatically reducing errors, inventories, onthe-job accidents, space requirements, time-to-market for new products, production lead times, the cost of extra product variety, and costs in general. At the same time, these simple ideas can make work more satisfying by introducing immediate feedback and facilitating total concentration, and they can damp the business cycle, itself the cause of an enormous waste of resources. They require little capital and they will create rather than destroy jobs as managers learn to use them properly. Finally, they provide a bridge to the next great technological leaps by pulling the economies of the developed countries out of their current stagnation and providing resources for research. All that remains is for enough investors, managers, and employees, like the change agent heroes of these pages andwe hopeyou the reader, to create a vast movement, in North America, Europe, Japan, and every other region, which relentlessly applies lean thinking to create value and banish muda.

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GLOSSARY
Change Agent Someone who will lead the company from the traditional manufacturing mentality to becoming a Lean organization. This person may come from within or outside the company. (Japanese Poka-Yoke) Also called Mistake Proofing. A system that addresses both the product and the processes to detect errors before they become defects. A method of workplace organization and visual controls developed by Hiroyuki Hirano. Japanese Americanized Seiri (Organization) Sort Seiton (Tidiness) Set in Order Seiso (Purity) Shine Seiketso (Cleanliness) Standardize Shitsuke (Discipline) Sustain How many times you can Turn your money over in a year. This is expressed as a ratio of the total inventory to the annual sales. Example: If the dollar value of the inventory (a number that probably must be reported to both your banker and the government) is $5,000,000 and the annual sales are $25,000,000 the inventory turns is five. If the inventory can be reduced to $1,000,000 the inventory turns become 25. Increasing your inventory turns may require a paradigm shift by your banker who may think inventory is something of value rather than MUDA. Producing the product at the correct time in the correct amount. To meet the customers requirements No More; No Less. The opposite of Just-In-Time is Just-In-Case, avoid this temptation. The Japanese word for continuous improvement to eliminate waste. As the name implies with continuous improvement you are never done, even the improvement can be improved. The time that is required from receipt of order until shipped to the customer. The Japanese word for waste or any activity that does not add value. Moving the product through each operation (both in manufacturing and in the office) as a single part, never handled in batches. A systemic method of measuring the work being done within the cycle time of the operation. The work is then divided into: Value Added Time Incidental Work Waste (MUDA) Then a conscious effort is made to eliminate the waste and reduce incidental work. Parts per million. The number of defective parts the customer receives per million parts shipped. This can be used to measure your supplies as well as your customer use, to measure you.

Error Proofing

Five Ss

Inventory Turns

Just-In-Time (JIT)

Kaisen

Lead Time MUDA One-Piece Flow Operator/Machine Balance Charts

PPM

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Paradigm Shift

Changing ones concept as what was believed to be correct. EXAMPLE(S) A production machine must be kept running all the time. to Its ok for a production machine to be idle, but not ok for an operator to be idle. Waste is scrap and rework to Waste is anything that doesnt add value to the product or Waste is anything for which the customer is not willing to pay. Also called Error Proofing, Mistake Proofing or Zero Quality Control (2QC). Poka- Yoke is a system and/or a devise that prevents errors before they become defects. With Poka-Yoke operators are not blamed for the errors, but instead finds ways to keep errors from becoming defects. When used with other Lean Principles Poka-Yoke can be a very valuable tool in the overall Lean Manufacturing process. The ratio of the number of production operators to the number of skilled trades personnel. The Japanese word for teacher. In acquiring Lean Knowledge the Sensei often is personally involved with the student. The German word for Pace or Rhythm used in Lean as the rhythm of the plant. i.e.-If the customer wants a part every 30 seconds, the plant (or the Lean Cell) should feel the heart beat of producing a part every 30 seconds. Total available production time divided by the customer & requirement. Note: Include all planned activities Clean-up Safety Meetings Etc. EXAMPLE: (1)8 Hour Shift=480 Minutes-(2) 10 Minute Breaks=460 1840 Pieces/Day Customer Requirements TAKT Time= .25 minute or 15 seconds

Poka-Yoke

Production: Skilled Sensei

TAKT

TAKT Time

Traditional Manufacturing

Grouping like processes together (paint, welding, fabrication, etc) and then making large batches of a part and holding them in queue waiting (Mass Production) waiting for the next process. Also called Batch-and- Queue. Value Stream Mapping A systematic method to identify all the activities (door-to-door) required to produce a product or product family. The Map will include both the flow of material and the flow of information. It should be first used to describe the current state and then redone to depict the future state.

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Addendum #1 Lean Manufacturing Resources

The Lean Enterprise Institute PO Box 9 Brookline, Massachusetts 02446-0001 www.Lean.Org Productivity Press PO Box 13390 Portland, OR 97213-0390 Continental Inc. 1524 Jackson Street Anderson, IN 46016 www.continentalinc.com SAE International 400 Commonwealth Drive Warrendale, PA 15096-0001 www.sae.org Doug Draper Mail Drop: GA/CR-K Toyota Motor Manufacturing, Kentucky, Inc 1001 Cherry Blossom Way Georgetown, KY 40324-5700 Telephone: 502.868.3026 Fax: 502.868.3711 Email: ddraper@tmmna.com Midwest Lean Alliance 1524 Jackson Street Anderson, IN 46016 Telephone: 765.778.9999 Fax: 765.778.8590 Provides Lean Tools Training & Publications

Provides books about Lean

Provides Lean Hands-on Workshops and Consulting

Provides Lean Standards (JS 4000) and Lean Auditor Training of Certification For the Toyota Production System Seminar & Tour

An organized group of manufacturers who are interested in implementing Lean

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Addendum #2 Examples of actual results others have achieved through the Continental Workshops
Lincoln, Nebraska
Metrics Production/ Operators WIP Floor Space Production Lead Time Mass or Batch 2000/Shift 8 Operators 10,716 480 FT 3.0 Hours Production Lean Manufacturing 2,667/Shift 6 Operators 20 214.5 FT 3 minutes Improvement 44% Nearly One Piece Flow 70% 98%

Oklahoma City, Oklahoma

Metrics Production/ Operators WIP Floor Space Production Lead Time Mass or Batch 7200/Day 121 Operators 4618 10,540 FT 11.54 Hours Production Lean Manufacturing 7200/Day 78 Operators 2909 5670 FT 6.16 Hours Improvement 36% 37% 46% 47%

Oklahoma City, Oklahoma

Metrics Production/ Operators WIP Floor Space Production Lead Time Mass or Batch 2918/Day 56 Operators 6541 pcs. 16,250 FT 2.25 Days Production Lean Manufacturing 3648/Day 48Operators 2234 pcs. 12,000 FT .62 Days Improvement 31% 66% 26% 72%

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Nogales, Mexico
Metrics Production/ Operators WIP Floor Space Production Lead Time Mass or Batch 1700/Shift 11 Operators 2,067 1826 FT 126 minutes Production Lean Manufacturing 4518/Shift 9 Operators 53 422 FT 5 minutes Improvement 76% 97% 80% 96%

Little Rock, Arkansas

Metrics Production/ Operators WIP Floor Space Mass or Batch 645 Min. 2 Day TAKT 74 Time 8.8 Units 3000 FT Production Lean Manufacturing 430 Min. 3 Day TAKT 63 Time 5.0 Units 2668 FT Improvement 43%

43% 11%
Most of the savings in walk time.

Production Lead Time

4.4 Days (13.2 Shifts)

1.67 Days (5 Shifts)

62%

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Addendum #3 Books The following books can be obtained from:

PRODUCTIVITY Productivity, Inc. Dept C04 1 P.O. Box 13390 Portland, OR 97213-0390

5 S FOR OPERATORS
5 Pillars of the Visual Workplace Created by the Productivity Development Team Item# 5SOP-C04

ONE-PIECE FLOW Cell Design for Transforming the Production Process Kenichi Sekine Item# 1PIECE-CO4 POKA-YOKE Improving Product Quality by Preventing Defects Nikkan Kogyo Shimbun, Ltd. & Factory Magazine (eds.) TODAYAND TOMORROW Henry Ford

A STUDY OF THE TOYOTA PRODUCTION SYSTEM

From an Industrial Engineering Viewpoint Shigeo Shingo, Translated by Andrew P. Dillon Item# STREV-C04

MISTAKE-PROOFING FOR OPERATORS

Created by the Productivity Development Team Item# ZQCOP-C04

The following books can be obtained from: The Lean Institute P.O. Box 9 Brookline, MS 02446-0001 www.lean.org
TOYOTA PRODUCTION SYSTEM Beyond Large-Scale Production Taiichi Ohno Lean Thinking By James P. Womack & Daniel T. Jones Simon & Schuster 1996 Learning to See By Mike Rother & John Shook Lean Enterprise Institute 1999 The Machine That Changed The World By James P. Womack & Daniel T. Jones Simon & Schuster 1990 Creating Continuous Flow By Rick Harris & Mike Rother

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ABOUT THE AUTHOR

Tom Epply is a leading authority on making the benefits of Lean Manufacturing a reality. He is internationally recognized as a Lean Consultant. Toms introduction to Lean started in 1992 with General Motors. He has continued with numerous successful Lean production implementation consultations for companies such as Molex, Remy Inc., Delphi Engine & Energy Management and Unit Parts. Toms monthly Lean Workshops have been delivered throughout the United States and Mexico, resulting in millions of dollars in annual savings. Toms background includes over thirty years with General Motors, where he gained hands-on experience in all functional areas. Among them are product engineering, manufacturing, engineering and operations for a wide range of products such as starting motors, alternators and electrical components. After retiring from General Motors, Tom became President of Continental Inc. in Indiana. In addition to his focused involvement in Lean consultations, he has been instrumental in the companys growth of 400% + in annual revenues, which has resulted in numerous regional and national award recognitions for business achievement. Tom received his formal education at Ball State University and New York University. He has remained informed on the latest in Lean Manufacturing technology studies at the University of Kentucky, the University of Michigan and at the Toyota Plant in Georgetown, Kentucky.

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ORDER FORM
for The Lean Manufacturing Handbook Name __________________________________________ Company _______________________________________ Address ________________________________________ ______________________________________________ Email: __________________________________________ Phone: _________________ Fax: ____________________
Price per Handbook .......................................................................... $3.00 Packs of 10 Handbooks .................................................................. $20.00 Shipping, handling and taxes are included in above price.

Quantity

Price

Total

Enclosed payment or PO# __________________________ Mail or Fax order form to: Continental Inc. 1524 Jackson Street Anderson, Indiana 46016 Phone: 765.778.9999 Fax 765.622.0697

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