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Seeing
theWhole
mappingthe
ffi
SHINGC
Pt<I.ZF
valuestream
by
DanJones
JimWomack
foreword
byJohn Shook
<r
theWhole
Seeing
Mapping
By Dan Jones
Forevvord
the Extended
and Jim
by John
Shook
Womack
Value Stream
With gratitude to Dan Jones'scolleaguesat the Lean Enterprise ResearchCcnter, Cardiff L.lniversity,
in particularNick Rich, Dave Brunt, Dave Simonsand MatthiasHolweg, who helped pioneerextended
value-streammapping.
And with further gratitude to our reviewers,editors and designers(who bear no responsibilityfor
the remaining faults):JoseFerro, Bruce Henderson, Dave LaHore, Graham Loewy, Dave Logozzo,
Bob Morgan, Guy Parsons,Atisa Sioshansi,Peter Tassi,Jeff liimmer, Helen Zak, Maria Elena Stophe1
and Thomas Skehan of OffPiste De sign.
And with specialgratitude, as always,to John Shook.
ISBN 0-96678,+3-5-9
All rights rcserved.
Design by Oi'f-PisteDesign, Inc.
Printed in thc LISA
May 2008
tr
F
F
F
F
FOREWORD
When the first item in the Lean Tool Kit, Learning to See,was launched in
June of 1998,
we at LEI began to hear from managersin many industriesthat "this is rhe tool we have
been looking for." Readersquickly realizedthat the grear power of Learning to Seelies in
focusingattention on the value stream for inclividual product families within plants. Rather
than concentratingon isolatedprocessesalong the value srreamor aggregatedactivities
serving many value streams,readerscould suddenly see how to optimize the flow of each
product from receiving to shipping. This insight was breathtakingfor many managers
caught up in narrow techniques or looking at only one activity in a complex system.
As more and more people heard aboutLearning to Seeand began to practicevalue srream
mapping' we began to hear of additional needs. "How can we introduce continuous flow at
the processlevel within facilities?"And, "How can we expand the scopeof value stream
mapping beyond individual facilities to the extended value stream from raw materialsto
the end customer?"Many readerssuspectedthat if there was vastmwda within the walls
of each facility rhere was even more mwda between facilities and firms.
We had been thinking about this issuelong beforeJune of 1998.Indeed, the initial ourline
of Learning to Seedevoted equal attention to mapping the extended value srream.However.
we knew that extended mapping is more challengingthan facility-levelmapping and we soon
concludedthat we would need severalpublications.In addition, we realizedthat managers
would do well to hone their skills by "learning to see" within a limited areabefore venrurins
forth to "see the whole".
We therefore included a diagram in Learning to Seeillustrating different levels of mapping.
We've recently addressedthe processlevel with Mike Rother and Rick Harris' Creating
Continuous Flow.In Seeingthe-Whole we tackle rhe higher, extended levels.
ollf'
a
It
arY
)
Why is an extended map harder to draw? It's not becausethe fundamental concept is
different. At every level of mapping, we are simply observingand writing down every step
in information processingand physical transformationfor individual product families.We
observethe flow of customer desiresmoving up the value stream,in the form of orders or
schedules,and then observethe progressof products moving downstreamin responseto
this information, from raw materialsto finished items.
Extended mapping is harderbecausewe need to map acrossplant, divisional,and company
boundaries.In addition,we must pay carefulattention to the variability in order and materials
flows. Finally, we need to think about untangling, simplifying, and "right sizing" complex
logisticsand informarion systems,large facilities,and high-scaleprocessingtechnologies
servingmany value streamsand operated by many firms.
Conducting extended mapping requires the cooperationof many departmentsand divisions
within firms and between firms. These entities rarely think about the total flow of individual
productsand ofren hide information from each other while pushing in opposite directions.
In addition, extended mapping requires that line managersdevote hard-to-sparetime to
direct observarionof each product family's value stream.Failing this, higher-levelmapping
easilybecomesa staff exercise(or a consulting project) yielding only another report that's
soon forgotten.
These additional dimensionsof extended mapping truly are challenges.However, we have had
considerablesuccessin overcomingthem, including recent instancesduring the prepararion
of this workbook.We now are certainthat change-agentmanagerscan meet thesechallenges
and we know that time alreadydevoted to learningto see at the processand the facility levels
will prove invaluableas you expand your field of view.
As with Learning to See,we hope usersof Seeingthe'Whole will tell us how to improve
this tool and will be willing to sharetheir experienceswith the lean community. Numerous
user suggestions,basedon hands-onexperiencewith value stream mapping at the facility
level, have permitted us to improve Learning to Seeseveraltimes since its first publication.
We look forward ro an intense and continuing dialoguewith the lean community on Seeing
the'Whole as well. Pleasesend your comments and suggestionsta stw@lean.org.
John Shook
Senior Advisor, Lean Enterprise Institute
Ann Arbor, MI, USA
,6.:-;;*#'d"
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March 2002
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CONTENTS
Foreword
by John
Introduction:
Shook
Your Focal Plane
Changing
Part l:
Getting
Started
Part ll:
an Extended
Part lV:
Future
State 1
Part V:
Future
State 2
Part Vl:
The ldeal
State
Future
States
Gonclusion
About
the Authors
Appendix
Value
Strearn
Appendix
Facility-Level
Appendix
Facility-Lewel
lcons
Gurrent Stite Maps
Future State Maps
Mapping
INTRODUCTION
Ghanging
For yearsnow we have loved to "take a walk" along the entire value stream for a
given product, looking for value and waste.We've done chis for dozensof products
in many industriesand followed streamsacrossthe world. We presentedour first
example in Lean Thinking (1996)when we drew the path of a humble cola can.
This simple product with only three parts (barrel,top, and "pop-top") traveled 319
days through nine facilities owned by six companiesin four countriesto progress
from ore in the ground into the hands of the customer.Yet during this long march
only three hours of value creating activities were performed and the great majority
of the steps- storing,picking, packing, shipping, unpacking, binning, checking,
reworking,and endlessmovementsof informationto managethe system'scomplexity
- createdno value at all.
Looking at the whole has alwaysseemed natural to us and doing so will always
suggestways to slashcostswhile dramaticallyimproving responsiveness
and qualiry.
Yet most managerswe have encounteredon our value streamwalks want to stand
in one place and look at only one point - their machine,their department,their
plant, their firm. Often, the machine, the department, the plant, and the firm are
performing well on traditional measures- high labor and machine utilization, low
defects,on-time shipments-
However, when we get managersto change their focal plane from their assetsand
their organizationto look at the product itself and what is actually happening on its
long journey, they immediately realizethat the performanceof the entire value
stream is abysmallysub-optimal.Indeed, most wonder how they have worked for
years in traditionally compartmentalizedoperationsand somehow failed to notice
the waste everywhere.Then they wonder what they can do about the mess.
What is Extended
S e l ecti n g
a P ro d u ct
Family
PARTI: GETTINGSTARTED
Final
Assembly
Component
Assembly
Apogee
Summa
Part
Production
Rarru Material
Production
Kappa
Asia Steel
Platform A
/'
Platform B
Delta
Zenith
Platform A
Platform B
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Platform B
\.,
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Steel
Platform A
Platform B
F i r m s a l o n g s i m i l a rv a l u e s t r e a m so f t e n h a v e c o m p l e x r e l a t i o n sw i t h e a c h o t h e r .
Pr o d u ct
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fro m
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Summ a' s
Per spectiwe
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Becausethe product family is defined from the vantagepoint of the final srep mapped, the
conceptis essentially"fractal".That is, you can define product families from many starting
points and map backwardup value streamsof varying lengths.For example,whar appearsro
be a product family for an armaturemanufacturer(largearmaturesfor alternators)is simply
one of many component parts for an alternatorproducer (who might define a product family
as largealternators).And the largealternatoris just one component among many from the
standpointof the auto assemblerwho defines product families in terms of vehicle platforms.
As you selectyour start point and move back upstream,it is best for your first map to follow
the path of a single family and a single component in the product. This is becausethe first
obiectiue of extended mapping is to achieue a breakthrougb in shared consciousnessof
waste and to identify systematicopportwnitiesfor eliminating the waste.It is highly likely
that the wastesidentified by following one component back upstreamwill occur in roughlv
equal measurein every componentgoing into the finished product.The alternativeapproach
of mapping the value stream of every component going into the product is time consuming
and costly and we have found that it overwhelms managerswith too much data.
In subsequentrounds of mapping -
PARTI: GETTINGSTARTED
D e t e r mi n i n g
a Ma n a g eable
Field of Vievv
The ideal map would truly show the whole. 1'hat is, it would srartwith rhe end cusromer
who usesor consumesthe product.The map would then follow the product all the way
up the value streamto moleculesin the ground (or in the rccyclingbin), showingall thc
wasted actionsand information lossen route. However, just as trying to map all of a
product'sparts back upstream is overwhelming, trying to see roo far with your current
vision may be fruitless. We advisc novice mappersthat a lor can be learncd by looking
one or two facilities and firms upstrcam from wherever you start.This is the minimum
s c o p eo f c x t e n d c dm r p p i n g .
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The Wrong
and $taffs
A n u n d e r s t a n d a b lien c l i n a t i o ni n a n y f i r m w i t h b u s y l i n e m a n a g e r s
-and this surely includespracticallyall firms-is to delegatethe
task of creatingvalue stream maps to outside consultantsor to
internalstaff groups,typically in operationsplanning or process
improvementdepartments.However,in our experiencethis is
misguided.The findings of the consultantor staff expert are
rarely credibleto the managerswho need to take action and the
consciousnessraisingexperienceof walking the value stream
together-discovering the waste and jointly agreeingto a crossfirm action plan-simply never happens.A beautifulreport is
produced by the consultantor staff team-and in our experience
the beauty and precisionof the maps is generallyinversely proportionalto their usefulness-but the findings are then fildd
away and soon forgotten.
Remember:Only managerstaking clear responsibilitycan fix
the mess. So the same managersought to draw the maps.
fi'|)
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PARTI: GETTINGSTARTED
Tvvo
A
Final
Diagnostic
Benefits
for
Functions
A Diagnostic
for Relations
Betrrueen
Firms
As teams start mapping, they are likely to make yet another discovery.Today we all use
languagestressingpartnershipand cooperationbetween firms sharingvalue srreams.
However, mapping teams in most caseswill discoveran enormousgap between these
high-level principles of collaborationand the day-to-dayreality down ar the level of
each value stream.If the value stream map showswidespreadconfusion and counterproductive actionsbetween firms at the value stream level, it will be obvious that
"partnership" at the top isn't translatinginto competitivenessat the bottom.
Fortunately,value stream mapping provides a clear and consistentlanguagefor firms
to start an intelligent conversationwith each other about the root causesof their shared
cost, quality, reliability, responsiveness,
and communicationsproblems.(Indeed, we
believe a relentless,fine-grainedfocus on improving each value srream,rather than
high-level agreementon principles, is what has given Toyota its edge in creating the
world's leanestsupply base.)A real bonus can be achieuedif the practical lessonsof
sbared ualue stream management can then be applied by each'firm to its relations
with its other customers and swppliers.
The Current
State Map
With the basic principles of extended mapping in hand, it's time to accompanya value
streamteam creating a map of the current state for a specific product family. This map
will characterizethe value stream as it is today.
We've chosento focus on a high-volumeautomotivecomponentoffered with a small number
of options- a windshield wiper consistingof a blade holding the actualwiping edge and the
arm attachingthe blade to the vehicle. This product is similar in complexity and variery to
the steeringcolumn bracket used to illustrate Learning to See.
We've decided to map only an intermediate portion of a total value srream,which runs its
entirety from the end user (you in your car) at the downsrreamend to raw marerials(iron
ore in the earth) at the upstream end. The portion we will map srartsat Alpha Morors, rhe
final assemblerof the finished vehicle, toward the customer end of the value stream.We
then proceedback up the streamthrough che facilitiesof Beta Wipers and Gamma Stamping
to the shipping dock at Michigan Steel, a raw materialsservicecenter.The five-member
team, from the four firms sharingthis portion of the value stream,will be led by the head of
supplierdevelopmentin the purchasingdepartmentat Alpha Motors and includesrhe product
line managerand the assemblyplant managerat Beta Wipers,the value streammanagerfor
this product family at Gamma Stamping, and the salesmanagerat Michigan Steel.
Windshield
W-per
Valrre
Strearn
Tearn
Information
flow
Michigan
Gamma
Steel
s.r". Manager
Stampers
Value Stream
Manager
Beta Wipers
f
Alpha
ProductLine
Manaoer
,,"n.*t*un",
Motors
Head of Supplier
Development
(Team Leader)
Material
flow
11
Windshield
Wiper
Assernbly
ancl
Fabrication
$
\B
.,
.--
brackets
windshield
A.
B.
G'
D.
E.
wiper
Assembly
and Fabrication
Steps
path
Before we start mapping, let's look at an exploded view of this product showing the parts
going into the wiper and its fit-point on the end product. Note that we will only map the
circled areain this initial map. This is to keep the map simple and to concentrateinitially
on raisingeveryone'sconsciousness
of the extended value stream.
.---
arm components
13
our windshield wiper comesin two specifications- high trim and standard
(HT and sr) - and in two sizes- small and large (s and L) to fit
two different vehicles (A and B). The right-hand and left-hand wipers
are identical on the vehicles in this example.The trim levels differ only
in the paint - a matte-black finish for the standardtrim vehiclesand a
glossy-blackfinish for the high trim models.The designsfor the two
models differ only in the size of rhe parrs,not in their number or basic
design.This means that the wipers are inrerchangeablefrom a final
assemblystandpoint becausethey use the same fit points and require
the same installationtime. The wipers clearly form a product family
becauseall of the actionsoccurringupstream- component assembly,
painting, and stamping - are in the same processsequencein the
same firms and use the same processingequipment with a few tool
and fixture changes.
with the product family clearly identified, the first step for the team is to
"take a walk" along the entire length of the value srreamto be mapped,
recordingthe facilitiesvisited, the transportlinks, every action performed
on the product' all information managementactions,and the time
required. we alwayssuggesrstarting at che customer end becausethe
customeris the point - indeed, the only point - of these materialflows.
No product should be advancingthat the customer doesn't wanr and
nothing should be happeningthat rhe cusromerdoesn'rconsiderof value!
For the wiper example, the list of actionson the product is shown in the
following list. Note rhat we have numbered all of the steps (73) in the
left hand margin of the list and comparedthese with value creating
steps (8) in the first column on the right. We have also recordedthe total
elapsedtime (total product cycle time) which sums the time required to
conducr all of the srepson a product (44.3 days) and compared this time
with the actualvalue crearingtime (54.7minures),which is the sum of
only the value creating steps.
Ph y s ica l
Total
A cti o n s
R e q uir ed
to Gr eate
a W indshield
Value
Creating
Steps
Steps
Total
Time
10m
Transport Link 1
2. Directship (truck),Tonawanda,NY (500 miles)
8h
Second-TierSupplier:
Gamma Stamping, Tonawanda, New York
3 . U n l o a dc o i l s
4. Receive& create ticket
5. Store coils
6. Conveycoil to Stamping Press1
7 . M o u n t o n c o i l r o l l e ra n d f e e d p r e s s
8 . S t a m p i n i t i a l( f l a t )s h a p e
9. Accumulatestamped parts during run
10.Convey parts bin to storage
1 1 .S t o r e p a r t s
12.Convey parts in bin to Stamping Press#2
13. Load parts in magazine,auto feed to press
1 4 .S t a m pf i n a l ( c u r v e d )s h a p e
1 5 .A c c u m u l a t ep a r t sd u r i n g r u n
16. Convey parts to storagearea
17. Store parts
18. Convey parts to paint shop
19. Rackparts on moving conveyor,clean,
d i p , p a i n t& b a k e
20. Remove parts,inspect,sort & accumulatein bin
21. Convey parts to storage
22. Store parts prior to shipment
23. Load parts for twice weekly direct ship
Transport Link 2
24. Directship (truck)to Harlingen,TX (1500
First-I'ier
First-lrer Supplier Warehouse:
Har,insen.
rX
T:tH,ffis,
26.Formallyreceive
27. Store Parts
10m
10m
14d
10m
5m
1s
4h
10m
48h
10m
10m
10s
4h
10m
48h
10m
130m
Sl*wt(.
.,;Kar-.
\?
. cnr$)lo'"
D - ' ' n '' i !
1s
10s
52m
96h
/r"gqo;.f..1*$
V\F'
Value
Create
Time
2h
10m
48h
10m
ols-Slrfi
/rq$'
W iper
10m
10m
48h
10m
15
Total
Steps
Value
Creating
Steps
Total
Time
Transport Link 3
29. Directship (truck)to Reynosa,Mexico
( 1 0 0m i l e sw i t h q u e u e a t b o r d e rc h e c kp o i n t )
6h
10m
48h
10m
8h
10s
4h
10m
8h
10s
4h
10m
Bh
10s
4h
10m
8h
20s
4h
10m
12h
10m
Transport Link 4
5 1 . S h i p b y t r u c kt o H a r l i n g e nT, X
( 1 0 0m i l e sw i t h q u e u e a t b o r d e rc h e c kp o i n t )
6h
First-TierSupplier Cross-Dock:
Beta Wipers, Harlingen,TX
5 2 . U n l o a dt r u c k
53. Cross-Dock
54. Store awaiting full truck
5 5 . R e l o a dt r u c k f o r d a i l y s h i p
Transport Link 5
56. Ship via multi-pick-uproute (truck)El Paso,TX
{ 6 0 0m i l e s )
Value
Create
Time
10m
10m
12h
1Om
l
96h
10s
10s
10s
Total
Value
Greating
Steps
Steps
Total
Time
Value
Create
Time
10m
10m
12h
10m
Transport Link 6
61. Directship to West Orange,NJ by truck
( 2 0 0 0m i l e s )
96h
10m
10m
48h
10m
10m
2h
1m
1m
10m
12h
2h
Transport Link 7
7 3 . S h i p t o C l e v e l a n dD i s t r i b u t i o nC e n t e rb y t r a i n
( 5 0 0m i l e s )
1m
1m
12h
Time
Distance
73
44.3Days
Value
Greating
I
54.7 Min.
17
L e a rn i n g
to S e e V alue
D r a vvi n g
a U se fu l
Map
18
State
Map
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However, for this information to be useful we need to simplify it and put it in a form
managerscan act on. The best way to do this is to group and summarize the data by each
of the facilities and transportlinks the product encounters.Again, the place ro starr is with
the customer,at the most downstreamend of the map. In this case,the customer is the
Alpha Motors Distribution Center, which interactswith car dealersto get end consumers
the products they want. We'll representthis organizationwith a facility icon placed on rhe
right side of the map. Underneath this icon we'll draw a databox recordingthe customer
requirement for size and frequency of shipmenr.
Note that this facility is a cross-dockingoperationwhere vehiclesare sorted and sent
onward as quickly as possible to several regional storageareasacrossNorth America.
From there they go to auto retailersand then into the hands of the customer.Thus our
intermediate-viewmap stops considerablyshort of the total value stream map thar ir may
be useful to draw at some point in the future.
19
a-L-14
lVichiganSteetl
ferviceco. I
DearbornHeights,
4--14
Gamma
stampins
I
I
fonawanda,NY
lbetaWipers I
I WarehouseI
lrr
|.t
Harlingen,TX
I betaWipereI
Agsembty
I
I
Reynosa,Mexico
To get from raw materialsto the Alpha Distribution Center, the procluctflows through
seven assembly,fabrication,warehousing,and cross-dockfacilities.These are:
o Alpha Motors' State street Assembly Plant in west orange, New
Jersey
o Alpha Motors' Cross-Dock,for many componentsfrom many suppliers,
in El Paso,'Ibxas
o Beta Wipers' Cross-Dock,for parts sent from severalplanrs ro many
customers,
in Harlingen, Texas
o Beta Wipers' ComponentAssemblyPlant in Reynosa,Mexico
o Beta Wipers' PartsWarehousein Harlingen, Texas
o Gamma stamping's stamping and Painting plant in Tonawanda,
New york
o Michigan Steel'sServiceCenter in Dearborn Heights, Michiean
Gurrent
State
Map
Shovving
All Facilities
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West Orange,NJ
We have createdtwo new facility icons not seen in Learning to See.One is a cross-dock
icon for facilitieswhere productsare not stored but instead moved immediately from an
incoming vehicle to an outbound shipping lane. The other is a warehouse icon for facilities
where incoming goods are sorted and stored before shipment to their next point of use.
(The iconsused in this workbook are displayedon the inside back coverand explainedin
Appendix A.) You may want or need to createother icons,of course,in particularfor
activitiesnot encounteredin our example.Just make sure that everyonc working on the
extended map Llsesthe same icons.
21
trn;Ww;1
I
I
ll
Gamma I
stampins I
Tonawanda,NY
I Warehciuee I
In
Harlingen,TX
t--RMaa6r'.-l
wrPl1o
h.
I
I
FG O\.
I
I
tathrrb"-l
I s;"v.I E?E=ro"vt.]
-1
Dd".t
a-=2oooppm
|
I oetaWipersI
Assembty
I
I
Reynosa,Mexico
RM56 h.
wtP41h.
FG12h
2Shifts
5Oavs
E?E = 1 Dav
Defects =
4OO ppm
You will soon discoverthat you can't successfullygather and summarizerhe informarion
needed for improving the value stream without drawing detailed currenr state in-facility
value stream maps for products as they move through manufacruringfacilities.This is why
masteryof the material in Learning to Seeis a prerequisitefor macro-mapping.
We've drawn current scatefacility-level maps for the three manufacturingfacilitiesalong
this value stream- Gamma Stamping, Beta Wipers Assembly,and Alpha Motors Assembly
-
in Appendix B of this workbook, and you'll want to append yorir facility-level maps ro
your current state macro map as well. Note that the data box under each facility contains
Shovving
All
Facilities
/L-L-1
| ,"il?,lf"",
I
Center
I
Cleveland,OH
l%otD"v--]
|
|
|
|
|
|
640^
42651
214Hr
32oB
2135f
1o7Hr
I oetawipersI
I Cross-DockI
|
.'---+ a
lsl
-l
1
Harlingen,TX
El?aso,TX
WeslOran6e,NJ
RM50 h.
wt?2h.
FG14h.
2?hifts
SDavs
E?E=1Day
Defects =
5P?^
"EPE = 1 Day" meaning "every part every day"), and the defect level (in parrs per million)
as reported by the customer at the next downstreamfacility (or by the customer'sinspector
at the point of shipment in the caseof the Alpha Morors Assembly Plant.)
We have not drawn facility-levelmaps for the Alpha and Beta cross-docksand for the Beta
partswarehouse.This is partly to keep the size of this guide manageableand alsobecausewe
will endeavorto eliminate these facilities altogetheras we move through progressivefurure
states.If your value streamswill require large distribution warehoutesin any imaginable
future
for example for serviceparts - or cross-docks,you should also draw maps
of these facilitiesas a guide to improving their performance.Exactly which facilitiesmerit
in-facility maps and in what detail will alwaysbe a matter of judgmenr, so be preparedto
adjustyour approachas your experienceaccumulatesand you encounterdifferent siruations.
|
|
I
I
I
I
T h e Ou a l i ty
S cre e n
As we look at the data in the facility boxes,we nore a trenclworthy of further crarnination.
At Alpha Motors Assembly the defect rate for wipers installed on rhe vehicle - def'ects
discoveredby a representative
from Alpha'sDistribution Division in a final inspectionjust
prior to shipment is 5 per million. (SinceAlpha is assembling250,000vehiclesper year
with two wipers per vchiclc, this means that two to three wipers per ycar arc rejccted at
final inspection,usually for scratchesin the finish.) Yer when we look at defects emerging
from Beta Wipers Assembly (asjudgcd by Alpha), we note that there are 400 def'ccrsper
million and when we look at defects emcrging from (]amma Stamping (asjudged bv Beta)
we note that there are 2000 defectivc parts per million. F'inally,when wc look at defccts
arriving ar Gamma from N,lichiganSteel the figure soarsro 10,000pcr million.
In brief, clualityis worseat every step up the value stream,a common phenomenonin
practicallyevery industrytoday.This meansthat to achieve5 clefectsper million (approaching
the Six Sigmalevel of 3.4 dcfectsper million), the prodr,rct
is flowing through a scriesof
qualitv screensin each facility,cach of which resultsin scrapand inspectioncost.The
slope
of this clualitygradient can surely bc reduced in firturc sraresanclit is importanr to nore
carefully the current slope to aid our thinking on how to do this. We therefore recommend
drawinga Quality Screen(asshown below) on the (lurrent Statemap. In this casewe have
placedthe diagramin a convenientspot in the rowerright-handcorner.
O.rrality
Screen
ppm
defects
2000
r500
1000
500
0
MICHIGAN
TO GAMMA
24
GAMMA
TO BETA
BETA
TO ALPHA
ALPHATO
ALPHAPC
Mapping
the Transport
Links
'fhe
next step, oncc the facilitv-level maps are drawn and the data have been summarized,
in facility boxes,is to add the transportlinks between the facilities.Tb do this, you may
need boat, train, and airplane icons,in addition to the truck icon frctmLearning to See.
In this example,we will use the airplaneicon with a dotted line for shipmentsexpedited
by air and a truck icon with the same stylc of dotted line fr-rrthose expedited by truck. Thc
the trcnd in
def'ectiveshipments:latc, early,or incorrect(the wrong product or in the wrong amount).
As is alscltypical in most industriestoday,we note that the furthcr up the value streama
O.ualitlz
and
Delirrerlz
lScreen
PPM
DEFECTS
2000
% DEFECTIVE
DELIVERIES
1500
10
1000
500
MICHIGAN
TO GAMMA
GAMMA
TO BETA
BETA
TO ALPHA
ALPHA TO
ALPHA PC
PARTII: THE CURRENTSTATEMAP
The
"Bottom
Line"
-2LzL-1
luichisansieetl
Sewiceco.
I
I
DearbornHeights, Ml
I
SteelCoits I
_N-
:\
l- 2"1_
lweekl I
u---*-
t\
ra;L
laf"a"lal
r1,l
t.\
oooo.or>
4-/14
Gamma
I P,, l-l
stampins
I
I
-2LzL-1
U-T
3t"w4#+
rrrrrrr+
Tonawanda,NY
Reynosa,Mexicot....
1
a
RM336h.
wrP110h.
FG4Ah.
l - ' FRM
f 56 h.
wt? 41h.
FG12h
35hifts
5Davs
E?E=3Davs
z5ntftq
SDavs
E?E=1Dav
Defects =
4OO ppm
Defec.ts
=zoooppm
o.3d.
o.25d.
20.6d.(3131e.)
22(3)
ril|Drv+
r^ ' o ' . . ,
Links,
zz't-21--1
//
qfil
/r
//
l xDay
| ,"flr,l&,",
I
Center I
I
Cleveland, OH
-1
,rooio^v
640^
|
|
|
|
|
|
4265r
214Hr
32oB
2135r
rc7Hr
|
I
I
I
I
I
WeetOrange,NJ
RM50 h.
wt?2h.
2xYear
FGIAh
2Shitrs
SDavs
E?E = lDav
Defects =
Sppm
4.Od.
o.5d.
4
4.Od.
o.5d.
4
o.5d.
2.Od. (12os.)
11(2)
Ouality
and
Delivery
Screen
.PPM
DEFECTS
defeds
2000
70 OEFECTIVE
DELIVERIES
1500
10
1000
t
,r,',r?*'
s00
0
MICHIGAN
TO GAMMA
GAMMA
TO BETA
BETA
TO ALPHA
ALPHATO
AIPHA PC
M a p pi n g
th e
l n fo rma ti on
Flow
The tcam has now completcd mapping the physicalflow of the product but the valuc srream
map is onlv half done. This is for the simple reasonthat if no clrstomcrsignalsa demand
for products from upstream,then nothing will flow. Or at least nothing shor-rldflow! We
thereforc need to go back to the upper right corner of our map and draw the flow of order
and prroductioninformarion going back from rhe customcr.
Howevcr, as we do this we nccd to warn you that mapping the information flow is the
'l'he
hardestpart of the task.
salcs,productioncontrol,and operationsgroupswithin most
companiestend to communicatepoorly and a managerwho fLrllytrnderstandsrhe infrrrmation
managementmethods of all thrcc groups is a rarity.Whcn you add the complexity of going
acrossseveralcompaniesand through sales,productioncontrol,and operationsdeparrmenrs
within eachcompany,it's not surprisingthat very feu, line managersseem to have useful
knowledge of how infclrmationis managedon a macro-scalc.
Cliven this rcality, vou shor"rldstart where ordersenter the sysremand follou' the ordcr flor,v
fiom department to department and from information managementsystem to infbrmation
managementsystem,first through the most downstreamfirm and then upstream through
the supplierfirms. Bc sure to use a pencil as you skctch informationflows and kccp an
eraserhandy! What's more, if you can, requcstthesedata aheadof your visit becausemany
facilitiesand IT departmcntsdo not have them readilv at hand.
To actuallydraw the informationportion of the extendcd map wc will need an additional
icon for production control, which we have drawn in the shapeof a compurer rerminal.The
first of these is for Alpha N,IotorsSalesOrder Bank. At this point orders are aggregatedand
placed in inventory (shown by order queue icons along the information flows). Thcv are
held trntil the weekly salesplanningmeeting that decidesthc specificarionof thc orders
that should be relcasedinto the system,given orders in hand from dcalers.These ordcrs
are then releasedupstream to the following firms and departments:
o Alpha l\{otors HeadquartersProduction Control
o Alpha N,fotorsAssembly Plant ProdLrctionControl
o Alpha NlotorsAssembly Plant Ntlarerials
Control
o Beta Wipers Headcluarters
ProductionControl
. Bcta Wipers AssemblyPlant ProductionControl
o Gamma StampingHeadquartersProductionControl
r (iamma StampingPlant ProductionControl
o Ntlichigan
Steel ServiceProductionControl
2A
Actions
Currently
Value Strearn
Required
to
Steps
Delays*
10 Davs
14 davs
6 davs
6 davs
6 davs
l,l davs
6 davs
14 days*
25 steps
58 days
8 nights
* All transmissions
areelectronic
and essentially
instantaneous.
The Value
of Information
At the sametime information is being releasedto the floor in each plant it is also being
sent upstream,from plant-level materialscontrol departments,in the form of daily
shipping releases.These are the preciseamounts of each part number the upstream
plant is authorizedto ship to its downstreamcustomer on the next pickup. These daily
releaseamounts are basedon known order lead times and the stocksthought to be on
hand at the downstreamplant.
From this it is apparentthat there are two separateinformation flows coming into each
plant - the weekly schedulefrom each firm's production control department and the
daily releasefrom the customer.Often, these flows are nor preciselysynchronized.So
a third information managementloop comes into play, which is direct communicarion
betweenthe materialshandling departmentin the downsrreamplant and the shipping
department in the upstream plant.
This direct link, usually a telephone voice line, becomesthe real production control
and shippingmechanismwhenevermanagersat the ends of this link overridethe
shippingreleasesand, in extreme situations,productionschedules.They usuallydo this
basedon their direct observationsof emerging shortagesand their judgment about what
to do in response.We have drawn these information flows between the plants with a
dotted line and our information expediting icon - an old-fashionedtelephone.
A Warning
on Order Data
As you move upstream don't confuse the customer's official
releasewith the amount each plant actuallymade. Instead
gather from each facility data on what was actuallyproduced
daily over an extendedperiod and compare this with customer
daily requestsin the form of shipping releasesso you can see
the relationof one to the other and the amount of variation in
both. We're alwaysamazedthat companiesawash in information
about what ought to happen do a poor job of recordingand
preservingwhat actuallyhappened.So you may need to dig a bit
or even assign an observerto captureaccurateinformationon l
plant-levelproductionand shipping performance.What you find
will be invaluablefor achievingyour future states.
Gurrent
State
Map
Showing
Information
Ftovv
I-"",,*I
| ?roduction I
Controt
I
I lr-J I
+_
6 days
f-MEI-I
14 dayo
Cleveland,OH
tdr
Fuffalo, NY
1
V
/v44ffi
luichiqanst,utl
servtceco. frji.
I
I lr{ |
6 daye
, I-1
-<
1""il?,21,"^l
DearbornHeights, Ml
Tonawanda,NY
,zl Control
f--
MiF--]
Harlingen,TX
I,
Dailv
I
I
7..'''''''''
(,
_/1/L.-1
oooo..>
-+
Tonawanda,NY
o
RM336h.
wt?110h.
FG4Ah.
t .2.*.Y"7"...'
,=;,,.;;, ,Trrrr+
'...fr..J
Reynosa,Mexicot....-
Harlingen,TX
t E TRM
] 56 h.
wt? 41h.
SShifts
25hif'rs
2 UaVS
5Davs
E?E=1Dav
Oefects =
4OO ppm
E?E=3Davs
Defects
=2000p?m
o.3 d.
+.od.
20.6 a. (3131e.)
32
.
T'"-1llr+
o.25d.
4.6 d, (3o s.)
-.''o..
Plymouth,Ml
I lf'J
lrN I
14 daye
10 dayo
birmingham,Ml
t--:-;----l
I vaity
Atpha
I
I
I Dietribution I
Center I
L
Ctevetand.oH
<1
/r-J -
//
//- PrE?-1
+zosr I
|
//
f--H----l
r
k
I--r-x{':'-
l.i,' l.l
Crrrr-r>
1,3"l.'
2135T
r c Zn r
|
|
'txDay
f 1"-L
z+ur I
32oD
'\
WeetOrange,NJ
Harlingen,fX
RM50h
wt?2h.
aaaaaaaaaloaaaaaaaaaaaaaaa
2xYear
FG14h.
2Shifts
5 Days
EPE = 1 Day
DefecI.s =
5ppm
o.5d.
4
o.5 d.
4.O d.
4.Od.
o.5 d.
4
2.8 d, (12Oe.)
11(2)
Ouality
MICHIGAN
TO GAMMA
and
Delivery
GAMMA
TO BETA
Screen
BETA
TO ALPHA
ALPHA TO
ALPHA PC
I
I
Demand Amplification
For the pasr year,Alpha Motors sales order Bank has senr very stable
weekly
orderscalling for 960 vehicles per day, five working days per week
to Alpha's
HeadquartersProductionControl. And HQ ProductionConrrol has releasecl
level
weekly buckets of orders to Alpha's Assembly Plant Production Control
and to
Beta HeadquartersProduction Control.
The actualbuild still variesfrom the schedule- due to pulling vehicles
out of
sequenceto correct defects or becauseof problems in the paint booth
or due ro a
lack of parts. However, by adjusting the scheduleand working overrime
at the end
of each shift as necessary,rhe output of Alpha Morors Assembly varies
by only
about SVofrom the 960 units planned for each day and all vehiclesbuilt
are shipped
on the daily train to the Alpha Distribution Cenrer.
Dernand
Arnplification
for Arpha
Motors
wipers/day
2800
amplification
ot +l-
2600
4Oo/"
2400
3OVo
2OVo
2200
10o/o
2000
1920
OVo
1800
-1Oo/"
1600
'20o/o
1400
-30o/o
1200
-40o/"
1000
March
15
ALPHA PRODUCTION
20
25
30
Similarly,the mix of models (A versusB) variesby only about 5% daily as does the
mix of wipers (StandardTiim with flat paint versusHigh Tiim with glossypaint.)
On average,Model A accountsfor two thirds of production and Model B one third
while StandardThim wipers accountfor two thirds of demand and High Tiim the
remainder.Thus production and shipments are fairly stable ar rhe cusromer(rieht)
end of our map.
Yet, as we plot the production and order/releasedataback upstream,we nore that
the amplitude of changesin both production and releasesincreasesmarkedly from
facility to facility. Minor variationsin production at Alpha Motors Assembly become
much larger by the time we reach Beta Wiper's assemblyplant, as shown below.
Dernanel
Arnplification
-nclrrding
Beta
Wipers
wipers/day
amplification
ol +l-
2800
4OVo
2600
30Vo
2400
I
I
2200
,,,
2000
1920
I
I
l,
1t
1800
t
ll
1t
I
I
I
1600
1Oo/o
I
I
2OYo
,
,
,
0o/o
?J'
tl
I
I
tl
'- - 'l--,'
i;{
l,
ll
ll
l,
I
I
,
,
'1Oo/o
1400
-20o/"
I
I
-30%
1200
-4OYo
1000
March
10
15
25
30
ALPHA PRODUCTION
BETA PRODUCTION
35
changein dailv productionand dailv releasesover rhe past month for each facility and alignecl
them in a simplified Demand Amplification chart as shown at right. We've placed this chart in
a box in the upper left cornerof our Current State map, as shown on the ncxr page spread.
Dernancl
Arnplification
screen
in Grrrrent
state
wipers/day
amplification
oI +l-
2800
40o/o
2600
2400
2200
2000
1920
ivi
ti"
1800
il-z
r i 'i
r
.'t
ri .j
r'tt'
:'r
-1Oo/o
:tt
1400
t.
:
i
-40o/o
10
ALPHAPRODUCTION
BETAPRODUCTION
GAMMA PRODUCTION
'Ib
ALPHAORDERS
TO BETA
BETAORDERS
TO GAMMA
GAMMA ORDERS
TO MICHIGANSTEEL
extra production capacityor carry large stocksof finished goods in inventory or disappoinr
downstreamcustomersa significant fraction of the time. Becausefailing to ship on tirne to
meet customcrneedsis an unacceptablcalternativefor suppliersin thc auto industryand
bccauscextra tooling can be very expensivc,most firms in this industrv includine Beta.
36
Sirnplified
% variation
Dernand
Demand
GAMMA
ORDER
Arnplification
Screen
Amplification
GAMMA
PRODUCTION
BETA
ORDER
BETA
PRODUCTION
ALPHA
ALPHA
ORDER
PRODUCTION
Demand
GAMMA
ORDER
Amplification
GAMMA
PROOUCTION
BETA
ORDER
BETA
PRODUCTION
ALPHA
ORDER
ALPHA
PRODUCTION
I ",",*I
| ?roduction I
Controt
I
f--
MRp-l
I lf{
6 daya
Cleveland, OH
Fuffalo. NY
I wTkryI
1
V
(anffi
l-t ^,1
lY2n?:"7:"1;'"*"
r-]
DearbornHeights, Ml
3. .
'.
'fonawanda,NY
..,.
t
l w e e k ll t ' . .
T-U
2a\
I- 6.-l--
r lr,flX,li,"l
<
ts
,zl Control
I
f2"-1---'
'...
6 days
MRp-l
19)'\'
+.+J
x
Tonawanda,NY
Reynosa,Mexico
RM336h.
wt?110h.
FG40h.
RM56 h.
wt? 41h.
SShrtbs
SDays
E?E=3Davs
Defecte
=2oooppm
EClCU
25hifts
SDavs
E?E=1 Dav
Defects =
4OO ppm
o.3 d.
20.6d.(3131s.)
22(3)
3a
W
I
|
Shipdarch
=6?allets
Final Gurrent
Map
State
Showing
Plymouth,Ml
Demand
Arnplification
ll'{ r
10 dayt
{-'N,l
14daye
6irmingham,Ml
i
4
EI
-4-4-1
I ,,Jl?,1,i,
I
center I
I
Cleveland,OH
/f
ar6ot-6oto-o"
640^
|
a| 9etaWivers I
I Croes-Oock I
Trr)
' -=*-l
l----,-+
-l
-t
El?aso,TX
n-s\t-->
Year
zooo"rA
@
| = 6?alteto I
@,"-J4
4.O d.
21zgr I
roznr I
I-T*-L:'t.'\. \
l.i'v l.l
I
'
.rr,*o^t
zl
-z*
o.5d.
l-lJ---]
--
rl;-l
lJ'v l.t
Harlingen,TX
i"f:i II
|i 32ob
//
//
TIME
WestOrange,NJ
44.3 day
RM 50 h.
wl?2h.
FGIAh
31.Oday:
2Shifte
SOaya
E?E = 1 Dav
Defecl,s =
Sppm
13.3 dayt
o.5 d.
4.O d.
o.5 d.
4
32b1 sec
54.7min
2.8 d. (12Oe.)
11(2)
Ouality
' PPM
DEF6CTS
and
Delivery
Scrgon
| 10,000
defeds
2000
7o DEFECTIVE
DELIVERIES
1500
10
1000
ttr?*- t
500
o
MICHIGAN
TO GAMMA
GAMMA
TO BETA
BETA
TO ALPHA
ALPHATO
ALPHAPC
The
Limits
of Our Map
As thc team finishesrecordingthese product and information flows, it seemssensibleto
conclude the Current State map at this scopeof mapping. The map does not go all the rvay
downstreamto the customertaking dcliveryof a car at the dealershipand it doesnot go all
the way upstreamto the steelmill, much lessto ore in the ground.Mapping theseaciditional
stepswould doubtlessprovide additionalinsights,but to do so would require largeamounts
of time and expenseto examine organizationswhose behaviorthe team has little prospectof
changing right now. Yet cven within this scope,the map coversa considerablepgrtion of a
lengthy and complex value streamand uncoverssomevery provocativepcrfclrmancefeatures.
Gamma
CurrentState
20.6
LEADTIME(in days)
Beta + Alpha : In-plant*
4.6
2.8
31.0
+ Tiansporr =
13.3
Total
44.3days
INVENTORY
TURNS(annually)**
1149805
*lncludesthreedaysspentin warehousesand
cross-docks.
**Notethatfacilities
with simple,frequentactivities
(e.g.,assembly
operations)
will havehigher
turnsthanfacilities
with manybatchoperations,
and individual
facilities
will havehigherturns
thanthe entirevaluestream.
40
State
Grrrrent
Srrrnrn
ary'
Gurrent
State
Total Lead Tme
Inventory Turns
Ouality Screen
(defectsat the downstream end
over defectsat the upstream end)
Delivery Screen
(% defectiveshipments at the
downstream over o/"defective
s h i p m e n t sa t u p s t r e a me n d )
44.3
days
o.oB%
11%
5
400
B
7
5300
operations,
productioncontrol, logistics,manufacturingengineering,quality, and purchasing- may be
in achievingtheir own objectives,they are not at all effective in supportingthis product on
are common to all
its path to the customer.What's more, becausethe processesinv<r.lved
productspassingthrough these departmentsand firms, it is highly unlikely that they are
doing a better job of supportingother product families.The functionaldiagnosticaspect
of our extended mapping process- which we believe is its most important contribution
to firms in the long run -
41
If this is an accurateportrayalof the current state- and, becausethe value streamteam has
directly observedit, there is good reasonto think that it is - there are surely opportunities
to speed the accuratedelivery of products to the customerwhile eliminating large amounrs
of cost.To begin to do this we need to specify in rhe nexr secrionthe featuresof a lean
extended value stream that can deliver these benefits.
The Power
o f S i mp l i city
"What do you consider the largest [scale]map that would be really useful?"
"About 6 inches to the mile."
"Only six incbes!...Weactually made a map on the scaleof a mile to the mile!"
"Have you used it much?,I enquired."
"It has never been spreadout... the farmersobjected [that] it would cover rhe whole
country and shut out the sunlight! So now we use the country itself, as its own map,
and I assureyou thar it does very well."
-
As you experiment with drawing extended maps suitable for your product families,you
may wonder just how much detail to include. We often find that novice reams- like
Lewis Carroll'smyopic mapmaker -
r-) e^
Value Stream
Fifty yearsago Thiichi Ohno at Toyota enumerated seven types of waste in value streams.
You may have them memorized by now but they bear repeating becausethe types of waste
are the same at the process,the facility, and the extended value stream levels of analysis:
OverproductionDefects-
Unnecessaryinventory -
customer needs.
Unnecessaryprocessing -
a separateinspeccionstep replacedby a self-monitoringmachine with auto-stop,or flashremovalafter molding eliminatedwith higher mold tolerancesand better mold maintenance.
Unnecessarytransportation between work sites -
44
Lovv
Low
lnwentories
vvith High Demand
= Ghaos
Process
Gapability
Variability
and
W e s o m e t i m e se n c o u n t e rl e a n i m p l e m e n t e r sw h o s e e kt o r e d u c ei n v e n t o r i e s
along a value stream without botheringto calculatethe standardinventory
n e e d e df o r t h e c u r r e n tl e v e l so f v a r i a b i l i t ya n d c a p a b i l i t yA. n i m m e d i a t e
"lowering of the water level" may indeed "expose the rocks" and put
pressureon everyoneto go fasterto reducevariabilityand improve
capability.However,a more likely consequenceis chaos and outraged
customerswhen the newly "lean" value stream fails to deliverthe right
a m o u n t sw i t h t h e r i g h t q u a l i t ya t t h e r i g h t t i m e .
A better strategyis to calculatethe standardinventoryat every storage
p o i n t a l o n g t h e v a l u e s t r e a mi n t h e c u r r e n ts t a t ea n d i m m e d i a t e l ye l i m i n a t e
i n v e n t o r i e sg r e a t e rt h a n t h e s t a n d a r d T
. h e n l o w e r t h e s t a n d a r da n d r e d u c e
inventoriesto the new standardin a future state after variabilityand
capabilityissuesare addressed.
The
Many
Forms
and
Uses of Inventory:
Greating
a Strategy
We've definedthe three traditionalcategoriesof inventoryand comparedthese with
severaladditionalcategoriesin common use (as shown in the next page).Note that these
categoriesoverlap."Finishedgoods" can be "safety stocks", "buffer stocks",or "shipping
stocks".What's more, the same item-a pallet of windshieldwipers in Beta'sfinished
goods area,for example-can be included in severalcategories-a "safety stock" and
a "buffer stock" in the case of our wiper-depending on the practiceof the firm and the
facility.The key point with regardto definitionsis for the members of the value stream
team to agree on a consistentuse of this sometimesconfusingterminology.
The key point with regard to the inventoriesthemselvesis for the team to make a strategic
plan for every part in a future state,describingthe reasonsfor keeping specificamounts of
materialsand goods in specificplacesas standardinventory.As they do this, many value
streamteams decideto actuallyincreasethe amount of inventoryin a downstreamfinished
goods area near the schedulingpoint, both as a buffer stock and as a safety stock.This
guards againstdemand amplificationtraveling upstreamand facilitatesthe reductionof
work-in-processand raw materialsto a very low level in upstreamfacilities.By increasing
inventoryat one point - seeminglya step backward- it may be possibleto reduce
inventoriesat every other point along the value streamand for the value stream as a whole.
The
Manyz
Forrns
of lnrrentort/
E:E
ll
lT.
#,
ll
#=l
EE:
l'T'all F+l|mql
46
Tlrpes
of
lnrrentory
TRADITIONAL CATEGORI ES
Definedby their positionin the valuestream
Raur Materials
Goodsenteringa facilitythat havenot yet beenprocessed.
Work-ln-Process
Itemsbetweenprocessing
stepswithin a facility.
Finished Goods
Itemsa facilityhascompletedthat awaitshipment.
A D D IT ION A L C ATEGORIES
Definedby their purposein the valuestream
Safety Stocks
Go o d sh e l da t a n y p oint( in RawMater ials,
W lP,or Finished
prevent
Goods)to
downstreamcustomersfrom beingstarved
by upstreamprocesscapabilityissues.
Buffer Stocks
Goods held, usually at the downstream end of a facility or
process,to protect the downstream customer from starvation in
the event of an abrupt increasein point demand by a customer
-a demand spike that exceedspoint production capacity.
Shipping
Stocks
Goods in shipping lanesat the downstreamend of a facilitythat
a r e b e i n g b u i l t u p f o r t h e n e x t s h i p m e n t .( T h e s ea r e g e n e r a l l y
proportionalto shipping batch sizesand frequencies).
PARTIII:THE EXTENDEDVALUESTREAM
47
48
of this
PARTIII:THE EXTENDEDVALUESTREAM
49
5()
Future State 1
Once the team completesthe Current State map and everyone agreesthat
it is accurate,the key question becomes,"What should be done in what
sequenceto create a better future state?" In our experience,the easiest
placeto start is to createfuture stateswithin the walls of each of the facilities
the product visits en route to the customer.By drawing and then achieving
a future state of the type describedin Learning to Seewithin each major
facility it will be possibleto achievea substantialimprovemenr in the
performanceof the entire value streamand to do this within a short time.
This createsconfidencein the processand give teams a sensethat much
more is possible.
Beginning with this step also has che critical advanrageof imposing a
"price of admission" on all of the value stream participants.Drawing the
current state map is fun but entails no real commitment. It's when you get
to the, "What are we going to do today about the waste?"question that the
hard issuesarise.Insisting that each participatingfacility and firm quickly
implement actual improvements as the price of continuing with the exercise
also tends to gain buy-in for the process.Yet the hurdle is nor roo onerous
becauselittle capital investment is needed to achieve a future state within
t h e i n d i v i d u a lf a c i l i t i e s .
Level
Pull and
Flovv Within
All
Facilities
In Appendix B, we show the Future State Maps for the Alpha Morors Final
AssemblyPlant, the Beta Wipers Component AssemblyPlant, and the Gamma
Stamping Part FabricationPlant. At the urging of the extended value stream
team, these were implemented and stabilizedover a three-month period by
newly appointed value stream managersin each plant. (As noted earlier,no
changeshave been attempted at the Alpha and Beta crossdocks and in the
Beta warehouse.This is both to keep the exercisemanageableand because
we will seek to eliminate these facilities in Future State 2..)
The cumulative result of these actionsat the plant level is shown in the
summary boxes on the Future State 1 map.
PARTIV: FUTURESTATE 1
Demand
7ovariation
Amplification
35
30
25
20
15
10
5
GAMMA
ORDER
GAMMA
PRODUCTION
BETA
OBDER
BETA
PRODUCTION
ALPHA
ORDER
ALPHA
PRODUCTION
f "",,*I
-r"ijl"#i^l
tFt
t-il-f
+-
6 days
C-MEI-I
14 daye
Cleveland,OH
Buffalo, NY
fri{
lwichiqansteell ?
Adavs
I seiviceco.I
-e
v
E
6 days
W
| ?tant
| ?roductio
r-1
DearbornHei7htz, Ml
a-sr.mt'-]
------\-
ii
:.
>r..
\-_
\-".
|l W?..
l__ \..\
eekl I
/ lr"#7,21,",1.
-
Ionawanda.NY
,zf Conrrol
t l l
ar;fi;iltlF"w,,kl
l'------r-
.
\3,..r:t-f
".
,-'8.-fr.. \'#!i fr
' oor . .
> I 32nfr?.,,
I '-rrr.+
l,-J
lonawanda,NY.
A-s\?
nlfl""'7;."'J
DetaWipers
Warehouse
|
I
Harlingen,TX
RM16 h.
w t ?o h .
re vn'
I
I
5oom.
|
la
zeh:,ft;--]
ehipaar,ch
I =7zcoits I |-jD-=2;-|
I arrlr:io^'1
=8%
I Derective
D"r*r"=
I
r| l tao o o p p m
I
f----;;;-------l
o.3 d.
| soo^.--ll
l- shtpl^r*h I
| =36?atetsI
F"r."t-;4%1
f-----__-1
2Shilts
SOays
E?E=1 Day
Defecls =
2OO ppm
4.Od.
5Jd. (3131s.)
20 (3)
52
M-Rr--]
o.25d.
2.Od.
o.25d.
1.2d. (3o e.)
I (3)
{ '--l
Plymouth,Ml
14 daye
birminqham,Ml
/r
//
Cleveland,OH
,160 tDrv
|
|
|
//
q=il
_._
I betaWipers I
I Cross1ock I
il;-l
I p,v [-]
!----i5
640^
426e1
214Hr
32oe
21351
lxDay
lo7Hr
1
|
|
I
I
|
lT---l
'Y,Ys:oi"
I b:I+
t_
-r-]
rrll
yl---X___+ .----> |l
| ---<'-+
|
-l
I
.\i.
IFJ
10 da
f rfrrr=r}
WeetOrange,NJ
Harlinaen.TX
RM 15 h.
w t ?2 h .
FG14h.
"oaaaaalaooaaaaoaaaaa.,
2x
Year
29hifte
5Davs
E?E = 1 Dav
Defecf,s =
5PP^
o.5 d.
4
o.5 d.
4.O d.
4.Od.
o.5 d.
4
1.3d. (12Os.)
7 (2)
1
,
Ouality
and
Delivery
Screen
ppm
deteds
2000
% defedive
deliveries
r500
1000
500
MICHIGAN
TO GAMMA
GAMMA
TO BETA
BETA
TO ALPHA
ALPHA TO
ALPHA PC
Future
State
1 Ghanges
Frrtrrre
I Srrrnrn
State
Gurrent
State
Future
State 1
44.3
daye
23.9
daye
o.oB%
o.16%
11%
15%
400
200
5300
5300
Inventory Turns
Ouality Screen
(defectsat the downstream end
over defectsat the upstream end)
Delivery Screen
(% defectiveshipments at the
downstream over o/odefective
s h i p m e n t sa t u p s t r e a me n d )
ary'
At the level of the scampingplant, che component assemblyplant, and the final assembly
plant these changesare often truly impressive.In the most striking instance- the Beta
Wipers component assemblyplant in Reynosa-
PARTIV: FUTURESTATE 1
55
This realizationprovides a useful insight to rhe value srreamteam abour the limits
of isolated,individual action: If you want ro achieve a breakthrough- a "game
changer" - that altersyour position in your industry or producesprofits far above
industry averages,you'll need to optimize the entire value stream rather than
stopping after improving the flow along small coursesof the streamwithin your
own facility - as many managersand firms do today.
Any firm unwilling or unable to implement the Future State I in its facilitiesis
unlikely to be willing or able to take the next steps to achieve Furure State 2.
'Iherefore,
if it becomesapparentat this point that some participantswon'r make
this commitment, it will be critical to find alternativevalue stream members befcrre
other participantswaste time in futile efforts.An obvious additional question for
thc firms downstreamto ask is, "Do we want to keep the do-nothing upstream
firms in our supply base?"
T h e D i sta n ce
S ti l l to Go
While the first five items in the summary box show a substantialimprovement
between the Current State and Future State 1, the last three items - the cleliverv
screen,the demand amplificacionscreen,and travel distance-
show no change.
56
Future State 2
As the value stream team achievesFuturc State 1 within each facility and begins tcr
sensethat collectivemanagementof the value streamis possible,it's time to take thc
next leap.This is to draw and quickly achievea Future StateZ, introducinga smoorh
and leveledpull alongwith frequent shipmentsbetween eachof the facilities.
I n sta l l i n g
L e ve l e d
Facilities
In concept,this is very simple. What we want to do is to link each point of use of the
product in a downstreamfacility with the prcvious point of production or shipment
in the next upstreamfacility. In this way, consumption at thc point-of-useis tluickly
and exactlyreplenishedby the nexr upsrreamprocess.
In practice,shipping qr-rantities
u'ill be considerablylargcrthan minimum trrroduction
quantities,even in a very lean value stream.For example,the minimum shipping
quantity of wipers to the final assemblyplant in this casc is one paller with 20 tra1,s
of wiper arms with each tray containing 16 wiper arms,for a total of 320 wipers. It is
simply too expensiveto ship individual rrays,much lessindividualwipcrs.
The minimum productionquantity,by contrast,would be one tray of 16 wipers.
This is becauseset-up times and cosr ro alrernareberween -fyp" A and Type B
wipers in the two trim levels are now zero at thc Beta Wiper Plant, after
implementingF'utureState 1. But itwould still be too expensivefor materials
handlersto wrap and movc individualwipers.
Therefore, to level production to the maximum extent feasible as orderstravel back
upstream,we will want to send production signalsto the work cell at Beta by travs
ratherthan by palletsand to level theseorders.For example,if 20 trays(one pallet)
are ordered by Alpha Motors Assembly with the order consistingof:
5 trays of Type A, High Trim (which we will call Part #1)
5 trays of Type B, High Trim (Part #2)
5 trays of Type A, Low Trim (Part #3), and
5 Trays of Type B, Low Trim (Part #4)
PARTV: FUTURESTATE 2
57
1I1I1|1I1t2t2t2t2t2t3
t3 t3 t3 t3 t4t4t4t4t4
Electronic
kanban
rrsing
a bar
code
reaeler
I
I
-t
Heijunkadevice
I
t - - - r - - - - ! - - - t
I
I
I
I
I
I
I
I
I
!
I
I
I
I
I
I
---1
I
I
I
via Web
t@
|Card I
l?nnterl
rytttt+l
: l-------:
f cr,.dl
lg,cannerl
-i
'
Clean,?aifii"&.Bake
Gamma1tamping
A99EMBLYCELL
DetaWipers
Note that the rows in the heijunka box are for the four types of parts in this product
f a m i l y w h i l e t h e c o l u m n s ( a c r o s st h e t o p ) a r e f o r t h e p i t c h ( r a t e )o f w i t h d r a w a lo f t h e
cards for conveyanceto the upstream paint process.
PARTV: FUTURESTATE 2
Demand
GAMMA
ORDER
Amplification
GAMMA
PRODUCTION
BETA
ORDER
BETA
PRODUCTION
ALPHA
ORDER
ALPHA
PRODUCTION
RM24
wt?62
FG12
3 thifr,s
RM 16
wtPo
FG 12
2 Shitrs
5 Days
E?E = 1 Dav
Defects =
25O ppm
o.3d.
4.Od.
a.o d. (3131s.)
20 (3)
60
5 Davs
EPE=1Dav
Defects =
50 ppm
1.2d.(3Os.)
B (3)
;:,^,loiaeroanul
rl
Dirmingham,Ml
t\
-T
I Daity I
Alpha
Materials
Conlrol
Z1z1--l
Atpha
Alpha
?roduclion
Control
I
I
I
I
Distribution I
Cen+er I
Cleveland,OH
#r-*r
32oo I
ll
t=fl
bxof -%
l xDay
RM 15
wt?2
FG14
2ShifIs
SDays
EPE='lDav
Defects =
5 ?P-
4.5 d.
o.5 d.
1.3d. (12Os.)
7 (2)
Ouality
and
Delivery
Screen
PPM
DEFfCTS
% DEFECTIVE
DELIVERIES
)ooo
10
1500
1000
500
dofective
deliveries
@....
0
MICHIGAN
TO GAMMA
GAMMA
TO BETA
BETA
TO ALPHA
ALPHA TO
ALPHA rc
The Need
for Gontrolled
Experiments
"But," you will say,"how can you do this for information flow for only a single
value streamco-mingledwith many others?The samecompurer sending signals
to control this streamis alsoschedulingother streams.Surely the whole sysrem
must be changedin order to changeanything and this, realistically,
is a massive
and costlyundertaking."
Actually massivechange is nor necessary.
Just as we have disconnectedour
sample product family from the MRPs within severalplants in Future Stare 1,
and installed simple pull loops between activities within each plant, we can
disconnectindividual value streamscurrendy running between facilities under
centralconrroland install simple pull loops.
The key point is for the value stream ream ro take this opportunity ro try the
experiment and judge the results.We confidently predict that the performance
of the value stream as mapped in Future State2 will argue forconverring more
and more product families to simple pull systemsso rhat the overly complex
production control systemscommonly in place today are graduallyconverted
to an activity where they are actually useful. This is capacityplanning on a
total systembasis.
Lean
62
Lab
/c
7^
\-t
HUU Futn
Installing
Frequent Transport
Loops
milkrun
replenishment
PARTV; FUTURESTATE 2
6:
7o variation
Demand
Amplification
35
30
25
20
15
10
5
GAMMA
ORDER
GAMMA
PRODUCTION
BETA
ORDER
BETA
PRODUCTION
4-/v/l
ALPHA
ORDER
ALPHA
PRODUCTION
W^^A
Daity I ba;i;tr ^ |
luicrtisansteetl J
center
lsewicecenterla_\|
I
Dearborn{eiqhts,Ml
<-
-1
ii
ii
iv
beta
wipe.g
Reynosa,Mexico
F.M24
wtP 62
FG'12.
3 thifr,s
21hifr,s
SOays
E?E = 1 Dav
Defects =
25O ppm
5Davs
E?E = 1 Dav
Defects =
50 ppm
o.3 d.
4.Od,
4.o d. (3131e.)
20 (3)
64
RM 16
WIPO
FG12
1.2d. (3Os.)
I (3)
loraeraanu
I
birmingham,Ml
L
_T
I ouiryI
Alpha
Materials
Conl,rol
ZLa-'1
Atpha
Alpha
?roduclion
Control
I
I
I
I
Diotribution I
Cenrer
I
Cleveland,OH
(\7 "*^-1
ll I x: I
I
l-J-J
Ioxoxl---%
1x D a y
Weet Orange,NJ
RM15
wl?2
FG14
25hitts
SDavs
E?E =1 Dav
DefecLs =
5PP
o.5 d.
4.5 d,
1.3d. (12Os.)
7 (2)
and
o'uality
PPM
DEFECTS
'
2000
Delivery
Screen
V DEFECTIVE
DELIVERIE
defeds
10
1500
1000
500
de{ective
deliveries
@.....
0
MICHIGAN
TO GAMMA
GAMMA
TO BETA
BETA
TO ALPHA
ALPHA TO
ALPHA PC
Frrtrrre
State
Inventory Turns
Ouality Screen
(defectsat the downstream end
over defectsat the upstream end)
Delivery Screen
(% defectiveshipments at the
downstream over Yodefective
s h i p m e n t sa t u p s t r e a me n d )
Totaling
the
2 Srrrnrnary
Current
State
Future
State 1
Future
State 2
44.3
days
23.9
daye
15.8
daye
o.o8%
o.16%
o.6%
11%
15%
21%
14
400
200
50
5300
5300
4300
Results
66
Compressing
What
is the
logic
of
relocation?
68
--
l d e a l S ta te
Changes
The value stream team therefore created the Ideal State map shown on the
next page.Note that wiper assembly(inclLrdingthe blade-to-armassemblystcp
previouslyconductedin Alpha'sassemblyplant),painting,and stampinghave
now been compressedinto one room in a "supplier park" clnthe site of the Alpha
Motors assemblyplant. A cheaper,low-speedstampingpresshas been introduced,
which we call a "right-sized"tool becauseits capacityis prt-'portional
to the
requirementsof this value stream.This pressis also able to make both the ;rrimary
and secondarystampingsfor all of the other parts needed for the wiper assembly
(seethc schematicdrawingon pages12 and 13 showingtheseparts)and in very
small batchesto minimize inventoriesand lead times.A mini paint booth - a
secondright-sizedtool - has also been designedand is located between the
stampingstep and wiper assembly.
Bccausethc new wiper manufacturingmodule gets an electronic signalon what
to build next as eachvehicle leavesthe paint booth in the vehicle assemblyplant
(a 3-hour lead time) and becausethe time neededfrom the startof wiper assemblv
until delivery to the final assemblylinc is lessthan thc availablelead time, wipers
with high and low trim for vehicle models A and B can now be assembledto line
sequence.They are then placedin line-sequencedtraysof 40 wipers and conveved
to the fit point on the final assemblyline every twentv minrrtesby a "water spider"
(a small cart pulled by a converted fork-lift). The water spider lo<-rp
connectsseveral
similarcomponentplantsadjacentto the Alpha final assemblyplant, bringing back
empty trays and needed parts to the wiper assemblyareaon each circuit.
Oc
s
PARTVI: THE IDEALSTATE
Demand
GAMMA
ORDER
Arnplification
GAMMA
PRODUCTION
BETA
ORDER
BETA
PRODUCTION
ALPHA
ORDER
ALPHA
PROOUCTION
NewJersey1beel
5ervice Center
Wiper
Value
Stream
ldeal
State
EaetOrange,NJ
o.4 d.
70
W
Dearborn.Ml
Alpha
Distribui;ion
Center
Alpha
?roduction
Alpha
Control
Materials
Control
/
Daily
t--J'
I
I
t
I--ELL
-l
I-cE[_-l
AlphaMotors
@Gl-ffiful
o.5 d.
1 . 1 d(.3 1 6 1 s . )
20 (6)
O.8 d. (12Os.)
7 (2)
Ouality
MICHIGAN
TO GAMMA
and
Delivery
GAMMA
TO BETA
Scron
BETA
TO ALPHA
ALPHA TO
ALPHA PC
71
ldeal
State
Srrrnrn
Inventory Turns
Ouality Screen
ar,y-
Gurrent
State
Future
State 1
Future
State 2
44.3
days
23,9
daye
15.8
daye
days
o.oB%
o.16%
o.6%
1.5%
11%
15%
21%
27%
ldeal
State
2.&
14
79
400
200
50
2.5
5300
5300
4300
525
Delivery Screen
(% defectiveshipments at the
downstream over lo defective
shipments at upstream end)
( % c h a n g ei n d e m a n da t d o w n s t r e a m
e n d o v e r % c h a n g ei n d e m a n d a t
u p s t r e a me n d )
Dramatic
Changes
72
Winners
Need
to Gornpensate
Losers
As future state and ideal state maps are drawn up, it will quickly become
apparent that positive change is most likely if the team can find a way for
'l'his
winnersto compensatelosers.
is becauseit will commonly be the
casethat a downstreamparticipant can get better value at lower cost if an
upstream participant leavesout wasted steps,implements leveled pull
systemswith its suppliers,introducesmore capableprocesstechnologies,
and relocatesactivities.However, even when everyonecan see that
the incremental savingsexceed the incremental costsof these
initiatives,little is likely to happenunlessupstreamparticipants
are compensatedby downstreambeneficiariesfor taking costly
actionsthat <,rptimize
the wholc.
If it were easily possible to compare total product cost before
and after the future state improvemen[s, compensation might be
73
Timing
Final
Risk
to Avoid
74
Achieving
Future States
PARTVII: ACHIEVINGFUTURESTATES
timing for the ldeal State may range from "soon" (particularlyfor
new products)to "much later". The team in our exampleconcludedthat
76
PARTVII: ACHIEVINGFUTURESTATES
YEARLY
Product-Family
Business Objective
Value Stream
Objective
GOAL
(measurable)
OUA R T ER LY
2oo2
lmproveWofitability
onwipersfor Alpha,
Deta,Gamma,+
steel eupplier.
F91
*continuousflow
wherepoeeiblein
allfacilii"ies
Leadtime=23.9 days
lnventnryturfls=9
Qualityecreen=2OO
*level
*level
pullbetween
allfacilities
F92
*trequent
repleniehment
loopsbetween
allfacilities
'value stream
compreeeionby
co-locating all
ete?e adjacent
to customer
Leadtime=15.8 days
lnventnry turne = 14
Quality ecreen = 50
Deliveryscreen=3
Demand amplification
gcreen=5
Leadtime=2.8 daye
lnvenlory turns =79
Quafityscreen=2.5
DeJivery
ecreen=1
Demand amplification
Sareen= 1
O Start
A Completion
78
::
SIGNATURES
\ 'A L U E
STREAM
PLAN
SCHEDULE
2()()3
5mith
Doe
baker
Jones
O On target
Behindtarget
Operatione
?urchaeing
?C&L
Manufacturing
Engineering
Quality
(inevery
firm/facility)
o
o
A
A
Wipersfor AlphaModelsA+b
PARTVII: ACHIEVINGFUTURESTATES
CONCLUSION
At the end of this brief breakthroughguide for achievingfuture and ideal srateswe must
sharea secret:You'll never actually achieveyour ideal state! It rurns out that there is always
more waste to removc and that value for the customer can alwaysbe further enhanccd.
For example,wipers might some day be molded as a singlepiece in matchingbody colors,
eliminatingthe need for the stamping,painting,and final assemblyof considerablenumbers
of parts.If cycle times for these activities were at or below takt times for wipers on the final
assemblyline and if changeoversfrom onc wiper color and specificationto the nexr were also
(or at leastwithin takt time), it woLrldbe possibleto mold wipersto
essentiallyinstantaneous
line secluence
with total throughputtime and value crcatingtime both shrinkingto seconds.
At that point, the "Ideal State" portrayed in this workbook will appearto be full of mwdal
However, there'sa companionpoint that alsoseemsto be a secretto manv managers.This is
that successivefuturc statesgetting much closerto the ideal statecan be achieved- by real
managersin real firms building current product designs- in only a short period of rime even
when there is no "value streamdictator" giving orders.And even more can be accomplished
with the next generationof products,before machinesand faciliticsare locked in place.
The trick is to take a walk together so everyonecan see the whole. Then estimatethe "prize"
availableto the group if the whole value streamcan be optimized. Then devise a mutually
acceptableway to split the loot if the current state "Bank of Muda" can be robbed. It won't
happen all at oncc and you'll probably never reach that huppy land of completely frictionless
cooperationbut the challengeis to get started,gain some initial successes,
and not look back.
As firms and departmentslearn to see togetherit should alsobe possibleto make your maps
ever more inclusive,eventuallvreachingall the way from the customer'suse of the product
through the life cycle back upstreamto inchoatcmatter before any processing.And wc believe
it will be attractiveto map wider and wider range of goods and servicesincluding office
processes,as many readershave already startedto do with the micro-mapsin Learning to
See.(For example, we at LEI have alreadyheard from readersabout mapping gold mining,
fish stick manufacture,postal sorting operations,insuranceclaims processing,the writing of
technical manualsfor complex aerospaceproducts,and visits to the doctor.)Bccausethere is
alwaysa value stream whenever there is a product (whether it's a good, a service,or some
combination),we are confident that consciousness
will continue to spreadabout the pcltential
of value streammapping.
Wc wish you the best in your endeavorsand hope to hear about your problemsand your successes.
About
the Authors
Dan Jones
Dan is co-author of rhe Machine That changed the'world and Lean Thinking.
He is a SeniorAdvisor to the Lean EnterpriseInstitute (LEI), and Chairman
and
Founder of LEI's affiliate organization,the Lean EnrerpriseAcademy in
the uK
(www.lean.uk.org).He has long had an interest in mapping
enrire value srreamsand
took the lead in developing the examplespresentedin Chapter Z of Lean
Thinking.
These began with the humble can of cola that requires319 days to passthrough
six
different companiesand nine facilities acrossthe world, firms and facilities
that
collectively conduct only three hours of value-creatingactivities before
the cola
finally reachesrhe cusromer.
Jim Womack
Jim is co-author of The Machine That Changed the'World and Lean Thinking and
Presidentand Founder of the Lean Enterprise Institute. He fin<isit hard not
to
think about extended value streamsincluding thoseinvolvinghealthcare,mobilitv
food, communication,construction,defense,and logistics.
82
AP P E N D IX
A - E xte n d ed
Value
Str eam
M apping
lcons
The icons and symbolsfor current and future state mapping fall into three categories:
Material FIow, Information Flow, and General Icons.
Material
lcons
tl
|
.'--+
lhl
----+
|
-
Represents
Notes
Process
Manufacturing
O u t s i d eS o u r c e s
Data Box
Cross-Dock
Warehouse
ln
NS_
-?
P l a n eS h i p m e n t
|-lr-.---I
T r a i nS h i p m e n t
T r u c kS h i p m e n t
Inventory
C o u n ta n d t i m e s h o u l db e n o t e d .
Lvdl-J
I Mon. I
| + wed.l-l
3OO pieces
lDay
APPENDIX
Material
lcons
Represents
Notes
Movement of production
m a t e r i a lb y P U S H
M a t e r i a lt h a t i s p r o d u c e da n d
moved forward before the next
processneedsit; usuallybased
on a schedule.
Movement of finished
goods to the customer
M i l kR u n
o
o
ooooooooo
Supermarket
A controlledinventoryof parts
that is used to scheduleproduction
at an upstreamprocess.
Withdrawal
P u l l o f m a t e r i a l su, s u a l l yf r o m
a supermarket.
Transferof controlled
quantitiesof material
between processesin
a "First-ln-First-Out,,
sequence.
Represents
Notes
+-
ManualInformationflow
F o r e x a m p l e :p r o d u c t i o ns c h e d u l e
o r s h i p p i n gs c h e d u l e .
ElectronicInformationflow
Information
Describesan informationflow.
max.20 pieces
-FIFO*
Information
84
ExpeditedTransport
lcons
Information
lcons
Represents
Notes
P r o d u c t i o nK a n b a n
(dottedline indicates
k a n b a np a t h )
T h e " o n e - p e r - c o n t a i n e kr "a n b a n .
Card or devicethat tells a process
how many of what can be produced
a n d g i v e s p e r m i s s i o nt o d o s o .
W i t h d r a w a lK a n b a n
S i g n a lK a n b a n
T h e " o n e - p e r - b a t c hk" a n b a n .
S i g n a l sw h e n a r e o r d e rp o i n t i s
reachedand another batch needsto
b e p r o d u c e d .U s e dw h e r e s u p p l y i n g
processmust produce in batches
b e c a u s ec h a n g e o v e r sa r e r e q u i r e d .
Kanban Post
P l a c ew h e r e k a n b a na r e c o l l e c t e d
a n d h e l df o r c o n v e y a n c e .
,/t\\t
I
lr
K a n b a nA r r i v i n g
in Batches
Load Leveling
ControlCenter
Phone
Itr't., I
General
lcons
Orders
Represents
Notes
Operator
APPENDIX
plant, west
orange,
NJ
Alpha
Crosb-Dock
-F--
---->
*
E|?aso.TX
l92OWiperslDay
\
12bOA
6406
16WiperslTray
32O Wiperel?allet
4A
26
\
Receiving
Kitting
"'?A+
2560 A
zAOD
Wipers
us
160A
808
Wipere
Wiper
5ub-aeeembly I'T-I
Alpha1ales
Orderbank
Dearborn.Ml
AlphaDist..
Center
--)(-*
.\_>
*
960WiperslDay
640 A
3200
l xDay
FACILIry9UMMARY
RM50 h.
wt?2h.
FG14h.
2Shifts
FinalAeeembly
&Test
SDaye
E?E=lDay
Defects = 5 ppm
Defeciive =1%
CIT= 60 sec.
CIO= O,
29hifts
2h.
1
60 e.
12h.
2h.
1 (1)
APPENDIX
Appendix
B : B e ta Wi p e rs
Gurrent State - February
Assem bly
Plant,
Reynosa,
Mexico
20o2
Gamma
Saamping
Tonawanda,NY
Harlingen,TX
|
@ ZOothox
I t,ooonau"t
I
1Z?allets
ril-lDuv I
br-'d
Receiving
A=eP
25,600 A
12,8000
?arts
4324
224b
?arts
Assemblyl
Qvt
Aseembly2
ryAsf q9r
4324
2249
Wipers
C I T= 1 9 e " " .
zN4324
2248
Wipers
ClT = 10 sec.
C I O= 5 m i n .
Uptime = 95%
29hifts
E?E = l Day
E?E=1Day
o,zh. 48.Oh.8.2h.
aa
B.Oh.
B.Oh.
4.2h.(1os.)
4.3h.(1oe.)
3 (1)
3 (1)
Beta HQ
?roduction
Control
Alpha
Motors
MRP
Harlingen,TX
h
I
Detroit.Ml
weetrv
I
Y
l92OWiperelDay
zAO A
640b
4?allets A
Z?alletsA
FACILIry9UMMARY
RM56 h.
wt?41h.
FG12h.
AssemblyS
Qr
ryA\il
4324
2249
Wipers
C I T= 1 O s e c .
ClO =5 min.
lnspect,&Test
Q2z
2Shifts
ryAsf
640 A
3200
Wipers
SDays
E?E=1Day
Defects=4OOp?m
Detective = 5%
Uptime=95%
2Shifts
E?E=1Day
B.Oh.
4.2h.(1oe.)
3 (1)
12,Oh.
4.5h.
APPENDIX
Appendix
B: Garnrna starnping
Assembly
Gurrent State - February
2OO2
plant,
Tonavvanda,
Ny
DearbornHeighte,Ml
Receiving
1tam pi ng2
"zA\+
fT]
336 coilg
25,600 A
12,800b
parae
CIO= th.
E ? E= 1 w e e k
10m.
14d.
4.4h. (1s.)
4.6h. (1Os.)
GammaHQ.
?roduction
Control
Cleveland,OH
9etaWipere
Warehouse
?lant,
?roduction
Control
97AM?ED?4R79
2OOlbox
1600l?allet
MRP
Tonawanda.NY
2 xWeekly
th i p 5 ch edule
12?allets
FACILIry9UMMARY
RM336h.
w t P1 1 0h .
FG4Ah.
SShifts
SDays
Clean,?aint&Bake
25,600 A
12,800 D
?aft,e
C IT= 5 2 mi n .
Shipping
25,600 A
12,800B
Parts
?roduclion _ 20.6
LeadTime
days
E?E=1week
4Bh.
4.5h. (312c.e.)
Defects=2OOO?pm
Defective = 6%
CIO = 3O min.
Uptime= 85%
48h.
E?E=$Q2yg
?rocessing _ 3,1$j
Time
gec,
5 (1)
APPENDIX
Assernbly
plant, west
orange,
beta
Wipers
Alpha
Cross-Dock
El?aso,
Wiper
1ub-Adoembly
NJ
Alpha
9ales
Order
Oank
Alpha
Dist,.Center
/r
//
|_LJ-_--.l
t-dl-J
l xDay
960lday
640 A
320b
FACILITY9UMMARY
RM15 h.
w t ?2 h .
FG14h.
29hifts
SDays
,F
E?E=lDay
Final&,eembly
60 s.
2 (1)
_F
Defects = 5 ppm
Delective = 1%
IFO*
12h.
2h.
prant, Reynosa,
Mexico
Tonawanda.NY
Beta
Warehouse
Harlingen,TX
rNr.....
1T
V box ,.)
Vt/'a
i----------------'
I
I
I
t-
,, &the
+
J
4- -
Cell
A9SEMDLYCELL
I A9SEMFLY
-1 I lo\e
I
--
ll
?tamped
?aris
= 30 sec.
CIO = 5 min.
=1OO%
25hifts
16h.
O.1h. (3O e.)
g4
beta HQ
?roduction
Control
Alpha
Motorg
Harlingen,TX
Detroit,Ml
beta?lant
?roduction
Control
Harlingen,TX
->%
toxoXl
1920tNiperelDay
12BOA
6404
16WiperslTray
D-
32O Wiperel?allet
4?allets A
Z?allet'sO
RM 16 h.
wl?oh.
FG12h.
Defecfts=4OO ppm
1 2h .
APPENDIX
Ap p e n d i x
C : Ga mma S ta mping
Asser nbly
Plant
Tonavvanda,
NY Future State
May 2OO2
GammaHQ
?roduction
Control
Cleveland,OH
iw
a'
DearbornHeights,Ml
Tonawanda,NY
9tampingl
9t amping2
ClT - l sec.
CIO = 3 min.
C I T= 1 Os e c .
CIO = 3 min.
Uptime = 95%
thifts =2
Uptime= 95%
thifts = 2
E ? E =4 x s h i f t
E ? E =4 x s h i f t
10 m.
2h.(1s.)
96
2 h . ( 1 Oe . )
BetaWipers
HQ
?roduction
Control
OetaWipers
Warehouse
STAM?ED?A'R15
2OOl6ox
1600l?allet,
12?allets
FACILITY9UMMARY
RM4A h.
w t ?6 2 h .
F G1 2 h .
SShifts
Clean,
?aini &6ake
thipping
SDays
7yg=1Day
Defecl,s=2OOOWm
Defective = 6%
CIT = 52 min.
CIO = 5 min.
Uptime = 95%
Shifts = 2
E?E = shift,
Trocessing_ 2131
Time
gec.
13Om.(312Oe.)
APPENDIX
{-
Feedback
we've tried to make this workbook easyto use, wirh
detaired instructions,
simple illustrations,and clear examples.However,
we know fiom yearsof
experiencethat applying even the simplesrconcept
in a complex organization
is difficult. So we need your help. After you have
tried implementing the
techniquesdescribedin this workbook,pleasemail,
fax, or email commentsto:
Lean EnterpriseInstitute, one cambridge center,
cambridge, MA 0zr42 usA
trax:617-871-2999. Email: stw@lean.orgo Reach
us ar: lean.org
r--
COOKBOOK
COMPILED BY FRANCOIS DE VILLIERS 2008-02-22
INTRODUCTION
A brave new world of least cost quality products and services awaits the adopters of Lean, Agile and World Class
Manufacturing.
However, these methodologies are often seen as daunting: a bewildering array of concepts and a healthy measure of
Japanese philosophy and language is enough to scare off most casually interested people. Even the naming the basic
concept seems troublesome, as Lean is often rightly or wrongly and interchangeably referred to as Toyota Production
System, Pull Manufacturing, Just-In-Time, Lean Manufacturing, JIT/TQC/EI/TPM, Short Cycle Manufacturing, One-PieceFlow, Cellular Manufacturing, Demand Flow Manufacturing, Stockless Production, Focused Flow Manufacturing, Agility,
Value Adding Manufacturing, Group Technology, Time Based Management, Synchronous Flow Manufacturing, End-Lining
Operations, and Continuous Flow Manufacturing. Every consulting group or writer chooses a new name or catch phrase
to describe the same collection of tools, techniques methodologies embodied in the basic lean philosophy.
Confusing as all these different titles may seem, the underlying principles of lean is neither new nor complicated. The fact
that lean is not new is clear from its history. Lean essentially stems from the work of a number of Japanese industrial
engineers (most of them employed by Toyota at some stage, based on the concepts, techniques and writings of Henry
Ford and the Ford Motor Company, which in turn was based on the foundations of lean penned by Benjamin Franklin more
than a century before. Also, lean is not complicated: it is good old fashioned common sense. In Fords own words The
old American virtues of thrift and industry have no successors or substitutes. Business success is still a matter of making
friends by service, and not a case of cornering necessitous people in such a way that they will have to come to you" (Ford,
1922a, 282-283).
Lean is basically all about getting the right things, to the right place, at the right time, in the right quantity while minimizing
waste and being flexible and open to change. It is a team based approach to identifying and eliminating waste (non-valueadding activities) through continuous improvement by flowing the product at the pull of the customer in pursuit of
perfection.
This book aims to demystify the basic (and some advanced) concepts of lean in an easy to read cross referenced
dictionary style. It is hoped that the inclusion of Japanese terminology will show that, while the language is foreign, the
principles are essentially simple and based on sound logic. Enough illustrations are included to make it an invaluable
training resource too.
While every effort has been made to make this guide as comprehensive as practical, it is not possible to distill all the work
of the leading industrial engineers of the previous century to a few pages. The subject is worthy of much deeper and wider
study. Therefore a comprehensive list of web references and suggested further reading is included at the back of the
book.
PAGE 2 OF 107
This book was never intended for publication it evolved from my needing to learn Lean Manufacturing concepts very
quickly when I was appointed as Logistics Director at an international manufacturing company in 2006. What started as a
glossary quickly grew to a fairly comprehensive resource on the key and supporting concepts of Lean Manufacturing.
Realising the inherent value in these concepts, I presented the first copy of the book to my former employer as a farewell
gift and kept on amending it for more than two years by liberally cutting and pasting from all over the www.
As it stands now I believe this is a unique and valuable tool for all lean practitioners, too good not to share with others.
Not contemplating publication at that time of compilation I did not keep meticulous records of my sources at the time of
compilation. Much material came from the web-sites listed at the back of the book, but countless others were used. While
I may be guilty of copyright infringement, this is entirely unintentional. In any event, the disjointed structure of this book
makes it worthless without one of the recognized texts on the subject, also listed at the back of the book. So please
support the authors and publishers who make a living out of their writing and books.
As I publish this collection on Scribd it now enters the public domain. Please feel free to copy and share this work with
others that may find it of value. However I retain copyright on this collection. Therefore please reproduce this document in
its entirety only, including this notice.
PS. The document has never been proof-read in its entirety. Please contact me should there be any glaring errors or
omissions.
PAGE 3 OF 107
Perfect first-time quality - quest for zero defects, revealing & solving problems at the source
Waste minimization eliminating all activities that do not add value & safety nets, maximize use of scarce
resources (capital, people and land)
Continuous improvement reducing costs, improving quality, increasing productivity and information sharing
Pull processing: products are pulled from the consumer end, not pushed from the production end
Flexibility producing different mixes or greater diversity of products quickly, without sacrificing efficiency at lower
volumes of production
Building and maintaining a long term relationship with suppliers through collaborative risk sharing, cost sharing
and information sharing arrangements.
Lean is basically all about getting the right things, to the right place, at the right time, in the right quantity while minimizing
waste and being flexible and open to change.
History of Lean Manufacturing
The basic principles of lean manufacturing date back to at least Benjamin Franklin. Poor Richard's Almanack says of
wasted time (a basic principle of the Theory of Constraints), "He that idly loses 5s. [shillings] worth of time, loses 5s., and
might as prudently throw 5s. into the river. He that loses 5s. not only loses that sum, but all the other advantages that
might be made by turning it in dealing, which, by the time a young man becomes old, amounts to a comfortable bag of
money." He added that avoiding unnecessary costs could be more profitable than increasing sales: "A penny saved is two
pence clear. A pin a-day is a groat a-year. Save and have."
Franklin's The Way to Wealth says the following about carrying unnecessary inventory, a concept that appeared two
centuries later in Eliyahu Goldratt's The Goal. "You call them goods; but, if you do not take care, they will prove evils to
some of you. You expect they will be sold cheap, and, perhaps, they may [be bought] for less than they cost; but, if you
have no occasion for them, they must be dear to you. Remember what Poor Richard says, 'Buy what thou hast no need of,
and ere long thou shalt sell thy necessaries.' And again, 'At a great penny worth pause a while:' He means, that perhaps
the cheapest is apparent only, and not real; or the bargain, by straightening thee in the business [reducing your available
cash, i.e. straightening your circumstances], may do thee more harm than good. For in another place he says, 'Many have
been ruined by buying good penny worths'." Henry Ford cited Franklin as a major influence on his own business practices,
which included Just-in-time manufacturing.
The concept of waste being built into jobs and then taken for granted was noticed by motion efficiency expert Frank
Gilbreth, who saw that masons bent over to pick up bricks from the ground. The bricklayer was therefore lowering and
raising his entire upper body to get a 5 pound (2.3 kg) brick but this inefficiency had been built into the job through long
practice. Introduction of a non-stooping scaffold, which delivered the bricks at waist level, allowed masons to work about
three times as quickly, and with less effort.
Frederick Winslow Taylor, the father of scientific management, introduced what are now called standardization and best
practice deployment: "And whenever a workman proposes an improvement, it should be the policy of the management to
make a careful analysis of the new method, and if necessary conduct a series of experiments to determine accurately the
relative merit of the new suggestion and of the old standard. And whenever the new method is found to be markedly
PAGE 4 OF 107
superior to the old, it should be adopted as the standard for the whole establishment" (Principles of Scientific Management,
1911).
Taylor also warned explicitly against cutting piece rates (or, by implication, cutting wages or discharging workers) when
efficiency improvements reduce the need for raw labor: "after a workman has had the price per piece of the work he is
doing lowered two or three times as a result of his having worked harder and increased his output, he is likely entirely to
lose sight of his employer's side of the case and become imbued with a grim determination to have no more cuts if
soldiering [marking time, just doing what he is told] can prevent it." This is now a foundation of lean manufacturing,
because it is obvious that workers will not drive improvements they think will put them out of work. Shigeo Shingo, the
best-known exponent of single-minute exchange of die (SMED) and error-proofing or poka-yoke, cites Principles of
Scientific Management as his inspiration (Andrew Dillon, translator, 1987. The Sayings of Shigeo Shingo: Key Strategies
for Plant Improvement).
American industrialists recognized the threat of cheap offshore labor to American workers during the 1910s, and what is
now called lean manufacturing was explicitly regarded as a countermeasure. Henry Towne, past President of the
American Society of Mechanical Engineers, wrote in the Foreword to Frederick Winslow Taylor's Shop Management
(1911), "We are justly proud of the high wage rates which prevail throughout our country, and jealous of any interference
with them by the products of the cheaper labor of other countries. To maintain this condition, to strengthen our control of
home markets, and, above all, to broaden our opportunities in foreign markets where we must compete with the products
of other industrial nations, we should welcome and encourage every influence tending to increase the efficiency of our
productive processes."
It was Henry Ford, however, who developed a comprehensive lean manufacturing system. "Ford's success has startled
the country, almost the world, financially, industrially, mechanically. It exhibits in higher degree than most persons would
have thought possible the seemingly contradictory requirements of true efficiency, which are: constant increase of quality,
great increase of pay to the workers, repeated reduction in cost to the consumer. And with these appears, as at once
cause and effect, an absolutely incredible enlargement of output reaching something like one hundred fold in less than ten
years, and an enormous profit to the manufacturer" (Charles Buxton Going, preface to Arnold and Faurote, Ford Methods
and the Ford Shops (1915)).
Levinson (2002, Henry Ford's Lean Vision: Enduring Principles from the First Ford Motor Plant) contends that Ford's lean
enterprise system "was directly responsible for making the United States the wealthiest and most powerful country on
earth." There is no doubt that Ford gave the country the forty-hour work week and, even during the First World War, a
cartoonist for The Times recognized that "Henry Ford is the most powerful individual enemy the Kaiser has." As for the
Second World War, Ford's production chief Charles Sorensen wrote, ""The seeds of [Allied] victory in 1945 were sown in
1908 in the Piquette Avenue plant of Ford Motor Company when we experimented with a moving assembly line" (1956, My
Forty Years with Ford).
Ford (1922, My Life and Work) provided a single-paragraph description that encompasses the entire concept of waste. "I
believe that the average farmer puts to a really useful purpose only about 5 %. of the energy he expends. Not only is
everything done by hand, but seldom is a thought given to a logical arrangement. A farmer doing his chores will walk up
and down a rickety ladder a dozen times. He will carry water for years instead of putting in a few lengths of pipe. His whole
idea, when there is extra work to do, is to hire extra men. He thinks of putting money into improvements as an expense.
It is waste motion waste effort that makes farm prices high and profits low." Poor arrangement of the workplace-- a
major focus of the modern kaizen-- and doing a job inefficiently out of habit-- are major forms of waste even in modern
workplaces.
Ford also pointed out how easy it was to overlook material waste. As described by Harry Bennett (1951, Ford: We Never
Called Him Henry), "One day when Mr. Ford and I were together he spotted some rust in the slag that ballasted the right of
way of the D. T. & I [railroad]. This slag had been dumped there from our own furnaces. 'You know,' Mr. Ford said to me,
'there's iron in that slag. You make the crane crews who put it out there sort it over, and take it back to the plant.'" In other
words, Ford saw the rust and realized that the steel plant was not recovering all of the iron.
Design for Manufacture (DFM) also is a Ford concept. Per My Life and Work, "Start with an article that suits and then study
to find some way of eliminating the entirely useless parts. This applies to everything a shoe, a dress, a house, a piece of
machinery, a railroad, a steamship, an airplane. As we cut out useless parts and simplify necessary ones, we also cut
down the cost of making. ...But also it is to be remembered that all the parts are designed so that they can be most easily
made." The same reference describes Just in time manufacturing very explicitly.
However, it was with Taiichi Ohno at Toyota, where the ideas and principles mentioned by Ford finally got in practice.
Norman Bodek wrote the following in his foreword to a reprint of Ford's (1926) Today and Tomorrow: "I was first introduced
THE LEAN, AGILE AND WORLDCLASS MANUFACTURING COOKBOOK
PAGE 5 OF 107
to the concepts of just-in-time (JIT) and the Toyota production system in 1980. Subsequently I had the opportunity to
witness its actual application at Toyota on one of our numerous Japanese study missions. There I met Mr. Taiichi Ohno,
the system's creator. When bombarded with questions from our group on what inspired his thinking, he just laughed and
said he learned it all from Henry Ford's book."
PAGE 6 OF 107
A-Z OF LEAN
1B
10 COMMANDMENTS OF IMPROVEMENT: Commonly cited rules for improvement.
PAGE 7 OF 107
2.
"Think of how the new method will work; not how it won't work."
3.
4.
"Don't seek perfection. A 50% implementation rate is fine as long as it is done on the spot."
5.
6.
7.
8.
9.
10.
16 CATCH PHRASES OF 3P: The 16 Catch Phrases of 3P are used as guidelines for designing processes according to
Lean manufacturing principles of JIT (Takt, Flow, Pull) and Jidoka. The 16 Catch Phrases are:
1. Production preparation should be lightning fast. Avoid over planning, use what you have, act now.
2. Build & layout equipment for smooth material flow. Flow like a river, not like a dam.
3. Use additive equipment. Buy many speedboats instead of one tanker.
4. Build equipment that is easy to set up. Design in the separation of internal and external tasks.
5. Make equipment easy to move. No roots, no vines, no pits. Put wheels on everything.
6. Use multi-purpose equipment. Simple, "just fast enough" machines that perform one function well.
7. Make operator work stations narrow. Town houses, not ranch houses.
8. Layout equipment for ease of operator movement. Remove obstruction to smooth human motion.
9. Eliminate wasted machine cycle time. Design out 'air cutting' and minimize machine movements.
10. Build equipment for small, swift flow lines. Enable Standard Work (Takt, Work Sequence, SWIP).
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11. Use short, vertical flow lines. Vertical = advancing process flow, horizontal = functional.
12. Build equipment for one-piece pull. Machine level. This is probably the most critical one.
13. Build in quick changeover. Design in SMED at the machine level.
14. Link machines for smooth loading and unloading. Line stops when WIP on the line is "full work".
15. Use multiple lines & rectified flows. 'Rectified' is an odd term, electrical engineers will get it.
16. Spiral upwards to jidoka. There are 5 steps to jidoka, which should be pursued a step at a time.
2
20 KEYS TO WORKPLACE IMPROVEMENT: Iwao Kobayashis list of 20 items to gain focus for workplace
improvement that can be used in manufacturing audits. It reads very much like a whos who of manufacturing
innovations and hence makes a very useful checklist. This is a useful list, but of course it still does not include
everything. A practical exercise is to take this and use it either to evaluate your current workplace or as a discussion
forum, ensuring people understand it all and adding to it other areas that you need to add for your company. These are:
1. Clean and tidy. Everywhere and all of the time.
2. Participative management style. Working with all people to engage their minds and hearts into their work as well as their
hands.
3. Teamwork on improvement. Focused on teamwork to involve everyone in enthusiastic improvements.
4. Reduced inventory and lead time. Addressing overproduction and reducing costs and timescales.
5. Changeover reduction. Reducing times to change dies and machines to enable more flexible working.
6. Continuous improvement in the workplace. Creating improvement as a way of life, constantly making work better and the
workplace a better place to work.
7. Zero monitoring. Building systems that avoid the need for machine minders and instead have people who are working on
maintaining a number of machines.
8. Process, cellular manufacturing. Creating interconnected cells where flow and pull are the order of the day.
9. Maintenance. Maintaining of machines by people who work on them, rather than external specialists. This allows constant
adjustment and minimum downtime.
10. Disciplined, rhythmic working. Synchronised total systems where all the parts work together rather than being
independently timed.
11. Defects. Management of defects, including defective parts and links into improvement.
12. Supplier partnerships. Working with suppliers, making them a part of the constantly-improving value chain, rather than
fighting with them.
13. Waste. Constant identification and elimination of things that either do not add value or even destroy it.
14. Worker empowerment and training. Training workers to do the jobs of more highly skilled people, so they can increase
the value they add on the job.
15. Cross-functional working. People working with others in different departments and even moving to gain experience in
other areas too.
16. Scheduling. Timing of operations that creates flow and a steady stream of on-time, high-quality, low-cost products.
17. Efficiency. Balancing financial concerns with other areas which indirectly affect costs.
18. Technology. Using and teaching people about more complex technology so they can use and adapt to it, bringing in the
latest machines and making them really work.
19. Conservation. Conserving energy and materials to avoid waste, both for the company and for the broader society and
environment.
20. Site technology and Concurrent Engineering. Understanding and use at all levels of methods such as Concurrent
Engineering and Taguchi methods.
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3
3Cs: Concern, Containment, Countermeasure Problem solving approach, sometimes referred to as 3C. Initial problem is
defined and stated as a Concern. Containment action is taken to protect the customer (internal and/or external). Then, after
route cause analysis with the problem solving cycle, PDCA, Countermeasure is installed to prevent recurrence.
3Ds: Working conditions or jobs that are dirty, dangerous, or difficult. In Japanese San Ke, the K's stand for kitanai,
kiken, and kitsue.
3 ELEMENTS OF DEMAND: The three drivers of customer satisfaction are Quality, Cost, and Delivery.
3 ELEMENTS OF JIT: The three elements of JIT are 1) takt time, 2) flow production, and 3) the downstream pull system.
3 EVILS OF MEETINGS: 1) Meet but dont discuss, 2) Discuss but dont decide, 3) Decide but dont do
3 GEN PRINCIPLE: The three principles are 1) shop floor (gemba), 2) the actual product (gembutsu), and 3) the facts
(genjitsu). The key to successful kaizen is to going to the shop floor, working with the actual product and getting the facts.
3MU: See Muda, Mura, Muri
3P: Production Preparation Process. Rapidly designing production processes and equipment to ensure capability, built-in
quality, productivity, and Takt-Flow-Pull. The Production Preparation Process minimizes resources needed such as capital,
tooling, space, inventory, and time. See 16 Catch Phrases of 3P.
3P (New): Purpose, Process, People (sometimes also Data). An archetype first used by Collins, James C. and Porras
in Built to Last and popularized in the lean movement by by Jim Womack.
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For lean enterprises to evolve beyond the current "tool age" focused on implementing individual methods such as valuestream mapping, kaizen, kanban, etc. to a new age focused on implementing lean management, managers and executives
must think differently about lean. The key is to focus on the fundamental issues of Purpose, Process, People, according to
Womack who led the MIT research team that coined the term "lean".
Purpose: means the organization cost-effectively solves the customer's real problems so the enterprise can
prosper.
Process : means the organization assess each major value stream to make sure each step is Valuable, Capable,
Available, Adequate, Flexible, and that all the steps are linked by Flow, Pull, and Leveling.
People: means that every important process in the organization has someone responsible for continually
evaluating that value stream in terms of business purpose and lean process. Is everyone touching the value
stream actively engaged in operating it correctly and continually improving it
4
4 CONDITIONS OF DELIVERY: Possible conditions are Scheduled Time, Unscheduled Time, Scheduled Quantity,
Unscheduled Quantity. See Futeiki, Futeiryou, Teike, Teiryou.
4Ps OF THE TOYOTA WAY: Philosophy, Process, People (Partners), Problem Solving
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4 W's & 1H: Who, What, Where, When and How. A useful tool to help develop an objective and a concise statement of the
problem.
5
5Cs: Alternate English translation used to describe the same stages of the 5Ss. 5 Cs is a 5 step technique very similar to
5S to stabilise, maintain and improve the safest, best working environment to support sustainable Quality, Cost and Delivery.
Clear Out ;Separate the essential from the non essential
Configure ; A place for everything and everything in its place
Clean and Check ; Manualy clean to spot abnormal conditions
Conformity ; Ensures that the standard is maintained and improved
Custom and Prctice ; Everyone follows the rules, understands the benefits and contributes to the improvement
5M COMPONENTS OF TECHNOLOGY: Technology consists of the following five elements, or what we may call the five
Ms. Modern technology must have all of these elements to function properly.
1. Raw materials and resources (including energy): M1
2. Machines and equipment: M2
3. Manpower (engineers and skilled workers): M3
4. Management (technology management and management technology): M4
5. Markets for technology and its products: M5
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5S: The principle of waste elimination through workplace organization. Derived from the Japanese words seiri, seiton, seiso,
seiketsu, and shitsuke (collective in Japanese Go Esu). In English the 5S are sort, straighten, sweep, standardize, and
self-discipline.
The discipline of 5S is a fundamental building block for Lean Manufacturing or the Lean Office. Good 5S improves quality,
cost, safety, the customer experience, and enables World Class Performance. It is easily applied to any business and any
process, by anyone. There are many reasons to begin your Lean journey with 5S:
Name
Action
Catch Phrase
Sort
Straighten
Sweep
Standardize
Self-discipline
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5S KAIZEN RADAR CHART: Graphical representation of score out of 5 for each S of 5S.
Sort
5 4.4
Self- 2.2
Discipline
1.9
Standardize
Straighten
3.7
2.7
Sweep
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5 WHY: A simple but effective method of analyzing and solving problems by asking why? five times (or as many times as
needed to find the root cause).
6
6M: Same as 5M of Production with the addition of Mother Nature. Also see PEMPEM. Other definitions:
Machines
Methods
Materials
Measurements
Milieu (Mother Nature, surroundings, environment)
Manpower (People/mainly physical work)
Mindpower (Also people/mainly brain work)
Management (separate from Manpower/People because it considers Tampering)
Money
Miscellaneous
Markets (including Products)
(the) Moon (so far unknown cause)
6 MAJOR LOSSES: OEE (Overall Equipment Effectiveness) is used to identify and attack what are called the Six Big
Losses of TPM. These losses are the most common causes of lost time and efficiency of production equipment. See
OEE, TPM.
1. Breakdowns and Failures
A loss of equipment function needed to perform a operation. Causes:
Excessive wear
Lack of oil
Contamination
2. Set-up and Adjustments
Time lost during changeover from the current product to the next product, or changing the settings during a run. Causes:
Remove tooling
Find tooling
Removing chips
Malfunction of sensors
Program error
4. Reduced Speed
Loss when machine operates below design standard speeds. Causes:
Machine wear
Human intervention
Tool wear
Overloading machine
5. Defects
Time lost to making scrap, doing rework, or managing defective parts. Causes:
Manual error
Bad material
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Tool breakage
Program error
6. Startup and Yield
Time it takes a machine to 'warm up' to full production after a period of downtime. Causes:
Quality Loss
Speed Loss
OEE Loss
Category
Event Examples
Comment
Breakdowns
Tooling Failures
Unplanned Maintenance
General Breakdowns
Equipment Failure
Setup and
Adjustments
Setup/Changeover
Material Shortages
Operator Shortages
Major Adjustments
Warm-Up Time
Small Stops
Reduced Speed
Rough Running
Under Nameplate Capacity
Under Design Capacity
Equipment Wear
Operator Inefficiency
Startup Rejects
Scrap
Rework
In-Process Damage
In-Process Expiration
Incorrect Assembly
Production Rejects
Scrap
Rework
In-Process Damage
In-Process Expiration
Incorrect Assembly
(Currently, JIPM identifies cutting blade losses as a seventh loss. Since this is not a common loss to all machines, cutting blade losses
should be categorized as either performance or downtime losses for the purpose of calculating OEE.)
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6 RULES OF KANBAN: A successful kanban implementation requires stable processes and a discipline of following
procedures and rules. Kanban works only if you have reliable equipment, good quality, a stable workforce, even demand,
and the practice of following standard and procedures. A kanban system can be made to work where these problems
exist but at higher inventory levels unless some of these problems are addressed. Thee six prerequisites for using kanban
are:
1. Downstream pull of material. The downstream process takes material when needed from the upstream process. If the
producer process delivers finished materials downstream, this is push. If the supermarket is located at the consumer process
(downstream) instead of the producer process (upstream) this is not a true pull system.
2. Upstream replenishmentof the quantity the customer process withdraws. This rule prevents overproduction. No parts can be
produced or moved without kanban providing the signal. The actual quantity in the container must equal the kanban quantity
total. The upstream process only produces what the downstream process takes away.
3. Zero defects passed on downstream. Built-in quality is a must, rather than inspect-in quality or rework-in quality. Calculating
the kanban quantities means taking out the slack in the system. Defective materials passed downstream will create line stops
and confusion. This must be avoided to have a smoothly flowing operation.
4. Heijunka scheduling. Smoothing the schedule by averaging the volume and mix allows for lower safety factors in the kanban
calculation. Without this you may end up carrying more inventory. A kanban system only functions when you know what you
will produce tomorrow. There must be a daily schedule based on monthly production requirements.
5. Kanban attachment to the actual part or actual container. The kanban card must be attached to the actual part in order to
promote visual management.
6. Reduce kanbans to identify problems and drive kaizen activity. Removing kanban cards from the system exposes part
shortages, line stoppages, and other problems that can help encourage further kaizen activity.
Kanban systems require training and awareness of the importance of following and maintaining the sequence dictated by
Kanban. These six rules help insure that habits of batch & queue push production do not interfere with smooth flow and
pull.
6S: Same as 5S with the addition of Safety
7
THE LEAN, AGILE AND WORLDCLASS MANUFACTURING COOKBOOK
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7 DEADLY SINS OF QUALITY (AND LEAN): Coined by Prof. John Dew in ASQ Quality Journal.
7 FLOWS: Man, Machine, Information, Engineering (& Tools), Raw Material, Work-In-Process, and Finished Goods
Inventory. All problems can be solved by looking at and understanding the 7 FLOWS Nakao
7 NEW TOOLS: Problem solving tools used for kaizen and Hoshin Kanri activities. They are 1) matrix diagram, 2)
relationship diagrams, 3) process decision program charts, 4) activity network diagrams, 5) radar charts, 6) tree
diagrams and 7) affinity diagrams.
7 TOOLS OF QC: Ishikawas 7QC Tools which revolutionized Japan and the world in the 60s and 70s. Data gathering
and analysis tools used for kaizen activities originally by QC Circles. They are 1) check sheets, 2) cause and effect
diagrams, 3) Pareto diagrams, 4) histograms, 5) graphs, 6) scatter diagrams, and 7) broken line graphs (control charts).
7 WASTES OF PRODUCTION: There are 7 types of waste that describe all wasteful activity in a production environment.
Elimination of the 7 wastes leads to improved profits. The 7 wastes are 1) Overproduction, 2) Transportation, 3) Motion, 4)
Waiting, 5) Processing, 6) Inventory, and 7) Defects. Use the acronym 'DOTWIMP' to remember the 7 Wastes of Lean.
The following seven categories or forms of waste easily remembered as COMMWIP:
Correction
Over-production
Movement of Material
Motion (excess for people)
Waiting
Inventory
Process/Procedure (lack or faulty)
Examples
Motion
Causes
Countermeasures
Forecasting
Long set-ups
Just in case for
breakdowns
Batch production
Push production
Storage
Functional layout
Flow lines
Pull system
Value Stream
organizations
Kanban
Workplace disorganization 5S
Missing items
Point of Use Storage
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Waiting
Processing
Inventory
Raw materials
Work in process
Finished goods
Consumable supplies
Purchased components
Defects
Scrap
Rework
Defects
Correction
Field failure
Variation
Missing parts
Water Spider
One-piece flow
Workstation design
Push production
Downstream pull
Work imbalance
Takt time production
Centralized inspection
In-process gauging
Order entry delays
Jidoka
Lack of priority
Office Kaizen
Lack of communication
TPM
Delay between processing Flow lines
Push system
One-piece pull
Customer voice not
Office Kaizen
understood
3P
Designs thrown over the Lean Design
wall
Supplier lead-times
External kanban
Lack of flow
Supplier development
Long set-ups
One-piece flow lines
Long lead-times
Set-up reduction
Paperwork in process
Internal kanban
Lack of ordering procedure
Process failure
Gemba Sigma
Misloaded part
Pokayoke
Batch process
One-piece pull
Inspect-in quality
Built-in quality
Incapable machines
3P
Jidoka
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7. Muda caused by
overproduction
6. Muda caused by
transport
5. Muda caused by
waiting
4. Muda caused by
unnecessary stock
3. Muda caused by
unnecessary
movement
2. Muda caused by
defects
1. Muda caused by
inappropriate
processing
BAD
GOOD
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8
8 WASTES: Same as 7 Wastes with the addition of Underutilized People This includes underutilization of mental,
creative, and physical skills and abilities, where non-Lean environments only recognize underutilization of physical
attributes. Some of the more common causes for this waste include poor workflow, organizational culture, inadequate
hiring practices, poor or non-existent training, and high employee turnover. See 7 Wastes, Muda.
8D (TOPS-8D): The 8D Process is a problem solving method for product and process improvement. It is structured into 8
steps (the D's) and emphasizes team. This is often required in automotive industries. The 8 basic steps are: Define the
problem and prepare for process improvement, establish a team, describe the problem, develop interim containment,
define & verify root cause, choose permanent corrective action, implement corrective action, prevent recurrence, recognize
and reward the contributors.
Of course, different companies have their different twists on what they call the steps, etc...but that is the basics.
8 D is short for Eight Disciplines which Originated from the Ford TOPS (Team Oriented Problem Solving) program. (First
published approximately 1987)
D#1 - Establish the Team
D#2 - Describe the problem.
D#3 - Develop an Interim Containment Action
D#4 - Define / Verify Root Cause
D#5 - Choose / Verify Permanent Corrective Action
D#6 - Implement / Validate Permanent Corrective Action
D#7 - Prevent Recurrence
D#8 - Recognize the Team
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AB
A3 REPORT: This "A3" sized (11 inches x 17 inches) form is used at Toyota as a one-sheet problem evaluation, root
cause analysis, and corrective action planning tool. It often includes sketches, graphics, flow maps or other visual means
of summarizing the current condition and future state.
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The A3 problem-solving method and document, in combination with the value stream map (VSM), both borrowed from
practices of the Toyota Motor Company, have shown their value in reducing waste and error. The A3 method offers a
long-missing standardized approach to solving problems identified in higher-level value stream maps.
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A-B CONTROL: A method used to regulate working relationships between a pair of operations such that overproduction is
minimised. Machine A cannot feed machine B until it is empty or waiting for work.
ABC: See Activity Based Costing.
ABC ANALYSIS: An inventory classification scheme that ranks items based on past (or projected) annual usage times
cost or price, with A items accounting for the top 10-20% in terms of number of items and 60-70% of dollar volume, B
items the next 20-25% of items and 20-30% of dollar volume, and C items as the bottom 60-70% of items and only 15-30%
of the dollar volume. A Class D is sometimes used for obsolete or non-moving items. ABC categories are often used in
specifying the amount of attention and control paid to specific items, (with the tightest control over A items), in exception
reporting and in selecting items for periodic inventory cycle counts (A items are counted the most frequently).Classification
system of items in decreasing order of annual sales value (price x projected volume). Usually displays the Pareto 80:20
rule in that 80% of inventory value is held in 20% of the materials. It can be that A, B and C class materials are planned
differently and perhaps as runners, repeaters and strangers.
ABNORMALITY MANAGEMENT: Being able to see and quickly take action to correct abnormalities (any straying from
Standard Work). This is the goal of standardization and visual management. Continuous waste elimination and problem
solving through kaizen are only possible when the abnormalities are visible. See Ijo Kanri.
ACTIVITY BASED COSTING: A management accounting system that assigns cost to products based on the resources
used to perform a process (design, order entry, production, etc.) These resources include floor space, raw materials,
energy, machine time, labor, etc.
AGILE MANUFACTURING: Tools, techniques, and initiatives that enable a plant or company to thrive under conditions of
unpredictable change. Agile manufacturing not only enables a plant to achieve rapid response to customer needs, but also
includes the ability to quickly reconfigure operations -- and strategic alliances -- to respond rapidly to unforeseen shifts in
the marketplace. In some instances, it also incorporates "mass customization" concepts to satisfy unique customer
requirements. In broad terms, it includes the ability to react quickly to technical or environmental surprises. A means of
thriving in an environment of continuous change, by managing complex inter and intra-firm relationships through
innovations in technology, information, and communication, organizational redesign and new marketing strategies. See
Fast and Flexible Manufacturing.
ANDON: A tool of visual management, originating from the Japanese word for 'lamp'. Most commonly, andons are lights
placed on machines or on production lines to indicate operation status. Andons are commonly color-coded green (normal
operations), yellow (changeover or planned maintenance), and red (abnormal, machine down). Often combined with an
audible signal such as music or alarms.
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ANDON BOODO: Andon Board (a board with sections that light up to advise the status of areas, processes, equipment,
etc.). See Andon.
ANDON KOODO: Andon Cord (the cord operators pull when problem are discovered on a moving line). See Andon.
ARUBEKISUGATA: The State Things Should Be In (the ideal) as defined by the principles of the Toyota Production System
(Just in Time, Quality in Station, Leveled Production, etc.).
See Material and Information Flow.
See
Monotojouhounonakarezu.
ASSEMBLE TO ORDER: An environment where a product or service can be assembled or provided upon receipt of a
customers order. The product will usually consist of a number of modules that are assembled to the highest level possible
and stored such that when the order arrives, it can be assembled quickly and to the customers specification.
ATARIMAE HINSHITSU: Focusing on intangible effects of processes and ways to optimize and reduce their effects. One
of the four steps of TQM. Japanese culture intrinsically values quality and appreciates the small details. In fact, the
Japanese expression for quality is atarimae hinshitsu, which can be roughly translated as "taken-for-granted quality" or
quality that is expected. One of four steps in TQM.
ATOHOJUU: Replenish, Pull and Replenish
ATOKOUTEIHIKITORI: Pull, Pull System (literally the next process pulls and takes). See Pull System.
AUTO-EJECT DEVICE: See Hanedashi.
AUTONOMATION: Machines are given human intelligence and are able to detect and prevent defects. Machines stop
autonomously when defects are made, asking for help. Autonomation was pioneered by Sakichi Toyoda with the invention
of automatic looms that stopped when a thread broke, allowing an operator to manage many looms without risk of
producing large amounts of defective cloth. Autonomation is a pillar of the Toyota Production System. See Jidoka.
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This illustration shows how a limit switch stops Operation #10 when the transfer conveyor has five pieces.
AUTOMATIC TIME: The time when a machine is running on auto cycle and a person does not needed to be there to
operate the machine. Commonly used for NC machine cycles, oven cycles, wash cycles, etc.
AVAILABILITY: See Bekidouritsu, Kadouritsu.
B
BACK FLUSHING: A method of recording accounting transactions for labor and materials based on what was shipped
rather than by using material issues or cards. The aim of back flushing is to reduce the number of non value-added
transactions.
BALANCE CHART: A bar chart or histogram that illustrates work content per operator. Can be used to balance work for
operators or machines in order to achieve improvements in flow.
BAKA-YOKE: A manufacturing technique of preventing mistakes by designing the manufacturing process, equipment,
and tools so that an operation literally cannot be performed incorrectly; an attempt to perform incorrectly, as well as being
prevented, is usually met with a warning signal of some sort; the term "poka-yoke" is sometimes referred to as a system
where only a warning is provided. See Poka-Yoke.
BATCH AND QUEUE: Typical mass production method such that a part going through a system will be produced in large
batches to maximise efficiency and then sit in a queue waiting for the next operation. Contrast Flow Production.
BEKIDOURITSU, KADOURITSU: Operational Availability, Machine Availability (100% is ideal because nothing should ever
prevent a machine from being available for planned production)
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BENCHMARKING: Comparing key performance metrics with other organization in similar or relevant industries.
Establishing standards for improvement based on what others have been able to achieve. Visiting or interviewing peers to
learn from what they have done.
BOTTLENECK: A process in any part of the enterprise (office, production, sales, etc.) that limits the throughput of the
whole process.
BREADTRUCK RESUPPLY: The "lowest hanging fruit" in material logistics is the breadtruck delivery system for small,
inexpensive parts. Instead of counting on sales forecasts to trigger an MRP system to generate purchase orders, all the
small, inexpensive parts can be made available in bins at all the points of use. A local supplier is contracted to simply keep
the bins full and bill the company monthly for what has been used, much like the way bread is resupplied by the breadtruck
in a small market.
All the MRP/purchasing expense is eliminated and this type of delivery can assure a constant supply of parts, thus
avoiding work stoppages. Being off the forecast/MRP system, the supply of these parts can be assured for "forecast-less"
operations such as Build-to-Order. Typical parts suitable for breadtruck deliveries are fasteners, resistors, capacitors, and
almost any small, inexpensive part.
As companies become more agile, they may include slightly more expensive and slightly larger parts into the breadtruck
system. The more expensive parts may incur some inventory carrying cost, but that should be outweighed by savings in
purchasing, materials overhead, expediting, and avoiding work stoppages.
Contrast to Milk Run (collections). Criteria for Breadtruck Deliveries:
A reliable supplier can be contracted. Many suppliers welcome such business and want to perform well, since they usually get
all the business for their categories of parts and raw materials.
Parts can be distributed at all points of use. Of course, part standardization helps here
Parts are small enough and cheap enough so that sufficient parts will always be on hand. Bin count can be set high enough to
preclude any chance of ever running out.
Parts are not likely to go obsolete or deteriorate while waiting to be used.
The breadtruck parts are not so "attractive" as to create a significant pilferage problem, since, generally, companies do not
correlate part consumption with product sales. However, making breadtruck parts freely available for R&D prototypes and
factory improvements may encourage innovation.
Manual reorders are not anticipated to occur. The supplier should be in a continuous improvement mode and be constantly
adjusting bin count to correspond to prevailing demand. The factory could alert the supplier about any anticipated "spikes" in
demand.
BREAKTHROUGH OBJECTIVES: Objectives that are stretch goals for the organization. Breakthroughs represent a
significant change for the organization providing a significant competitive advantage. Breakthrough goals are achieved
through multi-functional teamwork.
BROWNFIELD: An existing and operating production facility that is set up for mass-production manufacturing and
management methods. Contrast Greenfield.
BUILD TO ORDER: A production environment when a product or service can be made and assembled after receipt of a
customers order. See Seiban.
BULLWHIP EFFECT: Alternative name for demand amplification.
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C
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C-VARWIP: Circular - VARiable Work in Process (C-VARWIP) is the synthesis to both Push (first generation) and Pull
(second generation) production control systems when the system is taken as unitary, when whole-system analysis is
performed.
CANDO: Cleanup, Arranging, Neatness, Discipline and Ongoing Improvement - A precursor to 5S, CANDO is an industrial
housekeeping program developed by Henry Ford, circa 1922. See 5S.
CAPITAL LINEARITY: A philosophy linked to capital expenditure on machinery such that a small amount of additional
capacity can be added by using a number of smaller machines rather than one great big and very expensive machine.
See Labour Linearity.
CATCHBALL: A process used in Hoshin Planning to communicate vertically to obtain consensus on the Means that will
be used to attain each Breakthrough Objective. A series of discussion between managers and their employees during
which data, ideas, and analysis are thrown like a ball. This opens productive dialogue throughout the entire company.
CAUSE AND EFFECT DIAGRAM: A problem solving tool used to identify relationships between effects and multiple
causes (also Fishbone Diagram, Ishikawa Diagram).
CEDAC: Acronym for Cause and Effect Diagram with the Addition of Cards. CEDAC is a method for involving team
members in the problem solving process.
CELLULAR MANUFACTURING: An alignment of processes and equipment in correct process sequence, where
operators work within the cell and materials are presented to them from the outside of the cell. Often, cellular
manufacturing has not taken into account waste elimination or Standard Work principles, and therefore greater savings
have not been realized.
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COMBINE, ELIMINATE, SIMPLIFY: Basic tools of method study and cornerstone of improvement operartons. List
sometimes also includes rearrange. See Nagara.
CONCURRENT ENGINEERING: Designing a product (or service), its production process, the supporting information flow,
and its delivery mechanism at the same time. The benefits include shorter development time from concept to market, a
higher product quality, lower overall development cost and lower product or service unit cost. Concurrent engineering
requires up-front planning and dedicated resources early in the early stages of development.
CONTINUOUS FLOW MANUFACTURING: Continuous Flow Manufacturing (CFM) was developed by the IBM Consulting
and is a system that allows the management of bottlenecks of a line and implement a continuous improvement strategy
aimed towards bottlenecks elimination. To that extent it is a clever implementation of Kanban principles and Theory of
Constraints. It is a manufacturing strategy that produces a part via a just-in-time and kanban production approach, and
calls for an ongoing examination and improvement efforts which ultimately requires integration of all elements of the
production system. The goal is an optimally balanced production line with little waste, the lowest possible cost, on-time and
defect-free production. Often used interchangeably with Lean Manufacturing.
Manufacturing that takes place in a work center that is organized according to similar manufacturing processes, usually by
linking dissimilar machines. Continuous flow manufacturing is the opposite of job shop manufacturing
Continuous flow manufacturing encompasses four basic elements:
1) Based upon customer requirements, an overall manufacturing network must be configured.
2) Manufacturing requirements are identified, and strategic master plans are developed and implemented for each operation.
3) Information and management systems for the manufacturing process and operations are assessed, defined, purchased and
implemented. The information systems will drive the manufacturing continuous flow process and will interface with all of the
organization's business systems.
4) Once the manufacturing network, manufacturing requirements, and information and management systems are in place, the
process of continuous improvement must be installed
Continuous flow manufacturing (CFM) is a system's approach to total system improvement. In its simplest form, CFM is a
process for developing improved workflow using team-based problem solving.
The process is managed by a leadership team, which consists of three subteams. These teams manage cultural change,
identify and implement process flow requirements, and measure the cultural and physical process. The entire organization
is trained in process improvement and cultural change tools to facilitate the transition to a continuous flow manufacturing
environment.
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CONTINUOUS IMPROVEMENT: The never-ending pursuit of waste elimination by creating a better workplace, better
products, and greater value to society.
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CONTROL ELEMENT: Any specific process variable that must be controlled. The measurement of a control element
indicates whether the process is operating under stable conditions.
CONWIP: A pull technique adopted to high-mix low volume environments. The Conwip Spearman et al., 1990(CONstant Work In Process) production control system tries to maintain constant the maximum amount of work in process
in the system. This control system is implemented by means of kanban cards. One kanban card is attached to a job from
the beginning of the line. The maximum work in process equals the total number of cards in the system. When a part is
shipped to the system, the attached card is released and is sent to the beginning of the line, where it will be attached to
another job to be processed. Also see Kanban, Drum-Buffer-Rope, POLCA.
CONWIP control. Movement of parts shown in blue, circulation of release authorizations in green.
Hybrid CONWIP/kanban control. Movement of parts shown in blue, circulation of kanban in red, and release authorizations in green.
COST OF POOR QUALITY: Costs associated with supplying a poor quality product. Categories of cost include internal
and external failure costs.
COST OF QUALITY: Costs associated with supplying a quality product. Categories of cost include prevention, appraisal,
and failure.
COUNTERCLOCKWISE FLOW: A basic principle of Lean manufacturing cell layout is that the flow of material and the
motion of people should be from right to left, or counterclockwise. The origin of this idea came from the design of lathes
and machine tools with the chucks on the left side, making it easier for right-handed people to load from right to left. See
Cellular Manufacturing.
COUNTER MEASURES: Actions taken to bring less than expected results of a process back up to targeted levels.
CROSS DOCKING: A practice in logistics of unloading materials from an incoming semi-trailer or rail car and loading
these materials in outbound trailers or rail cars, with little or no storage in between. This may be done to change type of
conveyance, or to sort material intended for different destinations, or to combine material from different origins. See
Noritsugiunpan.
CURTAIN EFFECT: A method that permits the uninterrupted flow of production regardless of external process location or
cycle time. Normally used when product must leave the cell for processing through equipment that cannot be put into the
cell. (i.e. heat treat, curing oven, plating, wave solder) Curtain quantities are established using the following formula:
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Per unit Cycle Time of Curtain Process TAKT Time = Curtain Quantity
CYCLE TIME: Cycle time is the time it takes to do one repetition of any particular task. Cycle time can be categorized into
1) manual cycle time, 2) machine cycle time, and 3) auto cycle time. Also referred to as touch time or hands-on time. See
Saikurutaimu.
D
DAILY MANAGEMENT: The day-to-day activities that are required to serve the customers and ensure that the business is
generating profit. See Nichijo Kanri.
DANDORIGAE, DANGAE: Changeover, Set-up Change (of tools, dies, etc. to enable the production of a variation of a
product on the same machine or line). See SMED.
DATSU-CHAKU: Japanese term meaning Unload/Load used to tell the traditional way of component loading on a
machine/equipment. This terminology is usually compared with "Chaku-Chaku". Contrast Chaku-Chaku.
DAYS SUPPLY OF INVENTORY: Total number of days (if the production level equals zero) that it would take to deplete
finished goods inventory for the specified product line.
DbFM: See Demand-based Flow Manufacturing.
DEMAND AMPLIFICATION: The tendency for fluctuations in demand to increase as they move up the supply chain. Often
referred to as the bullwhip effect in recent literature.
DEMAND-BASED FLOW MANUFACTURING: Demand-based Flow Manufacturing (DbFM) has demonstrated its success
as a high velocity order-to-delivery strategy and process. The root origin for DbFM is in the lean production methods first
developed and remarkably well practiced by Toyota.
DEMAND-FLOW MANUFACTURING: Demand-flow manufacturing is customer-driven, rather than forecast driven.
Instead of producing in long runs and large batches, then storing products until they are sold, demand-flow lines create a
variety of items each day, keyed to direct customer orders. Often used interchangeably with Lean Manufacturing.
DEMAND LUMPING: A phenomenon in which an otherwise smooth flow of demand up a supply chain is grouped into larger
chunks than is necessary to meet operational requirements. Demand lumping is a major contributor to demand amplification.
It is known to be caused by batching, forward buying, and hoarding.
DESIGNED FOR MANUFACTURING AND ASSEMBLY (DFMA): A way of improving cost, quality, and safety of the
manufacturing and assembly processes by design.
DESIGN OF EXPERIMENT: Planning and conducting experiments and evaluating the results. The outcome of a design of
experiment includes a mathematical equation predicting the interaction of the factors influencing a process and the
relevant output characteristics of the process.
DOE: See Design of Experiment.
DOWNSTREAM PULL SYSTEM: See Pull System.
DRUM-BUFFER-ROPE: Drum-Buffer-Rope (DBR) scheduling is the manufacturing application of the Theory of
Constraints, a body of thought developed by Dr. Eliyahu Goldratt. The DBR logistical system is a finite scheduling
mechanism that balances the flow of the system. DBR controls the flow of materials through the plant in order to produce
products in accordance with market demand with a minimum of manufacturing lead time (MLT), inventory and operating
expenses. The definitions of DRUM, BUFFER and ROPE are:
ROPE - A schedule for releasing raw materials to the floor. The Rope is derived according to the Drum and Buffers; its mission
is to ensure the proper subordination of the non-constraints.
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E
EFFICIENCY: See Shinnonouritsu.
ELEMENTS OF WORK: The elements of work are 1) value-added work, 2) non value-added work, and 3) waste.
Thoroughly understanding the elements of work is a key first step to lean thinking.
ENGINEER TO ORDER: Products whose customers specifications are unique for each order therefore each product is
engineered from scratch upon receipt of an order.
EPE: See Every Part Every.
EVERY PART EVERY: Measured in terms of time (hours, days, weeks, months, etc.) Every Part Every X indicates the
level of flexibility to produce whatever the customer needs. For instance, Every Part Every day would indicate that
changeovers for all products required can be performed each day and the products can be supplied to the customer.
EVERY PART EVERY INTERVAL (EPEI): EPEI stands for Every Part Every Interval. EPEI is the lot size expressed in time.
The EPE Interval determines how often each item can be produced without exceeding available capacity and with the
smallest possible lot size. The calculations of takt time and the EPE Interval are the most important calculations involved in
setting up a lean execution system. Fundamental concept to lean manufacturing. The EPEI is the time it takes to run
through every regular part produced in a process. Knowing the EPEI helps determine the manufacturing lot size and
supermarket quantities for each part produced in a manufacturing process, as well as the number of kanban cards in the
replenishment loop.
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EXTENDED KANBAN: An alternative to single Kanban in dynamic environments. This system is also a hybrid combination
of Kanban system and Base stock like the Generalized Kanban system. The main difference between Extended Kanban and
Generalized Kanban is that in the former, the customer demand signal is instantaneously transferred to all stations, while in
the latter it is a non-instantaneous process (Dallery and Liberopoulos, 2000). Also see Kanban, Base Stock, CONWIP,
Drum-Buffer-Rope.
EXTERNAL SET-UP: All set-up tasks that can be done while the machine is still running. Examples are collecting tools,
the next piece of material, preparing or fixtures. Moving set-up activities from internal to external in order to reduce
machine down time is a central activity of set-up reduction and SMED. See Sotodandori.
F
FAILURE MODES AND EFFECTS ANALYSIS (FMEA): A structured approach to determining the seriousness of potential
failures and for identifying the sources of each potential failure. The aim is to identify possible failures and implement
corrective actions to prevent failures.
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FAST AND FLEXIBLE MANUFACTURING: The concept of Fast and Flexible Manufacturing, also referred to as Agile
Manufacturing, was introduced in 1991 by US government-sponsored research at Lehigh University. Seen by some as the
next major framework for world-class manufacturing. See Agile Manufacturing.
FIFO: See First-in First-out.
FINISH TO ORDER: An environment such that products are built to as higher level as is possible and then configured to
customers requirements upon receipt of order.
FIRST IN FIRST OUT: Also known as FIFO, a system of keeping track of the order in which information or materials need
to be processed. The goal of FIFO is to prevent earlier orders from being delayed unfairly in favor of new orders.
FIXED-POSITION STOP SYSTEM: A problem addressing method on continuously moving production lines such that if a
problem is identified and not resolved before a fixed point, the production line will stop. See Teiichiteishihoushiki.
FLEXIBLE WORKFORCE: See Shojinka.
FLOW: See Nagareka.
FLOW CHART: A problem solving tool that maps out the steps in a process visually. The flow (or lack thereof) becomes
evident and the wastes and redundancies are identified.
FLOW PRODUCTION: A way of doing things in small quantities in sequential steps, rather than in large batches, lots or
mass processing. Product (or service) moves (flows) from process to process in the smallest, quickest possible increment
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(one piece). Only acceptable quality products or services are accepted by the downstream customer. See One-Piece
Flow.
FUTEIKI: Unscheduled Time (one of the 4 possible conditions of delivery, meaning that there is no attempt to create a
fixed schedule for delivery runs). Contrast Teiki.
FUTEIRYOU: Unscheduled Quantity (one of the 4 possible conditions of delivery, meaning that there is no attempt to
define the quantity of material that is to be delivered on a run). Contrast Teiryou.
G
GEMBA: is a Japanese word meaning "actual place," or the place where you work to create value. In manufacturing this is
the factory. In each industry, the Gemba will be a different place. Also spelled Genba. See 3 Gen Principle.
GEMBUTSU: Japanese for 'actual thing' or 'actual product'. The tools, materials, machines, parts, and fixtures that are the
focus of kaizen activity. Also spelt Genbutsu. See 3 Gen Principle.
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GENBA KANRI: Workplace management: the system by which standards for running the day-to-day business are
established, maintained controlled and improved. Contrast with hoshin kanri.
GENCHI GENBUTSU: Genchi genbutsu means see for yourself or go and see. The word is often used in a factory
context. The basic idea is that as a decision-maker, you cant make a judgment about a situation before you have actually
seen the conditions with your own eyes. Japanese managers are therefore encouraged to spend time on the factory floor,
observing processes and interacting with workers. A manager should not remain sequestered in an office, relying on the
reports of subordinates. The actual place and the actual thing (where something is or happens, and the actual things that
are in question, the fundamental attitude necessary for successful management and problem solving ie All solutions lie in
careful observation of actual materials and the actual conditions under which they are handled, genbutsu is also spelled
gembutsu. See 3 Gen Principle.
GENERIC KANBAN / GENERALISED KANBAN: A kanban system designed for non-repetitive manufacturing
environments. Kanbans have shown successful results in lowering inventory and shortening lead time in repetitive
production systems. Unfortunately, such systems are not applicable to production environments with dynamic
characteristics. Here a modified kanban system, the generic kanban system, is proposed for such dynamic environments.
The generic kanban system behaves similarly to the push system except that it is more flexible with respect to system
performance and more robust as to the location of the bottleneck. Generalized Kanban (Buzacott, 1989, Zipkin, 1989 or
Frein et al., 1995) is a hybrid combination of the Kanban system and Base Stock and results similar to Extended Kanban.
Also see Kanban, CONWIP, POLCA & Drum-Buffer-Rope.
GENJITSU: Japanese for 'the facts' or 'the reality'. The actual facts or the reality of what is happening on the shop floor
and in the business. See 3 Gen Principle.
GO ESU: Japanese for 5S. See 5S.
GREENFIELD: A new production facility where lean principles are designed into manufacturing and management systems
from the beginning. Contrast Brownfield.
GRPI: GRPI stands for four critical and interrelated aspects of teamwork: goals, roles, processes, and interpersonal
relationships, and it is a tool used to assess them.
GROUP TECHNOLOGY: Group Technology examines products, parts and assemblies. It then groups similar items to
simplify design, manufacturing, purchasing and other business processes. The figures below illustrate how an apparently
random collection of items has surprising similarity. Also see Product Families.
Ungrouped Parts
Grouped Parts
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H
HAIYAAHOUSHIKI: On Call Delivery (the delivery vehicle is stationed in a specified place and awaits a request for
conveyance - similar to a limousine for hire, hence the name hire system).
HAMIDASHIHIN: Overflow Parts
HANAREKOJIMA: Isolated Jobsite (original Japanese is analogous to the expression deserted island, as if the worker at
such a site were marooned and cut off from normal factory activity). See Isolated Island.
HANDS-FREE: See Tebanare.
HANEDASHI: Auto-eject devices that unload the part from the machine once the cycle is complete. This allows the
operators to go from one machine to the next without waiting, picking up and loading parts. Hanedashi is a key component
of chaku-chaku lines.
HANSEI: Relentless, deep reflection. A Japanese term that means to reflect on one's failings or misdeeds, with the idea
that this self-reflection will cleanse the individual and result in self-rehabilitation. Without Hansei, you cannot have Kaizen.
Frequent reviews at key milestones and after completing a project to openly identify all shortcomings of the project. Then
develop countermeasures to avoid the same mistakes again. The third step in the PDCA Cycle, also referred to as
standardized worrying. In a nutshell, this concept is about reflecting on mistakes/weaknesses and devising ways to
improve. Hansei is a concept that Toyota uses as a practical improvement tool like Kaizen. Toyota actually conducts
Hansei events (like Kaizen events) to improve products and processes. As hansei is utilized, the improvements are fed
back into the organization and disseminated.
HEIJUNKA: Refers to keeping the total production volume and mix as constant as possible. See Leveling.
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HILL-CLIMBING: A technique used to search for a superior configuration of a system such as a supply chain by making a
series of small, beneficial changes to the system until no further improvements appear to be possible.
HINSHITSU HOZEN: Quality Maintenance
HISTOGRAM: A problem solving tool that displays data graphically in distribution. It is often used to reveal the variations
that any processes contain.
HITOKETA: Single Digit (referring to times measured with no more than single digit numbers, can mean less than 10
seconds, or less than 10 minutes)
HORIZONTAL HANDLING: When tasks are assigned to a person in such a way that the focus is on maximizing a certain
skill set or use of certain types equipment, this is called horizontal handling. Horizontal handling does not benefit flow.
Contrast to Vertical Handling.
HOSHIN KANRI: A method of policy deployment and strategic decision making that focuses and aligns the organization
on a few vital breakthrough improvements. The objectives and means to achieve the objectives are cascaded down
through the entire organization using a series of linked matrices. The process is self-correcting and encourages
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organizational learning and continuous improvement of the planning process itself. See Policy Deployment. Contrast
Genba Kanri.
HOURENSOU: Trusted advisor. Hourensou is a Japanese word made up of three parts: hou (houkoku -- to report), ren
(renraku -- to give updates periodically, inform) and sou (soudan -- to consult or advise). To serve some of the genchi
genbutsu functions, senior management uses hourensou, which is common within top Japanese companies. Hourensou
forms the basis of good communication on the shop floor. It entails reporting what you do, or what you observe, give
updates when e.g. arriving late at work (train, weather) or confirming appointments, and consulting with your superior or a
colleague if something is not understood, about the next task, etc. Communication, discussion and learning process from
management.
HYOUJUNSAGYOU: Standardized Work (work procedures posted on site that define the takt, the sequence of operation,
and the standard in-process stock). See Standardized Work.
HYOUJUNSAGYOU KUMIAWASEHYOU: Standardized Work Combination Chart (a Gantt chartlike tool which illustrates
standardized work as a combination of manual task time, automated work time, walk time, and waiting time, all against the
takt). See Standardized Work Combination Chart.
HYOUJUNTEMOCHI: Standard In-Process Stock, Standard Work in Process (should be no more than 1, literally
standard, onhand piece). See Standard Work in Process.
I
IJO-KANRI: See Abnormality Management.
IKKONAGARE: 1 Piece Flow (each station of a line completes its work on only 1 piece at a time, there is no batching).
See One Piece Flow.
INTELLIGENT AUTOMATION: See Autonomation.
INTERNAL SET-UP: Set-up tasks that can only be done when the machine is stopped. Examples are changing the fixture,
changing the tools, or making adjustments. After as many of the internal tasks have been externalized as is possible, the
remaining internal changeover time is reduced through use of quick-change mechanisms. See Uchidandori.
INVENTORY: A major cost for most businesses, inventory is all raw materials, purchased parts, work-in-process
components, and finished goods that are not yet sold to a customer. In some cases inventory may include consumable
goods used in production.
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INVENTORY TURNS: The cost of goods sold divided by the average level of inventory on hand. This ratio measures how
many times a company's inventory has been sold during a period of time. Operationally, inventory turns are measured as
total throughput divided by average level of inventory for a given period.
In business management, inventory turns (IT) measures the number of times capital invested in goods to be sold turns
over in a year. An item whose inventory is sold (turns over) once a year has higher holding cost than one that turns over
twice, or three times, or more in that time. The real purpose of inventory reduction campaigns is to increase inventory
turns, for three reasons.
Increasing inventory turns reduces holding cost. The organization spends less money on rent, utilities, insurance, and other
costs of maintaining a stock of good to be sold.
Reducing holding cost increases net income and profitability as long as the revenue from selling the item remains constant.
Items that turn over more quickly increase responsiveness to changes in customer requirements while allowing the replacement
of obsolete items.
ISOLATED ISLANDS: The result of a common mistake of cherry-picking lean techniques, which leads to building isolated
islands of improvement instead of improving the whole production flow to reap the biggest benefits. See Hanarekojima.
J
JASUTOINTAIMU: Just in Time, JIT (arrival of needed items only, only in the quantity needed (i.e. 1 at a time), and only at
the time needed). See Just in Time.
JIDOKA: See Autonomation. The five steps of Jidoka are:
5. Automatic unloading
4. Automatic return to home position
3. Automatic stop
2. Automatic feed
1. Automatic processing
JIKKOUTAKUTOTAIMU: Actual Takt Time (takt time is derived strictly from net working time divided by the number of
units ordered for that time, but actual takt time is derived from calculations that factor in real-world issues). See Takt Time.
JISHU HOZEN: Autonomous maintenance.
JISHU KANRI: Self-management, or voluntary participation.
JISHUKEN: Literally translates to a fresh set of eyes, which suggests that sometimes being too close to a problem
prevents a person from objectively seeing what is wrong. When applied to TPS, it refers to developing a creative approach
to problem solving, utilizing autonomous study groups. Kaizen with outside help - a "fresh pair of eyes" approach to kaizen
to complement the improvement ideas of those carrying out production tasks day-by-day. Outsiders (for example, from a
customer) help the production team to eliminate waste. Process improvement engineers going into suppliers are sometimes
described as "jishuken teams".
JIT: See Just-in-Time Production.
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JUNBIKI: Pick in Order of Use (as in material delivery systems that gather and deliver parts in consideration of the
sequence in which they are to be used according to Standardized Work).
JUNKAI: Japanese for milkrun, literally meaning tour. See Milkrun.
JUNJIDANGAE: Rolling Changeover, Rolling Set-up Change (changeovers of equipment along a production line
performed in succession according to the sequence of the use of the equipment in production so as to minimize production
line downtime).
JUST-IN-TIME PRODUCTION (JIT): A production system to make what the customer needs when the customer needs it
in the quantity the customer needs, using minimal resources of manpower, material, and machinery. The three elements to
making Just-in-Time possible are Takt time, Flow production, and the Pull system. See Jasutointaimu.
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JUTSU: The art of something (i.e., 'leanjutsu: the art of lean production').
K
KADOURITSU: Operation Rate, Utilization Rate (the time a machine is capable of working products divided by the time it
actually works the products).
KAI-AKU: The opposite of kaizen. Change for the worse. Bad change. Contrast Kaizen.
KAIKAKU: Radical improvements or reform that affect the future value stream. Often these are changes in business
practices of business systems.
KAIKAKU HOZEN: Planned maintenance.
KAIZEN: Japanese for 'change for the better' or 'improvement'. A business philosophy of continuous cost reduction,
reduce quality problems, and delivery time reduction through rapid, team-based improvement activity. Kaizen means
breaking apart the current situation, analyzing it, and quickly putting it back together to make it better. Contrast to Kai-aku.
The Kaizen concept consists of four elements:
Quality
Effort
Willingness to improve
Communication
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KAIZEN NEWSPAPER: A tool for visually managing continuous improvement suggestions. Based on the PDCA cycle and
designed to manage input by the workforce in an organized way.
KAMISHIBAI: Literally "Paper Drama" - Way of using cards to tell and track a story. Often cards in slots to show process
status visually.
KANBAN: A Japanese word for 'sign', cometimes spelled kamban, Kanbans are typically a re-order card or other method
of triggering the pull system based on actual usage of material. Kanbans are attached to the actual product, at the point of
use. Kanbans are cards that have information about the parts (name, part number, quantity, source, destination, etc.) but
carts, boxes, and electronic signals are also used. Squares painted on the floor to indicate storage or incoming areas are
frequently, but mistakenly, referred to as kanbans.
What is Kanban?
The literal meaning of the word kanban in Japanese is sign board like you would see in front of a store or on an office
building. In the narrow definition of kanban for Lean manufacturing it is a card that contains information about the lot size, the
process, the quantity, the location, etc. of the material. Kanban are used to signal production and link disconnected processes.
A kanban system is made up of a set of rules for calculation of kanban quantities, routes for withdrawal of kanban and delivery
to kanban posts, the cycle of kanban collection and delivery, and the material replenishment lead-times to support production at
minimum safe inventory levels.
The Four Functions of Kanban
Kanbans provide an autonomous nervous system for your factory. When kanban cards are withdrawn and cycle back to
the production process this creates a flow of information, parts sold. When the production kanban is placed in the producing
process it is the signal, produce part. Kanban cards themselves tell the process how much of which types need to be
produced.
A second function is to the limit overproduction. Only kanban can start production and the quantity produced is strictly
regulated by the quantity on the cards. In a properly designed and functioning kanban system overproduction does not happen.
The third function is visual management. In typical material flow and information flow in a factory, information arrives first and
the material catches up later. In kanban systems the information (in the form of a kanban card) is attached to the actual parts
or containers the cards are visual controls showing what is produced in what sequence.
The fourth and most important function of a kanban system is kaizen through reduction of number of cards. Each card
represents a certain number of pieces of inventory in the system. Each card removed forces you to connect processes, reduce
changeovers and lot sizes, improve yields, etc. to reduce inventory. This continuous reduction of kanban cards can be a good
measure of your progress in Lean.
Removing kanban cards from the loop reduces inventory. This exposes problems such as part shortages and line stops
because there is less safety stock to hide them. Many organizations implement kanban but do not continuously reduce
changeover times and lot sizes, improve quality, and continuously take our cards from the system. This often results in
increasing inventory over time, even the addition of extra cards.
The Best Kanban is No Kanban
Where you see kanban, there is inventory. Kanban by itself is not Lean. The goal of Lean is to reduce waste by connecting all
processes one-to-one. When this is not possible, kanban is a method to link lot production and one-piece production. Kanban
is an enabler of flow where processes are disconnected. The best kanban is no kanban. Kanban helps you replenish material
in a logical and controlled way while giving you a method of challenging inventory levels and improving the production system
continuously
Rules of Kanban
The rules for Kanban systems seem very are simple, but they are actually very strict:
Operation - the consuming process should withdraw the necessary products/units from the supplying process in the
necessary point in time using a Kanban signal.
Kanban Cards - if used, always accompany containers from the supplier until removed from the Kanban staging area, thus
ensuring visual control.
Each Container must have a Kanban card, indicating part-number and description, consumer and producer location and
quantity.
The Parts should always be pulled by the succeeding process (Consumer).
No Parts are produced without a Kanban signal.
No Defective parts may be sent to the consuming process.
The Producer can only produce the quantities withdrawn by the consuming process.
The Numberof Kanbans should be properly calculated, minimized, monitored and reduced..
Types of Kanban
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Production Kanban: A signal that specifies the type and quantity of product that an upstream process must produce.
Signal Kanban: A signal that triggers an upstream process to produce, when a minimum quantity is reached at the
downstream process.
Withdrawl Kanban: A signal that specifies the type and quantity of product that the downstream process may withdraw.
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products. Kansei Engineering can "measure" the feelings and shows the relationship to certain product properties. One of
four steps in TQM.
KANO TAXONOMY OF CUSTOMER NEEDS: Kano analysis is a quality measurement tool used to prioritize customer
requirements based on their impact to customer satisfaction. Briefly, Kano (a Japanese researcher), stated that there are
four types of customer needs, or reactions to product characteristics / attributes:
1. The 'Surprise & Delight' factors. These really make your product stand out from the others. Example, a passenger jet that
could take off vertically.
2. The 'More is Better'. E.g. a jet airliner that uses a little less fuel than the competition.
3. The 'must be' things. Without this, you'll never sell the product. E.g. A jet airliner that cannot meet airport noise regulations.
4. Finally, there are the 'dissatisfiers', the things that cause your customers not to like your product. E.g. a jet airliner that is
uncomfortable to ride in.
Must Haves
Delighters
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KOUTEIBETSU NOURYOKUHYOU: Process Capacity Sheet (a kaizen tool used to calculate if a process or machine has
sufficient capacity to meet demand as expressed by takt time). See Process Capacity Table.
KUUKINAGASHI: Running Air (the capability to perform rolling changeovers in which the changeover of each separate
machine is completed within takt time so that the production line fails to produce a product for only one beat of the takt
time)
L
LABOUR LINEARITY: A manning philosophy such that as demand increases or reduces manpower is added one at a
time as such manpower requirements are linear to production volume. See Capital Linearity.
LAST IN FIRST OUT (LIFO): The result of a typical material or information flow system without FIFO, resulting in earlier
orders being perpetually delayed by new orders arriving on top of them.
LEAD-TIME: The time it takes to produce a single product, from the time of customer order entry to shipment. The sum of
the VA/NVA time for a product to move through the entire value stream.
LEAN CONSUMPTION: Introduced by Womack and Jones in the book Lean Solutions.
consumption are:
1.
2.
3.
4.
5.
6.
Solve the customer's problem completely by ensuring that all goods and services work, and work together
Rather than providing patches for recurring problems, the focus should be on diagnosing and changing systemic
issues at their source.
Don't waste the customer's timeBy focusing on ways to get rid of non-value-added time for the customer, repeat
business is much more likely and provider problems will be solved as well.
Provide exactly what the customer wantsInstead of large orders based on centralized forecasts, the lean
provider has a "rapid replenishment" system that quickly orders exactly what the customer has just pulled from the
shelf.
Provide what is wanted exactly where it is wantedMost customers buy the same things from a variety of formats
(supermarket, warehouse store, convenience store, etc.) at different times. The authors provide an example of a
European retailer (Tesco) that provides local convenience stores, midsized stores in town centers, supermarkets in
the suburbs, hypermarkets on the periphery, and web-based shopping. The same items from the same suppliers are
available at very similar prices.
Provide what is wanted where it's wanted exactly when it is wanted"Most of us do plan ahead for large,
durable purchases and would be willing to share our plans with the producer in return for getting exactly what we want
at a future date with a discount."
Continually aggregate solutions to reduce the customer's time and hassleAdvances in information technology
will provide opportunities to connect bundled goods and services in a cost-effective manner.
From the consumer's perspective, the six principles of lean consumption are:
7.
8.
9.
10.
11.
12.
LEAN ENTERPRISE: A Lean Enterprise is an organization that is engaged in the endless pursuit of waste elimination. A
Lean Enterprise has a culture that does not tolerate waste of any kind.
LEAN LOGISTICS (LL, L2): Logistics systems which use the most direct and efficient means to supply, transport,
distribute, maintain, and repair resources.
LEAN MANUFACTURING: A business practice characterized by the endless pursuit of waste elimination. A manufacturer
that is lean uses the minimum amount of manpower, materials, money, machines, space etc. to get the job done on time.
1) Focus on the customer.
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(1)Waste (2) Continuous improvement (3) Sequencing (4) Stop and notify of defects
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LEAN METRICS: Lean metrics go beyond traditional financial and accounting measurements. Accounting and financial
metrics often measure only the end result. They do not help control the process, solve problems or motivate people. The
types of metrics and measurement appropriate for a Lean Manufacturing system include Material Handling, Inventory,
Quality, People and Customers. Here are some general principles for lean metrics:
Keep It Simple: Use metrics that are easy to compile and update. Complex calculations or metrics that require excessive
work do not get updated or people get lazy and fake the data.
Use Tripwires: Simple metrics may not reveal the problem source. This is OK. The daily or weekly metric only needs to
alert you that a problem exists.
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Limit The Metrics: Each person or team should have 3-6 daily or weekly metrics. More than this and the metrics do not
get monitored. These metrics do not have to contain all the information that the person or group will ever need; they should
just signal an alert.
Drill Down When Problems Arise: When a "tripwire" metric indicates a deviation, you can investigate further to find the
source of the problem. This may require additional data that is not continually gathered, processed and analyzed.
LEAN PRODUCTION: The philosophy of continually reducing waste in all areas and in all forms; an English phrase coined
to summarize Japanese manufacturing techniques (specifically, the Toyota Production System). The activity of creating
processes which are highly responsive and flexible to customer demand requirements. Successful lean production is
evident when processes are capable of consistently delivering the highest quality products and services, at the right
location, at the right time, in response to customer demand and doing this in the most cost effective manner possible.
LEAN PROVISION: Introduced by Womack and Jones in the book Lean Solutions, lean provision "comprises all of the
steps required to deliver the desired value from producer to customer, often running through a number of organizations."
LEAN THINKING: A 5-step thought process proposed by James Womack and Dan Jones in their 1996 book Lean
Thinking to guide managers through a lean transformation. The steps are:
1.
2.
3.
4.
5.
Let the customer specify Value and only design what the customer wants.
Create Value Stream Maps that show the flow material and information to produce a product.
Create continuous one-piece flow wherever possible to continuously move material without any stoppages or
backtracking.
Only flow product when customers want it.
Foster an environment of continuous improvement.
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LEAN TRANSACTIONAL: The application of Lean to business processes such as paperwork flow through an office in
accounts or marketing.
LEAN TRANSFORMATION: Developing a culture that is intolerant to waste in all of its forms. A successful Lean
Transformation should result in a Lean Enterprise, an organization that is engaged in the endless pursuit of waste
elimination. The transformation starts with (1) identifying the need for change, (2) communicating that need for change, (3)
defining the "value stream" current and future, (4) identifying those changes which address the need for change and solve
the situation at hand (5) developing change plans (6) measuring the results and (7) going back to 1 and starting over.
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Sales promotions that accentuate demand cycles rather than smoothing them
Commission plans that cause sales people to sell in spurts, or to
Commission plans that cause sales people to suggest substitutions that don't fit the strategic or production plans
Performance measures that cause people to "finish it before the deadline" (even if we need to sacrifice quality or rework it later)
M
MACHINE AUTOMATIC TIME: The time it takes for a machine to produce one unit, not including the manual time to load
and unload.
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MACHINE CYCLE TIME: The time it takes for a machine to produce one unit, including the manual time it takes to load
and unload.
MACHINE WORK: Work that is done by a machine. The time it takes to do machine work can overlap with manual work, if
the machine is manually operated.
MACRO PRODUCTION CONTROL: There are many methodologies ranging from simple and inflexible to complicated
and very flexible. The best system is the simplest one. Where the process allows, Physical Link is the system of choice.
Broadcast, Kanban, MRPand ROP follow in desirability. In practice Kanban offers a good choice. They can be a transition
between MRP and ROP approaches and Physical Linkage.
MANUAL WORK: Work that is done by people, without the aid of machinery. The human tasks of operating or loading
machines can also be called manual work.
MATERIAL AND INFORMATION FLOW: See Monotojouhounonakarezu.
MAZUME: Mazume is a Japanese word meaning "Gap Shrinking". This is used while doing a innovation in process lay
out by shrinking the gap between equipment, thus saving the floor space and movement of operator / material.
MEDEMIRUKANRI: Visual Control (for example: the posting of Standardized Work in front of the operator instead of
keeping it in a binder in a desk, shadow boards, taping footprint of items to designate where they are supposed to be
placed, etc.). See Mieruka.
MENASHINOSHOUJINKA: Designing for Minimal Staffing, Manning Flexibility (see Shoujinka, menashino refers to the
kanji character for shou in which the symbol for eye is not used, thus changing shoujinka from its usual meaning of
reducing personnel to few or minimum personnel)
MIERUKA: Implementation of Visual Control. See Visual Control.
MILK RUN: Reducing transport costs and batch sizes by performing multiple pick up and drops at multiple suppliers using
one truck. The purchase of parts usually involves transporting the parts directly from the vendor to the purchasers
THE LEAN, AGILE AND WORLDCLASS MANUFACTURING COOKBOOK
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manufacturing plant. The term milk run describes the method of making rounds to parts vendors to collect purchased
parts. The exact number of parts needed only when they are needed are collected, thus reducing the number of trucks on
the road and benefiting the environment. The term milk run was taken from the practice of making daily rounds to collect
milk from dairy farms. Pickups of material at a geographically clustered set of suppliers. Also applies to deliveries to a
geographically clustered set of Points of Use. Contrast to Breadtruck Deliveries. Also see Junkai.
MIRYOKUTEKI HINSHITSU: The charm of quality (i.e. measuring variables such as appearance, sound, and. touch that
give personality to a product). What New Consumers are looking, or quality that fascinates. Broadens management
concern beyond the immediate product. The fourth and final step of TQM.
MIXED MODEL: Mixed Model flow is making value flow by taking out the waste in your value stream so that multiple
products are made in each time period. This is accomplished by making the mixed model flow part perform as if it were a
dedicated asset. Each product flows at the rate of customer demand, even though mixed products are being made.
MIXED MODEL VALUE STREAM: An extention of value stream mapping for more complex environments. It goes
beyond the basics of value stream mapping to create future states in the real manufacturing world of multiple products,
varying cycle times and changing demand.
MIZUSUMASHI: Fixed Course Pick-up, Water Spider, Water Strider (ongoing line-side material delivery and empty
container and kanban pick-up, literally whirligig, although the allusion intended was to a water strider, the term water
spider came from an attempt to translate into Chinese, in which the term for water strider is written with the characters for
water and spider)
MONOTOJOUHOUNONAKAREZU: Material and Information Flow (a tool to identify the flows of material and information
in an operation so as to find where the principles of kaizen are being violated, it has 3 versions: the Current State, the
Target For Now State (see Toumennerau Sugata), and the Should Be State (see Arubekisugata), a variation of the
Material and Information Flow has come to be known as the Value Stream Map). See Material and Information Flow.
See Monotojouhounonakarezu.
MOKERU: The Japanese term for the industrial engineering, more properly translated as "profit-making industrial
engineering"
MUDA, MURA, MURI: Waste (non value added tasks), Irregularity (inconsistency) and Overburden (excessive stress and
strain). See San Mu.
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MUDA: Japanese for 'waste'. Any activity that adds cost without adding value to the product. A Japanese term, it refers to
non-value-added tasks, one of the 3 forms waste. Muda can be further broken down into 2 types:
Type I muda: Non-value-added tasks which are essential (see NVAE) under current conditions. Changing these business
conditions is required to eliminate this type of waste.
Type II muda: Non-value-added tasks which can be eliminated immediately.
MURA: Variations and variability (inconsistency, irregularity) in work method or the output of a process (refers to
performing a task inconsistently).
MURI: A Japanese term, it refers to excessive stress & strain required to perform a task. Tasks should be designed so that
anyone can perform them, regardless of their size, strength, or dexterity. Exertion, overworking (a person or machine),
unreasonableness. Overburden. Difficulty.
MULTI-MACHINE HANDLING: When a machine operator is running more than one machine of a certain type, this is
called multi-machine handling. See Tadaimochi.
MULTI-PROCESS HANDLING: When a machine operator is doing tasks for multiple processes sequentially, and this is
contributing to the flow of material, it is called multi-process handling. See Takouteimochi.
MULTI-SKILLED: See Tanoukou, Tanoukouka.
N
NAGARA: Accomplishing more than one task in one motion or function. Japanese for 'while doing something'.
NAGAREKA: Making (a process) Flow, Creating a Moving Line. See Flow Production.
NANATSUNOMUDA: The 7 Types of Muda (7 categories of worthless, or non-value-adding activities: Stocking,
Overproduction, Waiting, Conveyance, Overprocessing, Motion, Rework - Note that while in certain cases some of these
activities may be unavoidable, they do not produce value. See 7 Wastes, Muda.
NEMAWASHI: A Japanese expression used to describe the practice of obtaining support and buy-in for change by firstly
the idea and then the plan with upper management and stakeholders. Directly translated means preparing the ground for
planting.
NICHIJO KANRI: Nichijo means Daily. Hence Nichijo Kanri means Daily Management. It is the complement to Hoshin
Kanri, covering all the other things. It is usually covered by Business Fundamentals and Implementation Plans.
NINJUTSU: The art of invisibility (applies to management)
NISUGATA: Packing and Presentation (literally the state of the cargo, considering such aspects as how the packed item
will be removed and used, elimination of trash, etc.)
NORITSUGIUNPAN: Truck Transfer System (a pick up and drop off system that allows loading and unloading to take
place without forcing the truck or tugger to wait). Also called Cross-Docking.
NON VALUE-ADDED WORK (NVA): Activities that may be necessary but do not add value as defined by the customer.
Examples are packaging, paperwork, and inspection. Non value-added tasks can create value if their function is to identify
and eliminate waste.
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NOURITSU: Productivity (normally translated as efficiency, but in the context of kaizen the emphasis is on production of
goods that the customer wants and not efficiency for the sake of an isolated process).
NVAE: Non-Value Added, but Essential - NVA tasks that must be performed because:
O
OBEYA: In Japanese means simply big room. At Toyota it has become a major project management tool, used
especially in product development, to enhance effective and timely communication. Similar in concept to traditional war
rooms, an Obeya will contain highly visual charts and graphs depicting program timing, milestones and progress to date
and countermeasures to existing timing or technical problems. Project leaders will have desks in the Obeya as will others
at appropriate points in the program timing. The purpose is to ensure project success and shorten the plan-do-check-act
cycle. See Open Room Effect.
OEE: Short for Overall Equipment Effectiveness, OEE is calculated based on Availability x Performance x Quality to
determine how much of the time a piece of equipment is being used while it is actually making good parts at an
appropriate speed. OEE is one of the 5 pillars of TPM. World class OEE is 85%. See TPM.
OEE Factor
World Class
Availability
90.0%
Performance
95.0%
Quality
99.9%
Overall OEE
85.0%
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By establishing optimal machine operating conditions, OEE develops a baseline for root cause analysis of the 6 Major Losses
losses.
Availability: Down Time
Equipment failure & breakdowns
Set-up & adjustment
Performance: Speed Losses
Idling & minor stops
Reduced speed
Quality: Defects
Scrap & quality defects
Startup and Yield
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OPERATOR CYCLE TIME: The time it takes for a worker or machine operator to complete a sequence of operations,
including loading and unloading, but not including waiting time.
OPEN ROOM EFFECT: This common practice in Japanese offices involves taking down the walls and cubicles of an
office and laying all of the desks out into one big 'open room'. This saves space and improves communication between
those performing related tasks and creates a sense of teamwork. See Obeya.
OPERATION RATE: See Kadourisu.
OTED: One Touch Exchange of Dies - OTED (frequently used to describe changeovers that do not require adjustments
whether they involve dies or not)
OVERALL EQUIPMENT EFFECTIVENESS: See OEE.
OVERFLOW PARTS: See Hamidashihin.
P
PACEMAKER: A device or technique use to set the pace of production and maintain takt time. See Takt Time.
PACEMAKER PROCESS: Any process along a value stream that sets the pace for the entire stream. (The pacemaker
process should not be confused with a bottleneck process which necessarily constrains downstream processes due to a
lack of capacity.) The pacemaker process is usually near the customer end of the value stream, often the final assembly
cell. The process that corresponds to where master production scheduling is done. A basic concept of lean manufacturing
is to schedule at only one point in the overall value stream. Scheduling at this one pointthe pacemakerresults in
pulling work from upstream processes and flowing product to the customer through the subsequent processes. The
planned volume and mix at the pacemaker process typically corresponds to what's known as the master schedule; the
scheduled mix for the day's actual production, as defined by the heijunka box, corresponds to the finishing schedule.
PACKING AND PRESENTATION: See Nisugata.
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PARETO CHART: A problem solving tool in the form of a vertical bar graph showing the bars in descending order of
significance from left to right. A Pareto Chart focuses improvement activity on the vital few and not the trivial many. The
80/20 rules comes from the Pareto Principle, stating that 20% of the items account for 80% of the activity (problems, sales,
defects, etc.).
PDCA: PDCA stands for 'Plan-Do-Check-Act'. This is a basic principle followed for effective problem solving during kaizen.
Originally developed by by Walter Shewhart and later adopted by Deming (PDSA Cycle,S for Study)
PLAN: Senior management should use the visioning process in the context of it Business Plan. HP translates the Business
Plans to action plans, meaningful to all levels of the organization.
DO: Answer the whats, hows, and whos for the total number of tiers for your organization; remember, the fewer the
number of tiers, the better. Also, this is the time to bring management together and provide them with a basic
understanding of HP mechanics.
CHECK: On a periodic basis, review the measurements and note what youve learned that can help in the future.
ACT: Make the necessary adjustments to plans and priorities in order to ensure the success of the strategy breakthroughs.
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PERFECT PROCESS: In an article in 6L, a journal for Six Sigma and Lean Manufacturing professionals, Jim Womack
states, "Unless you have defined from the customer's perspective what specific value is required, it is premature to begin
thinking about building or improving processes to deliver it." Womack defines a perfect process as one that is:
1. Valuable
2. Capable
3. Available
4. Adequate
5. Flexible
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The perfect process is valuable because it creates and adds value for customers. Start by drawing a Value-Stream Map to
visualize the process. Then remove the non-value-adding steps. Don't begin by asking if a process step is valuable. First,
see if the step is even needed. In other words, would the customer miss it? If the answer is "no", don't try to fix it, just
eliminate it.
A capable process performs the same way with the same result every time. Improving the capability of a process is the
starting place of Six Sigma. An available process can be performed every time it needs to be performed and in the
standard cycle time. Availability depends on equipment reliability and uptime; therefore, it is the starting place for Total
Productive Maintenance.
An adequate process has enough capacity to perform every time when it needs to be performed, without waiting. This is
the concern of Theory of Constraints, Right-sized Tooling, and Lean Manufacturing System Design.
A flexible process can change over quickly from one member of a product family to another one. Perfect processes have
very low setup and changeover times. These flexible processes allow small amounts of parts for different products to be
made frequently, resulting in high throughput and low inventory. This is the concern of the Toyota Production System.
In addition to being valuable, capable, available, adequate, and flexible, a perfect process also has its steps linked and
coordinated by:
1. Continuous flow,
2. Customer pull, and
3. Leveled production.
Continuous flow is the quickest way to get materials from point A to point B, while allowing customers to pull products out
of the value stream to prevent the waste of overproduction. Leveling the volume and mix of product flow through the
process permits a steady consumption of resources and minimizes the work-in-process inventories associated with batchand-queue production.
Womack says a perfect process is waste-free. Every step is completely valuable, perfectly capable, perfectly available,
exactly adequate, and highly flexible. And, every step is connected by continuous flow, noiseless pull, and maximal
leveling.
PEMPEM: Plant, Equipment, Materials, People, Environment, Methods. Alternative acronym to 5M and E.
PERFORMANCE MANAGEMENT BOARD: See Seisankanriban.
PERFORMANCE MANAGEMENT: Using a set of tools and approaches to measure, improve, monitor and sustain the key
indicators of a business.
PICKUP AND SUPPLY SYSTEM: See Tsurubeshiki.
PICK IN ORDER OF USE: See Junbiki.
PITCH: The amount of time
Takt time x pack-out qty = pitch
required
by
production
area
to
make
one
container
of
products.
PLAN FOR EVERY PART (PFEP): The first step in creating a lean material-handling system for purchased parts is to
collect all of the necessary parts information in one place - the Plan for Every Part (PFEP). A comprehensive plan for each
part consumed within a production process. This would take the form of a spreadsheet or simple table and contain such
data as pack-out quantity, dimensions, location of use and storage, order frequency and so on. This provides one accurate
source of information relating to parts.
POINT OF USE STORAGE (POUS): Keeping all items needed for the job at the location of use in a neat and organized
manner. POUS is on of the goals of 5S activity.
POKAYOKE: Japanese for 'mistake-proofing'. Mistake-proofing and fool-proofing devices made by designing parts,
processes, or procedures so that mistakes physically or procedurally cannot happen. Also see Baka Yoke.
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POLCA: POLCA (Paired-cell Overlapping Loops of Cards with Authorization) is an effective material control system for
manufacturing environments with high-variety or custom-engineered products. POLCA is a hybrid push-pull strategy that
combines the best features of pull (Kanban) and push (MRP) systems, while avoiding their drawbacks. POLCA was
introduced by Suri (1998) as one component of the overall Quick Response Manufacturing (QRM) strategy. Also see
Kanban, CONWIP, Extended Kanban, Generic Kanban, Drum-Buffer-Rope, Quick Response Manufacturing.
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The POLCA system uses production cards circulating between overlapping pairs of workcenters to make most efficent use of production equipment in companies
manufacturing custom-engineered and high-variety products.
POLICY: (in Japanese management) describes long- and medium-range management orientations as well as annual
goals or targets. Another aspect of policy is that it is composed of both goals and measures. Goals are usually quantitative
figures established by top management, such as sales, profit, and market share targets. Measures, on the other hand, are
the specific action programs to achieve these goals. A goal that is not expressed in terms of such specific measures is
merely a slogan. It is imperative that top management determine both the goals and the measures and then "deploy" them
down throughout the organization.
POLICY DEPLOYMENT: The process of implementing the policies of a Kaizen program directly through line managers
and indirectly through cross-functional organization. See Hoshin Kanri.
POLICY PRIORITIZATION: A technique to ensure maximum utilization of resources at all levels of management in the
process of policy deployment. Top management's policy statement must be restated at all management levels in
increasingly specific and action oriented goals, eventually becoming precise quantitative values.
PCQDSM: TPM goals of Productivity, Quality, Cost, Delivery, Safety, Morale.
PQPR: Short for Product Quantity Process Routing Analysis. The PQ (Product Quantity) refers to Pareto analysis to
determine the 80/20 rule of the top products or services that make up 80% of work volume. The PR (Process Routing)
refers to the Parts-Process Matrix analysis to determine product families by grouping of products with similar process
flows. The result of a correct PQPR results in a definition of value streams and sufficient process flow data to begin
designing one-piece flow cells.
PROCESS CAPACITY TABLE: A chart primarily used in machining processes that compares set-up and machine load
times to available capacity. Also Table of Production Capacity by Process. See Koutebetsu Nouryokuhyou.
PROCESS / PRODUCT FLOW LAYOUT: Plant layout where location of machines are determined by the sequence of
operations. Machines are typically closely spaced in cellular fashion (see Mazume). Contrast to Functional Layout.
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PROCESS MAP: Process Mapping is also known as Process Charting or Flow Charting. It is one of the oldest, simplest
and most valuable techniques for streamlining work. A process map visually depicts the sequence of events to build a
product or produce an outcome. It may include additional information such as cycle time, inventory, and equipment
information.
Several systems of conventions exist, but the original system invented by Frank Gilbreth in the early 1900's is still the most
useful. The Gilbreth approach is highly visual and discriminates between waste and value-added activity. It is also simple,
intuitive and easily used by untrained groups.
PRODUCT FAMILY: A group of products that go through the same or similar downstream or "assembly" steps and
equipment. Useful for cellular layouts. Also see Group Technology.
PRODUCT FAMILY MATRIX: A Product Family Matrix can be used to group products into families. To use the matrix,
indicate which process steps are used by each product. Then, look for groupings of common process steps. The groupings
are the product families.
The process steps are arranged by flow order with downstream processes last. Downstream steps are those process
steps that are closer to the customer. Many times, the major difference between product families is the use of downstream
process steps.
With product families, workflow layouts can be configured to accommodate small differences in the workflow by building in
detours and planning for the use of portable equipment.
Product families do not have to serve the same market. Think in terms of shared processes, not shared markets.
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PUSH SYSTEM: In contrast to the pull system, product is pushed into a process, regardless of whether it is needed right
now. The pushed product goes into inventory, and lacking a pull signal from the customer indicating that it has been
bought, more of the same product could be overproduced and put in inventory.
Q
QCD: Quality, Cost, and Delivery are the key customer satisfaction metrics that determine if a company is competitive.
Kaizen activity focuses on improving QCD metrics. See also 3 Elements of Demand.
QCDSM: Quality, Cost, Delivery - Safety & Morale. A set of performance management measures that includes employee
satisfaction (safety & morale) as well as customer satisfaction. Lean Transformation aims to eliminate waste, improve
QCDSM metrics, and increase profitability.
QDCI / QCDI: Competitive issues of Quality, Delivery, Cost and Innovation.
QUALITY CONTROL CIRCLE (QCC): A QCC is a small group of staff working together to contribute to the improvement
of the enterprise, to respect humanity and to build a cheerful workgroup through the development of the staff's infinite
potential. A quality control circle (QCC) team of people usually coming from the same work area who voluntarily meet on a
regular basis to identify, investigate, analyse and solve their work-related problems.
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QUALITY FUNCTION DEPLOYMENT (QFD): A methodology involving a cross-functional team to reach consensus about
final product specifications based on the wishes of the customer.
QUICK RESPONSE MANUFACTURING (QRM): Quick Response Manufacturing (QRM) is a company-wide strategy that
pursues the relentless reduction of lead time all QRM principles stem from this singular driving concern. QRM is most
effective for companies making a large variety of products with variable demand, as well as for companies making highly
engineered products. POLCA is the suggested production control in such environments. See POLCA.
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R
REPLENISH: See Atohojuu.
RINGI: Shared decision making process, which encourages open input, consensus and ownership. Achieved by input
from people further down an organisation being circulated across management, without more senior management forcing
upon others their own ideas, but providing thoughts and feedback based on principles.
ROOT CAUSE: The most basic underlying reason for an event or condition. The root cause is where action must be taken
to prevent recurrence. See 5 Whys.
RUNNERS, REPEATERS AND STRANGERS: Based on P-Q Analysis (Part-Quantity) and in a way similar to ABC
classification, dividing products into three bands where runners constitute products with high volume and low variability
(HDLV), repeaters medium demand, medium variability (MDMV), and strangers low demand, high variability (LDHV). The
P-Q curve can be deep (8:2) or flat (6:4).
S
SAIKURUTAIMU: Process Cycle Time (the time required to complete one cycle of manual or automatic work or a
combination thereof)
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internal: setup work that can be done only when the machine or process is not actively engaged in production; OR
external: setup work that can be done concurrently with the machine or process performing production duties.
SET-UP REDUCTION: Reducing the amount of time a machine or a process is down during changeover from the last
good piece to the first good piece of the next product.
SGC PRODUCTION SYSTEM: Variation of Toyota Production System propagated by Shingijutsu Global Consulting.
SHIGOTO: True Work, Value-adding Work (activities that add value as opposed to activities that may be considered work
but do not modify materials). See Value-added Work.
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SHIJIBIRA, SEISANSHIJIBIRA: Specifications Manifest (on a mixed line where there is no guarantee that the following
unit will have the same specifications as the one preceding it, the spec manifest is attached to the unit in a visible place so
as to inform each worker what the unit requires).
SHINGIJUTSU CONSULTING CO.: Shingijutsu provides world wide consulting practices on manufacturing technology.
The literal translation of shingijutsu in English means new technologies. Originally formed by the late Yoshiki Iwata,
current President Chihiro Nakao, and Akira Takenaka in 1987, all whom had worked for top-level manufacturing
companies, and had personal relationships with Ohno and Shingo. See SGC Production System.
SHINNONOURITSU: True Efficiency (production of ordered goods only with minimum work and investment, as opposed to
arbitrarily producing at full capacity)
SHOUJINKA: Personnel (or Staff) Reduction (literally the move to savings through reduction of personnel). Continually
optimizing the number of workers in a work center to meet the type and volume of demand imposed on the work center;
shojinka requires workers trained in multiple disciplines; work center layout, such as U-shaped or circular, that supports a
variable number of workers performing the tasks in the layout; the capability to vary the manufacturing process as
appropriate to fit the demand profile. See Menashinoshoujinka. Contrast Teiinsei.
SHOUJINKA (MENASHINOSHOUJINKA): Designing for Minimal Staffing, Manning Flexibility (designing a process so
that it can be run by only one person, thus allowing increase and decrease of personnel according to the demand).
SHOURYOKUKA: Labor Saving (reducing the need for staff).
SHUSA: The leader of the team who designs and engineers the product into production.
SINGLE DIGIT: See Hitoketa.
SIX SIGMA: A structured process improvement program for achieving virtually zero defects in manufacturing and business
processes. The fundamental objective is customer satisfaction through continuous improvement in quality. Six Sigma is
the goal, which means products and processes will experience only 3.4 defects per million opportunities or 99.99966
percent good. Six Sigma can be understood/perceived at three levels:
Metric: 3.4 Defects Per Million Opportunities and NOT Defects per million. DPMO allows you take complexity of
product/process into account. Rule of thumb is to consider at least three opportunities for a physical part/component - one for
form, one for fit and one for function, in absence of better considerations. Also you want to be Six Sigma in the Critical to
Quality characteristics and not the whole unit/characteristics.
Methodology: DMAIC/DFSS structured problem solving roadmap and tools.
Philosophy: Reduce variation in your business and take customer-focused, data drive decisions.
Six Sigma is a methodology that provides businesses with the tools to improve the capability of their business processes.
This increase in performance and decrease in process variation leads to defect reduction and vast improvement in profits,
employee morale and quality of product. Six Sigma is a rigorous and a systematic methodology that utilizes information
(management by facts) and statistical analysis to measure and improve a company's operational performance, practices
and systems by identifying and preventing 'defects' in manufacturing and service-related processes in order to anticipate
and exceed expectations of all stakeholders to accomplish effectiveness.
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Six Sigma
Goal
Application
Approach
Teaching
principles
and
"cookbook
implementation based on best practice
Project Selection
Various approaches
Length Of Projects
1 week to 3 months
2 to 6 months
Infrastructure
Training
Learning by doing
Learning by doing
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SMED: Single Minute Exchange of Dies. A system of set-up reduction and quick changeover pioneered and developed by
Shigeo Shingo. See Sumeddo, Sotodandori, Uchidandori. The eight principles of SMED are:
1)
2)
3)
4)
5)
6)
7)
8)
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SOIKUFU: Soikufu (creative thinking or inventive ideas) is a framework for harnessing the creative abilities of employees
and a recognition of the fact that no one appreciates a task better than the person who performs it day in day out. Through
implementations such as Quality Circles and Suggestion Schemes (see Teian), employees are encouraged to
continuously think about improvement, and participate in and contribute to the continuous improvement process.
SOTODANDORI: External Setup, Off-line Setup (preparation for set up changes that is performed without stopping the
production process).
SUGGESTION: See Teian.
STANDARD WORK: Standard Work is the most efficient combination of man, machine, and material. The three elements
of standard work are 1) takt time, 2) work sequence, and 3) standard work-in-process. Performing standard work allows for
a clear and visible 'standard' operation. Deviation from standard work indicates an abnormality, which is then an
opportunity for improvement. See Hyoujunsagyou.
STANDARD WORK COMBINATION SHEET (SWCS): A document detailing the sequence of production steps assigned
to a single worker performing Standard Work. This document outlines the best combination of worker and machine. See
Hyoujunsagyou Kumiawasehyou.
STANDARD WORK SHEET (SWS): A visual work instruction drawing for Standard Work. Shows the work sequence, takt
time, standard working process, and layout of the cell or workstation. See Standard Work.
STANDARD WORK IN PROCESS: Also Standard WIP, or SWIP. The minimum work-in-process needed to maintain
standard work. Standard WIP parts are 1) parts completed and in the machine after auto cycle, 2) parts placed in
equipment with cycle times exceeding Takt time, and 3) the parts currently being worked on or handled by the operators
performing standard work. See Hyoujuntemochi.
STOP-THE-LINE AUTHORITY: When workers are able stop the line to indicate a problem, this is stop-the-line authority.
The production line or machine remains stopped until the supervisor, manager, engineer, maintenance personnel, support
staff or president have identified the problem and taken corrective action. Type of jidoka (line-stop jidoka).
STRATEGIC PLANNING: Developing short and long-term competitive strategies using tools such as SWOT Analysis to
assess the current situation, develop missions and goals, and create an implementation plan.
SUGGESTION SYSTEM: In a suggestion system workers are encouraged to identify wastes, safety, and environmental
concerns and submit improvement ideas formally. Rewards are given for suggestions resulting in cost savings. These
rewards are typically shared among the production line or by the kaizen team. See Teian.
SUPPLY CHAIN EXECUTION (SCE): A business strategy to improve shareholder and customer value by optimizing the
flow of products, services and related information from source to customer. Supply Chain Management encompasses the
processes of creating and fulfilling the market's demand for goods and services and involves a trading partner community
engaged in a common goal of satisfying the end customer.
SUPPLY CHAIN MANAGEMENT (SCM): A business strategy to improve shareholder and customer value by optimizing
the flow of products, services and related information from source to customer. Supply Chain Management encompasses
the processes of creating and fulfilling the market's demand for goods and services and involves a trading partner
community engaged in a common goal of satisfying the end customer.
SUPPLY CHAIN PLANNING (SCP): A subset of Supply Chain Management, this is the process of coordinating assets to
optimize the delivery of goods, services and information from supplier to customer, balancing supply and demand. A
Supply Chain Planning suite overlays a transactional system to provide planning, what-if scenario analysis capabilities and
real-time demand commitments.
SUMEDDO: Single Minute Exchange of Dies SMED (frequently used to describe very fast changeovers whether dies are
involved or not). See SMED.
SUNK COST: Any expenditure that has already taken place and can not be undone. Decisions should not be made based
on sunk costs.
SUPERMARKET: The supermarket is a tool of the pull system that helps signal demand for the product. In a supermarket,
a fixed amount of raw material, work in process, or finished material is kept as a buffer to schedule variability or an
incapable process. A supermarket is typically located at the end of a production line (or the entrance of a u-shaped flow
line).
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T
TABLE OF PRODUCTION CAPACITY BY PROCESS: See Process Capacity Table.
TADAIMOCHI: Tending Many Machines (to run more than one machine - refers to responsibilities assigned to a single
person). See Multi-machine Handling.
TAGUCHI TECHNIQUE: An experimental design method that allows the optimum condition for a large number of
variables to be reached efficiently, using an orthogonal array. The method provides an efficient technique to design
product tests prior to entering the manufacturing phase. However, it can also be used as a trouble-shooting methodology
to sort out pressing manufacturing problems. The technique is used to optimise complex production systems and is named
after engineer Dr Genichi Taguchi.
TAKAI: Production innovation or production flexibility, for example the ability to build different car models on the same line
or to mix different trim levels and body configurations with total flexibility to meet customer demand. Takai is also a
common surname in Japan.
TAKAIUMPAN: Frequent Runs (taking many trips instead of conveying an excess of material each time).
TAKOUTEIMOCHI: Tending Many Processes (to run more than one process - refers to responsibilities assigned to a
single person). See Multi-process Handling.
TAKT TIME: Takt time is the pace at which the customer is buying a particular product or service. Takt time is the total net
daily operating time divided by the total daily customer demand. Takt time is not how long it takes to perform a task. Takt
time cannot be reduced or increased except by changes in production demand or available time to work. Takt time is one
of the 3 Elements of JIT. Takt is a German word for 'beat' or 'rhythm'. See Jikkoutakutotaimu, Takutotaimu.
PAGE 86 OF 107
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TAKUTOTAIMU: Takt Time (net working time divided by the number of units ordered for that time - original meaning in
German is the beat of a musical composition to produce the units ordered, the cycle time of all jobs on the line must be
under takt time). See Takt Time.
TANOUKOU: Multi-skilled, Cross-trained (workers who are not limited to running only one type of equipment).
TANOUKOUKA: Fostering of training to produce multi-skilled workers.
TARGET COSTING: A way of establishing a cost goal for a product or service in the design phase. Target costing
follows this formula: Sales price - Target Profit = Target Cost.
TEBANARE: Japanese for 'hands-free'. The goal of tebanare is to use low cost automation on manual machines to allow
people to do work that is more valuable that only a person can do.
TEIAN: A proposal, proposition, or suggestion. A teian system can be likened to a system which allows and encourages
workers to actively propose process and product improvements. See Soikufu.
TEIICHITEISHIHOUSHIKI: Fixed Position Stop System (even if the andon cord is pulled to stop the line, the line will not
stop until the moving work reaches a fixed point). See Andon, Fixed Position Stop System.
TEIINSEI: Fixed Staffing, Fixed Manning (designing a line so that there must be a certain number of operators to begin
operation). Contrast Shoujinka.
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TEIKI: Scheduled Time (one of the 4 possible conditions of delivery). Contrast Futeiki.
TEIRYOU: Scheduled Quantity (one of the 4 possible conditions of delivery). Contrast Futeiryou.
THEORY OF CONSTRAINTS: Theory of constraints (TOC) is an overall management philosophy that aims to continually
achieve more of the goal of a system. If that system is a for-profit business, then the goal becomes one of making more
money, in the present as well as in the future. According to TOC, every profit making organization has at least one
constraint which prevents the system from achieving a higher performance relative to its goal (Liebig's Law of the
Minimum). These constraints can be broadly classified as internal resource constraint, market constraint and policy
constraint. In order to manage the performance of the system, these constraints must be identified and treated carefully.
Theory of Constraints is based on the premise that the rate of revenue generation is limited by at least one constraining
process (i.e. a bottleneck). Only by increasing throughput (production rate) at the bottleneck process can overall
throughput be increased. The key steps in implementing an effective TOC approach are:
1.
Identify the constraint (bottlenecks are identified by inventory pooling before the process)
2.
3.
Subordinate all other processes to the constraint process (other processes serve the bottleneck)
4.
5.
Rinse and repeat (after taking action, the bottleneck may have shifted or require further attention)
businesses), throughput is sales revenues less the cost of the raw materials (T = S - RM). Note that T only exists when there
is a sale of the product or service. Producing materials that sit in a warehouse does not count. ("Throughput" is sometimes
referred to as "Throughput Contribution" and has similarities to the concept of "Contribution" in Marginal Costing which is
sales revenues less "variable" costs - "variable" being defined according to the Marginal Costing philosophy.)
Investment (I) is the money tied up in the system. This is money associated with inventory, machinery, buildings, and other
assets and liabilities. In earlier TOC documentation, the "I" was interchanged between "Inventory" and "Investment." The
preferred term is now only "investment." Note that TOC recommends inventory be valued strictly on totally variable cost
associated with creating the inventory, not with additional cost allocations from overhead.
Operating expense (OE) is the money the system spends in generating "goal units." For physical products, OE is all expenses
except the cost of the raw materials. OE includes maintenance, utilities, rent, taxes, payroll, etc.
THULLA: Thulla is the term defined for the resource waste time during the processing due to the motivational reasons.
This term is a management concern.
TIM WOODS: Easy acronym to remember 8 wastes.
TIME-BASED STRATEGY: Driving improvement activity through focus on time and its relation to quality, cost, delivery,
safety, and morale. Reduction in lead-time, set-up time, cycle time as a means of becoming more competitive.
TOTAL CYCLE TIME (TCT): The time taken from work order release into a value stream until completion / movement of
product into shipping / finished goods. Contrast Takt Time.
TOTAL QUALITY CONTROL (TQC): Organized Kaizen activities involving everyone in the company - managers and
workers - in a totally integrated effort toward improving performance at every level. This improved performance is directed
THE LEAN, AGILE AND WORLDCLASS MANUFACTURING COOKBOOK
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toward satisfying such cross-functional goals as quality, cost, scheduling, manpower development, and new product
development. It is assumed that these activities ultimately lead to increased customer satisfaction. (Also referred to as
CWQC Company-Wide Quality Control.)
TOTAL QUALITY MANAGEMENT (TQM): Total Quality Management is a management strategy aimed at embedding
awareness of quality in all organizational processes. TQM has been widely used in manufacturing, education, government,
and service industries, as well as NASA space and science programs. As defined by ISO: "TQM is a management
approach of an organization, centered on quality, based on the participation of all its members and aiming at long-term
success through customer satisfaction, and benefits to all members of the organization and to society." In Japanese, TQM
comprises four process steps, namely:
Kaizen Focuses on Continuous Process Improvement, to make processes visible, repeatable and measureable.
Atarimae Hinshitsu Focuses on intangible effects on processes and ways to optimize and reduce their effects.
Kansei Examining the way the user applies the product leads to improvement in the product itself.
Miryokuteki Hinshitsu Broadens management concern beyond the immediate product.
TQM requires that the company maintain this quality standard in all aspects of its business. This requires ensuring that
things are done right the first time and that defects and waste are eliminated from operations.
TOUMENNERAU SUGATA: The Target State for Now (an improvement in the current state, but still short of the Should
Be State). See Monotojouhounonakarezu.
TOYOTASEISAN HOUSHIKI: The Toyota Production System (the system developed by the Toyota Motor group of
companies to minimize investment and production volume, and maximize productivity and profit). See Toyota Production
System.
TOYOTA PRODUCTION SYSTEM (TPS): A methodology that resulted from over 50 years of Kaizen at Toyota, one of the
most successful companies in the world. TPS is built on a foundation of Leveling, with the supporting pillars of Just-in-Time
and Jidoka. Often copied and slightly changed by consulting firms.
TPS - Toyota Production System or Thinking People System
The TPS House was developed by Taiichi Ohno and Eiji Toyoda to make it possible to explain Toyota's evolving system to
employees and suppliers. The aim of TPS is to eliminate all muri, mura, muda (overburden, unevenness, waste) from the
operations. It is a system that uses the PDCA approach to involve everyone in solving problems and improving quality, cost,
delivery, safety, and morale.
The Toyota Production System 'house' structure was used because with a roof, pillars and foundation it represented a familiar
shape that also represented stability. TPS continues to evolve today. Toyota people are beginning to call TPS the "Thinking
People System" instead of the Toyota Production System. TPS is always improving
.
TPS is the Operational Blueprint for a Lean Enterprise
The organizations that have implemented Lean most successfully have adopted TPS as their operational blueprint. They have
studied and understood the system, renamed it to take ownership of it as their own system, and adopted as pure a form of TPS
as possible
Make what the customer needs, when it is needed, in the right amount
Minimize inventories
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Separate machine work from human work and fully utilize both
Build quality into the process and prevent errors from happening
Reduce lead-times to allow for rapid, flexible scheduling
Produce a high mix of low volume products efficiently
The TPS house shows how to build a World Class production system that continuously improves by eliminating waste.
Left Pillar
Right Pillar
Foundation
Just-in-Time (Takt-Flow-Pull)
Eliminate the 7 Wastes of Production
Create a smooth flow of product and information,
minimize inventory and space
Jidoka (Autonomation)
Build quality into the process, separate man &
machine using intelligent automation.
Implement low-cost automation, error-proofing,
equipment upgrades and reliability improvement.
Heijunka (Leveling)
Stabilize production schedule variability
Reduce total Lead-time, coordinate sales,
scheduling, and customer needs
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TOTAL PRODUCTIVE MAINTENANCE (TPM): Total productive maintenance aims at maximizing equipment
effectiveness and uptime throughout the entire life of the equipment. See OEE.
The Five Pillars of TPM
A World Class manufacturer requires that their production equipment runs reliably and safely, producing high quality products.
Equipment breakdowns, unplanned maintenance, reduced speeds and frequent minor stops for adjustments are all factors that
must be addressed for defect-free one-piece flow production to be possible.
TPM is a set of improvement system that incorporates and builds on Lean tools such as 5S, Visual Controls, SMED, Pokayoke,
and others. The process is organized into several progressive steps, referred to as the "five pillars".
Pillar
Function
Autonomous
Maintenance
Clean
Maintenance
Mindset & Training
To
Detect
Planned
Maintenance
System
To
Correct
Overall Equipment
Effectiveness
To
Perfect
Early
Equipment
Management
System
To
Protect
The system has five major components: maintenance design standards, life
cycle costing, maintenance database, maintenance and operator involvement
in equipment planning & purchasing, and early warning diagnostics.
Explanation
Autonomous maintenance covers the operator performing initial cleaning,
general inspection, and process inspection while establishing standards for
cleaning, lubricating and inspecting.
Training of operators is in place to give them the knowledge of what daily
maintenance is needed as well as what the optimal operating conditions as
well. Training of maintenance is in place to give them the knowledge of how
to train operators as well as how to monitor, improve & correct design flaws
and equipment restoration. The ultimate goal being that operators
responsibilities would cover external while maintenance's responsibility would
be for internal.
A system developed to cover daily, weekly and monthly checks in conjunction
with identifying symptoms of deterioration and implementing an equipment
refurbishment program.
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TPM identifies the 16 types of waste (Muda) and then works systematically to eliminate them by making improvements
(Kaizen). TPM has 8 pillars of activity, each being set to achieve a zero target. These pillars are:
1.
2.
Autonomous maintenance (Jishu-Hozen): in autonomous maintenance, the operator is the key player. It involves daily
maintenance activities carried out by the operators themselves that prevent the deterioration of the equipment.
3.
4.
5.
Early equipment/product management: to reduce waste occurring during the im-plementation of a new machine or the
production of a new product
6.
Quality maintenance (Hinshitsu-Hozen): This is actually maintenance for quality. It includes the most effective quality tool of
TPM: poka-yoke, which aims to achieve zero loss by taking necessary measures to prevent loss.
7.
Safety, hygiene, environment: for achieving zero work-related accidents and for protecting the environment.
8.
Office TPM: for involvement of all parties to TPM since office processes can be improved in a similar manner as well.
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TPM: See Total Productive Maintenance. The concept of Zero is an overriding aim of TPM. TPM tries to reduce all forms
of waste in the process to as small as is economically possible or, ideally, Zero.
TSURUBE SYSTEM: A way to keep product flow continuous even when there are interruptions such as outside
processing or batch operations. The tsurube system is often used when product leaves the flow line for processing through
THE LEAN, AGILE AND WORLDCLASS MANUFACTURING COOKBOOK
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equipment that can not be placed into the cell (vendor operations, heat treat, plating, anodizing, etc.). Also called the Well
Wheel System because of the similarity to how water is drawn out of a well using two buckets and a pulley wheel. See
Well Wheel System.
TSURUBEHOUSHIKI: Pickup and Supply System (a shuttle delivery system that picks up empty containers and delivers
materials or parts in the same run - original Japanese word refers to a double bucket and pulley arrangement for drawing
water from a well)
TURN-AND-EARN SYSTEM: A policy in which suppliers limit customer purchases to the quantity of goods they turn by
shipping them out as finished goods to their own customers. Used to reduce hoarding during periods of limited availability.
TWO-BIN SYSTEM: An example of both visual management and the pull system, whereby two bins or containers are
used trigger reorder of parts or materials. Each bin contains enough parts to last during the delivery lead-time. When one
bin is empty, it is time to reorder the two-bin quantity.
U
UCHIDANDORI: Internal Set-up, On-line Setup (activities in a setup change that require the production line to stop If
these take less time than takt time then running air becomes possible). See Internal Setup.
V
VALUE-ADDED WORK: Work that the customer is willing to pay for. A transformation of the shape or function of the
material/information in a way that the customer will pay for. See Shigoto. To be a value added action the action must meet
all three of the following criteria:
1) The customer is willing to pay for this activity.
2) It must be done right the first time.
3) The action must somehow change the product or service in some manner.
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VALUE STREAM: A value stream is a series of all actions required to fulfill a customer's request, both value added and
not. A value stream contains a product or a family of products that have similar material and information flows. Value
Streams are typically identified using a combination of Pareto Analysis and Process Routing analysis.
VALUE STREAM MAPPING (VSM): Creating a picture of the complete material and information flow from customer
request through order fulfillment for an operation. Value Stream Mapping can be done at an enterprise level (showing
customer-supplier relationships as well as distributors), a door to door level showing the flow of material and information
primarily within a factory, office, or hospital operation, and a process level map with a narrower scope and more detail.
The 'Current State' is how the process works today and the 'Future State' map shows improvements towards a long-term
'ideal state'. See Monotojouhounonakarezu.
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VERTICAL HANDLING: When tasks are assigned in such a way that the materials processes are being progressively
worked towards completion, this is vertical handling. This in contrast to horizontal handling which only focuses on the
output of a specific process.
VISUAL CONTROLS: Various tools of visual management such as color-coding, charts, andons, schedule boards, labels
and markings on the floor. See Medemirukukanri.
VISUAL MANAGEMENT: When the normal state and abnormal state can be clearly and visually defined, visual
management is possible. In visual management, simple visual tools are used to identify the target state, and any deviance
is met with corrective action. See Medemirukukanri.
VISUALISATION: The design of a workplace such that problems and issues can be identified without timely and in depth
investigation. Truly visual work-places should be capable of assessment in less than 3 seconds.
W
WASTE: An activity that that consumes valuable resources without creating customer value. See Muda.
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Each of these objectives is important in and of itself; however, taken together, they describe the focus of the activities and
attitudes that define world class.
XYZ
YAMAZUMI: A yamazumi board is a bar graph typically showing the balance of workloads as operator cycle times. The
yamazumi can also be sued for load planning and scheduling. The word "yamazumi" literally means "to stack up".
YARUKI: The attitude of "Can do" - everything is achievable.
YOKOTEN: Yokoten encompasses the methods of documenting and distributing knowledge about what works and what
doesn't. Yokoten is a form of knowledge management. At its most basic level, it can be the notebook that a team keeps of
as a history of the group and problems encountered. Yokoten is the library of A3 problem reports that a team or work
group maintains for all to access. As a knowledge management device, Yokoten makes knowledge organizational, not
individual. In the process of dealing with problems Yokoten standardizes a solution and shares it. This typically happens
THE LEAN, AGILE AND WORLDCLASS MANUFACTURING COOKBOOK
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at the work group level. Sharing of standard procedures across an organization is the ideal. Technology is often specific
to a manufacturing process. Most standard work processes are place and process specific whereas a solution to a
technical problem is not.
YOOIDON HOUSHIKI: Simultaneous-start Time Study, Ready Set Go Time Study (it is desirable to time any process
while it is being performed together with the rest of the processes of the same line so before using the stopwatch the timer
will call out yooi don! which means ready go! so that all operators can begin their operations at the same time and the
times will be more accurate)
ZAIBATSU: The zaibatsu were large holding companies which dominated the Japanese economy until the 1950s, very
much as the chaebol of South Korea have driven that country's growth over the last 25 years. Following the break-up of
the zaibatsu, looser alliances called keiretsu emerged in which close trading relationships were cemented by crossshareholdings within the group.
Advanced Manufacturing
www.advancedmanufacturing.com/leanmanufacturing/leanmanufacturing.htm
Good collection of article in html and pdf formats from Advanced Manufacturing Magazine
www.emsstrategies.com/lean-resources.html
Lean Manufacturing Consulting and Training firms website with good articles.
www.gembapantarei.com
Gemba Research
www.gemba.com
GembaTM has been a firm focused on delivering knowledge and results through kaizen since 1998. The site
contains good training materials and articles.
iSixSigma
www.isixsigma.com/me/lean_manufacturing/
www.leanadvisers.com
http://www.leanuk.org/Lean_community_articles.htm
Lean Portal
http://membres.lycos.fr/hconline/engineer_us.htm
www.nwlean.net/
PAGE 99 OF 107
NWLEAN assists companies in implementing lean manufacturing and lean production systems The site contains
good information, downloads and tools.
Strategos Inc.
www.strategosinc.com
Lean Manufacturing and Strategy is the primary focus of this website. Most of the content is educational, unique,
wide-ranging and, above all, useful.
Superfactory
www.superfactory.com
Resources, tools, communities, events and books supporting lean manufacturing, enterprise excellence and best
practices
by Kiyoshi Suzaki
by Shigeo Shingo
by Masaaki Imai
by Taiichi Ohno
Japanese Manufacturing
Techniques : Nine Hidden
Lessons in Simplicity
by Richard J. Schonberger
by Hiroyuki Hirano
by Shigeo Shingo
by Productivity Press
Development Team
by Productivity Press
Development Team
by Productivity Press
Development Team
by Productivity Development
Team
by Productivity Press
Development Team
Mistake-Proofing for
Operators: The ZQC System
by Productivity Press
Development Team
by Productivity Press
Development Team
Focused Equipment
Improvement for TPM Teams
by Productivity Press
Development Team
by David Mann
By Art Smalley
st
Collaborative Advantage:
Winning Through Extended
Enterprise Supplier Networks
by Henry Ford
by Jeffrey H. Dyer
A Revolution in Manufacturing:
The SMED System
by Shigeo Shingo
by William B. Miller
Poka-Yoke: Improving
Product Quality by
Preventing Defects
by Hiroyuki Hirano
by Kenichi Sekine
and Keisuke Arai
by Pete Babich
By Bob Emiliani
by Kevin J. Duggan