WHAT IS LEAN MANUFACTURING?

An Overview

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

LEAN HISTORY

1900

1940

1980

2000

Notable Quote

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

MANY NAMES, BUT THE SAME CONCEPT

Toyota Production System Just-In-Time JIT/TQC/EI/TPM Short Cycle Manufacturing One-Piece-Flow Cellular Manufacturing Stockless Production Agility Group Technology Demand Flow Manufacturing Focused Flow Manufacturing Value Adding Manufacturing Time Based Management End-Lining Operations Pull Manufacturing World Class Manufacturing Lean Manufacturing

Synchronous Flow Manufacturing

Continuous Flow Manufacturing

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Lean Defined & Key Concepts

LEAN IS NOT

A cookie-cutter approach to improvement.

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

Something that a company does once.

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

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

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

KEY CONCEPTS
Waste Reduction Lead Time Reduction Variation Reduction Product Flow Pull of the Customer Continuous Improvement

VALUE ADDED
Value is added any time we physically change our product towards what the customer is buying. If we are not adding value, we are adding cost or waste. Lean Manufacturing drives the systematic elimination of waste.

ORDER

Value-Added Time : Minutes Time in Plant : Weeks

CASH

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

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Value added
LEAN = ELIMINATING THE WASTES

5%

Non-value added

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

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

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INVENTORY HIDES PROBLEMS

Raw Material
Poor Plant Layout

Inventory Level
Long Set-ups Scrap Downtime

Finished Product

Long Supplier Lead-times

Process Imbalances

Lack of Training

Poor Tooling

Unlinked Schedules

No Unclear Poor Improper Standardization Specifications Housekeeping Reward System

REDUCING INVENTORY WITHOUT SOLVING PROBLEMS

Raw Material
Poor Plant Layout

Finished Product

Long Set-ups

Scrap

Downtime

Inventory Level
Long Supplier Lead-times Process Imbalances Lack of Training Poor Tooling Unlinked Schedules

No Unclear Poor Improper Standardization Specifications Housekeeping Reward System

LEAN THINKING: VALUE-ADDING ANALYSIS

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

Is the activity adding value?

If YES
Is this the best way to do it?

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

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

Pull

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PUSH SYSTEM
Information Flow
WIP
Supplier Raw Matl

WIP

Fin. Goods

Process A

Process B

Process C

Customer

Part Flow Execution - Parts completed to schedule without any downstream considerations Replenishment - Based on projected demand (forecasts)

Shop Floor Control - System, transactions, paperwork

Problems - Hidden Reaction to changes and problems - Through system - rescheduling Linkage - Operations are NOT physically linked
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KANBAN
Kanban = Signal
Signals when to do work Signals what work to do Signals when not to do work Controls inventory

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

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PULL SYSTEM
Information Flow

Kanban Locations

Supplier

Raw Matl

Process A

Process B

Process C

Fin. Goods

Customer

Part Flow Execution - Parts produced upstream as signaled from the downstream operation or customer

Replenishment - Based on consumption

Shop Floor Control - Automatic - visible Problems - Exposed - creates urgency Reaction to changes and problems - Immediate - on-line and visible

Linkage - Operations ARE physically linked

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PULL SYSTEM
Information Flow

Kanban Locations

Supplier

Raw Matl

Process A

Process B

Process C

Customer

Part Flow

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

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LEAN BUILDING BLOCKS

Continuous Improvement
Pull/Kanban Plant Layout 5S System Cellular/Flow Quick Changeover Quality at Source TPM POUS Value Stream Mapping
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Batch Reduction Standardized Work Visual Systems

Teams/Employee Involvement

FUNCTIONAL DEPARTMENTS AND CELLS

FUNCTIONAL

CELL

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IMPACT OF BATCH SIZE REDUCTION

Batch & Queue Processing
Process Process Process

A
10 minutes

C
10 minutes

10 minutes

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

Continuous Flow Processing

ProcessProcessProcess

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

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CELL ADVANTAGES OVER FUNCTIONAL DEPARTMENT

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

Functional

Cellular
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STEPS IN A CHANGEOVER (taken from Shigeo Shingos A Revolution in Manufacturing: The SMED System)
Preparation, after-process adjustment, checking, return to storage of parts, tools, fixtures, move materials Removing parts, blades, jigs, etc.; mounting same for next lot, move materials. Machine setting, measurements

Percent of time of changeover

30% 50% 15%

5%

Making trial pieces and adjusting

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KEY BENEFITS OF REDUCING SETUP TIMES

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

Standardize

Analyze

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

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POKA-YOKE Mistake Proofing

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

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

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

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LEAN BUILDING BLOCKS

Continuous Improvement
Pull/Kanban Plant Layout 5S System Cellular/Flow Quick Changeover Quality at Source TPM POUS Value Stream Mapping
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Batch Reduction Standardized Work Visual Systems

Teams/Employee Involvement

DECODING THE DNA OF TOYOTA

The tacit knowledge that underlies the Toyota Production System can be captured in four basic rules. These rules guide the design, operation, and improvement of every activity, connection, and pathway for every product and service. The rules are as follows:
1. 2. All work shall be highly specified as to content, sequence, timing, and outcome. Every customer-supplier connection must be direct, and there must be an unambiguous yes-or-no way to send requests and receive responses. The pathway for every product and service must be simple and direct.

3.

4.

Any improvement must be made in accordance with the scientific method, under the guidance of a teacher, at the lowest possible level in the organization.
Decoding the DNA of the Toyota Production System by Steven Spear and H. Kent Bowen, Harvard Business Review, September-October 1999 33

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

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THE GOOD NEWS

Percentage of Benefits Achieved
0 25 50 75 100

Lead Time Reduction Productivity Increase

WIP Reduction
Quality Improvement Space Utilization

Flexibility

Skill Enhancement

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

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THE BAD NEWS?

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

Excerpt from IndustryWeek Magazine, November 2001

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Future of Lean

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THE FUTURE OF LEAN

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

3.

4.
5.

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

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KEYS TO SUCCESS
Prepare and Motivate People
Widespread orientation to CI, quality, training and recruiting workers with appropriate skills Create common understanding of need to change to lean

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

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

World Class Manufacturing: The Next Decade by Richard Schonberger World Class Manufacturing: The Lessons of Simplicity Applied by Richard Schonberger Lets Fix It! Overcoming the Crisis in Manufacturing by Richard Schonberger The Machine That Changed the World by James P. Womack and Daniel T. Jones Lean Thinking by James P. Womack and Daniel T. Jones

Becoming Lean by Jeffrey Liker

Lean Transformation by Bruce A. Henderson and Jorge L. Larco The Goal by Eli Goldratt The Race by Eli Goldratt

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

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RECOMMENDED READINGS

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

Kaizen For Quick Changeover by Kenichi Sekine and Keisuke Arai

Performance Measurement for World Class Manufacturing by Brian H. Maskell Breaking The Cost Barrier by Stephen A. Ruffa and Michael J. Perozziello

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The End

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