Waste overview and benefits. How do we manage the mulititude of tools used to eliminate waste and how do we sustain them in the long run.

1. WASTE OVERVIEW AND BENEFITS By: Romains Bos

2. TYPICAL SITUATION 75%

3. KAIZEN IMPROVEMENTS ARE THE RESULT OF WASTE ELIMINATION Time 1 System Performance

5. OHNO’S WASTES PEOPLE TYPES OF WASTE Processing Motion Waiting Fixing Defects Inventory QUALITY Making Too Much (WIP) Moving Things QUANTITY

7. TYPICAL SITUATION - PLANT Non-Essential Non-value Added (Waste or “Muda”) 60s Necessary Critical 0.02% 0.020% 99.96% Value Added 60s 345,600s (6d-12 shifts) 345,720s Totals Machining Test Lot Delays, Changeovers, Transport, Etc.

8. TRADITIONAL RESPONSE - PLANT 60s 60s 345,600s (6d-12 shifts) 345,720s Totals Before After $500K 30s 60s 345,600s (6d-12 shifts) 345,690s Machining Test Only 0.009% less in total processing time Claim 50% Improvement! Non-Essential Non-value Added (Waste or “Muda”) Necessary Critical 0.020% 99.96% Value Added 0.02% 0.01% Lot Delays, Changeovers, Transport, Etc. Spend!! Spend!! Spend!!

10. A PROBLEM WITH PERCEPTION The Executive Perception The Middle Management Perception The Informed Hands-on Performer Perception

11. THE TRADITIONAL EXECUTIVE RESPONSE The Perception The Reaction THROW A LOT OF MONEY/TECHNOLOGY AT WHAT APPEARS TO BE THE VALUE ADDED WORK The Result

12. THE TRADITIONAL MIDDLE MANAGEMENT RESPONSE The Perception The Result THROW “SOME” MONEY/TECHNOLOGY AT VALUE ADDED WORK AND REMOVE “OBVIOUS” WASTES The Perception “Rearranged” The Reaction

13. THE INFORMED HANDS-ON PERFORMER RESPONSE The Perception The Result ATTACK ALL NON-VALUE ADDED ACTIVITY AT THE MICRO-PROCESS LEVEL The Perception “Rearranged” The Reaction “ Easily” Recognized Non-value Added Micro-process Recognizable Non-value Added True Value Added

15. A FIRST PASS LEAN RESPONSE - PLANT Non-Essential Non-value Added (Waste) Necessary Critical Value Added Totals Before After $5K 75% faster in total processing time! Machining Test 60s 60s 345,600s (6d-12 shifts) 345,720s 60s 60s 86,400s (1.5d-3 shifts) 86,520s Lot Delays, Changeovers, Transport, Etc. 0.07% 0.07% 99.96% 99.86% 75% Less Waste

18. … DON’T USUALLY LAST Process Reengineering Value Stream Mapping QFD Poka-Yoke Black Belts Integrated Product Development Kanbans Kaizen Blitzes SMED SPC Shainin Boing! I’M BACK TO EAT MORE PROFITS!!! PEOPLE TYPES OF WASTE Processing Motion Waiting Fixing Defects Inventory QUALITY Making Too Much (WIP) Moving Things QUANTITY

19. WHY?NOT A WORD ABOUT HOW TO IMPLEMENT AND SUSTAIN! Master Jargon Chart Of Lean Operations TYPE OF WASTE WASTE REDUCTION APPROACH METHOD DESIRED RESULT Standard Work Workplace Organization Kaizen Workplace Management Just-in-time Error Proofing Processing Motion Waiting What You Need, When You Need It Highly Efficient, Safe Work Areas With High Output Good Quality Inventory Moving Things Making Too Much Fixing Defects Leveling Kanban Quick Setup Preventive Maintenance Detection Warning Prediction Prevention CATEGORY OF WASTE PEOPLE QUANTITY QUALITY FOCUS POINTS Work Balance WIP Location/Amount Kanban Location Kanban Types Lot Sizes Changeover Analysis PM Analysis Layout Labeling Tools/Parts Arrangement Work Instructions Efficiency Takt Time Skills Training Shift Meetings Cell/Area Teams Visual Displays Appropriate Automated Assistance Fixture Modifications Successive Checks Limit Switches Check Sheets Photocells, Templates, Etc. Cross Training PRINCIPLE WORKSHEETS Standard Work Sheet (SWS) Time Observation Form (TOF) Standard Work Combination Sheet (SWCS) Work Load Balancing Sheet (WLBS) Kaizen Target Sheet (KTS) Kaizen Action Sheet (KAS) SWS SWCS WLBS Kanbans Table of Production Capacity By Process (TPCP) PM Scheduling Sheet (PMSS) SWCS Error Proofing Action Sheet (EPAS) Error Proofing “To Do” List (EPL) Skill Versatility Visual Display Jidoka Autonomation

20. OFFICE KAIZEN WASTES

21. TYPICAL SITUATION - OFFICE Non-Essential Non-value Added (Waste or “Muda”) 30m Necessary Critical 0.35% 0.17% 99.48% Value Added 15m 8,640m (6 days) 8,685m Total Checking Hand-offs, In-box waiting, Signatures, Mailing prep., etc. Quote Preparation

22. TRADITIONAL RESPONSE - OFFICE Only 0.17% less in total processing time Claim 50% Improvement! Non-Essential Non-value Added (Waste or “Muda”) Necessary Critical 0.17% 99.96% Value Added 0.17% 0.17% Spend! Spend! Spend! 30m 15m 8,640m (6 days) Total Checking Hand-offs, In-box waiting, Signatures, Mailing prep., etc. Quote Preparation Before After 100K 15m 15m 8,640m (6 days) 8,685m 8,670m

24. A FIRST PASS LEAN RESPONSE - OFFICE Non-Essential Non-value Added (Waste or “Muda”) 30m Necessary Critical 0.35% 0.17% 99.48% Value Added 15m 8,640m (6 days) Total Checking Hand-offs, In-box waiting, Signatures, Mailing prep., etc. Quote Preparation 66.7% Faster in total processing time After 10K 30m 15m 2,851m (<2 days) 2,896m Before 8,685m 2/3 Reduction

26. … THERE’S MORE TO IT THAN TOOLS Process Reengineering Value Stream Mapping QFD Poka-Yoke Black Belts Integrated Product Development Kanbans Kaizen Blitzes SMED SPC Shainin Boing! I’M BACK TO EAT MORE PROFITS!!!

27. AGAIN, NOT A WORK ABOUT IMPLEMENTATION! A Highly Productive, Informed And Enthusiastic Workforce Focused On Key Processes That Are Fast, Results- Driven, Accurate, Repeatable, Value-added, Aligned With Organization Goals, Scrubbed Of Waste, And Supported & Driven By Accurate, Timely Metrics Information Flow Studies Technology Gap Analyses Accuracy, Relevancy And Availability Studies CATEGORY AND TYPE OF WASTE WASTE REDUCTION APPROACHES OFFICE KAIZEN SM OUTCOME PROCESS METHODS AND TOOLS DILO analysis Value stream Mapping RACI assessment Kaizen work sheets Structured problem solving Workplace organization 5S The 7 Quality Control Tools Lean Daily Management System Flow Charting Skill versatility analysis/matrices Flow charting Waste checklist Statistical process control charts Change teams Office Kaizen blitzes Work instructions Skills training Process benchmarking Core competency assessment Brainstorming (e.g., Affinity diagramming) Cross training Visual displays Error proofing Data integrity checklist Red-yellow-green analysis INFORMA- TION Project Management Methods Balanced Scorecard Error Proofing Process Reengineering Six Sigma Methods Processing Motion Waiting Assignment Goal Alignment Control Variability Tampering Strategic Reliability Standardization Suboptimization Scheduling Work-around Uneven Flow Checking Error Inventory Work-in-process Fixed Moving things Translation Missing Hand-off Irrelevancy Inaccuracy PEOPLE Kaizen Job Descriptions Workplace Organization Work Standards ASSET Asset Optimization Work Flow Analyses Material Practices Analyses Master Jargon Chart Of Lean Office/Admin. Implementation Specialists K C G

28. INTEGRATED PRODUCT DEVELOPMENT WASTE PEOPLE Processing Motion Waiting Composition Standardization Suboptimization PROCESS TEAM Structure Conflict Goal Alignment Focus Boundary Co-location Reporting Performance Resources Alignment STRUCTURE Assessment TOOLS TECHN OLOGY & Knowledge Interaction “ Ility” Parameter Surface Waste

31. LEAN APPROACHES AND TECHNIQUES TYPE OF WASTE WASTE REDUCTION APPROACH METHOD DESIRED RESULT Standard Work Workplace Organization Kaizen Workplace Management Just-in-time Error Proofing Processing Motion Waiting What You Need, When You Need It Highly Efficient, Safe Work Areas With High Output Good Quality Inventory Moving Things Making Too Much Fixing Defects Leveling Kanban Quick Setup Preventive Maintenance Detection Warning Prediction Prevention CATEGORY OF WASTE PEOPLE QUANTITY QUALITY FOCUS POINTS Work Balance WIP Location/Amount Kanban Location Kanban Types Lot Sizes Changeover Analysis PM Analysis Layout Labeling Tools/Parts Arrangement Work Instructions Efficiency Takt Time Skills Training Shift Meetings Cell/Area Teams Visual Displays Appropriate Automated Assistance Fixture Modifications Successive Checks Limit Switches Check Sheets Photocells, Templates, Etc. Cross Training PRINCIPLE WORKSHEETS Standard Work Sheet (SWS) Time Observation Form (TOF) Standard Work Combination Sheet (SWCS) Work Load Balancing Sheet (WLBS) Kaizen Target Sheet (KTS) Kaizen Action Sheet (KAS) SWS SWCS WLBS Kanbans Table of Production Capacity By Process (TPCP) PM Scheduling Sheet (PMSS) SWCS Error Proofing Action Sheet (EPAS) Error Proofing “To Do” List (EPL) Skill Versatility Visual Display Jidoka Autonomation

33. “ TRADITIONAL” OFFICE WASTES AND TOOLS A Highly Productive, Informed And Enthusiastic Workforce Focused On Key Processes That Are Fast, Results- Driven, Accurate, Repeatable, Value-added, Aligned With Organization Goals, Scrubbed Of Waste, And Supported & Driven By Accurate, Timely Metrics Information Flow Studies Technology Gap Analyses Accuracy, Relevancy And Availability Studies TYPE OF WASTE WASTE REDUCTION APPROACHES OFFICE KAIZEN SM OUTCOME CATEGORY OF WASTE PROCESS METHODS AND TOOLS DILO analysis Value stream Mapping RACI assessment Kaizen work sheets Structured problem solving Workplace organization 5S The 7 Quality Control Tools Lean Daily Management System Flow Charting Skill versatility analysis/matrices Flow charting Waste checklist Statistical process control charts Change teams Office Kaizen blitzes Work instructions Skills training Process benchmarking Core competency assessment Brainstorming (e.g., Affinity diagramming) Cross training Visual displays Error proofing Data integrity checklist Red-yellow-green analysis INFORMA- TION Project Management Methods Balanced Scorecard Error Proofing Process Reengineering Six Sigma Methods Processing Motion Waiting Assignment Goal Alignment Control Variability Tampering Strategic Reliability Standardization Suboptimization Scheduling Work-around Uneven Flow Checking Error Inventory Work-in-process Fixed Moving things Translation Missing Hand-off Irrelevancy Inaccuracy PEOPLE Kaizen Job Descriptions Workplace Organization Work Standards ASSET Asset Optimization Work Flow Analyses Material Practices Analyses SURFACE Implementation Specialists K C G

34. SOMETHING IS LURKING BENEATH SURFACE WASTE And It Doesn’t Smell Too Good! MMMmmmm, Chateau de Lost Profits, two quarters old, I think…left side of the garbage can.

37. LEADERSHIP MUST CREATE FOUR CONDITIONS AT EVERY LEVEL FOCUS STRUCTURE DISCIPLINE OWNERSHIP What Is Important? How Will It Be Pursued? Will We Stick To It? Do Results Impact Our Pride?

39. THE CHALLENGE: GET 12 CHECKS EXECUTIVE MANAGEMENT OTHERS STRUCTURE DISCIPLINE OWNERSHIP FOCUS

40. PRE-LEAN APPROACHES EXECUTIVE MANAGEMENT OTHERS STRUCTURE DISCIPLINE ONWERSHIP FOCUS YES YES YES YES ? ? YES YES ? ? ? ?

41. THE ACHILLES HEEL OF PRE-LEAN APPROACHES EXECUTIVE MANAGEMENT OTHERS STRUCTURE DISCIPLINE OWNERSHIP FOCUS YES YES YES YES YES YES THE PRE-LEAN GAP

42. THE PRE-LEAN GAP ALLOWS THE “WASTE CAKE” TO EXIST

43. IN THE OFFICE, TOO Focus Structure Ownership Discipline LEADERSHIP WASTES

44. THE WASTE CAKE Focus Structure Ownership Discipline

45. WIN-LEAN FILLS IN THE GAP EXECUTIVE MANAGEMENT OTHERS STRUCTURE DISCIPLINE OWNERSHIP FOCUS YES YES YES YES YES YES YES YES YES YES YES YES

46. SLMI-IT Decision Making Tools Team - Oriented Problem Solving QFD Balanced Constraint Management Flow Charts Process Reengineering FMEA One - By - One Flow Strategy Poka-yoke - Yoke Value Stream Mapping Six Sigma QFD SMED Six Sigma ISO/QS Balanced Scorecard SPC Kaizen Blitzes Visual Systems 5 “S” Shainin Primary Visual Displays DOE Kanbans TPS Worksheets FOCUS STRUCTURE DISCIPLINE OWNERSHIP Stream F

47. SLM 2 T 3 = “SLIM-IT” SM Structure Structure Mentoring Metrics Lean Daily Management System Tools Technology Teamwork

48. THE SLIM-IT LEAN OPERATIONS CUBE

49. THE SLIM-IT LEAN OFFICE CUBE People Processing Motion Waiting Hand - off Standardization Strategic Assignment Translation Uneven Flow Missing Alignment Irrelevancy Checking Variability Tampering Control Suboptimization Work - around Work - in - process Inaccuracy Inventory Fixed Moving Things Reliability Error Scheduling Process Asset Information TYPES OF SURFACE WASTE Ownership Structure Discipline Focus Structure Lean Daily Management System Mentoring Metrics Teamwork Technology Tools LEADERSHIP WASTES

50. THE FULL OPERATIONS CUBE • “ Value Stream Mapping (“as is” & “To be”) • Box and wire diagram dynamic analysis • Waste checklist • 7 Management Tools • Advanced statistical process control methods • Office Kaizen reengineering blitzes • Asset optimization • DILO analysis • RACI analyses • Kaizen work sheets • 5 “S” • Kanban • Error proofing • Structured problem solving • Work loading analysis • Key Goals Visual Focus Chart SM • 7 Quality Control Tools • Value chain analysis • Workplace organization • Scheduling analyses • Benchmarking analysis • Work leveling studies • Core competency analyses • Skill versatility matrices • Data integrity checklist • Red - yellow - green analysis • Exposition participation • Financial decomposition/analysis • Visual displays • Unsafe behavior analysis • Autonomation / jidoka SURFACE WASTE REDUCTION METHODS

51. THE FULL OFFICE CUBE • “ Value Stream Mapping (“as is” & “To be”) • Box and wire diagram dynamic analysis • Waste checklist • 7 Management Tools • Advanced statistical process control methods • Office Kaizen reengineering blitzes • Asset optimization • DILO analysis • RACI analyses • Kaizen work sheets • 5 “S” • Kanban • Error proofing • Structured problem solving • Work loading analysis • Key Goals Visual Focus Chart SM • 7 Quality Control Tools • Value chain analysis • Workplace organization • Scheduling analyses • Benchmarking analysis • Work leveling studies • Core competency analyses • Skill versatility matrices • Data integrity checklist • Red - yellow - green analysis • Exposition participation • Financial decomposition/analysis • Visual displays • Unsafe behavior analysis • Autonomation / jidoka SURFACE WASTE REDUCTION METHODS

53. EMPLOYEES’ INFORMATION NEEDS What Employees Want Amount of Information Required Type of Information CORPORATION DIVISION SITE DEPARTMENT WORK GROUP PERSONAL SITUATION What Employees Get

54. HOW ARE WE DOING SO FAR? None Almost A Some Fair A Completely none little amount Lot None Almost A Some Fair A Completely none little amount Lot None Almost A Some Fair A Completely none little amount Lot None Almost A Some Fair A Completely none little amount Lot Creating A Vision Over-communicating By A Factor Of 10 Creating A Sense Of Urgency Establishing A Leadership Coalition

56. RESULTS FROM OTHERS None Almost A Some Fair A Completely none little amount Lot None Almost A Some Fair A Completely none little amount Lot None Almost A Some Fair A Completely none little amount Lot None Almost A Some Fair A Completely none little amount Lot Establishing A Leadership Coalition Creating A Vision Over-communicating By A Factor Of 10 Non-management employees (4,459) Middle management/ supervisors (1,454) Upper management & executives (1,233) Creating A Sense Of Urgency

58. THE OBJECTIVE Creating a sense of urgency Establishing a leadership coalition Creating A vision Over-communicating by 10X Removing obstacles to the vision Creating short-term wins Not apt to Declare victory too soon Anchoring changes in the culture