1.
Achieving World-Class
Organizational
Results

2.
WHAT IS LEAN MANUFACTURING?
Lean Manufacturing can be defined as:
"A systematic approach to identifying and
eliminating waste
(non-value-added activities)
through continuous improvement by flowing the
product through flow processes based on a signal
from the customer."

3.
What is Lean Manufacturing?
 Lean manufacturing is the process of analyzing the flow of
information and materials in an environment and continuously
improving the process to achieve enhanced value for the
enterprise.
It uses the building blocks of: standardized work, workplace
organization, visual controls, effective plant layout, quality at
the source, batch reduction, teams, customer demand-based
manufacturing, point-of-use storage, quick changeover, one-
piece flow, cellular manufacturing, and Takt time.
Lean manufacturing also applies the modern elements and
technologies of scrap reduction, process improvements in
machining and tool selection as well as material selection, set-up
reduction, Just-In-Time, Kaizan, world class manufacturing,
synchronous manufacturing, and inventory management.

4.
CUSTOMER FOCUS
A lean manufacturing enterprise thinks more about
its customers (internal & external)
than it does about running machines
fast to absorb labor and overhead.
Ensuring Internal and External customer input and
feedback assures quality and customer satisfaction,

5.
FOCUS ON WASTE
The aim of Lean Manufacturing is the elimination of waste
in every area of the organization
including
•Customer relations (Sales)
•Accounting
• Product design
• Supplier Networks
•Quality
•HR
•Safety
•Manufacturing
•Engineering

6.
LEAN GOALS
Goal is to IMPROVE EVERY PROCESS WITHIN AN
ORGANIZATION REQUIRING:
•Less human effort
•Less materials
•Less inventory
•Less time
•Less space
To become highly responsive to
customer demand while producing top quality
products in the most efficient and economical manner possible

7.
In 1945, Toyoda challenged Taiichi Ohno to learn
how to compete with US Automakers not on
building large volumes of similar models, but
many models in low volume.
Ohno was given 3 years to develop a system to
achieve this goal.

8.
 Ohno went to the US and studied Ford mass
assembly processes at the Rouge River Plant.
 Ohno learned a lot from this experience, but
felt Ford stopped short of a better system.
 Ohno also studied the supermarket concept of
ordering and replenishing stock by a signal
system. This resulted in Ohno applying the
KANBAN concept to the system he would
develop.

9.
It took Ohno over 20 years to develop the system
that became known as The Toyota Production
System (TPS)
It took until the 1974 Oil Crisis before outsiders
and others in Japan really took notice of the
TPS system that Ohno built and the way it was
allowing Toyota to compete when others were
faltering.

10.
Typical use of automation which results in running parts faster and faster
but result in increased inventory as downstream cells cannot use the product
as fast as the upstream equipment is producing the parts. Increases
inventory which is waste

11.
 Lean Manufacturing came to the US with
James Womack’s Book, “ The Machine That
Changed The World” in 1990.
 Focused on Toyota Production System
Concepts and Why Toyota was able to so
successful over US Auto Manufacturers.

12.
Glossary of Lean Manufacturing Terms

Following is a short list of terms often used in explaining lean
manufacturing techniques.
Cellular Manufacturing - linking of manual and machine operations into
the most efficient combination to maximize value-added activities while
minimizing waste. A cell layout is typically U-shaped and utilizes one-
piece flow.
Kanban System - a pull system that uses color-coded cards attached to
parts or part containers to regulate the upstream production and delivery
flow.
Lean Manufacturing - the process of analyzing the flow of information
and materials in a manufacturing environment and continuously
improving the process to achieve enhanced value to the customer.
Non-Value Added - Any activity that does not add market form or
function or is not necessary. (These activities should be eliminated,
simplified, reduced or integrated.)

13.
 Pull System - method of controlling the flow of resources by
replacing only what has been consumed. A pull system relies on
customer demand.
Push System - resources are provided to the consumer based on
forecasts or schedules. (Lean manufacturing encourages the
elimination of push systems.)
Takt Time - customer demand rate. Takt time sets the pace of
production to match the rate of customer demand and becomes
the heartbeat of any lean system. It is calculated by taking the
work time available and dividing it by the number of units sold.
Value Added - Any activity that increases the market form or
function of the product or service. (These are things the customer
is willing to pay for.)

14.
 Most waste is invisible. Nor is elimination easy. A set of
techniques that identify and eliminate waste has evolved into
"Lean Manufacturing."
 Cellular Manufacturing
 Takt Time
 Kanban
 Setup Reduction
 Implementing
 Kaizen
 Group Technology
 Small and frequent Lot Sizing

15.
Transforming small manufacturers to high performance requires that they address
TOOLS ASSOCIATED WITH LEAN

16.
Understand the Current State
Start

17.
Present State Value Stream Map

18.
Future State Value Stream Map

19.
Improve processes (manufacturing; engineering; HR; Safety;
Quality; Sales; Accounting) by looking at building “cells” of
operations that are small complete factories of their own instead
of moving products, materials and information by large lots
throughout a large facility or office- Quick response Processing
results

20.
 A work cell is a work unit larger than an
individual machine or workstation but smaller
than the usual department. Typically, it has 3-
12 people and 5-15 workstations in a compact
arrangement.
 An ideal cell manufactures a narrow range of
highly similar
products/information/procdesses. Such an
ideal cell is self-contained with all necessary
equipment and resources.
 Cellular layouts organize departments around
a product/information/process or a narrow
range of similar products. Materials sit in an
initial queue when they enter the cell.

21.
 Once processing begins, they move directly
from process to process (or sit in mini-queues).
The result is very fast throughput.
 Communication is easy since every person is
close to the others. This improves quality and
coordination. Proximity and a common mission
enhance teamwork.
 Simplicity is an underlying theme throughout
cellular design. Notice the simplicity of
material/information/process flow. Simpler
Scheduling, supervision and many other
elements also reflect this underlying simplicity.

22.
This complicated flow becomes a much
improves and simpler flow between areas that
are adding value

23.
Key Element Functional Cellular
Inter-department Moves Many Few
Travel Distance 500'-4000' 100'-400'
Route Structure Variable Fixed
Queues 12-30 3-5
Throughput Time Weeks Hours
Response Time Weeks Hours
Inventory Turns 3-10 15-60
Supervision Difficult Easy
Teamwork Inhibits Enhances
Quality Feedback Days Minutes
Skill Range Narrow Broad
Scheduling Complex Simple
Equipment Utilization 85%-95% 70%-80

24.
An Example
 A firm that assembles air-handling products faced high
inventories and erratic delivery. They originally
assembled units on a traditional line. Long setups and
logistics required long production runs. Often, they
pulled products from finished goods and rebuilt them
for custom orders.
 Twelve small (1-3 person) assembly work cells that
were always set up and ready. People worked in
different cells each day and assembled to customer
order. Finished Goods Inventory dropped by 96%.
Lead-time was 24 hours. Productivity improved by
20%-30%.

25.
Traditional
Manufacturing
Lean
Manufacturing
Scheduling Forecast - push Customer Order - pull
Production Stock Customer Order
Lead Time Long Short
Batch Size Large - Batch & Queue Small - Continuous Flow
Inspection Sampling - by inspectors 100% - at source by workers
Layout Functional Product Flow
Empowerment Low High
Inventory Turns Low - <7 turns High - 10+
Flexibility Low High
COGS High and Rising Lower and Decreasing

26.
Continuous Improvement Firm (CIF) versus Mass Production (MP) firm
Issues MP CIF
Strategic advantage Large volume of
homogenous output
Production flexibility
Workforce Narrow specialization Multi-skilled
Output based on Forecasted demand Real demand
Productivity success
factors
Quality of
management; its
ability to plan and
to direct the
implementation of
those plans
The ability of the
entire work force,
not just
management, to
constantly improve
both the product
and the processes
whereby it is
produced

27.
ISSUE
OLD INDUSTRIAL
ECONOMY
NEW ECONOMY
Economic Development Steady and linear, quite
predictable
Volatile - extremely fast
change, sudden
downturns, and chaotic -
the direction of the
changes is not perfectly
clear4
Market changes Slow and linear Fast and unpredictable
Economy Supplier-driven Customer-driven
Lifecycle of Products and
Technologies
Long Short
Key Economy Drivers Large industrial firms Innovative firms
Scope of Competition Local Global hyper-competition
Competition: Name of the
Game
Size: The big eats the small Speed
Marketing: Name of the
Game
Mass marketing Differentiation

28.
DEFINITION OF WASTE
Essentially, "waste" is anything that the
customer is not willing to pay for.

29.
8 TYPES OF WASTE
 TRANSPORTATION
 WASTED MOTIONS
 EXCESS INVENTORY
 WAIT TIME
 SCRAP OR REWORK
 OVER-PROCESSING
 OVER-PRODUCTION
 UNDERUTILIZED HUMAN RESOURCES.

30.
is Usually Disguised as:
 Lost Time/Injury
Accidents
 Scrap/Rework
 Machine Setups
 Machine Downtime
 3rd Party Inspection
 Calibrations
 Inventory Storage
 Counting Inventory
 Supplier Lead-times
 Product Test
 Profit Reductions
 Falling Market
Share

31.
 Administrative Waste
 Conflicting Department Goals – not everyone on the same
page
 Traditional Accounting Methods – rewarding people for
creating waste, for example; inventory
 Poor Product Design – designs which do not include the needs
of the internal and external customers
 Long Order Processing Time
 Searching, Hunting, Looking – for files, orders, invoices,
reports, memos etc.
 Waiting Time – waiting for batched paperwork, instructions,
supervision etc.
 Purchasing Reorders, Transactions
 Authorizations

32.
What Types of Waste
Do You Have in Your
Facility?

33.
Improves our ability to
provide customer satisfaction,
while reducing our overall
costs!

34.
Overproduction
To produce more than is sold or produce it
before it is needed.
 It is visible as storage of material.
 Overproduction means making more than is:
- Required by the next process
- Making earlier than is required by the next
process, or
- Making faster than is required by the next
process.

35.
Causes for Over Production
 Just-in-case logic
 Misuse of automation
 Long process setup
 Unleveled scheduling
 Unbalanced work load
 Over engineered
 Redundant inspections

36.
WAIT TIME
Any time that is non-value added where the
operator must stop producing good parts and
wait for: materials; instructions; Team Leader;
equipment downtime.

37.
Causes of Wait Time Waste
 Unbalanced work load
 Unplanned maintenance
 Long process set-up times
 Misuses of automation
 Upstream quality problems
 Unleveled scheduling
 Poor Communication

38.
Inventory or Work in Process (WIP) Waste
Represents the material between operations
due to large lot production or processes with
long cycle times
One of the most frequent types of waste and
one of the most expensive to have

39.
Causes of Excess Inventory
 Compensating for inefficiencies and unexpected
problems
 Product complexity
 Unleveled scheduling
 Poor market forecast
 Unbalanced workload
 Unreliable shipments by suppliers
 Misunderstood communications
 Reward systems

40.
Over Processing Waste
Doing more processing to the parts than the
customer really requires
.
Over processing waste can be minimized by asking why
a specific processing step is needed and why a specific
product is produced.
All unnecessary processing steps should be eliminated.

41.
Causes for Over Processing Waste
 Product changes without process changes
 Just-in-case logic
 True customer requirements undefined
 Over processing to accommodate expected
downtime
 Lack of communication
 Redundant approvals
 Extra copies/excessive information

42.
Transportation Waste
Excess Material Handling either to production
area or within production areas.
Does not add any value to the product. Instead
of improving the transportation, it should be
minimized or eliminated (e.g. forming cells)

43.
Causes of Transportation Waste
 Poor plant layout
 Poor understanding of the process flow for
production
 Large batch sizes, long lead times, and large
storage areas

44.
WASTED MOTIONS
Any movement that does not add value.
Examples: looking for tools; walking many steps
to get parts or place parts into finished goods;
more movements than necessary to perform an
operation.

45.
Causes of Motion Waste
 Poor people/machine effectiveness
 Inconsistent work methods
 Failure to take ergonomic issues into
consideration
 Poor facility or cell layout
 Poor workplace organization and
housekeeping
 Extra "busy" movements while waiting

46.
SCRAP OR REWORK
Requires additional resources and time to
correct defects before shipping or replace parts
that are scrapped due to defects.

47.
Causes of Scrap or Rework
 Little or no process control
 Poor quality standards or inconsistent quality
standards
 Lack of or little planned equipment preventive
maintenance
 Inadequate education/training/work
instructions
 Product design (Process cannot produce to
quality)
 Customer needs not understood

48.
UNDER-UTILIZED HUMAN RESOURCES
The lack of involvement and participation of the
employees in improving operations; quality
and safety.

49.
Causes of People Waste
 Old guard thinking, politics, the business
culture
 Poor hiring practices
 Low or no investment in training
 Low pay, high turnover strategy
 Management thinking it has to “drive”
everything instead of involving those who
know the process the best

50.
SOME BASIC ELEMENTS OF LEAN
•Elimination of waste
•Equipment reliability
•Process capability
•Continuous flow
•Material flows one part at a time
•Less inventory required throughout the production process,
raw material, WIP, and finished goods
Defect reduction
•Lead time reduction
•Error proofing

51.
 Stop the Line quality system
 Kanban systems
 Standard work
 Visual management
 In station process control
 Level production
 Takt Time
 Quick Changeover
 Teamwork
 Point of use storage

52.
KAIZEN
The definition of Kaizen is "improvement"
and particularly------"Continuous
Improvement"-- slow, incremental but constant
Small-scale improvements are easier and faster.
The risks are lower because they generally have
limited effect.
However, the accumulated effect is often greater
than a single large improvement

53.
Takt Time
The desired time between units of production
and output, synchronized to customer
demand.
The concept carries backward through a process
stream. Ideally, every step synchronizes with
the final output. Takt Time is fundamental to
Lean Manufacturing.

54.
Takt time is useful for lean cells These are
typical of the work cells at Toyota and what
most people think of when they picture a cell.
Such cells have:
 Minimal Setups
 A Single Routing
 Identical Work Times for All Products
 Job-shops and other low-volume, high-variety
operations can also use cellular
manufacturing, it's just a bit more
complicated

55.
 Small lot production (ideally one piece) is an
important component of any Lean strategy.
Lot size directly affects inventory and scheduling
The larger the lot size the more time, materials,
money, inventory, lead time, scrap is produced
and lead time and scheduling is extended.

56.
Batching has an even greater effect on inventory. This chart shows the minimum
inventory on hand downstream of the work center. A lot size of 20 units generates an
average inventory of 15 units. A lot size of 200 generates an average inventory of 93
units with wide fluctuations. This is a 600% increase! Actual inventory would be
much larger than shown here because of the uncertainty of fluctuations, the
difficulty of correcting a stock out and the need for coping with other contingencies.

57.
The chart above shows the effect of large and small lots on one particular work
center's production. A green line shows daily demand from the customer. It
averages 50 units/day and does not vary more than about 20%. The black line
shows the actual production if units are made in lots of 20 or about 0.4 days of
demand. With this small lot size, required production tracks demand and even
smoothes the demand a bit. Output is quite linear.

58.
A lot size of 200 units is about 4.0 days of demand. The purple line
shows production requirements. Here there are large, intermittent
swings between 200 units and 0 units-- very non-linear.
This kind of pattern complicates scheduling, precludes the use of
kanban and generates large inventories. The slightest glitch can
cause stock outs

59.
Leaders must lead! Everyone must be involved
without exception! Lean applies to the office
and shop floor and it “paves the approach”
necessary for all other improvements which are
the long-term hope for a company’s survival.
“You will achieve the level of excellence
that you demonstrate you want to
achieve.”
Dupont