Lean Manufacturing Overview

© Operational Excellence Consulting. All rights reserved.
Lean Manufacturing Overview

4© Operational Excellence Consulting. All rights reserved.
Program Outline
• Introduction to Lean
• Value & Waste
• Lean Principles
• Lean Manufacturing
Framework (TPS)
• Stability
• Standardization
• Just-In-Time
• Jidoka
• Employee Involvement
• Value Stream Mapping
• Problem Solving
• Lean Implementation
• Role of Lean Leadership
• Developing "Kaizen Eyes"
• Critical Success Factors
• SummaryThis document is a partial preview. Full document download can be found on Flevy:
http://flevy.com/browse/document/lean-manufacturing-overview-160

What Lean IS NOT
• Laying off employees by the bus load
• Delivering less or working harder
• Outsourcing or offshoring
• Being mean to people
• Automation or buying a monstrous ERP system
• Narrow focus on unit cost management
• Winning a Shingo Prize so as to look Lean
This document is a partial preview. Full document download can be found on Flevy:

Toyota’s Philosophy
• Provide world class quality and service
• Develop employee potential through mutual trust
and cooperation
• Reduce cost through elimination of waste
• Develop a flexible production system that can
respond to changes in market demand

Lean Manufacturing System
• TPS is built on two main pillars:
Just-In-Time: It refers to the manufacturing and conveyance of
only what is needed, when it is needed, and in the amount
needed.
Jidoka: The ability to stop production lines in the event of
problems such as equipment malfunction, quality issues, or late
work. Jidoka helps prevent the passing of defects, helps identify
and correct problem areas using localization and isolation.
Underlying this management philosophy is the concept
that "Good Thinking Means Good Product."

Process Improvement Methodologies
Custom and
practice
Capability
Configuration
Capacity
Change-
overInventoryDefects
Intellect
Over-
processing
Transportation
Waiting
Overproduction
Motion
Waste Variability Inflexibility
Typical focus
of Lean
improvement
Typical focus
of “six sigma”
improvement
Typical focus of
de-bottlenecking
Sample distribution
“Voice of the process”
“Voice of the
customer”
+/- 3 Standard deviations

What does Lean in a service environment
look like?
Banks
•Mergers and
acquisitions
•Loans application
IT
•Outsourced
managed services
Application Common Issues Typical Solutions
•Differences in
business practices
•Loans approval
process
•Complicated tasks
•Unbalanced capacity
•Manpower utilization
•Process integration and
streamlining
•Fast track processing
for low-risk loans
•Segmenting complexity
•Pooling resources for
economies of scale
•Flexible manpower
systems
Telco
• Procurement
• Call centre
operations
•Cost-based and capex
management
•Customer service
•Inventory management
•Network sharing
•Channels efficiency
Source: Operational Excellence Consulting Research

Benefits of Lean
• Improve customer satisfaction
• Increase sales and profits
• Improve quality and lower costs
• See things differently than we do today
• Optimally utilize resources while meeting customer’s
needs
• Enhance process flow
• Improve throughput
• Create sustainable competitive advantage

Methods to Increase Productivity
How to Increase
Productivity?
Quantitative
Approach
More Staff
More Machines
Work Longer
Qualitative
Approach
Work Harder
Eliminate Waste
& Simplify
Focus of
Lean
Let’s work smarter!

Examples of Value-Added Activities
• Entering orders
• Translating materials
• Creating codes
• Preparing drawings or artwork
• Laying foundations
• Assembling goods
• Shipping to customersThis document is a partial preview. Full document download can be found on Flevy:

Eight Types of Waste
Over-production
Producing more than what
the customer needs
Inventory
Building and storing extra
services/products the
customer has not ordered
Transportation
Moving product from
one place to another
Rework
Reprocessing, or
correcting work
Over-processing
Adding excess value
when the customer
does not require it
Motion
Extra physical/mental
motion that doesn’t add
value
Intellect
Not using employees full
intellectual contribution
Waiting
Employees waiting for
another process or a
machine/tool
WasteWaste

Types of Waste
• Searching for tools, materials
• Searching for information in shared drive
• Lack of or sub-optimal standard operating
procedures (SOPs)
• Reaching, bending or unnecessary motion due
to poor ergonomics and workplace layout
• Unnecessary walking
• Providing higher quality than is necessary
• Unnecessary part/system replacement
• Multiple formats for the same information
• Redundant approvals (checkers checking on
checkers)
• Making extra copies and excessive reporting
• Excessive documentation
Unnecessary
Movement
Over-processing
5
6

Lean Principles

A value stream is all of the value-adding
activities AND all of the non-value adding
activities (pure waste and incidental waste)
required to provide a product/service to a
customer
Process A Process B Process CCustomer
Order
Customer
Finished
Product
Value Stream
Principle 2:
Map the Value Stream

Principle 4:
Establish Pull from Our Customer(s)
Traditional System
• When Process A completes
its work, it hands the product
off to Process B, where it is
stored until needed.
Pull System
• Process B is responsible for
getting parts and supplies
from Process A as they are
needed. There is no
intermediate storage.
A
B C
INVENTORY
INVENTORY
INVENTORY MATERIALS
FINISHED
PRODUCTS
FINISHED
PRODUCTS
A CB
MATERIALS

Systems Approach to Lean
“Most companies have
focused too heavily on
tools…without understanding
Lean as an entire system
that must permeate an
organization’s culture.”
- Dr. Jeffrey K. Liker
Author of “The Toyota Way”
Stability

5S
• Focuses on effective workplace organization
and standardization. It allows us to easily spot
variation from standard operating conditions.
• Cleaner, safer work
environment
• Organized, user friendly
workstations
• Open up space and
reduce clutter
Sort
Set In Order
Shine
Standardize
Sustain
Stability

Market Demand = 220,000 Units Per Year
Takt Time = 27 Seconds
Lathe Mill Mill InspectDrill
Drill
TestDrillPack
1 2 3 4 5
10 9 8 7
6
27
Seconds 27
Seconds
Inspect
27
Seconds
Cellular Layout
Stability

Lean Methodologies & Tools
Standardization:
• Standardized Work
• Heijunka / Load Leveling
• Supermarket
• Kaizen

Subjects for Standardization
Standardization

Heijunka (Load Leveling)
Level out the workload - Work like
the tortoise, not the hare
Standardization

Production Instruction Kanban with
Heijunka Box
Standardization

Kaizen “Blitz”
• Total focus on a defined process to create
radical improvement in a short period of time
• Dramatic improvements in productivity, quality,
delivery, lead-time, set-up time, space utilization,
work in process, workplace organization
• Typically five days (one week) long
Standardization

Just-in-Time (not Just-in-Case) Pillar
• The right material
• At the right time
• At the right place
• In the exact amount
Stability
Heijunka Standardized Work Kaizen
Just-In-Time
• Continuous flow
• Takt time
• Pull system
• Flexible workforce
Jidoka
• Separate man &
machine work
• Abnormality
Identification
• Poka yoke
• Visual Control
Goals:
highest quality,
lowest cost, shortest lead times
Involvement
Just-In-Time

Pull System
• Pull System is a flexible and simple method of
controlling/balancing the flow of resources
Eliminate waste of handling, storage, expediting, obsolescence,
repair, rework, facilities, equipment, excess inventory, etc.
• Pull System consists of:
Production based on actual consumption
Small Lots
Low inventories
Management by sight (visual management)
Better communication
Just-In-Time

Supermarket Analogy
1. A carton of milk is removed from shelf
2. A stock person restocks the empty location,
but only brings what shelf can accommodate
3. The supermarket combines visual control, pull
system, Kanban and 5S
Just-In-Time

Quick Changeover: Basic SMED
Principles
• Identify internal vs.
external changeover tasks
• Analyze each task’s real
purpose and function
• Focus on no/low cost
solutions
• Aim to eliminate
changeover time
Just-In-Time

Takt Time Calculation
• Calculation:
Total work time = 440 Minutes (7 hours/20 minutes),
20 days a month
Total demand = 17,600 units per month
Takt time = 17,600/8,800 = two per minute or
one piece every 30 seconds
Just-In-Time

Lean Methodologies & Tools
Jidoka:
• Quality at the Source
• Poka-Yoke
• Andons
• Problem Solving

Why Jidoka?
• Increase quality
• Lower costs
• Reduce lead time
• Improve customer
service
Jidoka

Jidoka - Prevention Techniques
• Poka-Yoke (Mistake Proofing)
Visual control of quality
Prevents defects from happening
• Andons
Commonly lights to signal production line status
Red: line stopped
Yellow: call for help
Green: all normal
Andon signals require immediate attention
Jidoka

Andon
• A visual control device in a
production area
Typically a lighted overhead
display
Gives the current status of
the production system
Alerts team members to
emerging problems
• Serves as warning system
to signal and identify
problems in the process
Jidoka

Eight Steps of Problem Solving
Identify the problem
Understand Present Situation
Identify Root Cause
Plan Improvement
Implement Improvement
Confirm Results
Standardise Improvement
Review & Follow-up
PLAN
ACT
CHECK
DO
Jidoka

Total Employee Involvement
• The essence of
Lean is engaging
everyone in
identifying and
solving problems
Stability
Heijunka Standardized Work Kaizen
Just-In-Time
• Continuous flow
• Takt time
• Pull system
• Flexible workforce
Jidoka
• Separate man &
machine work
• Abnormality
Identification
• Poka yoke
•Visual Control
Goals:
highest quality,
lowest cost, shortest lead times
Involvement
Involvement

Suggestion System
• One of the cornerstones of Small
Group Activities
• Suggestions are job-oriented and
implemented by the employee
Process
Equipment
Safety & Environment
• A key measure of morale –
number of suggestions per
employee
Involvement

Hoshin Kanri Process
Direction of
information flow
Catchball:
Negotiation &
Alignment between
two levels
MD/
Business Unit
GM
Dept Manager
Section
Manager
Engineer
Customer
Satisfaction
Feedback
Feedback
Feedback
Feedback
Set up & lead
Kaizen team
to reduce rejects
in Line A-1
To improve
quality
Improve
overall yield
Reduce
defects
Reduce rejects
in Line A-1
Policy Owner Objective Means
To improve
quality
Improve
overall yield
Reduce
defects
Involvement

Purpose of Value Stream Mapping
• Identify opportunities or processes where Lean
tools can be applied
• To free up resources or improve capacity
• Eliminate process waste
• Help reduce / eliminate waiting time
• Reduce cycle and processing time
• Understand process linkages and dependencies
• Create the basis for Lean implementation plan

Value Stream Mapping Steps
Define and Pick the Product/
Service Family
Create Current State Value
Stream Map
Create Future State Value
Stream Map
Develop an Implementation
Plan & Execution

Eight Steps of Problem Solving
Identify the problem
Understand Present Situation
Identify Root Cause
Plan Improvement
Implement Improvement
Confirm Results
Standardise Improvement
Review & Follow-up
PLAN
ACT
CHECK
DO

"As much as 95% of
quality related
problems in the
factory can be
solved with seven
fundamental
quantitative tools."
- Dr. Kaoru Ishikawa

4 Key Activities
1. Make a Commitment
2. Plan for Lean deployment
3. Put Lean systems in motion
4. Keep Lean going
Flow Kaizen
(Value Stream
Improvement)
Process Kaizen
(Waste Elimination)
Four
Key Activities
Plan
DoCheck
Act

3. Put Lean Systems in Motion
3.1 Set up work process measurements
3.2 Measure waste, cost of quality, etc.
3.3 Form Kaizen teams for solving problems
3.4 Recognize participation

What is Leadership?
Peter Drucker on Leadership:
“The greatest leaders of
the 20th century were
Hitler, Stalin and Mao: If
that is “leadership”, I
want nothing to do with
it.”

Leadership at Toyota -
From managing numbers to managing the process
• Leaders at Toyota, like leaders anywhere, want to see
measurable results.
• But they know that the financial result is a result of a
process.
• They also realize that the financial results reflect the
past performance of that process.
• Far better is to create a process that can be managed
right NOW.

Leadership at Toyota -
P-D-C-A
• Toyota would say this is essentially the P-D-C-A
management cycle they learned from Dr. Deming.
• Yet, my own observations say this is precisely the thing
that most companies can’t seem to do.
• Why?
• Surely one major reason for this is the way we lead and
manage.This document is a partial preview. Full document download can be found on Flevy:

Chairman Cho of Toyota: Three Keys
to Lean Leadership
• Go See
“Sr. Mgmt. must spend time
on the plant floor.”
• Ask Why
“Use the “Why?” technique
daily.”
• Show Respect
“Respect your people.”

Ways To Develop “Kaizen Eyes”

Ways to Develop “Kaizen Eyes” 3
41.Take something apart
42.Do a walkthrough with someone else
43.Study problem solving
44.Quiz suppliers
45.Listen to customers
46.What would you do with unlimited budget?
47.Search help forums
48.Create a checklist
Always be looking for opportunities
Source: Tom Curtis

Critical Success Factors 2
• Select a few projects to work on instead of trying
to “boil the ocean”
• Lean should be considered a long-term
philosophy, even at the expense of short-term
financial gains
• Build culture of stopping the line to fix problems
• Standardize tasks and processes
• Use simple visual control systems to bring
problems to the fore

Critical Success Factors 5
• People must be adaptive and flexible
• Proper allocation of resources
• Trust between the organization and trade union
• Line management must always retain the
authority and responsibility for Lean
implementation
• Regular review and measurement of progress
against pre-determined targets and expectations

Breakthrough Thinking Needed
“Everything should be
made as simple as
possible, but not
simpler.”
- Albert Einstein

End of Presentation
To view the full list of training presentations,
please visit us at:
Operational Excellence Consulting
http://www.oeconsulting.com.sg

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