green belt lean training
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Green Belt Training
Welcome!
Joel Perez
OE Objectives
You will …
– Understand how to use the Lean Tools and Methodologies
– Be able to recognize the Waste in processes
– Learn Lean concepts (Standardized Work, Just in Time, Theory of Constraints, TPM, etc)
– Know how to apply the Lean Tools and Methodologies in DMAIC framework
– Recognize Lean opportunities in office processes
– Learn how to create a Value Stream Map
– Gain practical understanding of Lean tools through a simulation exercise
Joel Perez
OE Agenda
• OE Lean Introduction 7
• Define 41
• Measure 58
• Analyze 127
• Improve 177
• Control 266
• OE Lean Summary 291
• Improvement Ideas 300
Joel Perez
Joel Perez
Introduction
Operations Excellence
Joel Perez
The OE Approach is …
A disciplined methodology for managing the business to
improve customer satisfaction and bottom line results by…
Focusing everyone on a few customer and financial
indicators…
Measuring process performance from the customer’s
perspective…
Applying rigorous analytical tools to improve processes and
move key customer and financial indicators . . .
… and managing by it!
Joel Perez
The OE Approach is Based on Fundamentals
Improvement activities aligned with business objectives
Focus on waste, defect and variation reduction
Defects defined by customer requirements
Use of disciplined methodologies
Data-based decision making
Building capability within the organization
Joel Perez
With Structured Components To Ensure Results Are Delivered
Vital few Top-Level
business metrics
focused on financial
performance and
customer needs
Eliminate defects,
variation, and
waste
Develop new
processes to meet
customer needs
Improved Planning and Execution . . . Emphasizing Critical Thinking & Disciplined Use of Data
Build accountability
into everyday
processes and
identify
performance gaps
Joel Perez
Why Lean and Six Sigma Are Combined Within OE Approach
• Our processes must be:
– Nimble and more responsive to customers
– Virtually defect free
– Effective and efficient
Lean means no waste, streamlined, process
simplicity
Six Sigma means less variability and fewer defects
Only the combination of Lean and Six Sigma can
fulfill all three goals – Quality, Speed, and Cost
OE approach maximizes the benefits of these techniques
Joel Perez
Implementing Lean Techniques Drives Efficiencies
• Lean companies use less amounts of
everything, compared to companies that use
traditional thinking :
– half the human effort
– half the space
– half the investment in tools
– half the engineering hours to develop a new
product in half the time
– less than half the inventory
From Womack, Jones, et.al.,
“The Machine That Changed the World.” Joel Perez
The Underlying Premise of Lean
Waste Customer
Order
Product
Delivery
Traditional
Time in Value Stream, “Lead Time”
Waste Customer
Order
Lean
Product
Delivery
Time in Value Stream, “Lead Time”
“Time to Cash”
Speed
Cost
A relentless focus on reducing cycle time to reduce
costs . . . by driving out WASTE Joel Perez
The Lean Thinking
• Operational philosophy or a business
system
• Alignment of actions that create value, in
the best sequence; elimination of waste
• Getting continuously closer to offering the
customers what they want, at the right time
Joel Perez
The Lean Principles
• Lean journey can be summarized by five principles/steps*: – Principle 1 - Precisely specify the value of a
particular process
– Principle 2 - Identify the value stream for the process
– Principle 3 - Allow value to flow without interruptions
– Principle 4 - Let the customer pull value from the process
– Principle 5 - Continuously pursue perfection
(*)From Womack: “Lean Thinking”
Joel Perez
Keys to Lean
–Integrated single piece production (i.e.. a continuous work flow ) with minimum inventories at each stage of production
–Production is synchronized to fit the schedule, without being based on the machine usage
–Defect prevention
–Team-based work organizations with multi-skilled operators
–The metrics are used to solve problems
Joel Perez
Keys to Lean
– Operators empowered to make decisions and improve operations with few indirect workers
– Workers actively involved in trouble shooting and problem solving to improve quality and eliminate waste
– Close integration of the whole value stream from raw material to finished product, through partnership oriented relations with suppliers and distributors
Joel Perez
Value and Waste - Definition
• WASTE:
• Activities that consume time, resources and space, but do not contribute to satisfy customers needs.
VALUE:
An activity that transforms or shapes
raw material or information to meet
customer needs.
Customers will pay for value … they will not pay
for waste Joel Perez
Value and Waste - Examples
Examples:
• Labeling
• Filling Bottle
Examples:
• Walking to get parts
• Waiting time
• Accumulating papers
Activities
Value
Added
Waste
100%
Operation
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Value added
Non
Value
Added,
but
necessary
Waste
Operation
60%
38%
2% • Report Produced
• Presentation Delivered
• Translating scope of project to completed materials
• Staff meetings
• Researching
• Refilling paper of printer
• Walking to get paper of printer
• Looking for files
• Waiting for data
Examples
Value and Waste - Examples
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Recognizing Waste
MOTION
OVER PRODUCTION
The Seven Major Wastes
OVER PROCESSING
WAITING
Move it over
there until we
need it.
CONVEYANCE
CORRECTION
INVENTORY Joel Perez
Recognizing Waste
Not Using the Skills and Knowledge of the Work Force
The Seven Major Wastes Plus 1 = 8 Wastes
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8 Types of Waste – Motion
• Actions of people or equipment that do not add
value to the product
Examples:
• Turning around to pick
up a part
• Sorting through a box of
parts to find the right one
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8 Types of Waste – Motion
• Poor work area configuration and organization
– Sales personnel walking to a fax machine located at the far end of the room in order to send quotes … missing an important customer call
• Visual Management not implemented, i.e. signs
– Office cubicles/conference rooms difficult to locate … being late to meetings
• Standardized Work not implemented
– A new employee “spinning the wheel” trying to create a monthly report … reports not published on time for customers
• Not storing items where they belong
– Administrative assistant looking for a file the boss wants right away for an important meeting … delayed meeting starts or unproductive meetings
Office Examples
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8 Types of Waste – Over Production
• Parts and products that are produced in excess
or earlier than required
Examples:
• Producing parts on
Monday that are not
shipped to the customer
until Friday
• Producing parts because
machines and people are
available Joel Perez
8 Types of Waste – Over Production
• Printing several hard copies of reports before it is finalized
• Getting to meetings too early before start
• Not making double-sided copies of a long report
• A manager assigning same task to several people
• Preparing and carrying “extra” information to a review meeting
• Salesman spending too much time on paper work instead of customer calls
Office Examples
Joel Perez
Examples:
• Painting the structure of
an automobile seat,
which will be covered
with leather and the
customer will never see
• Inspection, washing, etc..
8 Types of Waste – Over Processing
• Processing steps or unnecessary work
elements/ procedures (non-value-added)
Joel Perez
8 Types of Waste – Over Processing
• Standards unknown / unclear to employees
• Customer specifications are vague or fluctuate
• Functional departments have misaligned goals and poor communication
• Selecting “Reply to All” on emails
• CC’ing more people than really necessary
• Micro-managing
Office Examples
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8 Types of Waste – Waiting
• Time delays, idle time
Examples:
• Waiting for raw material
to be delivered
• Waiting for a machine to
complete its cycle
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8 Types of Waste – Waiting
• Waiting for a meeting to start
• Employee waiting for work directions from supervisor
• Waiting on hold for a telephone call
• Waiting for a copier or computer that is broken
• Waiting for manager’s signature approval before releasing a invoice payment
Office Examples
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8 Types of Waste – Conveyance
• Too much handling, delay on material handling,
unnecessary handling
Examples:
• Moving parts to and from
storage areas
• Transporting parts from
the machining area to the
final assembly area
Move it over there
until we need it.
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8 Types of Waste – Conveyance
• Handling excess paperwork
• Relocating office work materials
• Excessive approval authorities
• Assignment given to the wrong person
• Walking back and forth between
buildings to go to meetings, obtain
signatures, etc.
Office Examples
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8 Types of Waste – Correction
• Producing a product that is scrapped or requires
rework
Examples:
• Scrapping products that
failed final inspection
• Repairing a surface that
was scratched during
process
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8 Types of Waste – Correction
• Poor quality or slow feedback
• Excessive revisions to procedures that
do not add value
• Change document layouts that vary
among organizations
• Personal preference versus functional
requirement
Office Examples
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8 Types of Waste – Inventory
• Keeping or buying unnecessary raw materials,
work in process, finished goods
Examples:
• 10 days of raw material
supply
• A pallet containing 1000
bottles waiting to be
filled
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8 Types of Waste – Inventory
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e
Finished Product
to Customer
Tra
ns
po
rta
tio
n
Raw Material Sea of inventory
Material
Manpower
Product
Service
Excessive inventory hides problems/defects
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8 Types of Waste – Inventory
Reducing inventory makes problems/defects clearly visible
Tra
ns
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Tim
e
Finished Product
to Customer
Tra
ns
po
rta
tio
n
Raw Material
Material
Manpower
Product
Service
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8 Types of Waste – Inventory
• Mass mindset, batch and queue
• Concept of “the more, the better”
• Poor awareness and execution of Record Retention Policy
• Lack of discipline
• Stocking excessive amount of office supplies in the cabinet
Office Examples
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Waste From Not Using the Skills and Knowledge Of the Workforce
• Not listening to people’s suggestions and ideas
for improvement
Examples:
• Buying new computers
without asking for the
opinion of office workers
etc.
• Making changes on the
shop floor without getting
the operators’ input Joel Perez
Lean Benefits
– Efficiency: Eliminating waste of time and
movement makes every process more efficient
– Cost: A more efficient system costs less to
operate and enables the company to realize
greater profit
– Delivery: Right product, right amount, shipped
on time and delivered to customer when needed
– Safety: Eliminating waste makes the work site
safer with less opportunity for injury
Joel Perez
Continuous flow
Batch size
Element
Production
Layout
Processing
Maintenance
Based on forecast
Based on function /
department
Large
Batch & queue
Reactive
Based on orders
Based on product flow
Small
Predictive
Traditional Thinking Lean Thinking
Inventory Stock and buffer Just-in-time
In Summary … What’s Different in Lean Thinking
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DEFINE
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DEFINE Current Situation
• Goal
– Define the project’s
purpose, scope and
major milestones –
bound the problem
• Key Outputs
– A high level map of
the process
– A preliminary problem
statement
– A project plan
2
3
4
5
MEASURE
ANALYZE
IMPROVE
CONTROL
1
DEFINE
Joel Perez
DEFINE: Story Components
Identify Business
Opportunity/Gap ($)
Identify Customer’s
Critical To Quality
(CTQ) Attributes
Map High Level Processes
and Set Boundaries
• Select measures that link process performance to problem area related to CTQ
• Shows need for improvement
Develop
Preliminary Problem Statement
Select Resources (% Time) and
Charter Project
Prepare Communication & Project Plans
Who What When
A A B B C C D D E E Core
1 D
A D
B D
C D
D D
E
A A B B C C D D E E
L D A D
B D
C D
D D
E D A D
B D
C D
D D
E
Good
A A A A
D A
D A
Identify Outcome Indicators
Run Chart
To define the customer, their CTQs, the team charter, and map the core business process
Stakeholder Analysis
Assess Financial $ Impact (COQ)
Project Planning Worksheet
Joel Perez
Customer CTQs
Outcome Indicators
Identify Business Opportunity/Gap ($)
Identify Customer’s CTQ Attributes
Map High Level Processes
Identify Outcome Indicators
Develop Preliminary Problem
Statement
Assess Financial $ Impact (COQ)
Prepare Communication & Project
Plans
Tools, Indicators and
Methodologies Storyboard
DEFINE: Lean Tools, Indicators and Methodologies
DEFINE: Identify Business Opportunity/Gap
• Defects
• Variability
• Inconsistency
• New Product/Service
• Missed Due Dates
• Rework
• Scrap
• Slow
• Exception handling
• Unplanned downtime
• Bottlenecks
• Redundancies
• Capacity Constraints
• Inventory Write-offs
• Complexity
• Backlogs
• gaps
What problems do you face? Joel Perez
DEFINE: Customer CTQs – Critical to Quality Characteristic (CTQ) - A
description of a product or service attribute that influences a customer’s decision to purchase the product or service
– CTQs exist at various process levels and should be defined so that indicators can be created to measure them
Joel Perez
DEFINE: Determining CTQs
• Who are your customers?
– External (end users/consumer)
– Internal (next process step or operation)
• What is the “Voice of the Customer”?
– VOC is used to describe customers’ needs and
their perceptions of your product or service
Joel Perez
Product CTQs
– Performance
– Features
– Conformance
– Timeliness
– Reliability
– Serviceability
– Durability
– Aesthetics
– Reputation
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Service CTQs
– Reliability
– Responsiveness
– Competence
– Access
– Courtesy
– Communication
– Credibility
– Security
– Understanding
– Tangibles
Joel Perez
Exercise: What CTQs Can Describe Excessive Waste or Slow Speed?
– ______________________
– ______________________
– ______________________
– ______________________
– ______________________
– ______________________
– ______________________
– ______________________
– ______________________
– ______________________
Joel Perez
DEFINE: Outcome Indicators
• From the Business Opportunity/Gap it is possible to obtain Outcome Indicators
• Examples:
–Process speed
–Rework
–Scrap
– Inventory level
–Time delays
–Downtime
Ja
nu
ary
Ma
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Ma
y
Ju
ly
Se
pte
mb
er
No
ve
mb
er
Ja
nu
ary
Ma
rch
Ma
y
05
1015202530354045
%
Preliminary Problem Statement
• Good preliminary problem statements contain:
– A brief, clear and objective description of the problem revealed by the outcome indicator
– Specific information on the problem - Who? - Which
- What? - How?
- When? - How many?
- Where?
– Should not include solutions or assumptions about causes
Joel Perez
Preliminary Problem Statement
• Problem statement criteria:
–What is Wrong
–Measurable
–Specific
–Objective
–What Is and What Should Be
–How Customers Are Affected
Joel Perez
Is This Problem Clear?
• Preliminary problem statement:
• During the last four months, finished goods
were not shipped to the customers on time.
This generated unnecessary transporting of
finished goods between different
warehouses, besides causing customer
dissatisfaction.
Joel Perez
What do you think now?
• Preliminary problem statement:
• During the last four months, 72% of finished goods produced in the first week of the month were not shipped to the customer until the last week of the month. This generated unnecessary transporting of 750 pallets of finished goods 3 times between the main warehouse to satellites, besides causing customer dissatisfaction.
Joel Perez
The Problems You Face Drives the Choice of Tools to Use
• Preliminary problem statement:
• During the last four months, 72% of finished goods produced in the first week of the
month were not shipped to the customer until the last week of the month. This
generated unnecessary transporting of 750 pallets of finished goods 3 times between
the main warehouse to satellites, besides causing customer dissatisfaction.
Causes
%
Causes
%
Eliminating Defects
(Use Six Sigma Tools) Eliminating Waste/NVA
(Use Lean Tools)
Do we know
the cause of
the problem
yet?
Joel Perez
Exercise: Preliminary Problem Statement
• Instructions: In your project, a key checkpoint is to develop the preliminary problem statement before you review your work in DEFINE with your Leadership Team/Sponsor.
• Write a draft preliminary problem statement for your project and use the problem statement criteria to evaluate its’ effectiveness.
• Time: 10 minutes
Joel Perez
MEASURE
Joel Perez
MEASURE Current Situation
• Goal
– Measure the current process performance and narrow the problem area
• Key Outputs
– Data that pinpoints problem location or occurrence
– Understanding of how current process operates
– Final problem statement
1
DEFINE
2
3
4
5
MEASURE
ANALYZE
IMPROVE
CONTROL
2
MEASURE
Joel Perez
To measure the process performance
Calculate
Performance
DPMO_____
Sigma_____
Graphical Analysis
of data
Frequency Plots
Pareto Chart
Run Chart
Plot Data Over Time
A
Mary
John
Sally
Jim
B C E
Develop Data
Collection Plan Data Collection Plan Project ________________________
What questions do you want to answer?
Data Operational Definition and Procedures
What Measure
type/ Data
type
How
Measured 1
Related
conditions to
record 2
Sampling
notes
How/where
recorded (attach
form)
Create Detailed
Process Map
F 1
F 3
F 4
F 2
Customer Customer
Identify Value Added &
Non-Value Added Steps
Set Process
Performance / $
Improvement
Goal
Develop
Final Problem
Statement
Check Sheet
Collect Data
2 MEASURE Story Components
Joel Perez
Indicators
OEE
DTD
RTY
BTS
WIP
Develop Data Collection Plan
Collect Data
Plot Data Over Time
Graphical Analysis of Data
Calculate Performance
Set Process Performance / $
Improvement Goal
Develop Final Problem
Statement
Tools
Value Stream Mapping
VA & NVA Analysis
Create Detailed Process Map
Identify VA & NVA Steps
Tools, Indicators and
Methodologies Storyboard
MEASURE: Tools, Indicators and Methodologies
MEASURE: Tools, Indicators and Methodologies
• Tools
1. Value Stream Mapping
2. VA & NVA Analysis
• Indicators
3. Overall Equipment Effectiveness (OEE)
4. Dock to Dock (DTD)
5. Rolled Throughput Yield (RTY)
6. Build to Schedule (BTS)
7. Work in Process (WIP) Joel Perez
MEASURE: Tools, Indicators and Methodologies
• Tools
1. Value Stream Mapping
2. VA & NVA Analysis
• Indicators
3. Overall Equipment Effectiveness (OEE)
4. Dock to Dock (DTD)
5. Rolled Throughput Yield (RTY)
6. Build to Schedule (BTS)
7. Work in Process (WIP) Joel Perez
I. Value Stream Mapping Definition
• Value Stream Mapping (VSM) is a visual tool
which can be used to develop a complete descriptive
analysis of process flows and a detailed breakdown
of value towards the final product or service.
A value stream is all of the
actions required to change raw
materials into a product
delivered to the customer.
What is Value Stream?
Joel Perez
II. Value Stream Mapping Goal
• The goal of a Value Stream Mapping is to significantly reduce customer Lead Time and deliver product to customer at the lowest total
cost through the elimination of waste.
Joel Perez
III. Value Stream Mapping Steps
Current State Map (As Is) - The current state of the
process flow is documented.
Future State Map (To Be) - Identify improvements that
transform the current flow into a lean flow. Document
the future state of the flow – how the flow should be.
Implementation - Implement improvements
(elimination of all wastes ) to achieve the future state.
The major purpose of VSM is not simply to map the
flow, but to implement a lean flow. Joel Perez
III. Value Stream Mapping Steps
• The first step of a
Value Stream
Mapping is to evaluate
the current state
through the
development of a
Current State Map.
How?
Current State Mapping – “As Is”
III. Value Stream Mapping Steps
Physical Pull
Assembly
Manufacturing
process
ACME
Supply
Outside
sources
2 / wk
Truck
shipment
Push System
Buffer safety stock
Marketplace
Current State Mapping – “As Is”
Symbols
Joel Perez
3 Shifts CO=35 min CT=48 sec
Data Box
Finished goods to
customer
Manual Information
Flow
Electronic Information
Flow
I 200
Parts
1 Day Inventory
FIFO
First in, first out
or
III. Value Stream Mapping Steps Current State Mapping – “As Is”
Symbols
Joel Perez
Supplier Customer
Shipping Process
B
Process
A
Production
Control
III. Value Stream Mapping Steps Current State Mapping – “As Is”
Example
Joel Perez
C/T = 65 seconds
C/O = 10 minutes
Uptime = 80%
2 Shifts
27K sec. available
1 Inventory volume
65 seconds Processing time
Process X
3
Inventory or wait time Inventory or wait time
Cycle Time
Changeover Time
65 Sec. 89 Sec.
III. Value Stream Mapping Steps Current State Mapping – “As Is”
Example
Joel Perez
III. Value Stream Mapping Steps
•Always collect information while you walk on the shop floor
•Walk fast through the Value flow and start at the end, together with shipment
•Do not ground in the standard times, bring your own timer
•Always draw by hand and by pencil
Current State Mapping – “As Is”
Some Hints
Joel Perez
III. Value Stream Mapping Steps
• Choose a product or family of products
• Depict the customer requirements
• Follow the flow of the product from shipping, working backwards to
where raw materials arrive at the plant
• Draw the processing steps used to process, move and store the
product
• Input the appropriate process and inventory data
• Draw the information flow
• Draw a timeline depicting the lead time, showing value added and non-
value added time
Current State Mapping – “As Is”
Steps in Mapping
Joel Perez
IV. Value Stream Mapping Example Current State Map
WELD #1 FIXING WELD #2 ASSEMBLY #2 ASSEMBLY #1 CONVEYANCE
platform 4600 E
2400 D
Rolls
5 days
1100 E
600 D
1600 E
850 D
1200 E
640 D
2700 E
1440 D
Public
Organization Steel Company
Michigan
Production
Control
MRP
1x
daily
Tuesday and
Thursday
152 m rolls 18400 parts/month
- 12,400 E
- 6400 D
2 Shifts
Barrel = 20 parts
Weekly Program Daily Transportation
Program
Forecast: 90/60/30 days
Daily Request
Forecast: 6 weeks
Fax: weekly
I I I I I I 200 T
1 1 1 1
C/T = 1 sec.
C/O = 1hour
Uptime = 85%
27,600 sec. avaib .
EPE = 2 weeks
C/T = 39 sec.
C/O = 10 min.
Uptime = 100%
2 shifts
27,600 sec. avaib .
C/T = 46 sec.
C/O = 10 min.
Uptime = 80%
2 shifts
C/T = 62 sec.
C/O = 0 min.
Uptime = 100%
2 shifts
C/T = 40 sec.
C/O = 0 min.
Uptime = 100%
2 shifts
1 sec.
5 days 7.6 days 1.8 days 2.6 days 2 days 4.5 days
39 sec. 46 sec. 62 sec. 40 sec.
Waiting
Production Time
Value Added
Time
= 23.6
= 188 sec .
Reference: Rother , M. and Shook, J., Learning to See , The Lean Enterprise Institute, Brookline, MA, USA, 1998
27,600 sec. avaib . 27,600 sec. avaib . 27,600 sec. Avaib .
Joel Perez
V. Value Stream Mapping - Office Process
• Production vs. Office Processes: There
are some unique opportunities in applying
the Lean toolset to office processes. Office process Production Process
Minimize Variability
Synchronize Material Flow
Eliminate Physical Batching
Visual Production Controls
Eliminate Wasted Movement
Empower Teams
Minimize Variability
Synchronize Information Flow
Eliminate Time Batching
Visual Project Control/Scorecard
Eliminate Transaction Costs
Empower Teams
Joel Perez
V. Value Stream Mapping - Office Process
•Office Process Waste Examples:
•Ongoing Hand-Off of Information
•Waiting for Information / Decisions
•Multiple Approvals
•Lack of System Discipline
•Non-Standardized Processes
•High Process and Arrival Variation
•System Over-Utilization and Expediting
• Ineffective Communication
•Redundant Tasks Joel Perez
VI. Office Process Value Stream Mapping Example
Value-added Definition: Continuous flow of information and approvals for budget,
limiting delays to 48 hours or less.
Current State Map
Develop Project
Mgt. Review
Mgt. Approval
Plant Approval
Controller
Approval
Eng.
Director
Approval
Mfg.
Director Approval
Funding
Available
10 Weeks
6 h
221h 158h 60 h 75 h 20 h 40 h 64 h
2 h 0.5 h 1.0 h 16 h 2.0 h 2.0 h 3.0 h
Total =
1070.5 h
33.0
ME Supplier Supplier Plant
C/T = 6 RW = 98%
C/T = 3
RW = 95%
C/T = 2
RW = 65%
C/T = 2
RW = 85%
C/T = 16
RW = 33%
C/T = 1
RW = 20%
C/T = 0.5
RW = 18%
= 3 = 6 = 3 = 3 = 10 = 1 = 1 = 1 W W W W W I
1
I
20
Mgt. Review
Mgt. Review
Mgt.
221h 158h 60 h 75 h 20 h 40 h 64 h
2 h 0.5 h 1.0 h 16 h 2.0 h 2.0 h
C/T = 3 C/T = 2 C/T = 2 C/T = 16 C/T = 1 C/T = 0.5
= 3 = 3 = 6 = 6 = 3 = 3 = 3 = 3 = 10 = 10 = 1 = 1 = 1 = 1 = 1 = 1 W W W W I
1 1 1
I
20 20 20
Joel Perez
VII. Magic Caramel – Current State Map Exercise (Appendix 1)
Setup Setup Setup Setup Setup Setup Setup Setup
Availability Availability Availability Availability Availability Availability Availability Availability
Performance Performance Performance Performance Performance Performance Performance Performance
Quality Quality Quality Quality Quality Quality Quality Quality
Cycle Time Cycle Time Cycle Time Cycle Time Cycle Time Cycle Time Cycle Time Cycle Time
Receiving Laudering Wadding Cover Label Date Inspection Shipment
Supplier Customer
Joel Perez
MEASURE: Tools, Indicators and Methodologies
• Tools
1. Value Stream Mapping
2. VA & NVA Analysis
• Indicators
3. Overall Equipment Effectiveness (OEE)
4. Dock to Dock (DTD)
5. Rolled Throughput Yield (RTY)
6. Build to Schedule (BTS)
7. Work in Process (WIP) Joel Perez
I. Process Mapping Tools
– Activity Flowchart
• Functional Flowchart
Note: Functional Flowcharts are required as part of the Process Management
Control System implemented in the CONTROL step Joel Perez
II. Activity Flowchart Features
Process Name
Date of creation
/update &
name of creator
Clear direction of
flow (top to
bottom or
left to right)
Clear starting and ending
points
Consistent level of detail
Key of symbols
Numbered steps
Hotel Check-out Process
10
Approach front desk
20
Is there a line?
30 Wait
40 Step up to desk
70 Give room number
50 Clerk
available?
80 Check bill
90
Charges
correct?
100 Correct charges
110 Pay bill
No
No
No
Yes
Yes
Yes
Start/End
Action/Task
Decision
Sequence
J. Irving 7/19/97
BIT
60
Wait
Joel Perez
III. Value Analysis
Process Step
Necessary to Produce Output
Business Value Added Customer Value Added No-Value Added
Yes
Yes Yes
No
No
No Necessary to Meet Valid Requirement?
Needed for Business Requirement?
VA BVA NVA1 Update of EMS with new plant information X
2 Determine number of plants to be audited (EMS) X
3 Request information on plant maturity, risk and audit timing X
4 Evaluate every plant against agreed criteria (DIVISION) X
5 Prioritize based on risk and audit timing (DIVISION) X
6 Comunicate prioritized plant list to audit group (DIVISION) X
7 Collect prioritized list from divisions X
8 Any new process identified in the prioritized list? X
YES (10), NO(12)
9 Request information regarding new process X
10 Provide information regarding new process X
11 Development and inclusion of the new module X
12 Update prioritized list X Perform updating of EMS each quarter and detec new processes
13 Compare mandays required with mandays available X
14 Are sufficient auditors available within SBU? X
15 Are there auditors available in other SBU´that can be used? X
16 Re-evaluate prioritized list to focus on risk priority X Define sufficient number of auditors, based on process knowledge, language
skill, location, leading. Reduce number of audits based on risk evaluation
17 Do auditors have required process knowledge? X
18 Do auditors have required language skill? X
VALUE CATEGORY
ACTIONSTEP
Joel Perez
Yes
No No
No
Yes
Yes
Loop
Loop
Loop
Value-Added Steps Non-Value-Added Steps
Steps that
would not be
needed if
everything
worked right
the first time
move across
the right
side.
Steps that
are
essential
even when
everything
works
correctly
move down
the left side.
IV. Opportunity Flowchart Features
Joel Perez
Step P R I M E D O T S Action(s)
Step 1 X Action 1
Step 12 X Action 5
R = Rework created
P = Personnel efficiency possible
I = Indirect cost reduction
M = Mistake earlier in the process
causes this step
E = Eliminate this step?
D = Delays can occur in this step
O = Overproduction caused
T = Transportation of materials,
personnel, information is
unnecessary
S = Simplification of overly-
complicated step possible
V. Productivity Analysis
Joel Perez
V. Productivity Analysis
MOTION X X X X X
OVER PRODUCTION X X
OVER PROCESSING X X X
WAITING X X X X
CONVEYANCE X X X X X
CORRECTION X X X X X
INVENTORY X X
HUMAN RESOURCES X
WASTE P R I M E D O T S
VI. Opportunity Flowchart Features - Example
Hotel Check-out Process
10
Approach front desk
20
Is there a line?
30 Wait
70 Give room number
50 Clerk
available?
80 Check bill
90
Charges
correct?
100 Correct charges
110 Pay bill
No
No
No
Yes
Yes
Yes
60
Wait
40 Step up to desk
Value-Added Steps Non-Value-Added Steps
Joel Perez
VII. Value Analysis Matrix - Exercise
Fill the Value Analysis Matrix for the process of Hotel
Check out
Process Step 10 20 30 40 50 60 70 80 90 100 110 Total % Total
Time (Min) 1 1 10 1 1 10 1 2 1 5 3 36 100%
Add Value
P
R
I
M
E
D
O
T
S
Joel Perez
MEASURE: Tools, Indicators and Methodologies
• Tools
1. Value Stream Mapping
2. VA & NVA Analysis
• Indicators
3. Overall Equipment Effectiveness (OEE)
4. Dock to Dock (DTD)
5. Rolled Throughput Yield (RTY)
6. Build to Schedule (BTS)
7. Work in Process (WIP) Joel Perez
I. OEE Definition
• OEE is a fundamental measurement for
Lean and TPM. The objective is to
evaluate the global effectiveness of a
specific equipment. It is calculated
considering losses of availability,
productivity and quality.
Joel Perez
II. OEE Goals
PERFORMANCE
AVAILABILITY
QUALITY
OEE
• Improvement of quality and productivity
• Cost reduction
• Customer satisfaction
• Safe work
Joel Perez
III. OEE Description
• = X X
Overall
Equipment
Effectiveness
(OEE)
Availability Performance
Efficiency Quality Rate
Identifiable Stops
Equipment failure
and Tool Wear-out
Adjustment and Set
up losses
Losses with
reduced speed
Downtimes and
small breaks
Quality
defects or
process
losses
Joel Perez
Availability
Availability takes into account Down Time Loss, and is calculated as:
Availability = Operating Time / Planned Production Time
Performance
Performance takes into account Speed Loss, and is calculated as:
Performance = Actual Produced Parts / Ideal Production
III. OEE Description
Quality = Good Parts / Total Parts
Quality Quality takes into account Quality Loss, and is calculated as
Overall Equipment Effectiveness = Availability x Performance x Quality Yield
Availability Downtime loss
Speed loss Performance
Quality Yield Quality loss
III. OEE Description
Joel Perez
Total Operating Time
Availability
A. Net Operating Time
No
Scheduled
Production
B. Running Time Failure
Set-up
Performance
C. Target Output
D. Actual Output Minor
Stop
Quality
E. Actual Output
F. Good Output Scrap
Rework
OEE = B/A x D/C x F/E
III. OEE Description
Joel Perez
IV. OEE Example
Item Data
Shift Length 8 hours = 480 min.
Short Breaks 2 @ 15 min. = 30 min.
Meal Break 1 @ 30 min. = 30 min.
Down Time 47 minutes
Ideal Production 22,380 parts / shift
Total Produced Parts 19,271 parts / shift
Rejected Parts 423 parts
• Planned Production Time = [Shift Length - Breaks] = [480 - 60]= 420 minutes
• Operating Time = [Planned Production Time - Down Time] = [420 - 47] = 373 minutes
• Good Parts = [Total Parts - Rejected Parts] = [19,271 - 423] = 18,848 parts
Joel Perez
IV. OEE Example
Availability
Availability = 373 minutes / 420 minutes = 0.8881 (88.80%)
Performance
Performance = (19,271 parts / 22,380 parts) = 0.8611 (86.10%)
Quality = 18,848 / 19,271 parts = 0.9780 (97.80%)
Quality First Time Through (FTT)
OEE = 0.8881 x 0.8611 x 0.9780 = 0.7480 (74.80%)
OEE
Joel Perez
V. First Time Through
• Definition: Percentage of parts or aspects of a service that are completed without error the first time they go through a work process without being scrapped, re-run, re-tested, returned, or diverted.
• Corresponds to the Quality rate of the OEE indicator
Input = 1,000 parts
Scrap: 30 parts
Output = 970 parts approved
FTT = 900 / 1,000 = 90%
Step
1
Rework: 70 parts
Joel Perez
VI. OEE Exercise
• Calculate the OEE considering the
following data:
Item Data
Shift Length 8 hours = 480 min.
Short Breaks 2 @ 15 min. = 30 min.
Meal Break 1 @ 45 min. = 50 min.
Down Time (Set-up and Corrective Maintenance)
85 minutes
Ideal Production 15,750 parts / shift
Total Parts 12,300 parts / shift
Rejected Parts 63 parts
Joel Perez
VI. OEE Exercise
Availability
Availability = minutes / minutes = ( %)
Performance
Performance = ( parts / parts) =
Quality = parts / parts = ( %)
Quality
OEE = x x = ( %)
OEE
Joel Perez
MEASURE: Tools, Indicators and Methodologies
• Tools
1. Value Stream Mapping
2. VA & NVA Analysis
• Indicators
3. Overall Equipment Effectiveness (OEE)
4. Dock to Dock (DTD)
5. Rolled Throughput Yield (RTY)
6. Build to Schedule (BTS)
7. Work in Process (WIP) Joel Perez
I. Dock to Dock (DTD) Definition
• Dock-to-Dock Time is the elapsed time
between unloading raw materials and
releasing finished goods for shipment
ProcessInputs
Outputs
CustomersSuppliers
II. Dock to Dock (DTD) Benefits
• Decreasing inventories lead to less material handling and storing, which results in fewer opportunities for part damage. Few damaged parts improve the First Time Through (FTT)
• The improved DTD leads to an enhanced ability to adjust to changes in schedule and to support customers
• Less handling material, obsolescence and inventory maintenance costs lead to an Improvement in the Total Cost
Joel Perez
Production Process
Raw
material
warehouse Manufacturing Cycle Time (MCT)
Finished
Goods
warehouse
Dock-to-Dock (DTD)
Receiving Shipping
III. Dock to Dock (DTD) Example
1.5 days
3.0 days
Joel Perez
IV. Dock to Dock (DTD) Summary
• Dock-to-Dock time measures the time it
takes for raw materials to be converted
into finished products
MEASURE: Tools, Indicators and Methodologies
• Tools
1. Value Stream Mapping
2. VA & NVA Analysis
• Indicators
3. Overall Equipment Effectiveness (OEE)
4. Dock to Dock (DTD)
5. Rolled Throughput Yield (RTY)
6. Build to Schedule (BTS)
7. Work in Process (WIP) Joel Perez
• I. Rolled Throughput Yield (RTY) Definition
• Percentage of parts which go through the plant from
start to finish without being scrapped, rerun, retested,
returned, or diverted
Joel Perez
•II. Rolled Throughput Yield (RTY) Goal
• Objective: 100% RTY; zero defects made or passed on
Not baked
well
Ok
Joel Perez
• Enhanced quality reduces the need for abundant
inventories, therefore improving the Dock-to-Dock Time
(DTD)
• Improves the ability to keep a sequence along the
process
• The quality improved before the constraint assures the
revenue of “good parts” only, which reduces the wasted
output in constraint, improving the OEE
• Total Cost is reduced through warranty costs, scrap,
rework and lower repairs
•III. Rolled Throughput Yield (RTY) Benefits
Joel Perez
Step
1
Step
2
Step
3
Step
4
Input:
1000
parts
Output:
900 parts
without
defects
Is the RTY equal 90%?
• IV. Rolled Throughput Yield (RTY) Example
Scrap: 30 Scrap: 20 Scrap: 40 Scrap: 10
Joel Perez
FTY1= (890/1000) = 0.890 = 89.0%
FTY2= (900/970) = 0.928 = 92.8%
FTY3= (850/950) = 0.895 = 89.5%
FTY4= (830/910) = 0.912 = 91.2%
RTY = 0.89 x 0.928 x 0.895 x 0.912 =
Step
1
Step
2
Step
3
Step
4
Input:
1000
parts
Output:
900 parts
without
defects
Scrap: 30
970 950 910
67.4%!!
• IV. Rolled Throughput Yield (RTY) Example
Rework:80 Rework:50 Rework:60 Rework:70
Scrap: 20 Scrap: 40 Scrap: 10
MEASURE: Tools, Indicators and Methodologies
• Tools
1. Value Stream Mapping
2. VA & NVA Analysis
• Indicators
3. Overall Equipment Effectiveness (OEE)
4. Dock to Dock (DTD)
5. Rolled Throughput Yield (RTY)
6. Build to Schedule (BTS)
7. Work in Process (WIP) Joel Perez
• It’s a way of knowing whether you have built the right
parts, in the right quantity, in the right order
• BTS = Volume x Mix x Sequence
• Build to Schedule measures how well a plant executes
the process to deliver the right product on the right day,
and in the right mix or sequence
• BTS aligns capacity with the market demand
I. Build to Schedule (BTS) Definition
Joel Perez
II. Build to Schedule (BTS) Goal
• Objective: 100% Build-to-Schedule
Pizzaria
*Mozzarella
*Pepperoni
*Tomatoes
Joel Perez
III. Build to Schedule (BTS) Benefits
• Improved BTS requires less inventory,
which improves Dock-to-Dock Time (DTD)
•Less material handling and less cost of
inventory lead to improved Total Cost
Joel Perez
Usual causes for BTS Problems:
• Poor production schedule
• Production ignores the timelines that come from the
Schedule activity
• Equipment failures
• Lack of material
• Quality issues
• Product complexity
IV. Build to Schedule (BTS) Problems
Joel Perez
V. Build to Schedule Example
BTS calculation:
• Volume: (550 / 650) x 100 = 84.6%
• Mix: (390+140) / 550 x 100 = 96.4 %
• Sequence: (2 lots / 4 lots) x 100 = 50.0 %
• BTS= 0.846 x 0.964 x 0.50 = 40.8 %
V. Build to Schedule Example
• BTS is a production performance indicator. It can
be used in the Measure Step to establish an
initial situation, or in the Improve Step to verify
the improvement
Sequence Type Quantity Sequence Type Quantity
1 A 200 1 A 190
2 B 100 2 B 40
3 A 200 3 B 100
4 B 150 4 A 220 650 550
Planned Production Actual Production
MEASURE: Tools, Indicators and Methodologies
• Tools
1. Value Stream Mapping
2. VA & NVA Analysis
• Indicators
3. Overall Equipment Effectiveness (OEE)
4. Dock to Dock (DTD)
5. Rolled Throughput Yield (RTY)
6. Build to Schedule (BTS)
7. Work in Process (WIP) Joel Perez
I. Work in Process (WIP) Definition
• Work in Process Inventory is the number of parts that
have started the first value added step in the process
but have not completed the last value added step in
the process
Process 1 Process 2 WIP
Examples:
1 ton or
1150 units or
125,000 USD
½ Inventory day Joel Perez
II. Work in Process (WIP) Goal
• Tracking materials throughout the production process
provides increased visibility throughout the supply
chain
Joel Perez
II. Excessive Work in Process Problems
• By reducing WIP, wastes are clearly identified
• Excessive WIP can cause problems in terms of:
Quality
Space
Planning
Cost
Organization
• The higher the WIP, the higher is Dock to Dock
What different problems can result from
excessive Work in Process? Joel Perez
Metrics – Office Examples
Workload balance Employee
Efficiency
Overall Equipment
Effectiveness (OEE)
Customer Satisfaction
Survey results
Meeting Customer
Requirements
Build to Schedule (BTS)
Project delivery time Lead time Dock to Dock (DTD)
# projects completed
within targets
Quality Rolled Throughput Yield
(RTY)
Office Examples
What it Indicates
Production Measurable
# invoices in process Speed Work in Process
Final Problem Statement
• A good final problem statement contains:
– A more specific (focused) statement of what is wrong in terms of defects, or which customer needs are not being met, than the preliminary problem statement
– Current data on the problem (or defects)
- Who? - Which
- What? - How?
- When? - How many?
- Where?
– The improvement goal of the project
Joel Perez
What do you think?
• Final Problem Statement:
• During the last four months, 55% of the finished
goods of model “A-2006” produced in the new
plant were shipped with 3 weeks of delay. This
generated unnecessary transporting of 50 big
trucks between the main warehouse to satellites,
besides causing customer dissatisfaction.
• Goal: Reducing the delay 4x will reduce the
transporting from 50 to 7 trucks.
Joel Perez
The Problems You Face Drives the Choice of Tools to Use
Causes
%
Causes
%
Eliminating Defects
(Use Six Sigma Tools) Eliminating Waste/NVA
(Use Lean Tools)
Do we know
the cause of
the problem
yet?
Final Problem Statement:
During the last four months, 55% of the finished goods of model “A-2006”
produced in the new plant were shipped with 3 weeks of delay. This
generated unnecessary transporting of 50 big trucks between the main
warehouse to satellites, besides causing customer dissatisfaction.
Joel Perez
Joel Perez
ANALYZE
Joel Perez
ANALYZE to Identify Causes
• Goal
–Analyze potential root causes and confirm them with data
• Key Outputs
–Root causes that have been tested and confirmed
1
2 4
5
DEFINE
MEASURE IMPROVE
CONTROL
3
ANALYZE
Joel Perez
ANALYZE Story Components To analyze the data and the process map to determine
root causes and opportunities for improvement
Scatter Plots
Y
X
Contingency Table Sub Cause
Yes No
Present
Not
Present
Defe
ct
5 5
5 5
Made the Sale
Did Not Make the Sale
Time With Customer
(in minutes)
5 10 15 20 25 30 3 5 40 45 50 55 60 >60
5 10 15 20 25 30 3 5 40 45 50 55 60 >60
Made the Sale
Did Not
Make the Sale
5 10 15 20 25 30 3 5 40 45 50 55 60 >60
5 10 15 20 25 30 3 5 40 45 50 55 60 >60
Time With Customer
(in minutes)
5 10 15 20 25 30 3 5 40 45 50 55 60 >60 5 10 15 20 25 30 3 5 40 45 50 55 60 >60
5 10 15 20 25 30 3 5 40 45 50 55 60 >60 5 10 15 20 25 30 3 5 40 45 50 55 60 >60
Stratified Frequency Plots
Root Cause
1
Root
Cause
2
Sub
Cause
Sub Sub Cause
Sub
Cause
Sub Sub Cause
Sub Sub Sub Cause
Sub
Cause
Sub
Cause
Sub Cause Sub Sub Cause
Sub Sub Cause
Cause and
Effect
Diagram
Brainstorm and Organize Potential Causes
Verify Potential Causes with Data
Confirm Root Causes
Root Cause
1
Root
Cause
2
Sub
Cause
Sub Sub Cause
Sub
Cause
Sub Sub Cause
Sub Sub Sub Cause
Sub
Cause
Sub
Cause
Sub Cause Sub Sub Cause
Sub Sub Cause
Cause and
Effect
Diagram
Final Problem
Statement
Final Problem
Statement
3
Joel Perez
Takt Time
TOC
SMED
Brainstorm and Organize
Potential Causes
Verify Potential Causes with
Data
Confirm Root Causes
Tools, Indicators and
Methodologies Storyboard
ANALYZE: Tools, Indicators and Methodologies
ANALYZE: Tools, Indicators and Methodologies
1.Takt Time
2.Theory of Constraints (TOC)
3.SMED
Joel Perez
ANALYZE: Tools, Indicators and Methodologies
1.Takt Time
2.Theory of Constraints (TOC)
3.SMED
Joel Perez
I. Takt Time Definition
• Takt Time (“Pace”) - The rate of customer
demand. Takt is the heartbeat of a lean system.
Takt time is calculated by dividing production time
by the quantity the customer requires in that time.
TAKT = Available Time
Customer Demand
TAKT
Process 1 Process 2 Process 3
Joel Perez
I. Takt Time Definition
• What causes the inability to reach Takt Time and, therefore, add costs to the system?
• Examples of Wastes:
– Breaks (longer downtime) – Changeover – Interruptions (shorter downtime) – Late start-up – Delays – Scrap/Rework
Joel Perez
II. Cycle Time Definition
Cycle Time - Time (in seconds) to perform the process
operation at the workstation.
Cycle Time1 Cycle Time2 Cycle Time3
Process 1 Process 2 Process 3
Joel Perez
III. Lead Time Definition
Lead time - Time (in seconds) to produce one part.
LT = Cycle Time1 + Cycle Time2 + Cycle Time3
Cycle Time1 Cycle Time2 Cycle Time3
Process 1 Process 2 Process 3
Joel Perez
IV. Example – Pen Final Assembly
Process 1
Process 2
Process 3
Joel Perez
450 minutes available for
production
IV. Takt Time Example
TAKT = 2.3 s
TAKT = 27,000 seconds
11,740 parts
Customer Demand
Assemble pen
refill and spring
Assemble pen
refill inside the
pen body
Final Assembly
Body + Cap
Pen Final Assembly
Process 1 Process 2 Process 3
Joel Perez
IV. Cycle Time Example
Cycle Time1 = 2.5 s Cycle Time2 = 2.2 s Cycle Time3 = 2.4 s
Cycle Time = 4.7 s Cycle Time = 2.4 s
Assemble pen
refill and spring
Assemble pen
refill inside the
pen body
Final Assembly
Body + Cap
Pen Final Assembly
Joel Perez
LT = 2.5 + 2.2 + 2.4 LT= 7.1 s
IV. Lead Time Example
Cycle Time1
= 2.5 s
Cycle Time2
= 2.2 s
Cycle Time3
= 2.4 s
Assemble pen
refill and spring
Assemble pen
refill inside the
pen body
Final Assembly
Body + Cap
Joel Perez
VII. Takt Time vs Cycle Time
0
1
2
3
Process 1 Process 2 Process 3
Workstation
Tim
e (
seco
nd
s) TAKT TIME
= 2.3 sec.
Pen Final Assembly
• Which process cycle times do not meet the Takt time requirement?
• Can you meet the customer demand rate? Joel Perez
VII. Takt Time vs Cycle Time
0
1
2
3
Process 1 Process 2 Process 3
Workstation
Tim
e (
se
co
nd
s)
Waste
TAKT TIME
= 2.3 sec.
Pen Final Assembly
VA/NVA analysis revealed several opportunities for improvements.
Joel Perez
Wastes were removed from the process steps.
VII. Takt Time vs Cycle Time
0
1
2
3
Process 1 Process 2 Process 3
Workstation
Tim
e (
seco
nd
s)
TAKT TIME
= 2.3 sec.
Pen Final Assembly
• How about now? Are process cycle times below Takt time?
• Can you meet the customer demand rate? Joel Perez
Takt Time vs Cycle Time
• Let’s suppose, due to increased customer
demand, an uplift in production capacity is
required from 11740 parts to 13500 parts
(15% increase)
• What would you do?
Joel Perez
VII. Takt Time vs Cycle Time
• Let’s calculate the Takt time:
Takt Time
Takt Time
=
=
Available Time
Customer Demand
27,000 seconds
13,500 parts = 2.0 seconds
Pen Final Assembly
Joel Perez
VII. Takt Time vs Cycle Time
0
1
2
3
Process 1 Process 2 Process 3
Workstation
Tim
e (
seco
nd
s)
TAKT TIME
= 2.0 sec.
Pen Final Assembly
• How about now? Are process cycle times below Takt time?
• Can you meet the increased customer demand rate? Joel Perez
VII. Takt Time vs Cycle Time
0
1
2
3
Process 1 Process 2 Process 3
Workstation
Tim
e (
se
co
nd
s)
NEW
TAKT TIME
= 1.5 sec
Further improvements in process cycle times may be possible by
continuously identifying and eliminating wastes, thus improving ability to
meet increased customer demand rates, if required.
Pen Final Assembly
Joel Perez
VIII. Takt Time Summary
• Takt time / balancing is a tool that helps to
measure the capability of a process to
meet customer’s demand, as a guide for
better allocation of resources and
eliminating wastes
Joel Perez
ANALYZE: Tools, Indicators and Methodologies
1.Takt Time
2.Theory of Constraints (TOC)
3.SMED
Joel Perez
I. Theory of Constraints Definition
• It is a management philosophy with the basic premise that the optimization of all steps of a process does not necessarily generate improvements to the system as a whole
• One should work to identify, minimize or eliminate the main problems, called constraints
The TOC, or Theory of Constraints,
was developed in the 70’s by the
physicist Eliyahu Goldratt, who
wrote the book The Goal.
Joel Perez
II. Theory of Constraints - Bottleneck
•
Process constraint
(Bottleneck)
The constraint
determines the line
speed
Work accumulation
because of the
bottleneck
Joel Perez
II. Theory of Constraints - Bottleneck
• The bottlenecks (process constraints) limit a system's ability to achieve a better performance
• The bottleneck is a priority problem to be improved or, if possible, eliminated
• The process speed is determined by its bottleneck; thus, the process must be balanced through constraint
Joel Perez
II. Theory of Constraints - Bottleneck
• From the TOC, we can focus the efforts on
few process points that determine the
constraint performance, resulting in
immediate improvements.
Do you know the constraints of
your processes?
Joel Perez
III. Theory of Constraints Steps
• The process is divided into five steps:
1. Identify the system constraint.
2. Explore the system constraint.
3. Improve the system constraint.
4. Submit the whole system to the constraint.
5. If one of the previous steps is broken, you should go back to step 1.
IV. Theory of Constraints Terms
The Theory of Constraints has adopted three key terms:
• Drum
• Lung
• Rope
Joel Perez
Drum:
The system constraint determines its
rhythm.
In many cases, the drum should
include a program to assure that the
bottleneck is being used 100% of the
time, without the occurrence of
problems due to the lack of raw
material or because of damaged
equipment.
IV. Theory of Constraints Terms
Joel Perez
Lung:
It is the inventory used to protect the
constraint integrity from any kind of
problem (ruptures, delays,
deficiencies, etc.).
It is necessary to calculate how
much of the inventory will be used
as lung and that this number never
exceeds the determined values.
IV. Theory of Constraints Terms
Joel Perez
Rope:
Mechanism that requires all parts
of the system to work in a rhythm
given by the drum.
IV. Theory of Constraints Terms
Joel Perez
V. Theory of Constraints Example
Available Time / day = 28,000 sec.
Daily demand = 1,000 parts
Is there any bottleneck?
P1 P2 P3 P4 P5 Cycle
time
(sec.) 20 10 25 30 5
Product Book
Joel Perez
0
10
20
30
40
1 2 3 4 5
Process
Tim
e (
sec) Takt Time
28 sec
Cannot meet the demand Bottleneck
V. Theory of Constraints Example
Process 4 is the constraining process & determines the pace of production! Joel Perez
ANALYZE: Tools, Indicators and Methodologies
1.Takt Time
2.Theory of Constraints (TOC)
3.SMED
Joel Perez
I. SMED Definition
• Time needed to prepare a machine on model changes, measured from the last part of model A to the first quality part of model B.
What is Changeover?
Joel Perez
I. SMED Definition
• Reducing the time for tool change to less than 10 minutes (single digit of minutes), through the analysis and improvement of internal and external activities
Single Minute Exchange of Dies (S.M.E.D.)
Joel Perez
II. SMED Goals
• Team work
• Quality verification and assurance from the first time
• More flexibility, shorter downtime, availability for
preventive maintenance
• Allows production of smaller batches that can meet the
customer demand as well as reduce WIP
• Eliminates unsafe operational conditions
• Eliminates NVA activities
Joel Perez
III. Spaghetti Diagram
• What is the distance covered by the
operator?
Table of
Tools
Cabinet
Machine
Distance covered: 110 m
From: The new Manufacturing Challenge - Suzaki
Joel Perez
IV. Quick Changeover Methodology Steps
1. Document current changeover elements
2. Separate internal and external activities
3. Change internal activities to external
4. Locate parallel activities
5. Speed up internal activities
6. Implement the plan
7. Validate procedures / verify results
Joel Perez
• Internal Activities:
• The machine must be stopped. These can be main activities or can be executed while other activity is being performed (parallel activity).
• Example: Tooling changes, adjustments, tests, etc...
• External Activities:
• The activities performed when the machine is running.
• Example: Tooling preparation, Locating parts, tooling transportation, etc...
V. Internal and External Activities
Joel Perez
VI. Results of Quick Changeover
MORE FREQUENT CHANGES
SMALLER BATCHES
SMALLER INVENTORY
IMPROVED QUALITY
LESS WASTE
MORE FLEXIBILITY
DELIVERIES ON TIME
COMPETITIVE ADVANTAGE
LITTLE USE OF THE PHYSICAL SPACE
LITTLE
EFFECTIVE STOCK
LITTLE PRODUCT LOSS BY DETERIORATION
PRODUCTION OF SEVERAL
MODELS IN A LINE
HIGHER FINANCIAL MOVEMENT
Joel Perez
VII. Example of Setup Elements Form
If the area is occupied with
another tool, deposit it along
with the column of the
adjacent presser
X
Remove tool from the
inventory area, depositing it in
a space along with the
external column of the
machine to be prepared
5
Check Preventive
Maintenance program
X
Verify the integrity of the tool,
confirming the lack of
problems with the Tools 4
X
Locate the tool to be used 3
Implementation proposal
X
Apply Setup Check list 2
X
Consult Production Program
in order to identify the next
part to be produced 1
Parallel Main
Internal
External
Observations
Rate
Description Element
Joel Perez
VIII. Setup Analysis Example Office Example: Printing Reports Printing Certificates
E I
1 Close file LS x
2 Take the reports from the printer LS x
3File the reports in appropriate
placeLS x
4Take special paper to print
certificatesLS x
5 Put special papers in the printer LS x
6Take the list of people who will
receive the certificatesLS x
7 Open File - Certificate Model LS x
8Create models according to the
number of certificates to be printedLS x
9 Type the names in the models LS x
ProblemImprovement
Action
Form - Setup Analysis
Time (min)
Accum
ula
ted
Tim
e
Time (min)
E = External
I = Internalnº Activity
Responsib
le
En
d o
f re
po
rt
pri
ntin
g
1 2 3 4 5
Joel Perez
Determine Potential Causes
Starting from the final problem statement, you need to identify
and organize potential root causes following the next steps:
1. Review the final problem statement 2. Identify possible causes 3. Affinitize: Sort possible causes into reasonable clusters 4. Choose a cluster and label main bone 5. Develop and arrange bones for that cluster
Joel Perez
Determine Potential Causes
Usually, you will find most of the potential causes inside these
four groups:
System
Constraint
Sub
Cause
Sub
Cause
Sub Sub Cause
Final Problem
Statement
Sub
Cause
Sub Sub Cause
Sub
Cause
Sub
Cause
Change
Over
Downtime Inventory
Joel Perez
System
Constraint
Sub
Cause
Sub
Cause
Sub Sub Cause
Final Problem
Statement
Sub
Cause
Sub Sub Cause
Sub
Cause
Sub
Cause
Confirm Potential Causes
Change
Over
Downtime Inventory
Then, you need to collect data to confirm which potential
causes actually contribute to the problem.
Joel Perez
System
Constraint
Trucks
breakdown
often
Poor
Maintenance/
schedule
55% of Model-A were shipped
with 3 weeks of delay
Non-standard
Shipping racks
Short supply
Truck spare
Parts in W/H
Confirm Potential Causes - Example
Change
Over
Downtime Inventory
C/O time is
too long
between models
on truck
Drivers
Absenteeism
Not enough
trucks
Excessive
Loading
time
Collect data to confirm which potential causes actually
contribute to the problem.
Joel Perez
The Problems You Face Drives the Choice of Tools to Use
• Final Problem Statement:
• During the last four months, 55% of the finished goods of model “A-
2006” produced in the new plant were shipped with 3 weeks of
delay. This generated unnecessary transporting of 50 big trucks
between the main warehouse to satellites, besides causing
customer dissatisfaction.
Causes
%
Based on data, Excessive set-up time of shipping racks
on trucks for model changes and truck breakdowns
were identified as the top two root causes.
Consider applying appropriate Lean tools
to solve the problem!
Joel Perez
Joel Perez
IMPROVE
Joel Perez
IMPROVE the Process
• Goal
– Improve the process by developing and piloting solutions that address root causes
• Key Outputs
– Cost/benefit analysis with sign-off from Finance
– Planned and tested actions
– Before and After data that show how much of the initial gap was closed
1
2
3
5
DEFINE
MEASURE
ANALYZE
CONTROL
4
IMPROVE
Joel Perez
IMPROVE Story Components To generate, select, and implement improvements
Solution Selection Matrix
Identify and
Select Solutions
Conduct
Cost/Benefit Analysis
FMEA
Item or
Process
Step
Potential
Failure
Mode
Potential
Effect (s)
of Failure
Potential
Cause(s)
Current
Controls RP
N
Recommended
Action
Responsibil ity
and
Target Date Action Taken
Se
ve
rity
Occu
rre
nce
De
tecti
on
RP
N
“After” S
eve
rity
Occu
rre
nce
De
tecti
on
Total Risk Priority Number = “After” Risk Priority Number =
Develop Action Plan For
Full Implementation
Conduct
Risk Analysis Develop Pilot Plan
Updated Pareto Chart
Before After
Quantify Pilot Results
Update Outcome
Indicators
Before After
IMPROVE changes
implemented
} Improvement
Good
Time
DEFINE
Before After Good
Time
Before After
IMPROVE changes
implemented
Time
} Improvement
3.2s 3.6s
Cost/Benefit
Analysis
Approval from
Finance
Cost
Benefit
Solution (s) / Specific Task (s) ____________________________
Problem Statement ________________________________________ :
Task / Project Who Due Date Status
Gantt Chart
Problem Root
Causes
Solutions Specific
Tasks
1.3 s
A1 A2 A3 A4
} Improvement
A2 A1 A3 A4
3.1 s
50%
25%
75%
100%
50%
25%
75%
100%
Joel Perez
IMPROVE: Identify and Select Solutions
System
Constraint
Sub
Cause
Sub
Cause
Sub Sub Cause
Final Problem
Statement
Sub
Cause
Sub Sub Cause
Sub
Cause
Sub
Cause
Change
Over
DowntimeInventory
System
Constraint
Sub
Cause
Sub
Cause
Sub Sub Cause
Final Problem
Statement
Sub
Cause
Sub Sub Cause
Sub
Cause
Sub
Cause
Change
Over
DowntimeInventory
• Start with the results of the cause-and-effect diagram
• Identify possible solutions for verified root causes - denoted by an oval that is not crossed out
• Consider Waste Reduction Strategies as solutions for the verified root causes
Joel Perez
IMPROVE: Tools, Indicators and Methodologies
Storyboard Tool, Indicators and
Methodologies
Identify and Select Solutions
Conduct
Cost/Benefit Analysis
Conduct Risk Analysis
Develop Action Plan For Full
Implementation
Develop Pilot Plan
Quantify Pilot Results
Update Outcome Indicators
Just in Time
Pull System
One Piece Flow
5S
Poka Yoke
Kanban
Heijunka
TPM
Kaizen
Value Stream Mapping –
Future State
IMPROVE: Tools, Indicators and Methodologies
1. Just-in-Time - Pull System - One Piece Flow
2. 5S
3. Poka Yoke
4. Kanban
5. Heijunka
6. Total Productive Maintenance (TPM)
7. Kaizen
8. Value Stream Mapping – Future State
Joel Perez
IMPROVE: Tools, Indicators and Methodologies
1. Just-in-Time - Pull System - One Piece Flow
2. 5S
3. Poka Yoke
4. Kanban
5. Heijunka
6. Total Productive Maintenance (TPM)
7. Kaizen
8. Value Stream Mapping – Future State
Joel Perez
I. Just-in-Time Definition
• Just-in-Time: Means producing and
delivering the right parts/items, in the right
amount, and precisely at the right time
• All upstream and downstream tasks are
balanced and choreographed into a
perfect sequence, which eliminates the
need for too much inventory throughout
the process
Joel Perez
II. Just-in-Time Commitment
– Just-in-Time production requires a commitment
from everyone from the bottom up to the top
down
– Everyone must be dedicated to the elimination of
waste through continuous improvement
– Commitment is acquired through
communication, training and application
Joel Perez
III. Just-in-Time as a Pull System
• Traditional “Push” System
• When process A is completed, the product is “pushed” to process B where it is stored in inventory until required
•
Joel Perez
III. Just-in-Time as a Pull System
• Pull System
• Process B is responsible for getting parts and
supplies from Process A as they are needed,
there is no intermediate inventory (storage)
• Value of a Pull System
• The pull system provides an opportunity
for eliminating waste
–Waste of waiting (if parts are missing)
–Waste of production
–Waste of inventory
III. Just-in-Time as a Pull System
Joel Perez
• An analysis of the work process flow leads to: – Improved processes
– Increased efficiency
– Elimination of waste
– Greater savings
The Pull System and Process Flow
The pull system works in a better way when the process
flows efficiently.
III. Just-in-Time as a Pull System
V. Just-in-Time Example
• In the automotive assembly line, parts are supplied in
right amount, precisely at the right time
Joel Perez
IV. One-Piece Flow
• The process flow examines the flow of materials or products throughout the system
–Starts with procurement of raw material from suppliers
–Continues through each step of production process
–Ends with the delivery of finished product to the customer
Joel Perez
IV. One-Piece Flow
• Traditional process flow
–Process fluctuates
–Busy times and slow times
• Continuous one-piece process flow
–Process flows smoothly, one piece at a time
–Work load is leveled and steady
Joel Perez
IV. One-Piece Flow: Benefits
– Makes NVA work more evident
– Minimizes WIP
– Reduces excessive inventory
– Increases flexibility in meeting customer demands
– Produces only what the customer orders
– Shortens lead time from order to shipping
– Focuses on actual processing rather than waiting, transporting, storing
– Facilitates teamwork and communication
– Reduces costs
Joel Perez
IMPROVE: Tools, Indicators and Methodologies
1. Just-in-Time - Pull System - One Piece Flow
2. 5S
3. Poka Yoke
4. Kanban
5. Heijunka
6. Total Productive Maintenance (TPM)
7. Kaizen
8. Value Stream Mapping – Future State
Joel Perez
Manage
Activities
Optimize and organize
activities
I. 5S Definition
Sort
Straighten
Sweep
Standardize
Sustain
Joel Perez
OBJECTS
NECESSARY
UNNECESSARY
HIGH DISPLAY
MEDIUM DISPLAY
LOW DISPLAY
AUCTIONING
DISCARDED MATERIAL
SCRAP
RED CARD
METHOD
Desired Outcome: A safe and uncluttered work site, free of
hazards and workarounds
I. 5S Definition
• Sort: Get rid of what is not needed (separate what you do not
want)
Joel Perez
• Straighten: Arrange tools, parts and equipment so they can
be used without wasting time and motion. Mark and label
everything in order to find and access them easily.
Desired Outcome: Tools, equipment and materials are located
such that they are safe and easy to use. Waste due to motion is
minimized.
I. 5S Definition
Joel Perez
• Sweep, Wash, Clean and Tag abnormalities:
Clean work site daily to guarantee safety. This applies to both
office and plant areas. Tag items that need repair or removal.
Desired Outcome: The work site, required tools, equipment
and materials are clean, defect-free and ready for use.
I. 5S Definition
Joel Perez
• Standardize: Create standardized procedures and practices
(Safety First)
Desired Outcome: A plan with documented graphic layout of the
work site showing the proper location and amounts of all required
tools, equipment and materials, including visual controls and coding,
with required team member actions and assignments
I. 5S Definition
Joel Perez
• Sustain: Maintain good housekeeping and seek ways to improve
Desired Outcome: A continuously ready operational work site,
excellent housekeeping.
I. 5S Definition
Joel Perez
II. 5S Application
Is the object necessary?
Organize it! Eliminate it! Red Card
Auctioning
Discarded Material
Scrap
High Display
Medium Display
Low Display
Mark and Label
Create standardized
procedures and practices!
Yes No You don’t
know
Keep it clean
and usable !!!
Joel Perez
The objective here is to validate the application of 5S
• All participants will be audited and evaluated
• The auditors will visit the area and will give a 5S
qualification for each one
• This should be repeated periodically
An example of the graph is included in the following page
IV. 5S Audit
Joel Perez
IV. 5S Audit
Radar
0 4
8
12
16
1º S Sort (Seiri)
2º S Straighten (Seiton)
3º S Sweep (Seiso)
4º S Standardize (Seiketzu)
5º S Sustain (Shitsuke)
March
April
Joel Perez
IMPROVE: Tools, Indicators and Methodologies
1. Just-in-Time - Pull System - One Piece Flow
2. 5S
3. Poka Yoke
4. Kanban
5. Heijunka
6. Total Productive Maintenance (TPM)
7. Kaizen
8. Value Stream Mapping – Future State
Joel Perez
I. Poka Yoke Definition
• Mistake Proofing is a technique that
prevents the occurrence of failures or
identifies/eliminates defects, avoiding
their propagation.
•
Working on What You Can
Get Your Arms Around
Joel Perez
II. Poka Yoke Concepts
Failure is something that occurs outside the
expected process standards.
Defect is an effect resulting from a failure.
FAILURE DEFECT
CAUSE EFFECT
Joel Perez
II. Poka Yoke Concepts
• Detection is an inspection performed to identify potential defects.
Prevention means to analyze causes
of the failure and prevent their
occurrence.
Joel Perez
III. Types of Poka Yoke
FAILURE DEFECT CAUSE
(OF FAILURE)
Prevention Identify the cause and
prevent the
occurrence of the
failure
Detection Eliminate the failure and prevent the
occurrence of the defect
Eliminate the defect at the point of
occurrence, preventing its propagation
Ex.: A plastic cap placed
on electric points prevents
the risk of electric shocks.
Ex.: A sensor placed on the production
mat detects products outside the
specifications and warns the operator
through a light sign.
Joel Perez
POKA-YOKE
Signals the occurrence of
abnormalities for the operator through
light signs or sounds
Ex.: Fire sirens are activated by sensors
when the temperature is higher than normal
Ex.: Some home electric sets have a device that
turns off the equipment, in case the lid is open.
ALERT SHUTDOWN CONTROL
Corrects a failure or stops defective
products from going to the next processing
step
If there’s any sign of abnormalities, it
interrupts or blocks the process
Ex.: Spam identification system
III. Types of Poka Yoke
Poka Yoke Classification by Function
Joel Perez
Control Shutdown Alert
Detection
Prevention
VI. Poka Yoke Example
Long time spent to clamp bolts in its appropriate places during
setup.
What is the problem?
By Combining the colors of
the bolts with the colors on
the respective device, you
can speed up the setup
process.
X Joel Perez
Control Shutdown Alert
Detection
Prevention
VI. Poka Yoke Example
The introduction of a part with incomplete form.
What is the problem?
A device was installed in
order not to allow products,
with height lower than
specified one, pass to the
next stage. Thus, products
with incomplete form are
separated in boxes.
X Joel Perez
VI. Poka Yoke Example
Close document without saving the modifications.
What is the problem?
When a file is closed and
there are modifications not
saved, a window is opened
asking whether the user
wants to save them or not.
Control Shutdown Alert
Detection
Prevention
X
Joel Perez
Turn off
VI. Poka Yoke Exercise
The part is not positioned correctly in a machine.
What is the problem?
A button was installed to
identify a wrong part. If the part
is placed in the incorrect
position, the button will be set
and will not allow the machine
to work.
Control Shutdown Alert
Detection
Prevention
What do you think?
Joel Perez
IMPROVE: Tools, Indicators and Methodologies
1. Just-in-Time - Pull System - One Piece Flow
2. 5S
3. Poka Yoke
4. Kanban
5. Heijunka
6. Total Productive Maintenance (TPM)
7. Kaizen
8. Value Stream Mapping – Future State
Joel Perez
I. Kanban Definition
Kanban is a Just-in-Time tool that manages material
handling in the right time, place and in exact quantity.
• Kanban card indicates standard quantity of production
• Derived from two-bin inventory system
• Kanban maintains discipline of pull production
• Production kanban authorizes production
• Withdrawal kanban authorizes movement of goods
Joel Perez
II. Kanban
Q = order quantity
R = reorder point
= demand during lead time
Bin 1 Bin 2
Q - R
R
Reorder
Card
Kanban
a. Two-bin inventory system b. Kanban Inventory System
Origin
Joel Perez
II. Kanban
Machining
M-2 Assembly
A-4
Part no.: 7412
Description: Covers
From : To:
Box capacity 25
Box Type A
Issue No. 3/5
A Kanban Sample
Joel Perez
II. Kanban
P P
P
W
W
Container with withdrawal kanban
Container with production kanban
X
X
X X X
Work flow
Kanban flow
Dual Kanbans
Joel Perez
II. Kanban
X X X
X X
X
Work Flow Information Flow
Kanban Squares
Joel Perez
II. Kanban
407 409 410 412
408
411
Part
Number
Kanban Racks
Joel Perez
II. Kanban
• Kanban aims to transmit production information among the work and process areas.
Green
level
SYSTEM KANBAN
Needed
pieces
Red
level
Yellow
levelA visual management can be used to
indicate a Kanban.
Joel Perez
VI. Example – Kanban in the Office
Control inventory of papers in the office through Kanban cards.
Green: There is
enough material, it’s
not necessary to feed
the inventory
Yellow: This is an
alert. It’s suggested
to feed the inventory
at this stage.
Red: Risk of lack of
material
Joel Perez
IMPROVE: Tools, Indicators and Methodologies
1. Just-in-Time - Pull System - One Piece Flow
2. 5S
3. Poka Yoke
4. Kanban
5. Heijunka
6. Total Productive Maintenance (TPM)
7. Kaizen
8. Value Stream Mapping – Future State
Joel Perez
I. Heijunka (Production Leveling) Definition
• Produce only what the customer needs
• Equalize volume and types of production
• Level production sequence
Joel Perez
II. Production Leveling
• This load smoothing method significantly reduces the
risk of waste in the system by producing only what the
customer needs.
• Level production scheduling, determined by sales
volume and variety, then equalizing the volume and
types across the entire manufacturing process.
Volume Type
Joel Perez
III. Leveling and Sequencing
• Assuming 20 working days per month: – If a customer orders 5000 A models per month
We should produce 250 a day
– If another customer orders 2500 B models per month We should produce 125 a day
– And, if another customer orders 2500 C models per month We should produce 125 a day
– Should we first produce all A’s, then all B’s, and then all C’s, or . . . ?
• Well, what do you think?
Joel Perez
III. Leveling and Sequencing
• To level the production mix and volume, it
is necessary to:
• Determine the package size
• Determine the work pitch Pitch = Takt Time x Package Size
Joel Perez
IV. Example
• Assuming 20 working days per month:
• Takt Time = =
• Assuming 1 package with 50 parts:
Pitch = 57.6 x 50 = 2,880 seconds = 48 minutes
576,000 seconds
10,000 parts 57.6 seconds
Joel Perez
IV. Example
• For each 48 minutes:
Production of a package amount (50 parts)
Withdrawal of finished goods amount from one pitch
A A B C A A B C A A B C A A B C A A B C A A B ...
First day of production Second day of production
10 packages per day
Or another combination like:
B A A C B A A C B A A C B A A C B A A C B A A B ...
Joel Perez
IMPROVE: Tools, Indicators and Methodologies
1. Just-in-Time - Pull System - One Piece Flow
2. 5S
3. Poka Yoke
4. Kanban
5. Heijunka
6. Total Productive Maintenance (TPM)
7. Kaizen
8. Value Stream Mapping – Future State
Joel Perez
I. TPM Definition
•Total Productive Maintenance is a process
that allows continuous improvement within
the production processes of the company
•It consists of cross-functional work teams
which work together in order to improve
equipment effectiveness in their work areas
Joel Perez
I. TPM Definition
• A plant-wide, team-based effort to build quality into equipment and to improve Overall Equipment Effectiveness.
• Total
– all employees are involved
– it aims to eliminate all accidents, defects and breakdowns
• Productive
– actions are performed while production goes on
– troubles for production are minimized
• Maintenance
– keep in good condition
– repair, clean, lubricate
Joel Perez
II. TPM Objective
• The objective of TPM is to create a culture where
operators develop ownership of their equipment, and
become full partners with Maintenance, Engineering and
Management to assure equipment operates properly
everyday.
GOAL: Zero Breakdown
• Zero accidents
• Zero quality defects
• Zero machine downtime
• Zero waste
Joel Perez
III. TPM – The Five Elements
5. SGA´S – Small
Groups Activities
1. Training in operation
and maintenance
4. Improving the
overall equipment
effectiveness
2. Conducting planned
maintenance
3. Management of the
whole equipment
life cycle
5
TPM elements
Joel Perez
1. Training in Operation and Maintenance
• Team work
• Single Point Lesson
• Specialized training in one function
• Inspection techniques
• Data collection
• Knowledge of Lubrication
• Skills and performance on basic mechanics
• Knowledge of R&M (Reliability & Maintainability)
Training is a critical
part of TPM.
III. TPM – The Five Elements
1
Joel Perez
2. Conducting Planned Maintenance
• Specialized Staff – Facilitators and high level of
technical knowledge
• Operators – Group performance with
maintenance
• Preventive Maintenance Schedule
• Autonomous Maintenance – Develop
operator’s capacity to execute small repairs
and inspections, keeping the process according
to the established standards, predicting the
occurrence of problems
III. TPM – The Five Elements
2
Joel Perez
3. Management of the Whole Equipment Life Cycle
• Minimizing the cost of a new equipment’s life cycle
• Data collected by SGA’s (Small Groups Activities) to
prevent the recurrence of problems
III. TPM – The Five Elements
3
Joel Perez
MTTR & MTBF
MTTR (Mean Time To Repair): Average time to repair a
machine/equipment to normal working condition
MTBF (Mean Time Between Failure): Average time a
machine/equipment operates before it experiences a failure
MTTR = Total repair time
Number of failures
MTBF = Available Time – Downtime
Number of failures
III. TPM – The Five Elements
Better
Better
Joel Perez
Reliability
• Probability of the machine/equipment operating
continuously, without failure, for a time period
under regular conditions
III. TPM – The Five Elements
Joel Perez
Maintainability & Availability
• Availability
• The percentage of time a machine/equipment is ready to function
• Maintainability
• The probability that a failed machine/equipment is fixed or replaced at or before certain time
III. TPM – The Five Elements
Joel Perez
4. Improving the Overall Equipment Effectiveness
PRODUCTIVITY
AVAILABILITY
QUALITY
O. E. E. • Improvement of quality
and productivity
• Cost reduction
• Customer satisfaction
• Work safety
III. TPM – The Five Elements
4
Joel Perez
5. Small Groups Activities
• 1 - Cleaning is Inspection
• 2 - Lubrication, Cleaning and Safety Procedures
• 3 - Eliminating Contamination Sources
• 4 - Training on general Inspection
• 5 - SGA´s Inspections and Procedures
• 6 - Organization of the Work Area
• 7 - Equipment Handling by the SGA
III. TPM – The Five Elements
5
Joel Perez
IV. TPM Workshop
Small Groups Activities
• Measuring and eliminating deterioration trends
• Ensuring that the equipment is maintained at the optimum
operational level
• Eliminating problems that impact quality and productivity Joel Perez
IMPROVE: Tools, Indicators and Methodologies
1. Just-in-Time - Pull System - One Piece Flow
2. 5S
3. Poka Yoke
4. Kanban
5. Heijunka
6. Total Productive Maintenance (TPM)
7. Kaizen
8. Value Stream Mapping – Future State
Joel Perez
I. Kaizen Definition
Kaizen philosophy states that our way of life –
at work, in our society or at home – should be
continually improved.
Joel Perez
II. Origin of Kaizen
–Developed in postwar Japan by companies needing to rebuild
–Deming and Juran provided Japan concrete process tools to assist in implementing Kaizen philosophy
–Based on a belief that there should be step-by-step continuous improvement
–Established a strategy for making improvements every day
–Kaizen, “the elimination of waste through continuous improvement,” became a way of life
Joel Perez
III. Kaizen/Standardized Work Stair Steps
Standardize
Standardize
Standardize
Ka
izen
Kaiz
en
Kaiz
en
Standardized Work:
The foundation step
for Kaizen
Kaizen:
Elimination of waste
through continuous
Improvement, using
lean tools
Standardize
Joel Perez
IMPROVE: Tools, Indicators and Methodologies
1. Just-in-Time - Pull System - One Piece Flow
2. 5S
3. Poka Yoke
4. Kanban
5. Heijunka
6. Total Productive Maintenance (TPM)
7. Kaizen
8. Value Stream Mapping – Future State
Joel Perez
I. Value Stream Mapping Steps
• Current state map – “As Is”
– Identify sources of waste
• Future state map – “To Be”
–Eliminate wastes, creating a value stream the way it should be
• Customer-oriented processes
• Continuous or pulled flows
• Producing only what is required, when required
Future State Mapping – “To Be”
Joel Perez
I. Value Stream Mapping Steps
• The pacemaker process is the scheduling point. Typically, it is where you begin implementing the leaner future-state value stream designed during the value stream mapping (VSM) process
• The pacemaker process is generally at the customer end of the value stream where products take their final form. It's often the final assembly process, but not all of the time
• This process is called the pacemaker because how production is controlled there determines the pace of production at all the upstream processes. How well the pacemaker functions also determines how well you meet external customer demand. Mess up at the pacemaker, and the rest of your value stream will never be lean
Future State Mapping – “To Be”
Joel Perez
I. Value Stream Mapping Steps
•What is the target time?
•Will you build to a finished goods supermarket, or directly to shipping?
•Where can you use continuous flow processing?
•Where will you need to use supermarket pull systems to control production of upstream processes?
Future State Mapping – “To Be”
Key Questions for Future State Map
Joel Perez
I. Value Stream Mapping Steps
•At what single point in the production chain (the “pacemaker process”) will you schedule production?
•How will you level the production mix at the pacemaker process?
•What increment of work will you consistently release and take away at the pacemaker process?
•What process improvements will be necessary for the value stream to flow as your future-state design specifics?
Future State Mapping – “To Be”
Key Questions for Future State Map
Joel Perez
I. Value Stream Mapping Steps
• In order to reduce Lead
Time, one should not only
eliminate the seven wastes,
but also find the basic
causes of these wastes.
Future State Mapping – “To Be”
Value Lean Flow
Joel Perez
I. Value Stream Mapping Steps
• “What we are trying to do in lean production is to obtain a process
that can do only what the next process needs and when it is
necessary. We are trying to link all of the processes – from raw material to the final customer –
in a regular flow decreasing lead time, increasing quality and
reducing costs”.
Future State Mapping – “To Be”
Value Lean Flow
Joel Perez
I. Value Stream Mapping Steps
•Produce according to your Takt Time
•Develop a continuous flow wherever possible
•Use supermarkets to control production where the continuous flow does not extend to the previous processes
•Try to send the customer schedule to only one production process
Future State Mapping – “To Be”
Rules for a Value Lean Flow
Joel Perez
I. Value Stream Mapping Steps
•Uniformly distribute production of different products through time in the pull process
•Create an initial “pull” releasing and withdraw a small and uniform work improvement in the pull process
•Develop the ability to perform “every part every day” in the fabrication processes previously to the pull process
Future State Mapping – “To Be”
Rules for a Value Lean Flow
Joel Perez
I. Value Stream Mapping Steps
• An Implementation Plan should be used to help in the Future State Map implementation process. It includes:
–Lean Policy (Mission, Vision, Values)
–What is planned to do and when
–The responsibility for implementation
–Quantifiable goals
–Clear checking points including time limit and appraiser
Implementation Plan
Joel Perez
II. Business Value Stream Mapping Example
Future State Map
Develop Project
Mgmt . Review
Plant Approval
Controller Approval
Mgmt .
Approval Funding Available
6 Weeks
6 h
48h 48h 48h 48h 10 h 473.5 h
1.0 h 3 h 16.0 h 2.0 h 5.0 h
ME Supplier Supplier Plant
PT = 15 Wks PT = 240 h
FTT = 30%
PT = 72 h
FTT = 100%
= 3 = 2 = 3 = 10 = 1 = 1 W W
W W I
20 = 3 = 3 = 3 = 3 = 10 = 10 = 1 = 1 = 1 = 1 W W W W
W W I
20
I
20 20
PT = 96 h
FTT = 50% PT = 30 min
FTT = 99%
PT = 2 h
Local
33.0
Project . Plant
Approval
.
6 Weeks
6 h
48h 48h 48h 48h 10 h 473.5 h
1.0 h 3 h 16.0 h 2.0 h 5.0 h
ME Supplier Supplier Plant
PT = 240 h
FTT = 30%
PT = 72 h
FTT = 100%
= 3 = 3 = 2 = 2 = 3 = 3 = 10 = 10 = 1 = 1 = 1 = 1 W W W W
W W W W I
20
I
20 = 3 = 3 = 3 = 3 = 10 = 10 = 1 = 1 = 1 = 1 W W W W
W W I
20 20
I
20 20
PT = 96 h
FTT = 50% PT = 30 min
FTT = 99%
PT = 2 h
33.0
Joel Perez
IMPROVE: Select Solutions
• Shows relationship of problem statement, root causes
and proposed solutions
Problem Root
Causes
Solutions (What)
Specific
Tasks (How) X X =
SCALE: 1-None 2-Somewhat 3-Moderate 4-Very 5-Extreme
Joel Perez
Solution Selection Matrix - Example
Separate internal &
external activities
Non-standard
shipping
racks
Poor maint.
& schedule
Late Delivery to
Customers
Problem Root
Causes
Solutions (What)
Specific
Tasks (How)
Prepare tools for next
change before truck
arrives
X X =
SCALE: 1-None 2-Somewhat 3-Moderate 4-Very 5-Extreme
5 4 3 60 Yes
5 3 4 60 Yes
4 2 1 8 No
4 4 4 64 Yes
5 3 3 45 Yes
... ... ... ... ...
... ... ... ... ...
Standardize procedure for
rack adjustments
Contract maintenance
work Schedule preventive
maintenance
Improve maintenance
quality
Shop Foreman develops
schedule
& allocates work to Techs
Improve Tech skills thru
Training and SOPs
........... ..................... ........
........
Joel Perez
IMPROVE: Update Outcome Indicators
Ja
nu
ary
Ma
y
Se
pte
mb
er
Ja
nu
ary
Ma
y
Se
pte
mb
er
Ja
nu
ary
Ma
y
0
10
20
30
40
50
• Revise Outcome Indicators showing improvements in
the process performance
Before
After
%
Joel Perez
Joel Perez
CONTROL
Joel Perez
CONTROL the Process • Goal
– Control the process to maintain the gains and transition to full implementation
• Key Outputs
– Documentation for the new method
– Training for the new method
– An operating Process Management Control System
1
2
3
4
5
DEFINE
MEASURE
ANALYZE
IMPROVE
CONTROL
Joel Perez
CONTROL: Story Components To institutionalize the improvement and implement ongoing monitoring
Develop and Document
Standard Practices Train Personnel
Training
Curriculum Training
Manual
Build the
Process Management Control System
Fully Implement Solutions
and PMCS
Close Project
and Celebrate
Standard
Practice
Replicate
Projects at Other
Locations
Cost/Benefit
Analysis
Approval from
Finance
Verify Cost/Benefit
“X” Upstream Indicators UCL
LCL
UCL
LCL
“Y” Outcome Indicators
Good
5
Joel Perez
PMCS (Standardized Work)
Visual Management/Andon
Develop and Document
Standard Practices
Build the Process Management
Control System
Train Personnel, Fully Implement
Solutions & PMCS
Close Project, Celebrate and
Replicate
Tools, Indicators and
Methodologies Storyboard
CONTROL: Tools, Indicators and Methodologies
CONTROL: Tools, Indicators and Methodologies
1.PMCS
2.Visual Management/Andon
Joel Perez
CONTROL: Tools, Indicators and Methodologies
1.PMCS
2.Visual Management/Andon
Joel Perez
I. PMCS (Standardized Work)
Process Management
Control System
Process
Control Improving
= Process
Stability
A
Improving
= Process
Capability
B
Identify and Select Top-Priority Process
Identify and
remove
special
cause
variation
Investigate
common
cause
variation and
change the
process
Standardize and Replicate
Is process stable?
Develop Indicators and Build the Process Management Control System
Identify Customer and Supplier Requirements
Document Top-Priority Process
Implement the Process Management Control System
N
N
Y
Y
A
B
Is process capable?
Managing Process Performance…
Pro
cess M
an
ag
em
en
t
Joel Perez
Process Management Control System
Outcome Indicators ( Ys ): Customer’s CTQs : Primary Customer of Process: Process Name:
Misc.
Information Capturing Data Process Map
Position
Step/
Time
- Indicator Formula
- Procedures
- Abbreviations
- Comments
Recovery
Action
Who
Perform
Check
When to
Check
“ Physical “
Item to
Check
Indicator
Chart
Type
- Name
- Numerator &
Denominator
or Description
Approver By Change Log – Describe Revisions Date Rev #
Outcome
Indicators
(Ys)
- Name
- Numerator &
Denominator
- Specification
Upstream
Indicators
(Xs)
Joel Perez
Process Management Control System
Outcome Indicators ( Ys ): Customer’s CTQs : Primary Customer of Process: Process Name:
Misc.
Information Capturing Data Process Map
Position
Step/
Time
- Indicator Formula
- Procedures
- Abbreviations
- Comments
Recovery
Action
Who
Perform
Check
When to
Check
“ Physical “
Item to
Check
Indicator
Chart
Type
- Name
- Numerator &
Denominator
or Description
Approver By Change Log – Describe Revisions Date Rev #
Outcome
Indicators
(Ys)
- Name
- Numerator &
Denominator
- Specification
Upstream
Indicators
(Xs)
Yes
Step up to desk
Is there a line?
Wait
Approach front desk
Clerk available?
Give room number
Check bill
Charges
correct?
Correct charges
Pay bill
Yes
Yes
No
No
No
Wait
Hotel Check-out Process Hotel Customer
Y1 = % of
bills paid in
more than 10
minutes
X1 = Waiting
time (line)
CUSTOMER CLERK
X2 = Waiting
time (clerk)
X3 =
Checking the
bill
XR Chart
XR Chart
XR Chart
Trend
Chart
Y1
X1
X2
X3
Check and
record in
worksheet
5
measurements
per hour
5
measurements
per hour
5
measurements
per hour
Daily K.
Houston
J.Blake
J. Blake
J. Blake
Free
daily
expense
3 m
inu
tes
Lin
e / C
lerk
ava
ila
bili
ty
3 m
inu
tes
Pa
y B
ill
Y1 = % of bills paid in more than 10 minutes Timeliness
Check and
record in
worksheet
Check and
record in
worksheet
Check and
record in
worksheet
Joel Perez
CONTROL: Tools, Indicators and Methodologies
1.PMCS
2.Visual Management/Andon
Joel Perez
I. Visual Management Elements
• 1. Visual Display
• Communicates important information, but does not always control what people or machines execute. It is the first level of visual control.
• Example: Information can be placed in a safety chart, however this information alone cannot control the behavior.
• Ex.: n# of accidents/month
MONTH
ACCIDENTS
0
5
Joel Perez
I. Visual Management Elements
• 2. Visual Control
• Provides important information, usually standards, in a way that activities can be controlled based on these information and standards. There are several levels of visual control.
• Example: Several controls are placed to direct specific individual behavior and to prevent accidents: tickets, machine protectors, non-slippery surface, etc.
CAUTION!!!
HIGH POTENTIAL Ex..:
Joel Perez
II. Visual Control System
• A visual control system is a set of control equipment, information, color codes, layouts and plates (indicative and warning), all standardized, which creates a common visual language in the workplace to:
• Readily distinguish the normal from the abnormal
• Make abnormalities and wasting obvious enough so that anyone can see them
• Constantly discover improvement needs and opportunities
Joel Perez
III. Visual Management Implementation
5 STEPS:
1. Project identification
2. Workplace organization (5s)
3. Visual display
4. Elements to control/tools and methods
5. Visual control development
Joel Perez
1. Project Identification 1. PLACE
Identify the specific area to
implement Visual Control.
Selection criteria:
- Disordered and disorganized
- Consistent problems
- Low adherence to standards
- Great improvement opportunity
2. PURPOSE
Identify the primary purpose to
which the area is used.
What is described:
- Which is the process
- Inputs and outputs
- More important functions performed
3. PEOPLE
Identify individuals who work
with and/or need information.
Who identify:
- Operators
- Maintenance and setup personnel
- Engineers, supervisors, managers
- Suppliers, customers
4. VCS TEAM (VISUAL CONTROL SYSTEM)
Who will be responsible for the
implementation of Visual
Control.
Who select/identify::
- People who work in the area
- Everybody motivated to the improvement
- A customer or supplier
III. Visual Management Implementation
Joel Perez
2. Workplace organization (5S)
SORT STRAIGHTEN
SWEEP STANDARDIZE
SUSTAIN
III. Visual Management Implementation
Joel Perez
3. Visual Display
• Everything which helps, informs, directs, warns and leads, etc.
• Standards established to: • - inventory • - equipment • - operations • - quality • - safety
• Activities results and improvements such as: • - production number • - defects • - maintenance number • - preparation time • - improvement goals • - operational productivity time
Other information such as:
- name of the department
- equipment and processes identification
- employees’ names
- training
- 5S/plant/line map
- process chart
- sample of pieces
- maintenance plan
- labels
III. Visual Management Implementation
Joel Perez
4. Elements to Control: Tools and Methods
• Elements to Control/Tools and Methods for Visual Management
• Contents/amount at inventory/container
• Location/proximity of inventory
• Distinction of conforming from non-conforming goods
• Preventive maintenance schedule and verifications
• Detection of abnormalities/Detection of defects
• Dangerous operation
III. Visual Management Implementation
Joel Perez
5. Visual Management Development
1. What information (standard) about the focus area needs to be
known by each team member?
2. How is each team member notified about standards,
information and/or situations/positions?
3. Make a list of ideas about how the standards, information
and/or situations/positions above can be visually
communicated for the co-workers of an area. (Brainstorming).
4. What are the resources needed to implement visual displays
or controls?
III. Visual Management Implementation
Joel Perez
IV. Visual Management - Andon
• Andon immediately alerts the supervisors
about abnormalities that happen in the
plant.
Joel Perez
Library shelf
Work station
Visual kanbans
Tool board
Machine controls
Better
Good
Best
30-50
How
to
sensor
V. Visual Management Example
Joel Perez
Font: www.london-electronics.com
V. Visual Management Andon Example
Joel Perez
V. 5S & Visual Management Exercise
• Using 5S & Visual Management, let’s organize the room!!
Joel Perez
Lean Summary
Joel Perez
DEFINE: Identify Business Opportunity/Gap
• Defects
• Variability
• Inconsistency
• New Product/Service
• Missed Due Dates
• Rework
• Scrap
• Slow
• Exception handling
• Unplanned downtime
• Bottlenecks
• Redundancies
• Capacity Constraints
• Inventory Write-offs
• Complexity
• Backlogs
• PMCS gaps
What problems do you face? Joel Perez
Customer CTQs
Outcome Indicators
Identify Business Opportunity/Gap ($)
Identify Customer’s CTQ Attributes
Map High Level Processes
Identify Outcome Indicators
Develop Preliminary Problem
Statement
Assess Financial $ Impact (COQ)
Prepare Communication & Project
Plans
Tools, Indicators and
Methodologies Storyboard
DEFINE: Lean Tools, Indicators and Methodologies
Indicators
OEE
DTD
RTY
BTS
WIP
Develop Data Collection Plan
Collect Data
Plot Data Over Time
Graphical Analysis of Data
Calculate Performance
Set Process Performance / $
Improvement Goal
Develop Final Problem
Statement
Tools
Value Stream Mapping
VA & NVA Analysis
Create Detailed Process Map
Identify VA & NVA Steps
Tools, Indicators and
Methodologies Storyboard
MEASURE: Tools, Indicators and Methodologies
Takt Time
TOC
SMED
Brainstorm and Organize
Potential Causes
Verify Potential Causes with
Data
Confirm Root Causes
Tools, Indicators and
Methodologies Storyboard
ANALYZE: Tools, Indicators and Methodologies
IMPROVE: Tools, Indicators and Methodologies
Storyboard Tool, Indicators and
Methodologies
Identify and Select Solutions
Conduct
Cost/Benefit Analysis
Conduct Risk Analysis
Develop Action Plan For Full
Implementation
Develop Pilot Plan
Quantify Pilot Results
Update Outcome Indicators
Just in Time
Pull System
One Piece Flow
5S
Poka Yoke
Kanban
Heijunka
TPM
Kaizen
Value Stream Mapping –
Future State
PMCS (Standardized Work)
Visual Management/Andon
Develop and Document
Standard Practices
Build the Process Management
Control System
Train Personnel, Fully Implement
Solutions & PMCS
Close Project, Celebrate and
Replicate
Tools, Indicators and
Methodologies Storyboard
CONTROL: Tools, Indicators and Methodologies
OE LEAN Tools Summary
MEASURE ANALYZE DEFINE IMPROVE CONTROL
• VSM (current state)
• VA/NVA Analysis
• OEE
• DTD
• RTY
• BTS
• WIP
Project
Opportunity
Sources
• Takt Time • Theory of Constraints
• SMED (Quick Changeover)
• Spaghetti Chart
• Just-in-Time
• Pull System
• One-Piece Flow
• Kanban Pull
• 5S
• Poke-Yoke
• Heijunka
• TPM
• Kaizen
• VSM (future state)
• PMCS (Standardized Work)
• Visual Management
• Bottlenecks
• Complaints
• Business Plan
gaps
• PMCS gaps
• Value Stream
Map
• Capacity
Constraints
Joel Perez
Joel Perez
Improvement Ideas
Joel Perez
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