Basic Lean Training

FUNDAMENTALS OF LEAN

HISTORY OF MANUFACTURING

• Made to customer specifications

• Single piece mfg… each product unique

• Variable quality

• Little inventory

• High cost … made for the rich

Craft

Interchangeable parts Division of labor Assembly lines Labor strife

Mass Production High variety Small batch sizes PPM quality Engaged workforce

“Lean” Enterprise

WHY ARE WE HERE??

LONG-TERM“HEALTH”

QUALITY

CU

STO

MER

SATI

SFA

CTI

ON

SALE

S A

ND

PRO

FITS

COST REDUCTION

DELIVERY

It’s About Performance!

KEY RESULTS TO BE EXPECTED

Immediate 20%+ Productivity Improvement 30%+ Floor Space Reduction 25%+ Quality Improvements 75%+ WIP Inventory Reduction 35%+ Set-Up Time Reduction

KEY RESULTS TO BE EXPECTED

Longer Term

Lead times cut from weeks to hours Quality approaches zero defects Significant improvement in employee and

customer satisfaction Continually reduced unit costs

5 PRINCIPLES OF LEAN THINKING

• Key principles of “Lean Thinking”:VALUE - what customers are willing to pay for

VALUE STREAM - the steps that deliver value

FLOW - organizing the Value Stream to be continuous

PULL – triggering flow from customer needs

PERFECTION - continuous improvement forever (culture)

(from Lean Thinking, Womack and Jones, 1996)

VALUE STREAMS ARE FINANCIAL

items in

items out

value added

PROFIT

items in

items out

value added

PROFIT

RETURN ON KEY ASSETS

• Key Assets=Inventory=Receivables=Fixed assets

• equipment• facilities

• Goals=More profits=With less assets

RAPID CONTINUOUS IMPROVEMENT (RCI)

• A Rapid Continuous Improvement Event is=An intense, focused activity (4.5 days)=A team focused on a specific area

• Specific Lean Tools used to identify waste=Roots: Toyota Production System=Applied wherever work is done

• Lean is a Learn by Doing process=Learn the tools by using them=Measurable improvement expected

THE 7-WEEK CYCLE OF AN RCI EVENT

• 3 weeks before – Value Stream review, Event Selection, Select Team Leader/Co-Leader … Financial Impact?

• 1-2 weeks before – RCI Checklist, preparation .. Cell Communication

day 1 - current conditions day 2 - big changes day 3 - run the cell day 4 - standard work day 5 - presentation

1st week after - Capture the savings 2nd week after – Update Standard

Work 3rd week after – CFO validation

•Step 1 “Identify” waste•Step 2 “Eliminate” waste

• “Value-Adding” changes the value of an item

•Drilling•Assembling•Painting•Cutting•Welding

VALUE ADDING

NON-VALUE ADDING

• Consumes time and money

• Does not change the value of an item

•Sorting•Counting•Stacking•Expediting•Checking

VALUE-ADDING / NON-VALUE-ADDING

• Value-adding:=Any activity that contributes directly to satisfying

the need of a customer, e.g.,• Airline transportation service (actually flying)• Admin. process for hiring (interviewing a candidate)• Remodeling service (attaching drywall panels)• Admin. process for payables (reconciling Invoices

with purchases)

VALUE-ADDING / NON-VALUE-ADDING

• Non-value adding:=Any activity that takes time or resources but does

not contribute directly to satisfying the need of a customer, e.g.,

• Airline transportation service (lining up to check in)• Admin. hiring process (scheduling the interview)• Remodeling service (waiting for materials)• Admin. process for payables (finding and sorting

purchase orders)

All value streams are a combination of value adding and non value adding

Value added

Lead Time

PROBLEM WITH TRADITIONAL IMPROVEMENTS

Total Lead Time to Customer

Un-changed

97.5 % NVA

95 % NVA

V.A. Time 2.5%

5%

Value Adding

“Lets make improvements” (e.g. faster machines)

Existing Batch Operations

Order

Order

Ship

Ship

Improvement will be easier and more likely to succeed by focusing on & removing the non-value added activities (waste)

THE ‘BIG IDEA’ OF LEAN THINKING ?

Total Lead Time to Customer

95 % NVA 5%

Value Adding

Order Ship

Profit = Price - Costs

WHY LEAN THINKING ?

The world has changed! We can no longer sell everything we make.Competition is everywhere!

Capacity = Work + Waste

WHAT ARE THE BENEFITS?

TRADITIONAL FLOW VS. CELLULAR FLOW

Traditional flow Cellular flowDept 1

Dept 2

Dept 4

OUT

DONE

OUT

OUT

OUT

IN

IN

IN

IN

DONE

IN

•Natural Groups in each cell•Work sequence may be different from part flow sequence

4 3

1 2

Out

In

Dept 3

RCI IS ABOUT SEEING WASTE (8 WASTES)

• Wasted Human Talent – Damage to people• Defects – Material that isn’t right & needs to be fixed• Inventory – Material waiting to be worked• Overproduction – Too much / too early • Waiting Time – People waiting for material to arrive• Motion – Unnecessary human movement• Transportation – Moving people & material • Processing Waste – Tasks we have to do that don’t add

value to the material we are producing!

TPS – THE ROOTS OF “LEAN”

TOYOTA PRODUCTION SYSTEM (“TPS”)

JUST-IN-TIME

- what’s needed

- when needed

- in the quantityneeded

LEVELING (of overall volume and of mix variation)

AUTONOMATION(JIDOKA)

- autonomous

- defect-free

- detects abnormalconditions

INVOLVEMENT:Flexible, Motivated, team members always looking for a better way

T.P.S

TAKT TIME TIME OBS. BARCHART 6S

PROD. CONTROL SPAGHETTI STANDARD STD WIP BOARD DIAGRAM WORK SHEET KEY POINTS CAPACITY COMBINATION LOAD-LOAD

SHEET SHEET

PULL SYSTEM TPM POKA-YOKE ONE PIECE FLOW (KANBAN)

SETUP LEVELING REDUCTION

WASTE ELIMINATION TOOLS

IMPROVEMENT TOOLS COME FROM TPS

9 KEY TOOLS FOR SEEING WASTE

• The key to eliminating waste is to first be able to see it

• These 9 tools help us identify waste:Takt TimeTime observationBar chartSpaghetti diagramFlow diagramStandard work sheetStandard work combination sheetProduction control boardStandard WIP

TAKT TIME

• Takt Time = (available time) / (customer demand)What is the Takt Time?Are we producing at Takt Time?Why not?

Takt Time is the first tool which distinguishes between “faster is better” from “how many do I need”?

TAKT TIME CALCULATION

8 hour shift- 20 min breaks- 10 min c/u450 min

27,000257

105 Sec.

total time available

real demand per shift with backup data

TAKT TIME

convert to seconds for Takt Time calculation

8 hr. shift x 60 min/hr = 480 min(breaks) - 20 min

(clean up) - 10 min450 min

450 min x 60 sec/min = 27,000 sec.

426

63

TAKT TIME

• Takt time tells you how much time you “get”Takt Time will be different in all areas of your plantAvailable time can vary by department or cellTakt Time can vary by day …. Or shift …Customer demand is based on actual demandDo you know your customer demand? Does your supervisor?Takt Time drives product cost!

• Staffing (Productivity)• Size of cell (Floor Space)• Capital equipment (Burden)• Inventory (Turns/Cash Flow)

TIME OBSERVATION

• The time observation determines how long it takes to do the task

=Time observations are not time studies=The time observation is a tool to help you see waste=Time observations help you see the non-value-adding steps in detail

TIME OBSERVATION

• Time observations help you identify the waste• Look for opportunities to eliminate “work” when

observing someone• Selecting the “lowest repeated” time, when observing

someone, provides Step 1 in improvement=Make every unit repeat in the “lowest repeated” time=Break down the steps into Value-Added and Non-Value-Added steps

=Eliminate the Non-Value-Added tasks

BAR CHART

• Bar Charts show time observation data:=Place line showing Takt Time=1 bar for each person (1 time observation for each person)=Look for waste Identified by the Bar Char=How many people do we need?

SPAGHETTI DIAGRAM

• Purpose: To help see movement of people

• Makes motion and transportation waste obvious

• Stand back and observe the operator

=Where do they go?=Why?

• 1 Spaghetti Diagram per person in the cell

FLOW DIAGRAM

• Flow diagrams often help us see how “material” flows=VA and NVA steps=Total process … before and after your cell=Use Value Stream Maps for detailed diagram

• See the flow, see the waste, and develop a vision

Weld Paint

Cut Punch BendStore

QC

Store

Cut Punch BendStore Store

Store Store

FLOW DIAGRAM

STANDARD WORK SHEET

• Standard Work Sheets show the “current best way”=Layout of the cell=How many people in the cell=Work sequence of each person=Standard WIP

• quantity and locations

STANDARD WORK SHEET

# peopleSafety Hazards

QualityChecks

Standard WIP

• Production Control boards help us achieve Takt Time=Visually monitor Output vs. Takt Time=Operators communicate problems/issues=Supervisors responsible for resolution=Problems/solutions are visible and documented

PRODUCTION CONTROL BOARD

• Standard WIP is a calculated number

• Standard WIP highlights where the problems areWhere should the Standard WIP be located?Is it there now? If not, what has happened?

Use the Standard WIP to make problems visible

STANDARD WIP

• Standard WIP is a calculated number• Standard WIP is used to manage obstacles to “flow”

=Examples:• Glue drying• Yield• Heat treating (monuments)• Parts used as pairs or sets• Timing of complex flows

STANDARD WIP

STANDARD WORK BOARD

- TIME OBSERVATION SHEET (on file in the cell)

- BAR CHART (1 per cell)

- STANDARD WORK SHEET (1 per cell)

- STANDARD WORK COMBINATION SHEET (1 per person in the cell)

- KEY POINTS SHEET (1 per work station in the cell)

- CAPACITY SHEET (1 per cell)

WHERE TO USE THESE TOOLS

TAKT TIME

TIME OBSERVATION

BAR CHART

SPAGHETTI DIAGRAM

FLOW DIAGRAM

COMBINATION SHEET

STANDARD WORK SHEET

PRODUCTION CONTROL BOARD

STANDARD WIP

documentingStandard Work

RI Eventcurrent

conditions

VisualManagement

of a cell

MANAGEMENT DECISIONS

• Managers/Supervisors make decisions that create results

• Good decisions create good results (measurements)=Key decisions

• How many people do I need?• Who does what?

=Critical skills• Seeing problems (visual management)• Resolving problems

ADJUST FOR CHANGES

• Cell managers maintain and update Standard Work• When Takt Time changes...

=Determine staffing=Add or redeploy people … what happens if you overstaff?=Standard Work documents should exist for different staffing

• When the cell is improved=Update all Standard Work documents

Encourage Improvements!!!

WALK, STOP AND LOOK

• Management succeeds or fails at the cell level first• Spend at least 30 minutes, 2 times per day• Take the time to stop and observe:

=Production Control Boards=Standard WIP=Standard Work sequence

• 10 second rule!!• Is anyone capturing the “Golden Nuggets”? • What’s being done to resolve them?• Is anyone Identifying waste?• Is anyone eliminating waste?

CELLS

• Cells are the building block of Lean• To establish a cell you need:

=One Piece Flow=Standard work=6S=Pull Systems

ONE-PIECE FLOW (CELLS)

• Natural groups of parts or steps

• One piece flow inside the cell

• One operator may run the cell

• No birdcages or barriers

• U-shaped design

• Multi-skilled people

• Layout based on flow steps

Work sequence based on output required!

DONE

IN

4

3

1 2

5

Batch size of 300 vs. Batch size of 1

A

B

C 1

minute 2

minutes

3minutes

• First Piece Done - 3 Minutes(can move on to next step)• 300th Piece Done - 302 Minutes• WIP = 3 Pieces

A

B

C 300

minutes

600minutes

900minutes

• First Piece Done - 601 Minutes(but waits for other 299 pieces)• 300 Pieces Done - 900 Minutes• WIP = 900 Pieces

Reduced Batch Sizes

• Standard Work is a management system=TAKT TIME (available time / customer demand)=WORK SEQUENCE (assign one Takt Time to each person)=STANDARD WIP (minimum amount needed to run the cell)

• Standard Work has a standardized documentation

• Standard Work enables Visual Management=Production Control Boards=Standard WIP Levels=Standard Work Board

STANDARD WORK

see and resolve

problems

6S

1. SAFETY (see and fix unsafe conditions)

2. SORT OUT (get rid of what’s not needed)

3. STRAIGHTEN (organize what belongs)

4. SCRUB (clean up, see and solve problems)

5. STANDARDIZE (who does what to keep it up)

6. SUSTAIN (be disciplined… keep it orderly)

6S is the foundation for all future improvements

VISUAL MANAGEMENT (SUPPORTS ALL TOOLS)

APPLY VISUAL TOOLSVISUAL WIPINDICATORS

STATUSUNITS VS PLAN

ALARMSLOCATIONS

CORRECTIVE ACTION / 6-SIGMA

OWNED BY THE PEOPLE WHO WORK IN THE AREA

SEE

AT-A-GLANCE(5 seconds)

NORMAL

ABNORMAL

VISUAL MANAGEMENT (SUPPORTS ALL TOOLS)

PULL SYSTEMS

• Pull Systems link cells together=Only when a single cell is not possible

• All Pull Systems have three elements:=Upstream “ready” - pulled when needed=Downstream “in use” - being consumed "now"=Trigger - a signal (what, where, when, how many)

PULL SYSTEMS

BASICS OF LEAN FOR MANUFACTURING

On-Demand, Defect-Free,One-By-One at the Lowest

Cost

Philosophy(Long Term Thinking)

Process(Eliminate Waste)

People & Partners(Respect, Challenge and Grow Them)

Problem Solving(Continuous Improvement and Learning)

•Continual Organizational Learning•Go see For Yourself To Fully Understand The Situation•Make Decisions Slowly By Consensus, Thoroughly Considering All Options; Implement Rapidly

•Grow Leaders Who Live The Philosophy•Respect, Challenge, And Grow Your People And Teams•Respect, Challenge, and Help Your Suppliers

•Base Management Decisions On Long-Term Philosophy,

4P Model Of The Toyota Way

•Create Process Flow to Surface Problems•Use Pull Systems To Avoid Overproduction

• Level Out The Workload• Stop When There Is A Quality Problem• Standardize Tasks For Continual Improvement

• Use Visual Controls So No Problems Are Hidden• Use Only Reliable, Thoroughly Tested Technology

HEXAGON LINCOLN

K. Hazen