LEAN and AGILEapproaches to manufacturing

and process improvement

Dr Peter Ball

Centre for Strategic Manufacturing

www.dmem.strath.ac.uk/csm/p.d.ball@strath.ac.uk

        

  

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DMEMDMEM

The frog!

Rebbit!

OoC

5OoC

10OoC

Uh oh!Rebbit!

“Poikilothermic” (= don’t try this at home)

A Lean and Agile Manufacturing

What are they? What are the benefits? How to do it? Case studies Sources of further information

Lean Thinking roots in Toyota Philosophy

Doing it all for the Customer Levelled production Pull system Continuous-flow production Takt time Multi-skilling TQM TPM Poka Yoke SPC Standardised work Kaizen

workcentre

workcentre

K K

store

replacement batches

kanbans withdraw & process

Item Qnty Day 1 Day 2 Day 5Runner 100 20 20 20

Repeater 27 7 7Stranger 5 5

Load 132 27 27 25Cap’ty 135 27 27 27

Uncompetitive Competitive

Competitor

Continuous improvementSelf

Present change

Co

mp

etit

iven

ess

Time

time

Upper action limit

Upper warning limit

aver

age

action?

What is Lean Manufacturing?

Builds on roots but with specific focus on:

Lead time reduction Regular production New products

Flexibility improvement

Variability reduction

Cost reduction

Lean Characteristics & Benefits

Characteristics Benefits (higher …)

Customer DrivenCustomer Driven

Profit DrivenProfit Driven

Team BasedTeam Based

Fewer PlayersFewer Players

Devolved responsibilityDevolved responsibility

Customer SatisfactionCustomer Satisfaction

ProfitabilityProfitability

Greater ControlGreater Control

Improving business performance

Increase turnover Sell more Charge more

Reduce cost Reduce direct material cost Improve production efficiency/effectiveness Increase the rate of adding value

Time based competitiveness - some rules

0.05 to 5 Value actually added between 0.05% - 5% of total time

Source: survey of industry (by Boston Consulting Group?)

3 / 3 Why no value being added:

Waiting for completion of batchesWaiting for physical / intellectual reworkWaiting for management decision

3 x 2 Lean competitors enjoy x3 avg growth rate, x2 profit margin

1/4 - 2 - 20 For every quartering of total time, productivity doubles,

costs reduce by 20%

What is World Class Manufacturing?

Being the best

Being the lowestcost producer

Delighting thecustomer?

Schonberger’sagenda?

What is World Class Manufacturing?

Product quality right first time, every time

Product quality right first time, every time

Reduction of waste in the manufacturing

system

Reduction of waste in the manufacturing

system

Flexibility & control to satisfy customer on

time, every time

Flexibility & control to satisfy customer on

time, every time

Managing through people, teams and aligning all to goals

Managing through people, teams and aligning all to goals

How to go lean

Objective Method

Understand customers and what value they want

Setting the direction, targets and checking

results1

Define the internal value stream

An internal framework for delivering value2

Eliminate waste, make info & products flow, pulled by

customer needs

Appropriate method to make necessary change3

Extend the definition of value outside your

company

Externalise the value focus to the whole value stream4

Continually aim for perfection

Strive for perfection in the product and in all

processes and systems5

Cornerstone of Lean Manufacturing

Value stream mapping Construct process map of the value stream

Avoid using existing maps, may be out of date or have misconceptions

Analyse the process mapFocus on customerIdentify value-added and non-value-added activities

Calculate the value-add ratio Reduce and eliminate wasteful steps

(several value streams exist in a value chain,

e.g. key product line to key customer)

Many mapping tools (process activity, supply chain response, quality filter, etc.)

Many mapping tools (process activity, supply chain response, quality filter, etc.)

Conduct all improvements in context of value-add ratio

Example of process map Note value-add time -vs- lead time

Demand amplification mapping

Many tools exist including demand amplification mapping

Concerned with batching and response time

Spreadsheet example from IOM publication shows effect

Capability of processes and the dangers

Need to establish capability in all processes Need capable machines Need capable suppliers etc.

Danger is that you can base lean on poor foundations Focus on assembly area when machine shop is not capable Focus on production processes when supplier is not capable

Need to be careful with available literature, can assume You have sales and operations planning You have capable machines etc.

If your production planning function was likely to produce infeasible plans occasionally would

you trust them?!

If your production planning function was likely to produce infeasible plans occasionally would

you trust them?!

See roots of leanthinking slide

Capability / variance

Variation of output of a process can give rise to defects internally and/or passed onto customer

Aim to reduce process variation to increase reliability of a process

This is the foundations of Six Sigma methodology …

Nominal

Upperspecificationlimit

Lowerspecification

limit

±3±6

Defects 1350 parts per million

Defects 0.001 ppm

Six Sigma

A complete methodology for improving the business or simply a process reliability concept?

Key to Motorola, GE and other businesses at all levels

Executive visionExecutive vision

Assess & kickoffAssess & kickoff

Deploy strategyDeploy strategy

MeasurementMeasurement

AnalysisAnalysis

ImprovementImprovement

ControlControl

Select champions …

Train and set up structure …

Map, id critical input/output variables …

Determine variance …

Design of experiments …

Use control charts …

Project implem

entation

Agile – a step on from lean?

Roots of agile in America defence industry – developing the ability to react and reorganise to successful equipment bids

Lean and agile have common components See “Lean Thinking Roots” slide (quality, reliability,

improvement, etc) But lean is process focused, agile is boundary focused

Ability to thrive in constant, unpredictable changeKey attributes of agile

Customer value focus (solutions not products) Flexibility to adapt to fundamental market changes

Not simply changes in product mix Competing from multiple fronts, possibly virtually Organisational knowledge, including ability to adapt IT

systems to support new processes

Different views on lean -vs- agile

TraditionalTraditional LeanLean AgileAgile

The journey

LeanLean AgileAgile

Make to stockLow variety

Mass, repetitive“Cost minimiser”

Make/Engineer to order, High variety, Service culture

“Product Innovator”?“Customer intimate”?

A spectrum of companies

ComplementaryStock

(to decouple)

LeanLean AgileAgileMaterialsuppliers

customer

Make to forecast Make to order

Upstream variation Downstream variation

Establishing Foundations for Lean, Agile …

Need the classic pre-requisites for any programme Strategy Commitment Objectives Communication Empowerment Establish framework Activity plan, cost, time and execution Measurement and evaluation system

Culturechange

Use ofchampion

Key to Lean Manufacture is measurement

Need clear, objective focus on value

Example: OEE (Overall Equipment Effectiveness) A composite measure of the ability of a process to carry out

value adding activity OEE = % availability x % output achieved x % perfect

output If change to a process increases OEE it is worthwhile

Actual Available Production TimeTheoretical time minus planned downtime and shutdownsThis is the realistic best available production time (100%)

Planned DowntimePM, Shutdowns, Holidays

Machine Running TimeActual production hours minus downtimesThis is possible production if 100% performance

Unplanned LossesBreakdowns, HR, Set-up time

Availability

Net Operating TimeMachine speed against theoretical speedThis is the possible output if 100% quality

Speed lossesIdling, minor stopages performance

Performance

Useful Production TimeMaterial in minus product outThis is the real output

Quality Losses, adjustments, Set-up waste

Quality

OEE

OEE Example Calculation

PerformanceG. Total dozens produced = 3869 dozenH. Balanced Speed (180 BPM=0.067) = 0.067I. Performance (HxG / Ex100) = 85%

QualityJ. Rejects during operating time = 20 dozenK. Rate of quality products (G-J / Gx100) = 99%

Overall Equipment EffectivenessOEE (F x I x K / 10000) = 52%

Loading TimeA. Working Time = 525 minsB . Line Off Time = 30 minsC. Loading Time (A-B) = 495 mins

Line Off Time Lunch break 30 mins Asset Care 0 mins

AvailabilityD. Downtime = 190 minsE. Operating Time (C-D) = 305 minsF. Availability (E divided by C x 100) = 62%

DowntimeStart up 30 minsShut down 20 minsBreakdown 40 minsChangeovers 90 minsMaterials Supply 10 mins

Cost benefit analysis

Costs Benefits (higher …)

InvestigationInvestigation

ImplementationImplementation

Project specificProject specific

Customer SatisfactionCustomer Satisfaction

ProfitabilityProfitability

Greater ControlGreater Control

Summary

Strategy that encompasses business [profit] objectives and customer order winning [and maintaining] criteria

Achieve short-term, KPI-driven improvements consistent with strategy

Plan and act for sustainable change

Example: Rolled metal manufacture (batch)

Major initiative to remove waste Significant formal education and training Targeted specific product stream From supplier to customer Mapped out processes and established measures

Result Major quality improvements, 60% drop customer complaints Other significant financial benefits

Short / long term EVA moved negative to neutral

(EVA=Economic Value Add -> sustainable investment)

Openness of data systems!

Example: Bottled water (process)

Phase 1 Education and training of teams Use of DTI funding via TCS Programme (tcd.co.uk) Full integration of sales, purchasing, manufacturing Improved management information system (Soft) greater teamwork, responsiveness From 80% to 100% peak season stock cover Sales up 30%, same headcount

Phase 2 (underway) Production processes focus Introducing OEE Focus on waste CI, include quick changeovers Ambitious, achievable targets Self-managed work teams

DEPALLETISER

TOPSTAR/DUBUITT

RINSER

FILLER

CAPPER

LABELLER

OCME (S/wrapper)

HANDLE APPLICATOR

PALLETISER

STRETCHWRAPPER

CASE SEALER

CASE ERECTOR

CASE PACKER

FIL

LIN

G H

ALL

BO

TT

LIN

G H

AL

L

Example: Whisky bottling (process)

Use of OEE as key measure

Specific focus on bottling lines Low OEE

Start / stopBreakdowns

Introduced asset care5S Sort, Straighten, Sweep, Standardise, Self disciplineQuick changeoversReliability centred maintenance

Asset care programme brought £0.5m savings in 6 months

Useful sources of informationwww.competitiveSCOTLAND.com

Seminars, resources & discussion for Scottish manufacturing

Centre for Strategic Manufacturing web site dmem.strath.ac.uk/csm/ (this presentation, resources, lean courses)

James Womack & Daniel Jones, Lean Thinking: Banish Waste and Create Wealth in your Corporation (Simon & Schuster, 1996)

John Bicheno, The Lean Toolbox, 2nd edn (Picsie Books, 2000) http://www.picsie.co.uk/ (£10?)

Peter Hines & David Taylor, Going Lean: a guide to implementation (Lean Enterprise Research Centre, Cardiff Business School, 2000)

Institute of Operations Management (IOM) Papers and courses on Lean, Agile, etc, see iomnet.org.uk Seminars (e.g. Recently: Lean at Boots, 5S at Ratheon)

Pande, Neuman, Cavanagh, R.R. 2000 "The Six Sigma Way”, McGraw-Hill ISBN 0-07-135806-4 (£20) For knowing about it without actually dealing with the detail

Breyfogle 1999 "Implementing Six Sigma - Smarter Solutions Using Statistical Methods" Wiley-Interscience ISBN 0-471-29659-7 (£60) Good for detail if you actually want to implement it

Agile http://www.agility.co.uk/ or internet search for “agile” (care with “agility”!)

LEAN and AGILEapproaches to manufacturing

and process improvement

Dr Peter Ball

Centre for Strategic Manufacturingp.d.ball@strath.ac.uk

        

  

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DMEMDMEM

These slides can be downloaded from:www.dmem.strath.ac.uk/csm/

Rebbit!