wits lean 2015

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  ‘All models are wrong; some models are useful’   (George Box, a likely candidate for the sta>s>cian of the 20th Century.)

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World Class Priorities...

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Lean Operations

Six Sigma

Supply Chain

Lean Thinking Sy

stem

s

Thin

king

5

Process Thinking

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MRP MRPII ERP

TOYOTA LEAN

DEMING TQC TQM SIX SIGMA

TAYLOR MASS BATCH

COLT FORD

TPM

TOC Factory Physics

AGILE Lean Startup

Different Starting Points

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TOYOTA LEAN

DEMING TQC TQM SIX SIGMA

AGILE Lean Startup

TPM

TOC Factory Physics

TAYLOR MASS BATCH

VARIANCE

VOLATILITY

LEAD TIME

AVAILABILITY

BOTTLENECKS

UTILISATION

P. CONTROL MRP MRPII ERP

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  See The Lean Toolbox, Chronology

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Whitney Taylor Gilbreth Ford Ohno Shingo Toyoda

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  1950 to 1975  What was Toyota doing?   Ohno?   Shingo?   (See ‘Art of Lean’ website)   Beware….

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Sea temperature is influenced by currents of the business environment

…

….and by natural laws that cannot be broken

(like Kingman’s equation)

If these change, the

Iceberg melts…

irrespective of tools and

culture!

  The purpose of the Toyota Manufacturing System (or Lean Manufacturing) was defined by Taiichi Ohno (1988) to be ‘. . . looking at the ,meline from the moment the customer gives us an order to the point when we collect the cash. And we are reducing that ,me line by removing the non-‐value-‐added wastes’.

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Order Cash (reduce by removing non-value added wastes)

Toyota Production System Time Line

A modification ? ‘Idea to Cash’

Lean at Wits 12 D.Wayne, 2007. Deming Management Philosophy and so called Six Sigma Quality.

Lean at Wits 13 D.Wayne, 2007. Deming Management Philosophy and so called Six Sigma Quality.

  The ‘Adjacent Possible’ §  Darwin’s Paradox §  Ci>es §  Prin>ng §  Journals and Tim Berners-‐Lee

  Lean futures?

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‘Fortune favours the prepared mind’

‘Adjacent Possible’ is discussed at length in Steven Johnson, Where Good Ideas Come From, Penguin, 2010

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Engines Daimler & Benz

Standardisation of parts

Electric Motors

Job Specialisation

Ford and the Assembly Line

Moving Line and

Disassembly

Juran and Deming Quality and ’94/6’

People

The Loom

Line stop

Small batches Cash

Shortages Toyota Production System

Pull & Kanban

Hawthorne Bicycles and

Roads

Innovation and parts reduction, but then

becoming more rigid

Strikes but leading to teams and job

security

 Who was Malcolm McLean?  Who was Billy Durant?

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William Durant McLean

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18

After Rother and Liker

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  “My favourite word is ‘understanding’”   Don’t use consultants. They will bring old ideas. For breakthrough you need to develop ideas yourself   Humans are addicted to hoarding. This goes back to the security required by ancient man. But it is a habit that must be broken, because excessive inventory is a severe waste   The greatest waste is overproduc>on

Have we forgotten?

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  JIT and automa>on. Both are needed equally. But in the West far more a`en>on has been given to JIT   The two dis>nguishing features of TPS that makes it different from mass produc>on are small lot sizes and levelling the schedule   Standardiza>on should never get in the way of crea>ve thinking

Have we forgotten

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  Sakichi Toyoda as a great inventor. He developed may machines by experimenta>on   There are three levels of schedule. The annual plan, monthly plan, and daily schedule. All must be capable of change if required. But only if there is significant change. Stability is required.   The plant should be like the human body. The nervous system works automa>cally responding to changes in the environment without having to refer to higher level decision making.

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  Excessive informa>on must be suppressed.   Computers are useful and fast calcula>on tools, but should never be allowed to take over decision making from people. Computers generate huge volumes of informa>on, much of it unnecessary for running a plant.   TPS is profit based industrial engineering

?

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  First published in 1859   ‘The spirit of self help is the root of all genuine growth in the individual; and, exhibited in the lives of many, it cons>tutes the true source of na>onal vigor and strength’

  By learning to be more efficient, employees could improve the quality of their own lives and those of co-‐workers. They could also improve the quality of life for the people who used the products they made, which were consequently of more use and value.

  ‘The greatest results in life are usually a`ained by the exercise of ordinary quali>es… they who are the most persistent, and work with the truest spirit, will usually be the most successful.’

  It is the only book on display at Sakichi Toyoda’s birthplace

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Some Chapters   Self Help -‐ many great mean of humble origins, and self

taught   Leaders and inventors -‐ who learned by doing and

observa>on   The Poèrs -‐ searching for the secrets   Applica>on and perseverance -‐ ‘genius is pa>ence’   Helps and opportuni>es -‐ Wa`, Brunel, Newton, Priestly -‐

observing with intelligence (at gemba)   Ar>sts -‐ wealth not the ruling mo>ve   Energy and courage -‐ the force of purpose, and

promp>tude of ac>on -‐ Wellington, Napoleon, Dr Livingstone

  Men of Business -‐ aèn>on to detail, economy of >me, accuracy, punctuality -‐ Wordsworth, Shakespeare, Walter Sco`, Dr Johnson

  Money -‐ living within means, frugality, riches no proof of wealth, independence aàinable

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See also Terence Keely Sex, Science and Profits

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  Specify what creates value from the customers perspec>ve   Iden>fy all steps across the whole value stream  Make those ac>ons that create value flow   Only make what is pulled by the customer just-‐in-‐>me   Strive for perfec,on by con>nually removing successive layers of waste

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0 200 400 600 800

1000

iPad 4 64G US$

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Source: Ma`hias Holweg and 3 Day Car

Lean at Wits 31 Source: Ma`hias Holweg and 3 Day Car

0 10 20 30 40 50 60 70 80 90

100 R

aw M

ater

ial

Bou

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ut P

arts

In-h

ouse

bui

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IP

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IP

Fini

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Com

pone

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Inbo

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On-

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Par

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Vehi

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WIP

Load

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Tran

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Mar

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Cus

tom

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s of

Inve

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Max Average Min

First Tier Suppliers Vehicle

Manufacturers Distribution & Retail Outbound

Logistics Inbound Logistics

  Solve my problem completely   Don’t waste my >me   Get me exactly what I want   Provide value where I want it   Solve my problem when I want   Get me the solu>on I REALLY WANT

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  How do we know what the customer’s real problem is? §  Drills or holes? §  ‘Bed blocking’ §  Customer’s actual >ming requirements or the salesman’s incen>ve?

  Study it, by direct observa>on.   Remember, all Demand is not ‘work’

  Rework and Failure Demand Unidirec>onal flow   Goldra`: Throughput and Herbie…  Manufacturing and Service §  Manufacturing: Internal failure and line stop; external failure? For some other manager. Measures and Accoun>ng

§  Example: OEE : availability or u>liza>on? Quality and capacity

§  Service: External failures felt internally   Seddon and Lean in agreement?

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  Customers and Value §  for Customers and all

Stakeholders §  Benefit / (Costs + Harm); §  Value demand vs Failure

Demand (or Rework)   People §  Deming’s 94 /6 §  Trust §  Mo>va>on and ‘small wins’

§  The brain and thinking. Bias.

  System §  end-‐to-‐end value streams §  holis>c, integrated, with

feedback   Process efficiency

§  Flow efficiency not resource efficiency

§  Con>nuous improvement §  The ‘big five’ opera>ons

concepts §  Timing

  Innova>on §  S curves and the need for

breakthrough

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breakthrough

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  TRIZ is the Russian acronym for Teoriya Resheniya Izobreatatelskikh Zadatch

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Genrich Altshuler 1926-1998

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Exploration

Exploitation

The whats

The hows

Unknown Unknowns?

Known Unknowns?

  Backgrounds:   Increasing risk §  Short termism

•  Discounted cash flow •  Vast R&D investments and risk of failure •  Mashmallow effect

§  Health and Safety and Li>ga>on   Failure of Big (IT) Projects

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Waterfall

IT Design Factory Scheduling People and Motivation Projects

Agile

SCRUM

Stage Gates

Big Transformation

Plans

Kaizen Blitz

Kata

Optimization, OR, LP

MRP, TOC Batches

Kanban Heijunka

Change whole culture

Top down KPI’s

Small wins

CPA, PERT

Last Planner

Simultaneous and

Concurrent Eng

Set Based

Lean Startup

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John Bicheno 2015 41

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breakthrough

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(Lord) William Armstrong Cragside, Northumberland (Later Vickers-Armstrong,

Later BAe systems)

The Accumulator

Efficient Power Collection

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What happens if: You insert a mouse? You insert a burning candle? You insert a mint plant? You insert a burning candle, then later a mint plant, Then after a month, a mouse?

Reference: Steven Johnson, The Invention of Air, Riverhead, 2008

Why do this? What is needed to do this?

What are the implications?

Joseph Priestley

time

performance

Beat competitors with functionality and reliability

Beat competitors with speed, responsiveness and convenience

Following Clayton Christensen ‘The Innovators Solution’ HBS Press, 2003

Products are ‘not good enough’

Products are ‘good enough’

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Time

Customer expecta>ons

  Clayton Christensen video

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breakthrough

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  ‘Ford was both the most brilliant and the most senseless marketer in American history. He was senseless because he refused to give the customer anything but a black car. He was brilliant because he fashioned a production system designed to fit market needs. We habitually celebrate him for the wrong reason: for his production genius. His real genius was marketing. We think he was able to cut his selling price and therefore sell millions of $500 cars because his invention of the assembly line had reduced the costs. Actually, he invented the assembly line because he had concluded that at $500 he could sell millions of cars. Mass production was the result, not the cause, of his low prices.…’

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Theodore Levitt, ‘Marketing Myopia’, Harvard Business Review, July / Aug 1960

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Quality Flexibility Service

Costs Response Times

Variability

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Absent

High Satisfaction

“enragers”

“Delighted”

Neutral

Low Satisfaction

High quality performance

Quality or performance not achieved

“Disgusted”

Fully Implemented

“delighter”

“more is better” “must be”

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1 5

Performance and Cost

Human Fit (Ergonomics)

Craftsmanship

Emotional Appeal

Elegance and Sophistication

Symbolism and Cultural Values

Global Fit (Environment)

From James L Adams, “Good Products, Bad Products”, McGraw Hill, 2012

  The customer, and the supply chain!

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breakthrough

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  Seeking not to be reduc>onist. Wholes not Parts   Understanding about rela>onships and interdependencies   Engaging in mul>ple perspec>ves   Reflec>ng on the boundaries Learning

  (These are closely linked concepts)

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  Purpose   ‘Doing the right thing and doing things right’ (Ackoff)   The Whole greater than the sum of the parts

§  ‘The Systems Approach seeks not be to reduc>onist’ (Checkland)   Interconnec>ons: Silos and Streams   System boundary Subop>misa>on

  Feedback   CATWOE

§  Clients, Actors, Transforma>on, Weltanschauung, Owners, Environment   Vic>ms and Beneficiaries   Viewpoints (Tops, Middles, Bo`oms, Customers)

§  ‘The Systems Approach begins when you first see the world through the eyes of another’ (Churchman)

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Fred Emery Eric Trist

Ackoff Kurt Lewin Tavistock Institute (Univ of London)

Complexity Interaction

‘Systems Thinking’ (1969) Self directed teams Socio Tech Design Open Systems Movement

Job Enrichment Job Enlargement Job Rotation Work Design

Not the technical system alone (like Taylor)

But interactions between Technical systems (plural)

and Social systems (plural)

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£

“What Matters?”

£ If we don’t understand the Customer we are in danger of doing more than is necessary OR assume that things are important that are not (e.g.: Flowers and Chocolate)This costs money.

If we don’t understand the Customer we are likely to not do something, or not do it right resulting in failure demand, rework and complaints. All cost money.

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Treat a special cause as common cause and you will make the system worse Treat a common cause as special cause and you will make the system worse 97% of defects are common cause problems inherent to the system (W. Edwards Deming) Or ‘The righter you do the wrong thing, the wronger you become’ (Russell Ackoff)

Common Causes and Special Causes

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‘Learning to See’ HB as a System

Inspect

Sort Scan Index

Decide

Allocate

Notify

Hand out forms Take in documents

Pay

22%V 78%F

44%V 56%F

34%V 66%F

99% claims ‘dirty’ No case ownership CTax fragmentation

1-10 cycles to clean (ave.4) 95% cases over-specified 20% docs. duplicated

60% errors Rework

Multiple Sorts & Checks Cases fragmented Scanning/Indexing errors

64% passed back Manage queues

Letters unclear

0-152 days to pay 3% visit once

Handoff

HO

HO

HO HO HO

“I want to claim”

Workers’ activity ‘managed’

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External Influences

IT Systems Budgets Policy & Procedure Functional Specialisation Repair request info Budget commitment Cost of works

completed Schedule labour

and material Repair info carried out

W/o completion info. & customer satisfaction

Repair received

Contractor receives job

Operative receives job

Obtain materials Attend repair Works order

processed Invoice received

Invoice paid

Hand off Hand off Hand off Hand off Hand off Hand off Hand off

Order part and re-book

Wrong address

50 - 100 p.a.

Wrong trade

1%

Invoice without V.O.

5 - 10%

No access 15 - 20%

Overbooking 3%

10%

Post inspection Up to 4 week delay

Further works required

20%

Inaccurate contact details

30%

Invoice match fail 1 - 2 p.m.

Lack of time 2%

Wrong office 10% in CS

Wrong or no part 50 - 80%

No w/o issued 2 - 3%

No contact for Cat E 20 - 25%.

V.O. authorisation

30 - 40%

Wrong Contractor

1 - 2%

Not on Contract

20 p.a.

Hold payment as job incomplete

1 - 2%

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Age of Inventory

‘Pressure’ on Capacity

Returns

Bigger Batches

Increased Order Book

Demand for Higher

Utilization

Earlier Orders

Reduced Maintenance

Shortages of some SKU’s

More breakdowns

See ‘Industrial Dynamics’ Forrerster, MIT, 1960’s – 1970’s

Changes to the

Schedule

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breakthrough

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Adjusts Expedites Measures Repairs Sets up

Approves Files Monitors Requests Updates

Assigns Identifies Moves Returns Verifies

Changes Inspects Receives Reviews Waits for

Copies Labels Reconciles Revises

Distributes Maintains Records Selects

William E. Trischler; Understanding and Applying Value-Added Assessment

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 Waste of Human Poten>al   ‘Not bringing your brain to work’

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 Waste of energy and natural resources

  Becoming the most important waste of all?

Hunter Lovins see Hawkin, Lovins, Lovins, Natural Capitalism, Li`le Brown, 1999

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  How many of the wastes are pure waste, and how many are tradeoff wastes?

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‘I spent most of my money on women, booze and gambling….’

…the rest I wasted.

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  Transport   Inventory  Mo>on  Wai>ng   Overproduc>on   Overprocessing   Defects   Employees   Green

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From Lifescan Scotland

  The Seven Green Wastes §  Energy §  Water §  Materials §  Garbage §  Transport §  Emissions §  Biodiversity (impact on surrounding area – wildlife, birds, bugs, plants and trees, water table)

  Do VSMs with the data boxes containing these wastes   Document Input / Output   Set up kaizens and A3’s for countermeasures for each type

Lean at Wits Reference: Brett Wills, Green Intentions, CRC Press, 2010 81

n  Appropriate work shall be specified as to content, sequence, gg, & outcome �  Standardisa>on in detail,

fixing a seat n  Every customer-‐supplier

connec>on must be direct, & there must be one unambiguous way to send requests & receive responses •  Immediate requests for

assistance, solving within takt

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  The pathway for every product & service must be simple & direct •  One specific route means con>nuous experimenta>on

  Any improvement must be made in accordance with the scien>fic method, under the guidance of a teacher, at the lowest possible level in the organisa>on •  Predict & test improvements

Toyota South Africa Story

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  The Management was sa>sfied, even delighted   But Lionel Aldworth was not!   Not so much what was achieved, but HOW it was achieved   Using (mental?) models to surface your knowledge deficiencies   PDCA is Win, Win   Puwng in place a Learning System, not just solving problems, or making ‘savings’   “If you want to understand TPS then you must first understand the scien>fic method and thinking behind the system” (Dr. Shingo)

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  These three steps must go in a circle instead of in a straight line, . . . It may be helpful to think of the three steps in the mass produc,on process as steps in the scien,fic method. In this sense, specifica,on, produc,on, and inspec,on correspond respec,vely to making a hypothesis, carrying out an experiment, and tes,ng the hypothesis. The three steps cons,tute a dynamic scien,fic process of acquiring knowledge

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  Lesson 1: There’s no subs>tute for direct observa>on.   Lesson 2: Proposed changes should always be structured as experiments. Seeking to fully understand the problem and solu>on, even ques>oning if a solu>on is more successful than projected.   Lesson 3: Workers and managers should experiment as frequently as possible. As confidence grows experiments will change from single factor / single machine issues to look at linking processes and sub-‐systems.   Lesson 4: Managers should coach, not fix.

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  The US Nuclear Submarine Propulsion Program and the Soviet Nuclear submarine Fleet   Columbia’s fatal mission   Alcoa

Steven Spear Chasing the Rabbit McGraw Hill, 2009

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  Spear’s 4 Capabili>es 1.  Capturing the best collec>ve knowledge and making problems visible

2.  Building knowledge by swarming and solving problems

3.   Spreading lessons learned to the whole organiza>on 4.   Leading by developing capabili>es 1, 2, and 3 in others.

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•  While doing supplierdevelopment with Toyota early in my research, I was challenged to "stop thinking and start doing." Why? My mentors saw I was trying to solve problems by shear thought. The difficulty was that the whole reason I had the problem in the first place was because I didn't know enough to get something to run well. More thinking trapped me in a loop of not knowing enough but thinking more so not doing anything.

•  The subtle elegance of their approach was that by doing something, even quick, cheap, and non-‐intrusive, I might have that extra cycle of learning to discover the answer.

•  In today's markets, no one knows enough to make great calls consistently. Those who will emerge less scathed are those who recognize that what they currently know is inadequate, so they will start discovering and developing others to discover with relentless ferocity.

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  Kingman’s equa>on   Li`le’s Law   Three Types of Buffer   Inventory – Fill Rate Curve   Pull

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Capacity

Inventory Time

Entities = Entities/Time x Time

Que

ue

Utilization

Inve

ntor

y $

Fill Rate

  The Tortoise and the Hare (Ohno)   Financial games: build up or run down at end of year or month

  KPI >ming   Design: take longer but do be`er?   Orders: End of month hockey s>ck?

  Inventory and Capacity: Chase vs Level

  Delays in communica>on, and mapping

  Religious holidays; industry fairs

  Report when a project is half complete.

  Differences in perceived >me (by situa>on, by customer, by culture)

  Repor>ng periods (too fast or too slow?)

  MRP net change   New Manager?   End of quarter repor>ng?   Car registra>on periods   Is there a ‘first mover advantage’ ?   Necessity: Falklands ships   PARKINSON!

Lean at Wits 91 See Stuart Albert ‘When’ ;and Frank Partnow “Wait’


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Capacity

Inventory Time


Que

ue

Utilization

Inve

ntor

y $

Fill Rate

  ‘Whenever there is varia>on, someone or something will wait’

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Because they affect..   …..   …..   ……

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lead

time

30% Utilisation ρ 100%

Moderate variation

Zero variation

High uncertainty

Some uncertainty

 Muda -‐ waste -‐ non value added  Muri -‐ overburden -‐ pushing a machine, person, or process beyond ‘natural limits’. (See also Factory Physics).  Mura -‐ unevenness – varia>on, non steady flow; interrup>ons, instability, ‘unnatural’ work  Mura and Muri are ozen the cause of Muda

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Muri – South Africa Style ‘Don’t worry, be happy’

Load affects Speed!

L = (C2a + C2e)/2 x (ρ / (1-‐ ρ)) x te + te C2a is arrival variance; C2e is process variance ρ is u>liza>on (load / capacity or arrival rate / service rate)

MURA MURI Ave Process Leadtime

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  The Highway §  What do highway engineers do? §  Op>mal throughput: speed and density

  The importance of rework and failure demand   Sensi>vity: u>liza>on and varia>on. Above and below ρ = 0.5   When is six sigma worthwhile?   Arrivals at bo`leneck   Rework, load, and the Goldra`’s Herbie   CV is standard devia>on / >me: Implica>ons   The order: Muri, Mura, Muda (NOT Muda, Mura, Muri!)

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The broader and deeper meanings behind them are:

Muri -‐ Difficult to Do (See, Hear, Reach, Understand, Teach, Develop, Find, Develop, Manage, etc, etc., etc.), Beyond Current Capacity or Capability, Physical, Mental, Psychological Overburden or Unreasonableness, No Reason or Principle Mura -‐ Fluctua>ons, Varia>on, Interrup>ons, Instability, Inequality or Unnatural work Muda -‐ Non Value Added, Not Needed Organiza>ons that are truly people / par>cipa>on focused will also understand that the order must be Muri, Mura and lastly Muda. First iden>fy and start elimina>ng or reducing the difficult and frustra>ng and you can think about how to get people involved. Some things you may want to also classify as Mura or Muda will also be eliminated. Mura is not about measuring varia>on on graphs, it is about seeing varia>on as it happens. Eliminate or reduce Instability, Unpredictability and Interrup>ons and you also impact the psyche of the Team involved. Muda will also be eliminated. The key skill is not to know specific tools to get rid of the 3 Mu's, but to develop and prac>ce seeing and recognizing them in all or specific parts of processes, systems or organiza>ons.

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From Erik Hager, TPS Network, Linkedin

Parkinson’s Law?

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Capacity

Load

Utilization =

Value Demand

Failure Demand +

Base Capacity Waste -

Arrival Variation

Process Variation

102

Server Customer

System

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Capacity

Arrival Variation

Variation and

Process Variation

Common Cause and

Special Cause

External : Hard To

Control

Internal: May be Easier to Control

104

Utilisation 100%

lead

time

production feasible

not feasible

Traditional Lean (?)

lead

time

Utilisation 100%

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Time

De

ma

nd

A Steady Demand

Time

De

ma

nd

B Seasonal Demand

Time

De

ma

nd

C High Variation Demand

Time

De

ma

nd

D Low Variation Demand

From Kevin Duggan, Creating Mixed Model Value Streams, Productivity, 2002

From Garry Hencher, MSc Dissertation, 2011

Frances Frei, in Harvard Business Review, describes five types of ‘customer-‐introduced variability’:   arrival variability (the >me between arrivals),   request variability (within arrivals),   capability variability (customer skill)   effort variability (how much effort has the customer made – say before airport security)

  ‘subjec>ve preference variability’ (different customer expecta>ons).

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from Frances Frei, ‘The Four Things a Service Business must get right’ Harvard Business Review, April 2008

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Cycle time (days)18161412108642 2826242220 30 38363432

0.02

Den

sitie

s

System 1

0.04

0.06

0.08

0.10

0.12

0.14

0.16

0.18

System 2

Lead Time System 1 = 14 days

Lead Time System 2 = 23 days

Both systems have an average lead time of 10 days But for a 90% service level, System 1 must quote 14 days, System 2 23 days

From Wallace Hopp, Supply Chain Science

  Varia>on is much more important where there is high u>liza>on, but is rela>vely unimportant where there is low u>liza>on. If you are at the low u>liza>on end, Six Sigma projects aimed at varia>on reduc>on could be a waste of >me and money! (But not, of course, is defects are the issue)

  U>liza>on generally has more influence on queues (lead >me) than varia>on. (U>liza>on has geometric influence!)

  Reducing process varia>on is not enough! Arrival varia>on may be more significant

  Never compromise failure demand by a`empts to reduce varia>on.

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  The coefficient of varia>on (C in the formula) is σ / t §  Where σ is the standard devia>on of the process >me §  Where t is the average process >me

  It is not absolute varia>on (σ) that is important, but the ra>o.   So…   Varia>on is much more important in short cycle opera>ons (typically volume manufacturing) than long cycle opera>ons (many types of service and administra>on)

  Where opera>on >mes are long, it is MUCH more important to ‘get it right first >me’ than to focus on reducing varia>on.

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  Constraint iden>fica>on should take both varia>on and u>liza>on into account. §  Red has longer average cycle >me and is therefore likely to be the

constraint, but blue has greater varia>on….   Protec>ng the constraint with a >me buffer is a tradeoff decision

§  If inventory is very expensive, a permanent buffer may not be a great idea

§  Would the loss in throughput compensate for the cost of inventory? §  A buffer is a queue that affects lead >me: is this worth it?

  The resource upstream of the constraint determines the arrival varia>on at the constraint. (See the linking spreadsheet.)

Lean at Wits 111

Cycle time: Which is the Constraint?

  OEE   All factors the same?  MTTR and MTBF

Lean at Wits 112


Lean at Wits 113

Capacity

Inventory Time


Que

ue

Utilization

Inve

ntor

y $

Fill Rate

  ‘It may be li`le but it is the law’ (Wally Hopp)   Robust!   Applies widely §  Inventory and throughput §  Hospitals and health §  Service §  Design §  …

Lean at Wits 114

Lean at Wits 115

Cycle Time = WIP

Throughput

Throughput TH = WIP

Cycle Time

Entities = entities / day x days

WIP = WIP / day x days

(so, patients = patients / day x days )

(so, inventory (e.g. jobs) = jobs / day x days )

OR

OR

Little’s Law is completely general, but •  Applies to the long-term steady-state, average, not to the short term •  The process must be stable (e.g. no ramp up in production rate)

OR weeks = units

units / week

  Consider a single machine over 20 hours, doing 4 jobs: A, B, C, D

  Throughput: 4 jobs in 20 hours; TH=4/20 = 1/5 jobs per hour

  Cycle Hme: A is 4 hours in system; B is 7;C is 8; D is 5; Total 24 hours; average is 24/4 = 6 hrs

  Average WIP = 24/20 = 6/5   LiPle’s Law: WIP = TH x CT or 6/5 = 1/5 x 6

Lean at Wits 116

Job Arrives at (hr) Takes (hrs) A 2 4 B 3 4 C 5 3 D 15 5

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

A A A A B B B B C C C D D D D D

Lean at Wits

  Parcel Co has a throughput of 1400 parcels per day and a lead-‐>me of 34 days. They state that their total WIP across the process is 30k parcels. Is this plausible?   A manager claims that her inventory turns three >mes per year. She also states that everything the company buys gets processed and leaves within six weeks. Is this consistent?

117

Lean at Wits

 WIP = Throughput x Cycle >me = 1400 x 34 = 47600

But they claim WIP is 30 K so it is inconsistent!

118

Lean at Wits

Inventory Turns = Throughput

WIP

3 / year = once every 52 / 3 = 17 weeks Against 6 weeks claimed So, inconsistent!

Another way, by Little’s Law

Cycle time = WIP

Throughput

Cycle time

Throughput

WIP =

1

6 weeks c.f. 3 per year

1

6 c.f. 3 per year

52 per year

119 See ‘Slow’ and ‘W

  Throughput: the rate at which en>>es are processed e.g. pa>ents / day   WIP: the number of en>>es in the system e.g. pa>ents   Cycle >me: average >me taken end-‐to-‐end, including rework e.g. days   (Hence en>>es = en>>es per >me x >me)   (e.g.400 pa>ents in a hospital = 40 discharged per day x 10 day stay)   Capacity = base capacity – detractors (or as Ohno said, (actual) work + waste)   U>liza>on = rate / capacity ( or load / capacity)

Lean at Wits 120


Lean at Wits 121

Capacity

Inventory Time


Que

ue

Utilization

Inve

ntor

y $

Fill Rate

Lean at Wits

Capacity

Inventory

Variation Is

Buffered by

Time

Capacity

or

or And in no other way

122


Lean at Wits 123

Capacity

Inventory Time


Que

ue

Utilization

Inve

ntor

y $

Fill Rate


Lean at Wits 124

Capacity

Inventory Time


Que

ue

Utilization

Inve

ntor

y $

Fill Rate

  Is not just Kanban   ‘A pull system is one in which work is released based on the status of the system and thereby places an inherent limit on WIP’ (Hopp and Spearman)   Mul>-‐stage pull (DBR, CONWIP)   Does not have to be linked with the customer (Note Womack and Jones wrong interpreta>on?)   The Lean Startup (Eric Reis)   Lean Design   Pulling in Labour as needed (Tesco)   Pulling in manager help (Andon, Seddon)   Training as needed (TWI)

Lean at Wits 125

5 S

As much to do with the mind as with the physical situaHon

Lean at Wits 126

TWI is a System!

JI

JR

JM

JS

Lean at Wits 127

Quotes

  ‘To my amazement, the program that Toyota was going to great expense to transfer to NUMMI, was exactly that which the Americans had taught the Japanese decades before’ (Shook)   ‘You will not become Lean by doing TWI, but you will not become Lean without doing TWI’ (Huntzinger)

Quoted in Jim Huntzinger,’TWI Case Study: Ohno’s Vehicle to TPS’, TWI Summit, 2008

Lean at Wits 128

Jim Huntzinger – The Roots of Lean

Lean at Wits 129

Job Breakdown   A key tool used for this is the job breakdown sheet (refer to Figure). Not to be confused with a standard

work combinaHon sheet that focus on labour allocaHon, sequencing & balancing tasks, a job breakdown sheet is a training aid that ensures the criHcal knowledge of a job is transferred to the trainee creaHng a stable repeatable outcome.

Percentage of total work

Importance Effect on work

15-20% Critical Š work must be highly consistent.

Definite effect on the results if performed out of range.

60% Important Š work must be consistent within a slightly wider range

Probable effect on results if performed out of range.

20% Low Importance Š work method may be variable

Not likely to affect results regardless of method.

After Liker & Meier, Toyota Talent, 2007, p 144

Lean at Wits 130

Comparing Approaches

Step Charles

Allen Scientific Method

Shewart Or

Deming Kaizen Job

Instruction Job

Method Job

Relations

1 Prepare Observation

& Description

Plan Observe &

time the process

Prepare Breakdown Get the facts

2 Present Formulation

& Hypothesis

Do Analyse

the current process

Present Question Weigh & Decide

3 Application Use

Hypothesis to Predict

Check Or Study

Implement ant test the

new process

Try out Develop Take action

4 Testing

Test Prediction

by Experiment

Act Document

the new standard

Follow up Apply Check

results

TWI

Adapted from Huntzinger, 2006 Lean at Wits 131

Lean at Wits 132 From Suzanne Nuttall, MSc Dissertation 2011 / 2012

TWI Effectiveness (from Dinero, p4-5)

Lean at Wits 133

Lean at Wits

Standards and SOPS

134

Lean at Wits

Standards

“To standardise a method is to choose out of many methods the best one, and use it. What is the best way to do a thing? It is the sum of all the good ways we have discovered up to the present. It, therefore becomes the standard. Today’s standardisaHon is the necessary foundaHon on which tomorrow’s improvement will be based. If you think of ‘standardisaHon as the best we know today, but which is to be improved tomorrow -‐ you get somewhere. But if you think of standards as confining, then progress stops.” Henry Ford, Today and Tomorrow, 1926

135

Lean at Wits

Standards - another quote

“In a Western company the standard operaHon is the property of management or the engineering department. In a Japanese company it is the property of the people doing the job. They prepare it, work to it, and are responsible for improving it. Contrary to Taylor’s teaching, the Japanese combine thinking and doing, and thus achieve a high level of involvement and commitment.” Peter Wickens, 1995

136

… & from Ohno

“A proper (standard) procedure cannot be wriPen from a desk. It must be tried & revised many Hmes in the producHon plant. Furthermore, it must be a procedure that anybody can understand on sight For producHon people to be able to write a standard work sheet that others can understand, they must be convinced of its importance.”

137 Lean at Wits

Standard Work & Work Standards

  Standard Work relies mostly on the efforts of shop floor teams to develop standards.

 Work Standards are developed by staff specialists & engineers -‐ usually with no involvement from the shop floor -‐ & are imposed standards.

138 Lean at Wits

Lean at Wits

Purpose of a Standard

 Make it easier for people to do a job   Avoid known pikalls   Assure safe operaHons  Make it easier to teach new employees  Make it easier to track down the cause of a problem   Reduce unnecessary variaHon

139

Lean at Wits

Standardisation and Management

Top

Middle

Supervisor

Operator

140

Lean at Wits

Standardised Work Procedure

  Is not a set of rules   Should not be confused with safety standards, health standards, BS, etc.   Is not fixed in stone

But   Is the current best known way to do a job safely and easily   It documents know-‐how   Allows measurement and improvement  WriPen by operators for operators

141

Lean at Wits

Standards: Characteristics

  Use verb plus noun -‐ or picture   One moHon, one step   Kept at the point of use   Comparing actual to standard uncovers waste or problems; a problem is a deviaHon from standard   If there are no changes to SOPs there has been no improvement

142

Misunderstanding Standards

Lean at Wits

From Mike Rother

143

Holding the Gains?

Lean at Wits 144

Lean at Wits

Examples of Standards

  FootprinHng   Painted levels of min & max inventory   Sample board   SOP (3 types -‐ see later)   One-‐point lessons   ProducHon control board   Checklist   Equipment operaHon

145

Lean at Wits

Managerial Standards

  AdministraHve rules   Personnel guidelines   Budgets   Delivery schedules   Project plans

  Equipment checks   Quality assurance (ISO 9000)   Reference samples   Safety instrucHons

Window Analysis

Party X

Party Y

Known

Practised Un-Practised Unknown

Kno

wn

Unk

now

n Pr

actis

ed

Un-

Prac

tised

147 Lean at Wits

Visuality: How Visual Can Change Behaviour (1)

Lean at Wits 148

What do you see? How does this change behaviour for Students, bus driver, car drivers?

Visuality: How Visual Can Change Behaviour (2)

Lean at Wits 149

Stage 1

Stage 2

Stage 3 What does this do to reduce waste?

Visuality

Lean at Wits 150

Visuality: A vital part of Lean!   5S   Schedule   TPM   Leader Standard Work   Inventory   Defects   B/neck status   Ideas   ….

Lean at Wits 151

Not just information But What behaviours would you like to change?

Exercise:

Careful….

Lean at Wits 152

Visual Management

Lean at Wits 153

Viagra HQ

Mapping

Lean at Wits 154

Five Stage Mapping

1.  Top Level Preliminary Analysis and PrioriHzaHon 2.  High level Current State Value Stream Analysis 3.  Future State: Layout and Detailed Scheduling 4.  ExecuHon and Control 5.  ImplementaHon of the ‘AcHon Plan’

•  For ‘first Hme around’, go straight to Step 2

Lean at Wits 155

1.   The opera>ons sequence, 2.   Informa>on flows 3.   Physical flows and layout (Spaghew) 4.   A financial map 5.   A map of zones of responsibility 6.   Time line, Pareto and postponement 7.   Inventory investment and Fill rate curve 8.   Demand profile: repea>ng, non repea>ng, plateaus 9.   Amplifica>on Map 10.   Demand Categories 11.   Part and Component Usage.

Lean at Wits 156

Lean at Wits 157

Basic Mapping Tools (1)

Lean at Wits

Blank

Pres

s

Pres

s

Pres

s

Welding

Store

SPAGHETTI DIAGRAM

Supplier

BLANK

I C/T = 3 sec

C/O = 15min 2 shifts

1% scrap

PRESS SHIP

I

Customer

C/T = 10 sec C/O = 30min

3 shifts 2% scrap

C/T = 2 sec C/O = nil

1 shift 0% scrap

500 parts 1 day

1000 parts 2 days

PRODN CONTROL

MRP

WEEKLY DAILY Daily Schedules Weekly Schedule

Monthly orders

Forecast

Daily Call

LEARNING TO SEE: CURRENT STATE PROCESS STEPS

INFORMATION FLOWS

158

Basic Mapping Tools (2)

Lean at Wits

Qua

ntity

Time (days)

Steel delivery

press

assby orders

AMPLIFICATION MAP

159

Inve

ntor

y $

Fill Rate INVENTORY INVESTMENT /

FILL RATE CURVE

Supplier 1

Production Control MPS - MRP

£10K

Daily requirements

Daily Production Schedules

£12k/day

Supplier 2

Customer

Press Assemble 2 Assemble 1 Weld 2 Weld 1 Ship

W/house

£16K £40k £30K £15k £70k

Daily requirements

Daily requirements

Daily Shipments £35k

£105k

£95k



£8k/day £7k/day £4k/day £4k/day

WIP: 32 days RM: 16 days FGI: 8 days Credit granted: 30 days

Operation financing: 28 days Payment terms - 30 days

Manager Responsibility

Zones

Value Stream Financing

Lean at Wits 160

Mapping and Transformation   Stage 1 (Top Level A3)(‘Value Streams’ not decided as yet)

•  ContribuHon analysis •  Demand profile – repeaHng and non-‐repeaHng orders •  Demand profile – arrival variaHon •  Demand plateaus •  Target uHlizaHon policy •  Shipment frequency and aPainment •  LiPle’s Law for overall lead Hme •  Delivery achievement •  Outline physical process map •  AmplificaHon Map •  Inventory Investment and Fill rate curve •  Supply chain analysis? •  People Issues? •  Priori>es?

Lean at Wits 161

Mapping and Transformation (2)

  Stage 2 (Level 2 A3) •  Break down into value streams •  Map the current state : Sequence •  Map the current state: InformaHon •  Map the current state: Physical layout and spagheu •  Map the current state: Financial •  Map the current state: Zones of responsibility •  Lead Hme: Time line, Pareto, Postponement •  Buffers and Scheduling Points •  Priori>es?

Lean at Wits 162

Mapping and Transformation (3a)

Æ Waste ReducHon •  7 Classic wastes •  Changeover reducHon •  Ergonomics •  Visuality

Æ Layout •  CreaHvity and the physical process

Lean at Wits 163

Stage 3: Future State: Layout and Detailed Scheduling

Waste Reduction and Layout

Layout Opportunities for Future State?

  Change the sequence?   Choose the right duraHons for each step – slower or faster?   Create a new sequence to minimise risk or maximise flexibility – a parallel line ? redundancy?   Change the locaHon – of a machine, a sequence, a supermarket, a facility ?   Skip a step or join two steps ?   Giving customers choice – discounts for early orders, or regular orders, or standard products?

Lean at Wits Adapted from Stuart Albert, ‘When’, Jossey Bass, 2013 164

Mapping and Transformation (3b)

Æ Batch sizing and Resource Scheduling •  Batch sizing •  Constraints and buffer locaHons

•  Supermarket sizing •  EPEI calculaHons •  Pull and scheduling system to be used

Æ Value Streams •  Buffer sizing for make to order and to stock

•  Takt and cycle Hmes •  Mixed model schedules •  CONWIP and kanban loops •  Supermarket sizing •  EPEI calculaHons •  Line balance

Lean at Wits 165


Scheduling

plus, Linking the Loops and the Pacemaker

Mapping and Transformation (3c)

Æ Skill shorkalls? Æ Alignment between value streams and organisaHon structure

Æ KPI’s Æ Role of managers?

•  Inventory reducHon impact?

•  Cash flow? •  Standard cosHng? •  Plain English accounts?

Lean at Wits 166


The Future Organisation. The Financials


  Stage 4 : ExecuHon and Control •  Visual management •  CommunicaHons board design •  KPI’s •  Day by hour schedules •  Day by hour problem highlight •  Feedback

Lean at Wits 167


  ImplementaHon Plan: Internal   ImplementaHon Plan: External

Lean at Wits 168

Mapping and Transformation

Lean at Wits 169

A Different sort of Value Stream Map

Lean at Wits 170

Top Level Scheduling 1

Lean at Wits 171

Moments of Truth:

SAB Miller India

Lean at Wits 172

Defects and Problems

Lean at Wits

Variation Mistakes Complexity

Man Machine Material Method Information

Individual differences; motivation

Wrong Instructions;

Misreads

Verbose; Interpretation

Wrong method

Execution methods

Gage Accuracy

Material variation

Difficult method

Difficult to work

or assemble

Wrong material or part

Difficult setup

Incorrect Setup;

Software errors

Tool wear; Vibration

Omission; Dropped

parts

Training Experience

173

Toyota Kata

 What is a Kata?   How does this relate to the Human brain?  What is a ‘Target CondiHon’?  What is not a ‘Target CondiHon’?  What do we assume about geung to the target condiHon?

Lean at Wits 174

Kata from Rother

Not   Daily management + improvement   But   Daily management = improvement

Target and Target CondiHon   Target is an outcome   Target condiHon is a descripHon of a process operaHng in a way required to achieve the outcome

Lean at Wits 175

Kata: The Five Questions

1.  What is the target condiHon? 2.  What is the actual condiHon now? 3.  What obstacles are prevenHng us from reaching the

target condiHon? 4.  What is the next step?

•  And, how can we test this step or idea as quickly as possible? An experiment?

5.  When can we go see what we have learned in taking the step?

•  Reflect on what actually happened

Lean at Wits 176

Target Condition   Without a target condiHon we could have lots of ideas:

•  Reduce setup Hme… •  Introduce kanban… •  Set up a cell…

  A target condiHon could be ‘what is prevenHng us from a MTTR less than 5 minutes?’. This could lead to the next acHon e.g. ‘improve signaling system’   A target condiHon should not be too trivial or too difficult   Note the similariHes with Maurer, Amabile, Expectancy Theory   Then another small step. RepeHHon. Coaching   So moHvaHon! (and Tools are used to develop people!)

Lean at Wits 177

A long list! As from a VSM But what to do first?

Confusing? Demotivating?

From Mike Rother, Toyota Kata, McGraw Hill, 2010

Two Types of Kata: (1) Improvement

•  Establish the target condiHon (note: ‘a target is an outcome; a target condiHon is a descripHon of a process operaHng in a way required to achieve the desired outcome’)

•  Without a target condiHon: ‘we could reduce setup Hme, start %s, apply kanban,…’ •  With a target condiHon: ‘What is prevenHng us from compleHng a part every 2 minutes?’

  The NEXT target condiHon. Step by step. Not the final (see next slide)

•  Examples of NOT a target condiHon ‘implement’ (vague),’apply’ (countermeasure), ‘minimise’ (vague, must be related to a point in Hme),’ reduce’ (an outcome)

  It is PDCA; rapid experimentaHon, not the workers fault.   The Five QuesHons

•  What is the target condiHon? •  What is the actual condiHon now? •  What obstacles are prevenHng you from reaching the target condiHon? •  What is your next step? •  When can we go see what you have learned from taking the step?

Lean at Wits 178

See Mike Rother, Toyota Kata, McGraw Hill

The problem path

Lean at Wits

The Current

Condition The

Target Condition

The next step

The way through the grey zone is unclear; but get started, don’t debate The torch analogy (You can only see so far) The Heuristic (Keep climbing) Predict and Lean (like PDSA and Steve Spear) Establish the small next step (not threatening); not the ideal (too difficult!)

179

Tools and Kata

Not   ‘I have a toolbox so let me look for areas where I can apply them’ or ‘I know about 5S so let us apply that’

But   ‘I have a target condiHon, so let me find an appropriate tool to use’

So   (For me) not a quesHon of ‘Toolheads’ or not, but how tools are selected and used

Lean at Wits 180

Two Types of Kata: (2) Coaching Kata

  Philosophy •  If a problem occurs, Do it now! (Why?) •  Who should learn and follow up ? (The team leader, not the worker who

does not have the Hme; so smaller span)   The mentor, mentee dialog   A3 problem solving

•  ‘if the worker hasn’t learned the instructor hasn’t taught’ •  ‘it takes two to A3’ •  Toyota 8 step methodology: a way to focus and clarify the specific (small)

problem – by dialog •  Define, break down into chunks, i/d root cause, set next target, select soluHon from

several alternaHves, implement, check, adjust and standardise •  Go and see together (not report back); show me •  Focus on understanding, not the countermeasure •  Focus on the process, not the people •  Fact based, test and see

Lean at Wits 181 See Mike Rother, Toyota Kata, McGraw Hill

Learner or Knower?

Lean at Wits 182

From Flinchbaugh (2013)

After Action Reviews   US Army   Do it immediately, every Hme; NOT an evaluaHon or a criHque!   The four steps are:

1.  ObjecHve. What did we set out to do? (What was planned?) 2.  Reality: What actually happened? (Note: this is not judgmental or

an evaluaHon. It is simply the facts about what happened at each stage of the game or project.)

3.  Learning: Why did it happen that way? What went right and wrong. What did not meet expectaHons. What went well? Again, sHck to the facts. It should not be personal. No blame. This is a learning step so ask what caused the results to turn out the way they did.

4.  Next Hme. What should be changed next Hme: planning, processes, behaviours. What should be kept

  Senge on why this is the best, but o}en fails

Lean at Wits 183 See detailed description in David Garvin, Leaning in Action, HBS Press, 1999, pp 106-116

A3 Problem Solving

Issue

Background

Problem Analysis

Current Condition

Why? Cost

Why?

Why?

what who when outcome

Countermeasures

Implementation Plan

Target Condition

Cost / Benefit Test

To customer To organization

Follow up

Stamps

184 Lean at Wits

A3 Problem Solving (this is PDCA!)

Issue

Background

Problem Analysis

Current Condition

Why? Cost

Why?

Why?

what who when predicted outcome

Countermeasures

Implementation Plan

Target Condition

Cost / Benefit Test

To customer To organization

Follow up

Stamps

Through the eyes of the customer

Sketch or Current state

VSM

Run diagram, Fishbone,

5 why

Sketch or Future state

VSM

Study cost, Implementation cost Note both

All who have seen

Now; Soon

How to move towards The ideal state

185 Lean at Wits

186 Lean at Wits

Lean at Wits 187

A3 and ‘Rapid Response’ at Lifescan, Scotland

Lean at Wits 188

Improvement Types

Lean at Wits 189

Standardisation and Management

Lean at Wits

Top

Middle

Supervisor

Operator

Point Kaizen means establishing new standards

190

Kaizen: One Small Step at a Time :Why?

Lean at Wits 191

Kaizen: One Small Step at a Time :Why?

  Non threatening   Immediate   Leads to habit   Builds confidence   Linked with ritual   Empowers staff   Less fear of failure   Reduce stress (‘How do you eat an elephant?)   Encourages experimentaHon (The drunk, his lost item, and the streetlamp)

Lean at Wits 192

Kaizen, Small Steps and the Brain

Lean at Wits

Large Goal > fear > access to cortex restricted > failure

Small Goal > fear bypassed > cortex engaged > success

Three Stages of brain

Reference: Robert Maurer, One Small Step Can Change Your Life: The Kaizen Way, Workman, 2004

193

Small Steps: Maurer Suggests   Ask liPle quesHons   Set small goals (‘Take one less bite at the chocolate; Not 5S but one minute per day to Hdy)   Solve small problems   Learn to see small opportuniHes and rouHne (What colour car is parked..)   An org structure that makes small ideas easy to implement   Learn to anHcipate (Deming, Spear)   Break down big problems into small ones   Small ideas repeated have bePer retenHon (Think exams!)   Don’t keep problems to yourself. Encourage discussion

Lean at Wits Reference: Robert Maurer, One Small Step Can Change Your Life: The Kaizen Way, Workman, 2004 194

Rewards and Small Steps

 Why are suggesHon schemes, in general   A failure in the West?   A success in Japan?

Lean at Wits 195

Pokayoke

  For Six Sigma perfecHon, standards and SPC may not be enough   You can have high process capability, but sHll fail due to mistakes

hence   100% automaHc inspecHon together with warning or stop

Lean at Wits 196

Absolutely Excellent Web Site on Pokayoke!

Lean at Wits

http://www.campbell.berry.edu/faculty/jgrout/pokayoke.shtml

197

Everyday Pokayokes

Lean at Wits 198

Suggest a Pokayoke

Lean at Wits

Truck jammed Smoke detector that Is not working

199

Implementing Pokayoke

Lean at Wits

Simplify Mistake- Proof Convert adjustment to settings Control Variation

Product Process Tools & Equipt

1 2 3

Fixture setup

Use repair

Assmby simplif

Product simplif

Process flow

Process exec

Process control

SPC Six Sigma

Simple equipmt

Mistake proof equipment

“The priority in applying quality paradigms should proceed from top to bottom and right to left in the order shown” Martin Hinckley Make No Mistake! Productivity, 2001

200

Another pokayoke…

These men have just finished installing poles to prevent cars parking on the sidewalk

Lean at Wits 201

Why are Manhole Covers round?

202 Lean at Wits

….and Checklists

  Boeing B17   TWI

Lean at Wits 203

Checklists

Lean at Wits 204

Pokayoke Methods and Examples

Lean at Wits

Contact Fixed Value Motion Step

Control Warning

Parking height bars Armrests on seats

Staff mirrors Shop entrance bell

French fry scoop Pre-dosed medication

Trays with indentations

Airline lavatory doors Spellcheckers Beepers on ATMs

from : Richard Chase and Douglas Stewart, Mistake Proofing Based on Shigeo Shingo

205

Pokayoke Cycles

  “LiPle pokayoke” •  Immediate detecHon and stop or warning •  Short term prevenHon

  “Big pokayoke” •  Geung a}er the root cause of the problem •  Long term prevenHon and problem solving •  Accumulate the evidence

Lean at Wits

PDC

A

P

DC

A

206

Pokayoke References

  Shigeo Shingo, Zero Quality Control: Source InspecAon and the Pokayoke System, ProducHvity, 1983 Nikkan Kogyo (ed), Poke-‐Yoke, ProducHvity, 1989  Web site by John Grout (excellent)

•  See Quality 75   C. MarHn Hinckley, Make No Mistake!, ProducHvity, 2001

Lean at Wits 207

Ideas?

Lean at Wits 208

Your Experience?

Idea Management..

Lean at Wits 209

Ideas are evaluated by shop floor operators across all 3 shifts

Lifescan, Scotland

Idea Management..

Lean at Wits 210

Lifescan, Scotland

Idea Management..

Lean at Wits 211

Implemented ideas. (Now shown on Touchscreen TV)

Lifescan, Scotland

TPM

Lean at Wits 212

  Nothing said about schedule a`ainment   Changeover!   Cost factors

§  Reducing OEE (& esp changeover at great cost may not be worthwhile §  OEE is in terms of >me, not cost -‐ for example, quality may be minor wrt

OEE, but a major cost

  Do not measure OEE plant wide   Use a control chart, for common & special causes   A boast like ‘we have improved OEE by 20%’ should be treated with cau>on §  Overproducing? Bo`leneck? Appropriate? Bigger batches?

Lean at Wits 213

 OEE is best used for shop floor problem iden>fica>on, but less good when used as a top-‐down imposed measure  No such thing as world-‐class OEE -‐ depends on industry (in process industry 85% is poor)  Loca>on of the bo`leneck -‐ downstream more cri>cal because higher part value   Is .9 x .7 x .9 same as .7 x .9 x .9 ? (depends on policy advantage)

Lean at Wits 214

Lean at Wits

OEE

Quality

Speed

Availability

=

X

X

215

Lean at Wits

OEE

Quality

Speed

Availability

=

X

X

Utilization

216

Lean at Wits

OEE

Quality

Speed

Availability

=

X

X

MTBF

MTTR + MTBF

=

217

Machine MTTF (hr) MTTR (hr) Defect % OEE %

1 90 10 10 81%

2 9 1 10 81%

3 85 15 5 81%

4 8.5 1.5 5 81%

Lean at Wits 218

Lean at Wits

OEE

Quality

Speed

Availability

=

X

X

Productivity

219

  Case A: Quality = 80%; availability and speed both 100%   Case B: Availability is 80%; quality and speed both 100%   OEE is the same in both cases: 80%   Output is the same in both cases: 80% of poten>al   BUT   Inputs (e.g. Raw Material) is different   So, Produc>vity (Output / Input) is different!

Lean at Wits 220

Lean at Wits 221

After Teresa Hayes MSc Lean, 2013

Lean at Wits 222

Lean Layout

Lean at Wits 223

224 Lean at Wits

PRODUCT LAYOUT PROCESS LAYOUT

1 DescripHon SequenHal arrangement of machines

FuncHonal grouping of machines

2 Type of Process ConHnuous, mass producHon mainly assembly

IntermiPent, job shop batch producHon, mainly fabricaHon

3 Product Standardized made to stock

Varied made to order

4 Demand Stable FluctuaHng

5 Volume High Low

6 Equipment Special purpose General purpose

7 Workers Limited skills Varied skills

225 Lean at Wits

PRODUCT LAYOUT PROCESS LAYOUT

8 Inventory Low in-‐process high finished goods

High in-‐process low finished goods

9 Storage space Small Large

10 Material handling Fixed path (conveyor) Variable path (forkli})

11 Aisles Narrow Wide

12 Scheduling Part of balancing Dynamic

13 Layout decision Line balancing Machine locaHon

14 Goal Equalize work at each staHon Minimize material handling cost

15 Advantage Efficiency Flexibility

Proc

ess

project job shop batch cell line flow

one off low repetitive high continuous volume volume flow

226 Lean at Wits

Proc

ess


APS + Lean

Lean + MRP?

Lean

LP/MP

CPA+ Lean project job shop cell line flow

227 Lean at Wits

Process

project job shop cell line flow


Professional Services

(a la carte, corporate lending)

Service Shops

(Pizza Hut, Personal banking)

Mass Services

(McD, Subway, ATMs)

228 Lean at Wits

cost demands Process

variety demands

cost demands

market demands


project job shop cell line flow

229 Lean at Wits

 Loca>on  Plant Layout  Cell Layout  Worksta>on Layout

230 Lean at Wits


231 Lean at Wits

  The very big picture  Map the external flows   Focus §  The Great Nuclear Fizzle at old B&W

232 Lean at Wits

  To support an organisa>on’s vision   Safety, comfort, convenience and job sa>sfac>on for employees   Effec>ve u>lisa>on of equipment and resources to facilitate the manufacturing process   Flexibility of opera>on and ease of maintenance  Minimising capital expenditure & maximising ROI  Minimise material handling and make economical use of the building/site space

(Adapted from Apple 1977 and Tompkins et al. 1996)

Lean at Wits 233

1.   Changes in the design of exis>ng product, the elimina>on of products from the product line, and the introduc>on of new products.

2.   Changes in the processing sequences for exis>ng products, replacements of exis>ng processing equipment, and changes in the use of general-‐purpose and special-‐purpose equipment.

3.   Changes in produc>on quan>>es and associated produc>on schedules, resul>ng in the need for capacity changes.

4.   Changes in the organiza>onal structure as well as changes in management philosophies concerning produc>on strategies...”

(Tompkins et al 1996, p. 307) Uniq Evercreech current reality

  Material   Machinery   Man   Movement   Wai>ng   Service   Buildings   Change

(Taken from Muther 1955)

“The need for a facility layout study can arise under a variety of circumstances...

The 8 factors that influence layout:

Lean at Wits 234

  The General Hospital   Vs   Sholdice Hospital, Toronto

235 Lean at Wits

100%

Contribution

Ranked Products

Invest ? Provided they

are future products

Reorganise ? Go Lean !!!

Cut ?

But how similar is this profile to the next….

236 Lean at Wits

Lean at Wits 237

Ranked contribution

per bottleneck

minute

Ranked Products

You don’t want to be making products which make low

contribution, and which tie up precious bottleneck capacity!

Note these!


238 Lean at Wits

  Richard Muther began to develop the SLP process in the 1950’s; it has con>nued to evolve and can be found as the base framework for many other layout approaches (e.g. Moore 1962, Apple 1977, Tompkins et al. 1996, )

  SLP is a ‘scien>fic’ approach to layout and involves: §  A clear statement of the problem or

task §  Facts that can be measured §  Restatement or reclarifica>on of the

task in light of the facts §  An objec>ve analysis, leading to a

decision §  Ac,on for approval and installa>on §  Follow-‐up or check

(Muther 1955, p. 143)

Background Systema>c Layout Planning Pa`ern*

Lean at Wits 239

Uniq Evercreech is to receive an addi>onal 35 Sku’s during 2012 as its M&S desserts business is transferred from its Shropshire site; Evercreech has an integrated Manufacturing, Innova>on and People strategy, which it aims to deliver between 2010 and 2013 – these involve an innova>on-‐led, flexible opera>on with engaged people as its key lever to drive change;

  The acquisi>on of Uniq by Greencore in 2011 has led to an increased focus on results delivery as well as the approval of capex to make building changes.

Richard Muther & Associates 2005

Lean at Wits 240

  Rule of thumb: §  Maximum area -‐ around 200,000 square z; 20,000 sq m §  Maximum people -‐ 500 §  Maximum SKU’s -‐ 2,000 §  For fab / assembly -‐ cut all numbers by 4 (except steel, auto, etc.)

  Why ? §  Internal flows become too complex §  Access to central areas -‐ even with mul> docks §  People cease to feel like a family §  Loss of focus §  Management structures too complex, too remote §  Examples: Nypro, 3M, HP, Solectron, Celes>ca -‐ Telford, mi`lestand

Lean at Wits 241

After Richard Schonberger, Let’s Fix It!

  Shape §  Rectangular 60:40 offers many op>ons §  Long and narrow, very few op>ons §  Square may not offer enough side-‐to-‐side distances for some, too much for others

  Flow Pa`erns

After Richard Schonberger

Good Less Good

242 Lean at Wits

  Not end-‐to-‐end, but mul>-‐dock around the outside   For flexibility   Dell demolishing a two year old plant to create mul>-‐access. 50% of outside walls are receiving and shipping docks -‐ for 5 inventory turns a day – §  (Tom Peters, AME, 2001) and Ford, Wixom MI (one of the most profitable in world)

Lean at Wits 243

After Richard Schonberger, Let’s Fix It!

  Collect the opinions of the par>cipants   Summarise onto the REL chart using AEIOUX   Ac>vity Arrangement diagram -‐ eyeball method   Space rela>onship diagram -‐ fiwng the rela>ve loca>ons into the available space   Physical model and discussion

Lean at Wits 244

  A Absolutely necessary   E Essen>al   I Important   O Ordinary   U Unimportant   X Must not be located together

 Make the diagram cooler!

245 Lean at Wits

Production

Offices

Stockroom

Shipping and Receiving

Locker Room

Toolroom

A A

A O

O

OO

O

U

U U

U

E X

I

246 Lean at Wits

247 Lean at Wits

248 Lean at Wits

Format taken from Richard Muther & Associates . Colour Key taken from A. G. Raymond & Company.

RELATIONSHIP CHART Plant (Company)

Charted by

Date

Reference

Uniq Evercreech (Greencore)

Carolyn Hobdey

Jan-12

SLP_CH_2012

With

Project

n/a

Site Layout: Module 3

Sheet of 11

111 Offices (inc. HR & Finance)

1CLOSENESS No. of

Ratings1 Value1 Offices (inc. HR & Finance) 2

1CLOSENESS No. of


ECLOSENESS No. of


3ECLOSENESS

A

No. of Ratings

14

1

2

Value1

2

Offices (inc. HR & Finance)

Planning, Purchasing & Technical Offices

35EU A 1422 Planning, Purchasing &

Technical Offices

34

5 U A 1422 Planning, Purchasing & Technical Offices I

4_O

5 U

E

A 14

8

22 Planning, Purchasing & Technical Offices I

4_O 5 E 8

2

3

2

3

Planning, Purchasing & Technical Offices

Changing Rooms A 2I_

6O

6I5

ImportantI

E 83

133 Changing Rooms A

62

7E

6

A6I

2 I Important

O

I

22

133

4

Changing Rooms

Business Unit 'A' Production

61A

78

EA6

2 I2A I

O 224 Business Unit 'A' Production1A 8

9

6

UAA

2A6 A6

I5 O

U

22

9 Unimportant

4

5

Business Unit 'A' Production

Warehouse & Distribution9

10IU

E 6A6

A_

6 A6

I15

I

X

U 9 Unimportant

0Not desirable

5 Warehouse & Distribution 10IO5

11E 6

O

6

A

_

E6I2

1

AI1

X 0Not desirable

5

6

Warehouse & Distribution

Business Unit 'B' Production

O511

124 EA O

OA1 4

E2

62

I1A 1

U X 0

66

Not desirable

Total = =56 Business Unit 'B' Production

1312

U

4 EAI

O41

1

E E

4

U

2I2

1

AU_

66Total = =5

Dairy

6

7

Business Unit 'B' Production

1314

U_UO

I_

41

O2 21E E U

IA

2A1

_

15Dairy7 14

_UO2 O _

_O2 2

OI

1

AI4U 1

A14

16Packaging Store15

Dairy

8

7

22 O _

44OI

OA

I

4

O3U_

1

O

4

1617

Packaging Store8 22

IO 444O

4I O3

O3_

OO

1718

Packaging Store

Innovation Centre

8

9 O

2 IO 434

4 O4

3

AO4 O 18Innovation Centre9 O 34

O 44A

3 O

4

O 4O 18

19Innovation Centre9

O 43 OO 419

Innovation Centre

Rest Room/Canteen

9

103 O 4O 4

43 OO 4

E 2019

Rest Room/Canteen103 O 44 E

1

20Rest Room/Canteen

Engineering Department

10

11

U_

3 O4

44

4O

E2

U 12

Engineering Department11_4

OU_ 2

3

Engineering Department

Main Parking Area

11

12

O4

_

34

Main Parking Area124

45

Main Parking Area12

13 56

136

714

13

78

148

9

14

15 910

15

Code REASON

1011

15

16 Code REASON1 Flow of material

1112

161 Flow of material

2 Management communication

1216

17 13 2 Management communication

3 Internal service delivery1417 13

3 Internal service delivery

4 Convenience

1415

17

18 4 Convenience

5 Financial control

1516

185 Financial control

6 Food safety/legislative requirements

1617

18

19 6 Food safety/legislative requirements

7

1718

1978

181920

19

89

1920

20

RICHARD MUTHER & ASSOCIATES - 130

92020

Reasons in code (below)

Importance of relationship (top)

This block shows relationbetween "1" and "3"

"Closeness"Rating

Reasons behind the

"Closeness" Value

N x (N-1)2

NecessaryAbsolutely

ImportantEspecially

OrdinaryCloseness OK

Lean at Wits 249

  Bad

  Be`er

  Much Be`er

Lean at Wits 250

  Bad (conveyor)

  S>ll Bad (forkliz)

  Much Be`er (tugger)

  Best (hand trolley)

Lean at Wits 251

 Material handling spine   Communica>on / people spine   Services grid   Flexible cell areas   Local receiving docks

E.g. HP Corvallis Printer Plant

Lean at Wits 252

Lean at Wits 253

!

T1

T2

F1

F2

C1

C3

C2

Inspection

Final Testing

Paint shop240 meter

80 meter

Training space

1. Flow line is cut up - large buffer capacity between

2. The system capacity is high

3.  “Autonomous Complete Process”

Toyota Motomachi plant and Toyota Tahara plant

254 Lean at Wits

  Lozy ceiling makes large one-‐touch inventory lineside buffers (and clear floors) possible   Large inter-‐segment buffers (up to 15 cars); 8 segments   Rela>vely long distance between cars (5 – 6 m)   High system capacity / low assembly density   Operators can use double the regular cycle >me without disturbing colleagues

Lean at Wits 255

Lean at Wits 256

Lean at Wits 257

Lean at Wits 258

  This self regula>ng, near op>mal, system can be used wherever operators are cross trained to do all jobs (or most jobs) in a cell or line.

  Method: Operators walk upstream un>l they meet another operator, then they work downstream un>l either they meet another operator or they reach the end of the line. Then repeat.

  Star>ng off: n operators occupy the first n posi>ons in a line. Operator 1 passes work to operator 2 and so on un>l the last operator. The last operator progresses work through all following worksta>ons un>l the end of the line. Then walks back to operator 2 (who is by then working further downstream). Then revert to step 2.

  This method is useful for mixed model, for frequent breaks, for automa>c coverage, etc. Very robust and flexible.

  Arranging workers from slowest (at the start) to fastest is shown to be best.   This method originated at Seiki Sewn products (a Toyota subsidiary)   See Bartholdi and Eisenstein, ‘A Produc>on Line that Balances Itself’, Opera,ons Research, v44, n1, 22-‐34, 1996

Lean at Wits 259

Lean at Wits 260

Production Plan

Master Production Schedule

Material Requirements

Planning

Purchasing

Resource Plan

Rough Cut Capacity

Evaluation

Capacity Requirements

Plan

Detailed Scheduling

Input/Output Control

(Shop Floor Control)

Simulation

Accounting

Lean at Wits 261

Production Plan



Planning plan only

Purchasing

Resource Plan

Rough Cut Capacity

Evaluation

Capacity Requirements

Plan

Detailed Scheduling

Input/Output Control

(Shop Floor Control)

Simulation

Accounting

Lean at Wits 262

Production Plan



Forecast

Purchasing Advance Warning

Resource Plan

Rough Cut Capacity

Evaluation Shop Floor

Cell Capacity Planning

Detailed Daily

Schedules

Detailed Scheduling,

and Execution including Kanban

operations Heijunka

and call off

Mixed Model

Sequence

Improvement Targets

Central

Cell Lean at Wits 263

MPS

MRP

Supplier Press Shop Assembly Dispatch Customer

Mixed Model or Heijunka

forecast

forecast

call off

advisory

kanban kanban

Supermarket

advisory

Lean at Wits 264

Utilisation 100%

lead

time

production feasible

not feasible

Traditional Lean (?)

lead

time

Utilisation 100%

Lean at Wits 265

  Definition (Push and Pull): §  A pull system is one in which work is released

based on the status of the system and thereby places inherent limit on WIP.

§  A push system is one in which work is released without consideration of system status and hence does not inherently limit WIP.

Lean at Wits 266

  Iden>fy the system constraint §  the part of the system that cons>tutes its weakest link can be either physical or

a policy

  Decide how to exploit the constraint §  obtain as much capability as possible from a constraining component, without

undergoing expensive changes or upgrades §  e.g. eliminate down>me at bo`leneck

  Subordinate everything else §  adjust non-‐constraint sewngs to enable constraint to operate at maximum

efficiency

  Elevate the constraint §  take whatever ac>on necessary to eliminate the constraint §  only if step 2 and 3 not successful

  Return to step 1 -‐ avoid iner>a!

Lean at Wits 267

  Drum: constraint, works to customer demand   Buffer: located in front of drum to keep it working at maximum output   Rope: drum is roped to release point, work is pulled through system   Synchronised with demand   Constant tuning of policy buffers ensures minimum inventory   Is TOC disguised pull system?

Lean at Wits 268

1 2 3 6 5 4

GYR

GYR Constraint Rope

Backlog Rope

269 Lean at Wits

1.   Eliminate obvious waste n  Scrap, rework, poor layout, excessive changeovers

2.   Swop Buffers n  Swop inventory buffers for capacity buffers: by working

more hours at key resources, in fact all the tac>cs in ‘The Goal’

3.   Reduce Variability n  Six Sigma, Standard Work, 5S

4.   Con>nuously improve n  Kaizen ac>vi>es; TOC 5 steps

Lean at Wits 270

1.   Schedule your plant at 100% of capacity 2.   Start working. Variability happens. 3.   Cycle >mes increase, WIP piles up, delivery dates

are missed 4.   Add capacity (over>me? subcontract?), or reduce

the number of jobs in the plant 5.   Things get back under control. 6.   So you go go back to step 1

Lean at Wits 271

  Varia>on is much more important where there is high u>liza>on, but is rela>vely unimportant where there is low u>liza>on. If you are at the low u>liza>on end, Six Sigma projects aimed at varia>on reduc>on could be a waste of >me and money!   U>liza>on generally has more influence on queues (lead >me) than varia>on.   Reducing process varia>on is not enough! Arrival varia>on may be more significant   Never compromise failure demand by a`empts to reduce varia>on.

Lean at Wits 272

  The coefficient of varia>on (C in the formula) is σ / t §  Where σ is the standard devia>on of the process >me §  Where t is the average process >me

  It is not absolute varia>on (σ) that is important, but the ra>o.   So…   Varia>on is much more important in short cycle opera>ons (typically volume manufacturing) than long cycle opera>ons (many types of service and administra>on)   Where opera>on >mes are long, it is MUCH more important to ‘get it right first >me’ than to focus on reducing varia>on.

Lean at Wits 273

Lean at Wits 274

Variabilty Reduction

Excess Inventory

Excess Inventory

ExcessCapacity

ExcessCapacity

DelayTime

DelayTime

From Wallace Hopp, Supply Chain Science

  Constraint iden>fica>on should take both varia>on and u>liza>on into account.

  Protec>ng the constraint with a >me buffer is a tradeoff decision

  The resource upstream of the constraint determines the arrival varia>on at the constraint.

Lean at Wits 275

Which is the Constraint?

  Eight Building Blocks   Ten Lean Scheduling Concepts

§  See Lean Toolbox 4th edi>on

Lean at Wits 276

A is a bottleneck or pacemaker, B is a non-bottleneck

A B

Where to place buffer inventory ?

Lean at Wits 277

A is a bottleneck or pacemaker, B is a non-bottleneck

A B


Lean at Wits 278

A is a bottleneck (or pacemaker), B,C are non-bottlenecks

A B


C

Lean at Wits 279

Buffer

X

X

X Assembly Constraint Work station

Example from Tomlinson, TPMI

Lean at Wits 280

A requires relatively long changeover, B has short or nil c/o

A C

Where to place a supermarket ? How does A know what to work on ?

D

B

Lean at Wits 281

A is a bottleneck (or pacemaker), B,C are non-bottlenecks

A B

How much inventory in front of A ? Other questions? (from B, from C, from both?)

C

Lean at Wits 282

A, B, C, D are sequential operations

B C

What is the first question to ask ? What determines the location of supermarkets?

A D

Lean at Wits 283

A

C

B

A is a bottleneck, so needs to be protected by inventory What are other considerations?

A, B and C all have

Changeovers

Lean at Wits 284

What are the buffer considerations along the Two sections of power conveyor?

A is a bottleneck

B and C are Non-

bottlenecks The three are

joined by conveyors

A C B

For example, a bottling plant:

Lean at Wits 285

  Demand Smoothing   Takt and Pitch   ONE Pacemaker   Supermarkets and FIFO Lanes   Runners, Repeaters, Strangers   Mixed Model Scheduling   Pull and Kanban   Smaller Batch Sizes and EPE   Regular Material Handling Route (‘Runner’)   Levelling and Heijunka Authorisa>on

Reference: The New Lean Toolbox Pages 103 - 120

Lean at Wits 286

  Iden>fy the most constrained machines or processes   List the products that go through the process, their weekly demand and their unit cycle >mes.   Calculate the sum of (weekly demand x cycle >mes)   Divide by available working >me per week.   Where this ra>o is >1, more than 1 machine or over>me is needed.   Where the ra>o is above approx 0.8 take care (remember queuing theory and dice game!).

Lean at Wits 287

buffe

r

Quality Demand

Smoothed demand

Perfect quality

Occasional longer customer waits (but note some customers don’t mind waiting)

Zero tolerance of defects Very strict, receiving, requirements

…and never pass on a defect, even if it means waiting

…and never cause amplification

Lean at Wits 288

Takt time =

Net available time is total time less planned downtime

Required production quantity per day

Net available production time per day

Pitch time = Takt time x Container quantity

Container quantity could be the final packing quantity or the container move quantity. Often “human movable”

Lean at Wits 289

Helps avoid   Unsynchronised opera>ons   Amplifica>on   Data processing schedule and inventory inaccuracies

Lean at Wits 290

Reference: Lean Lexicon, LEI

Lean at Wits 291

  If a subsequent opera>on has a changeover (or inspec>on) but shorter cycle, calculate the number required to catch up   If the next opera>on has a longer cycle >me, or inspec>on, takt >me should govern -‐ but a short FIFO lane could be appropriate to allow the previous opera>on longer ‘breathing space’.

Lean at Wits 292

  Runners : dedicate facili>es; may be worth doing irrespec>ve of volume for >me compe>tors   Repeaters : build the schedule around them; give them regular slots; make as ozen as possible §  repeaters are by regularity, not volume §  two types : high frequency -‐ put them into regular slots; and low frequency -‐ use priority kanban

  Strangers : fit them around repeaters; batch size may be determined by order quan>ty, but transfer quan>ty may differ

Lean at Wits 293

Product Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Grand Total Frequency Freq Type Culm % Culm Useage12008CABLE ASSY, 3/D/2362, ISS 6 9 12 11 9 9 9 11 14 10 14 6 114 11 Runner 9.53% 11412020CABLE ASSY, 3/D/2492 ISS 3 13 8 4 8 9 11 8 8 5 10 7 91 11 Runner 17.14% 20512057CABLE ASSY RDS KEYPAC ISS 2 11 8 14 11 10 8 5 5 5 10 87 10 Runner 24.41% 29212077CABLE TAMPER LEAD ISS 2 2 3 7 6 8 8 4 9 9 7 9 72 11 Runner 30.43% 364205XFMR (E/K1000), ISSUE 11 6 6 8 4 5 4 4 5 4 5 4 55 11 Runner 35.03% 41912091Cable Assembly, Earth Lead, PAC202 ISSUE 1 1 1 5 2 6 7 3 8 4 6 4 47 11 Runner 38.96% 466218XFMR (11226), ASSEM,ISSUE 14 4 3 4 5 4 4 4 3 4 3 3 41 11 Runner 42.39% 50712087Cable Assembly, GSM Modem, EK1000/2200 6 5 4 2 2 3 3 6 1 4 4 40 11 Runner 45.74% 547176XFMR,COIL, STANDARD RDR,ISSUE4 6 3 3 2 4 4 3 4 3 4 2 38 11 Runner 48.91% 58512110Cable Assembly, E/K Printer 4/E/2431 Issue 0 3 3 8 3 2 4 2 3 4 3 35 10 Runner 51.84% 620164XFMR,UNIVERSAL COIL 1 3 6 3 6 6 2 1 3 31 9 Runner 54.43% 65112078Cable Battery Lead PAC 2200 Issue 2 1 2 5 4 2 2 3 4 3 3 1 30 11 Runner 56.94% 681235Transformer, 240/16.5V 3/D/1947 issue 2 1 3 1 4 3 3 1 2 3 1 4 26 11 Runner 59.11% 70712076Cable SWB To SWB PAC 2284 Issue 2 1 1 4 3 1 2 3 3 2 2 1 23 11 Runner 61.04% 730

12518Cable Assembly, PC Reader Issue 1 2 1 2 1 3 1 1 11 7 Died 87.37% 104512090Cable Assembly, 3/E/2727 Issue B 2 1 1 1 1 2 1 1 10 8 Runner 88.21% 105512085Cable Assembly, Micro Reader, 4/E/2714/iss0 1 2 2 2 2 9 5 Repeater 88.96% 106412051Cable Assembly, 4/E/2511 Issue 2 1 1 1 1 1 1 1 1 8 8 Runner 89.63% 1072216XFMR (19401), ASSEM,ISUE 14 1 1 1 1 1 1 1 1 8 8 Runner 90.30% 108012029CABLE ASSY, 3/E/0350 ISS 3 2 1 1 1 1 1 1 8 7 Runner 90.97% 1088168AFMRAIRCOIL, EKEY, MKII,ISSUE3 1 2 1 1 1 1 1 8 7 Repeater 91.64% 109612028CABLE ASSY, 3/E/0350 ISS 3 1 1 1 1 1 1 1 7 7 Runner 92.22% 110312112COIL CABLE, 4/D/2512 ISS 1 1 1 1 1 1 1 1 7 7 Repeater 92.81% 1110175XFMR, COIL, PAC-KEY SLIMLINE RD 1 1 1 1 1 1 1 7 7 Runner 93.39% 111712518Cable Assembly PC Reader Issue 1 1 1 2 2 6 4 Runner 93.90% 11231863Cable Assy PSU To NTWK Cont Issue 4 1 1 1 1 1 5 5 Repeater 94.31% 112812517E/K Battery Leads - Issue 1 1 1 1 1 4 4 Repeater 94.65% 1132179XFMR COIL,L/P RDR,ISSUE 7 1 1 1 1 4 4 Stranger 94.98% 11361870Cable Assembly, Earth Lead Assembly D7112-X01 - Issue 1 1 1 1 1 4 4 Stranger 95.32% 1140161XFMR COIL,FF 4000,ISSUE 5 1 2 1 4 3 Stranger 95.65% 114412519Cable Assembly, PC Reader Cable 6 Core 1 1 1 3 3 Stranger 95.90% 1147203XFMR Reader (19256), Issue 14 1 1 1 3 3 Stranger 96.15% 1150

Example from Tomlinson, TPMI Lean at Wits 294

Runners Repeaters Strangers

A B C 2 bin

tight kanban

2 bin

MRP

MRP ?

2 bin MRP ?

tight kanban MRP ?

“loose” kanban

tight kanban

Lean at Wits 295

Runners Repeaters Strangers

A B C

MRP

Short L/T

Short L/T

Short L/T

Long L/T

Long L/T

Long L/T

Tight kanban

VMI

2 bin + SS

MRP

MRP

VMI

Kanban

Kanban Kanban

Kanban + SS

Kanban

Kanban + SS MRP

2 bin + SS 2 bin + SS

2 bin

2 bin

Lean at Wits 296

Lean at Wits 297

Lean at Wits 298

  Conver>ng Strangers into Repeaters §  Design and G.T. §  Product line ra>onalisa>on §  Working lower down in the BOM §  Changeover / Batch size reduc>on §  Thinking Heijunka (work slots)

  Conver>ng Repeaters into Runners §  As above, plus §  Crea>ng cells §  Choosing machines or capacity rather than inventory

Lean at Wits 299

 Why is ABCABCABC be`er than AAABBBCCC ?  Uniform material flow  Balance  Reduced inventory §  In FGI §  In WIP

Lean at Wits 300

“Don’t make anything until it is needed, and then make it very quickly.”

Womack and Jones

“The thing to do is to keep everything in motion, and take the work to the man and not the man to the work.”

Henry Ford, Today and Tomorrow, 1926

Lean at Wits 301

  Withdrawal (Move) kanban §  From finished good supermarket to shipping §  Authorise movement §  May be ini>ated by Heijunka slots

  Produc>on kanban §  At workcentres, to authorise produc>on §  Indicate parts to be replenished to a finished goods supermarket

  Signal kanban §  Authorise batch produc>on. Ozen triangles §  Tell how many units have been pulled from the supermarket

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Kanban

Production

Signal / Triangle In plant Supplier

Move or “withdrawal”

Production card

Adapted from Suzaki The New Manufacturing Challenge Free Press

Lean at Wits 303

Kanban movements

Material movements

Op 1 Op 2 Op 3

Adapted from Bonvik, web.mit.edu

Lean at Wits 304

Kanban movements

Material movements

Op 1 Op 2 Op 3


Pulling a red leads to replacement of red Pulling a blue leads to replacement of blue

red or blue red or blue red or blue

Lean at Wits 305

Kanban movements

Material movements

Op 1 Op 2 Op 3


Pulling a red leads to replacement of red Pulling a blue leads to replacement of blue, etc BUT with many products, WIP becomes excessive SO…..

Lean at Wits 306

Kanban movements

Material movements

Op 1 Op 2 Op 3


So, Card indicates a replacement, but what to make comes from the Schedule at gateway workcentre Other workcentres work on a FIFO basis

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Kanban movements

Material movements

Op 1 Op 2 Op 3


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  Product based and Capacity based   Squares   Single card   Dual card   Priority   Heijunka board (10 minute capacity)   Other signals §  golf ball, faxban, e-‐ban

  CONWIP and POLCA

Why all

these?

Lean at Wits 311

Number of kanbans =

Daily demand x (EPE frequency + Lead time) + Safety stock

Container size

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Number of kanbans =

Daily demand x (EPE frequency + Lead time) + Safety Stock

Container size

EPE is given in days

(see EPE section)

The replenishment interval from sending the signal to receipt

This is a variable, used to adjust the no of kanbans to a feasible replenish-

ment interval

Used to compensate for

process uncertainties & demand variation

Lean at Wits 313

  Don’t forget to review kanban quan>>es periodically   Especially when demand, lead >me, or supplier performance changes   This is where a computer system can be useful -‐ to track significant changes and give warnings.

Lean at Wits 314

  No of batches x changeover >me = constant   Maximum number of changeovers = (total >me -‐ >me for produc>on) internal setup >me but note if total external setup >me is longer than prodn and maint >me, this is the deciding factor

  Changeover >me + (batch x cycle) = (batch x takt) gives target changeover and min. batch   Minimum batch = Weekly demand / max changeovers

Lean at Wits 315

  Start with the available >me per day (allowing for rou>ne main, OEE)   Subtract the total required run >me per day to give >me available for changeover   Maximum changeovers per day = >me available / average changeover >me   Distribute the maximum changeovers per day between all the parts. More changeovers for A parts (perhaps more than 1 per day), less changeovers for C parts (perhaps less than one per day).   Leave a li`le slack >me.

Lean at Wits 316

  8 hour net working day; 6 products with daily demand (in produc>on >me) 2, 1, 1, 1, 0.5, 0.5 hours (total 6) per day; changeover >me = 1 hour   1 day EPE not feasible   2 day EPE not feasible   3 day EPE just feasible (over>me req’d?)   4 day EPE OK; can run A twice   5 day EPE OK; can run A every day (just)

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  Available >me per day = 7 x 60 mins = 420 mins.

  8 products (A to H); total run >me for one days demand = 300 mins

  Demand / day = 200, 100, 100, 50, 50, 30, 20, 20

  Time remaining for changeover = 120 mins

  Ave changeover >me = 20 mins   No of changeovers per day = 120/20 = 6

Changeover Schedule Prod C/overs Batch EPE A 2 / day 100 0.5 B 1 100 1 C 1 100 1 D 0.5 100 2 E 0.5 100 2 F 0.3 90 3 G 0.3 60 3 H 0.3 60 3

Lean at Wits 318

Replenishment Interval (or EPEI Interval)

EPEI (the basis is): available resource Hme per day -‐ Hme to run a day’s quanHty of parts

= daily changeover Hme available Then make best use of this Hme to reduce batch size

Lean at Wits

EPEI = Total available time per day -

∑ (changeover time per campaign)

∑ (run times per day)

This gives the EPEI in days and batch size EPEI x daily demand

319

Batch sizing issues   The EPEI calculaHon is a check in itself: if batch sizes work out larger than currently being run then the data is incorrect

  Different machines may of course have different batch sizes.   If there are skilled sePers who do the changeovers, use their net available Hme, not the machine available Hme

  Sequence dependent changeover Hmes: Get an indicaHon of the batch size as above, but then use constant sequence, variable quanHty ( that is, when next due make up to the target level -‐ fix this at 2 x the batch size?)

  If you have a flow sequence, say of 3 machines, take the largest batch on any machine.

Lean at Wits 320

Supermarkets   Two possible locaHons for supermarkets

•  At the supplier workcentre •  At the point of use

  Point of use is simpler for visibility   But may have to locate at the supplier due to material handling consideraHons, or for mulHple branching

  Note there are inventory implicaHons on supermarket sizing because the replenishment Hme may be longer if located at the point of use. This is a reason for locaHng at the supplier point.

  SomeHmes both, to achieve both the above. Then link via move kanbans.   Make to order inventory does not go in a supermarket

Lean at Wits 321

Sizing of Supermarkets

  Covers the batch quanHty (EPEI)   Covers customer demand during the normal replenishment transport lead Hme (order to receipt)

  Covers buffer stock for customer demand variaHon

  Covers safety stock in case of internal failure or breakdown

Lean at Wits

Note this variant of the standard Supermarket symbol:

Lead times and Order Points   Replenishment Lead Hme = Total Transport Time + setup and make Hme   SomeHmes the setup and make Hme needs to be replaced by the full EPEI interval, when there is likely to be a queue of work waiHng. Another factor is whether other products are being used by the customer workcentre during the lead Hme -‐ if so, no demand takes place during this Hme, and the queue Hme can be omiPed.

  Transport Hme is the Hme to physically collect the kanban and to return the batch a}er processing. It is the worst case for the runner route -‐ note that a runner may someHmes collect a kanban every second route.

  Order Point is customer demand *( lead Hme + safety stock)

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  See The New Lean Toolbox, page 115   Set the EPE target interval (ozen one day)   List the number of products to be made during this EPE interval   Calculate the required run >me during this EPE target interval   Calculate the >me available for changeover during this EPE interval ( available >me -‐ total run >me needed)   Calculate target changeover >me from (>me available for changeover)/no of products

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  The pacemaker of the whole system  Maintains the pitch   Completes a collect and delivery cycle every pitch increment   Starts at Heijunka box, and collects the authorised “work order”; goes the supermarket and picks this up; takes kanbans to cells; delivers material; moves material; returns to Heijunka

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Lean at Wits 327

Products

A B C D E F G H I

Red Zone

Green Zone

Yellow Zone

Black Zone

Spike Demands

Calculate Capacity by Zone Daily

c/o times + run times

If black can’t cope then overtime

Then calculate the time horizon to complete all red and all yellow

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Pitch Increments Today 8 9 10 11 12 13 14 15 16 17 Next Week Week After

Part A

M T W Th F M T W Th F

Part B

Part C

9 10 11 12 13 14 15 16 17 18

Pitches Missed 4

Missed Pitches Analysis No Reason

Lean at Wits 329

Heijunka Extensions: Different Pack out Quantities and Pitch (2)

Lean at Wits

Pitch

Product 8:00 8:15 8:30 8:45 9:00 9:15 9:30 9:45 10:00

Red Break

Green

Blue

Yellow

Red, Green, Yel have different

Pitches to Blue

Two cards per Pitch, except when Blue

May be balanced for 3 pitches

if very different; Otherwise ignore

330

Day-by-the-Hour (or Tally) Board

  Use as an interim on the road to Heijunka Target

Accum Actual

Accum Ahead +

Behind - Causes and

Countermeasures

8:00

9:00 Breakdown

Red card issued

10:00

11:15 Caught up with Extra manning

100

50

50 50

50

50 150

50

50

200

40

70

50

90

140

210

0

-10

+10

-10

Lean at Wits 331

Day by Hour Board: Lake Region

Lean at Wits 332

Lean at Wits 333

Wide aisle 4m

Turning machines

Priority Kanban boards

Lean at Wits 334

Boxes With products accumulate on a roller FIFO

Lane

If boxes accumulate into the red zone, Operators

must stop working on other products and start working on this one, until

the red zone is clear

Lean at Wits 335

Tugger collects Components at 10am

Tugger collects Finished Products

at 11:30am

Production between

10:30 and 11:00

Inside are Details of

the products to be made

And the components

required

Tugger (Runner) goes around

once per hour, but

production is In half hour

increments; so Tugger

collects two Tablets per

round Clear Plastic Tablet,

Perhaps 120mm x 200mm

Lean at Wits 336

  Can be linked to long-‐cycle opera>ons §  Using standard work packages §  Some work packages may repeat several >mes

  Can be used for warehouse opera>ons §  The Heijunka box determines the pick cycles §  Can use >me mul>ples e.g. 12, 24, 36 minute pick cycles

  Can be used to synchronise various converging paths §  Each box slot contains cards which go to several routes

Lean at Wits 337

  The Lean Toolbox, 4th edi>on, relevant sec>ons   Jeff Liker, The Toyota Way, McGraw Hill, 2004, Chaps 8 – 10   Hopp and Spearman, Factory Physics, Irwin, 2007 (3rd ed)   Kevin Duggan, Crea,ng Mixed Model Value Streams, Produc>vity, 2002

  Goldra` and Cox, The Goal   See www.factory-physics.com/

Lean at Wits 338

  Highly seasonal  Major product families   Some customized   Some machining with changeover >mes   Large items (2 – 4 m)  MRP with MPS   Quality Issues

  Laser cuwng, Welding, Pain>ng, Assembly of products   Job shop in above areas.   Frequent delivery failures   5 x 8 hr. week with frequent over>me.  What to do?

Lean at Wits 339

Three stages   Job Shop   TOC   Lean Flow

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breakthrough

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343

Change…

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“And let it be noted that there is no more delicate matter to take in hand, nor more dangerous to conduct, nor more doubtful in its success, than to set up as a leader in the introduction of changes. For he who innovates will have for his enemies all those who are well off under the existing order of things, and only the lukewarm supporters in those who might be better off under the new. This lukewarm temper arises partly from the fear of adversaries who have the laws on their side and partly from the incredulity of mankind, who will never admit the merit of anything new, until they have seen it proved by the event”. Niccolo Machiavelli

The Physics of (Lean) Change?   “Physical laws apply everywhere, whether or not you choose to believe in them’ says astronomer

Neil deGasse Tyson.   In 1918 Emmy Noether proved that the laws of physics are consequences of deep symmetries. ‘A

thing is symmetrical if there is something you can do to it so that, a}er you have finished doing it, it looks the same as before’ (Like some Lean ‘transformaHons’…)

  Newton’s Laws   First law: An object remains at rest or conHnues to move at constant velocity unless acted on by an

external force   Second law: F = ma. The sum of forces on an object is equal to the mass of the object mulHplied by

the acceleraHon of the object. Third law: When one body exerts a force on a second body, the second body simultaneously exerts a force equal in magnitude and opposite in direcHon on the first body.

  Third Law. For every acHon there is an equal and opposite reacHon

  Thermodynamics   The Second Law states that "in all energy exchanges, if no energy enters or leaves the system, the

potenHal energy of the state will always be less than that of the iniHal state." This is also commonly referred to as entropy.

Lean at Wits 345

Hawthorne Studies

  ‘…in other words, the mystery seemed to lie within the worker, rather than within the system. This impulse to blame – or credit – the individual person, rather than the system within whiich he or she works, although completely anHtheHcal to quality management principles, persists to this day.’ •  Quoted in John Butman, ‘Juran: A lifeHme of Influence’, Wiley, 1997 – drawing on Elton Mayo.

Lean at Wits 346

Does this sound like Deming’s 94 / 6 Rule?

Drive out Fear

Lean at Wits 347

A Lean Leader’s First Duty

  To culHvate a culture that is intolerant to Systemic Failure   And reduces Process Ignorance.   Problems are opportuniHes to be solved and not to be ignored.

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From Steve Spear

Leadership Styles

Lean at Wits 349

From Liker and Hoseus, Toyota Culture, 1998, p334

Jack Smith…

  Learning to Lead at Toyota..

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Jack Smith: Parts A, B, C Harvard Business School Case Study

Leadership ‘moves’ for Lean

Number Leadership Moves

1 Leaders must be teachers

2 Build tension, not stress

3 Eliminate fear and comfort

4 Lead through visible parHcipaHon, not proclamaHon

5 Build lean into personal pracHce

Lean at Wits 351

From Flinchbaugh and Carlino, The Hitchhikers Guide to Lean, 2006, page 32

Three interacting concepts…

352

Kata Repetition

‘Small and varied Wins’

‘Yet’

Rituals e.g. church Frequency

and Severity

‘Filters’

Maths Army

recruits Students

Amygdala and Cortex

The Progress Principle

‘Pygmalion’ Effect

Myth of Genius

and Talent

Habit and Practice

‘Brainwash’ Nazis &

Jews Korea

prisoners

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353

Kata Repetition

‘Small and

varied Wins’

Yet

Kaizen

PDSA

Respect

Leader Standard

Work

Idea Feedback

Feedback from others and

from work itself

Ongoing Mentoring

Genuine Listening

‘Zero Tolerance’ of

Defects, mess

Heijunka

Andon

A3: break into small chunks

Learning cycles: single and

double

Go see

Reflection Hansei

AARs

TWI Practice not Talent

Lean at Wits

Excellence and Habit

  “We are what we repeatedly do. Excellence, then, is not an act, but a habit” •  Aristotle

Lean at Wits 354


Lean at Wits 355

Kata Repetition

‘Small Wins’

Yet and Confirmation

Bias

Kaizen

PDSA

Respect

Leader Standard

Work

Idea Feedback

Feedback from others and

from work itself

Ongoing Mentoring

Genuine Listening

‘Zero Tolerance’ of

Defects, mess

Heijunka

Andon

A3: break into small chunks

Learning cycles: single and

double

Go see

Reflection Hansei

AARs

TWI Practice not Talent

Kaizen, Leader Standard Work, Kata, Repetition

  David Mann Leader Standard Work  Mike Rother Toyota Kata   Steve Spear Chasing the Rabbit, Uncovering   Deming PDSA   Schwartz Sony: PracHcing Simple Rituals

»  Daily walks, breaks, no e mails

  Gladwell ‘10,000 hour rule’ for Mastery »  ‘How do you get to Carnegie Hall?’ »  List of 75 innovators and inventors »  David Shenk, The Genius in All of Us’, Icon, 2010

Lean at Wits 356

More on..Kaizen, Kata, Repetition, Learning, Motivation

  Colvin   TWI

  AAR   Amabile

  Koenigsaecker Duhigg

  Talent is Overrated   Do it again; ConHnue unHl you know they know   Every Hme, not judgmental   Small step, conHnuous feedback as moHvator  MulHple Kaizens   Habit

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Dilbert knows about bias..

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Avoiding Bias

  You can’t do it yourself!   It is intuiHve (or System One) thinking. AutomaHc. Unconscious. So, never self contradicted and hence is believed. Context dependent. (e.g. What does ‘walk to the bank’ mean to you?)   System Two Thinking is slow, efforkul, deliberate.   But you can check for System One bias with your people or teams.   See the 12 tests in Daniel Kahneman, ‘Before You Make that Big Decision’, HBR, June 2011, pp51-‐60

Lean at Wits 361

Beware Halo Effect and Saliency Bias

  Halo: Companies deemed ‘excellent’ are frequently circled by Halos. Once branded as excellent, people tend to assume that ALL their pracHces are exemplary. The same goes for ‘excellent’ leaders. A company’s success is frequently aPributed to a leader – and success will conHnue as long as that leader is in place. •  See Phil Rosenzweig, ‘The Halo Effect’

  Saliency Bias: A past successful case study is taken as evidence of or analogy for good pracHce. Of course, the circumstances likely to be different. •  See Daniel Kahneman, ‘Fast or Slow’

Lean at Wits 362

David Mann on Culture and Lean Leadership

David Mann considers the culture of an organizaHon to be: “…the sum of peoples’ habits related to how they get their work done”. He defines the term as “…a concept we make up to organize and get a handle on what we have seen or experienced.” There are four elements:

1.   Leader standard work – where a rouHne ‘checklist’ is developed to standardize a porHon of a team leader or supervisor’s day to ensure that essenHal elements of their job are performed.

2.   Visual controls – to enable the leader to monitor performance at a glance by walking around the area. To visually manage their area through observing what is in control and what is out of control.

3.   Daily accountability process – acHng upon performance as observed through the visual controls and ensuring correcHve measures are put in place for items idenHfied as being out of control.

4.   Leadership discipline – ensuring standard work is adhered to, guaranteeing the integrity of the process is controlled and all other elements are sustained.

363 Lean at Wits

Daily Accountability Board

Lean at Wits 364

Creating and Sustaining Improvement: Example of System Dynamics

capability

Pressure to do Work

Time spent on improvement

Investment in capability

Work Harder

Desired Performance

Performance Gap

Pressure to improve

Work Smarter

Shortcuts

Actual performance Time spent

working

Reinvestment

delay

After Repenning and Sterman, ‘Nobody ever gets credit for fixing problems that never happened’, California Management Review, Summer 2001, pp 64 - 88 Lean at Wits 365

From Nelson Repenning and John Sterman, ‘Nobody Ever Gets Credit for Fixing Problems that Never Happened: Creating and Sustaining Process Improvement’ California Management Review Summer 2001

Lean at Wits 366

From Lake Region Manufacturing, Ireland Lean at Wits 367

Deming on Pay and Measures

  “Reward for good performance may be the same as reward to the weatherman for a pleasant day” The New Economics, p 28

  “A numerical goal accomplishes nothing. Only the method is important, not the goal. By what method? A numerical goal leads to distorHon and faking, especially when the system is not capable to meet the goal” The New Economics, p 31

  “IncenHve pay and pay for performance, among others, are forces of destrucHon. These forces cause humiliaHon, fear, self-‐defence, compeHHon for gold star, high grade, high raHng on the job. They lead anyone to play to win, not for fun. They crush out joy in learning, on the job, in innovaHon. Extrinsic moHvaHon gradually replaces intrinsic moHvaHon, self esteem, dignity” The New Economics, p 121

Lean at Wits 368

Seddon’s view:

Lean at Wits 369

Conventional Thinking Better Thinking

Purpose

Measures

Method

Begin here: Think Purpose from the customer’s view

Derive measures

Creates de facto purpose

Liberates

Begin here: Impose targets And standards

Constrains method

From John Seddon, The Whitehall Effect, Triachy Press, 2015

Motivation Flowchart

370

Is the task mostly

routine?

1. Offer a rationale for

why the task is

necessary

Can you increase the task’s challenge or variety, make it

less routine, or connect it to a larger

purpose?

Concentrate on building a healthy, long-term motivational environment that pays

people fairly and fosters autonomy, mastery and purpose. Avoid ‘if then’ rewards in almost all circumstances.

Consider unexpected, noncontingent ‘now that’ rewards. And those rewards will be

more effective if:

Yes, I can

That’s pretty hard

Use rewards, even ‘if then’

rewards, but be sure to:

2. Acknowledge that the task is

boring

3. Allow people to complete the task in their own

way

2. They provide useful information,

rather than an attempt to control

1. They offer praise and

feedback rather than things

people can touch or spend

Yes

No

From: Daniel H Pink, Drive, Canongate 2009

Lean at Wits

Deming’s Profound Knowledge (or, Why Things Go Wrong!)

  System •  HolisHc, opHmizing a part does not…, feedback •  relaHonships between the parts are crucial

  VariaHon •  Is a fact of life; snapshots are not valid observaHons •  Common or special causes

  Theory of Knowledge •  ‘without theory knowledge has no meaning’ •  Do PDCA against a hypothesis; otherwise can’t learn •  Be interested in failures that disprove – more valuable than success stories

  Psychology •  Only intrinsic moHvaHon moHvates in the long term •  Extrinsic moHvators undermine in the long term •  Management must create the condiHons for intrinsic moHvaHon – a gemba style helps

with this.

Lean at Wits 371

X: Cross Functional Working

  EssenHal to Lean, but a problem of experHse   Socio-‐Technical Working…..

Lean at Wits 372

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Measures

Lean at Wits 374

Targets and Measures

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Process and Person Measures

Lean at Wits 376

Measures should…   Provide short-‐term indicators of problems and no-‐problems   Be part of a feedback loop of surfacing and resolving problems   Focus on improving performance   Be capable of being acted upon.   Relate to learning or capability of the process or people

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The Power of Measurement   ‘What gets rewarded gets done’ Michael LeBoeuf’s ‘GMP’   But   ‘You get what you measure’ -‐ more fundamental? ‘Most individuals and organizaHons don’t get what they want because they don’t measure what they really want’.   Examples…..

  (see Michael Blastland and Andrew Dilnot, The Tiger that Isn’t, Profile, 2007 and Dean Spitzer, Transforming Performance Measurement, AmaCom, 2007)

Lean at Wits 378

Two types of Mesures

1.  InformaHonal measurement -‐ used for informaHonal purposes

2.  MoHvaHonal measurement -‐ used for rewards and punishment

The first can be a powerful aid; the second almost invariably negaHve.

Lean at Wits

Adapted from Dean Spitzer, Transforming Performance Measurement, AmaCom, 2007

379

Two other types of Measures

  ObjecHve -‐ fact based; can be observed and verified   SubjecHve -‐ a maPer of opinion or judgement, and an opportunity for revenge, prejudice, fear, etc.

It is the second that gives big problems. Looking good as opposed to being good. Who is measuring whom? (Witgenstein’s ruler) Measurement should be a non-‐judgemental process of collecHng, analysing, and most

importantly understanding what is being measured.

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Dysfunctional Measurement

  CheaHng (see for example LeviP in Freakonomics, 2006)   Measuring too much -‐ and ignoring most of the signals -‐ a complete waste or delusion

  Driving behaviour that favors the individual but is dysfuncHonal to the organizaHon.

Whether measurement dysfuncHons occur has less to do with the number and more to do with how people respond to the measure.

Almost everyone has experienced negaHve measurement used to expose negaHve

things -‐ errors, cost overruns etc -‐ and trigger negaHve emoHons -‐ fear, threat, blame, defensiveness

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381

Four Keys to Transformational Measurement

  Context •  Everything that surrounds the measurement -‐ social, psychological -‐ effecHve

measurement can only occur in a posiHve context. Process not person.

  Focus •  Measure the right thing, don’t measure too much, the vital few

  IntegraHon •  A framework, balanced, aligned, adapHve

  InteracHvity •  About ongoing measures, acted upon in real Hme, using feedback loops. ‘A social

process, not a technical process’.

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382

‘Four Steps to Redemption’

1.  Select the right things to measure n  End to end processes, not verHcal silos n  Determine the ‘drivers of enterprise’. (e.g having the right stock available when needed.)

2.  Measure these right things in the right way n  Value and Failure Demand (e.g call compleHon rates.) n  Precision, Accuracy, Overhead, Reliability, Validity, Robustness n  MulHple measures (OEE and schedule aPainment)

3.  Embed the metrics in a disciplined process for improvement, not blame n  Ways in which the measures will be acted on: who, visual progress n  Problems with process design; problems with execuHon. These need different responses;

which of these is the cause? (Deming 94/6 rule) 4.  Create an organizaHonal value system that uses the measures for ongoing

performance measurement n  Role modeling, rewards, implementaHon, arHculaHon, commitment

Lean at Wits

From: Michael Hammer, ‘The 7 Deadly Sins’, MIT Sloan Management Review Spring 2007

383

Problem

  P sells for £ 90; demand is 100 units / week   Q sells for £100; demand is 50 units / week   There are four resources -‐ A, B, C, D, each with the same fixed cost.  Work Hme is 40 hrs per week (2400 mins)   Total fixed costs (labour and rent) is £6000 / week

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We have a simple BOM and Routing

Lean at Wits

P Q

D 15 min

Purchase Part

£5/unit D

5 min

C 10 min

C 5 min

B 15 min

A 15 min

B 15 min

A 10 min

RM1 £20/u

RM2 £20/u

RM3 £20/u

385

Contribution

  P: £90 -‐ £ 40 -‐ £5 = £45 / unit   Q: £100 -‐ £40 = £60 / unit

 Make Q !

Lean at Wits 386

Extensions

  By purchasing tooling for £2000 we can increase the load on C (central) from 5 to 7 minutes, which reduces the load on B (central) from 15 to 14 minutes   Should we go with this?

Lean at Wits 387

Extensions (2)

  ConvenHonal CosHng:   The total Hme to make a Q has increased! -‐ so No!

  “Lean AccounHng”   Looking at the LP, C is irrelevant; but any improvement in B will go directly to the boPom line. A saving of 130 units x 1 min = 130 min. Means 130/30=4 units @ £60 = £240 for an outlay of £2000 -‐ an 8 week payback!

Lean at Wits 388

Problem 2: Before and After..

Lean at Wits

Adapted from Brian Maskell

CNC Machine

Inspect & Pack

Drill

Grind

Inspect & Pack

Grind

Drill Turn on Lathe

U Batch of 3000

One piece flow

1 minute

4 minute

6 minute

4 minute

4 minute

6 minute

4 minute

4 minute

Labour time = 15 mins Labour Cost = £5 Overhead = £5 x 3 = £15 Material = £2 Total £22

Lead time = 6 weeks Inventory 25 days Batch size = 3000 On-time deliv = 82%

Labour time = 18 mins Labour Cost = £6 Overhead = £6 x 3 = £18 Material = £2 Total £26

Lead time = 2 days Inventory = 2 days Batch = 300 (1 day) On time deliv = 99%

389

Accounting for Lean and the New Kitchen

  In 2007 we had a new kitchen installed, a}er a flood.   The costs, of course, must be apporHoned between all future meals.   It is now too expensive to eat at home.   So cooking must be outsourced…..

Lean at Wits 390

Basic Measures

  Customer Service or saHsfacHon   Lead Time   Schedule Adherance   Inventory Turns (WIP to SWIP)

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QCDMMS

Lean at Wits 392

Cell Measures (by day)

  Day by the hour Schedule aPainment •  And deviaHon reasons

  First Time Through •  ROTIF aPainment •  (Start -‐ (Scrap + Rework)) at each workstaHon mulHplied

 WIP to SWIP •  Actual vs. Standard work in process audited daily

  OEE •  On selected machines •  For the cell as a whole?

Lean at Wits From Maskell & Baggaley Practical Lean Accounting 393

Value Stream Measures (by week)

  Sales per Person   On-‐Hme Shipment

•  Orders in full shipped against customer requirements

  Dock-‐to-‐dock Time •  (RM+WIP+FGI) / (products shipped / hours in week) •  Can use representaHve components e.g. unit containers

  First Hme through •  (Start -‐ (Scrap + Rework)) at each workstaHon mulHplied

  Average cost per unit •  See next page

  Accounts receivable days outstanding

Lean at Wits From Maskell & Baggaley Practical Lean Accounting 394

Features of Hoshin   3 Levels of review (tasks, strategies, system)   Use real feedback on last periods’ actual planning process, and deployment.   Avoid blame (“It is my fault that you are doing the wrong job” -‐ system not person) (No blame does NOT mean no-‐one gets fired)

  Ask if the work that is being done right now is the right thing to do   Modifying the objecHves part way through if necessary   If 30% of the projects are late, you need to know why. If 0% are late, you also need to know why

  Real research is required -‐ that is why you cannot have more than a few suppliers involved, a more than a few Hoshins. Hoshin focuses on breakthrough.

Lean at Wits 395

What do you need to do to win an Olympic Medal?

  __________________   __________________   __________________   __________________   __________________

Lean at Wits 396

Policy Deployment Exercise   Pick an achievement that you or your (sport?) team are aiming at   Using the matrix, work through the

•  Aims •  Projects •  Delivery •  Results

  Establish the relaHonships between the elements   IdenHfy responsibiliHes

Lean at Wits 397

Hoshin Cascade

Lean at Wits

Middle Management

Horizontal Deployment And Understanding

Senior Management Create Policy

Implementation Level Devise Implementation Plans

deploy

goals

means

deploy

actions

means

review

review

398

Unipart Policy Deployment

Lean at Wits

aims

projects

results

delivery

What are the policy

Objectives? Why is success

Important?

What are the Project

Deliverables? What are the

SMART KPI’s

What projects are the team Expected to complete so as

To achieve the aims?

Market, operational and Financial Benefits expected by period end

To what extent Do the projects

Contribute to the aims?

To what extent Do the results

Contribute to the aims? To what extent

Does each deliverable Contribute to the results

What will each project Deliver?

To what extent?

399

Deployment

Lean at Wits 400

Hoshin and A3

Lean at Wits

Purpose

Current and 5 whys

Future state

implement

Purpose

Current and 5 whys

Future state

implement

Purpose

Current and 5 whys

Future state

implement

Purpose

Current and 5 whys

Future state

implement

Purpose

Current and 5 whys

Future state

implement

401

Ford 1: From Jan Krafkik in Womack ‘Gemba Walks’ 2nd ed

Ford’s system, all three producHon lines were converted to a steady pace, powered by moving chains. The plant employed go/no-‐go gauges to catch defecHve parts at the source and assure complete interchangeability, cellularized parts fabricaHon with operaHons located in process sequence, a crude pull system for managing the movement of parts toward their point of use on the line, and standardized work at a steady pace. All in a new building designed with con,nuous flow as its central objec,ve. Most of the individual elements had been previously tried in some form: it was their combinaHon in a complete system that produced Highland Park’s remarkable leap in producHvity and velocity. These events of 1914 deserve to be celebrated for their transformaHon of world industrial pracHce. And I hope someone at Ford will seize the opportunity on the occasion of the centennial. The Lean Community should celebrate too, because what happened at Highland Park was foundaHonal for lean thinking. Henry Ford and his associates were the first truly systemaHc lean thinkers, with a passion for dramaHcally increasing value while eliminaHng waste through careful process analysis from raw materials to finished product. Much of what Toyota achieved later was built on Ford’s shoulders, as Taiichi Ohno at Toyota freely acknowledged. Because of its enormous achievements, for a long Hme Highland Park existed in my mind’s eye as Ford’s stately Temple of Flow. This bubble was rudely popped a few years ago when I took a Gemba walk and found a sadly dilapidated and largely empty structure. Since my visit I have asked myself: What happened a}er the great breakthrough of 1914? What can we learn from what happened? And what might happen next at Highland Park. As Ford’s plant was reaching its zenith in the 1920s, Henry was racing to complete his new complex – the Rouge – on the southwest edge of Detroit. While Highland Park was dedicated to a single vehicle, with the idea of maximizing the velocity of product flow from start to finish, the Rouge complex was dedicated to scale. Parts for many types of vehicles, to be assembled all over the world, were cranked out -‐-‐ not in process villages within one plant but in process factories on the massive site. The buildings needed for each category of item – engines, transmissions, bodies, various types of parts – and more massive buildings for transformaHons of materials– steel mills, foundries, forges – were connected by conveyors under central control. This seemed impressive to visitors, but in pracHce large buffers of parts were needed at many points to insure steady producHon. While Ford could claim that the plant started with iron ore on day one and produced a finished vehicle 2.5 days later, this was simply the sum of the Hme needed for the value creaHng steps. Actual start-‐to-‐finish Hme, including waits in buffers, was many Hmes longer and for the vehicles assembled elsewhere – up to 90%

Lean at Wits 403


  But the Rouge was a compelling idea in an age of industrial concentraHon and scale economies. If a lot was good, then even more was bePer, and the Rouge was the most anyone could imagine. When the new facility completed in 1927 in Hme for the Model A, Ford also offered a new name – “mass producHon”—to tout his achievement. The term “flow producHon” that Ford had coined earlier to describe Highland Park quickly disappeared from use.

  (It bears men>on that Ford’s concept of “mass produc>on” at the Rouge was where Toyota started its thinking about lean produc>on and was the concept our MIT automo>ve team set out with in our global survey of manufacturing performance. In the 1980s we were simply unaware of the significance of the system created earlier at Highland Park.)

  Once the Rouge was in place, Highland Park became an anachronism. Too small for the body shop needed for stamped steel vehicles, seemingly too ramped with its machines crowded Hghtly together to minimize movement, too focused on a single product. Highland Park simply didn’t scale in an age of scale. So, when Model T producHon came to an end in 1926, Ford converted Highland Park to high-‐volume producHon of certain categories of parts (for shipment to assembly plants around the world) and to low-‐volume assembly of a few vehicles such as delivery trucks for the Post Office.

  Over Hme, as Ford’s original objecHve of auto ownership for everyone became widespread, workers could drive to new plants far away from the high land costs of the city. Cheap land on the city’s edge made it possible to spread out producHon on one level, making Highland Park look too verHcal, with its five floors and gravity slides that moved parts from fabricaHon in the top of the building to final assembly at the boPom. In just a few years Highland Park had become the picture of the old-‐fashioned factory.

  A}er 1930, producHon declined slowly at Highland Park, and with it the populaHon of the Hny (3 square miles) city surrounding the plant, which had grown from 4,000 in 1910 just as the plant opened to a peak of 53,000 in 1930. Decline was checked for a while by the presence of Chrysler’s corporate headquarters and engineering center a few blocks away, but Highland Park’s descent accelerated a}er the boom years of World War II when all capacity of any type was needed. By 1973 Ford disconHnued manufacturing at Highland Park and in 1974 the property was sold to a developer who tore down a few of the buildings to create a shopping mall (which also failed.) A}er Chrysler le} for the northern suburbs in 1993, to be close to the homes of its managers and engineers, the trend gathered speed and by 2012 Highland Park had a fi}h of the populaHon (11,000) of the peak.

Lean at Wits 404


Today the buildings on the site are mostly empty except for some document storage for Ford and a garment warehouse. In 2011 the City of Highland Park removed two thirds of its street lamps due to inability to pay the electric bill. Forty percent of the remaining populaHon is living below the poverty level. In 100 years the Temple of Flow transiHoned from the most dynamic industrial site in the world in a rapidly expanding city, to an abandoned industrial relic in one of the poorest and most dangerous places in America. Is there any way out of this smoking crater? I think there is, and for reasons that go far beyond any consideraHons of urban redevelopment. In recent decades the car industry has progressed from a collecHon of naHonal industries to a completely globalized acHvity with a few massive companies selling the same products in many markets. As product technology has converged on stamped steel bodies and every manufacturer strives to sell in every market, the scale requirements for each vehicle “plakorm” (on which a number of body styles are o}en based) have risen to a million – or even two million – vehicles per year. In this situaHon, massive assembly plants -‐-‐ with 250,000 to 500,000 units of capacity -‐-‐ make imminent sense. A facility with the scale of Highland Park has no place. However, the massive scale requirements of this strategy leave many white spaces in the market where smaller numbers of buyers may want vehicles with very different capabiliHes. These vehicles can’t be produced on the five or six standard plakorms of every car maker. AlternaHve power vehicles, high-‐end sports cars, specialty trucks, and city cars are examples. The common characterisHc of these vehicles is that they are suited for extruded aluminum or fiber-‐composite body structures with plasHc surface panels, which are cost effecHve at scales of up to about 50,000 units per year. A recently announced example is the BMW i3, an all-‐electric vehicle with a fiber composite tub for the passenger compartment, extruded aluminum structures at both ends for the engine and the storage compartment, and a snap-‐on plasHc skin. BMW plans to build it in a Hny, dedicated factory in Munich near the delivery center it has created for customers to receive its top-‐of-‐the line vehicles. (By contrast Tesla and Fysker opted for new moHve power vehicles but with convenHonal metal bodies and chose to build them in abandoned tradiHonal car plants: NUMMI in Fremont, California, in the case of Tesla, and GM’s Wilmington, Delaware, light truck plant for Fysker’s aborHve effort to develop a second, high-‐volume vehicle. With luck, Tesla might generate enough volume to jusHfy a high-‐scale plant. A bePer approach for those who follow is to use a new technology body as well, and target lower volumes, building addiHonal modules of producHon if necessary.) Looking at Highland Park in this new situaHon, one can see a double opportunity: A producer could use the exisHng building to fabricate major components on the upper floors and drop them to final assembly on the ground floor, at a modest investment compared with current car industry norms. The building is already there and the state and federal governments would doubtless help with the

Lean at Wits 405

Innovation, Design and NPD Overlaps


Innovation

Design Process

Cost Reduction

New Product Introduction

‘Design Thinking’

‘Lean Startup’

Innovation…


Innovation

“Adjacent Possible”

Disruptive Technology

TRIZ

…and many others

‘Adjacent Possible’ is discussed at length in Steven Johnson, Where Good Ideas Come From, Penguin, 2010

Creativity: •  Insight •  Improvisation •  Divergent Thinking

Design Process…


Design Process

Reinertsen and Kingman

Concurrent and

Simultaneous Engineering

‘LAMDA’

Risk

‘The Innovators Method’ ‘Set Based’

And Cadence (Toyota)

Tradeoffs: Product Price, Product Cost,

Production Cost, Time to Market

Design for Manufacture

(DFM) Learning Cycles

And Rapid Prototyping

Design Cost Reduction..


Cost Reduction

Value Engineering

Group Technology

Target Costing

“Variety Effectiveness Process”

Market Analysis Product Analysis

Part Analysis

Design Wastes

Variety Analysis Tools (VAT) (Galsworth)

From Gwendolyn Galsworth, Smart Simple Design Reloaded, Visual Lean Enterprise Press, 2015

Contribution analysis And

Contribution / b-neck minute

Design Thinking..


‘Design Thinking’

IDEO

Service Design

Systems Thinking

Vanguard?

Lean Consumption ‘Good Product /

Bad Product’ (Adams)

‘Double Diamond’

(Exploration and Exploitation)

New Product Introduction..


New Product Introduction

3P

Experimentation

Ramp Up: One feature at a time; Phase in transition

Supplier Partnership

Lean Startup


‘Lean Startup’

Agile Software

SCRUM

Lean Customer

Development

Kanban for

Software

Innovation: Recent Articles in HBR

  ‘Build an InnovaHon Engine in 90 days’, HBR, Dec 2014, p60   ‘The Discipline of Business ExperimentaHon’, Dec 2014, p70 (Useful for dissertaHons!)   ‘Leading your team into the unknown’, HBR, Dec 2014. p80 (This is a summary of the book ‘The Innovator’s Method)   ‘How I did it…Intuit’s CEO on Building a Design-‐Driven company’, Jan 2015, p35


Creativity   Insight

•  The goat problem •  Right and le} brain •  What do pine, crab, source have in common? •  No such thing as a single sudden flash; rather brain working in

background   Improvising

•  The brick test: how many uses of a brick? (Gilford and USAF during WW2). Points 1 to 5 for creaHve uses

•  IQ and creaHvity   Divergent Thinking

•  Jazz •  Switch one of the steps (like puung marmalade then rubbing the

toast) •  RouHne, easy, non-‐thinking tasks ; relax and do something different


Move one stick to make a different goat

Creativity…and Kata

  Kata: reinforcing and building pathways and habits •  ‘The more you do something, the more likely you are to do it again’ (Gilbert)

  CreaHvity: breaking pathways and habits •  Seeing things differently; establishing new pathways

  System 1 and System 2 ?


wits lean 2015

Documents

wits lean operations

cash lean

liker lean

lean manufacturing

chronology lean

lean toolbox

art of lean website

william durant mclean