Lean Manufacturing Overview

with Lego Simulation

Ted Theyerl NWMOC / CVTC Project Manager V-Feb 2007

“Helping Manufacturers Succeed”

2

The National MEP System

United States Department of Commerce, National Institute of Standards and Technology, State of Wisconsin

Blue = NWMOC Region

Headquarters Location

3 3

Economic Development

NWMOC Promote economic development in Northwest Wisconsin through retention and growth of the

existing manufacturing base.

“To create and keep good jobs for our clients”

Last year NWMOC’s client companies reported over $93 million dollars in positive impacts to their organizations directly attributed to our work with them.

4 4

Some NWMOC Services

• Strategic Focus - Business planning - Performance measures - People, culture, leadership, work teams

• Operations Improvements – Both Manufacturing and Office - Value Stream improvements - Tactical tools such Lean; 5-S, Quick Change-over, Cellular, Pull/Kanban,

• Sales and Marketing Improvements - 21st Century Lean Marketing System - Selling to the Government

• Training, Certifications, Resources - Lean Certificate series; Public and in-house - Technical College System; Workplace training - standard, custom, on site - UW-Stout; Technical resources, faculty, class projects, internships

5

Introductions

• Name!

• What you do?

• Why did you come?

• What do you expect to learn?

6

Round 1 Instructions

“Traditional Manufacturing”

1.  Build airplanes with Legos 2.  7 minute round 3.  Follow your instructions. 4.  Do your own job, don’t worry about others – don’t stop. 5.  Batches of 5 – make a batch, move a batch, make another batch and keep moving. 4.  Station #1 – keep process moving (expensive

equipment) 5.  Quality problems – turn upside down, keep going. 6.  Let me know when first batch of 5 is complete.

Questions?

7

Round One: Debrief

•  Discuss results

•  Discuss the process

•  Relationship to real world

•  List problems that need to be solved on flip chart

8

Traditional Manufacturing

»  Large inventories »  Manufacture in Batches »  Shortages »  Delivery delays »  Overtime »  Excess equipment »  Process problems hidden »  Short on Space

“Push System”

9

Why should a business consider a lean strategy?

10

Mass Production

Material

Value-Added Time: Minutes Time in Plant: Weeks

Receiving Warehouse

Sawing

Pre-fab Fabrication

Storage

Repair

Assemble

Shipping Warehouse

Ship

ORDER CASH

Lay-up

11 11

Rapid Changes in the World – Since About 2000

Shorter Lead Times

Price set by the Customer More frequent

schedule changes, expedites

More Changeovers

Increased competition

Smaller batches

The Customer

12 12

So… We want to help our country??? Let’s Buy an “American Car” !

• Toyota - Is manufactured in the USA. - Has a higher percentage of US-made parts than any other car

made in the USA, or anywhere.

• Chevy Equinox - Made in Canada - With a motor made in China

• Chevy Impala – you guessed it, Canada

• Chrysler PT Cruiser - Mexico

Toyota is pushing the in-USA percentage higher. US auto companies are pushing their percentage lower.

13

Lean is Market Driven

Price Set By Manufacturer

Cost + Profit = Price

Price Set By Market

Price - Cost = Profit

Past Present

Customer Demands:

14

It’s All About Time

“The longer an article is in the process of manufacture,

the greater is its ultimate cost.”

Henry Ford, 1926

15 15

More about time…

“The average North American-produced vehicle crosses the border seven times.

During the journey each vehicle faces a staggering 28,200 customs transactions.

By comparison, cars imported from Europe or Asia involve a single customs transaction.

If we delay cross-border shipments by just a day, the Americas lose their proximity advantage over Asia.”

Mike Eskew UPS Chairman and CEO July 23, 2007

Read into this: If we delay Manufacturing Thru-put Time……

16

Defining Lean

Lean is:

17

Definitions

•  Value Added Any activity that increases the market form or function of the product or service. i.e. Chip time, paint time, touch time. (These are things the customer is willing to pay for.)

•  Business Value Added Any activity that is necessary to run the business. Examples: Financial, legal, payroll services, maintenance.

•  Non-Value Added Any activity that does not add market form or function or is not necessary. (These activities should be eliminated, simplified, reduced, or integrated.)

18

Lean = Eliminating Waste

Value-Added

Typically 95% of all manufacturing lead time is non-value-added.

1.  Overproduction

2. Waiting

3.  Transportation

4.  Non-value-added processing

5.  Excess inventory

6.  Defects

7.  Excess motion

8.  Underutilized people

Non-Value-Added - “The 8 wastes”

19

Total Lead Time

Waste In A Value Stream

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

Value Stream: Every activity,from Beginning to End

Value Added Activities – Customer is willing to pay for

Non Value Added Activities – Customer is not willing to pay for

PO

The downward pressure on price is because the customer does not want to pay for the “wastes” in the system.

Waste Eliminated from the System

Invoice

20

The Value Stream / Lead Time

Investing $$

12 Wks Lead Time

Invoice

3 Wks Lead Time

Invoice

9 Wks Invested $$ Now Available

Traditional

Lean

Lead Time Affect on Cash Flow

Value Stream: Every activity,from Beginning to End

As Waste is Eliminated from the Value Stream, the Lead Time is Shortened,

and Invested Dollars Lowered!

21

How Do I…?

STOP / REDUCE

THE

WASTE

22

Lean Tactical Building Blocks

Quick Changeover

Standardized Work Batch Reduction Teams / Culture

Quality at Source

5S / Visual Measures Plant Layout

Point of Use Storage

Cellular/Flow Pull / Kanban / Scheduling

Equipment Reliability

Value Stream Mapping

Continuous Improvement

Foundations of Lean for Office and Manufacturing

23

How to Improve

Utilizing Lean Tools

1. Create a work cell 2. Balance the workload – establish takt time 3.  Implement a pull/kanban system 4. Batch size reduction 5. Simple, visual instructions 6. Point of use storage

24

Impact Of Batch Size Reduction

10 minutes 10 minutes

• Batch & Queue Processing

Lead Time: 30+ minutes for total order 21+ minutes for first piece

10 minutes

Process A

Process B

Process C

Process B

Process A

Process C

• Continuous Flow Processing

12 min. for total order

3 min. for first part

25

Pull System Flow Diagram

Supplier Raw Matl

Process A

Process B

Fin. Goods

Kanban Locations

Process C

Customer

Part Flow

Information Flow

26

Cellular Manufacturing

Linking of manual and machine operations into the most efficient combination to maximize value-added content while minimizing waste.

Punch

Cut to size De-burr

Sand

Form Package

27

Takt Time

Helps us understand the flow patterns and demand rate of processes that are reasonably repetitive in nature.

28

Balance the Process

29

Round Two Preparation

What lean manufacturing techniques can we use to improve our Lego airplane production?

How can we solve the problems?

30

Typical Results

Lead Time Reduction

Productivity Increase

WIP Reduction

Quality Improvement

Space Utilization

Quick Changeover

31

Where do I Start ??

– Current State Map: Create a clear picture of current material and information flow .

– Future State Map: Build a future vision of an improved process through effective use of lean and value stream mapping strategies.

– Action planning: Make it happen.

Value Stream Mapping is key.

Or…….. Just do something ….. Anything.

32

Sample Value Stream Maps

Current State

Future State

Thru put: 4 weeks to 3 days Travel Distance: 4,337 feet to 340 feet

33

Continuous Improvement

Old Adage:

“If you always do what you always did, you’ll always get what you always got.”

Competitive Corollary:

“If the other guy gets BETTER, you’re gonna get LESS.”

34

Conclusion - The Journey to Lean

•  Simple and visual •  Demand driven •  Inventory as needed •  Reduce non-value- added •  Small lot size •  Minimal lead time •  Quality built •  Value stream managers

Lean Traditional

•  Complex •  Forecast driven •  Excessive inventory •  Speed up value-added

work •  Batch production •  Long lead time •  Inspected-in •  Functional departments

Thank You.

“Helping Manufacturers Succeed”

If you can do this for Lego airplanes………...

Think what you can accomplish on a process you understand and care about!

36

Contact Information

• Phone Number: (715) 232-2397 • Fax Number: (715) 232-1105 • Web Site: http://nwmoc.uwstout.edu

NWMOC Central Office

Ted Theyerl NWMOC/CVTC – Project Manager CVTC Gateway Campus 715-874-4658 theyerlt@uwstout.edu