Introduction Operations Analysis and Improvement 2010 Fall Dr. Tai-Yue Wang Industrial and...

Introduction

Operations Analysis and Improvement

2010 Fall

Dr. Tai-Yue WangIndustrial and Information Management Department

National Cheng Kung University

2Dr. Tai-Yue Wang IIM Dept. NCKU

Presentation Asian culture has had a significant impact

on the rest of the world. Many words used in our daily languages.

Martial arts, religion or food.

Within the business environment. Improvement tools (kaizen( 改善 ) tools) Production philosophies such as Just-in-time.

Just-in-time philosophy is also known as Lean Manufacturing.


Presentation Another important philosophy is the concept

developed by a Japanese consultant named Kobayashi( 小林 ). Based on a methodology of 20 keys leading

business on a course of continuous improvement (kaizen).


Presentation The core elements of Kobayashi’s concepts are

presented in order to focus on production improvements. In addition, a measurement standard for

improvement results is also explained.


Introduction

Continuous improvement is a management philosophy based on employees’ suggestions. It was developed in the United States at the end of

the 19th century. Many important improvements took place

when this idea or philosophy arrived in Japan. Japan was already utilizing tools such as quality

circles. When they combined these two ideas, kaizen was born.


Introduction

In 1926 Henry Ford wrote “To standardize a method is to choose out of the

many methods the best one, and use it. Standardization means nothing unless it means standardizing upward.

Today’s standardization, instead of being a barricade against improvement, is the necessary foundation on which tomorrow’s improvement will be based.


Introduction

In 1926 Henry Ford wrote If you think of “standardization” as the best that

you know today, but which is to be improved tomorrow - you get somewhere. But if you think of standards as confining, then progress stops.”


Kaizen vs Reengineering Creating an useable and meaningful standard is key to the

success of any enterprise. Businesses usually utilize two different kinds of

improvements. Those that suppose a revolution in the way of working. Those that suppose smaller benefits with less investment.


Kaizen vs Reengineering

Kaizen

Final situation

Initial situation

time

Reengineering

productivity



The evolution consists of continuous improvements being made in both the product and process.

A rapid and radical change (kaikaku, 改革 ) process is sometimes used as a precursor to kaizen activities. Carried out by the utilization of process reengineering

or a major product redesign.


Kaizen vs Reengineering Require large investments and are based on process

automation. In the U.S., these radical activities are frequently called

“kaizen blitzes”.



If the process is constantly being improved (continuous line), the innovation effort required to make a major change can be reduced (discontinuous line in the left). Otherwise, the process of reengineering can become

very expensive (discontinuous line in the right).


Improvement Philosophies and Methodologies

In order to find the source of a problem, it is important to define and understand the source and core of the problem.

Problem -> Any deviation with respect to the standard value of a variable (quality and production rate). It is necessary to know what the variable objective is

(desired standard) and what is the starting situation in order to propose a realistic objective.


Improvement philosophies and methodologies

Three main factors that production managers fear. Poor quality. Increase of production cost. Increase in the lead time.



Production improvements should be based on the improvements of processes as well as operations. Problems can appear in any of the basic

elements that constitute the production area.



Some example of problems. Defects, obsolete work methods, energy waste, poorly

coached workers, low rates of performance in machines and materials.

By analyzing the production management history, several improvement approaches can be identified. Just-in-time Methodologies (Lean Manufacturing). 20 Keys to Workplace Improvement (Kobayashi).



The keys to the Japanese success are. Simple improvement methodologies. Workers respect. Teamwork.


Just-in-Time--Introduction In accordance with this philosophy principle,

nothing is manufactured until it is demanded, fulfilling the customer requirements “I need it today, not yesterday, not tomorrow.”

The plant flexibility required to respond to this kind of demand is total, and is never fully obtained. It is critical that inventory is minimized.

Product obsolescence can make in-process and finished goods inventory worthless.


Just-in-Time--Introduction

In 1949 Toyota was on the brink of bankruptcy. While in the United States Ford’s car production was at

least 8 times more efficient than Toyota’s. The president of Toyota, Kiichiro Toyoda, presented

a challenge to the members of his executive team. “To achieve the same rate of production as the United

States in three years.”



Taiichi Ohno( 大野耐一 ), vice president of Toyota, accepted his challenge. Inspired by the way that an American supermarket

works, “invented” the Just-in-time method. With the aid of Shigeo Shingo( 新鄉重夫 ) and Hiroyuki

Hirano( 平野博之 ) .



Daiichi Ohno ( 大野耐一 ) and Shigeo Shingo ( 新鄉重夫 ) wrote their goal. Deliver the right material,

in the exact quantity, with perfect quality, in the right place just before it is needed”.

They developed different methodologies.

Thinkingrevolution

The 5S

Standardoperations

One-Pieceflow

Poka-Yoke Jidoka

TPM

JUST IN TIME

Work

forc

e o

ptim

izatio

n

Vis

ual C

on

trol

LevelingProductionKanban

Multi-functionalworkers

SMED


Just-in-Time--Introduction The systematic application of all the methodologies

create a new management philosophy. The real value is the knowledge acquired during its

implementation. The philosophy developed in Toyota was not

accepted until the end of the sixties. Japan in 1973 benefited from the petroleum crisis and

started to export fuel efficient cars to the United States. Since the 1970s, Japan has been the pioneer of work

improvement methodologies.


Just-in-Time--Thinking Revolution

The Western world employed the following formula to obtain the price of a product. Price = Cost + Profit. In Japan, mainly Toyota, employed the following expression.

Profit = Price – Cost. Today, this formula is used worldwide.

In order to make sure that Toyota would work like the supermarket it was necessary to identify and eliminate all business and production wastes.


Just-in-Time--Thinking Revolution

The real cost is “as big as a seed of a plum tree.” In some cases, manufacturers, let the seed (cost) grow

as big as a tree. Managers try to decrease the cost by cutting some leaves out.

In reality, it is more efficient to eliminate tasks that do not add value to the product.

Reducing the tree to a smaller size is equivalent to planting a smaller seed.

The goal of Toyota’s executives was to find this plum tree seed and work hard to reduce the cost.


Just-in-Time--Seven types of Waste

Hiroyuki Hirano ( 平野博之 ) defined waste as “everything that is not absolutely essential.” Few operations are safe from elimination.

He also defined work as “any task that adds value to the product”. In Toyota’s factories outside of Japan, they required

between 5 to 10 times more operations to produce the same car.

Shigeo Shingo identified 7 main wastes common to factories.



Overproduction Producing unnecessary products, when they are not

needed and in a greater quantities than required. Inventory.

Material stored as raw material, work-in-process and final products.

Transportation. Material handling between internal sections.



Defects. Irregular products that interfere with productivity

stopping the flow of high quality products.



Processes. Tasks accepted as necessary.

Operations. Not all operations add value to the product.

Inactivities. Correspond to machines idle time or operator’s idle time.

Inventory is considered the type of waste with greater impact


Just-in-Time--Inventory Inventory is a sign of an

ill factory because it hides the problems instead of resolving them. For example, in order to

cope with the problem of poor process quality, the size of production lots is typically increased.

Products that will probably never be used, get stored.


Just-in-Time--Inventory If the problem that produces the

low quality is solved inventory could be reduced without affecting service.

Sometimes it is necessary to force a decrease in inventory in order to identify the production variability that necessitated it. Then, the work method can be

changed.


Lean Manufacturing Lean Manufacturing is the systematic elimination

of waste. Lean is focused at cutting “fat” from production

activities. Lean has also been successfully applied to administrative

and engineering activities as well.


Lean Manufacturing Many of the tools used in lean can be traced back

to Taylor, Ford and the Gilbreths. The Japanese systematized the development and

evolution of improvement tools. Lean Manufacturing is one way to define

Toyota’s production system. MUDA is the term chosen when referring to lean. In

Japanese, MUDA means waste.


Lean Manufacturing

Lean Manufacturing is supported by three philosophies. Just-in-time Kaizen (continuous improvements)


Lean Manufacturing

Jidoka ( 自働化 ). Translates as autonomation. Machinery automatically inspects each item after producing it,

ceasing production and notifying humans if a defect is detected.

Toyota expands the meaning of Jidoka to include the responsibility of all workers to function similarly.

這個自『働』化與一般的自動化(Automation)不同，它的動加了人字旁，加了人工的智慧。不但會自動生產所需要的零件，也會在發現品質問題時自動停止。引申到一般的生產線自主管理，生產線不但會生產所需的產品，也會在發現問題的時候自動停止！


Lean Manufacturing Traditional approximations improves the lead time

by reducing waste in the activities that add value (AV).

Lean Manufacturing reduces the lead time by eliminating operations that do not add value to the product (MUDA).

Lead Time95% MUDA 5% VA

98% MUDA 2% VA

Lead Time

95% MUDA

Lead Time

90% MUDALead Time

5% VA

10% VA


20 Keys to workplace improvement

Iwao Kobayashi, in 1988, published a book explaining 20 keys to Workplace improvement. They all must be considered in order

to achieve continuous improvement.

2016

121197

14 5

4

815

13101918

17

6

1

2 3



These 20 keys are arranged in a circle. Shows the relations between the

keys and their influence on the three main factors.

Quality, cost and lead time.

2016

121197

14 5

4

815

13101918

17

6

1

2 3


20Leading

Technology

16ProductionScheduling

12Developing

yourSuppliers

11Quality

AssuranceSystem

9MaintainingEquipment

7Zero Monitor

Manufacturing

14EmpoweringWorkers to

Make improve-ments

5Quick

ChangeoverTechnology

4ReducingInventory

8Coupled

Manufacturing

15Cross

Training13

EliminatingWaste

10Time Control

AndCommitment

19ConservingEnergy andMaterials

18Using

Informationsystems

17EfficiencyControl

6Method

Improvement

1Cleaning andOrganizing

2Rationalizingthe system

3Improvement

TeamActivities

Quality

Cost Lead time


Quality


Cost


Lead Time



There are four keys outside the circle. Keys 1, 2 and 3

must be implemented before the rest.

Key number 20 is the result of implementing the other 19 keys.

20Leading

Technology

16ProductionScheduling

12Developing

yourSuppliers

11Quaility

AssuranceSystem

9MaintainingEquipment

7Zero Monitor

Manufacturing

14EmpoweringWorkers to

Make improve-ments

5Quick

ChangeoverTechnology

4ReducingInventory

8Coupled

Manufacturing

15Cross

Training

13Eliminating

Waste10

Time ControlAnd

Commitment

19ConservingEnergy andMaterials

18Using

Informationsystems

17EfficiencyControl

6Method

Improvement

1Cleaning andOrganizing

2Rationalizingthe system

3Improvement

TeamActivities

Quality

Cost Lead time



Kobayashi divided each key into five levels and set some criteria to rise from one level to the next. Kobayashi offers the steps to reach the final level

gradually rather than attempting to directly reach the top.



Kobayashi presents a radar graphic to show the evolution of the factory The scoring of each key is

represented. Kobayashi recommends to

improve all the keys equally. In the radar graphic, the

factory’s scoring will grow concentrically.

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20


Overall Equipment Efficiency (OEE)

To improve the productivity of production equipment Nakajima ( 中島 ) summarized the main time losses for equipment based on the value of three activities.

Available work time -> Calendar time. Fixed time for planned stops -> Preventive maintenance,

operators break. The rest of the time is considered load time.

Load time

Calendar time

Planned stops


Overall Equipment Efficiency

Six main causes that reduce valid operation time. Breakdowns.

The time that the machine is stopped by repairs. Setup and changeovers.

Corresponds to the change time between models, or between products of the same model.

Idling and minor stoppage. Loss time caused by the processes´ randomness or by the worker-

machine cycle complexity.



Six main causes that reduce valid operation time. Reduced speed.

Caused by the wear of components. Defects and reworks.

Low quality products. Starting losses.

Machine produces defects until it reaches the operation steady state.



These six main losses are grouped.

Load time

Useful time

Operating time

BreakdownsSetup and changeover

Idling and minor stoppagesReduced speed

Defects and reworkStarting losses



Load time

Useful time

Operating time

100time load

time setup and breakdowntime loadty AvailabiliA

100time operating

units processedtime cycle stardardePerformancP

100units processed

units defective units processedualityQQ

QPA(OEE) Effeciency

Equipment Overall

The previous grouped losses define three basic indicator. Availability, performance and quality. Overall Equipment Efficiency (OEE) = A · P · Q



Objectives predicted for each indicator by Nakajima. More than 90% in the availability. More than 95% in the rate of performance. More than 99% in the rate of quality.

The main advantage of the implementation of these rates is that they can show how the improvements carried out affect directly the equipment efficiency.



Startitg situation

0,000

0,200

0,400

0,600

0,800

1,000

1,200

1 4 7 10 13 16 19 2 25 2 31 3 37 4 4 4 4 52

A

P

Q

OEE

Transitory improvement

0,000

0,200

0,400

0,600

0,800

1,000

1,200

1 4 7 10 13 16 19 2 25 2 31 3 37 4 4 4 4 52

A

P

Q

OEE

Permanent improvement

0,000

0,200

0,400

0,600

0,800

1,000

1,200

1 4 7 10 13 16 19 2 25 2 31 3 37 4 4 4 4 52

A

P

Q

OEE

Permanent improvement but

worsening in the OEE rate

0,000

0,200

0,400

0,600

0,800

1,000

1,200

1 4 7 10 13 16 19 2 25 2 31 3 37 4 4 4 4 52

A

P

Q

OEE


More on OEE(1/2)

The OEE definition in SEMI E79 is composed of four components.

OEE = Available Efficiency * Operation Efficiency* Rate Efficiency * Rate of Quality


More on OEE(2/2) Available Efficiency

= (Equipment Uptime) / (Total Time) Operation Efficiency

= (Productive Time) / (Equipment Uptime) Rate Efficiency

= (Actual unit output) / (Theoretical unit throughput) /(Productive Time)

Rate of Quality = (Actual unit output – Rework - Scrap)

/ (Actual unit output)

Introduction Operations Analysis and Improvement 2010 Fall Dr. Tai-Yue Wang Industrial and...

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