Lean in a Lean Economy
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Transcript of Lean in a Lean Economy
Copyright EMS Consulting Group, Inc. 2008
Lean Manufacturing in a Lean Economy
Darren Dolcemascolo
EMS Consulting Group, Inc.
Copyright EMS Consulting Group, Inc. 2008
Lean Manufacturing in a Lean Economy
• You will learn:– The need to become lean today– Benefits you can expect by implementing a
lean initiative– Principles and steps of implementing a
lean program– Critical success factors—the reasons that
lean ideas fail in so many companies, and how to avoid these pitfalls
Copyright EMS Consulting Group, Inc. 2008
Presentation Agenda
1. Lean Manufacturing Principles and Benefits
2. The Lean Implementation Process
3. Pitfalls/Critical Success Factors
4. Q&A
Copyright EMS Consulting Group, Inc. 2008
• Not a set of Techniques• Structural System• The house is strong only if the:• Roof is strong• Pillars are strong• Foundation is strong• People are strong
• A weak link weakens the whole system
The TPS House Diagram
A System Based on a StructureGoal:
Highest Quality, Lowest Cost, Shortest Lead Time
Best Safety, High Moral
TPS
Just In TimeRight part-
Right amount-Right Time
JidokaBuilt-in-Quality
• Line Stop• Efficiency• Visual
Controls• Error
Proofing• Andon• 5 Whys
Operational StabilityStandardized Work TPM
KaizenLeveled Production
• Flow• Takt Time• Pull• Quick
Changeover
Toyota Production System
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Lean Manufacturing Overview
• Value - A capability provided to a customer at the right time at an appropriate price, as defined in each case by the customer. Features of the product or service, availability, cost and performance are dimensions of value.
• Waste - Any activity that consumes resources but creates no value.
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Lean Manufacturing Overview
• Lean Manufacturing is an operating philosophy that focuses on the elimination of the seven wastes:– Overproduction – Excess inventory – Defects – Non-value added processing – Waiting – Excess motion – Transportation
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What does Lean do?
Value-Creating Time
Non-Value-Creating Time (waste)
Total Lead Time
Total Lead Time
Lean Transformation
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Lean Manufacturing OverviewMeasure Initial Lean Conversion Continuous
Improvement
Labor Productivity Double Double Again
Production Throughput Times
90% reduction 50% reduction
Inventories Throughout 90% reduction 50% reduction
Errors Reaching Customers
50% reduction 50% reduction
Scrap 50% reduction 50% reduction
Time to Market / New Product Development
50% reduction 50% reduction
Lean Thinking, Womack and Jones, 1996
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Lean Conversion Process
“The greatest enemy to tomorrow’s success is sometimes today’s success.”
- John Maxwell
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Current State of Our Economy
• Credit Crisis: Difficult for Businesses to Obtain Credit to– Meet Payroll– Purchase Raw Materials– Grow as a company
• Unemployment on the Rise• Major Recession
Copyright EMS Consulting Group, Inc. 2008
How Can Lean Help?
• Current Economic Conditions create an opportunity for lean thinking – a need to go lean based on survival!
• Applying lean principles will create the following:– Shorter Lead-Times to Customers– Net Decrease In Inventory- Frees Up Cash– Productivity Growth- increases capacity without
additional capital/hiring– Quality Improvement- lowers costs and attracts
additional business
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How Can Lean Help: Shorter Lead Times
• Benefits to Operation– Ability to Quote Jobs Faster– Ability to Process Orders Faster– Ability to Get Orders to Production Faster– Ability to Process Jobs Through Production
Faster• Competitive Advantages
– Attract more business– Get paid faster/rely less on credit
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How Can Lean Help: Decrease in Inventory
• Benefits to Operation– Freed up floor-space– Freed up cash
• Competitive Advantages– Have cash on hand for expansion of
business or to handle short-term “down” periods
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How Can Lean Help: Productivity Growth
• Benefits to Operation– Lower Product Costs– Increased Capacity
• Competitive Advantages– Increased profitability – Ability to compete on price due to lower
costs– Attract more business
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How Can Lean Help: Quality Improvement
• Benefits to Operation– Lower Product Costs– Better Quality Product Produced
• Competitive Advantages– Increased profitability – Attract more business
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How Can Lean Help: Bottom Line
• Lean thinking will help a company become self-reliant:– Fuel for growth by producing better quality, lower
cost products with the shortest lead times.– Ability to Grow without relying on the availability of
credit from financial institutions.
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Lean Conversion Process: Lean Thinking
• Specify value – can only be defined by the ultimate customer
• Identify the value stream – exposes the enormous amounts of waste
• Create flow – reduce batch size and WIP
• Let the customer pull product through the value stream – make only what the customer has ordered
• Seek perfection – continuously improve quality and eliminate waste
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Value Stream Approach• Select Product Family• Create current and future state maps• Develop and manage action plan using
Project Management approach
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Planning Tool: Value Stream Mapping
• Definitions
- Current State Map – Map showing information and product flow as it is currently done.
- Future State Map - Map showing an attainable information and product flow with significantly less waste than that of the current state.
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Value Stream Mapping
• Purpose of Mapping– To identify and eliminate waste in the value
stream.• End Product of VSM
– Picture of “future state” with an action plan to achieve it.
– Prioritized Projects
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Value Stream Mapping: Current State
• Begin mapping at the end of the process (customer) and work backwards.
• Then, map the information flow from your customer back to your supplier.
• Connect the two.
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Current State Value Stream Map
Process C
Data
Customer
Units/day
Production
Control
MRP
Process B
Data
Process A
Data
Raw Matl.
Units/day
Supplier
Value Creating Time = 180 seconds
Lead Time = 18 days
Material Flow
Information Flow
I I I
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Value Stream Mapping: Future State Elements
• Flexibility• Short Lead-Time• Connected Processes• Flow Loops• Simplified Information Flow• Awareness of the Customer Requirement• Scheduling one point in the value stream
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Kaizen Event Approach
• Kaizen Event Overview– 3 to 5 day breakthrough event– “Working level” participants w. facilitator– Appropriate for use with several lean tools– Appropriate for new implementations and
for continued improvement
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Kaizen Events
• Typical Tools– 5S– SMED (Single Minute Exchange of Die)– TPM (Total Productive Maintenance)– Mistake Proof (Poka-Yoke)– Visual Controls– One-Piece Flow/Takt Time/Layout
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Kaizen Events
• Kaizen Event Process– Educate (1/2 – 1 day) – Lean with emphasis on
particular tool– Set goals– Map out baseline– Brainstorm ideas– Select ideas and formulate future state– Develop plan to implement future state (Implement
as much as possible immediately- during event.)
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Kaizen Events
• Advantages– Exciting experience for all involved– Can Accomplish Improvement Rapidly– Participants learn a great deal– Skeptics can be won over– Valuable tool for implementing aspects of a
value stream improvement
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Kaizen Events
• Disadvantages– Improves points in the process but without VSM
approach, does not lead to flow across the enterprise
– Action list at the end often is ignored- important to meet weekly until complete.
– Tendency to revert to old methods after the event.– No lasting cultural change.– Tendency to judge events on short-term cost
savings only
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Where to Start- Toyota’s 4 P’s?
1. Philosophy – Hold an off-site meeting of top leaders and define your company’s vision
2. Process – Begin implementing a connected value stream.
3. People – Train and indoctrinate your people into the new lean way of thinking, effecting culture change.
4. Problem Solving – Train people in a problem-solving methodology and give them time to meet in groups and solve problems.
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Typical Approach that Works1. Perform an assessment and develop an overall
plan for implementation. Create a Company X Production System based on an assessment.
2. Select some key items/pilot projects for process improvement (based on an assessment) and implement kaizen/5S.
3. Combine VSM approach with problem solving and 5S training.
a) Use the Value Stream Mapping approach to identify improvement projects (both kaizen and “six sigma” projects)
b) Roll out 5S implementation and basic problem solving training plant-wide to build momentum.
Copyright EMS Consulting Group, Inc. 2008
Typical Approach that Works4. Implement the projects/roll out lean training in small
bites in conjunction with projects5. Continue expanding by value stream (or
department), whichever makes more sense.6. Extend across entire organization.7. Create a Lean Promotion Function.8. Develop a growth strategy for additional business.9. Extend Lean to Your Suppliers.
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Pitfalls/Barriers• Too much compromise/Lack of Leadership
Commitment to Lean• Tendency to Revert Back to Old Ways when
setbacks occur• Tendency to use TPS/Lean as a Cookbook• Tendency to make surface changes without
applying lean principles properly (customizing to suit the situation)
• Short-Term Thinking at the Expense of Long Term
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Roles in Change Process
Lean Coach
Executive Sponsor
Process Owner
Value Stream Team
Resources Accountability
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Leadership• Top management support /commitment is
critical for successful lean transformation.• Support and commitment means not only lip
service but $$, resources, making difficult decisions, and eliminating roadblocks.
• Middle managers down to team leaders must become change agents- the transformation from skeptic to teacher does not happen overnight.
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Lean Coach/Teacher• Internal or external lean expert that teaches
but does not do the work. The lean coach:– Leads model line programs – Leads value stream mapping– Leads kaizen events– Teaches lean tools and philosophy through
courses and improvement events– Coaches leaders at all levels– Develops the lean operating system (metrics,
principles, assessment approaches)– Internally promotes the lean transformation.– Externally learns and brings back new ideas.
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Key Ingredients of Change
Change
Effort
Learn by doingEducation &mentoring
Accountability
Committed, Knowledgeable
Leadership
Structure• Organization• Documents• Roles/Resp
Participation &Ownership
Lasting Results
Toyota Way Fieldbook, Liker and Meier, 2005
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Culture Change
• Education and changing metrics alone will not drive culture change
• Seeing/Experiencing is believing.• Lean must be tried and the word must
be spread through successes in pilot projects.
• Strong leadership is necessary to drive culture change.
Copyright EMS Consulting Group, Inc. 2008
Recap• The Current Economy is a compelling reason to
implement lean• Lean thinking will help a company become self-
reliant:– Fuel for growth by producing better quality, lower
cost products with the shortest lead times.– Ability to Grow without relying on the availability of
credit from financial institutions.• Lean Requires a Systematic Implementation
Approach• Lean Requires Strong Leadership
Copyright EMS Consulting Group, Inc. 2008
Lean Conversion Process
“Perfection is not attainable, but if we chase perfection, we can catch excellence.”
- Vince Lombardi
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Questions?