An Introduction to LEAN MANUFACTURING

History of ManufacturingCRAFT• Made customer specific• Each product is unique• Variable quality /expensive

MASS• Interchangeable –Whitney• Division of labor-Fredrick Taylor• Assembly lines and flow variety-Ford

LEAN• High variety • Small batches• Six sigma quality

What is LEAN?

• “Lean is the elimination of anything not absolutely required to deliver a quality product or service, on time, to our customers.”

• LEAN is fundamentally different business logic• LEAN is based on eliminating unnecessary action• LEAN links value activity in a continuous sequence• “Only a small fraction of total time and effort in an

organization adds value for end customer”

Why LEAN?

• Severe Competitions in all walks of business• Firms face reduction in margins to keep the market

share• Every little saving will improve the economy• Time for every available resource to perform the best• Operation cost reduction is critical to our survival• Profits =price-cost (price dictated by the market and

cost incurred by us)• Cost = activities involved (VA+NVA)

LEAN- Some myths

• LEAN is a factory thing• LEAN will not work here• We tried it, it is another kaizen event• 5S is all about cleaning up your office or

workstation• We are different, it can’t apply to our business• Its an excuse to take our jobs away• Zero inventory

LEAN System -Benefits

The Hard ones (typical)• 15% growth in 1 year• 12% Productivity increment in one year• 20% space saving in one year• 90% on time delivery in full• 28% throughputs lead time reductions• Improved supplier performance• Improved customer quality• Progressive MUDA elimination

LEAN System -Benefits

The Soft ones• Flexible structures assigned to business goals• Roles & Responsibilities assigned to business goals• Process driven culture• Visual demonstration of achievements• Increased employee ability and morale• Visual abnormal situations• Focused application of resources for best return• Believable prediction of results

LEAN Principles

• Specify what creates value from customer’s perspective

• Identify all steps across the whole value stream• Make those actions that create the value flow

at the pull of the customer• Involve and power emplyoees• Strive for perfection by continually eliminating

the successive layers of waste

What is Value?

• Value is what the customer wants, when they want it in the expected quantity and quality

• To establish the “customers wants” employ the QFD (Quality functional deployment) technique

• To analyze the customers wants using KANO model

KANO Model

• Classify Characteristics as Basic, performance and delighter

• Ask two questions1. What if the characteristics is present?2. What if the characteristics is absent?• If 1=neutral, & 2=bad it is basic• If 1=good & 2=neutral, it is delighter

Define values in the eyes of customer

• What product / service?• What attribute / features?• What quality levels?• What delivery?- Rate- Response time expectations• Are we measuring it? If yes, how?

• Visual Representation of a Value Stream or the work process• Pencil & Paper Tool with lots of post its • Helps Reveal Waste & Problems with the Flow • It Establishes a common language to document a process• Provides a blueprint for improvement

A value stream involves all the steps in a process, both value added and non value added, required to complete a product or service from beginning to end.

What is a Value Stream?

What is a Value Stream Map?

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What is WASTE?

Any Activity that DOES NOT increase the Market Form or Function of the Product or Service based on the Critical Customer Requirements.

These are things the customer is NOT willing to pay for.

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Value Added

Any activity that increases the market form or function of the product or service. (These are things the customer is willing to pay for.)

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.)

Where is the Waste?• Defects – incomplete or incorrect information

• Overproduction – releasing work before next process can work on them, unbalanced work loads

• Waiting – unbalanced work loads, slow system response, incomplete information, approvals

• Not Utilizing Employees – old guard thinking, politics, high turnover, low investment in training

• Transportation – poor layout, poor flow

• Inventory – large batches, complexity to complete task

• Motion – poor organization, no standard work

• Excess Processing – excess communication, lack of communication, unnecessary approvals, customer requirements are not clearly understood

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

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•Understanding the Process

•Information and Material Flow

•Data Driven Decision Process

Prerequisites of Value Stream Mapping

94% if Failures are due to Poor Systems6% are caused by Worker Mistakes

Taiichi Ohno’s 7 Wastes (muda)

types of waste: overproduction waiting time transport process inventory motion defective goods

7 Service Wastes

• Delay – customers waiting for service.• Duplication – having to re-enter data, repeat details etc.• Unnecessary movement - poor ergonomics in the service encounter.• Unclear communication – having to seek clarification, confusion over use of

product/service.• Incorrect inventory – out of stock.• Opportunity lost – to retain or win customers.• Errors – in the transaction, lost/damaged goods.

The 5S’s• The 5S‘s are simple but effective methods to organise the

workplace. • The methodology does however, go beyond this simple

concept, and is concerned with making orderly and standardized operations the norm, rather than the exception.

• Posters bearing the 5S terms can be found on the walls of Japanese plants, and are a visual aid to organisational management.

The Japanese Origins• Seiri Sort

• This requires the classifying of items into two categories, necessary and unnecessary, and disregarding or removing the latter.

• Seiton Straighten• Once Seiri has been carried out Seiton is implemented to classify

by use, and arrange items to minimise search time and effort. The items left should have a designated area, with specified maximum levels of inventory for that area.

• Seison Shine• Seison means cleaning the working environment. It can help in the

spotting of potential problems as well as reducing the risk of fire/injury by cleaning away the potential causes of accidents.

The Japanese Origins• Seiketsu Systematise

• Seiketsu means keeping one's person clean, by such means as wearing proper working clothes, safety glasses, gloves and shoes, as well as maintaining a clean healthy working environment. It can also be viewed as the continuation of the work carried out in Seiri, Seiton, and Seison.

• Shitsuke Sustain– Shitsuke means self-discipline. • The 5 S‘s may be viewed as a philosophy, with

employees following established and agreed upon rules at each step. By the time they arrive at Shitsuke they will have developed the discipline to follow the 5 S‘s in their daily work.

Principles for Implementing Lean Manufacturing

Lean Building Blocks

Quick Changeover

Standardized Work

Batch Reduction

Teams

Quality at Source

5S System Visual Plant Layout

POUS

Cellular/FlowPull/Kanban TPM

ValueStreamMapping

KAIZEN

Push Production/Distribution Systems

• A push system produces finished goods inventory in advance of customer demand using a forecast of sales.

• Parts and subassemblies are “pushed” through the operating system based on a predefined schedule that is independent of actual customer demand.

• A traditional automobile factory and distribution system is a good example of a push system.

TAKT time

• The available operating time to satisfy customer demands

• Establishes the pace, beat or cadence of the process

• TAKT time is used to balance the various loads and identify the bottlenecks in the process

Flow

• Using one piece flow by linking of all the activities and processes into the most efficient combinations to maximize value-added content while minimizing waste.

• The waiting time of work in progress between processes is eliminated, hence adding value more quickly.

Pull

• Pull = response to the customer’s rate of demand i.e. the actual customer demand that drives the supply chain.

• Based on a supply chain view from downstream to upstream activities where nothing is produced by the upstream supplier until the downstream customer signals a need.

Perfection

• The journey of continuous improvement.

• Producing exactly what the customer wants, exactly when, economically.

• Perfection is an aspiration, anything and everything is able to be improved.

Summary• Lean manufacturing was developed by the Japanese.• Lean is a philosophy that seeks to eliminate waste in all

aspects of a firm’s production activities.• Lean is principally associated with manufacturing industries

but can be also equally applicable to both service and administration processes.

• Works on 5 basic principles.• Cornerstone of Lean is the Toyota Production System.• Considers 7 Wastes (muda).• Utilises 5 S methodology.