LEANTRANSFORMATION

CulturalEnablersandEnterpriseAlignment

LEANTRANSFORMATION

CulturalEnablersandEnterpriseAlignment

SureshPatel

CRCPressTaylor&FrancisGroup

6000BrokenSoundParkwayNW,Suite300BocaRaton,FL33487-2742

©2016byTaylor&FrancisGroup,LLCCRCPressisanimprintofTaylor&FrancisGroup,anInformabusinessNoclaimtooriginalU.S.Governmentworks

Printedonacid-freepaperVersionDate:20160419

International Standard Book Number-13: 978-1-49874336-5 (Hardback) This book contains informationobtainedfromauthenticandhighlyregardedsources.Reasonableeffortshavebeenmadetopublishreliabledata and information, but the author and publisher cannot assume responsibility for the validity of allmaterialsortheconsequencesoftheiruse.Theauthorsandpublishershaveattemptedtotracethecopyrightholdersofallmaterial reproduced in thispublicationandapologize tocopyrightholders ifpermission topublish in this formhas not been obtained. If any copyrightmaterial has not been acknowledgedpleasewriteandletusknowsowemayrectifyinanyfuturereprint.

Except as permitted under U.S. Copyright Law, no part of this book may be reprinted, reproduced,transmitted,orutilizedinanyformbyanyelectronic,mechanical,orothermeans,nowknownorhereafterinvented, includingphotocopying,microfilming,and recording,or inany informationstorageor retrievalsystem,withoutwrittenpermissionfromthepublishers.

For permission to photocopy or use material electronically from this work, please accesswww.copyright.com(http://www.copyright.com/)orcontact theCopyrightClearanceCenter, Inc. (CCC),222 Rosewood Drive, Danvers, MA 01923, 978-750-8400. CCC is a not-for-profit organization thatprovides licenses and registration for a variety of users. For organizations that have been granted aphotocopylicensebytheCCC,aseparatesystemofpaymenthasbeenarranged.

TrademarkNotice:Productorcorporatenamesmaybetrademarksorregisteredtrademarks,andareusedonlyforidentificationandexplanationwithoutintenttoinfringe.

LibraryofCongressCataloging-in-PublicationDataNames:Patel,Suresh(Qualitymanagementconsultant),author.

Title:Leantransformation:culturalenablersandenterprisealignment/SureshPatel.Description:1Edition.|BocaRaton:CRCPress,2016.|Includesbibliographicalreferencesandindex.Identifiers:LCCN2015048105|ISBN9781498743365Subjects:LCSH:Organizationaleffectiveness.|Productmanagement.|Qualitycontrol.|Corporateculture.Classification:LCCHD58.9.P38252016|DDC658.4/013--dc23LCrecordavailableathttps://lccn.loc.gov/2015048105

VisittheTaylor&FrancisWebsiteathttp://www.taylorandfrancis.com

andtheCRCPressWebsiteathttp://www.crcpress.com

IwanttodedicatethisbooktoMr.K.K.Nair,executivedirector,Ahmedabad

ManagementAssociation,whoencouragedmetowriteitafterreceiving

excellentfeedbackfromthedelegatesatthefirst-everLeanSixSigmathree-day

courseattheAMAinJune,2011.

Ialsodedicatethisbooktomydearwife,Pushpa,whohadtobearmany

disruptionsandinconvenienceswithoutmyhelp,andwithoutherfull

cooperation,thisbookwouldnothavematerialized.

Contents

ForewordbyMadanMohankaForewordbyTaiichiOhnoAcknowledgmentsMakingItBiginManufacturingProductandProvidingService

SECTIONILeanCultureEnablers

Chapter1Introduction

HistoryofLean

Chapter2BusinessProcess

RoadblockstoLeanTransformationBusinessProcessViewManagingthePurposeSIPOCDiagram

Chapter3EmbarkingontheLeanJourney

ShingoProcessWhiteCoatLeadershipversusImprovementLeadershipNurturingtheLeanCulture

RespectfortheIndividualABigNo–NoWIFMResolution(WhatIsinItforMe?)

LeadingwithHumility

Chapter4TechniquestoChangetoLeanCulture

Cross-Training:AWin–WinSituationStepstoImplementCross-TrainingOn-the-JobTraining

PreparetheTrainee

PreparetheTrainingMaterialsandtheTrainerEvaluatetheTrainingDeliveredandtheLessonsLearned

CoachingandMentoringTeamManagementTeamDynamics

FormingStormingNormingPerformingClosing/Adjourning

HandlingProblemPeopleConflictsTeamDecisionandConsensusBuilding

ReachingConsensus:SomeTipsSuggestionSchemesTheIdeaBoardSafeWorkingEnvironment

SECTIONIIPrinciplesofContinuousImprovementProcess

Chapter5ImportanceofPrinciples,Systems,andToolsinContinuousImprovement

WhatIsaPrinciple?PrinciplesGovernConsequences

Chapter6PrinciplesofContinuousImprovementProcess

ProcessFocusIdentificationandEliminationofBarrierstoFlow

FunctionalSilosQualityasaSpecializedFunctionCostAccountingNineWastes(Muda)Muri(Overburden,Stress)MuraNotManagingtheFlow

MatchingtheRateofProductiontotheLevelofCustomerDemand

ScientificThinkingScientificThinkingProcessManagementbyFactGoandSee

Jidoka(Automation—CombinationofAutomationandMistakeProofing)IntegrateImprovementwithWorkSeekPerfection

Chapter7QualityIsBuiltintheProductorServiceattheSource

StandardWorkSuccessiveChecksSelf-ChecksVisualManagementPokaYoke(ErrorProofing)

NoDefectPassedForwardSeparateManfromMachineMultiprocessHandling—MultimachineHandlingCellular(Cell)ManufacturingStopandFix

SECTIONIIIContinuousImprovementProcessTOOISandPractices

Chapter8ContinuousImprovementProcessSystem

VisualWorkplaceTransferringVitalInformationintoVisualDevices“TheFirstQuestionIsFree”RuleoftheVisualFactory

5SStandardsSystemCompletewithImplementationGuidelines5SActivities

TheBenefitsof5SArePDCAModelfor5SImplementation

WhentoUsethePlan–Do–Check–ActPlan–Do–Check–ActProcedure5SAuditRadarChart

SortKeyInformationforSorting

KeyActionstoSortDevelopCriteriaforSortingMoveItemstoaHoldingAreaRemovingItemsfromtheHoldingArea

UsetheBottomGrayPortionoftheRedTagandMarkStraighten

KeyInformationaboutStraightenKeyActionstoStraightenOutlineLocationswithLines(Tape)

ShineKeyInformationaboutShineImmediateBenefitsofCleanlinessKeyActionstoShineTheOne-MinuteorOne-PointLesson

AdoptCleaningasaFormofInspectionImportantNotefortheTeamLeader

StandardizeKeyInformationaboutStandardizeKeyActionstoStandardize

SustainLessonFiveCriticalFactorsEnsureaSuccessful5SImplementation

LotSizeReductionandProductionLevelingSystem(Heijunka)HeijunkaDefinitionTotalVolumeofAllModelsModelSequenceandModelVolumeEqualVolumebutMixedProductsDifferentVolumesandMixedProducts

TotalProductiveMaintenanceSystem(TPM)andItsImplementationEffectiveTPMEliminatestheFollowingLossesWhatAretheSteps?WhatAretheResourceRequirementsforImplementation?FirstThingsFirstManufacturingEquipmentTPMSpecificationImplementingTPMOverallEquipmentEffectiveness(OEE)AnalyzeResultsofOEEDaily

StandardWorkStandardWorkDefinitionTaktTime

RulesofTaktTimeCycleTimeStandardWorkSequence

ProcessInstructionDocumentStandardWork-in-Process

ContinuousImprovementStandardizedWorkSustainsContinuousImprovementsKaizenKaikaku

PDCA—ProblemSolvingandProcessImprovementModelPDCAImprovementCycle

ToolsofProblemSolvingThatAreAppliedasPartofPDCACauseandEffectDiagramParetoChart

ParetoAnalysisofPrintingDefectsParetoDiagramofTotalPrintingDefects

CheckSheetControlChartHistogram

HistogramConstructionScatterDiagramFlowchartValidateRootCauseofaProblemWhenProblemSolvingIsNotEnough,DeployDMAIC(SixSigma)EmployeeInvolvement

KaizenGuidelinesforFacilitatingaSuccessfulKaizenEvent

PreparefortheEvent,TeamRoles,andIssuesKaizenEventIssues

JobSecurityPolicyDisplacedWorkersPolicyPayGradeDifferencesPolicyUnionIssues

TeamLeaderShouldFocusonWorkerParticipationPlanforAdvanceProduction

RunningaSuccessfulKaizenEventManagementand/orSponsorParticipationIsRequiredFollowingUptheKaizenEventChangeManagement

CommitmenttoChangeWhyDoPeopleResistChange?AftertheKaizenEvent—SustainImprovements

A3ReportCorrective/PreventiveActionSystem

RootCauseAnalysis(RCA)

Chapter9ContinuousImprovementProcess

ValueStreamMappingCustomerLoop,SupplierLoop,ManufacturingLoop,andLeadTimeBarCustomerLoop,SupplierLoop,ManufacturingLoop,LeadTimeBar,andInformation,MaterialResourcePlanning(MRP)Loop

ExerciseFutureStateMappingErrorProofing

FailureModeandEffectAnalysisFailureModePFMEAInputsandResultsPFMEA—StepbyStepPreventionorDetectionDefinitionofTermsRatingScaleExampleRiskPriorityNumber(RPN)DynamicsoftheRPN

ContinuousFloworOne-PieceFlowOrderFulfillmentProcess

SetupReductionPullSystemKanban

SECTIONIVLeanPerformanceMeasuresandPerformanceAssessment

Chapter10LeanPerformanceMeasures

On-TimeDelivery(OTD)Definition

CostofNonconformance(CONC)DefinitionProductWarranty

FieldFailureCosts(ProductWarranty)As-ReceivedFailureCosts

ReworkScrapExcessandObsoleteInventoryMaintenanceOvertime(Premium)PremiumInboundandOutboundFreight

Chapter11LeanToolSystemAssessment

ValueStreamMapping5SStandardizedWorkTotalProductiveMaintenance(TPM)ErrorProofingSetupReductionContinuousFlowPullSystemToolAssessmentSummaryRadarChartLeanAssessment

Appendix1:AttributesofaTrulyLeanOrganization

Appendix2:JobDescriptionofaLeanSupervisor

Appendix3:JobDescriptionofaLeanTeamLeader

Conclusion

Glossary

Bibliography

Index

AbouttheAuthor

Acknowledgments

Acknowledging the help and guidance in writing these sister books is likechurningtheoceansoftheworldandputtingalltheblessingsinateacup.Ifinditverydauntingbecauseduringmymorethan50yearsofindustryexperience,Ihavebeenguidedandhelpedbymanypersons,companies,andinstitutionswithwhose associations, I have learned, practiced and taught these subjects andachievedmodesttoexcellentresults.

After I decided to return to Ahmedabad from Texas, Prof. R. D. Patel, afinanceprofessoratIIMAhmedabad,askedmetoaddresstheirSMEprogramasaguestspeakertotalkaboutLeanSixSigma.Thefeedbackfromtheattendeeswas good, and he (Prof. Patel) took me to the Ahmedabad ManagementAssociation(AMA) tomeetwith itsexecutivedirector,K.K.Nair,whoaskedme to conduct a second five-day AMA Lean Six Sigma seminar attended byindustryrepresentativesfromRajkot,Vadodara,Surat,andAhmedabad.Thisledto another seminar at AMA and an invitation by the HR head of ISRO(equivalent to IndianNASA), J. Ravisankar, to address ISRO technicians andengineers on the subject of zerodefects deliveryof space systems,whichwaswellreceived.

Consequently,K.K.Nair askedme towrite a bookonLeanSixSigma forIndian engineers.My learning and experience as an operations excellence andengineeringmanager at EatonCorporation (Eden Prairie,MN,USA) and FiatGlobal(BurrRidgeOperations,Chicago,IL,USA)mademetakeaholisticviewand include the global quality management system at the bottom rung andbusinessexcellenceatthetoplevel.SoIwoundupwritingfourbooks.

Ithankthefollowingindividualsfortheircontributionstomyknowledgeandall the help and guidance they offered me in my career, which resulted increating these books: C. S. Patel, former CEO of Anand Group, leadingautomobile companies manufacturing automotive components; the late D. N.Sarkar,CMDofGestetnerLimited;SamirKagalwala,consultantforthedesignand manufacture of power magnetics; Stefan Lorincz, renowned electronicsengineer and source developer for key electronic components worldwide atPhillips,Holland;LevyKatzir, formerMotorolaVP,whoputme in chargeofthequalityandreliabilityofthenewlydevelopedelectronicballastsin1994;G.

P.Reddy, formerdirectorofqualityatUniversalLightingTechnologies; InderKhatter, internationalQMSleadauditorforDNV,Houston,USA;DevRaheja,internationalconsultantandco-authorofAssuranceTechnologiesPrinciplesandPractices;FrankKobyluch,globalgeneralmanageratKleinToolsand formerplantmanageratEatonCorporation;andDonJohnson,directorofqualityatFiatGlobal–CaseNewHollandDivision.

Myspecialthanksandgratitudealsogotomycolleaguesandteammembersat the following companies where I worked, learned, developed, andimplemented many of the tools and techniques contained in these books:Gestetner Limited (now Ricoh India); Energy Savings, Inc., Schaumburg,Chicago, IL; United Lighting Technologies, Nashville, TN, USA; EatonHydraulics,EdenPrairie,MN;andFiatGlobal–CaseNewHolland,BurrRidge,Chicago,IL.

My abilities as an operations excellence manager in charge of providingqualityproductsforCFLballasts,hydraulicvalves,pumps,hydraulichoses,andfittings were honed, tested, and appreciated by customers such as GE CFLLamps,OsramSylvania,JohnDeere,CaseNewHolland,OshkoshCorporation,manufacturersof severeheavy-dutyall-wheeldrivedefense trucks,Caterpillar,GM trucks, Ford trucks, Volvo trucks, Zamboni ice resurfacer (for OlympicGames),etc.

Iwillremaingratefultothefollowingsupplierswhocollaboratedwithmeandmy team in developing components and major assembly units requiringextremely high-precision and pre-or posttreatments: Parker Hannifin, whichsupplied high-quality hydraulic seals and O-rings; Bosch, which suppliedspecialtyhydraulicvalves;CarraroPune,whichsuppliedacompletefour-speedtransmissionunitforagricultural tractors;TGL-CarraroPune,whichdevelopedprecision gears and shafts for transmissions; Carraro, Quingdao, China, withwhichwedevelopedtheentirerearaxleassemblyforbackhoeloaders;GrazianoTransmission, Noida, India, in which we developed a continuously variabletransmissionunitforatractorforthefirsttimefortheU.S.market;GNAGroupPunjab,which supplied us forged and precisionmachined components for thetractor transmission assemblies; and Craftsman Automation Limited,Coimbatore, which machined our large castings for transmission bodies andcoversusingheavyCNCmachinesanddigitalCMMs.

I have remained in touch with developing technology and professionalknowledgethroughtheAmericanSocietyforQuality,whosemembershipIhavehadsince1993.

Illustrations and design of charts and figures in these books were done bySanjayTrivediandMinalMehta.

MakingItBiginManufacturingProductandProvidingService

Itisageneralbeliefthatsuccessfulpeopleineveryfieldareblessedwithtalentorarejustlucky.However,thefactissuccessfulpeopleworkhard,worklong,andworksmart.

MarissaAnnMayer, thecurrentpresidentandCEOofYahoo,used towork130hoursperweekwhileworkingatGoogle. India-born IndraKrishnamurthyNooyi,thechairmanandchiefexecutiveofficerofPepsiCo,workedmidnightto5a.m.asa receptionist toearnmoneyso thatshecouldcompletehermaster’sdegreeatYaleUniversity.In1958,QimatRaiGuptalefthiseducationmidwayandfoundedElectricTradingoperationsintheelectricwholesalemarketofOldDelhi, India. With an investment of Rs 10,000 ($150), he started HavellsIndustries. Today, Havells is a billion-dollar company. In his own words,“Overnightsuccessmeans25yearsofhardwork,devotion,anddedication.”

The story of the founder and CEO of the Kolkata, India–based TegaIndustries,MadanMohanka,isunique.Whenhewentintobusiness,hehadtheright combination—hailing from a business family, having an engineeringdegree, getting an MBA from IIM Ahmedabad, and having a foreigncollaborator as a joint partner. Yet this combination failedmiserably.Hewaswitnessingtheimminentclosureofhiscompanyin1979,butliketheepicheroOdysseus,heneverlostfocusforamoment.Hekeptatit.Somethreedecadeslater, it is Madan’s die-hard optimism that saw Tega Industries become thesecond-largestplayerintheworldinrubbermillliningproductsfortheminingindustry.

In her book Stay Hungry, Stay Foolish, Rashmi Bansal (IIMA Graduate)depictedMadanMohanka’shard-wonstoryveryaptly.ShesaidMadanfacedallhurdlesandchallengesstartingfromscratch,butthenMadanhadwhatyoucallan “obsession.” Over the last three decades,Madan built a strong foundationcombining three technologies, viz., mechanical engineering, rubber (polymer)technology, and mineral processing and grinding. Over the last 5 to 6 years,Tega accepted challenges, grabbed overseas marketing opportunities, andmaintainedconsistentgrowthkeepinganeyeonthemargins.

Tega’s presence in 19 international locations has enabled it to increase a

turnoverof$4millionin2009to$120millionin2014.AccordingtoMehulMohanka,Madan’ssonwhotrainedandearnedanMBA

in theUnited States, the stage is now set for organic and inorganic growth—organically building up larger capabilities and inorganically looking foracquisitions for successful integration with Tega’s culture, values, andphilosophy.

SectionI

LeanCultureEnablers

1

Introduction

ManypeopleoftencomeacrossthewordLeanandwonderwhatitisallabout.Well,Leanisneitheraboutgettingasix-packbellynoraboutbeingskinny.

Lean is amethodology foroperational excellence. It isbasedon theToyotaProduction System (TPS). TPS differentiates between two fundamentallydifferentbusinesssystems—Leanproductionversusmassproduction.Thesearetwoverydifferentwaysofthinkingtocreatevalueforthecustomer.

“Leanmanufacturing” is a favoritebuzzwordofbusiness circles today. It iseasyfortheuninitiatedtobeunclearonthedifferencebetweenLeanandmassmanufacturing.Infact,theydifferinmanyways,fromphilosophyandbusinessstrategytoproductionmodelsandcompanyculture(Table1.1).

Leanisdefinedasfollows:

•Apassionatebeliefthatthereisalwaysasimpler,betterway;worksmarternotharder•Acontinuousdrivetoidentifyandeliminatewaste

• A way of thinking that empowers employees (including executiveemployees) to use their talent to improve the business every day • Aculture that extends the concepts of Lean across all business processes

usingacommontoolsetTABLE1.1MainCharacteristicsofMassandLeanProduction

LeanProduction MassProduction

Lowvolume HighvolumeManyproducts FewproductsRapidsetup SlowsetupShortproductlifecycle Longproductcycleindevelopment,design,andmanufacturingphasesFastresponsetomarketchange SlowresponsetomarketchangeControlbasedonproductknowledge Controlbasedonpartnumbers

HISTORYOFLEANForthefollowingcompilationofthehistoryofLean,themainreferenceisfromWomack, Jones, andRoos (1990,TheMachine that Changed theWorld: TheStoryofLeanProduction,NewYork,HarperCollins).

Early1900s

HenryFordcreatesefficientassemblylines—massproduction.TheModel-TautomobileisconsideredasthefirstexampleofLeanproductionwithsimpledesignandinterchangeableparts.

1913

Fordimplementsacontinuous-flow(moving)assemblyline,slashingcycletimes. Ford separates skilled trades from assemblers to speed uptraining.

1920

Fordproducesmorethan2millionvehiclesperyearandcutscostsbytwo-thirds.

1920s

Ford Motor Company’s operation adopts the key element of scientificmanagementpromotedbyFrederickW.Taylor(1856–1915)havingthefollowingmaincharacteristics:–Standardizedproductdesigns–Massproduction–Lowmanufacturingcosts–Mechanizedassemblylines

–Specializationoflabor–Interchangeableparts

1926

Toyoda Loom Works develops Jidoka—a device that detects a brokenthreadandstopstheloom.Oneoperatorcanthusoperatemanylooms.

1937

ToyotaMotorCompany(TMC)isborn(loomsandtrucksformilitaryandfinallyautomobiles).

1940s

TaiichiOhno, Toyota’s chief production engineer, experimentswithU.S.presses and perfects a quick die changeover called “singleminute dieexchange”(SMED).

1950

EijiToyoda,aJapaneseengineer,visitsFordMotorCompanywithTaiichiOhno,beginningtheLeanmanufacturingrevolution.The13-yeareffortofToyotaMotorCompanyhadproduced2685automobilesupto1950,comparedwiththe7000automobilesproduceddailyattheFordRougePlantinDetroit.Thiswassoontochange(Womacketal.,1990,p.48).

Early1950s

The U.S. automotive is mighty—the United States and Europe embracemassproductionandautomation(Ohnoseeswaste).

1950s–1960s

TheLeanmanufacturingrevolutionisborn.WhiletheUnitedStatesfocuseson mass production, at TMC, Ohno institutes defect prevention,teamwork, problem signaling, pull production, flow control, small lotsizes,andsupplierintegration.

1961

Unimate is the first robot in production in theUnited States—part of theautomationrevolution,humanreplacementconcept.

Early1970s

Microprocessor technology is developed—programmable automation ismadepossible.

1973

Fuel prices increase dramatically. Consumers’ preferences change: Theywantfuelefficiencyandcompactsize.OhnoandEijiToyoda’s20-yearfocus on productivity, quality, and responsiveness (just in time [JIT])comesintoplay.

1980s

With quality revolution andSixSigmaborn,Toyota grows in popularity,andU.S. automobilemanufacturers begin to see a negative shift. TheUnitedStatesfocusesontechnology(automateswasteatrecordrate).

1988

InternationalMotorVehicleProgram(IMVP)/MITresearcherJohnKrafcikcoins the term Lean in his research article “Triumph of the Lean

Production.” He concludes, “Lean production uses half the humaneffort, space, tools, engineering hours to develop new products ascompared to mass production. Lean production has less inventory,fewer defects, and produces greater variety of products.”Later on, hejoinedFordMotorCompany,andnowheiswithHyundaiMotors.

Late1980s

Toyota isa legitimate threat; fuelefficiencyandcustomerpreferencesarecritical success factors. JIT and total quality management (TQM)becomeimportanttotheUnitedStates.

1990s

Customer focus (customer is always right) is observed in the globalmarketplace: Outsourcing and international trade are fully embraced,andTQMbecomesmoreemphasized.

1990s

WiththeevolutionofSixSigma/DMAIC(Motorola),Leanmanufacturingsignificantlygrowsinpopularity,butimplementationisdifficult.

2000

WithLeanSixSigma,Lean is applied to fields other thanmanufacturing(e.g.,construction).

Present

TMCistheworld’slargestautomobilemanufacturer.Leanisappliedtoallfields,serviceindustries,supplychains,andbusiness

processes, e.g., Lean office, Lean healthcare, Lean farming, Leanconstruction,Leanaccounting,andLeangraphiccommunications.

Today,employerswantpeoplewhoaremotivated,trainable,educated,andskilled(butwithoperationsmanagementabilities).

Today,efficiencyistheprimarydriver,nottechnology.

2

BusinessProcess

ROADBLOCKSTOLEANTRANSFORMATIONMostorganizationswantquickfixesandimmediateresults.Iftheydonotgettheimmediaterewardtheyseek,theymayabandontheprogram,theteam,orgoinsearchofthenextprevailingfad.Thisneedforshort-termresultshascausedthetotal discard or partial success ofmany performance excellence programs likeLeantransformation.

SuccessfultransformationtoaLeancultureisfullofhardships.Itrequiresanenterprise-wideapproachthatengagestheentireorganizationandchallengesitsnorms and existing practices. It requires knowledge of new tools andmethodologies, and a level of internal winning instinct beyond the existingdisciplineandwillpowerinwhichthemajorityoforganizationsoperate.

WhydoesLeanwork in someorganizationsandnot inothers? In short, thedifferencebetweensuccessandfailureisinculturalacceptanceandtheabilityofanorganization toacceptchange,not justLeanchange,butchange ingeneral.Understandingthemind-setofbusinessiscrucialtothesuccessofimplementingmethodologieslikeLeanandSixSigma.

Letusfirstunderstandthebusinesssystem.Aswediscussedearlier,asystemis “a group of interacting, interrelated, or interdependent elements forming acomplexwhole.”Nosystemelementcanfunctionon itsown.Ithas torelyonotherelementsandhastomaintainitsrelationshipwithotherelements.

Thehumanbody isa systemwherehands, feet, stomach,heart,etc., are theelementsenablingthebodytofunctionasawhole.Noelementcanfunctiononitsown.Dr.Ackoffoncejoked,“Trycuttingoffyourhandandputitonthetable—itwon’twork!”

Now, let us apply the system concept to business and as stated in the

beginning;howdoesthistranslateintoimplementingLeanandSixSigmaforabusiness?

Letusconsiderabusinesshavingthefollowingcorefunctions:•Sales•Marketing•Engineering•Production•Customerservice

ThesecorebusinessfunctionsaredepictedinFigure2.1.Eachofthesecorefunctionshasitsownsetofdefinedprocesses,asshownin

Figure 2.2, and it uses its processes to accomplish its goals.Now let us recapprocessdefinition.Process isdefinedas“aseriesofactions,changes,steps,orfunctionsbringingaboutaresult.”

In Part 1, we explained that each process has the following elements thataffectitsfunction:•Inputs

•Process•Outputs

Now, apart from the main core functions (Figure 2.2), business is alsosupportedbytypicalsupportfunctionslike:•Humanresources

•Finance•Informationtechnology(IT)•Warehousing

ThesesupportfunctionsaredepictedinFigure2.3.

FIGURE2.1Corebusinessfunctions.

FIGURE2.2Eachcorefunctionhasitsownprocesses.

FIGURE2.3Businessesandsupportfunctions.

At thispoint, theanalysisof thebusinesssystemlooksvertical (Figure2.3).

Individualsinsideaparticularfunctionalareahavefullviewoftheirownprocessbut havedifficulty seeingoutsideof these “silos.”They intersectwith anotherfunctionalareaonlywhentheyneedtouseacommonresource.Forexample,anintersection between sales and production functional areas occurs when atrackingsystemmanagedbytheinformationtechnologysupportfunctionisusedby the production function to deliver a product to a customer. In short, eachindividual part of the business system is trying to work on its own. Anotherexample of this silo mentality can be commonly seen with engineering whenengineeringchangesarecarriedoutwithoutchangingproductionprocesses.

This limited perspective is why it is crucial to understand the businessprocessesthatcutacrossthesefunctionalprocessareas.

BUSINESSPROCESSVIEWAbusinessprocessisacollectionofrelatedactivitiesthatproduceaproductorserviceofvaluetotheorganization,itsstakeholders,oritscustomers.

Letuslookatthefollowingexamplesofbusinessprocesses:•Quote-to-cash•Procure-to-pay•Newproduct/servicedevelopment•Orderfulfillment•Processimpactontheorganization

Becomingfamiliarwiththesecross-functionalbusinessprocessesdescribedinFigure2.4greatlyincreasesourunderstandingoftheinterrelationshipsbetweenthecorefunctionsandclarifieshowaqualityprojectinoneareaofthecompanywillaffectotherareas(Figure2.4).ThisinteractionandinterdependenceamongcorefunctionsisthekeytoremovingtheroadblocksinimplementingLeanSixSigma.Totrulygraspthesystem,however,wemustconsideranotheraspectofthebusinessprocess:Itspurpose.

FIGURE2.4Cross-functionalbusinessprocesses.

MANAGINGTHEPURPOSENo business process can be effective unless its purpose is properlycommunicated to all stakeholders. Figure 2.5 shows the main purpose of theorganization. Executive leadership should drive management of the businesspurpose, and impress upon allmembers of the organization the importance ofunderstanding and fulfilling that purpose. In addition, leadershipmust govern,manage,adjust,andreset thepurposebasedon thecustomer’sneedsandotherfactors.

In theGlobalQualityManagement book,wehave seen that there aremanyinput,output,andfeedbackprocessesforanorganization.Allinputsandoutputsof aparticular process shouldbemeasurable so that quality canbe controlled.SeeFigure2.6.

FIGURE2.5Purposeofthebusinessistomanagegoalsandimprovecontinuously.

FIGURE2.6Processinputsandoutputswithfeedbackandmeasurementpoints.

SIPOCDIAGRAM

Suppliers, inputs,process,outputs,andcustomers(SIPOC)diagramsarea toolthat can be used to help identify these processes in an organization.We havediscussed SIPOC in more detail in Part 1, but it is important to know thatimprovements in one area may create errors in another. For example, if thebusinesspurposeofimprovingprofitabilityisnotmadecleartosalesfunction,itmay inflate its sales forecast at the expense of too much overtime expense,excess work in process inventory, and high logistics price for productionfunction.

Inthischart(Figure2.7),“how,”“withwhat,”“withwhom,”and“howoften–howmuch”goals,etc.,canbeaddedasshownintheprocessidentificationchart(turtlechart)in(Figure2.8).

FIGURE2.7SIPOCdiagram.

FIGURE2.8Turtlechart.

3

EmbarkingontheLeanJourney

SHINGOPROCESS

Let us start the Lean journey. In the bookGood to Great (Collins Business,2001),theauthorJimCollinstalksabouttheflywheeleffect.Greatorganizationsdonotbecomethatwayovernight.Hewrites,“Theybecomethatwaybecausecontinuous small pushes create a breakthrough velocity.This velocity sustainsgrowth. At the point where the momentum of change reaches breakthroughvelocity (the tipping point), the organization moves forward along its Leanjourney.”

Anorganizationnormally contains amajorityof the “anchordraggers,” few“early adaptors,” and “fence sitters.” While traditional managers spend theireffortsfocusingontheanchordraggers, theyshouldbespendingtimewith theearlyadapters,providingcoverandsupport.Theorganization’sfocusshouldbeonpositive reinforcement,whichpromotes a forward shift in the fence sitters.Whenwetalkaboutthebestroadmaptoimplement“Lean,”weshouldusetheslidepresentedinFigure3.1,whichdescribestheguidingprinciplesandhowtosupportthem.

Thepeopleaspect,calledculturalenablersbyShingo, isoftenmissedwhenorganizationssaytheyaredoingLean.

MarkGraban,aleadingLeanauthorandpractitioner,hascoinedanacronym—LAME(LeanasexecutedmistakenlyorLeanasmisguidedlyexplained)—forsuchattempts.

Now refer to Table 3.1. Let us talk about the difference in style ofmanagementthatwillberequiredbyleadershipinaLeanorganization.

FIGURE3.1Theguidingprinciplesandhowtosupportthem.

TABLE3.1ControlandCommandversusLeanManagement

ControlandCommand

LeanManagement

Allknowing Humility“Incharge” CuriosityAutocratic Facilitator“Buckstopshere” TeacherImpatient StudentBlaming CommunicatorControlling Perseverance

WHITECOATLEADERSHIPVERSUSIMPROVEMENTLEADERSHIPOn the left-hand side,we seebehaviors andbeliefs that arepretty common in

most organizations and most leaders. They come from the way people weretaught(inschooloronthejob),andpeoplewhoweremanagedinthiswaywererewardedandrecognizedforgoodmanagement.Itisthewaywesawourbossesmanage. “The system” produced these behaviors. (A system is a “set ofinterdependent components working together toward a common aim”—thatdefinition,fromW.E.Demingwillcomeupagain later.) (SeeTable3.1.)Thelist on the right-hand side is not just a little different—it is a lot different.Leadersneedtoexhibithumility(admittingtheydonotknowitall);theyneedtobe curious about how things work (because they do not know), they need tobecome facilitators not “tellers,” and they need to become teachers.However,beforetheycanteach,theyneedtoknowsomething—theyneedtobestudents.

ThislistissimilartoalistthatyouwillfindinDr.Deming’s1993bookTheNewEconomics(seeTable3.2).Ontheleft-handside,weseewhatDr.Demingcalled “the prevailing style of management”; on the right-hand side, “bettermanagement practice” presents practices of management with suggestions forbetterpractice(W.E.Deming,TheNewEconomics).

Thepointtonoteisthatmovingfromtheleft-handsidetotheright-handsiderequires the cultural transformation of management. The following is a quotefromTheNewEconomicsbyDr.Deming:Thefirststepistransformationoftheindividual. This transformation is discontinuous. It comes from understandingthe system of profound knowledge. The individual, transformed,will perceivenewmeaning tohis life, toevents, tonumbers, to interactionsbetweenpeople.Once the individual understands the system of profound knowledge, he willapplyitsprinciplesineverykindofrelationshipwithotherpeople.Hewillhavea basis for judgment of his own decisions and for transformation of theorganizationshebelongsto.

TABLE3.2CulturalTransformationfromPresenttoBetter

PresentManagementPractice BetterManagementPractice

Reactiveskillsonlyrequired LeanmanagementtheoryrequiredShort-termthinking;failuretooptimizethroughtime Dolong-termplanningthroughconstancyof

purposeRewardatthetop,punishmentatthebottom.Throughaso-calledmeritsystem,rankpeople,teams,anddivisions

Abolishmeritsystem;runthecompanyasasystem

Incentivepay Abolishincentivepayandpaybasedonperformance

Failuretomanagecorporationasasystem;componentsaretreatedasindividualprofitcenters

Managecorporationasasystem;encouragecommunicationandcontinuallearning

Managementbyobjectives(MBO) Managementbyfacts(MBF)

Managementbyobjectives(MBO) Managementbyfacts(MBF)Settingnumericalgoals Workonmethodsofimprovementofprocesses

Thetransformedindividualwill•bearolemodel;• be a good listener, but will not compromise on Lean principles;

•continuallycoachotherpeople;•helppeopletodetachfromtheircurrentpracticeandbeliefsandmoveinto

thenewphilosophywithoutafeelingofguiltaboutthepast.

If an organization on the left-hand side realizes that the prevailing style ofmanagementisnotgoingtobesustainable,theymaywishtomovetotheright-handside.

If an organization on the left-hand side realizes that the prevailing style ofmanagement isnotgoingtobesustainable(costsarehigher thanrevenues,notproducingresultsthatprovidevaluetocustomers),theymaywishtomovetotheright-handside.

But how? They build a bridge to close the gap. This is called theinfrastructure,andtherearelotsofwaystodothis—lotsoftypesof“bridges.”

Hence, theystart tomobilizeacross this firstbridgeby trying to learnaboutLean thinking and methods. They often do so by training people how to usevariousLeantools,usingteamsinorganizedevents,andtheydoproduceresults—atleastforawhile.

They have trained people and learned Lean tools. However, the rate ofimprovement decreases over time, and they are still not across this deep gap.Their style of management has not transformed. Hence, what do manyorganizationsdo?

SomecoupletheirLeaneffortswithSixSigma,andthisreenergizestheeffort—forawhile.However,ittoofallsshort,andtheimprovementisnotsustained.

Someorganizationstrythisagainwith“Leanandtheoryofconstraints(TOC),Leanandgreen,etc.,”butittoofallsshort.

Thus, they are disappointed and perhaps find themselves hanging on orwanting to scurry back to the left-hand side (current state). They claim this“Leanstuff”doesnotwork,andmanagementstartslookingforthenext“shinyobject.”

Itisacommonexperienceformanyorganizationsthatstartwithevents,tools,and training, thinking that this will be sufficient. However, getting trained inLeantoolswillnotgetthemallthewayacrossthedeepgap.

Figure 3.2 shows that focusing on tools will get temporary results. See the

right-hand image called theShingo transformational process. The half portionbelowtheboldlineshowsthattheapplicationoftoolswillgettheresults.It isnot that the approach iswrong; it is just incomplete. It is a necessary part oflearning. Thus, what else is needed to complete the transformation? This iswherethe“diamond”(ortransformationelement)oftheShingomodelcanhelp.

Through personal and organizational understanding of the 10 guidingprinciples,thedesignandtheredesignofsystemsbyadjustingthetoolsthatareused, the organization not only achieves sustained results but also impactsbehaviors to achieve a true cultural transformation. This is described inmoredetailinFigure3.2.

FIGURE3.2The “diamond element”—individual and organizational focus. (Courtesy ofShingo Prize.)Where did these 10 guiding principles come from? Figure 3.3shows that over the years, there have been many thought leaders who havecontributedtotheseguidingprinciples.

Theseprinciplesgovernconsequencesforeveryone.Theprincipleofgravity

governs us regardless of what we believe. In the same way, the guidingprinciples such as “respect for every individual,” “focus on process,” or“constancyofpurpose”governus.

NURTURINGTHELEANCULTURESuccessor failureofanewinitiativesuchasLeandependsentirelyonpeople.TherecanbenoLeanculturewithoutpeople.Leantools,Leanequipment,andLeanconsultantsareofsecondaryimportance.

Thus,wecanembracetheLeanculturethroughthefollowing:•Respectfortheindividual

•Leadingwithhumility• Techniques and practices to change to the culture Respect for the

Individual“Respectfortheindividual”isalittlehardertodefine.Leanisnotabout“beingnice” and smiling all the time.Respectmeans you select and recruit the rightpeople.Train themtobecomeskilled,and thenholdpeopleaccountable to thesystem,followingitandimprovingit.Respectingindividualsandtreatingthemwithdignity is themostcriticalaspectofLeanculture.Respect startswith topmanagementandflowsdownthroughtheorganizationrightuptotheindividualworkeroroperator.

However,respectfortheindividualdoesnotendwithinthefourwallsoftheorganization;itextendstoallcustomers,suppliers,andstakeholders.

Throughrespect,theorganizationwillachievethefollowinggoals:•Promoteteamwork

•Improveemployeeinvolvement•Empoweremployees•Createthecultureofcontinualimprovement•Redeploymentofpersons

FIGURE3.3Deming’s 14 points, Toyoda’s continuous improvement process, and StephenCovey’ssevenhabits,JimWomack’sLeanapproach,and10guidingprinciplesarelikelawsofphysics.

ABigNo–No

TheLeanprogramwillcertainlyfailifemployeeswhoarenolongerneededinthe new improved process are let go. A common philosophy of Lean-mindedemployers should be that “no one will lose his or her job as a result of our

continualimprovementprogram.”Sowhatdoyoudowiththeextrapeoplemadeavailableaftertheprocessimprovement?

Youcan

•reducetemporaryworkersifapplicable,•reduceovertime,•absorbredeployedemployeestofillinvacanciescreatedbecauseofnormal

attrition, • provide for growth (growth is assumed because of Leanimplementation)withouthiringadditionalpersons,• retrainandredeploytowheredemandisrequired.

WIFMResolution(WhatIsinItforMe?)

In addition, employees ponder over the question What’s in it for me afterdeploying Lean and eliminating waste? The response is an effectivecommunication explaining the following: • A secure future in a financiallysound,competitivecompany•Anopportunityforexcellence

• Avoice inhow thingsaredone (a feelingof involvement)LeadingwithHumility

Lean leadership involves, enables, and empowers people. Lean leadershippromotes professional and personal growth of the people. It allows people totake pride in theirwork. Lean leaders do not set goals for people, sit in theiroffices,andshoutatpeoplewhentheydonotachievethosegoals.Leanleadersspendtimecoachingpeople.Theyspendmostoftheirtimeinthegemba.Theyobserveprocesseswithpeopleandseewhatisactuallyhappening.Theydonotjustmanagemetricsandreadreports.

InStephenCovey’s“The7HabitsofHighlyEffectivePeople,”habit5says,“Toseekfirst tounderstandand then tobeunderstood.” Insteadof jumping inwithadesiretobeheard,byunderstandingtheotherperson’spointofview,youcreate better relationships and find valuable solutions to problems. This ispersonalhumility—beinghumblewithself-respectanddignity.Humilityenablesyou to understand your strengths and weaknesses. Strength allows you tobecomeabetterteammember.

The weakness or the opportunity to improve enables you to continuallydevelopasasuccessfulperson.

4

TechniquestoChangetoLeanCulture

KnowingLeantoolsandtechniquesislessthanhalfthejobdonetowardgettingtransformedtoaLeanculture.Inthissection,wewilllearnaboutthewaysandpractices to instill this new culture through training, coaching, andcommunication.

•Cross-training•Skilldevelopment•On-the-jobtraining(OJT)•Coachingandmentoring•Teamwork•Suggestionschemes•Safeworkingenvironment

CROSS-TRAINING:AWIN–WINSITUATION

• Basically, cross-training consists of training an employee to do differentorganizationalactivitiesorwork.Alternatively,cross-trainingalsopreparesmultipleemployees todoa singleactivity,duty,orwork.This leads toamultifunctionalworkforce.

• Cross-trainingreducesbottlenecks.Becauseoftheirflexibilityandabilitytocarryoutmultiplefunctions,employersarereadytofacesituationslikeabsenteeism, cover for breaks, illnesses, and vacations. The variations insupplies like late and nonconforming deliveries, and customer demands,suchaschangesindeliveryschedulesandcanceledorchangedquantities,arehandledefficientlybecause theorganization is capableof adapting tonewsituations.

• The line supervisors,managers, and even areamanagers undergo cross-training. This makes them capable of training and filling in for absentemployees.

• One big advantage of cross-training is that it promotes continuousimprovement.Withjobrotation,employeesareabletoobservebottlenecksand problemswith fresh eyes and are able to ask questions and suggestremedies.

• Cross-trainingenables theemployees, thecompany,andthecustomers towin.

STEPSTOIMPLEMENTCROSS-TRAINING

•Communicatetheadvantagesandopportunitiesitwillcreateforemployeesandleaders.

• Identify who is interested in getting cross-trained. It is useless to forcesomeone who is unwilling; instead, find out how to deal with suchemployees.

•Identifyexistingemployeecompetenciesintasks.•Developatrainingprogram.Trainingthetrainersisthefirststep.Eitherthe

supervisoror thecurrentcapableoperatorperforming that jobcan impartthe training after getting trained as a trainer. For more on “Train theTrainer,” visit:http://www.isohelpline.com/train_the_trainers_skill_training_process_powerpoint_ppt.htm

• Allow the trainees to learnnew jobswithoutunduepressure tocompleteexisting jobs.Allow sufficient time to learn the new job. Two hours perweeksetforskilledjobsisagoodnorm.

• Prepare a visual cross-training record anddisplay it for everyone to see.Here,theemployee(preferablywithphoto)andjobmatrixiscreatedsuchthat the current status of each employee is seen by all. Each employeestatus(“nottrained,”“intraining,”or“trained”)foreveryjobcanbeseenonthiswallchart(Figure4.1).Thispromotesprideamongemployees.

• Lastly, recognize and reward the employees who gain new skills andresponsibilities.

For every task in an organization, determine the skill set required. Thisinformation can be gathered fromwork instructions, procedures, testmethods,

quality plans, process experts, and experienced operators (Figure 4.2). Skillssuchaswelding,soldering,riveting,testing,assemblingusingtorqueapplicators,dataentry,amongothers.

FIGURE4.1

Operatorskillmatrix.

Listallemployeesinadepartmentwhoareappointedtodothatcompletetaskor assembly. List the skills required needed by that department. Refer to theskillsmatrixandusingtheguideshowninFigure4.3,completethematrix.

Thisskillmatrixneedstobeupdatedandreviewedeachtimewhen:•Anewemployeeisrecruited

•Anemployeeistransferredfromonedepartmenttoanother•Changesinprocessrequirements

•Anewprocessdemandsaspecialskillset•Ajobpositionischanged

Aside from this, even if nothing has changed, a biannual audit should beconducted to ensure that everything is accurate. Thus, skillmanagement is anintegralpartofavisualorganization.

Aftereverystageinskilldevelopment(stages0to4),theestablishedlearninggoalsmustbesatisfied.Eachlearningstageshouldhavealearningoutcomethatshould be verified.Use verbs such as describe, demonstrate, analyze, list, andothers, to ensure that the student canperform the taskaswell as intendedandfinallycantrainothersinthattask.

ON-THE-JOBTRAININGIn today’s manufacturing-and service-providing organizations, tools, software,and technologies are changing rapidly. Skill development becomes urgent. Insuchcircumstances,OJTbecomesaverycommonformoftrainingfornewandexperiencedemployees.

TherearethreemainaspectsofOJT:

•Preparethetrainee•Preparethetrainingmaterialandthetrainer• Evaluate the training delivered and the lessons learned

FIGURE4.2

LeanSixSigmaskillmatrix.

FIGURE4.3Skillassessmentlevelguide.

PreparetheTraineeThe person undergoing the trainingmust be prepared prior to the training. Inother words, this person should be willing to learn, has the requirededucation/ability to absorb and understand the training material, and ismotivated.This isnormallyascertainedby thehumanresource functionbeforerecruitingaperson.

PreparetheTrainingMaterialsandtheTrainerAgoodtrainermustknowthejobandbeabletoteachthetrainee.Normally,themost experienced employee is selected to train the new employee. This canmisfirebecausethistrainermaytakecertainjobaspectsforgrantedortreatthemastrivial—leavingthetraineeinthedark.Inotherwords,thetrainerneedstobewell-versed in the training skills. The trainer has to be able to transfer theknowledge and the intricacies of the job to the trainee so that the trainee canbecomeeffectiveanddothejobefficiently.

Facilitating the training is a human resources/training function.The trainingmaterials are first prepared by the appropriate departments—engineering,

systems,maintenance,finance,etc.,asappropriate.

EvaluatetheTrainingDeliveredandtheLessonsLearnedAfter theOJThasbeencompleted, it isnecessary to evaluatewhatwentwell,whatdidnotgowell,andwhatchanges(ifany)needtobemade.Thefindingsshould be documented. The plan–do–check–act (PDCA) cycle for continualimprovement in theOJT shouldbe followed.OJT is very economical becausethetrainingisin-houseanditisimpartedbyexperiencedemployees.Thetraineegetsimmediatefeedbackfromthemanager.

COACHINGANDMENTORING

We expect greatness from all our people.We expect them to accept andconquer challenges that may seem overwhelming at first sight. Thegreatnessinpeoplecomesoutonlywhentheyareledbygreatleaders.Weareallgrowingandlearningandweallneedteachersandcoachestohelpguide us.We say at Toyota that every leader is a teacher developing thenextgenerationofleaders.Thisistheirmostimportantjob.

AkioToyoda

PresidentoftheToyotaMotorCorporation

Themanagersandleadersofanorganizationwhoaredeterminedtounderstandand adopt Lean philosophy have their task defined by the Toyota chief—improvethecapabilitiesofthepeoplearoundyou.

Jobdescriptionofacoachifsuchapositionneedstobecreated:•Performingskillassessmentstofindoutwhatskillsyourdepartmenthasandwhichskillsareneeded.Determinethegaps.

•TrainingthroughOJTandcross-training.•Trainemployeestofollowstandardizedwork.•Seekopportunitiesforimprovementsthroughkaizenactivities.• Promoting teamworkby stepping inandhelping the team toovercomea

problem.

•Developpotentialleaders.Findthemandgivethemopportunitiestosolveproblemsbyfindingsuchopportunities.

•Share,spread,andcommunicateinformationarisingoutoflessonslearnedforthebenefitofallpeople.

•Monitorandhelptoimplementideasfromsuggestionschemes.Usetheseopportunities to see how the teammembers think.What is their thoughtprocess?Nurture their ideasandprovide themasafeandsecure (withoutthefearoflosingtheirjobs)environment.

•Problem-solvingcapability.•Finally,acoachisalifelonglearnerlearningnewthings.Bypreparingto

teach and observing human nature, the coach attains more skills andbecomesabetterteacher.

Mentoring is a long-term commitment between the mentor and mentee towork together. Mentors teach and guide a mentee. The mentee works on theissuetolearnandgrow.Intheprocess,thementorandthementeereachastagewhere “I don’t know” is an acceptable and valid answer, and when “I don’tknow”istheanswer,itistimetogoandsee!(Rother2010)Eventopexecutivesshouldseekoutmentors tohelp thembecomebetteratwhat theydo.Lifelonglearningisimportanttothoseinleadershippositions.

Herearesomepracticalsuggestionsformakingpeoplemorecreative.Yearsofexperiencehaveshownmethatalmosteveryoneisfarmorecreative

thanheorsheiseverallowedtobeatwork.Thetalentissittingthere—settingittoworkcanbeexciting.Here’show:•Tellingpeopletobecreativeprovokesanoppositeresponse.Ontheotherhand,praisingeverytraceofcreativityyoufind—in someone’s suggestion or even something another company has done—prompts people to believe that creativity is what’s wanted, admired, andrewarded.Thatalonecanbequitestimulating.

• Using brainstorming is more difficult than it looks. Make it clear thatpeoplemustcomeequippedwithpreparedideas—andthemorethemerrier—youwillhavearicherfieldtoworkwith.

• Manypeoplehave theirbest ideason thewayhome, justbeforeor aftersleepingor,intheshower.It’swellunderstoodbyneuroscientiststhatoftenthebestwaytosolveaproblemistolookawayfromit.Discussthiswithyourteamsandmakeitclearthattakingbreaksanddisruptingroutinescanbeproductive.IfinditespeciallyhelpfultoaskmyselfaquestionbeforeIgotosleep.

TEAMMANAGEMENTObviously, teams can outperform individuals. Teams offer more than justincreased efficiency. Because the teammembers are empowered to deal withmany things that affect their work, teams provide a great source of jobsatisfactionandemployeeinvolvement.

A team can be beneficial when: • A complex and companywide task likeLeanimplementationmustbeaddressed•Creativityisrequired

•Thepathforwardisnotclear•Improvedefficiencyofresourcesisrequired•Learningneedstobefast•Ahighlevelofcommitmentisdesired•Cooperationisrequiredtoimplementtheplan•Thetaskortheprocessiscross-functional

Whentraditionalmethodsofproblemsolvingfail,anddecisionmakingorfastimplementation likeLeanmethodology is required, teams can helpmeet thesechallenges.Teamsarenotananswertoeveryconceivableproblem.However,ifproperlyformedandwellconceived,theirpotentialisvast.

Forexample:

•Teamscanreduceleadtimes•Decreasecycletimes•Operatebusinessunits•Redesignproductsandsystems•Identifycustomerneeds

Thelistcangoonandon…Thetypesofteamscanbedefinedbytheirobjectives.

• A functional team is composed of amanager and the employees in thedepartment.Here, issues like decisionmaking, objectives, and leadershiparesimpleandclear.

• Theproblem-solvingteamoffers ideasandsuggestionsonhowprocessescanbeimproved.Regularmeetingsareheld.

• A fully self-managed team selects its ownmembers.Members evaluate

each other’s performance. Here, the supervisor’s position has lessimportanceandcanalsobeeliminated.

• Across-functional teamhasmembers fromvariousdisciplinesbutof thesame hierarchical level. Complex issues and problems can be tackled bythisteam.

• Avirtual teamusescomputersandinformationtechnologytotie togetherphysicallyseparatedmemberstoachieveacommongoal.

TEAMDYNAMICSTeamformationtakestime.Teamsgothroughthefivefamousstages.Thesearethe forming, storming, norming, performing, and closing/adjourning stages(Figures4.4and4.5).

FormingCharacteristics:

•Positiveexpectations•Moderateeagernesstogetstarted•Lowaccomplishment

Feelings:•Excitement,anticipation,andoptimism•Initialtentativeattachmenttotheteam•Suspicion,fear,andanxietyaboutthejobahead

Behaviors:• Attempts to define tasks and how they should be accomplished

• Attempts to define group behavior and how to deal with groupproblems • Complaints about theorganization andbarriers to the taskTomovebeyondtheformingstage:

•Theleadersetsthedirection•Thegroupdefinesanddevelopsitspurpose• Team members begin problem solving and decision making

FIGURE4.4Processofdevelopmentthroughwhichteamspass.

FIGURE4.5Stagesofteamdevelopment.

Storming

Characteristics:•Goalsandstructureareclear•Groupskillsaregraduallyincreasing•Accomplishmentsoftasksisincreasingslowly•Motivationplummetsbecausethereisadiscrepancybetweentheinitial

hopesand reality.Teambecomesdissatisfiedwith itsdiscrepancywithauthorityFeelings:

•Resistancetotask•ChangesinattitudeabouttheteamandchancesforsuccessBehaviors:•Arguingamongthemembers•Defensivenessandcompetition•Questioningteammembers

To move beyond the forming stage: • The team must begin to shareleadershiptasks

• Define roles, responsibilities, policies, and procedures • Sharephilosophieswithotherteammembers

•Besupportiveofoneanother•Createsystemnecessarytosupporttheteamaction

NormingCharacteristics:

•Productivitycontinuestorise•Expectationsfallinlinewithreality•Satisfactionincreasesdramaticallybecausethestructureandprogressare

clearandrelationshipsarebuiltandhavebecomesettledFeelings:•Anewabilitytoexpressconstructivefeedback•Acceptanceofmembershipintheteam•Reliefthateverythingwillworkout

Behaviors:•Anattempttoachieveharmonybyavoidingconflict•Morefriendlinessintrustingandsharingofpersonalproblems•Asense

ofteamunityandacommonspiritandgoals•Establishingandmaintainingteamgroundrules

Tomovebeyondtheformingstage:

•Acknowledgetheprogressofthegroup•Makesurethattheteammembersareempowered

PerformingCharacteristics:

•Thegroupispositiveandeager•Groupproductivity,prideandconfidencearehigh•Membersworkautonomously•Membersgooutoftheirwaytohelpeachother

Feelings:•Insightsintoeachother’sstrengthsandweaknesses•Satisfactionintheteam’sprogress

Behaviors:•Constructiveself-challengeandimprovement• Ability to prevent or work through the group problems • Close

attachmenttotheteam

Tomovebeyondtheformingstage:•Keepcommunicationsopen•Focusenergyonresults• Recognize and support member’s competence and accomplishments

•Helpthegroupexecute,followthrough,andfollowup•Continuetoconduct problem solving sessions to keep morale highClosing/Adjourning

Characteristics:•Theteam’smissioniscomplete•Improvementshavebeenorarebeingimplemented•Arecordhasbeenmadeoftheteam’sprogressandconclusions•Afinal

reporthasbeensubmitted

Feelings:• Nostalgia, reminiscence,andmourningaboutwhat itwas likeworking

with the team in the beginning versus more recently and what waslearnedintheexperience•Accomplishment

•Lossandending

Behaviors:•Promisestostayintouch•Haveregularreunions

Tobringclosure:•Celebratetheteam’ssuccesses• Acknowledge and allowothers to acknowledgeyour accomplishments

•Saygoodbye

HANDLINGPROBLEMPEOPLEFirst,weshouldnot:

• Be defensive and argue with them, preach, lecture, or threaten them•Ignorethem

•Criticizethem•Tellthemwheretogo•Putthemdownbyridiculeorshame

Somewaysforhandlingproblemindividualsinclude:

•Ignoretheir“wisecracks”orjokes•Informthegroupwhenyoufeelthatasubjectliesoutsidethescopeofthe

training • Face the problem squarely and state the reasons as you knowthem•Defertheproblemtoalaterdate—giveyourselftimetothinkaboutit or talk it over with others • Defer the problem to a private meetingduringabreakorafterthesessionwiththepersonwhoraisedit•Don’tbeafraidofpartingwaysifapersonisstillproblematic

CONFLICTSConflictsareroadblocks toprogress.Conflictscanberesolved.Someeffectivesteps include: • Identify the interests of eachpersonby asking “Whatdoyouwant?”Then,listentotheansweryouget.People’sinterestsareissuesthatcauseconflicts.Weusuallyonlyknowtheirpositions,whichisprobablyobvious.

•Identifyhigherlevelsofinterestbyasking,“Whatdoeshavingthatdoforyou?”It’simportanttounderstandwhatpeoplereallywant.

• Createanagreementframebyasking,“IfIshowyouhowtogetX(Xisperson’s real interest), would you do Y (Y is what you want from the

personX)?”• Brainstormforsolutions together to findawin–winsolution.Donot just

giveasolutionandexpecttheotherpersontoaccept.Awin–winsolutionmust satisfy interests of both parties. You get commitment by gettingpeopleinvolved.

TEAMDECISIONANDCONSENSUSBUILDINGWhenadecisionisreachedbyconsensus,eachteammembershouldbeabletohonestlysay:•“Ibelievetheteamunderstandsmypointofview”

•“IbelieveIunderstandthepointsofviewintheteam”•“Thismightnothavebeenmyfirstchoice,butIcanlivewithit”• “Iwill support this decision because itwas reached in an open and fair

manner”

Whenever possible, use consensus building to optimize communication,motivateteammemberstoworktogetheronimplementation,andminimizetheriskofsabotagebydisgruntledmembers.

ReachingConsensus:SomeTips•First,agreeonwhatconsensusmeans.• Setatimelimitformakingthedecision—andafallbackifnodecisionis

reached.•Checktoseehowmuchconsensusalreadyexists(writeproposalonaflip

chart).Discussonlythepointofconcern.

Anotherwaytocheckforexistingconsensusistoconductastrawvote.Each member writes a number from 1 to 5 on an index card to indicate

readinesstoendorsethedecision.Write“5”forcompleteagreementand“1”tostronglydisagree. If the teamgetsstuck,breakthe teamintosmallergroups toreachconsensus.Smallerteamspresentviewstothelargerteam.

Onekeyrule:Ifaparticipantdisagreeswithadecision,heorshemustexplainwhyandofferanalternativetohelpavoidastalemate.

Finally,trytoselectateammemberwithsomeorallofthefollowingtraits:•Hasabalanceof“hard”and“soft”skills

•Bestexperiencepossible•Hasknowledgeofthesubject•Haswillingnesstojoin•Isavailable•Isagoodlistener•Cangiveandtakefeedback•Cancommunicateclearly•Ismatureenoughtotakeresponsibility•Hasgoodfollow-throughoncommitments•Hasleadershipandmanagerialskills

SUGGESTIONSCHEMESEmployeesuggestionschemeshavebeeninexistenceforoveracentury.Itcanbeintheformofasimpleboxonthewallorafullydevelopedsystemledbythemanagersandcoaches.

The box on the wall system, in which employees hand over their ideas tomanagement, has its own problems. Many ideas are submitted but themanagement does not have enough resources to handle them. This results infrustrationamongemployeesbecausetheirsuggestionsarenotimplemented.

TheLeansuggestionsystemiswhere:

•Allideasareaccepted•Anappreciationandrecognitionisgivenforthesuggestion•Coacheshelp

togrowtheidea•Theoriginatorofthesuggestionimplementshis/herideaStepstomakethe

suggestionsystemsuccessful:

•Getasmanypeopleinvolvedaspossible•Focusonsmallideasandsmallsuccesses•Don’tmicromanageideas•Keepthemvisible• Keep the recognition plan simple—usually immediate small

payments/prizes Organize all ideas/suggestions received using a simpleidea board.Most importantly, realize that people want to be recognizedeveniftheydon’tshowit.

THEIDEABOARDThere are many other types of idea boards. The idea is to make it easy toprioritize and follow up the ideas until their successful resolution,implementation,andsubsequentcontrol.

The real value of the suggestion system lies in its simplicity, which isdesignedfortheemployees.Thesystemisfreeofallcomplicatedformfillings,andcost–benefit jargons.Theseare simple ideas to create aLeanmindset thateveryonecancontributetotheoverallgrowthofthecompanythroughtheirideas(Figure4.6).

FIGURE4.6Ideaboard.

SAFEWORKINGENVIRONMENTThe work environment safety plays an important role in improving workingconditions,employeesafety,andproductivity.

Under government safety laws, it has been emphasized that workers areentitled to working conditions that do not pose a risk or hazard of seriousphysical harm. Hazards can range from repetitive motion issues to life-threateninghazards.

Poor ergonomics has a very big impact on employee safety. Ergonomicinjuriesaccountformorethan50%ofallworkplaceinjuries.Themostimportantergonomics risk factors are posture, force, and repetition.Understanding thesefactorswill enable the organization to reducewaste by eliminating non–valueadded work. Additionally, improving safety will reduce insurance costs, losttime,andregulatorypenalties,etc.

SectionII

PrinciplesofContinuousImprovementProcess

5

ImportanceofPrinciples,Systems,andToolsinContinuousImprovement

Thecontinuousimprovement(CI)processbeginsbyclearlydefiningvalueintheeyes of customers, both internal and external. Expectations of customers andstakeholdersmustbeclearlydefinedandunambiguouslycommunicatedsothattheCIprocesscanbedesignedtomeetcustomerneeds.

Dr. Shigeo Shingo said (Model and Application Guidelines 2010–2011),“Improvement means the elimination of waste, and the most essentialprecondition for improvement is the proper pursuit of goals.Wemust not bemistaken,firstofall,whatimprovementmeans.”

Thefourgoalsofimprovementmustbetomakethings•Easier•Better•Faster•Cheaper

NewLeanpractitionersmaybe confusedwith theShingoapproachbecauseLean is generally taughtwith a focuson tools and results.Focuson tools andresults leads the Lean practitioner away from the CI philosophy preached byShingo—atime-testedapproachthathasmadeToyotaaworldleader.Figure5.1illustratestheconnectionbetweenCIprinciples,CIsystems,andCItools.

InatypicalLeanimplementationattempt,organizationsstartontheleft-handside, providing training on tools to Lean teams to make improvements. Theybuild systems and believe that people will eventually discover the principlesbehindthetoolstheyareusing.Theintentionisnottosaythatthefocusontools,teams,etc.,iswrong,butIdobelieveitisnotcomplete.Ithinkwealsoneedtolook at working from right to left—to help people understand the guidingprinciples, to think about the kinds of systems theywant, and to use tools todesignandredesignthosesystems.Dr.Shingosaid,“Peopleneedtoknowmorethanhow,theyneedtoknowwhy.”

FIGURE5.1CIprinciples,systems,andtoolstoknowwhyandthentoknowhow.

The10guidingprinciplesinFigure3.2arelikethelawsofscience.Theydonotneedproof,theyareeternal,andtheygovernconsequencesforeveryone.Itisimmaterialwhetheronebelievesthemornot.ThinkintermsofNewton’slawofgravity.Youmayormaynotagreeingravity,butitgovernsyouregardlessofwhatyoubelieve.Thesameistrueregardinganyoftheguidingprinciples,suchas“respectforeveryindividual,”“focusonprocess,”or“constancyofpurpose.”Youmay not agreewith them (ormay not even be aware of them), but theygovernyou.

WHATISAPRINCIPLE?

PrinciplesGovernConsequencesPrinciples are not the same as values. Many organizations have their valueslistedeverywhereintheirorganization.Manywillprovideallemployeeswithalistofvaluesthattheycankeepintheirwalletorontheiremployeenamebadge.

Values are social norms. They are personal, emotional, subjective, andarguable,andtheyarenotthesameasprinciples(Figure5.2).

NowseeFigure5.3tounderstandthedifferencebetweenvaluesandprincipleandhowtheprinciplecangoverntheconsequence.Itshowsacartoonwherealadyhasbeenmuggedandapolicemanistakingherstatement.Shesays,“Theywereyourheight,butthinnerandbetterlooking.Youhaven’tcaughtthemyet,soobviouslythey’resmarter.”

If you looked at the policemen’s badge, you might find the values of“teamwork, loyalty,precision,and innovation”on thebadge.Youcan find thesamewiththethieves.TheycouldhavethesamevaluesontheirIDcards.They

couldworkwellasateam,beloyaltoeachother(nottobeaninformeragainsttheothers),beverypreciseintheirwork,andquiteinnovativeinthewaytheircarryouttheirwork(steal).

FIGURE5.2Principlesthatgovernconsequences.

FIGURE5.3Acartoonofamuggedladyandapoliceman.

The twogroupsmayhave the samevalues, but onegroup (policeman)mayhave those values anchored to a guiding principle, that is, “respect for everyindividual.” This makes all the difference. Thus, seek out the underlyingprinciple and how the values need to be anchored to the guiding principles tohave a clear understanding of the ideal behavior you want to see in yourorganization. Seemore examples of how values are anchored in principles inTable5.1.

Values, when anchored with principles, lead to ideal behaviors. If anorganization having values such as team work wants to understand thedistinction between principles and how their values need to be anchored toguiding principles, theymust ask people to pick a value (“teamwork”) and todescribewhatthiswouldlooklikeintermsofbehaviorsthattheycouldsee.Inthiscase, thebehavior responses to thevalue“teamwork”couldbeas follows:•Respecteveryindividual•Leadwithhumility

• Create value for the customer In summary, Lean leadershipmust learn,practice,andfollowthe10Demingprinciples:1.Respecteveryindividual

2.Leadwithhumility3.Focusontheprocess4.Embracescientificthinking5.Followandpullvalue6.Assurequalityatthesource7.Seekperfection8.Createconstancyofpurpose9.Thinksystematically10. Create value for the customer These principles not only govern the

consequences but also create a vision and strategy for organizationalexcellence.

TABLE5.1HowPrinciplesDetermineValues

Value ShingoGuidingPrinciple

Makeourcustomersthefocusofeverythingwedo CreatevalueforcustomerRecognizeourpeopleasourgreatestasset RespecteveryindividualTreateachotherwithrespect RespecteveryindividualStriveforexcellence SeekperfectionKeepourcommitment Constancyofpurpose

Keepourcommitment Constancyofpurpose

6

PrinciplesofContinuousImprovementProcess

“The Principles of Continuous Improvement” chapter includes seven sections:1.Processfocus(withfivesubsections)

•Focusontheprocess•Spendtimeonthefloor•Lookattheprocessinactualoperation• Measure the process to catch disruptions and problems • Teach the

importanceofprocessfocus2. Identification and elimination of barriers to flow including waste (with

sevensubsections)•F.W.Tayloreconomicsandflow•Functionalsilos•Qualityasaspecializedfunction•Costaccounting•Ninewastes(Muda)•MuraandMuri•Notmanagingtheflow

3. Match the rateofproduction to the levelof customerdemand (with twosubsections)4.Scientificthinking•MBF(managementbyfact)•Goandsee

5. Jidoka(autonomation—combinationofautomationandmistakeproofing)6.Integrateimprovementwithwork

7.Seekperfection

PROCESSFOCUSProcesses in general are administered by the supervisor and the team leaderunder the regular watch of the process manager. For reference, review theToyotaSupervisorandToyotaTeamLeaderjobdescriptionandspecificationintheappendix.

•FocusontheProcessTeam leaders, supervisors, andmanagers play amajor role in “how to

focus on the process.” For them, it includes spending as much time aspossible “differently” and learning to look for, ask about, measure, andteachdifferentthings.

•SpendTimeontheFloorThefirstthingLeanadvises:gotothegemba(gemba—wheretheaction

takes place—the shop floor/activity center) and spendmost of your time(80%)ifyouareateamleader,atleastonceaweek(preferablyonehour)ifyouareanoperationsexecutive,andproportionatelyforotherpositionsinbetween.Go to theplacewhen theprocess isoperating.Talkwithpeopledoingthework;observetheprocessasitisbeingperformed.Theideaistoanchoryourselfintheregular,fresh,andnewinformationabouttherealityoftheprocess.Beingthereistheonlywayyoucandothis.

•LookattheProcessinActualOperationTo be most useful, measure what you see with a standard or with

expectedperformance.Isthepracticeyouseeasperthestandardizedwork?Learn what people really deal with daily. When actual outcome fails tomeet expected outcome, ask people about it.What happened?Howoftendoesitoccur?Whereisitdocumented?CanIlookatit?Isproblem-solvingunderwayforthisissue?

• Measure the Process to Catch Disruptions and Problems Normally, theoperationshavemanymeasures such asqualitydefects, productivity, on-timedelivery,scrap,etc.,whicharethelaggingmeasures.Muchwaterhasflown down the river by the time actions are taken on these measures.Process measure consists of measuring the actual process performancewhen the process is running against the expected performance. Forrepetitive manufacture, the frequency of the measure may be every takttime,asoftenas10,12,or15minutes.Foradrawingoffice,itmaybeonceortwiceaday;fororderprocessing,thefrequencymaybefourtimesaday.For all changeovers, the frequency will be every changeover and its“handoff”points.The purpose of process measure is to identify, isolate, and highlight

processmissesandprocessdisruptions.Thisdistinguishes theLeanmind-set from the conventional world. Conventionally, we are conditioned toworkaroundproblems—nottofacetheproblemsbuttokeepthemononesideandcarryontomeettheschedule.

Contrarily,aLeanthinkerdevisesmeasurestohighlightproblemsevenifatemporarywork-aroundisnecessary.TheLeanthinkerlooksfortherootcause and then eliminates it. This proves the point that Lean is animprovementsystem.

•TeachtheImportanceofProcessFocusWhenyouareinthegemba,peopleaskquestionsandaskforresponses.

Your response shouldbeexplicit. “You identifyproductionproblems thatslowyoudownorinterruptyou,andwewilleliminatethemorgiveyouagoodreasonwhynot.”Whenyoukeepyourendof thebargain,youhavesuccessfullytaughttheimportanceoftheprocessfocus.

Throughtimelyshopfloorvisits,leadersandfloorlevelpeoplebecomemoreengaged with each other. With further improvements and clues about theprocess, you experience a steady streamof favorable changes that collectivelymakeaconsiderabledifferenceinperformance.Inthisway,processfocusisanimportantkeytounlockingthe“goldmine”ofcontinuousimprovement.

IDENTIFICATIONANDELIMINATIONOFBARRIERSTOFLOWThefollowingarethebarrierstoflow(flowofaproduct/serviceprovisionvaluestream):•F.W.TaylorEconomicsandFlow

•Functionalsilos•Qualityasaspecializedfunction•CostAccounting•NineWastes(Muda),•MuraandMuri•Notmanagingtheflow

F.W. Taylor Economics and Flow is one itemwhich is a barrier to flow! Sopleasetreatthisitemasanyother—likeFunctionalSilos.

F.W. Taylor’s (1856–1915) scientific management technique has beenemployed to increase productivity and efficiency both in private and publicsectors.Ithasalsohadthedisadvantagesofignoringmanyofthehumanaspectsof employment. This led to the creation of boring repetitive jobs with theintroduction of systems for tight control and the alienation of shop flooremployeesfromtheirmanagers.Theoperatorsareaskedtocometoworkwiththeirhandsonly,leavingtheirbrainsathome!Thisdivisionoflaborasacentral

conceptofthe“bestway”isstillprevalentinmanyorganizations.

FunctionalSilosWhen you think of a silo, you think of the type found on farms, full of grain(Figure 6.1). Full grain, full harvest, full happiness—it sounds like a perfectmetaphorforasuccessfulorganization.

The silo effect in abusiness refers to the lackof communication and cross-departmentalsupport.Eachfunctionbehaveslike“silos.”Functionalteamsworkonlyontheirowngoals,oftenignoringtheneedsofothers,andinformation(andcustomers)gets lost in themiddle.Thecycle repeats—ignoringcompany-wideobjectivesandexternalcustomerexpectations.

This results inadangerousdownward spiral resulting from the“silo”mind-set.

Eachdivisionisfocusedonitsownprimaryobjectives

Divisions do not communicate sufficiently or effectively because of the

factorsthatfeedintosiloformation

Divisionsdonotcooperatewithoneanotherbecausetheyareuninformed

Thelackofcooperationbreedsresentmentandareciprocallackofgiving

Divisionmembersfeelisolatedfromotherdivisionsandfocusworkeffort

withintheirowndivisions

Eachdivisionfocusesonitsprimaryobjectives

QualityasaSpecializedFunctionWheneveraproblemarises,youhearthesupervisorsanddepartmentalmanagerscry out, “call the quality control guys” or “call the Six Sigma guys.” The

problem and its solution often gets delayed or lost in endless meetings anddiscussions. This practice hides the problems and opportunities frommanagementandcreatesademoralizingatmosphereforworkers.

FIGURE6.1Silotowers.

This specialization is most damaging because such functions “design” theworkinanofficeawayfromtheworkarea.

CostAccountingCostaccountingbelievesthataprocessisequaltothesumofitsoperationsandcostcanbeimprovedbyimprovingtheindividualoperations.InaLeansystem,thewhole is not equal to the sumof its parts because an individual operationcouldbecontrolledtothelastsecondbutthepartsoraproductcansitinqueues

orawarehouseformonthswithnofurtheradvancementtowardthecustomerortowardgettingpaid.

NineWastes(Muda)MudaisaJapanesewordforwasteoranyworkthatthecustomerisnotwillingtopay for.This is oppositeof thevalue.Wecan say that allwork consists ofvalue-added,non–value-added,andnon–value-addedbutessentialwork.

TheAmericanSocietyforQuality(ASQ)definesnon–value-addedasa“termthat describes a process step or function that is not required for directachievementofprocessoutput.Thissteporfunctionisidentifiedandexaminedforpotentialelimination.”

This represents a shift forproductionandmanufacturingengineering,whichhavetraditionallystudiedwaystoimprovevalue-addedfunctionsandactivities(e.g.,howthisprocesscanrunfasterandmoreprecisely).

Leanthinkingdoesnotignorevalue-addedactivitiesbutdoesshineaspotlightonwaste(muda,mura,andmuri;Figure6.2;Table6.1).

Muri(Overburden,Stress)MuriistheLeanwastethatoccurswhenaperson,machine,orprocessispushedbeyond the normal or designed limits (Figure 6.3). For persons, this meanspushingthebodyataworkingratethatcouldcausefatigue,injury,ordefectivework.Workinginanunsafeenvironmentcouldalsocauseinjuriesandaccidents.Forcingamachinetoworkbeyonditsdesignedlimitsresultsinabreakdownorcauses repeatedcorrectivemaintenancecalls.Process,when it ispushed to thelimits,cancausethedatahandlingtogohaywire!

FIGURE6.2Ninewastes.(CourtesyoftheDepartmentofBusinessInformation.)TABLE6.1

NineWastes(Muda)andTheirDefinitions,Characteristics,andCauses

Waste Definition Characteristics Causes

Overproduction •Producingmorethanneeded•Producingfasterthanneeded

•Accumulatedinventory•Extraequipment/oversized

equipment•Unbalancedmaterialflow•Extrapartstorageracks•Extramanpower•Batchprocessing•Excessivecapacity/investment•Additionalfloorspace/outside

storage•Largelotsizes•Buildingahead

•Incapableprocesses•Just-in-casereward

system•Lackof

communication•Localoptimization•Automationinthe

wrongplaces•Costaccounting

practices•Lowuptimes•Lackof

stable/consistentschedules

Waitingtime •Idletimeisproducedwhentwodependentvariablesarenotfullysynchronized•Manwaittime

•Machinewaittime

•Manwaitingformachine•Machine/materialswaitingforman•Unbalancedoperations(work)•Lackofoperatorconcernfor

equipmentbreakdowns•Unplannedequipmentdowntime

•Inconsistentworkmethods

•Longmachinechangeovertimes

•Lowman/machineeffectiveness

•Lackofproperequipment/materials

Unnecessarytransporttime

•AnymaterialmovementthatdoesnotdirectlysupportaLeanmanufacturingsystem

•Extracarts,forklifts,dollies•Multiplestoragelocations•Extramaterialracks•Extrafacilityspace•Incorrectinventorycounts•Damagedmaterial

•Largelotprocessing•Unleveled

schedules•Lackof5S•Lackofvisual

controls•Improperfacility

layout•Largebuffersand

in-processkanbansOverprocessing •Effortwhichaddsnovaluetoaproduct

orservice•Enhancementswhicharetransparenttothecustomersorworkwhichcouldbecombinedwithanotherprocess

•Processbottlenecks•Lackofclearcustomerspecifications•Endlessrefinement•Redundantapprovals•Extracopies/excessiveinformation

•Engineeringchangeswithoutprocessingchanges•Decisionmakingat

inappropriatelevels•Inefficientpolicies

andprocedures•Lackofcustomer

inputconcerningrequirements

Inventorybuild-up

•Anysupplyinexcessofprocessrequirementsnecessarytoproducegoodsorservicesjustintime

•Extraspaceonreceivingdocks•Materialbetweenprocesses•Stagnatedmaterialflow•LIFOinsteadofFIFO

•Incapableprocesses•Uncontrolled

bottleneckprocesses

•Extensivereworkwhenproblemssurface

•Longleadtimeforengineeringchanges

•Additionalmaterialhandlingresources(men,equipment,racks,andstoragespace)

•Incapablesuppliers•Longchangeover

times•Management

decisions•Localoptimization•Inaccurate

forecastingsystemsWasted

movement•Anymovementofpeoplethatdoesnot

contributeaddedvaluetotheproductorservice

•Lookingfortools•Excessivereachingorbending•Materialstoofarapart(walktime)•Equipmentformovingparts•Extra“busy”movementswhile

waiting•Equipment,office,andplantlayout

•Lackof5S•Lackofvisual

controls•Inconsistentwork

methods(standardizedwork)

•LargebatchsizesReworkand

makingdefectiveproduct

•Repairofaproductorservicetofulfillcustomerrequirements

•Extrafloorspace/tools/equipment•Extramanpowerto

inspect/rework/repair•Stockpilinginventory•Complexmaterialflow•Questionablequality•Missedshipments/deliveries•Lowerprofitsduetoscrap•Reactiveorganization•Indifferentattitudeofemployees

•Excessivevariation•Incapablesuppliers•Management

decisions•Insufficienttraining•Inadequate

tools/equipment•Poor

layouts/unnecessaryhandling

•Highinventorylevels

Unusedtalent •Nonuseoffullpotentialoftheemployees •Indifferentattitudeofemployees •Lackofskilldevelopmentprograms.IncompleteLeantransformation

Energywaste •Wastedelectricity/gas/water/compressedair

•Doorskeptopen,roofnotinsulated,skylightsabsentordirty,light/motorsnotswitchedoffwhennotinuse,repairsandmaintenancenotdoneintime

•Lackofsystematicenergyconservationprograms.ISO14001notimplemented

FIGURE6.3Muri,mura,andmudaexplained.

In the factory, an assembler has three documents—a fixture instruction, anassemblydrawing,andabillofmaterial—andnoneofthemagree.Whatshouldshedo?Thisisanexampleofpersonal(mental)muri,which,intheworstcases,can cause not only migraine but can also lead to a serious human resourcesproblem.

MuraMuraisvariation,fluctuation,unevenness,ordeviation.Muraresultsfrompoorand unplanned schedules, unplanned changeovers, and lack of standards. Theworstformofmuraistamperingoroveradjustingaprocesstocontrolitwithoutunderstandingtheprocessinputsandoutputrelationships.Thiscausesadditionalvariationsresultingintheproductorservicetogobeyondthespecificationsthatareaskedforbythecustomer.

The effects of mura can be managed by leveling the production, varietyreduction,andjust-in-timeusingapullsystemoracontinuousflow(onepieceflow)method.

NotManagingtheFlowUnmanaged and invisible flow is the biggest barrier to flow. To manage theflow,controltheflowandmakeitvisible.

Thefirststeptomanagingtheflowistopreparethestandardwork.Standardworkmakestheprocesslesswastefulby•Removingnon–value-addedactivitiesfromtheprocesssteps•Connectingandaligningtheprocessstepstomaximizecustomer value • Aligned steps complete the process, which is carried outaccordingtoacustomer’sdemand(takttime)Thenextstepistocontroltheflowandmakeitvisiblefromendtoendforallpersonsinvolvedintheprocess.Thisis accomplished through value stream mapping. This is a powerful graphicaltechniquetodocumentandcommunicatethecurrentandidealfuturestateofthevalue stream. The stream is an unhindered flow of processes. “Value” is anefficientandeffectiveprocess.

Value stream, in the Lean vocabulary, describes a business process. Abusinessprocessprovidingvaluetothecustomercanbeanyoneofthefollowingandmore:•Quote-to-cash

•Procure-to-pay•Newproductorservicedevelopment•Day-to-dayorderfulfillment

MATCHINGTHERATEOFPRODUCTIONTOTHELEVELOFCUSTOMERDEMANDJust-in-time is the ultimate goal of Lean implementation. This means theevolutionofaprocesstothelevelinwhichitisabletoproduceexactlywhatthecustomerwants,when thecustomerwants it,and in the rightquantity. Just-in-time is completelyopposite tooverproduction—overproduction is theworst ofallninewastes.

Just-in-time is supported by continuous flow, kanban or pull system, andheijunkaorproductionleveling.

SCIENTIFICTHINKING

ScientificThinkingProcess•Findanddefinetheproblem

•Considertheproblemasanopportunitytoimprove•Observetheprocess,record thedataand information, and“measure” theprocess • Determineanddefinetheproposedsolution

•Validate,test,andcarryoutapilotrunoftheproposedsolution•Compareresultsbeforeandafterthetask

• Document the new process steps; ensure all affected people are trained• Go back to step 1 and continue the plan–do–check–act cycleManagementbyFact

Decisionsforimprovementsmustbebasedondata.Thisiscalledmanagementbyfactormanagementbydata.TheformandexampleareshowninFigure6.4.

GoandSeeGutfeeling,perceptions,incompletestandards,andpastexperiencesareusedtomakedecisions—usuallybysittinginanofficeorameetingroom.Thiscanleadtochangesthatcanmaketheprocessdifficulttocontrolandcreatemorewaste.Bydirectlywatching,trueandaccurateinformationanddatacanbegatheredandconfirmed.

JIDOKA(AUTOMATION—COMBINATIONOFAUTOMATIONANDMISTAKEPROOFING)Respectforpeopleisattheveryrootofthewordjidoka(Table6.2).Asyoucansee,jidokaandjust-in-timearethetwomainpillarsofLean.Jidokaisthemoreimportantpillaroutofthetwo(Figure6.5).

FIGURE6.4

Managementbyfactform.

TABLE6.2JidokaandJust-in-Time,theTwoMainPillarsofLean

GoalsofToyotaProductionSystem

HighestQuality,LowestCost,andShortestLeadTime

TwoPillarsoftheToyotaProductionSystem

JidokaJust-in-Time

Buildqualityin•Stoptheline•FindabnormalitiesFlexiblemanpower•Separatehumanandmachinework

Takttime•Standardizedwork•LaborsavingContinuousflow•Onepieceflow•Synchronization•Multiprocesshandling•Equipmentdeployment•Streamline•SmalllotsizePullsystem•Kanbantooltotransporttoolsandinformation

BaseofToyotaProductionSystemKaizen,People,Heijunka

Theprincipleofstoppingworkimmediately,whenaproblemoccurs.(central

toLean)

FIGURE6.5Jidokadefined.

It is important to understand the following six key concepts (principles) ofjidoka to implement it fully: • Quality isbuilt in theproductor serviceat thesource•Nodefectpassedforward

•Man/machineseparationwhereoperatorrunsmorethanonemachineatatime• Multiprocesshandling—multitasking • Self-detectionoferrors topreventdefects

•Stopandfix

INTEGRATEIMPROVEMENTWITHWORK

In aLean organization,all employees have theirwork divided into two parts:routineworkandimprovementwork.

Lean culture promotes employee empowerment.With empowerment comesthe feeling of ownership and ownership begets the responsibility to improvecontinuously. Employees need to be developed as process detectivesinvestigatingthecurrentstateoftheprocesstolookforopportunitiestoimprove.

To do this, employees need information (they need to be communicatedconstantly),tools,andsupporttoimplementimprovementsastheyidentifythem.

Table6.3depictstheresponsibilitytoimproveamongemployeesatdifferentlevels.

SEEKPERFECTIONA Lean organization relentlessly pursues perfection. Therefore, theseorganizationswillremainintheforefrontandneverbecomedormant.

TABLE6.3HowEmployeesatDifferentLevelsCanIntegrateImprovementwithWork

Level Responsibility

Seniorleader ImprovementofstrategyplanningprocessesandresourceallocationMiddlemanagement Improvementofqualitysystems,product/serviceflow,employeedevelopment,training,and

communicationShopfloor–frontlineemployees

Improvementofcycletimes,quality,standardwork,visualmanagement,errorproofing(pokayoke),etc.

FIGURE6.6Standardizedworksustainsimprovements.

Organizations can achieve a state of continuous improvement in twoways:1.Kaizen(continuous“incremental”improvements)

2.Kaikaku(radical“breakthrough”improvements)

Kaizencombinedwithbreakthroughimprovementisthebetterapproachtotake(Figure6.6).

7

QualityIsBuiltintheProductorServiceattheSource

Quality is built in the product or service through the followingnine elements:1.Standardwork

2.Successivechecks3.Self-checks4.Visualmanagement5.Pokayoke6.Separatemanfrommachine7.Multiprocesshandling—Multimachinehandling8.Cellular(Cell)manufacturing9.StopandFix

STANDARDWORKInthetoolsandtechniquessection,standardworkhasbeendescribedindetail.Itis useful to understand how vastly important standard work is in Leanimplementation.

Duringtheentireprocessofprovidingtheproductorservice,therearepointswhere tasks critical to customers are performed. It is important forworkers toknowwhatthesecriticalpointsare.

Nowtheworkersarenotsupposedtoremembereverycriticaltask.Therefore,itisveryimportanttodocumentwhattoinspect,howtoinspect,andwhattodowhenadefectoccurs.Thedocumentshouldalsodescribehowtocarryout thetask“rightatthefirsttimeandeverytime.”

SUCCESSIVECHECKSThese are the inspection checks performed by the operators on the tasks

performed by the operators upstream in the value stream (customer-focusedprocess).Thismethodisalsoknownasnextoperatorasacustomer(NOC).Theoperatorreceivingtheoperationcheckstheworkofthepreviousoperatororthesupplieroperator.Successivechecksprovideimmediatequalityfeedback.Thesechecks also prevent value addition to faulty product or service information.Withoutsuccessivechecks,itisdifficulttodrivetimelyrootcauseanalysisandcontinuousimprovement.

SELF-CHECKSTheseareperformedbytheoperatorsfollowingthestandardwork.Self-checkspreventdefectiveproductorservicegoingtothenextprocessstep.

Successive checks and self-checks are known as source inspection. Skilltraining is the key here because the operator should knownot only his or heroperation but also the upstream and downstream operation. Source inspectionkeepsdefectsfromoccurringduringthework.

VISUALMANAGEMENTVisualfactoryisa termtodescribehowdataandinformationisconveyedinaLeanmanufacturing environment. In a Leanmanufacturing environment, timeand resources dedicated to conveying information, although necessary, are aform ofwaste. By using visualmethods to convey information such as signs,charts, and andons, information is easily accessible to thosewho need it. Thecurrentstatusofallprocessesisimmediatelyapparent.Andon is a Japanese termmeaning paper lamp. Andon refers to any visual

display that enables operators to signal a line status based on color: green fornormal operation, yellowwhen assistance is needed, and redwhen the line isdown.Nowadays,more sophisticated visual displays are used for andons, buttheirpurpose—efficient,real-timecommunicationofplantfloorstatus—remainsthesame(Figure7.1).

FIGURE7.1Modernandonpanel.

Wewill discuss visual workplace in the Chapter 8, item 1. It is enough torememberthatthevisualfactoryprincipleisaveryimportantaspectofJidoka.

POKAYOKE(ERRORPROOFING)

InJapanese,pokameans“inadvertenterror”andyokemeans“prevention.”Error proofing is a systematic approach for anticipating and detecting

potential defects and preventing them from reaching the customer (internal orexternal).

WewillhavemoreinformationonerrorproofingintheChapter9,item5.

NoDefectPassedForwardThis principle is the same as self-checks. This principle is a key to one-pieceflowmanufacturingbecausepassingthedefectsalongwilldisrupttheflow.ForJIT,thisprincipleisalsoextremelyimportant.

SEPARATEMANFROMMACHINE

Figure7.2presentstheevolutionofautonomation.

FIGURE7.2Stagesofmanualprocess,mechanization,andautonomation.

MULTIPROCESSHANDLING—MULTIMACHINEHANDLINGCross-trainingisaprerequisiteforthisprinciple.Theworkpracticeofassigningoperators to operatemore than one process in a product flow–oriented layoutrequirestrainingoperatorstooperatedifferenttypesofmachines(e.g.,blanking,crimping,andinspection).

This practice contrastswith the typicalmass production practice of placingoperatorsinseparatedepartmentssuchasturning,milling,grinding,etc.,wheretheywork only one type ofmachine andmake batches of parts to transfer tootherprocessesinotherdepartments.

CELLULAR(CELL)MANUFACTURINGThe organization that implements multiprocess handling and cellularmanufacturing can improve quality by reducing defects and improveman andmachine utilization (see Figure 7.3). Job enrichment promotes employeesatisfaction.

FIGURE7.3Typicalmanufacturingcelllayout.

STOPANDFIXThisis theextensionof theJidokaprinciple,wherethemachinestopsuntil theimmediate solution is found. This is followed by root cause analysis andpreventivesolutionimplementationtopreventrecurrence.

As soon as you read this, a thought comes tomind, “You can’t disrupt theprocess.Itisexpensive.”ThisLeanprincipledictatesthatassoonasadefectisdetected, production is stopped, root cause is identified, and corrective actiontaken toprevent the reoccurrencebefore theproduction is restarted. Itmaybeeasilyappreciatedthathalftoonehourspentindowntimeto“stopandfix”theissuenowwillsaveasignificantamountofvalueinthelongrun.

Ifaproblem isdetected thatcannotbesolvedduring theworkcycleandanoperator discovers a problem with parts, tools, materials supply, safetyconditions,etc.,theoperatorpullsaropeorpushesanandonbuttontosignalthesupervisor.Thesupervisorassesses thesituationanddetermines if theproblemcan be fixed before the end of the current work cycle. If the problem can befixed, the supervisor resets the signal system so the line does not stop. If theproblem cannot be corrected within the remainder of the cycle time, the linestopsattheendoftheworkcycle.

SectionIII

ContinuousImprovementProcessToolsandPractices

8

ContinuousImprovementProcessSystem

Thesystemcanbedefinedas“agroupof interdependentprocessesandpeople(alsoknownassubsystems)thattogetherperformacommonmission.”

ASQGlossary

Continuous improvement principles can be effectively followed by installingcontinuous improvement systems. These systems provide • Clearcommunicationchannels

•Accountability•Planningforcurrentandfuturestatesofthevalueadditionprocess•Trackingofplannedactivities•Actionableobservationsandcountermeasureswhenneeded

Figure 8.1 is taken from the Malcolm Baldrige National Quality Award(MBNQA)criteria.Itshowsushowasystemapproachleadsanorganizationtoachieve excellence. The lines with arrowheads represent the interdependentprocesses,includingthepeopleineachprocess.Thesystemisineffectiveaslongasitis•ReactingtotheproblemsORfirefighting

•Intheearlystagesofprocessdevelopment;lackinganintegratedapproach• An aligned approach where processes are repeatable—all departments

pulling in the same direction to fulfill organizational goals

FIGURE8.1Systemsapproach.

• An integrated approach of a multiunit organization where efficienciesacrossallunitsaresought,shared,andachievedForLeantransformation,thecontinuousimprovementprocesssystemsare

1.Visualworkplace2.Lotsizereductionandloadleveling3.Totalproductivemaintenance(TPM)4.Standardwork5.Continuousimprovement6.Correctiveactionsystem

VISUALWORKPLACEWithout visual signs, our airports, railway stations, hospitals, and our nationalhighways would be in chaos. As amatter of fact, in any place where humanbeings gather around to work—whether it is a factory, service center, or aninsurance office—the aim is tomakework safer, simpler,more efficient, and

economicalbyusingvisualaids.Theseaids,signs,orpicturesarebetterthanathousandwords.

GwendolynD.Galsworth,Ph.D.,authorofWorkThatMakesSense (Visual-Lean Enterprise Press, 2010) and Visual Workplace/Visual Thinking (Visual-Lean Enterprise Press, 2005), and recognized visual expert, defines a visualworkplace as follows: A visual workplace is a self-ordering, self-explaining,self-regulating,andself-improvingworkenvironment…wherewhatissupposedto happen does happen on time, every time, day or night—because of visualsolutions.

Thisdefinitiondescribes the resultsafter implementing thevisualworkplacesystem.Whenaworkplacegetsvisual,itbecomessafer,better,faster,cheaper,and smoother. All value streams of the products and services flow withoutdisruptionsfromwastes.

TransferringVitalInformationintoVisualDevicesAvisualdeviceprovidesvitalinformationtocontrolandinfluencebehaviors.Itcan be in the form of a tool, picture, or an electronic device that guides orcontrolsbehaviorbymakinginformationvitaltothetaskathandeasilyavailableat aglance; silently,without speakinga singleword.Figures8.2 through8.13providesomevisualworkplaceexamples.

FIGURE8.2Apictureisbetterthana1000words.

FIGURE8.3Modelairplaneassemblypictorialinstruction.

FIGURE8.4Visualworkinstruction.

FIGURE8.5Useofashadowboardforeasyaccesstothehandtools.

FIGURE8.6Visualdeviceshowingworkactivities.

“TheFirstQuestionIsFree”RuleoftheVisualFactoryYou may have come across supervisors and managers complaining that theirmainjobistoprovideanswersdayinanddayout!Well,hereisavisualsystemanswerthatwillminimizesuchinterruptionsandmaketheworkplacedoubt-andconflict-free,resultinginanefficientandreliableworkplace.

Whether you are a quality executive, marketing manager, technician,accountant,doctor,oranurse,herearethestepstoimplementit:

FIGURE8.7Visualdevicesprovidingeaseofaccess.

FIGURE8.8Safetyauditsandsafeaisles.

When a person comes and asks you a question, answer it very politely andclearly.Afterthatpersongoesaway,eitherwriteitdownormakeamentalnote:“that’snumberone.”

Then,whenthatquestionisaskedagainbythesamepersonorsomeoneelse,answer itverypolitelyandclearly.After thatpersongoesaway,eitherwrite itdownormakeamentalnote:“that’snumbertwo.”

FIGURE8.9Visualsafetysigns.

FIGURE8.10Visualguidetopresentdataforqualitysystemimprovement—1.

FIGURE8.11

Visualguidetopresentdataforqualitysystemimprovement—2.

FIGURE8.12Visualaccountabilityboard.

FIGURE8.13Visualstorage,segregation,andidentificationofnonconformingmaterial.

The firstquestion is free!Noactionneeds tobe taken.However,whenyouhearthesamequestionasecondtime,itistimetocreateavisualdevicesoyounevereverhavetoanswerthatquestionagainandnoonehastoaskagain!

5SSTANDARDSSYSTEMCOMPLETEWITHIMPLEMENTATIONGUIDELINESAfter standard work, the 5S system is considered the core process fororganizations pursuing Lean. It strengthens the Lean culture and prepares theorganization for the Lean journey. Therefore, 5S is the foundation for adisciplinedapproachtotheworkplace.5Scanalsobeconsideredasfivesteps.

Howdid theword5Scomeabout?5Soriginated in Japan; thewords in thebracketshowtheJapaneseequivalent.

Step1:Sort(seiri)Step2:Straighten(seiton)Step3:Shine(seiso)Step4:Standardize(seiketsu)Step5:Sustain(shitsuke)

5SActivities

•Sort—involvessortingthroughthecontentsoftheworkplaceandremovingunnecessary items • Straighten—involves putting the necessary items intheir place and providing easy access • Shine—involves cleaningeverything, keeping it clean daily, and using cleaning to inspect theworkplace and equipment for defects • Standardize—involves creatingvisual controls and guidelines for keeping the workplace organized,orderly,andclean•Sustain—involvestraininganddiscipline(5Saudit)toensurethateveryonefollowsthe5SstandardsTheBenefitsof5SAre

•Safety•Efficiency•Quality•Eliminatewaste•Controlovertheworkplace

Safety

Safety is everyone’s concern.When 5S is applied, the safety problemswhichhavethusfarbeenignoredwillsurface.Thishappensbecause:Regularly

•Guards,covers,andshieldsarechecked•Electricalfittingsandswitchgeararelookedatclosely•Buildingandplantconditionsareexamined

Efficiency

•5Sfocusesonthesmallerissuessothatlargerproblemsareeliminated•Thefactorybecomeslesscrowded•Timeisn’twastedinsearchingfortoolsandparts

•Productionflowisimproved

Quality

A5SOrganizedWorkplace:

• Producesbetter quality by allowingpeople to concentrate onperformingworkwithoutunnecessarywalking,reaching,hunting,etc.

•Arrangesmaterialsandtoolsproperlytoreducevariationintheprocessandenhancesrepeatability(standardizedwork)EliminateWaste

Whenequipmentisclean,wecanseethewastequickly;thisisanimprovementinvisualcontrol.Addressingwasteeliminationisateameffort.5Sisconsidereda fundamental tool to achieving a heightened maintenance system andimplementingTPM.

ControlOvertheWorkplace

5Swillprovideasenseofaccomplishmentfortheemployeesandempowerthembyallowingthemto•Identifywhatisneededintheirworkarea

•Determinewhereitemsshouldbelocated•Keepthingsthatway

PDCAMODELFOR5SIMPLEMENTATIONThe following Shewhart (or Deming) PDCA cycle is a simple, yet powerful,approachfordeveloping, testing,andimplementingchanges(Figure8.14).TheuseofthePDCAcyclebringsthepowerofthescientificmethodtoimplementeachstageof5S.

WhentoUsethePlan–Do–Check–Act•Asamodelforcontinuousimprovement•Whenstartinganewimprovementproject• When developing a new or improved design of a process, product, or

service•Whendefiningarepetitiveworkprocess

FIGURE8.14Plan–do–check–act.

• When planning data collection and analysis to verify and prioritizeproblems or root causes • When implementing any change such as theintroductionofa5Ssystem

Plan–Do–Check–ActProcedure•Plan—recognizeanopportunityandplanachange•Do—testthechange.Carryoutasmall-scalestudy• Check—review the test, analyze the results, and identify what you’ve

learned•Act—takeactionbasedonwhatyoulearnedinthestudystep

Ifthechangedidnotwork,gothroughthecycleagainwithadifferentplan.Ifyou were successful, incorporate what you learned from the test into widerchanges.Usewhatyoulearnedtoplannewimprovements,beginningthecycleagain(Table8.1).

5SAuditRadarChart

• Activeparticipationfromthe leadership team(Figure8.15)• Emphasizestartingandsustainingthe5Sprogram

TABLE8.1FiveLevelsofImplementationof5S

FIGURE8.15Radarcharttorecordauditscoreofeachstepof5S.

•Conduct5Saudit•Setarecurring5Sauditschedule(daily,weekly,etc.)•Recognizeandrewardresults

Nowletusconsidereachstepindetail.

SORT

KeyInformationforSorting•Sortthrougheverythingintheworkarea•Separatetheitemsthatarenotneededorareinthewrongplace•Removethoseitemsfromtheworkarea•“Ifindoubt,moveitout!”

KeyActionstoSort

•Developcriteriafordisposalofnot-neededitems•Tagandidentifynot-neededitems(includeofficeareas)•Establishasafeandsecureholdingareafornot-neededitems•Evaluateandremoveunnecessaryitemsfromthesite

DevelopCriteriaforSorting•HowoftendoIneedtousethesortoperationfornot-neededitems?•Ifitisdailyoronceaweek,keeptheholdareaneartheworkplace•Ifitislessthanonceamonth,keeptheholdareainaremoteplace• If it is seldom used, say, once a year or is broken, having no value—

considerdisposal• Be reasonable about personal items (food packs, God/family pictures,

plants,etc.)

Backpacks,handbags,etc.,thatcancausesafetyorqualityproblemsshouldbekeptinlockersorawayfromtheworkplace.

“Redtagging”isavisiblewaytoidentifyitemsthatarenotneededorareinthewrongplaceintheworkplace(Figure8.16).

Questionsyoushouldaskyourself(Figures8.17through8.19):•Isthisitemneeded?

•Ifitisneeded,isitneededinthisquantity?•Ifitisneeded,shoulditbelocatedhere?•Canyoufindanyunnecessaryitemsclutteringupyourworkplace?•Aretheretoolsormaterialsleftonthefloor?

FIGURE8.16Redtagprocedure.

FIGURE8.17Redtagexample.

FIGURE8.18

Holdingareaoffice.

FIGURE8.19Holdingareaequipment.

MoveItemstoaHoldingAreaAholdingareaisatemporarystorageplaceforred-taggeditemsthatneedtoberemovedfromtheworkplacebutcannotbedisposedofuntilallinterestedpartiesagree.Holdingareasshouldbe“local”foreachdepartment.A“central”holdingarea can be set up for itemswhose final disposition cannot be decided at thelocallevel.Holdingareasshouldbehighlyvisibleandclearlylabeled.

RemovingItemsfromtheHoldingAreaTheHoldingAreaCoordinator is responsible for logging in items as they aredelivered,and,findingouttheasset’svalue.TheCoordinatorwillbethecontactperson who is authorized to categorize the items as follows: Use the BottomGrayPortionoftheRedTagandMark

•Dispose•Findanewhome•Returntooriginallocation

The holding area should be cleared in a timely manner—daily, weekly,monthly(Table8.2).

When all the criteria for “sort” are satisfied after a thorough audit, giveyourself a score according to the scoreguidechart inTable8.1, andmark thescoreontheradarchart(Figure8.20).

Note:Here,20istheperfectscorewhenallchecksheetitemsarecompleted.

TABLE8.2KeyActionChecklistforSortStage

KeyActionActivity ResponsibilityCheck

1.Developcriteriaforsorting

Developcriteriafordisposalofnotneededitems

2.Pictureit Take“before”photos3.Tagit Tagandidentifynotneededitems4.Moveitemstoholding

areaEstablishasafeandsecureholdingareafornot

neededitems5.Removeitemsfrom

holdingareaEvaluateandremoveunnecessaryitemsfrom

thesite6.Pictureit Take“after”photos7.Evaluationsare

conductedCompleteevaluationusing“5S”levelsof

implementation8.Stageinspection Contactplantmanager/keymanagement

personforevaluation

FIGURE8.20Sortauditscoreonradarchart.

STRAIGHTEN

KeyInformationaboutStraighten•Decidewheretokeepnecessaryitems• Organize items by frequency of use and clearly designate their correct

location•Makeiteasytofindandusethem•Makeitvisuallyobviouswhentheyarenotintheircorrectplace•“Aplaceforeverything,andeverythinginitsplace!”

KeyActionstoStraighten•Determinelocationforeveryitem•Outlinelocationsofequipment,supplies,commonareas,andsafetyzones

withlines(tape)•Developshadowboards•Labelneededitems

• Determinewhereandhowmuch inventoryorsuppliesshouldbekeptonhand.Usevisualaidslikelevelmarks,twobins,andcolorcoding(Figure8.21)•Determinelocationforitems

•Use“5Whys”todecidewhereeachitembelongs• Use the “5 Whys” technique to determine where each item should be

located.The idea is to ask“Why?”until youcanno longer ask, “Why?”The team then decides where each item belongs • For an interactiveexampledemonstrating theuseof the“5Whys” (see5Whysexample inshine)•Locateneededitemssotheycanberetrievedin30secondswithminimumsteps

OutlineLocationswithLines(Tape)•Dividerlinesdefineaisles/waysandworkstations•Markerlinesshowpositionofequipment•Rangelinesindicaterangeofoperationofdoorsorequipment•Limitlinesshowheightlimitsrelatedtoitemsstoredintheworkplace•Tigermarksdrawattentiontosafetyhazards•Arrowsshowdirection

FIGURE8.215Simplementationbyoperators.(From5SforOperators,ProductivityPress.)

The picture below shows a “tiger” tape and some of the industrialmarkingtapes.Ascrapermaybeneededifthetapeneedstobereplacedorshifted.Easytoseeifoneismissing.Everythingisavailableforsetup(Figures8.22through8.26).

Whenalltheabovecriteriafor“straighten”aresatisfiedafterathoroughaudit(Table8.3),giveyourselfascoreaccordingtotheradarchart(Figure8.27).

SHINE

KeyInformationaboutShine•Cleaneverything,insideandout• Find ways to prevent dirt, oil/water leaks, and contamination from

occurring•Adoptcleaningasaformofinspection•Makecleaningpartofeverydaywork

FIGURE8.22Tapeusedtooutlinevariouslocations.

FIGURE8.23

Exampleshowingtheoutlinesoflocations.

Note:Shineandstep1ofTPM(autonomousmaintenance)areverysimilar inthattheybothfocusoncleaningandinspectingtheequipment.

Themost obvious goal in the cleaning step is to turn theworkplace into aclean,brightplacewhereeveryonewillenjoyworking.Anotherkeypurposeofstep 3 is to keep everything in top condition so when someone needs to usesomething, it is available and ready to use. By implementing step 3, “spring-cleaning”or“year-endcleaning,”or“DiwalicleaninginIndia”becomesathingofthepastascleaningbecomesapartofdailyworkhabits.

FIGURE8.24Developshadowboards.

FIGURE8.25Itemsontherightneededlabelingandareproperlylabeledontheleft.

ImmediateBenefitsofCleanliness•Well-lit,cleanenvironment;improvedquality•Absenceofpuddlesofoilandwaterimprovessafety• Machines will not break down as frequently when they are cleaned,

maintained, and inspected • Improved delivery to our customers byreducingleadtime

•Machineswilloperateconsistentlyandcorrectlywithregularmaintenance

FIGURE8.26Developtoolcarts.

TABLE8.3KeyActionChecklistforStraightenStage

KeyAction

Activity ResponsibilityCheck

1.Pictureit Take“before”photos2.Determinelocation

foritemsDecideandorganizewheretokeepnecessaryitems

3.Outlinelocationswithlines(tapes)

Outlinelocationsofequipment,supplies,commonareas,andsafetyzoneswithlines(tapes)

4.Developshadowboards

Installshadowboards.“Aplaceforeverythingandeverythinginitsplace”

5.Labelneededitems Identifyallneededitemswithlabels6.Pictureit Take“after”photos7.Evaluationsare

conductedCompleteevaluationusing“5S”levelsof

implementation8.Stageinspection Contactplantmanager/keymanagementpersonfor

evaluation

•Reduceddowntimeandimprovedquality

•Cuttingsandshavingswillbecleanedaway,andnotmixedintoproductionandassemblyprocesses;improvedquality•Fewerinjurieswillresultfromcuttings and shavings being blown into people’s eyes; improved safety

FIGURE8.27Straightenauditscoreonradarchart.

KeyActionstoShine•Performinitialcleaningofworkplaceandequipment(Figure8.28)•Find

waystokeepeverythingclean• Adoptcleaningasanopportunity to improveproductivity throughvalue-

added formof inspection • Makecleaningpartof everydaywork for allemployees

•Performinitialcleaningofequipment(Figure8.28)•Identifyandtaganyitemsthatyoufeelmaycauseoil/waterleaksandcontamination

FIGURE8.28Findwaystokeepeverythingclean.

• Analyze reasons for contamination and brainstorm countermeasures orsolutions to theseproblems• Use the“fivewhys”and“causeandeffectdiagram” techniques to brainstorm the root cause of a problem • Toanalyzereasonsforcontamination,usebrainstormingtechniqueslike“fivewhys” and “fishbone analysis” to help find the root cause • Developstrategies to eliminate sources of contamination, like controlling coolantoverspray,andcontainingcuttingshavingsastheyareproduced•Askthefivewhys(Figure8.29)

• Causeandeffectdiagram(Ishikawadiagramorfishbonediagram;Figure8.30)•Findwaystokeepeverythingclean(Figure8.31)

•Keepalogofareastobeimproved• Example of a simple log to be kept by the area team leader/supervisor

(Table8.4)TheOne-MinuteorOne-PointLessonThisdisplayconveysimmediateknowledgeaboutasingleprocess,problem,orskillthatshouldbesharedamongtheteamsandalsoamongvariousshifts.Thedisplaycontainedherehasabriefinstructiononwhataone-pointlesson(OPL)is,itsobjective,andhowitisgenerated.InLeanorganizations,anopenbinderforarchivedlessonsonOPLismaintainedforalltorefertoandgetmoreideasforcontinuousimprovement.

FIGURE8.29Fivewhysexchange.

FIGURE8.30Causeandeffectdiagram.

FIGURE8.31Tablesawwithandwithoutvacuumsawdustextraction.

TABLE8.4Follow-UpActionItemsLog

LocationofContamination

Problem SolutionWhoWhen

OntheflooraroundhydraulicpressNo.3 Oiloverflowingfromdrippan

Replacegasket Anil 5/15/2008

AdoptCleaningasaFormofInspection

Cleaningandinspectingkeepsdirtandgrimeoffequipmentandexposesslightdefects.Asweclean,wetouchtheequipment,checkit,anddiscoverimpendingfailures.Theseitemsarethentaggedformaintenanceattention.

•ThisstepisaprecursortodevelopingaformalTPMprogram

•Makecleaningpartofeverydayworkforallemployees•Cleaningbuildsprideintheworkplace•Operatorsareencouragedtousetheirfivesensestocatchproblemswhile

theyaresmall

DevelopdailychecksheetsasshowninFigure8.32.

ImportantNotefortheTeamLeader

Havetheteamcomplete“shine”activitiesbyusingthe“keyactionchecksheet”(Table 8.5). The “5S levels of implementation” matrix is found in theIntroduction. The plant manager (or staff member) should use this matrix toevaluatecompliancewithall five levelsofshine.Uponsuccessfulcompliance,theplantmanagerwillattachagoldsealtoshineonthe5Swheelthatispartoftheactivityboard.SeeexampleinIntroduction.

Timeisvery important inconducting“shine.”Monitor the timeclosely,andkeeptheteamontrack.Whensatisfied,completetheradarchart(Figure8.33).

FIGURE8.32

5Schecksheetfordaily,weekly,andmonthlyactivities.

TABLE8.5KeyActionChecklistfortheShineStage

KeyAction Activity ResponsibilityCheck

1.Pictureit Take“before”photos2.Performinitialcleaningof

workplaceCleaneverythinginsideandout

3.Findwaystokeepworkplaceclean

Developteamproblemsolvingskills.Analyzecontaminationsources

4.Adoptcleaningasaformofinspection

Checkforcontaminationwhilecleaning,anddocumentfindings

5.Makecleaningapartofeverydaywork

Developactivitychecksheetsanddivideresponsibilities

6.Pictureit Take“after”photos7.Evaluationsareconducted Completeevaluationusing“5S”levelsof

implementation8.Stageinspection Contactplantmanager/keymanagement

personforevaluation

FIGURE8.33

Shineauditscoreonradarchart.

STANDARDIZE

KeyInformationaboutStandardizeMany organizations pursuing 5S often say that they failed at sustaining theirefforts—thefifth“s.”However,itismorelikelythattheyfailedat“standardize.”Establish the routines and standard practices for regularly and systematicallyrepeatingthefirstthreeSs.

Create procedures and forms for regularly evaluating (grading) the status ofthefirstthreeSs.Animportantelementhere:Don’tcreatearulethatnoonewillfollow.

KeyActionstoStandardize

• Documenthoworganizingandcleaningwillbedoneandmakestandardsvisiblebymeansofphotos,videos,etc.

•Maintainandmonitorthefirstthree“Ss”•Standardizered-tagproceduresandholdingarearules(seeSort)• Standardize procedures for creating shadow boards, position lines, and

labeling of all items (see Straighten) • Standardize cleaning schedulesusingthe“5Soperatorchecksheets”(seeShine)

FIGURE8.34Standardizetoolinspectionarea.

FIGURE8.35Standardizeofficearea.

•Standardize“one-minutelessons”fordocumentingandcommunicating5S

proceduresandimprovementsinworkplaceandequipment•MaintainandmonitorthefirstthreeSs

The methodology of by whom and how often to inspect should reflect thecultureoftheorganization.Acommonapproachisforcross-functionalteamstoinspectareasonaweeklycycle(Figures8.34and8.35;Table8.6).

Whensatisfied,completetheradarchart(seeFigure8.36).

SUSTAIN• Record and report 5S activity for lessons learned and knowledge

management•Take“before”and“after”photos• Document the results using a standard form to create a summary report

folder•SubmitthesummaryreporttotheLeancoordinator•Reviewsummaryreportforpossiblebestpractices•Uploadthesummaryreporttothebestpracticeswebsite• Useknowledgemanagement to shareandbegin sustaining5S inanother

areaofthesameplantoranotheroffice/warehouse/plant(Figures8.37and8.38)TABLE8.6

KeyActionChecklistfortheStandardizeStage

KeyAction Activity ResponsibilityCheck

1.Pictureit Take“before”photos2.Maintainandmonitorthefirst

threeSsSort,straighten,andshinearefully

implementedandfunctioningwell3.Documenthoworganizingand

cleaningwillbedoneandmakestandardsvisible

Postallteamactivitydocuments/checklistsontheteam5Sboardforvisibility

4.Performinternalaudits Audittheteamtovalidatesuccess5.Pictureit Take“after”photos6.Evaluationsareconducted Completeevaluationusing“5S”

levelsofimplementation7.Stageinspection Contactplantmanager/key

managementpersonforevaluation

FIGURE8.36Standardizeauditscoreonradarchart.

FIGURE8.37Sustainauditscoreonradarchart.

FIGURE8.38Requirementsforachange.

Lesson• Strategy with incentive/reward, skill development, providing required

resources,makinganactionplanthatwillbringaboutchange•Withanyoneof thesefiveaspectsmissing(shownbya“noentry”sign), theresultwillbeeitherconfusion,lethargy,anxiety,frustration,orfalsestarts!

•Use5StobeginLeanevolutionandtosustainforwardprogress•5SisafundamentalpartofTPM•5Sisafundamentalpartofstandardizedwork

FiveCriticalFactorsEnsureaSuccessful5SImplementation•Acustomer-centricculture•Positivefinancialresultsobtainedduringinitial5Simplementation•Managementengagementandencouragement•Strongresourcecommitmentbythetopmanagement• An infrastructure that integrates Lean Six Sigma projects into the

organization’s realworkThe5S systemauditprocess is shown inFigure

8.39.

LOTSIZEREDUCTIONANDPRODUCTIONLEVELINGSYSTEM(HEIJUNKA)

HeijunkaDefinitionThedistributionof productionvolumeandmix evenlyover time is defined asheijunka.Theheijunkasystemisbasedontwoimportantconcepts•Takttime

•Changeovertimereductionorsetupreduction

In traditional push production operation, big lots or batches of product arecreated and “pushed” to thenext process, regardlessofwhether theproduct isneeded.Atthispoint,theproductwaitsinaqueueasworkinprocess(WIP).

Normally, large batches are created as a result of “forecasted” customerdemand.Thisresultsinfinishedgoodsinventory.Theideaistohavetheproductonhandtomeettheforecasteddemandifandwhenthecustomersplaceorders.

To eliminate this type of fluctuation (mura), load leveling, also calledproduction leveling, has been successfully applied in many small and largeproductionorganizations.

FIGURE8.395Sauditform.

There are three components to production leveling (Figure 8.40): 1. Totalvolumeofallmodels

2.Modelsequenceinwhichthemodelsarerequired3.Volumeofeachmodel

TotalVolumeofAllModelsCustomerdemandvaries.However, therearepredictablepatternsover specificperiodsoverwhichthedemand,onaverage,isrelativelyconstant(Figure8.41;

Table8.7).

ModelSequenceandModelVolumeAs the day-to-day customer demand varies, so does the type of product orservice.Therealizationoftheseproductsandservicesdemandstimeneededforchangeoversfromonetypetotheother.Thisaffectstheoverallcapacityoftheorganization. A reduction of the changeover time is the key factor here.Changeover time begins when the last good part or service is completed andends when the first good part or service is started at normal cycle time andefficiency.

FIGURE8.40Componentsofproductionleveling.

FIGURE8.41Anexampleofproductionleveling—1.

Therefore,mostLean companies strive hard to reduce the changeover time.Generally, the common scenario in product/service provision is that ofmixedmodelproduction.

TABLE8.7AnExampleofProductionLeveling

WeekTotalDemand

4-WeekAverage

WeeklyLevelProduction

1 478 434 4342 376 4343 453 4344 432 4345 362 423 4236 480 4237 450 4238 400 4239 350 407 40710 440 40711 450 40712 390 407

EqualVolumebutMixedProductsAcustomerneeds20unitsperhourofproductA,20unitsperhourofproductB,and20unitsperhourofproductC.Thismeansatotalnumberof60unitsneedtobeproducedperhourforproductsA,B,andC.Thetakttimeforproductis:Available time/required volume = 60 minutes/20 + 20 + 20 = 1 product perminute.

Thismeanstheproductsequencecanbe:ABCABCABC,whereproductsA,B,andCareproducedatintervalsofthree

minutes each.With a sequenceofAAABBBCCC, the customer for productCwill have towait a full nineminutes to receive productC, and sixminutes toreceiveproductB.ThecustomerforproductCcan’twaitthatlongandgoestoanothersupplier,saySub-Way,leavingMcDonald’scausingitalossofbusinessandpossibleincreaseinWIPinventorybuildup.

DifferentVolumesandMixedProductsAcustomerneedstenunitsperhourofproductA,20unitsperhourofproductB, and30unitsperhourofproductC.Thismeans a total numberof60unitsneedtobeproducedperhourforproductsA,B,andC.

ProductA:Demand/totaldemand=10/60=1/6ProductB:Demand/totaldemand=20/60=1/3=2/6ProductC:Demand/totaldemand=30/60=1/2=3/6.

Determining the least common denominator, we will be able to find therepeatability number. The repeatability number (denominator) is the totalnumberofopenslotsinthesequence,andthenumeratoristhenumberofslotsinthesequence.

ProductAhasdenominator6,oreverysixthslot.Itsnumeratoris1soithasoneslot.ProductBhas2slots,oreverythirdslot.Slotnumber6istakensoBwill occupy slot number 5.The third slot from5 is slot number 2. Therefore,product5occupiestwoslots(5and2).Intheend,productCoccupiestherestoftheslots.

Product C B C C B ASequenceslot 1 2 3 4 5 6

TOTALPRODUCTIVEMAINTENANCESYSTEM(TPM)ANDITSIMPLEMENTATIONWhatisit?

• It isamethodtomakecapitalequipmentmoreproductivebyeliminatingand controlling downtime, machine slowdowns, and increasing processcapabilities • TPM is a Lean tool to optimize the effectiveness ofmanufacturingequipmentandtooling

•Startswith5S/visualfactorysystemimplementation• Builds a comprehensive downtime database by cause, frequency, and

duration•PredictsandpreventsdowntimebyPM(plannedmaintenance)system• Expands the role of the operator as the first point of earlywarning and

prevention•Developsprofessionalmaintenanceskills

EffectiveTPMEliminatestheFollowingLosses•Equipmentbreakdowns•Qualitytimelosses—defects,scrap,andrework•Lossesduetosafetyissues•Lossesduetoministoppages•Slowdown(speed)lossesduetoreducedspeed•Idletimelosses,setuptimelosses•Maintenancetimelosses(breakdowns)

WhatAretheSteps?•Performinitialcleaningandinspection•Eliminatethecausesofcontaminationandinaccessibleareas•Developcleaning,lubricating,andinspectionstandards• Provide basic training in themachine’s functions and controls to enable

effective general inspection • Enhance and implement autonomousinspectionstandardsandschedules

• Implementworkplace organization and housekeeping, employing 5S andvisualcontrols

•Follow-uponalltheabovestepsandadvancedimprovementactivities

WhatAretheResourceRequirementsforImplementation?

•Cross-functionalteamofoperators,maintenance,supervision,andsupportareas for three to five days • Machine availability for five to ten daysdependingonthemachine’sconditionandtimeofrepairsFirstThingsFirst

• Prepare the inventory of equipment and tooling so that all equipment isaccountedfor

•PrioritizeequipmentforTPMusingacauseandeffectmatrix(Figure8.42)Completejobsafetyanalysis(JSA)foreachpieceofequipment.Dealwithcritical equipment first and then the rest of the equipment and tooling(Figures8.43and8.44)

InstructionsforCompletingtheJobSafetyAnalysis

Jobsafetyanalysis(JSA)isanimportantpreventiontoolthatworksbyfindinghazardsandeliminatingorminimizingthembeforethejobisperformedandbeforetheybecomeaccidents.UseJSAforjobclarificationandhazardawareness,asaguideinnewworkertraining,forperiodiccontactsandforretrainingofseniorworkers,asarefresheronjobswhichruninfrequently,asanaccidentinvestigationtool,andforinformingworkersofspecificjobhazardsandprotectivemeasures.

SetprioritiesfordoingJSAs:jobsthathaveahistoryofmanyaccidents,jobsthathaveproduceddisablinginjuries,jobswithhighpotentialfordisablinginjuryordeath,andnewjobswithnoaccidenthistory.

Selectajobtobeanalyzed.Beforefillingoutthisform,considerthefollowing:thepurposeofthejob—Whathastobedone?Whohastodoit?Theactivitiesinvolved—Howisitdone?Whenisitdone?Whereisitdone?

Insummary,tocompletethisform,youshouldconsiderthepurposeofthejob,theactivitiesitinvolves,andthehazardsitpresents.Ifyouarenotfamiliarwithaparticularjoboroperation,interviewaworkerwhois.Inaddition,observingaworkerperformingthejob,orwalkingthroughtheoperationstepbystepmaygiveadditionalinsightintopotentialhazards.Youmayalsowishtovideotapethejobandanalyzeit.Here’showtodoeachofthethreepartsofajobsafetyanalysis.

Foreachpieceofequipmentandtooling,developTPMspecifications.

ManufacturingEquipmentTPMSpecification

1. Develop a cleaning and inspection checklist in a format that can bedisplayed and used by the operator (in addition to that contained in themachinemanuals).

2.Developalubricationchecklistinaformatthatcanbedisplayedandusedbytheoperator(inadditiontothatcontainedinthemachinemanuals).

3. Mark the proper operating ranges on temperature, pressure, flow, andspeedgauges.Proper ranges canbe indicatedby linesor shaded regions.

The resultmust give the operator a clear understanding of the operatingcondition of the machine. The preferred method is to use a gauge withgreenzonesforproperrangeandaredzoneforout-of-toleranceranges.

FIGURE8.42

CauseandeffectmatrixtoprioritizeequipmentforTPMimplementation.

FIGURE8.43Jobsafetyanalysisform.

FIGURE8.44JSAexample.

4.Ensureallgaugesarevisibleandeasilyread.5.Labelallequipmentcomponentsidentifyingfunctionandpurpose.6.InstallpermanentlineIDtagsonallpneumatic,hydraulic,oil,andcoolant

lines.7. Markdirectionsof flow, feed,or rotationon respectivedevices (motors,

conveyordrives,pumps,etc.).8.InstallclearLexanorPerspexcoversonallbelt,chain,andcouplingdrive

covers.Theoperatorshouldbeabletovisuallychecktheconditionoftheseitems.

9.Usecolor-codedgreasecapstoprotectanddesignatelubricationtypesandfrequencies. Ensure that all grease and oiling points are identified andeasilyaccessible.

10.Wherecentralizedgreaseandoilingsystemsareused,provideafeedbacksystem to ensure that fluid is being dispensed properly. If this feedbacksystem is not installed, provide a PFMEA or other similar document todefineyourmethodofensuringthatthesystemisoperatingcorrectly(e.g.,Howdoyouknowthatthesystemisapplyingoil/greaseasrequired?).

11. Ensure that there is a metal lubrication schematic plate attached in aprominent position on the machine referencing the identified grease andoilingpoints(item10).

12.Ensurethatallinternalintakefiltersforhydraulicsystemsareplumbedtotheexteriorofthetankandareplumbedwithshutoffvalvestoallowtheoperatortoquicklychangethefilters.Allexternalfiltersshouldhavevisualorelectricalcontaminationnotificationgaugesonthem.

13.Ensurethatallliquidlevelgaugeshavelowandhighlimitmarksonthem.Properrangescanbeindicatedbylinesorshadedregions.Theresultmustgivetheoperatoraclearunderstandingofthefluidlevel.

14.Installlowliquidlevelalarmsonallcoolantsupplytanks.15. Apply replacement information labels for belts, chains, filters, etc., on

respectivecoversand/orcomponents.16.Applynameplatestoallelectricalcabinetsandpanels.17.EnsurethatalldocumentationformachinesaretranslatedinbothEnglish

andthelocallanguage(machinemanuals,drawings,schematics,etc.).

18.Eliminateallspecialtoolsrequiredtooperateandmaintaintheequipment.If there is a tool required for daily operation of themachine, itmust beapprovedbytheprocessengineerpriortorunoff.

19. No tools are allowed for fixture adjustments/changes. These deviationsmustbeapproved.

20.Ensurethatallwiringandcablesareasshortaspossible.Therearetobenowires,cables,conduits,pipes,etc.runonthefloor.

21. Ensure that all fresh air intake vents for electrical control cabinets andpanelshavefilterframesandfiltersinstalledonthem.

22. Install filter frames and filters on all electrical motor fan covers. Forinaccessible motors, use a flexible hose to bring the filter out to aconvenientplaceforchangingbytheoperator.

23.Ensurethatallhand-operatedcontrolvalveshaveopen/closeindicationsonthem.Inthe“on”position,thehandlemustbeinlinewiththedirectionofflow.Wheninthe“closed”position,thehandlemustbeperpendicular(oropposedinsomemanner)totheflow.

24. For regularly requiredoperation, eliminate any inaccessible andhard-to-reachareasfortheoperator.

25.Ensurethatthereisadequatecoolantflushinglineswithinthemachinetodisperse chips and facilitate daily cleaning of the immediate machiningarea. The flushing linesmust be containedwithin themachine enclosure(nofittingsorlinesoutsideofthesheetmetalenclosure).Storagepositionswithintheenclosuremustbeprovidedfortheflushinglinewhennotinusetokeepthemclearofthemachineoperation.

26.Nodrippansareallowedundermachinesorsupportequipment(hydraulicunits, etc.).No recessed areas on themachine or equipment intended forretaining lost fluidareallowed.The sourcesof leaksmustbeeliminated.Fluidleakswillbespecificallyaddressedatmachinerunoffs.

27. Open cavities or areas on the machine enclosure that cannot be wipedcleanshouldbecoveredwithLexanorsheetmetal.

28.Machinecontrolsmustbemountedtothemachine,notfloorstanding.29.Iftheequipmenthassubsidiarysystemsthatarenotcontainedwithinthe

machine enclosure (chillers, filtration systems, etc.), the supply/controllinesmustbequicklydisconnected(withfluidretained)andtheunitmustbe on wheels to allow for cleaning around the machine. Deviationsrequired,basedonsizeofthesubsidiarysystem,mustbeapproved.

30.Hosesandwiresthatarenotcontainedwithinthemachineenclosuremust

becontained in sheetmetal traywithaccess lidsordoors.Deviations forsubsidiarysystemsmaybeallowedtofacilitatemovementforcleaning.

31.OSHAlockoutdiagramsshouldbeplacedonallmachines,andanyspecialaccessories (conveyor systems, etc.) showing where energy sources arelocated,howthemachineistobelockedout,operatorpositionrelativetothemachine,etc.,istobeshown.

32.Hydrauliclinesgoingtotwo-waycylindersarenotrequiredtobemarkedwithdirectionof flow;single-direction flow linesare required to indicateflowdirection.

33. Machines subject to vibrations are to be equipped with vibrationabsorptionpadssoasnottotransmitvibrationstothefloor/othermachines.

34.Areasofequipmentthataresubjecttohighheat(over100°F(37°C))andin an area within human reach are to be covered with some type ofpermanent insulation to avoid injuries. If this is not possible, thenappropriate guarding must be installed to prevent injury. This guardingmust be designed for quick removal to allow access to the heat area formaintenance.Example:heattreatmentoilfilters,normallyrunover200°For93°Cbutmustbechangedperiodically.

35. Drain lines (from areas such as air regulators)must be providedwith asmall collection container that is easily accessed by the operator and ofsufficientsizetocontainashifts’worthofcondensation.Theyarenottobedischargedtotheshopfloor.

36. Allenergysources(water,air,hydraulic)are tohaveanOSHAlockabledeviceinstalledatthepointofmachineconnection.Similartoadisconnectbuiltintheelectricalcabinet.

37. All digital devices are to have a label nearby stating normal operatingranges.Forexample,adigitalgaugetoshowthetemperatureofawashertank—itsays140°F—whatisitreallysupposedtobe?

38. Excessive lengths of cords/hoses are to be contained in a roll-up typedevicemountedupandoutofthewayfornormaluse,soasnottocreateaworkhazard.Example,TeachPendantcordforarobotorgantry.

39. Communication device connections are to be RJ-45 type to allow all

machinestobeconnectedtoaplant-widefinancialinformationsystemandplacedwithintwofeetoftheCNCcontrolmonitor.

40. Heavy machine guards/shields are to be provided with lifting eyes ortappedholesforliftingeyestofacilitateeasyremovalforrepairs.

41. Allmachineswithoil reservoirs tobeequippedwitheither sightglassesand/orlevelindicatorsofsometype.

42.Heavybelt/chainguardsaretobehingedtofacilitatequickchangeofbeltsandchains.

43. Identificationplaquesare tobepermanentlyattached to themachine,notapeofanytypeallowed.

44. Excesscable lengthswillbeallowedup to12 in.maximuminelectricalcabinets.

45.Allmachinesafety/lubeplacardstobemountedonthebackofmachines.46.ThemachinesupplieristoprovideanFMEAfortheirmachineandrelated

supportequipment.

ImplementingTPMThe first step in implementingTPM is to runapilotTPMononeof themostcriticalpiecesofequipment(Figures8.45and8.46).

•Completevisualfactory5SstagesandJSAforthisequipment•ExamineeachitemoftheTPMspecification•Identifylubricatingpoints.Makechangesandimprovementsasspecifiedin

theTPMspecification•Designaformtorecordlosttimes

FIGURE8.45PreparationofnewequipmentforTPM—1.

FIGURE8.46PreparationofnewequipmentforTPM—2.

OverallEquipmentEffectiveness(OEE)

OEE=availability×performanceefficiency×qualityrateOEEmeasurestheeffectivenessofTPMactivity.

In our example,we have assumed an eight-hour shift, or 480minutes. Theactualtimeplannedbymanagementis435minutes(30minutesforlunchbreakandtwo15-minutebreaks).Notethatiftherewereoneormoretoolchangeoversorsetups,thenthistimeshouldbedeductedfromthe480minutesoftotalshifttime.

Inourcase,theavailabletimeis435minutes.Therefore,theavailabilityrateis=435minutes/480minutes=90.6%

Theperformancerate=actualoutput/targetoutput.

Assumingourequipmentisratedtoproduce120partsperminute,ourtargetoutput=435×120=52,200parts.

To calculate the actual output, we need to know the time lost during thenormalworkingoftheshiftapartfromthetimeallowedbythemanagement,i.e.,45minutes.

Assumethatwelostthefollowingtimes:Idletime 10minutesSetuptime 25minutesMaintenancetime 20minutesMiscellaneoustimelost 10minutesTotal 65minutes

Therefore,theactualoutputwillbe(435minutes–65minuteslost)×120=44,400parts

Actualoutput=44,400parts

Theperformancerate=actualoutput/targetoutput=44,400/52,200=85%

Qualityrate=goodoutput/actualoutput

Assuming our partswent out of specification for one hour, sowe scrapped120×60=7200.

Also,wereworked2000partsproducedduringthesetuptime.

Now,qualityrate=(44,400–7200–2000)parts/44,400=79.2%.CalculatetheOEEandanalyzetheresult:

OEE=90.6%(availabilityrate)×85%(performancerate)×79.2%(qualityrate)

OEE=0.906×0.85×0.792=0.61or61%

AnalyzeResultsofOEEDailyAswecansee,theaboveOEEresultisforoneshift.Wealsohavethedataofthelosttimeandthewastes.MostofthedowntimecanbereducedoreliminatedthroughrootcauseanalysistechniquesexplainedearlierandsubsequentlyinthesisterbookTheTacticalGuidetoSixSigmaImplementation.

ThefollowingfactsareworthknowingtounderstandtheeffectofOEE:

•InitialstageofTPMimplementationyieldsOEElevelslessthan50%•World-classTPMcompaniescanexpectanOEEof85%•Typically,breakdownistentimesmoreexpensivethantheTPMprogram

(Figure 8.47)

FIGURE8.47ExampleofOEEcalculations.

STANDARDWORKLetme tellyouabout the success storyofSouthwestAirlines. It is the largestlow-cost carrier in theUnitedStates, and is headquartered inDallas,Texas. ItwasstartedbyRollinKingandHerbKelleherintheearly1970s.

Their initialgoalwas toprovideairservicebetweentwocitiesatacost lessthanitwouldtakeyoutodrivebetweentwocities.TheyboughtfourBoeing737planes.Threeplaneswerealwaysusedandthefourthonewasusedasaspare.Theystarted theservicebetweenSanAntonio,Dallas,andHouston—the threemajor cities of Texas, situated in a triangle, and each one separated byapproximately350km.

Their core competency is in standardization. Southwest Airlines’standardization falls into four areas: • A standard product—open seating atequalprices.Noclasses.Yousitanywhereyoufindanemptyseat.

•Astandardprocess—inandoutofagateinlessthan20minutes•Astandardpart—everyplaneintheirfleetisaBoeing737• A standard training—standard operating procedures promote

interchangeable and multifunctional staff. Absenteeism has a minimaleffect.

Sinceitsinceptioninthe1970s,Southwesthassufferedmadealoss!Today,Southwesthasmorethan46,000employeesandoperatesmorethan3400flightsperday.AsofAugust2012,SouthwestAirlinesoperatesscheduledservices to77destinationsin40states.

Thisisthepowerofstandardization.

StandardWorkDefinitionIt is a documented system inwhich productionworkers develop and follow arepeatablesequenceof taskswithinaworkassignment.Thestandardizedworksequence represents the best practices for the operator to follow in thecompletionofhis/herjob.

Whatisthebenefitofstandardwork?

•Documentedprocess• Improved efficiency because of process stability. Stability means

repeatability•Improvedtrainingprocedures,resultinginorganizationallearning•Workbalancing•Betterutilizationofequipment,tools,andpersons•BasisofallLeanactivities

Whataretheresourcerequirements?

• Operators and support areas documenting process and working out takttime,cycletime,andlinebalancing,etc.

•Approximatelythreetofivedaysincludingfourhoursoftraining.TrainingdocumentationcanthenbemadeavailableforfuturetrainingWhataretheelementsandsteps?Thisiscomposedofthreeelements:

1.Takttime2.Cycletime3.Standardworksequence4.Standardwork-in-process

TaktTimeTakt isGerman for the baton that an orchestra conductor uses to regulate thespeed,beat,orrhythmatwhichmusiciansplay.InaLeanenvironment,wecansaythatitistherhythmwithwhichaproductorserviceprovidershouldpacetheactivityorworktomeetcustomerdemand.

RulesofTaktTime

• It is the time required between the completion of successive units ofproductorservice

•Takttimeiscalculatedforeachprocessstepandisusedtopacethework• Takt time becomes extremely difficult to manage when the customer—

demand environment is unstable • Takt time must be reviewed andupdatedwithchangesindemand

• Takt time (in minutes) = available time per period/required customerdemandinthatperiod

• Assumingnetavailable timeof420minutesper shiftand thedemandof

210gadgetspershift•Takttime=420/210=twominutespergadget• Here, the flow rate of the gadget production stepsmust be less than or

equaltotwominutespergadget•Ifitismorethantwominutes,abacklogwillbedevelopedwithrespecttocustomerdemand,causinglatedeliveriesand,inthelongrun,thecustomerwillfindanothersupplier!

CycleTimeUnliketakttime,whichisrelatedtocustomerdemandandcanbecalleddemandrate, thecycle time is thedesigned time tocompleteoneunit according to thestandardwork sequence, and can be called production time orwork sequencetime.

StandardWorkSequence

ProcessInstructionDocument

Theprocess instructiondocument forstandardworkshouldhaveapreciseanddetaileddescriptionofeachworkactivity,withvisualinstructionswrittenfromthe perspective of the operator that details the sequence, methods, and toolsrequiredandthatarecriticaltothequalitycharacteristicsofanoperation.Thestandardworkiscreatedbymeansofthefollowingcharts:

•Timeobservationchart•Processcapacitychart•Operatorbalancehart•Standardizedworkchart•Standardizedworkcombinationtable

TimeObservationChart

TimeobservationchartforatypicalassemblyoperationisshowninFigure8.48.Itisselfexplanatory.

ProcessCapacityChart

This chart determines the production capacity based on the followingcalculations (Figure8.49): 1. Findworkinghoursper shift. For example, 480

minutes=2880seconds2. Findprocess timeperpiece in seconds=manualwork+machinework.

Forexample,5+40=45seconds3. Findsetup time.Forexample,150seconds

4.Theproductionlostduringsetuptime=3005.Extratimeperpieceneededtocompensateforsetuptime=150/300=0.5

seconds6.Totaltimeperpiece=45+0.5=45.5seconds7.Capacitypershift=2880/45.5=633pieces

OperatorBalanceChart

SeeFigure8.50.

StandardizedWorkChart

SeeFigure8.51.

StandardizedWorkCombinationTable

SeeFigure8.52.

FIGURE8.48Timeobservationchart.

FIGURE8.49Productioncapacitycalculationchart.

FIGURE8.50

Operatorbalancechart.

StandardWork-in-ProcessStandardwork-in-processisthedeterminedminimumamountofmaterialneededtokeeptheStandardWorkflowing.InordertodothisLeanToolslikeU-shapedmanufacturingcell,Continuousflow(Kanban),andOnePieceFlowareused.

FIGURE8.51Standardizedworkchart.

FIGURE8.52Standardizedworkcombinationtable.

CONTINUOUSIMPROVEMENTStandardizedworkisthefoundationofcontinuousimprovement.

Today’s standardization is thenecessary foundationonwhich tomorrow’simprovementwillbebased.Ifyouthinkof‘standardization’asthebestyouknowtoday,butwhichis tobe improvedtomorrow—yougetsomewhere.Butifyouthinkofstandardsasconfining,thenprogressstops.

HenryFord(1926)

It is impossible to improve any process until it is standardized. If theprocess is shifting from here to there, then any improvementwill just beonemorevariationthatisoccasionallyusedandmostlyignored.Onemuststandardize,andthusstabilizetheprocess,beforecontinuousimprovementcanbemade.

MasakiImai,Kaizen,1986

StandardizedWorkSustainsContinuousImprovementsKaizenmeanssteadybutcontinualimprovement.Dr.RussAckoffexplainsthedifference between “continuous improvement” and “discontinuousimprovement”asseenthroughthelensofsystemsthinking.

One of the most difficult aspects of introducing and implementing acontinuousimprovementsystemisassuringitscontinuity.

When a company introduces continuous improvement, it experiences someinitialsuccess,butsoonsuchsuccessdisappearslikescatteredcloudsonarainyseason and after awhile nothing is left, andmanagement keeps looking for anewflavorofthemonth.

Thereisastudyconcludingthattwo-thirdsofmanagerswhostartedprogramsin continual improvement said the programs failed. The study also concludedthattheyfailedbecausetheywerenotembeddedinsystemsthinking.Dr.Ackoff

describes systems thinking inhischaracteristicprofound, insightful, and funnyway, remindingus that only the systemcanperform its functions.Noneof itspartscan.Theproductsandservicesanorganizationprovidesandthefunctionsitperformsareallthe“productoftheirinteractions.”Settingouttoimprovethepartsindependentlywillnotimprovethewholesystem.

Mymindwentimmediatelytosports.IrememberwhenonMarch17,2012—

Mirpur Bangladesh, the most-awaited 100th international century by SachinTendulkarwent invain as India suffered ahumiliating lossby fivewickets intheirAsiaCupencounter.Onepartofthesystem(Sachinasabatsman)excelled,but the team (system) failed because it did not perform in cohesion toward agoal.

KaizenKaizen is a state of mind or philosophy in which one seeks to continuouslyimprove—neverrestingoracceptingthestatusquo.

Kai=totakeapartZen=tomakegoodKaizen=continuousimprovement

Thesevenconditionsforsuccessfulimplementationofkaizenstrategyare

•Topmanagementcommitment•Topmanagementcommitment•Topmanagementcommitment•Settingupanorganizationdedicatedtopromotekaizen•Appointingthebestavailablepersonneltomanagethekaizenprocess•Conductingtrainingandeducation•Establishingastep-by-stepprocessforkaizenintroduction

All conditions are important. Without top management supporting everymove,however,thetrialwillbeshort-livedregardlessofotherpreconditions.

Top management may express commitment in many different ways, and itmusttakeeveryopportunitytopreachthemessage,becomepersonallyinvolvedin following up the progress of kaizen, and allocate resources for successfulimplementation.

Moreonkaizenfollowslaterinthissection.

KaikakuKaikakumeansrevolution,orradicalimprovement.Bothkaizenandkaikakuareneeded for successful continuous improvement. The following 10 kaikakucommandmentsareallgoodbasicprinciplestostartanyimprovementjourney.Itisatop-downinitiativetoactivateabottom-upempowermentforchange.

10KaikakuCommandmentsbyHiroyukiHirano

• Throw out the traditional concept of manufacturing methods. Thinkoutsidethe“box”

•Thinkabouthowthenewmethodwillwork,nothowitwon’twork•Don’tacceptexcuses;totallydenythestatusquo•Don’tseekperfection;a50%implementationrateisfineaslongasit’s

doneonthespot•Correctmistakesthemomenttheyarefound•Don’tspendmoneyonkaikaku•Problemsgiveyouachancetouseyourbrains•Ask“Why?”fivetimes•Tenperson’sideasarebetterthanoneperson’sknowledge•Kaikakuknowsnolimits

Figure8.53explainskaizenandkaikakupictorially.Continuousimprovementtools

1.PDCA2.Organizingkaizensforimprovement3.Kaizen4.A3reports

FIGURE8.53Standardizedworksustainsimprovement.

FIGURE8.54Inventorybuildupandexcessproductionhidemany“sins.”

The first thing todo is tokill themonster calledoverproductionorbuilt upinventory.Reducingwaste fromoverproduction(inventory)bringsproblems tothesurfaceandforcestheirresolution(Figure8.54).

PDCA—ProblemSolvingandProcessImprovementModel

PDCAsoundssimpleandiseasilyglossedover,butifwelldone,itisgreatforproblem-solvingandprocessimprovement(Figure8.55).PDCAisconsideredavitalelementoftheToyotaProductionSystem.

FIGURE8.55PDCAimprovementcycle.

PDCAImprovementCycle

Plan—Select the process/problem towork on.Describe the current process.Collectdata:4W1H.Withaproblem,taketimetodefinetheproblemandagree on root causes (use fishbone, five whys, Pareto, etc.). Develop asolutionandactionplan.

Do—Implementtheprocesschangeorproblemsolution.Startonasmallscale(pilot).

Check—Istheprocesschangeworkingasplanned?Istheproblemsolved?Ifnot,whynot,andwhatcanwelearn?

Act (or Standardize)—This is a vital, but frequently neglected, step. If youwere successful, standardize the solution. Celebrate and congratulate.

Otherwise,continueinthecycletoplanforfurtherimprovements.

ToolsofProblemSolvingThatAreAppliedasPartofPDCA

CauseandEffectDiagram

Afishbonediagram,alsocalledcause-and-effectdiagram,orIshikawadiagram(Figure8.56).Thefishbonediagramidentifiesmanypossiblecausesforaneffectorproblem. Itcanbeused tostructureabrainstormingsession. It immediatelysortsideasintousefulcategories.

WhentoUseaFishboneDiagram

•Whenidentifyingpossiblecausesforaproblem•Especiallywhenateam’sthinkingtendstofallintoruts•Fishbonediagramprocedure•Materialsneeded:flipchartorwhiteboard,markingpens

FIGURE8.56Causeandeffectdiagram.

• Agreeonaproblemstatement (effect).Write it at thecenter rightof theflipchartorwhiteboard.Drawaboxarounditanddrawahorizontalarrowrunningtoit•Brainstormthemajorcategoriesofcausesoftheproblem.Ifthisisdifficult,usegenericheadings•Methods•Machines(equipment)•People(manpower)

•Materials•Measurement•Environment

HowtoStart?

Writethecategoriesofcausesasbranchesfromthemainarrow.Brainstormallthepossiblecausesoftheproblem.Ask,“Whydoesthishappen?”Aseachideais given, the facilitator writes it as a branch from the appropriate category.Causescanbewritteninseveralplacesiftheyrelatetoseveralcategories.

Again ask, “Why does this happen?” about each cause. Write subcausesbranchingoffthecauses.Continuetoask“Why?”andgeneratedeeperlevelsofcauses.Layersofbranchesindicatecausalrelationships.

Whenthegrouprunsoutofideas,focusattentiontoplacesonthechartwhereideasarefew.

FishboneDiagramExample

Thisfishbonediagramwasdrawnbyamanufacturingteamtotrytounderstandthe source of periodic iron contamination. The team used the six genericheadingstopromptideas.Layersofbranchesshowthoroughthinkingaboutthecausesoftheproblem(Figure8.57).

ParetoChart

TheParetoprincipledealswiththevitalfewandtrivialmanyrule.Itisalsocalledthe“80:20Rule”ItisnamedafterVilfredoPareto—anItalianeconomist(Figure8.58).

• He observed in 1906 that 20% of the Italian population owned 80% ofItaly’swealth

•Hethennoticedthat20%ofthepeapodsinhisgardenaccountedfor80%of his pea crop each year

FIGURE8.57Fishbonediagram(Ishikawadiagram).

FIGURE8.58VilfredoPareto.

TheParetoPrinciple

•Asmallnumberofcausesisresponsibleforalargepercentageoftheeffect—usuallya20%to80%ratio.

• This basic principle translates well into quality problems—most qualityproblemsresultfromasmallnumberofcauses.

• You can apply this ratio to almost anything, from the science ofmanagementtothephysicalworld.

•Addressingthemosttroublesome20%oftheproblemswillsolve80%ofit.

• Within your process, 20% of the individuals will cause 80% of yourheadaches.

•Ofallthesolutionsyouidentify,about20%arelikelytoremainviableafteradequateanalysis.

•80%oftheworkisusuallydoneby20%ofthepeople.

A Pareto chart is a useful tool for depicting these and other relationshipsgraphically.Itisasimplehistogramstylegraphthatranksproblemsinorderofmagnitudetodeterminetheprioritiesforimprovementactivities.

Thegoalistotargetthelargestpotentialimprovementarea,thenmoveonto

thenext,thenthenext,andinsodoingaddresstheareaofmostbenefitfirst.Thechartcanhelpshowyouwhereallocatingtime,human,andfinancialresourceswillyieldthebestresults.

While therule isnotanabsolute,oneshoulduse itasaguideandreferencepointtoaskwhetherornotyouaretrulyfocusingon20%(thevitalfew)or80%(thetrivialmany).Trueprogressresultsfromaconsistentfocusonthe20%mostcriticalobjectives.

Thesimplicityof theParetoconceptmakesitpronetobeingunderestimatedand overlooked as a key tool for quality improvement. Generally, individualstendtothinkthattheyknowtheimportantproblemareasrequiringattention…iftheyreallyknew,whydoproblemareasstillexist?

Althoughtheideaisquitesimple,togainaworkingknowledgeoftheParetoprinciple and its application, it is necessary to understand the following basicelements:ParetoAnalysisofPrintingDefectsThe Pareto diagram is a combined bar chart and line diagram based oncumulativepercentages.

ParetoDiagramofTotalPrintingDefectsSimilar Pareto diagrams can be prepared for each press.We can observe herethatcolorvariationisthemajordefectamongalldefectsandthepress22×28isthemajorcontributortothisdefect(Figure8.59).

Knowingthis,wecanapplythePDCAandRCA(rootcauseanalysis)methodto reduce this defect to a minimum. Actions can then be taken for the nexthighestdefect(Figure8.60).

FIGURE8.59Paretoanalysisofprintingdefect.

FIGURE8.60Paretochartfortotalprintingdefects.

CheckSheet

Also called defect concentration diagram. A check sheet is a structured,preparedformforcollectingandanalyzingdata.Thisisagenerictoolthatcanbeadaptedtoawidevarietyofpurposes.

WhentoUseaCheckSheet

•Whendatacanbeobservedandcollectedrepeatedlybythesamepersonoratthesamelocation•Whencollectingdataonthefrequencyorpatternsofevents,problems,defects,defectlocation,defectcauses,etc.

•Whencollectingdatafromaproductionprocess

CheckSheetProcedure

• Decide what event or problem will be observed. Develop operationaldefinitions

•Decidewhendatawillbecollectedandforhowlong•Designtheform.Setitupsothatdatacanberecordedsimplybymaking

checkmarksorXsorsimilarsymbolsandso thatdatadonothave toberecopiedforanalysis•Labelallspacesontheform

• Test the check sheet for a short trial period to be sure it collects theappropriate data and is easy to use • Each time the targeted event orproblemoccurs,recorddataonthechecksheet

CheckSheetExample

FIGURE 8.61 shows a check sheet used to collect data on telephoneinterruptions. The tick marks were added as data were collected over severalweeks.

ControlChart

showsanexampleofacontrolchart.

Histogram

Afrequencydistributionshowshowofteneachdifferentvalue ina setofdataoccurs. A histogram is the most commonly used graph to show frequencydistributions. It looks very much like a bar chart, but there are importantdifferencesbetweenthem.

FIGURE8.61Checksheetfortelephoneinterruptions.

FIGURE8.62Controlchart.

WhentoUseaHistogram

•Whenthedataarenumerical•Whenyouwanttoseetheshapeofthedata’sdistribution,especiallywhen

determiningwhether the output of a process is distributed approximatelynormally • When analyzingwhether a process canmeet the customer’srequirements

•Whenanalyzingwhattheoutputfromasupplier’sprocesslookslike• When seeingwhether a process changehas occurred fromoneperiod to

another• When determining whether the outputs of two or more processes are

different•Whenyouwishtocommunicatethedistributionofdataquicklyandeasily

toothers

HistogramConstructionCollect at least 50 consecutive data points from a process. Use the histogramworksheet(below)tosetupthehistogram.Itwillhelpyoudeterminethenumberof bars, the rangeof numbers that go into eachbar, and the labels for thebaredges.Aftercalculatingbarwidthinstep2oftheworksheet,useyourjudgmenttoadjustittoaconvenientnumber.Forexample,youmightdecidetoround0.9to an even 1.0. The value forWmust not havemore decimal places than thenumbersyouwillbegraphing.

Step1:Determinethenumberofbarsusingthefollowingtable:

NumberofDataPointsNumberofBarsB

50 760 875 9100 10125 11150 12200 14

Step2:Determinethewidthofthebar(upperedge–loweredgeofeachbar)W

W=rangeofthedatapoints/numberofbarsB

Example:

Numberofdatapoints=100Lowestdatapoint:109.25Largestdatapoint:141.88Numberofbars=10Range=32.6WidthW=3.26

Add3.26tothelowestdatapoint(109.25),gotothenextbar,etc.

HistogramAnalysis

Before drawing any conclusions from your histogram (Figure 8.63), satisfyyourselfthattheprocesswasoperatingnormallyduringtheperiodbeingstudied.If any unusual events affected the process during the period of the histogram,your analysis of the histogram shape probably cannot be generalized to allperiods(Figure8.64).

Figure8.63Histogram.

Figure8.64Typicalhistogramshapes.

ScatterDiagram

Also called scatter plot or X–Y graph. The scatter diagram graphs pairs ofnumericaldata,withonevariableoneachaxis,tolookforarelationshipbetweenthem. If the variables are correlated, the pointswill fall along a line or curve.

Thebetterthecorrelation,thetighterthepointswillhugtheline.

WhentoUseaScatterDiagram

•Whenyouhavepairednumericaldata•Whenyourdependentvariablemayhavemultiplevaluesforeachvalueof

your independent variable • When trying to determine whether the twovariablesarerelated,suchas…

•Whentryingtoidentifypotentialrootcausesofproblems• After brainstorming causes and effects using a fishbone diagram, to

determine objectively whether a particular cause and effect are related• When determining whether two effects that appear to be related bothoccur with the same cause • When testing for autocorrelation beforeconstructingacontrolchart

ScatterDiagramProcedure

•Collectpairsofdatawherearelationshipissuspected•Drawagraphwiththeindependentvariable(X)onthehorizontalaxisand

thedependentvariable(Y)ontheverticalaxis.Foreachpairofdata,putadotorasymbolwheretheX-axisvalueintersectstheY-axisvalue(iftwodotsfalltogether,putthemsidebyside,touching,sothatyoucanseeboth)•Lookatthepatternofpointstoseeifarelationshipisobvious.Ifthedataclearlyformsalineoracurve,youmaystop.Thevariablesarecorrelated.Youmaywish to use regression or correlation analysis now.Otherwise,completesteps4through7

•Dividepointsonthegraphintofourquadrants.IfthereareXpointsonthegraph•CountX/2pointsfromtoptobottomanddrawahorizontalline

•CountX/2pointsfromlefttorightanddrawaverticalline•Ifthenumberofpointsisodd,drawalinethroughthemiddlepoint•Countthepointsineachquadrant.Donotcountpointsonaline•Addthediagonallyoppositequadrants.Findthesmallersumandthetotal

ofpointsinallquadrants• A=pointsinupperleft+pointsinthelowerright

•B=pointsinupperright+pointsinthelowerleft•Q=thesmallerofAandB•N=A+B

•LookupthelimitforNonthetrendtesttable(Table8.8)•IfQislessthanthelimit,thetwovariablesarerelated

• IfQ isgreater thanorequal to the limit, thepatterncouldhaveoccurredfromrandomchanceTABLE8.8

TrendTestTable

N Limit

N

Limit

1–8 0 51–53 189–11 1 54–55 1912–14 2 56–57 2015–16 3 58–60 2117–19 4 61–62 2220–22 5 63–64 2323–24 6 65–66 2425–27 7 67–69 2528–29 8 70–71 2630–32 9 72–73 2733–34 10 74–76 2835–36 11 77–78 2937–39 12 79–80 3040–41 13 81–82 3142–43 14 83–85 3244–46 15 86–87 3347–48 16 88–90 3449–50 17 90 35

ScatterDiagramExample

Themanufacturingteamsuspectsarelationshipbetweenproductpurity(percentpurity)andtheamountofiron(measuredinpartspermillionorppm).Purityandironareplottedagainsteachotherasascatterdiagram,asshowninFigure8.65.

Thereare24datapoints.Medianlinesaredrawnsothat12pointsfalloneachsideforbothpercentpurityandppmiron.

Totestforarelationship,theycalculate:

A=pointsinupperleft+pointsinlowerright=9+9=18B=pointsinupperright+pointsinlowerleft=3+3=6Q=thesmallerofAandB=thesmallerof18and6=6N=A+B=18+6=24

Then,theylookupthelimitforNonthetrendtesttable.ForN=24,thelimitis 6.Q is equal to the limit. Therefore, the pattern could have occurred fromrandomchance,andnorelationshipisdemonstrated.

Figure8.65Histogram.

ScatterDiagramConsiderations

Herearesomeexamplesofsituationsinwhichyoumightuseascatterdiagram:Variable A is the temperature of a reaction after 15 minutes. Variable B

measures the color of theproduct.You suspect that higher temperaturesmaketheproductdarker.Plotthetemperatureandcoloronascatterdiagram.

VariableAisthenumberofemployeestrainedonnewsoftware,andvariableBisthenumberofcallsmadetothecomputerhelpline.Yoususpectthatmoretraining reduces thenumberof calls.Plot thenumberofpeople trainedversusthenumberofcalls.

To test for autocorrelation of a measurement beingmonitored on a control

chart,plotthispairofvariables:VariableAisthemeasurementatagiventime.Variable B is the same measurement, but at a previous time. If the scatterdiagram shows correlation, do another diagram where variable B is themeasurementtwotimespreviously.Keepincreasingtheseparationbetweenthetwotimesuntilthescatterdiagramshowsnocorrelation.

Even if the scatter diagram shows a relationship, do not assume that onevariablecausedtheother.Bothmaybeinfluencedbyathirdvariable.Whenthedataareplotted,themorethediagramresemblesastraightline,thestrongertherelationship.

Ifalineisnotclear,statistics(NandQ)determinewhetherthereisreasonablecertaintythatarelationshipexists.Ifthestatisticssaythatnorelationshipexists,thepatterncouldhaveoccurredbyrandomchance.Ifthescatterdiagramshowsno relationship between the variables, consider whether the data might bestratified.

If the diagram shows no relationship, considerwhether the independent (X-axis)variablehasbeenvariedwidely.Sometimesarelationshipisnotapparentbecausethedatadonotcoverawideenoughrange.Thinkcreativelyabouthowtousescatterdiagramstodiscoverarootcause.Drawingascatterdiagramisthefirststepinlookingforarelationshipbetweenvariables.

Flowchart

Description

Flowchartsareusedindesigninganddocumentingprocesses.Likeothertypesofdiagrams, they help the viewer visualize and understand a process andpotentiallydiscoverflaws,bottlenecks,andotherless-obviousissueswithinit.

Therearemanydifferenttypesofflowcharts,eachwithitsowncollectionofboxes and notational conventions. The twomost common types of boxes in aflowchart are a processing step, usually called activity and denoted as arectangularbox,andadecision,usuallydenotedasadiamond.

Aflowchart isdescribedas“cross-functional”whenthepage isdivided into“swimlanes”describingthecontrolofdifferentorganizationalunits.Asymbolappearinginaparticular“lane”iswithinthecontrolofthatorganizationalunit.This techniqueallows theauthor to locate the responsibility forperforminganaction or making a decision correctly, showing the responsibility of each

organizationalunitfordifferentpartsofasingleprocess.

Benefits

•Visualrepresentationoftheprocessorissueunderstudy•Easilycreatedusingsimpleapplicationsorbyhand•Involvesteamworkandusespeopleknowledgetodocumenttheflowchart•Applicabletoallaspectsofanorganization

HowtoUse

Step1.Assembleateamofpeoplewithknowledgeoftheprocess.Thescopemustbedefinedpriortostartingthemapping:Wheredoestheprocessstartandwheredoesitfinish?

Step 2. Starting at the beginning of the process, document the steps insequencefromstarttofinish.

Step 3. Add all the different loops that are within or between the differentprocesses.

Step4.Connecttheboxes(activities)anddecisionpoints.Step5.Validatethefinalmapwiththeteamandmanagement.

RelevantDefinitions

Common alternate names include: flowchart, process flowchart, functionalflowchart,processmap,processchart,functionalprocesschart,businessprocessmodel,processmodel,processflowdiagram,workflowdiagram,andbusinessflowdiagram.

Example An organization specializing in printing multicolor brochures forsmallbusinesseshasrealizedthatasthenumberofordersincreases,itsleadtimestarts to creep upwards and promised delivery dates are notmet on a regularbasis. To understand the process and identify actions to fix the issue, animprovementteamdecidestomaptheprocess.Becauseseveraldepartmentsareinvolved, the team uses swim lanes. The map below shows the differentactivities and the responsible departments. The processmapmakes it obviousthat there is too much back and forth between the sales and graphic designdepartments,causinghugedelays(Figure8.66).

ValidateRootCauseofaProblem

Through experimentation, observation (or simulation), verify that you havefoundthetruerootcause(s).Seeifyoucangenerateandeliminatetheproblembyrepetitivelyinstallingandremovingthecause(Figure8.67).

WhenProblemSolvingIsNotEnough,DeployDMAIC(SixSigma)

TheDMAICprocessisshowninFigure8.68.

EmployeeInvolvement

AcartoondepictingemployeeinvolvementisshowninFigure8.69(Table8.9).G.Truellonthe“involvementofpeople”:Organizationsmustprovideeffectiveresponses to increasing quality expectations for goods and services throughemployeeinvolvement(EI).EIisavitalcomponentofanyefforttodevelopanorganizationasaproactivesystemthatrespondstochangesrapidlyinthefaceofdramaticshiftsinnationalandinternationalmarketplaces.

As supervisors begin to decide when to involve teammembers in problemsolving and decision making, they frequently ask themselves the followingquestions:•WhenshouldIinvolveothers?

•Whoshouldbeinvolved?•TowhatextentshouldIinvolvethem?•Whoshouldmakethefinaldecision?

FIGURE8.66Flowchart.

FIGURE8.67Criteriatovalidatetherootcauseofaproblem.

FIGURE8.68DMAICprocessforcontinuousimprovement.

Therearethreekeyfactorsinproblemsolvinganddecisionmakinginvolvingpeople(Table8.9).

• Possession of data—amount, kind, and quality of data the supervisor

possesses• Acceptance by others—degree to which support, understanding, and

commitmentofothersisimportantinimplementingthedecision•Time—amount of time the supervisor has before a decision must be made andimplemented

It is important tounderstandhowthefinaldecisionwillbemade,especiallywhenusingtheconsultphase,whichinvolvesthinkingthatyougetinputbutyoumake a decision, and the join phase where the members of the teammake adecision(Figure8.70).

FIGURE8.69Cartoonaboutfailedcommunicationregardingemployeesafetyrisk.

TABLE8.9EmployeeInvolvementStages

TypeofOrganization WaysofEmployeeInvolvement

Traditionalorganization ManagersolvesproblemsOrganizationhavingqualitycircles EmployeeshelpidentifyandsolveproblemsOrganizationwhereproblemsolvingisapartofemployee’sjob

Self-managingworkteams

KAIZEN

GuidelinesforFacilitatingaSuccessfulKaizenEvent

PreparefortheEvent,TeamRoles,andIssues

Kaizen Team Members and their Roles Explained (Figure 8.71):

FIGURE8.70G.Truell’sthreefactorsregardingtheinvolvementofpeople.

FIGURE8.71Kaizenteammembers.

•Timekeeper/checker•Keepsteammeetingsontimescheduleandfocusedonagenda.

•Processownerorsponsor•Authorizesanddemonstratesownershipforchange.Possessessufficient

organizationalpowerandabilitytoinfluencedecisions.Hasthemosttogain/losefromthekaizenoutcome.

•Teamleader•Comember;managesteam.Ultimatelyresponsibleforgroup’sprogress.

Contact point for team. The team leader is accountable to the processowneranddoesnot supervise the teamorapplyhis/herownsolutions,butleadstheteamtoitsgoals.

•Facilitator(Leancoordinator)• Focuses on team process; skilled in Lean Six Sigma tools; provides

training;understandsgroupdynamics:providessupportuponrequestofchampion.Webster’sdefines“facilitate”as“tomakeeasier.”Hisjobisto make the team’s work easier by managing the process and thedynamics.Asafacilitator,heisexpectedtoguide,assist,andcoachthe

team(notparticipateintheworkoftheteam).•Recorder

•Recordsprogressofeachteammeeting.•Teammember

• Has the required skills and knowledge of the process; sharesresponsibilityofassignments;communicatesandlistenswell.

TeamMembers’Roles

• Represent allmajor stakeholder groups involved at various stages of theprocess (including upstream and downstream processes). Select teammembersbyaskingforvolunteers.

• Possess authority and skills to gather data, conduct problem solving,recommendchanges,andimplementsolutions.

•Viewissues/problemsasapriorityforimprovementandwillseeitthroughtoitsnaturalend.

•Representthevoiceofthecustomer.•Willingtoputteamgoalsaheadofindividualgoals.•Ableandwillingtoattendallteammeetings.• Open to change, i.e., be willing to look outside the boundaries of their

currentjob.Teammembersshouldbewillingandabletotakerisksandtolookatthingsinanewway.

TeamSize

Typical kaizen teams include five to ten peoplewho often represent differentcross-functionalareas.Teamcompositionisusuallydividedintothirds:•One-thirdaretheveryhands-on“processexperts”(stakeholderswhowillbeaffectedby the outcome) • One-third are management “decision-makers” who haveauthority to act (either as a full-time member or through their sponsorship)• One-third are outsiders, people from direct upstream and downstreamprocesseswhocanlookattheprocesswithfresheyesThreewordsaboutteams:communications,communications,communications!

Communicationlinksincreaseasthesizeofthegroupincreasesby

n[n–1]/2(wheren=numberofpeople).

Therefore,whenn=5,5[5–1]/2=10linksWhenn=20,20[20–1]/2=190

linksThelargerthegroupis,themorecommunicationtrafficthereistohandle.Theidealsizelimitforagroupisfivetotenmembers.

•Sponsor(alsocalledvaluestreammanager,whoisnotateammember):• Clearlyarticulatesthebusinesscaseorrationaleforwhythischangeis

needed.Establishesasenseofurgency.• Communicates strong ownership and personal commitment for this

change.Acceptssomedegreeofrisk.• Establishespriorities for improvement inawaywhichensures that the

organization’sstrategyisachieved.•Creates(whenneeded)aguidingcoalitionofpeoplewithenoughpower

toleadthechangeandworktogetherasateam.• Ensures adequate resources are available, i.e., time, money, people,

authoritytoact,accesstodecisionmakers.•Alignstherewardandrecognitionsystems.

TeamCharter(Scope)

A key part of a successful kaizen event is that each team member and teamleadercananswerthefollowingquestions(Figure8.72):• Whatis thedrivingissueandwhyhasthisprocessbeenselected?(Whyarewehere?)

•Whatarethespecificmetricswearetoimprove?•Whatisourroleandthatofothers?•Whatarethedeliverables?(Designmanufacturingcell,re-layoutarea,etc.)•What,ifany,aretheconstraints?Whatareoff-limits?•Whatisthedeadline?Howmuchtimeareweexpectedtospend?•Whathappenstoour“regularjobs”whileweareinvolvedinthisevent?

Thisbringsusto“kaizeneventissues.”

FIGURE8.72Kaizenimprovementsneedtobelinkedtooverallprocessimprovement.

KaizenEventIssues

JobSecurityPolicy

Communicate that no layoffs will result from improvements in productivitydirectly related to a kaizen event. Kaizen focus is on eliminating waste, notpeople. People may be reassigned (unsatisfactory performers should not beprotectedbythispolicy;likewise,lossofbusinesscanresultinreductionsinallstaffinglevels).

DisplacedWorkersPolicy

A list of specific new assignments should be prepared before the event, forexample:

•Eliminatetemporaryemployees(ifanyarecurrentlyemployed)•Growbusinessandenterintonewmarkets(requiringpeople)• Special projects, including facilitating future kaizen events and other

continuousimprovementefforts•Cross-training

PayGradeDifferencesPolicy

Whenfunctionaldepartmentsarecombinedintocells,operatorsmayberequiredtoperformfunctionsthatpreviouslycrossedpaygrades.Someadjustmentmayberequired—higherorlower.

UnionIssues

Address and resolve any union issues before the event starts. These includeovertime,workhoursduring the event,etc.Consider holding specialmeetingswithunionleadersateverystageoftheprocess.

TeamLeaderShouldFocusonWorkerParticipation

Team leaders should be encouraged to involve people from the shop floorthroughouttheevent.Theresultinggainsaremorelikelytobesustained.

PlanforAdvanceProduction

Be sure that you have adequate production to cover for the loss in productionthatmayoccurduetotheabsenceofpersonsparticipatingintheevent.

RunningaSuccessfulKaizenEvent

A.Use“SPACER”toBeginEachKaizenEventInformparticipantsabout

•Safety(restrooms,evacuation,housekeeping)•Purpose•Agenda• Code of conduct (ground rules belong to the group… attendance,

promptness, cell phones, etc.) • Expectations (clarify purpose/obtainexpectations)

• Roles, responsibilities, and rules (review sponsor, team leader, teammembers,facilitatorroles,andrulesslides)B.RulesforKaizenEvents

•Thereisnorankamongteammembers—oneperson,onevote•Keepanopenmindtochange•Maintainapositiveattitude

•Neverleaveasilentdisagreement•Don’tblameanyoneforanything•Respectoneanother•Thereisnosuchthingasadumbquestion•Rejectexcuses,seeksolutions• Takeaction.Implementideasimmediately.“Don’t letperfectionget in

thewayofgettingbetter.”Justdoit!C.CharacteristicsofaKaizenEvent

A kaizen event is a highly focused, action-oriented, three-to five-dayimprovementworkshopwhere a cross-functional improvement team takesimmediateactiontoimproveaspecificprocess.

Teamworks(typically)threetofivedaysfulltime

ResourcesAreDedicated

Participantsspend100%oftheirtimeonthekaizenevent.Participantsshouldbetreatedasiftheyareonvacationfromtheirregularresponsibilities.

TheKaizenEventIsWell-DefinedBeforehand

Thereisnotimetodefinethepurposeorscopeintheevent;therefore,businesscases, goals, and charters must be well-defined ahead of time. Usually, thepurposeofakaizeneventistoproducemorewiththesamenumberofpeopleorproducethesamewithfewerpeople.

ImplementationIsImmediate

Implementationiscompletedasmuchaspossibleduringtheweekoftheevent.Generatingshort-termwinsgreatlyhelpjustifytheshort-termcostsinvolvedandbuildsmomentum.Don’tlet“perfect”getinthewayof“better.”

Managementand/orSponsorParticipationIsRequiredThearea’stopmanagershouldkickofftheevent.Thesponsorshould“checkin”attheendofeachdaytoprovideguidanceandapproval.Attheconclusionofthekaizenevent,managementstaffshouldbepresentsothattheactionitemscanbereported.

FollowingUptheKaizenEventThefirstthingtodoistoevaluatetheevent.AnexampleofanevaluationformisshowninFigure8.73.

Akaizeneventgenerallybringschange.Changemanagementaspectsneedtobecarefullyconsideredinfollowingupthekaizenevent.

FIGURE8.73Kaizeneventevaluationform.

ChangeManagementRemember,changeisexcitingwhenitisdonebyus,threateningwhenitisdonetous.

CommitmenttoChange

•5%ofpeoplewillembracechange—earlyadopters•5%willneverchange—concreteheads(anchordraggers)•90%willlookforleadership—fencesitters

While traditional managers spend their efforts focusing on the anchor-draggers,theyshouldbespendingtimewiththeearlyadapters,providingcoverand support. The organization’s focus should be on positive reinforcement,whichpromotesaforwardshiftamongthefence-sitters.

FIGURE8.74Kaizennewsletter.

WhyDoPeopleResistChange?

•Threatofuncertainty•Fearofunknown•Lesssecurity•Lesscontrol•Lesspower•Lessrecognition•Lossofidentity•Lossofcontact•Morework•Morepressure

AftertheKaizenEvent—SustainImprovements

After the kaizen event, the team should meet on a weekly basis to do thefollowing:

•Reviewstatusofopenactionitems(futurekaizens)•Reviewprocessmetricstoensureimprovementsarebeingachieved•Discussadditionalopportunitiesforimprovements•Continuetoimprovetheprocess(PDCA)

Management should do 30-day reviews of the storyboard (idea board, Leanstatus board) to evaluate metrics, open items, and resolve any roadblocks toimplementation.Theyshouldalsoproviderecognitiontotheteamastheyreachmilestonesinimplementation.

An example of a kaizen newsletter (Cheese Report), published biweekly, isshowninFigure8.74.

A3REPORTIncontinuousimprovementcultureterminology,theA3reportisknownasMr.

A3orA3San inJapanese. It isan11 in.×17 in.plainA3sizepaper (Figure8.75). It is a unique method of storytelling about Lean deployment projects.During the A3 process, the coach asks the learner to make an A3 report asfollows:

FIGURE8.75SampleA3reportlayout.

•Definethebackground,whatarewetryingtodo?• Describewhat is happening andwhy it is important. The unfavorable

trends,etc.•Currentstateorsituation•Setfuturestateactionablegoalsandtargets• Analyzecurrentprocesses tounderstand the root causesof thechallenge

fully(fivewhys,Ishikawadiagram)•Proposecountermeasures•Developactionstomovetowardatargetcondition

•Completeactions

• Execute countermeasures to determine the effect. What, who, when,where,andthecost

•Standardize.Follow-upplan• Create standard work, set upmonitoring or controls to maintain new

standardworkandnewcurrentstateThemainpurposeoftheA3processistogenerate:•Athoroughandrobuststyleofthinking

•Communicationthatfocusesonfactualdataandvitalinformation•Collaborativeandobjectiveproblemsolving

A3thinkingcanalsobeappliedtothefollowingprojects:

•Projectmanagement•Suppliercapabilities•Newproduct/processconcepts•Capturingnewknowledge

CORRECTIVE/PREVENTIVEACTIONSYSTEMTo be successful on the Lean journey and to implement a continuousimprovement system is tohavea soundcorrectiveaction system.Thisprocessensuresthatacorrectiveand/orpreventiveactionistakenwhenproblemsoccur.

Preventiveactionisaproactiveactiontakenonpotentialproblemsthatcouldoccurinthefuture.Therefore,acorrectiveactionisnecessarytodriveoutorto“switchoff”therootcausesandimplementcorrectionstotheseissues.

RootCauseAnalysis(RCA)

Everydefectisatreasure,ifthecompanycanuncoveritscauseandworktopreventitacrossthecorporation.

KichiroToyodaFounderofToyota

Sourcesfromwheretheproblemsinanorganizationcanbediscovered:

•Noncompliancesfrominternalandexternalaudits•Customercomplaints,customerreturns,fieldfailures,andwarrantycases• Unfavorable trends inkeyperformance indicators • Failure to achievea

statedgoalorobjective•Internalfailuressuchasscrap,rework,orreprocessing• Material nonconformances at the receiving (incoming inspection), in-

process inspection, and final inspection • Poor supplier performance,quality,andon-timedelivery

•Rootcauseanalysisandeightdisciplineprocesses

9

ContinuousImprovementProcess

Earlier, we have studied that the first requirement for improvements is theobservationofthesystemorthebusinessprocess.Thisknowledgewillenableustodetermineinterrelatedandinterdependentprocesses.Thenextstagewillbetochange theway thework flows through these processes andmake them leastwasteful. Again, the process is a sequence of linked activities or taskswhosepurposeistoproduceaproductorserviceforthecustomer.

Thus, if we want to make the process efficient and effective, we need toensurethattheprocesssequencerunsorflowssmoothlywithoutobstructionofthenon-value-addedactivities.Wecandescribe this stateas thevalues for thecustomerflowingsmoothly.Suchassuranceisattainedthroughthestudyoftheworkflow,called“workflowanalysis”orvaluestreammapping.

VALUESTREAMMAPPINGWecanevaluatetheworkfloworthevaluestreamintwoways:flowchartsandvalue stream mapping. A suppliers, inputs, process, outputs, and customers(SIPOC) chart is a form of a value-added flow chart,whereas a value streammap(VSM)isaflowchartonsteroids—aflowchartblownupwithdetailsforeachstepoftheprocess.

HowtodrawcurrentstateVSM(Figures9.1through9.5):Tips:• Doaquickwalk-through first toget a senseof the flow starting from

incomingmaterialtothefinalshipping(drawasimpleblockdiagram).

FIGURE9.1Elementsofvaluestreammap.

FIGURE9.2VSMcustomerloop.

FIGURE9.3VSMsupplierloop.

FIGURE9.4Manufacturingloop.

•Beginthecurrentstatemapnearestthecustomer,theshippingend,andworkbackwardorupstreamthroughtheprocess.

• The informationgathered for each stepduring the current stageof themapisasfollows:–Personspershiftforeachstage–Changeovertime–Numberofchangeovers–Totalcycletime–Value-addedtimeversusnon-value-addedtime–Leadtime–Workinprocessinventory–Qualitydatasuchasscrap/defectrate

FIGURE9.5Leadtimedatabar.

CustomerLoop,SupplierLoop,ManufacturingLoop,andLeadTimeBarDelaytimeinbetweenoperationalstagesisonthetopline.Thistimedeterminestotalleadtime.Operationcycletime(includingaproportionalsetuptime)isonthebottom line.Starbursts show the timeswhere immediate corrective actionsareneeded(Figure9.6).

FIGURE9.6Information(MRP)loop.

CustomerLoop,SupplierLoop,ManufacturingLoop,LeadTimeBar,andInformation,MaterialResourcePlanning(MRP)Loop

Exercise

Drawthecurrentstatemap

•Dividetheprocessintosectionsandassignteammemberstoeachsectionorvaluestream.Takeasingleproduct/servicecaseasanexampletostart.

• Referback to thebusiness casegoal statement tomake sureyouwillbecollecting enough data/process detail to help quantify to reasoning forimprovementsasstated.

•Sharetheinformationwiththeentireteamtodrawonecurrentstatemap.•Selectateammember(s)topresentthemaptotheentireshop/department

group.

• Select special (obvious) stages of the VSMwith starburst icons so thatthesestagescanbeselectedimmediatelyforcontinuousimprovementwithrespecttothedelayandcycletimes(Figures9.7and9.8).

FIGURE9.7Valuestreammappingiconsanddataboxes.

FIGURE9.8Manufacturingwastes.

FUTURESTATEMAPPINGThefollowingisanexampleofhowthecurrentstatemapenabledaLeanteamto implement a change in the future state: • A process control audit at thesupplierfacilityreducedsupplierdeliverytimefrom45to30days.

•Simplemovementofpluggingtheresponsibilityafterpaintingreducedthetimeofoperationno.6from60to20minutes.

•Setupreductionandtheadditionofonehoningmachinereducedadelayoffivedaystothreehours.

• Operationno.6cycle time reduced to10minutesbymovingpartof theoperationoutsidetheprocess.

• This future statemapwill now become a current statemap, and furthercontinual improvements will be made on this chart. Thus, a plan–do–

check–act(PDCA)cyclegoeson.

Sofar,wehavelearnedaboutthefollowingLeantools:1.5S2.Totalproductivemaintenance(TPM)3.Standardwork4.Valuestreammapping

FourmoreLeantoolsfollow:

5.Errorproofing6.Continuousfloworone-pieceflow7.Setupreduction8.Pullsystem(Kanbansystem)

ERRORPROOFINGWhat is error proofing? It is the detection, containment, prevention, andeliminationofadefectiveproductatthesource.

Whatarethesteps?

• Eliminate potential defects which are capable of being but not yet inexistence.

•Preventdefectsfromoccurring.•Detectthedefect.•Losscontrol.

Whatarethebenefits?

•Reducedscrap,rework•Reducecostofquality•Moreconsistentoutput

Whataretheresourcerequirements?A cross-functional team will take three days, including training. Error

proofingisasystematicapproachforanticipatinganddetectingpotentialdefectsandpreventingthemfromreachingthecustomer(internalorexternal).

The following are the primary approaches for error proofing, in order ofpriority: 1. Eliminate potential defects: Design the potential for errors in the

process.2. Prevent defects from occurring: Find ways to make it difficult or

impossibleforemployeestomakeanerrorinthefirstplace.3.Detectthedefect:Evenifanerroroccurs,itcannotbepassedontothenext

stepoftheprocess.4.Losscontrol:Minimizetheeffectoftheerror.

Perform all the above-mentioned methods using the failure mode and effectanalysis(FMEA).

FailureModeandEffectAnalysisFMEAisthemostsystematicwaytoidentifyerrorproofingopportunities.

Alittlebitoftrivia:FMEAusedtobeFEMA,afailureeffectmodeanalysis,and itwasdevelopedbyNASAtopreventcatastrophic failures inspaceshots.During1974,theU.S.NavydevelopedMIL-STD1629regardingtheuseofthepotentialfailuremodeandeffectanalysis(PFMEA).Duringthelate1970s,theautomotiveindustryadoptedittocontrolliabilitycosts.

FailureModeFailure mode is the way in which a component or the process step fails“functionally”onacomponent/process level.Note:AllFMEAsareconsideredpotential FMEAs. PFMEA is an approach • to identify the ways in which aproductorprocess couldpotentially fail • to estimate the riskassociatedwithcauses

•toprioritizetheactionstoreducetherisk•toevaluatetheproductdesignvalidationplan•toimprovetheprocessinapreemptivemanner(beforefailuresoccur)•to

prioritizeresourcestoensureprocessimprovementeffortsarebeneficialtocustomer•todocumentcompletionofprojects

• to be a dynamic document for the current process control plan ProcessPFMEAfocusesonprocessinputs,anddesignPFMEAfocusesonproductfunction. The role of the PFMEA is to continually review, amend, andupdatetheprocessforcontinualimprovement.

PFMEAInputsandResults

Inputs•Processmap•Cause-and-effectmatrix•Processhistory•Processtechnicalprocedures•OtherssuchasinputsfromexpertsandlessonslearneddataResults

• Prioritized listofactions topreventcausesanddetect/minimize/eliminatefailuremodes•Historyofactionstaken(Table9.1)TABLE9.1

FMEAForm(withoutActionPlanonRPN)

Note:DET,detection;OCC,occurrence.

PFMEA—StepbyStepYouwillwanttobrainstormthefailuremodes,effects,causes,andcontrolsforeachinputwithyourteam.Theremaybemanyfailuremodesforeachstep,sobe sure to capture everything that is appropriate as you work through theprocess.

Theratingscalesaretypically1–10,with1beingleastsevere,occurringleastfrequently and being totally detectable, and 10 being most severe, occurringmostoftenandbeing totallyundetectable. It isyour team’schoice,buta1–10scaleismostcommon:1.Layouttheformwith17columnsasshownpreviouslyusinganExcelspreadsheet.

2. For each process input, determine the ways in which the input can gowrong—thefailuremodes.

3.Foreachfailuremodeassociatedwiththeinputs,determinetheeffectsofthefailuresonthecustomer—donotforgettheinternalcustomers.

4.Identifypotentialcausesofeachfailuremode.5.Listthecurrentcontrolsforeachcauseorfailuremode.6.Createseverity,occurrence,anddetectionratingscales.7.Assignseverity,occurrence,anddetectionratings.8.Calculatetheriskprioritynumbers(RPNs)foreachrowandsortfromhigh

tolow.9.DeterminerecommendedactionstoreducehighRPNs.10.TakeappropriateactionsandrecalculateRPNs.

Consider that the PFMEA team consisting of the spray paint operator, theprocess engineer, themaintenance engineer, and the paint shop supervisor areanalyzingthepaintprocesswherethefirststepis“paint.”ThiswillbeenteredinthefirstcolumnoftheFMEAform.

Step1Failuremodecolumn:thewayinwhichaspecificprocessinputfails—in

thiscasethewayinwhichpaintoperationcanfail.Ifthefailuremodeisnotdetected,corrected,orremoved,itwillcauseaneffecttooccur.

The failure mode can be associated with a defect or a process inputvariablethatgoesoutsidethespecification(customerrequirement).

For example,what can gowrongwith the paint operation? It could be

temperature too high (Table 9.2). Generally, it can be external customerfocus,butitcanalsoincludedownstreamprocesses.

Step2Process potential failure effects: Brainstorm all the potential failure

effects for each failure mode before moving on to the next step—thepotentialcauses.Byexhaustingallthepossibleeffects,youwillmovedowntheFMEAinamoreorderlyfashion,andyouwillnothavetogobackandaddalotoflinestotheExcelspreadsheetwheretheFMEAisdocumented(Table9.3).

Step3Cause:sourcesofprocessvariationthatcausesthefailuremodetooccur.

Again,brainstormallthepotentialcausesforoneeffectbeforemovingon.YouwillsavealotoftimeintheExcelspreadsheetthatway.Asatip,youmaywanttobrainstormtheissuesseparatelyonPost-itNotesoraflipchartfirst before filling out the form. That way, you will not miss anything(Table9.4).

Step4Currentcontrols: systematicmethods/devices inplace topreventcauses

or detect failure modes (Table 9.5).Which is more important to processimprovement?

PreventionorDetectionWewanttomovetoaculturethatpreventsratherthandetectserrors,sowewantto develop controls that prevent rather than detect. PFMEAwill focus on theimportantfew.

Wefindthevitalfewbyratingeachrowoffailuremode/effect/cause/currentcontrolintermsofthefollowing:•Severityoftheeffect

•Occurrenceofthecause•Detection(capabilityofcurrentcontrols)

TABLE9.2

Step1:RecordAllProcessPotentialFailureModesforThisStep

TABLE9.3

Step2:RecordAllProcessPotentialFailureEffectsforThisStep

TABLE9.4

Step3:BrainStormCausesfortheFailureModetoOccur

TABLE9.5Step4:StateCurrentControls

DefinitionofTerms• Severity (of effect)—importance of effect on customer requirements—

concernedwithsafetyandotherrisksiffailureoccurs(1=notsevere,10=verysevere)•Occurrence(ofcause)—frequencywithwhichagivencauseoccursandcreatesfailuremode.Itcansometimesrefertothefrequencyofafailuremode(1=notlikely,10=verylikely)•Detection(capabilityofcurrent controls)—ability of current control scheme to detect or prevent•thecausesbeforecreatingfailuremode• the failuremodesbefore causing effect (1= likely to detect, 10=not

likelyatalltodetect)•Whenyoubeginyourprocessimprovement,youmay not know how severe, how often, or how well you can detect aproblem.Inthesecases,youmayneedtogooutandcollectdata,butdonot get bogged down in your FMEA. You may be able to validatepresumptionswithpeopleintheprocessorbasedonhistoricaldata.Youcan always go back and make revisions. Remember, these tools areiterative.DoinganFMEAshouldnotbeamonth-longorevenaweek-longexercise.Useitandmoveon.

RatingScaleExample• Severity: severity of the effect (Table 9.6) • Occurrence: probability of

failure (Table 9.7) • Detection: likelihood of detection by designverification(DV)program(Table9.8)RiskPriorityNumber(RPN)

•Afterrating,wegetanoutputofthePFMEA•RPN• It is calculated as the product of three quantitative ratings, each one

relatedtotheeffects,causes,andcontrols:RPN=severity×occurrence×detection

TABLE9.6SeverityRankNumbers

Ranking Description GeneralCriteria

1 None Nodiscernibleeffect2 Veryminor Fitandfinishdoesnotconform;noticedbyadiscerningcustomer3 Minor Fitandfinishdoesnotconform;noticedby50%discerningcustomers4 Verylow Fitandfinishdoesnotconform;noticedby>75%discerningcustomers5 Low Operatesatareducedlevelofperformance;customerissomewhatdissatisfied6 Moderate Operatesatareducedlevelofperformance;someminorfeaturesinoperable;customeris

dissatisfied

dissatisfied7 High Operatesatareducedlevelofperformance;customerisverydissatisfied8 Veryhigh Inoperable;lossofprimaryfunction;customerisfrustrated9 Hazardouswith

warningAffectssafeoperationandviolatesgovernmentnormswithwarning

10 Verysevere/fatal Affectssafeoperation,canhurtlimb;doesnotcomplytogovernmentnormsandwithoutwarning

TABLE9.7Occurrence(ProbabilityofFailure)

Ranking Description GeneralCriteria

1 Remote Failureisunlikely<1in100,0002 Low Relativelyfewfailures<1in10,0003 Low Relativelyfewfailures<1in20004 Moderate Occasionalfailures<1in10005 Moderate Occasionalfailures<1in5006 Moderate Occasionalfailures<1in2007 High Occasionalfailures<1in1008 High Occasionalfailures<1in509 Veryhigh Occasionalfailures<1in2010 Veryhigh Occasionalfailures<1in10

TABLE9.8Detection(LikelihoodofDetectionbyDVProgram)

Ranking Description GeneralCriteria

1 Almostcertain Designcontrolwillalmostcertainlydetectafailuremode2 Veryhigh Veryhighchancethatdesigncontrolwilldetectafailuremode3 High Highchancethatdesigncontrolwilldetectafailuremode4 Moderatelyhigh Moderatelyhighchancethatdesigncontrolwilldetectafailuremode5 Moderate Moderatechancethatdesigncontrolwilldetectafailuremode6 Low Lowchancethatdesigncontrolwilldetectafailuremode7 Verylow Verylowchancethatdesigncontrolwilldetectafailuremode8 Remote Remotechancethatdesigncontrolwilldetectafailuremode9 Veryremote Veryremotechancethatdesigncontrolwilldetectafailuremode10 Absoluteuncertainty Nodesigncontrol;cannotdetectfailuremode

DynamicsoftheRPNThe team defines the rating scale (1–10) for the severity, occurrence, anddetectionratings.Youandyourteamchoosethelevelsandnumbers(aslongastheyareonascaleof1–10).

Howsevereisit?Notsevere=1

Somewhat=3Moderately=5Verysevere=10(verybad)

Howoftendoesitoccur?Never/rarely=1Sometimes=3Halfthetime=5Always=10(verybad)

Howwellcanyoudetectit?Always=1Sometimes=3Halfthetime=5Never=10(verybad)

TABLE9.9ActionstoBeTakentoReduceRPNContinually

UsingExcel,sortRPNnumbers,keepingthehighestnumberfirst.Select all process steps where RPNs are greater than 100. (This is just an

example.Actually,select the top5or7RPNs.)Determineactions, responsibleperson,actioncompletionresources,andtimetoreducetheRPNs.

Repeat actions by sorting the RPN and by selecting the top 5 RPNs andcontinuethisPDCAcycleforcontinualimprovementoftheprocessorproduct(Table9.9).

CONTINUOUSFLOWORONE-PIECEFLOW

Whatisit?Continuous flow is defined as the movement of material from value-added

processtovalue-addedprocesswithouttransporttimeorstorageinbuffers.Processesareorganizedsuchthatonepersoncanbuild theentireproduct. If

volumeincreases,additionalpeopleareaddedtomatchthetakttime.Whatarethesteps?

1.Determineactualworkelements2.Designlayoutforflow3.Distributeworkcontentforflow4.Runpilotandkaizen

Whatarethebenefits?

•Reducedthroughputtimeandreducedinventories•Moreconsistentoutput•Makingtoordernottoforecast•Helpsmanufacturersachievetruejust-in-timemanufacturingWhatarethe

resourcerequirements?Across-functionalteamfromtheareaisneededforapproximately3daysfor

theplanandkaizenevent.ItshouldbeprecededbyVSM,5S,andstandardizedworkandmaybeprecededbyTPM,setupreduction,anderrorproofing.

Letusfindoutifitisabatchorasingle-pieceflow.

OrderFulfillmentProcessAt awarehouse, itwasmandatory to complete one order at a time, instead ofseveralorders(batch)atatime.Theassociateshadadifficulttimeunderstandingthis concept until it was shown to them that the batch approach leads to“switcheroos”—thatis,mistakenlyputtinganiteminthewrongorder.Theone-pieceflowapproachavoidedthisdefectaltogetherandledtoshortercycletimes,enablingtheordertomeetshippingdeadlines.

AsshowninFigure9.9,fouroperatorstake20minutestoprocessabatchoffiveparts,whereastheone-pieceflowcompletesthejobineightminutes.

Continuousflowgivesflexibilityasfollows:Belowtotalworkcontent=fiveminutes/part(Figure9.10).

SETUPREDUCTIONWhatisit?

Setupreductionreducesthedowntimeduetochangeoverssothatbatchescanmove quickly through the production process, making the company moreresponsivetocustomerneedsandsupplythecustomerwhattheywantandwhentheywantit.

FIGURE9.9Continuous(one-piece)flow.

FIGURE9.10Continuousflowpromotesflexibility.

Whatarethesteps?

•Analyzethecurrentsetupprocess(videotape)•Separateexternalandinternalactivities• Convert as many internal activities as possible to external activities

•Eliminate/simplifytheinternalactivities•Eliminate/simplifytheexternalactivities

Whatarethebenefits?

• Improvement of flexibility and productivity and more consistent output• Reduction of batch sizes to improve delivery and reduce inventoriesWhataretheresourcerequirements?

Cross-functional team, operators, supervision, engineering, andmaintenanceare needed for three days. A machine should be available to perform the

changeoverandtomodifyforimprovements(Table9.10).

PULLSYSTEMGenerally,thesupplychainsoftheorganizationsworkas“push”systemswhereproductsareproducedbasedonasalesforecastandthenstoredinanticipationofthedemand.

Leanproductionusesthe“pull”ratherthanthe“push”systemtoproduceandship the products. The pull system starts with the last operation station andworksbackwardthroughthesystem.Eachoperationrequests theexactnumberof products needed from the previous operation. If the products are notrequested,theyarenotproducedandexcessinventoryisnotgenerated.

TABLE9.10SetupReductionPhases

Period Efforts/Time/Expense SetupTimeReduction

PotentialActivities

Immediate Implementimmediately;noexpense

Upto90% Convertinternaltoexternal,organizetoolstorage,ensuretoolfitnessforuse,organizehandtoolsandaccessories

ShorttermRelativelylow/weeksormonths/someexpense

Upto95% Simplifylocationandclamping,eliminateadjustments,simplifyapproval,standardizeprocedures

Mediumterm

Relativelyhigh/monthsoryears/relativelyhighexpense

Upto99% Designforreducedsetuptimes:developandimplementstandards,powerclamps,poweredhandling,etc.

Earlier,wehaveusedananalogytodescribeinventorytothatofariverwhererocks are coveredwithwater and they cannot be seen.However, as thewater(inventory) recedes, the rocksare exposed.Reduced inventory level shows theproblems,andtheycanthenbesolved.

KANBANAs we mentioned previously, for the pull system to work, communicationbetweentheworkstationsneedstobesetup.ThisismadepossiblebytheuseofasignalingsystemcalledKanban,aJapanesewordmeaning“signal”or“card.”A Kanban card contains information such as part/product number, name, andquantity to be produced. It is attached to a container.When operators need aproduct from the operator or station before them, they pass on an emptycontainerwithanattachedKanbanandtakeafullcontainer.Theoperatorwho

receivedtheemptycontainerwithaKanbannowhastheauthoritytoproducetheamountofproductsmentionedontheKanbanandfilltheemptycontainer.Theguidingprinciple:Themethodologythatnothingisproduceduntilthereis

a“demand.”Whatarethesteps?

•Flowproductwhereyoucan•CalculateKanbansize(maintainflow)•Usecontainerormarksforcontainerlocation• Use supermarkets at batchoperationsorwhereproductmust accumulate

•CalculateKanbansize(maintainflow)•Calculatecontainersinthesystem• Review as improvements are made or demand changes What are the

benefits?

•Simplifiedschedulingmethod•Reducedinventoriesandthroughputtimes•Moreconsistentproductionoutput

Whataretheresourcerequirements?

•Teamofsupervision• Production planning and operators for two days; develop Kanbans and

recalculate•Normallyprecededbycontinuousflowmanufacturing,VSM,5S, standardized work, TPM, setup reduction, and error proofing FourtypesofKanbans

•ProductionKanban•SupermarketKanban.Supermarketisastorageforhigh-usematerialsthat

turnfasterthanthestandardmaterialhandlingcycleandislocatedclosetothelinetofacilitateretrievalbyanoperator.

•In-processKanban• Supplier Kanban (Figure 9.11) Table 9.11 presents a guide for an

organization to assign Lean tool champions to appropriatedepartment/processheads.

FIGURE9.11FourtypesofKanban.

TABLE9.11LeanToolsandTheirSuggestedChampions

LeanTool Champions

•Pull(productionKanban)•Pull(supplierKanban)•Errorproofing•TPM•Setupreduction•Standardworkandcontinuousflow•5S•Valuestreammapping

•Productioncontrolmanager•Purchasingmanager•Qualitymanager•Maintenancemanager•Manufacturingengineeringmanager•Productionmanager•HRmanager•Valuestreammapping

SectionIV

LeanPerformanceMeasuresandPerformanceAssessment

10

LeanPerformanceMeasures

ON-TIMEDELIVERY(OTD)

Definition“OTD—zero days early, zero days late to the last date agreed to by thecustomer.” It is a measure of an organization’s ability to consistently meetcustomer expectations, a reflection of schedule stability and execution, areflection of a stable management process, and a reflection of consistentmaterials,SCM,andHRmanagement.

COSTOFNONCONFORMANCE(CONC)

DefinitionCONCisa“valueofnonconformancecost”asmeasuredbytheinclusionofthe“big seven” (numbers can be derived from a software such as Encore orcompiledmanually):

1.Productwarranty2.Rework3.Scrap4.Excessandobsoleteinventory5.Maintenance6.Overtime(premium)

7.Premiuminboundandoutboundfreight

ProductWarranty

Productwarrantyisexpressedwithtwosubaccounts:

•Fieldfailurecosts•As-receivedfailurecosts

FieldFailureCosts(ProductWarranty)

•Coversproductdeficienciesstartingwiththedeliveryoftheequipmentorservicetothecustomerandexcludescarrierdamage.

•Specificationconformanceissuesandfieldshortagesclearlyresultingfromplantoversightsormistakesaretobeincluded.

• Specification conformance issues and field shortages resulting fromcustomerorfieldsaleserrorsshouldbechargedtoamarketingbudgetortoafieldsaleserrorbudget.

•Plant“productwarranty”departmentalcostsassociatedwithfailurerelatedactivitiesshouldbeincluded.

•Wages,benefits,andtravelexpensesforanyplantortechcentersalaryorhourlyemployeeassistingthewarrantydepartmentshouldbecapturedandchargedtoanonconformanceaccount.

• Charges from internal engineering services or other subcontract servicesshouldbeincluded.

As-ReceivedFailureCosts

•Coversproductnonconformancesstartingwiththedeliveryoftheproducts,equipment,orservicetothecustomer,butexcludescarrierdamage.

•Includesdimensional,functional,cosmetic,andproductmarkingissuesaswell as packaging, labeling, andpackagingmaterial contamination issuesdetectedatreceivinginspectionorduringuseinthecustomer’sfacility.

•Wages,benefits,andtravelexpensesforanyplantortechcentersalaryorhourlyemployeeassistingintheresolutionoftheissueshouldbecapturedandchargedtothisaccount.

• Costs related to inspection, testing,or reworkof theproductbysupplier,customer,orthird-partyresourcesaretobeincluded.Transportationcostsrelatedtotheinspection,testing,orreworkaretobeincluded.

•Penaltycostsimposedbythecustomer,e.g.,linestoppage,downtime,yardhold,etc.,aretobeincluded.

•Transportationcoststoprovidereplacementproducttothecustomeraretobeincluded.

Rework

• Rework of returned product should include direct labor and material,including the costs for personnel to tear down and restock usable parts.Creditshouldbegiventoproductwarrantyforthecostofpartsreusedandvendorexpensesthatarerecovered.

• Labor and expensematerials associatedwith internal production reworkshouldbecapturedandassignedasnonconformancecosts.

Scrap

• Scrap should be all deficient material that does not meet designspecification and must be discarded. Blanked strip residues or punchedslugsare“billofmaterial”itemsandshouldbeexcludedfromthecostofnonconformance.

• Plants should maintain an effective system for capturing defectiveapparatus(DA).Fullmaterial,labor,andoverheadshouldbeincluded.

•Anyrecoveryamountassociatedwithscrappedmaterial(i.e.,copper,brass,aluminum,orsteel)shouldnotbecreditedagainstqualitycosts.

ExcessandObsoleteInventoryExcessinventoryisthedifferencebetweenactualinventoryonhandandusage.Itiscalculatedbyapartnumberusingthree-yeartheoreticalvaluesderivedfromtwo-yearactualvalues.

Forexample,

Three-yeartheoreticalinventory:$10,000(i.e.,two-yearactualinventory)×

3/2=$15,000Two-yearactualusage=$8000Three-year theoretical usage: $8000 (i.e., two-year actual usage) × 3/2 =

$12,000Excess inventory: three-year theoretical inventory—two-year theoretical

inventoryExcessinventory:$15,000–$12,000=$3000

Thecompanymayallowtoreserve50%oftheexcessinventorycost;thus,theexcessinventoryreserveis$1500.

Obsoleteinventoryisthetotalofthefollowing:

• Raw materials and work in process inventory that cannot be used tomanufactureareadilysaleableproduct,orforwhichthereisnoforeseeableuse.

•Finishedgoodsinasaleableconditionthatcannotbesoldbecausethereisnomarketdemand.

•Thereserveforobsoleteinventoryshouldequalthevalueofinventoryonhandforthreeyearsthathadnousagewithinthepastyearandisnotbeingretainedasaresultofacontractualagreementwithoneormorecustomers.Actualobsoleteinventoryshouldbewrittenoffwithintheperiodinwhichitisidentified.

• The value of excess and obsolete inventory that is written off plus anypositiveornegativechangerequiredinthereserveshouldberecordedasacostofnonconformance.

Maintenance

•Tostartwith,anorganizationmusthaveasysteminplacetoidentifyandexclude“preventive”maintenancecostsandinvestmentsfromtheirgeneralmaintenanceaccounts.

•Forexample,routinesharpeningorrebuildingoftoolstopreventdefectiveproduction parts is preventive. Doing the same maintenance aftermanufacturedpartsarescrappedisconsideredoperatinginafailuremode.

• Maintenance employees that perform preventive maintenance onequipmentshouldnotbeingeneralmaintenancebudgets.

• Any “general” maintenance agreements, such as routine machine andbuildingmaintenance,aretobeconsideredpreventive.

Overtime(Premium)

•Thepremiumportionofovertimeisconsideredacostofnonconformance.• This applies to production overtime only. Any overtime by engineering

techniciansassociatedwithproductdevelopmentshouldnotbeincluded.•Ifproceduresandsystemsdonotexisttoallowthepostingofthepremium

portionofovertime,thenthesiteshallreport33%ofthegeneralovertimeaccountsasCONCovertime.

PremiumInboundandOutboundFreight

• Premiumfreightcostsassociatedwithmovingmaterial intooroutofanyfacility tominimize the impact of failure or delay are to be recorded asnonconformancecosts.

•Premiumfreightisdefinedasfreightcostsassociatedwithairandgroundexpeditingcostlesstheamountthatischargedtocustomers.

•Expeditedinboundandoutboundpremiumfreightusedtoresolvecustomerwarrantyerrorsordelaysshouldbereportedinthiscategory.

Therestofthebigsevencostsareexplainedasfollows:

1.Daysonhand(DOH)=costofgoodssold/sales2.Dayssalesoutstanding(DSO)=outstandingreceivables/sales3. Days payable outstanding (DPO)=measures payments per agreed upon

“terms”

These metrics (items 1–3) help us measure velocity of materials,conversion of material to sales, execution of contractual obligations,receivablesaging,andpayablesaging.

Theyareareflectionofagility,areflectionofcontractualconformance,andaquickassessmentofcashassetsandliabilities.

4.Cashflowreturnoncapital(CFROC)•Measuresourabilitytogeneratecashutilizingourfixedcapitalassets•Areflectionofourefficiencyinutilizingourassets•Areflectionofstabilityinschedulingkeyassets•Areflectionofrunrateandequipmentutilization

•Areflectionofasystematicandright-sizedappropriation• Areflectionofasystematicapproach indeterminingfootprintorplant

layout5.Productivity

Productivitycanbedefinedascostperunitsproduced.Inmanufacturingindustries,itiseasytodefineproductivitybecauseproductionnumbersareavailable and the expenses can be determined. In the case of $100,000produced over 1 month with a combined total man hours of 5000, thecalculation would be as follows: $100,000/5000 = $20 per hourproductivity.•Measuresourabilitytoachieveproductionstandards•Areflectionofourconsistentandwell-alignedplanning•Areflectionofstabilityinschedulingkeyassets•Areflectionofrunrateandequipmentutilization•Areflectionofathoroughmanufacturingprocessunderstanding•Areflectionofasystematicapproachindeterminingfootprint

6.CycletimeFordetailsoncycletime,seeChapter8onstandardwork.

7.Customerreturns(DPPM)andsupplierrejects(DPPM)This is the ratio of total plant-verified customer returns reported in the

monthtototalunitssoldduringthemonthexpressedin“partspermillion.”

Formula:(NumberofverifiedunitsrejectedatCustomerfacility/Numberofunitsshipped)×1,000,000.

Note: Units that are analyzed and found to be not the responsibility of thecompanyareexcludedfromthiscalculation.

11

LeanToolSystemAssessment

VALUESTREAMMAPPINGValue stream mapping (VSM) is a visual tool that diagrams the product,material, and information flows from the customers’ order to the receipt offinished goods. The basic requirements are a current statemap, a future statemap,animplementationplan,andmetricstomeasureandcommunicate(posted)yourprogress.

Value Conditions

1Point Valuestreammapisbeingdeveloped.2Points Allproductfamilieshavebeenformallyidentified.

Atleastonecurrentstateandfuturestatevaluestreammapsaredeveloped.3Points Multiplecurrentstateandfuturestatevaluestreammapsaredeveloped.

Implementationplansaredocumentedandinprogress.Metricstomeasuretheprogresshavebeenselectedandarebeingused.

4Points Atleastonefuturestateimplementationplaniscompleted.Allproductfamilieshavecurrentstateandfuturestatevaluestreammapsdeveloped.

Allproductfamilieshavedocumentedimplementationplans.5Points Allproductfamilieshaveonecompletedfuturestatevaluestreammap.Newfuturestatemapsand

implementationplanshavebeendevelopedforallproductfamilies.Asystematicprocessisinplacetoimprovethecurrentsystemtoidentifyproductlines/familiesandmappingthecurrentandfuturestates.

Score 0Comments

5S

5S is the basis for Lean and the foundation for a disciplined approach to theworkplace: (1) sort, (2) straighten, (3) shine, (4) standardize, and (5) sustain.Thisstep-by-stepapproachhelpscleanup theplaceofunnecessary items,dirt,and clutter and organize everything based on the principle of “place foreverythingandeverythinginitsplace.”5Simplementationbenefitsofficeareasasmuchasthemanufacturingshopfloor.5Scanbeimplementedinasmallareaaround a machine, in an entire department, and throughout the plant. Whileassessingafacility(plantoradepartment),lookforextentofdeployment.

Value Conditions

1Point 5Sprogramhasbeenstarted.2Points Sortandstraightenhavebeencompletedin50%oftheareasofthefacility,

andevidenceisavailabletosupportit.Criteriafordisposalofnot-neededitemshavebeendeveloped,anditemshavebeenidentifiedandtagged.Designatedareaforholdingnotneededitemsisestablished,andalltheseitemsareremovedtothisarea.This

areacanbetemporary.Locationforeveryneededitemhasbeenestablishedandlabeled.Outlineforequipment,supplies,commonareas,andsafetyzonesaremarked.Shadowboardsaredeployed,whereappropriate.Visualdisplayboardsareinuse.

3Points Sort,straighten,andshinehavebeencompletedintheentirefacility,andevidenceisavailabletosupportit.Majorcausesofcontaminationthatcanmakeitdifficulttokeeptheareacleanareidentifiedandremoved.Documentedcleaninginspectionproceduresareimplemented.Cleaningisapartofeverydayactivity.Visualdisplayboardsaremaintainedinanorderlyandtimelymanner.

4Points Sort,straighten,shine,andstandardizehavebeencompletedthroughoutthefacility,andevidenceisavailabletosupportit.DocumentedstandardpracticesandroutinesareestablishedforsystematicallyrepeatingthefirstthreeSs.Proceduresandformsarecreatedandimplementedthathelp

regularlyauditthestatusoffirstthreeSs.

5Points Sustainhasbeencompletedfortheentirefacility,andevidenceisavailabletosupportit.Managementensuresthat5Sactivitiesareahabitforallandthatthestandardsaremet,throughpersonal

involvementandassessments.5Sstandardsareapartofdailyworkandarelinkedtotheotherrelevantinitiatives.Asystematicprocessisin

placetocontinuouslyevaluateandimprovethesestandards.

Score 0Comments

STANDARDIZEDWORKStandardized work is the optimum combination of operators, machines, andmaterials to ensure that a task is completed the same way every time withminimumwasteandatmarketpaceortakt.Inmostcases,thereismorethanone

wayofperformingatask,andonemaybemoreefficientthantheother.Ateamof appropriate people (operators, line leaders, and engineers) develops anddocumentsstandardizedwork—themostefficientway—afterevaluatingall thedifferentwaysofperformingthesametask.Theobjectiveofstandardizedworkis to make sure operator productivity and equipment utilization aresimultaneouslyoptimized and also that the inventory isminimized.Using fivedifferentforms,thisobjectiveisachievedbyestablishingarelationshipbetweentakt and cycle time, balancing the work content of all the operators andequipmentinacell,andestablishingappropriatequantitiesforthepullsystem.

Value Conditions

1Point Standardizedworkiscurrentlybeingdeveloped,andsomedocumentationiscompleted.2Points Someoperationsareperformedinastandardizedmanner,asaresultofindividualoperatorefforts.Standard

worklayoutsareimplementedinsomecells.Somestandardsaredocumentedandfollowedbyalltheoperators.Somecycletimesarelessthanorequaltotakt.Someworkisbalanced,butnottotakt.Someproductiondisplayboardsareusedtotrackhourlyproductionstatus.

3Points Severalcellsandflowlineshaveimplementedstandardizedwork,wheredocumentedstandardizedworkchartsareavailableforalltheoperators.Standardizedworkhasbeendevelopedformostcommontakt.Operatorbalancechartsareimplementedinsomecells.Severalcellsarebeginningtousetaktasthepacingelement.

4Points Standardizedworkisimplemented,andtaktisfollowedbymostofthecellsandflowlines.Opportunitieshavebeenidentifiedforremovingwastefromthecompletevaluestream,bystandardizingthe

workthataffectintercellactivitiesandinventories.Evidenceexiststhatoperatorsarebeginningtogeneratestandardworkimprovements.Taktispacingelement

throughoutthefacility.Thereisvisibleevidencethatresourceadjustmentsutilizestandardworktobalancechangesintakt.

5Points Standardizedworkisimplementedthroughallthecellsandflowlinesforallthepossibletakt.Theentirevaluestreamisbeingcontinuouslyoptimized(wasteeliminated)bystandardizingalltheintercell

activitiesandinventories.Evidenceexiststhatoperatorsaregeneratingandmaintainingstandardizedwork.Standardizedworkhastobedevelopedforallthepossibletakt.Asystematicprocessisinplacetocontinuouslyevaluateandimprovethesestandards.

Score 0Comments

TOTALPRODUCTIVEMAINTENANCE(TPM)Because Lean requires just-in-time supply of all the components and

subassemblies, if theproduction equipmentbreaksdownor fails toproduce atthe expected rate or quality, Lean product lines can suffer.Overall equipmenteffectiveness (OEE) is used to measure the equipment’s performance in thisregard.Tomakesure that theproductionequipmentperformsatorbetter thanthe expected level, they should undergo TPM. TPM beginswith updating theequipment’sconditiontoasgoodorbetterthanthenewmachine,anditdevelopsand implements procedures and checklists that ensure themaintenance of thislevel of the equipment’s condition for a long period of time. A good TPMprogram also requires well-implemented 5S practices. World-classmanufacturingplantsconsistentlymaintaintheiraverageOEEhigherthan85%.Critical equipment in these plants ismaintained at anOEE of 95%or higher.WorldclassplantsdonotneedtomeasureOEEallthetime,onallthemachines.TheOEEofaveragemanufacturingplantsisusuallybetween35%and50%.

Value Condition

1Point

Routinemaintenanceiscarriedoutregularly,andpreventivemaintenanceispracticedtosomeextent.

2Points

Asystematicpreventivemaintenanceprogramisinplace.OEEisbeingimplemented,andbaselineisbeingestablished.TPMimplementationplanisbeingdevelopedforequipmentidentifiedascriticalonvaluestreammaps.

3Points

Initialcleaningandinspectioncompletedonallthecriticalequipment.Mostofthecausesofcontaminationandinaccessibleareashavebeeneliminatedonallthecriticalequipment.Operator-performedcleaningandinspectionstandardsaredevelopedanddeployedforallthecriticalequipment.ImprovingtrendsinOEEmeasureareevident.

4Points

Allthecausesofcontaminationandinaccessibleareasareeliminatedonallthecriticalequipment.Trainingonequipment’sfunctions,controls,andsystemsarecompletedforallthecriticalequipment.Regularauditsofallthecriticalequipmentareconductedfordeploymentofautonomousstandards.AllthecriticalequipmentidentifiedontheVSMmaintainoptimumOEElevels.

5Points

Autonomouscleaningandinspectionstandardsaredeployedthroughouttheplant.Regularauditsofalltheproductionequipmentareconductedfortheimplementationofautonomousstandards.OEEisusedforperiodicmonitoringofproductionequipment,andresultsareconsistentlysustainedatoptimum

levels.TheSixSigmaapproachisbeingappliedforpredictivemaintenance.AsystematicprocessisinplacetoevaluateandimproveOEEmonitoring,TPM,andproceduresdeployedfor

cleaningandinspections.

Score 0Comments

ERRORPROOFING

Errorproofingisasystematicapproachtopreventpotentialdefectsfromleavingtheareainwhichtheyareproduced.Duringerrorproofing,alltheopportunitiesfor defects (key characteristics) are identified, proactively, and the causeseliminatedor100%verificationmeansareputinplaceeithertopreventtheerrorfrom occurring or to detect a defective product. This will lead to correctiveactionstakingplaceandgettingclosertothe“goalofzerodefects.”

Value Conditions

1Point Inspectionortestingisusedtocapturesomeofthepotentialdefects.Rootcausesofdefectsareinvestigatedinfrequently.

2Points Systematicapproach(suchasdesignandprocessPFMEA)isbeingdeployedtoidentifythepotentialdefectsaffectingtheexternalcustomers.Causesformanyoftheidentifieddefectsareeithereliminatedordetectedandcontainedatthesource.

3Points Systematicapproach(suchasdesignandprocessPFMEA)isdeployedtoidentifyallthepotentialdefectsaffectingtheexternalcustomersandmanyofthepotentialdefectsaffectingtheinternalcustomers.Allthecausesofpotentialdefectsaffectingtheexternalcustomerhavebeeneliminatedordetectedand

containedatthesource.4Points Systematicapproach(suchasdesignandprocessPFMEA)isdeployedtoidentifyallthepotentialdefects.

Causesofallthepotentialdefectshavebeeneliminatedordetectedandcontainedatsource.5Points Asystematicprocessofelimination,prevention,detection,andlosscontrol,inthatorderofpreference,is

appliedtoallthepotentialerrors.Errorproofingisactivelyimplementedduringproductandprocessdevelopment.Asystematicprocessisinplacetoevaluateandimprovethedeployederroridentificationmeansanderror

proofingmethodsapplied.

Score 0Comments

SETUPREDUCTIONSetupisthetimeduringwhichequipmentisbeingsetupforthenextorderandnotproducingparts—asdefinedbythetimebetweenthelastgoodpieceoftheprevioussetupand the firstgoodpieceof thecurrent setup.Leanusesa smallquantity of controlled inventory; this means smaller batch sizes and frequentruns.Thus,reducingthesetupbecomesveryimportantforaproduct linetobeLean.Setupreductionisasystematicapproachusedtoreducethenonproductivetimeduringsetup.

Value Condition

1Point

Manyfactorsaffecttheoverallsetuptimebecausethesetupprocesseshavenotbeenstandardizedanddocumented.

2Points

Somesetupsareevaluated(e.g.,analyzingvideotapes),andrelatedactivitiesarestandardizedanddocumentedandstandardsarebeingfollowed.Thereisametricdefinedtomeasuresetuptimeforcriticalequipment—asidentifiedinthevaluestreammap.

3Points

Mostsetup-relatedactivitiesarestandardizedanddocumented,andstandardsarebeingfollowedforcriticalandsubordinateequipment.Setupactivitiesaresystematicallyevaluated(e.g.,analyzingvideotapes),andattemptsaremadetomoveasmany

internalactivities(whenmachineisidleduringsetup)totheexternalsetupprocess(whenmachineisproducinggoodparts).

Attemptsaremadetoreducethetimetakenbytheremaininginternalactivities.4Points

Allpossiblesetup-relatedactivitiesarestandardizedanddocumented,andmostoperatorsfollowthestandards—forcriticalandsubordinateequipment.Setupactivitiesaresystematicallyevaluated,andallthepotentialinternalactivitiesaremovedtotheexternalsetup

process,resultinginleadtimeandinventoryreductionandgreaterflexibility.Alltheremaininginternalactivitiesarebeingcontinuouslyoptimized.Effortsaremadetocontinuouslyoptimizetheexternalactivities.

5Points

Allinternalandexternalactivitiesarebeingcontinuouslyoptimizedforcriticalandsubordinateequipment.Setup-relatedstandardsaredeployedthroughouttheplantandusedbyeverybody,resultingintheabilitytorunallpartseveryday.Systematiccontinuousimprovementprocessis

implemented,whichhelpsachieveprogressivereductioninsetuptime.

Score 0Comments

CONTINUOUSFLOWContinuousflowisdefinedas themovementofmaterialfromonevalue-addedprocess to another without transport time or storage in buffers in a spirit of“make one—move one.” In a continuous flow environment, the rate ofproduction of the entire product stream exactlymatches the customer demand(takt).Continuous flowenvironmenthasoptimizedequipment,manpower, andspacethrougheffectivelylinkedmanufacturingcells,balancedworkloadforallthe workstations and the operators (for various takt). Also, continuous flowenvironment provides flexibility through U-shaped cell designs, cross-trainedwork force, and ability to flex. Continuous flow environment would havedocumented all the task details and are easily visible to the operators. Also

visible is a display that indicates the customer demand rate and achievedproductionrateinrealtime.

Note: Need to define “cell” in the glossary to encompass the concept ofprocess.

Value Conditions

1Point Processesareseparatedbyaconsiderableamountofworkinprocess(WIP).Processesareseparatedbygeographicdistancethatrequiresextensiveandcomplextransportpathforparts.Machinesaregroupedbasedonequipmenttype,notprocessflow.

2Points Somecellsareformedtoenhanceoperatorefficiency,anditeffectivelyreducesthepartstransportorthecontrolledWIP.Evidenceexiststhataclearunderstandingofcustomerdemandhasbeenincludedintoacelldesigntopromote

flexibility.Evidenceexiststhatcelldesignsaredefinedbyvaluestreammaps.3Points Severalcellsexistthatinternallyflow“onepiece.”

Somecellsarelinkedtogethertoflowtheproductthroughtheentireproductvaluestream.Productionratesofthecellsarevariablebasedoncustomerdemand.

4Points Mostproductionequipmentisbasedonthevaluestreammapincells.Mostcellsarelinkedtoachievecontinuousflow,withminimumcontrolledWIPbetweenthem.Productionratematchesthetakt.Operatorsarecross-trainedwithinthecell’sactivities,andthecellisvisuallydisplayingaskillsmatrix.

5Points Allthepossibleequipmentisincellsandlinkedtoflowbasedonthevaluestreammap.Eachcelliscapableofadjustingthenumberofoperatorsbasedonthetakt.Eachoperatoriscross-trainedto

performseveralactivitiesandalsoflexupordown,asneeded.Kanban-controlledWIPareusedonlywheretheprocessdoesnotallowcontinuousflow(e.g.,batchheattreatmentprocess).Asystematicprocessisinplacetocontinuouslyevaluate

andimprovethestandards.

Score 0Comments

PULLSYSTEMPull is a system of cascading production and delivery instructions fromdownstreamtoupstreamactivitiesinwhichnothingisproducedbytheupstreamsupplier until the downstream customer signals a need. A variety of simplevisual methods (Kanban) are used by the customers to signal the upstreamsupplier tosupply/produce just in time(JIT).Asignal to indicate thecustomer(outsidecustomer)orderisgiventoonlyoneinternalprocess,whichiscalledapacemaker(ideallytothelastprocess).Idealpullsystemrequiresthatthesetup

timesareverylowtoproducesmallbatchsizes,withouteconomicpenalty,andthequantityofthosebatchsizesorworkinprocess(WIP)isagoodindicatorofthepull system’s levelof implementation. In apull systemenvironment, if nosignal were received from the downstream customer, equipment and operatorwouldbe idle. In environmentswithout thepull system,parts areproduced asfastasonecanproduceandpushed to thedownstreamcustomer, regardlessofneed.

Value Conditions

1Point Someevidenceofapullsystemexists.Effortsarebeingmadetoensurethatinventoryisnotstoredinrandomamountswithmanydifferentcomponent

quantitiesbeingdeliveredatmanydifferentareas(typicalbatchwarehouse).MostoftheprocessesreceiveordersfromatypicalMRP/ERP-typesystem.

2Points SomeproductionKanbanareused,butprimarilyforlargebatchsizes,toandfromsupermarket/stores.Themaximumbatchsizeispredeterminedbythesalesorderquantity.Someprocessesgetsignalsfromthedownstreamprocess,tosupplyorstartproduction.

3Points Products/partsrequiringbatchprocessingandbufferinventory(supermarkets)areproducedandsuppliedusingpullsignals(Kanban).SomesuppliersreceiveJITpullsignalsorKanbantosignaltheneed.Constantattemptsaremadetoreducethebatchsizes(internalandexternalcustomer).AmethodologyisinplacetocalculateappropriateKanbansizesonanongoingbasis(setupreductiontimesare

reviewedrelativetolotsizes).In-processKanbansareusedinmanyplaces,whichensurepullsystembetweenprocesses.

4Points Theonlypartsbeingstockedinthesupermarket(s)arethosebeingproduced/suppliedinbatches,duetolimitationsoftheproductionequipmentorsupplier.Thequantityofpartsinthesupermarkethavebeensystematicallyminimized.Conveyanceofpartsiswell

planned,intermsoftiming,sequencing,andquantities.All“A-classified”materialsuppliersgetordersthroughatypeofJITKanbansignal.Mostoftheinternalprocessesthroughoutthevaluestreaminitiateproduction/deliverybasedonpullsignals.Appropriatemeans(Andonpanels,lights,sirens,etc.)toattractattentiontoout-of-partsconditionareinstalled

toavoidanylinestoppages.5Points Materialmovementthroughouttheplantvaluestreamisbasedonpullsignalslinkedtorealdemand.

Movementofmaterialbetweenprocessesisminimized,andWIPbuffersareminimizedoreliminatedtothesmallestpracticaldeliveryquantitybutnotmorethanonesmallcontainer,box,orpart,whereapplicable.

Customerordersaresenttothe“lastprocess”triggeringthepullofcomponentsfromtheentirevaluestream.Asystematicprocessisinplacetocontinuouslyevaluateandimprovethesestandards.

Score 0Comments

TOOLASSESSMENTSUMMARYRADARCHART

AradarchartcanbemadebyinsertingtheassessmentscoreforeachtoolusingExcel.

LEANASSESSMENT

Element Score

Valuestreammapping 15S 1Standardizedwork 1TPM 1Errorproofing 1Setupreduction 1Continuousflow 1Pullsystem 1Total 8Average

1.0

Appendix1:AttributesofaTrulyLeanOrganization

Finally,youknowyouareLeanif

•Youcanseewhatisgoingonwithoutasking•Everyone•showsupand

•“pullsthecord”•Supervisorsare

• checking the process, checking the process, checking the process,checking the process, checking the process • Everyone in theorganization is regularly on the shop floor • Every process isstandardizedanddocumented•Problemsareembraced,notshunned

•YoucannotfindtheWIP• The janitorhas standardizedworkandaproductionpacingboard • You

caneatofftheproductionmachines• No one can rememberwhen a shipment datewasmissed • People ask

“Why? Why? Why? Why? Why?” and no one gets mad at them•Managementisconcernedthattheyaregainingmarketsharetooquickly• Theno. 1 sellingbook atCrossword is about your company’s success• Companies from around theworld are learning newwords… in yourlanguage • Customer buyers start orderingweird productswith standardlead times … just to win bets with friends • Your company movesproductionbackintotheoriginalgarage,butwith$500millionannualsales•Theonlyplaceyoucanfindanydustisinthescrapbins•Youthinkyoufindaproblem.Nokanbans.Thenyoulearneverythingrunsinsinglepieceflow•TheparkinglotisonebigFIFOlane

• You could not buy a Coke with your monthly cost of nonconformance(CONC) • Youhave a drive-through lane to take your customer’s orderand then load it into the truck • Machinemanufacturerscome to lookattheirTPM’edmachinesinyourplantbeforedesigningtheirnextmodel

Appendix2:JobDescriptionofaLeanSupervisor

A.JOBDATA

Job position: Supervisor (SV) Code: Function: Supervisor Area:Production

B.SUMMARY(DESCRIBEBRIEFLYTHEPOSITIONGOALS)Coordinatetheareathatisresponsible,managingandgivingorientationforoperatorsunderhisresponsibility,todevelopactivitiesaccordingtoplant

goals.

C.MAINRESPONSIBILITY(DESCRIBEACTIVITIESDONECONSIDERINGFOURBASICQUESTIONS:WHATDOESHEDO?HOWDOESHEEXECUTE?WHICHKINDOFEQUIPMENTDOESHEUSE?WHYDOESHEDOIT?)Participateinthemanagermeetinganddefinestrategyforhisareatoachievethegoalsdefinedbytheplant

manager.

Reinforceout-of-lineresourcesprovision(man,maintenance,material,safety,andenvironment)toreducethelineproblemimpact.

Participate todevelopnewprocesses(equipment, tools,materials,andmethods),andberesponsibletointroduceitinline.

Consolidate production results, and prepare and present it in themanagermeeting.

Daily analyze the production results and take action when there is aneedtorecoverdelays(quantity,overtime,HRissues,etc.).

Analyzeproduction,quality,safety,cost,anddeliveryissues,andtakeactionsaccordingtoTPStoimprovetheproductivityandoperatorsenvironment.

Daily check the quality and the productivity on each line, checkingproblems andmaking followup in the countermeasures.Check ifgroupleadersandteamleadersareorientingoperatorsaccordingtothe operation standard, standardized work, using check sheetscorrectly,and5S.

Controlthecostinhisarea.GiveorientationaboutMESH(environment, safety,andhealth),TPS,

andtheToyotaway.ParticipateandencourageyourstafftodevelopKaizenCircleactivities.

D.QUALIFICATION

D1—Obligatory qualification Academic background: completedcollege/universityExperience:morethanfiveyearsintheindustrialoperationLanguage: Portuguese andEnglish (basic)D2—DesiredqualificationAcademic background: production or mechanical engineer, high

school completed at technical school (SENAI) Experience:groupleaderexperienceLanguage:Japanese

Additionalknowledge:proactive,organized,andgoodrelationshipamongoperatorsandareasD3—Trainingandskills

Accordingtothemanufacturingarea

E.ORGANIZATIONALSTRUCTURE

Plantmanager Second-levelmanagerDepartmentchief First-levelmanagerSupervisor JobdescriptiontitleOtherstaffbelowthismanager Directstaffbelow

– –

Plantmanager Humanresources

Appendix3:JobDescriptionofaLeanTeamLeader

A.JOBDATA

Jobposition:Teamleader(TL)Code:Function:TeamleaderArea:Production

B.SUMMARY(DESCRIBEBRIEFLYTHEPOSITIONGOALS)Coordinatethejobintheareathatisresponsible,managing,andgivingorientationforoperatorsunderhisresponsibilitytodevelopactivities

accordingtoplantgoals.

C.MAINRESPONSIBILITY(DESCRIBEACTIVITIESDONECONSIDERINGFOURBASICQUESTIONS:WHATDOESHEDO?

HOWDOESHEEXECUTE?WHICHKINDOFEQUIPMENTDOESHEUSE?WHYDOESHEDOIT?)•Distributetheactivitiesaccordingtothedailyplan,andadviseoperatorsaboutproceduresandtechnicalissuesto

performaccordingtothestandard.

•Provideequipment,tools,materials,andaccessoriestorunthearea.•Giveorientationforoperatorsaboutthemachinestop,tousetheirtime

inthebestway.

•Updatetheinformationaboutproductionplansandcommunicateitforevery operator, informing production changes (quantity target,overtime,HRissues,etc.).

•Collectproductiondatatogroupleader(manufacturedquantitybyline,machineproblems,productivity,etc.).

•Readandunderstandproductandmanufacturingprocessspecificationstoinstructnewoperatorsorwhentheyhaveanydoubt.

• Prepare and deploy operation standards, standardize work, checksheets,anddefine5Sstandards.

•Checkifoperatorsarefillingcorrectlythechecksheets.•GiveorientationaboutMESH(environment,safety,andhealth),TPS,

andtheToyotaway.• Participate and encourage your staff to develop Kaizen Circle

activities.

D.QUALIFICATION

D1—Obligatoryqualification• Academicbackground:completedhighschool• Experience:more

than two years in the industrial operation • Language: onlyPortuguese

D2—Desiredqualification• Academic background: high school completed at technical school

(SENAI) • Experience: more than three years of work in themanufacturingactivity•Language:English,basiclevel

•Additionalknowledge:machineNCcontrolprogram,computeruse,forkliftandcranecertificationD3—Trainingandskills

•Accordingtothemanufacturingarea

E.ORGANIZATIONALSTRUCTURE

Conclusion

During the last quarter of the 20th century, nearly everyone in seniormanagement thought thatmanufacturing operations had been perfected.HenryFord’s great innovation, themoving assembly line, had been refined over thefivedecadesafter1910,hadservedasthemagicbulletduringWorldWarII,andbythemid-1960swasoperatingefficiently,atmassproductionscale,inawiderangeofindustriesaroundtheworld.

Silently,inJapan,TaiichiOhnoandhisengineeringcolleaguesatToyotawereperfectingwhattheynamedtheToyotaProductionSystem,whichwenowknowasLeanproduction.

Initially,Leanwasbestknown in theWestby its tools: forexample,kaizenworkshops, where frontline workers solve knotty problems; kanban, theschedulingsystemforjust-in-timeproduction;andtheandoncord,which,whenpulledbyanyworker,causesaproductionlinetostop.

In more recent years, this early understanding of Lean has evolved into aricher appreciation of the power of its underlying management disciplines:putting customers first by truly understanding what they need and thendeliveringitefficiently,enablingworkerstocontributetotheirfullestpotential,constantlysearchingforbetterwaysofworking,andgivingmeaningtoworkbyconnectingacompany’s strategyandgoals inaclear, coherentwayacross theorganization.

Similarly, these companies are discovering that Lean can supply powerfulinsightsaboutthenextfrontiersofenergyefficiency.Toyotaitselfispushingtheboundaries of Lean, rethinking the art of the possible in production-linechangeovers. For example, bring customer input more directly into factories.Leadingservice-basedcompanysuchasAmazon.comisextendingthevalueofLeanfurtherstill,intoareasbeyondmanufacturing,suchasfulfillmentcenters.

RETAILBANKING

Leanhas transformedhow leading companies think about operations—startinginassemblyplantsandmovingmorerecentlyintoservicessuchasretailbanking

becauseitinvolvesaphysicalprocess,suchasanassemblyline,thehandlingofpaper checks, and credit card slips, which lends itself readily to Leanmanufacturingtechniques.Moreover, their impactcanbedramatic: thefasterabankmoveschecksthroughitssystem,thesooneritcancollectitsfundsandthebetteritsreturnsoninvestedcapital.

HOSPITALS

Itisagreedthatahospitalisnotanautomobilefactory,andpeople(thepatientsandthehospitalstaff)arelesspredictablethancarparts.Nevertheless,hospitalscan often reduce a large amount of their variability in operations, such asprescription distribution, use of consumables, and patient registration andoutpatientprocesses.

AIRLINES

Aircrafts worthmillions ormore routinely sit idle at gates. Turnaround timesbetweenflightstypicallyvarybyupwardof30%.Leantechniquescuthourstominuteswithanimprovedchangeoversystem.

RESTAURANTS

Lean techniques seek to improve product and service quality whilesimultaneously reducingwaste and labor costs.For food serviceoperators, theadditionaltrickistolinksuchimprovementstocustomerloyalty.

DESIGNINGPRODUCTSFORVALUE

Data are now available throughmachine telemetric devices having embeddedsensors.These small data sensorsmonitor installed equipment in the field andgive companies insight into how and where products are used, how theyperform,theconditionstheyexperience,andhowandwhytheybreakdown.The

nextstepistolinkthisinformationbacktoproductdesignandmarketing—forexample, by tailoring variations in products to the precise environmentalconditionsinwhichcustomersusethem.

Savvy companies will use the data to show customers evidence of unmetneeds they may not even be aware of and to eliminate product or servicecapabilities that are not useful to them.ApplyingLean techniques to all thesenew insights arising at the interface of marketing, product development, andoperations should enable companies to make new strides in delighting theircustomersandboostingproductivity.

Glossary

5S:standsforfiveJapanesewordsthatbeginwiththeletter“S.”ThewordsastranslatedinEnglishareasfollows:Seiri=sort,Seiton=straightenorsetinorder,Seso=shine,Seiketsu=standardize,andShitsuke=sustain.Alltogether, they mean orderly, well-organized, well-inspected, clean, andefficientworkplaces.

5-Whys:asimpleprocessofdeterminingtherootcauseofaproblembyasking“why”aftereachsituation todrivedeeper inmoredetail toarriveat therootcauseofanissue.

7Wastes:originally identifiedbyTaiichiOhno.Theseare(1)overproduction,(2)waiting, (3) transportation, (4)overprocessing, (5)stockonhand, (6)movement,and(7)makingdefectiveproduct.

8D:apopularmethodforproblemsolvingbecauseitisreasonablyeasytoteachandeffective.The8Dstepsandtoolsusedareasfollows:D0,prepareforthe 8D; D1, form a team; D2, describe the problem; D3, interimcontainmentaction;D4,rootcauseanalysis(RCA)andescapepoint;D5,permanentcorrectiveaction;D6,implementandvalidate;D7,prevention;andD8,closureandteamcelebration.ThisprocessisknownasGlobal8DbyFord.

A3:areportpreparedonan11″×17″plainpaperbytheowneroftheissue.ThePDCAformatisused.Itgatherscurrentinformationandanalysis,createsgoalsandmetrics,andbuildsbuy-infromstakeholders.

Andon:aJapanesewordmeaninglightorlantern.Itisaformofcommunicationforabnormalconditionsormachinemalfunction.Itoftenresemblesastoptrafficlightwherered=stop,yellow=caution,andgreen=go.Anotherform can be an andon cord, which is pulled by the operator tocommunicateanabnormalsituation.

AS9100:awidelyadoptedandstandardizedqualitymanagementsystemfortheaerospaceindustry.

BE:businessexcellence.

Blackbelt:aprofessionalwhocanexplainandpracticeSixSigmaphilosophiesandprinciples,includingsupportingsystemsandtools.

Budget: an estimate of costs, revenues, and resources over a specifiedperiod,reflectingareadingoffuturefinancialconditionsandgoals.

Businessprocessreengineering(BPR):theanalysisandredesignofworkflowwithinandbetweenenterprises.BPRreached itsmaximumpopularity intheearly1990s.

CA:correctiveactiontakentoeliminatethecauseofthenonconformity.

Causeandeffectdiagram:thisdiagram-basedtechniquehelpsusidentifyallofthelikelycausesoftheproblemsfacedinworkingenvironments.

Changeover: settingup amachineor production line tomake adifferent partnumberorproduct.

Changeover time: the time fromthe lastgoodpieceof thecurrentproductionruntothefirstgoodpieceofthenextrun.

Constraint:anythingthatlimitsasystemfromachievinghigherperformance.Itisalsocalledabottleneck.

Continual improvement: continual indicates duration of improvement thatcontinues over a long period, but with intervals of interruption, forexample, the plant modification disrupted by logistics/traffic for nearlytwoyears.

Continuousimprovement:anapproachofmakingfrequentandsmallchangestoaprocesswhosecumulativeresultsleadtohigherlevelsofquality,cost,andefficiency.

Countermeasure:correctiveactiontakentoaddressproblemsorabnormalities.

Customer: aparty that receivesorconsumesproducts (goodsor services)andhastheabilitytochoosebetweendifferentproducts.

Cycle:asequenceofoperationsrepeatedregularly.Cycletime:thetimeforonesequenceofoperationstooccur.

Effectiveness: the degree to which objectives are achieved and the extent towhichtargetedproblemsaresolved.Incontrasttoefficiency,effectivenessis determined without reference to costs and, whereas efficiencymeans“doingthethingright,”effectivenessmeans“doingtherightthing.”

EFQM:EuropeanFoundationforQualityManagement.

Equipment availability: the percentage of time equipment (or process) is

availabletorun.Thisissometimescalled“uptime.”

Errorproofing:seePokaYoke.

Externalsetup:proceduresthatcanbeperformedwhileamachineisrunning.

FAI:firstarticleinspection.Failure mode and effects analysis (FMEA): a step-by-step approach for

identifyingallpossiblefailures inadesign,amanufacturingorassemblyprocess, or a product or service. “Failure modes” means the ways, ormodes, inwhichsomethingmightfail.Failuresareanyerrorsordefects,especially ones that affect the customer, and can be potential or actual.“Effectsanalysis”referstostudyingtheconsequencesofthosefailures.

FIFO:“first-in, first-out”; inotherwords,materialproducedbyoneprocess isconsumedinthesameorder(FIFO)bythenextprocess.

Firstpassyield(FPY):definedasthenumberofunitscomingoutofaprocessdivided by the number of units going into that process over a specifiedperiod.Onlygoodunitswithnoreworkarecountedascomingoutofanindividualprocess.Alsoknownasthroughputyield(TPY).

Fishbonediagram:thefishbonediagramidentifiesmanypossiblecausesforaneffect or problem. It canbeused to structure a brainstorming session. Itimmediately sorts ideas into useful categories. The major categories ofcauses of the problem are methods, machines (equipment), people(manpower),materials,measurement,andenvironment.

Flow: thecompletionofstepswithinavaluestreamso thatproductorservice“flows”frombeginningofthevaluestreamtothecustomerwithoutwaste.

Flowproduction:sameasflow.

Gemba: a Japanese word meaning “real place,” where action takes place—ashopfloororworkareas.

Gemba walk: a walk carried out by a coach (a Lean sensei) and student orstudents to look for abnormal conditions, waste, or opportunities forimprovement.

Heijunka:amethodforlevelingproductionformixandvolume.

HoshinKanri:astrategicdecision-makingtoolusedforpolicydeployment.

Internal setup: procedures that must be performed while the machine isstopped.

Ishikawadiagram:seefishbonediagram.

Jidoka:adevicethatstopsproductionorequipmentwhenadefectiveconditionarises.Attentionisdrawntothisconditionandtheoperatorwhostoppedtheproduction.TheJidokasystemhasfaithintheoperatorwhoistrainedforthejob.

Just in time (JIT): originally developed by the Toyota Production System(TPS). JIT presupposes that all waste is eliminated from the productionline, andonly the inventory in the rightquantity andat the right time isusedfortheproductionwheretherateofproductionisexactlyasrequiredbythecustomer.

Kaikaku:aJapanesewordmeaninginnovationoraradicalbreakthrough.Thus,Kaikaku requires radical thinking and takes more time in planning andimplementation.

Kaizen: a Japanese word meaning change for the better or do good. It is aprocessofmakingcontinual improvementsbyeveryonekeepinginmindqualityandsafety.

Kaizenevent:ashortteam-basedimprovementproject;alsocalledKaizenblitz.

Kanban: means “sign board” or a label. It serves as an instruction forproductionandreplenishment.

KCC:keycriticalcharacteristic.KPC:keyperformancecharacteristic.

KPI:keyperformanceindicator.

Leadtime:atimerequiredtomoveonepiecefromthetimeorderistakenuntilitisshippedtothecustomer.

Line balancing: a technique where all operations are evenly balanced andstaffingisalsobalancedtomeetthetakttime.

MalcolmBaldrigeNationalQualityAward(MBNQA):anawardgiventotheorganizationforachievingthehighestqualitystandard.

Manufacturing resource planning (MRP II): an MRP but takes intoconsiderationthecapacityplanningandfinancerequirement.Itworksoutalternativeproductionplansthroughthesimulationtool.

Materials requirement planning (MRP): a computerized system ofdeterminingquantityandtimingrequirementsforproductionanddeliveryofproductsforcustomersaswellassuppliers.ThisisaPUSHproductionsystem.

Milkrun: the routingof supplyanddelivery trucks/vehicles tomakemultiple

pickupsanddeliveriesatvariouslocationstoreducetransportationwaste.

Muda:Japanesewordforwaste.Itisanelementthatdoesnotaddvaluetotheproductorservice.Alsoknownasnon-value-addedactivitycarriedoutonaproductorservicethatdoesnotaddvalueandthecustomerwillnotpayforit.

Mura:Japanesewordforvariabilityorunevenness.

Muri:aJapanesewordforphysicalandmentalstrainoroverburden.

One (single)-piece flow: practiced in the JIT system where one work pieceflowsfromprocesstoprocesstominimizewaste.

Operational excellence (Opex): an element of organizational initiative thatstresses the application of a variety of principles, systems, and toolstoward the sustainable improvement of key performance metrics. Thisphilosophy is based on continuous improvement, such as qualitymanagement system, Lean manufacturing, and Six Sigma. Operationalexcellencegoesbeyondthetraditionalmethodsofimprovementandleadstoalong-termchangeinorganizationalculture.

Overall equipment effectiveness (OEE): a product of the following keymeasures:(1)operationalavailability,(2)performanceefficiency,and(3)first-passyieldquality.

PAIP:aprocessforperformanceanalysisandimprovement.

PCP:processcontrolplan.PDCA:plan,do,check,andactcycleforcontinualimprovement.

PFMEA:processfailuremodeandeffectanalysis.

Point-of-usestorage(POUS):storingorkeepingmaterials, tools, information,anditemsneartowheretheyareused.

Poka yoke: also known as mistake proofing. “Poka” in Japanese meansinadvertentmistake, and “yoke”means prevention.These can be simplelow-cost devices to sophisticated electro mechanical devices to preventproductionofdefectiveproduct.

Process: sequence of interdependent and linked procedures which, at everystage,consumeoneormoreresources(employeetime,energy,machines,money) to convert inputs (data,material, parts, etc.) into outputs. Theseoutputs thenserveas inputsfor thenextstageuntilaknowngoalorendresultisreached.

Product realization: the termused to describe thework that the organization

goesthroughtodevelop,manufacture,anddeliverthefinishedproductorservicetothecustomer.

Productivity:measuredasanoutputforagiveninput.Productivityincreaseiscriticaltoimprovinglivingstandards.

Pull: alternativelyknownaspullproductionwhere theupstreamsupplierdoesnotproduceuntilthedownstreamcustomersignalstheneed.

Push: alternatively known as push production where the upstream supplierproduces as much as it can without regard to the fact whether thedownstreamcustomerneedsitornot.

QOS: quality operating system originally implemented by Ford. Themethodologywas established tomeasure the effectiveness of thequalitysystemandtodrivecontinuousimprovement.

Risk priority number (RPN): in FMEA, RPN = severity × occurrence ×detection.

Rolled throughput yield (RTY): a probability that a single piece will passthroughallproductionstepswithoutasingledefect.

Shadow board: a board where each tool has a place and in which tools aremissing.

Singleminuteexchangeofdies(SMED):agroupoftechniquesdevelopedbyShiegoShingoforthechangeoverofproductionequipmentinlessthan10minutes.

SIPOC: a process identification where the requirements for supplier, input,processsteps,output,andcustomeraredefined.

Six Sigma: a set of tools and techniques for process improvement. It isoriginallydevelopedbyMotorolain1981.

Spaghetti diagram: a diagram showing the layout and flow of information,material, and people in a work area. It is generally used to highlightmotionandtransportationwaste.

Standardwork: an accurate description of every process step specifying takttime, cycle time, minimum inventory needed, and sequence of eachprocess step. The entire process is carried out with minimum humanmotionandotherwastes.

Statisticalprocesscontrol(SPC):qualitycontrolwhereprocessvariationsaremeasuresandcontrolled.

Supermarket:part storagebefore theygo to thenextoperation.Thepartsare

managedusingminimumandmaximuminventorylevels.

Sustainability: continued development or growth, without significantdeterioration of the environment and depletion of natural resources onwhichhumanwell-beingdepends.

SWOT: stands for strength, weakness, opportunity, threat. Strength andweaknessanalysisguidesustoidentifythepositivesandnegativesinsideyourorganization(S-W),whileopportunityand threatanalysisguidesustoidentifypositivesandnegativesoutsideofit.DevelopingafullSWOTanalysiscanhelpwithstrategicplanninganddecisionmaking.

System: American Society for Quality (ASQ) defines system as “a group ofinterdependent processes and people that together perform a commonmission.”

Takt time: available production time divided by the rate of the customerdemand.

Total productive maintenance (TPM): a system to ensure that everyproductionprocessmachineisabletoperformitsrequiredtaskssuchthatproductionisnotinterrupted.

Totalqualitymanagement(TQM):amanagementapproachthatoriginatedinthe 1950s. The TQM culture requires quality in all aspects of thecompany’soperations,withprocessesbeingdoneright the first timeanddefects and waste eradicated from operations. To be successful inimplementing TQM, an organization must concentrate on the eight keyelements:(1)ethics,(2)integrity,(3)trust,(4)training,(5)teamwork,(6)leadership,(7)recognition,and(8)communication.

VAA:value-addedactivity.Value: a capability provided to a customer at the right time at an appropriate

price,andisdefinedbythecustomer.

Value stream: sequenceof actions required todesign,produce, andprovideaspecific good or service and along which information, materials, andworthflows.

Visualfactory:isatermtodescribehowdataandinformationareconveyedtoaLeanmanufacturing environment. Here time and resources dedicated toconveying information are a form of waste. By using visual methods,information is easilyaccessible to thosewhoneed it.Visual informationmakesthecurrentstatusofallprocessesimmediatelyapparent.

Work in process (WIP): incomplete product or services that are awaitingfurtherprocessing.

Bibliography

AutomotiveIndustryActionGroup,MeasurementSystemAnalysis,3rded.,AIAG,Southfield,MI,2001.AutomotiveIndustryActionGroup,PotentialFailureModeandEffectsAnalysis:FMEA,3rded.,AIAG,

Southfield,MI,2001.AutomotiveIndustryActionGroup,StatisticalProcessControl,3rded.,AIAG,Southfield,MI,2005.American Society for Quality,CertifiedManager of Quality/Organizational Excellence.Westcott, R. T.

(ed.),ASQQualityPressHardcover,Milwaukee,WI,2013.American Society for Quality, Certified Quality Auditor, 3rd ed., Russell, J. P., ASQ Quality Press,

Milwaukee,WI,2011.American Society for Quality, Certified Quality Engineer. Borror, C. M. (ed.), ASQ Quality Press

Hardcover,Milwaukee,WI,2009.AmericanSocietyforQuality,FoundationsinQualityLearningSeries.PattersonJ.V.(ed.),ASQQuality

Press,Milwaukee,WI,2009.Brassard,M.,TheMemoryJoggerPlus+®.Crosby,P.,Crosby’s14stepstoimprovement,QualityProgress,December2005.Crosby,P.,QualityWithoutTears,McGraw-Hill,NewYork,1984.Deming,W.E.,OutoftheCrisis,MITPress,Cambridge,MA,1986.Deming,W.E.,TheNewEconomics for Industry,Government,Education,MITPress,Cambridge,MA,

1993.Galsworth,G.,Visual-LeanInstitute,1997.Gryna, F.M., Chua, R. C.H., andDeFeo, J.A., Juran’sQuality Planning and Analysis for Enterprise

Quality,5thed.,McGraw-Hill,2006.Juran,J.M.,JuranonQualitybyDesign,TheFreePressoftheMcMillanInc.,NewYork,1992.Pyzdek,T.,QualityEngineeringHandbook,1sted.,ASQQualityPress,Milwaukee,WI,1991.Pyzdek,T.,TheSixSigmaHandbook:ACompleteGuideforGreenBelts,BlackBelts,andManagersatAll

Levels,2nded.,McGraw-Hill,NewYork,2003.Shingo, S. and Dillon, A., A Study of the Toyota Production System: From an Industrial Engineering

Viewpoint,ProductivityPress,NewYork,1989.TheToyotaProductionSystem,www.toyotaGeorgetown.com/tps.asp.Wheeler,D.J.,AdvancedTopicsinStatisticalProcessControl,SPCPress,Knoxville,TN,1995.Womack,J.P.,GembawalksLeanEnterpriseInstitute,2011.

Index

A

Advanceproduction,planningfor,161Airlines,226Anchordraggers,17Areasofstandardization,126A3report,165–167As-receivedfailurecosts,198–199

B

BeginningofLeanjourney,seeEmbarkingontheLeanjourneyBusinessprocess,7–15

businessprocessview,10–11LeanSixSigma,11managingthepurpose,11–12roadblockstoleantransformation,7–10

businessandsupportfunctions,9corebusinessfunctions,8definitionofprocess,8silos,10systemconcept,7

SIPOCdiagram,13–15processidentificationchart,14turtlechart,15

C

Cashflowreturnoncapital(CFROC),201Causeandeffectdiagram,139–140Cellular(cell)manufacturing,72–73ChangetoLeanculture,seeTechniquestochangetoLeancultureChecksheet,144–145Coaching,33–34CONC,seeCostofnonconformanceConsensusbuilding,41

Continuousimprovement(importanceofprinciples,systems,andtoolsin),47–50consequences,48–50guidingprinciple,49principle,descriptionof,48–50socialnorms,48values,50

Continuousimprovementprocess,principlesof,51–67“goldmine,”53heijunka,62identificationandeliminationofbarrierstoflow,53–62

costaccounting,56functionalsilos,54–55mura,61muri(overburden,stress),56ninewastes(muda),56,57,58–60notmanagingtheflow,62qualityasspecializedfunction,55–56

integrateimprovementwithwork,66jidoka(automation),63–66

definition,65keyconcepts,65–66respectforpeople,63

kanban,62matchingofproductionratetolevelofcustomerdemand,62processfocus,52–53scientificthinking,63

goandsee,63gutfeeling,63managementbyfact,63,64process,63

seekperfection,66–67ultimategoal,62valuestream,62

Continuousimprovementprocesssystem,77–168A3report,165–167continuousimprovement,135–156

causeandeffectdiagram,139–140checksheet,144–145controlchart,145defectconcentrationdiagram,144DMAICprocess,153Rule,140employeeinvolvement,153–156factorsinproblemsolving,155fishbonediagram,139–140,141flowchart,151–153,154foundationof,135histogram,145–147kaikaku,136–139

kaizen,135,136Paretoanalysisofprintingdefects,143Paretochart,140–143Paretodiagramoftotalprintingdefects,143–146PDCA,problemsolvingtoolsappliedaspartof,139–143scatterdiagram,147–151standardizedworksustaining,135–136validaterootcauseofproblem,153

corrective/preventiveactionsystem,167–168rootcauseanalysis,167–168sourcesofproblems,167–168

5Sstandardssystem,85–87activities,86benefits,86controloverworkplace,87efficiency,86eliminatewaste,87originofword,85–86quality,87safety,86

kaizen,156–165advanceproduction,planningfor,161changemanagement,163–165commitmenttochange,165communication,159displacedworkerspolicy,160eventissues,160–161follow-up,162guidelines,156–160jobsecuritypolicy,160managementand/orsponsorparticipation,162newsletter,164paygradedifferencespolicy,160preparation,156–160resistancetochange,165runningasuccessfulevent,161–162sustainingofimprovements,165teamcharter,159teammembers,157,158teamsize,158–159unionissues,161workerparticipation,161

lotsizereductionandproductionlevelingsystem(heijunka),110–114differentvolumesandmixedproducts,114equalvolumebutmixedproducts,113–114heijunkadefinition,110–112modelsequenceandmodelvolume,113totalvolumeofallmodels,112workinprocess,110

PDCAmodelfor5Simplementation,87–90

levelsofimplementation,89procedure,88radarchart,88,90whentousePDCAcycle,87–88

shine,96–105cleaningasaformofinspection,103immediatebenefitsofcleanliness,98–99importantnotefortheteamleader,103keyactions,100–101keyinformation,96–97one-minuteorone-pointlesson,101

sort,90–94criteriadevelopment,91keyactions,90keyinformation,90movingitemstoholdingarea,93–94questions,91removingitemsfromholdingarea,93

standardize,106–107keyactions,106–107keyinformation,106

standardwork,126–134areasofstandardization,126cycletime,128definition,127operatorbalancesheet,129,132processcapacitychart,129,131processinstructiondocument,128–131sequence,128–131standardizedworkchart,129,133standardizedworkcombinationtable,129,134standardwork-in-process,132takttime,127–128timeobservationchart,129,130

straighten,95–96keyactions,95keyinformation,95outlinelocationswithlines(tape),95–96

sustain,107–110criticalfactorstoensuresuccessful5Simplementation,110lesson,109–110

system,definitionof,77totalproductivemaintenancesystem,114–126

causeandeffectmatrixtoprioritizeequipmentforTPMimplementation,117definition,114implementation,123–124jobsafetyanalysis,116losseseliminatedby,115manufacturingequipmentTPMspecification,116–123OEEresults,dailyanalysisof,125

overallequipmenteffectiveness,124–125preparation,116,118resourcerequirementsforimplementation,115steps,115

visualworkplace,78–85definition,79examples,79–85“thefirstquestionisfree”rule,81–85transferringvitalinformationintovisualdevices,79

Continuousimprovementprocesstoolsandpractices,169–194continuousfloworone-pieceflow,188–189errorproofing,176–188

benefits,176definitionofterms,185dynamicsofRPN,187–188failuremodeandeffectanalysis,176–177potentialfailuremodeandeffectanalysis,177–180preventionordetection,180ratingscaleexample,185resourcerequirements,176riskprioritynumber,185severityranknumbers,186

futurestatemapping,174–175example,174–175Leantools,175

kanban,192–194benefits,192card,192guidingprinciple,192resourcerequirements,193steps,192supplier,194types,193

orderfulfillmentprocess,189pullsystem,191–192setupreduction,189–191

benefits,191description,189resourcerequirements,191steps,191

suppliers,inputs,process,outputs,andcustomerschart,169valuestreammap,169–174

customerloop,170,172,173elements,170exercise,173howtodraw,169–172iconsanddataboxes,174leadtimedatabar,172,173manufacturingloop,171,172,173materialresourceplanningloop,173

starburstsymbol,172,173supplierloop,171,172,173

Controlchart,145COP,seeCustomerorientedprocessCostaccounting,56Costofnonconformance(CONC),197–202,216

as-receivedfailurecosts,198–199definition,197excessandobsoleteinventory,199–200fieldfailurecosts(productwarranty),198maintenance,200overtime(premium),200–201premiuminboundandoutboundfreight,201–202productwarranty,198–199rework,199scrap,199

Cross-functionalteam,35Cross-training,27–28

advantage,28description,27reducingbottlenecks,27stepstoimplement,28–30visualrecord,28

Culturalenablers,17

DDaysonhand(DOH),201Defectconcentrationdiagram,144Defectiveapparatus(DA),199Demandrate,128DMAICprocess,153,155

E

80:20Rule,140EmbarkingontheLeanjourney,17–25

nurturingtheLeanculture,22–25bigno-no,24leadingwithhumility,24–25respectfortheindividual,22–24WIFMresolution(whatisinitforme?),24

Shingoprocess,17–18anchordraggers,17culturalenablers,17

flywheeleffect,17LAME,17

whitecoatleadershipversusimprovementleadership,18–22bettermanagementpractice,19culturaltransformation,19humility,19infrastructure,20meritsystem,19prevailingstyleofmanagement,19Shingotransformationalprocess,21theoryofconstraints,20

Employeeempowerment,66involvement(PDCA),153–156questionponderedby,24suggestionschemes,42

Energywaste,60Errorproofing,176–188

assessmentof,207–208benefits,176definitionofterms,185dynamicsofRPN,187–188failuremodeandeffectanalysis,176–177potentialfailuremodeandeffectanalysis,177–180preventionordetection,180ratingscaleexample,185resourcerequirements,176riskprioritynumber,185severityranknumbers,186

FFailuremodeandeffectanalysis(FMEA),176–177Fieldfailurecosts(productwarranty),198Fishbonediagram,139—140,1415Sstandardssystem,85–87

activities,86assessmentof,204–205benefits,86controloverworkplace,87efficiency,86eliminatewaste,87implementation

criticalfactorstoensure,110PDCAmodelfor,87–90

originofword,85–86quality,87

safety,86Flowchart,151–153,154

alternatenames,152benefits,152description,151–152example,153howtouse,152

Flywheeleffect,17FMEA,seeFailuremodeandeffectanalysisFunctionalsilos,54–55Functionalteam,35Futurestatemapping,174–175

GGlossaryofterms,229–235Gutfeeling,63

H

Heijunka(productionleveling),62,110–114definition,110–112differentvolumesandmixedproducts,114equalvolumebutmixedproducts,113–114lotsizereductionand,110–114modelsequenceandmodelvolume,113totalvolumeofallmodels,112

Histogram,145–147HistoryofLean,4–6Hospitals,226Humility,leadingwith,24–25

I

Ideaboard,43Improvementleadership,whitecoatleadershipversus,18–22

bettermanagementpractice,19culturaltransformation,19humility,19infrastructure,20meritsystem,19prevailingstyleofmanagement,19Shingotransformationalprocess,21

theoryofconstraints,20Infrastructure,20InternationalMotorVehicleProgram(IMVP),6Inventory

buildup,59,138excessandobsolete,199–200

JJidoka(automation),63–66

definition,65keyconcepts,65–66respectforpeople,63

JIT,seeJustintimeJobdescription

Leansupervisor,217–219jobdata,217mainresponsibility,217–218organizationalstructure,219qualification,218summary,217

Leanteamleader,221–223jobdata,221mainresponsibility,221–222organizationalstructure,223qualification,222summary,221

Jobsafetyanalysis(JSA),116,118Justintime(JIT),5,62,211

K

Kaikaku,136–139commandments,137monster,138PDCAand,138,139pictorialexplanationof,137

Kaizen,156–165changemanagement,163–165commitmenttochange,165descriptionof,135,136eventissues,160–161

advanceproduction,planningfor,161displacedworkerspolicy,160jobsecuritypolicy,160

paygradedifferencespolicy,160unionissues,161workerparticipation,161

follow-up,162guidelines,156–160

communication,159preparation,156–160teamcharter,159teammembers,157,158teamsize,158–159

managementand/orsponsorparticipation,162newsletter,164pictorialexplanationof,137resistancetochange,165runningasuccessfulevent,161–162sustainingofimprovements,165

Kanban,62,192–194benefits,192card,192guidingprinciple,192resourcerequirements,193steps,192supplier,194types,193

LLean

assessment,213,215–216definitionof,3earlyunderstandingof,225mainpillarsof,65

Leanperformancemeasures,197–202costofnonconformance,197–202

as-receivedfailurecosts,198–199definition,197excessandobsoleteinventory,199–200fieldfailurecosts(productwarranty),198maintenance,200overtime(premium),200–201premiuminboundandoutboundfreight,201–202productwarranty,198–199rework,199scrap,199

on-timedelivery,197Leantoolsystemassessment,203–213

continuousflow,209–211

errorproofing,207–2085S,204–205justintime,211overallequipmenteffectiveness,206pullsystem,211–212setupreduction,208–209standardizedwork,205–206toolassessmentsummaryradarchart,212totalproductivemaintenance,206–207valuestreammapping,203workinprocess,211

Leantransformation,introductionto,3–6buzzword,3definitionofLean,3historyofLean,4–6singleminutedieexchange,5totalqualitymanagement,6ToyotaProductionSystem,3

Lifelonglearning,34

MMalcolmBaldrigeNationalQualityAward(MBNQA),77Managementbyfact,51,63,64Massmanufacturing,characteristicsof,4Materialresourceplanning(MRP)loop,173Mentoring,33–34Mr.A3,165Muda(ninewastes),56,57,58–60

energywaste,60inventorybuildup,59overprocessing,59overproduction,58reworkandmakingdefectiveproduct,60unnecessarytransporttime,59unusedtalent,60wastedmovement,60wastingtime,58

Multimachinehandling,72Mura,61Muri(overburden,stress),56

N

Nextoperatorasacustomer(NOC),70

Ninewastes(muda),56,57,58–60energywaste,60inventorybuildup,59overprocessing,59overproduction,58reworkandmakingdefectiveproduct,60unnecessarytransporttime,59unusedtalent,60wastedmovement,60wastingtime,58

OOne-pointlesson(OPL),101On-the-jobtraining(OJT),30–33

evaluatethetrainingdeliveredandthelessonslearned,32–33mainaspects,30preparethetrainee,32preparethetrainingmaterialsandthetrainer,32

On-timedelivery(OTD),197OSHAlockoutdiagrams,122Overallequipmenteffectiveness(OEE),124–125,206Overproduction,58,138

P

Paretochart,140–143Perfection,seeking,66–67Performancemeasures,seeLeanperformancemeasuresPFMEA,seePotentialfailuremodeandeffectanalysisPlan–do–check–act(PDCA)cycle,33,87

futurestatemap,175kaikakuand,139modelfor5Simplementation,87–90

levelsofimplementation,89procedure,88radarchart,88,90whentousePDCAcycle,87–88

problemsolvingtoolsappliedaspartof,139–143causeandeffectdiagram,139–140checksheet,144–145controlchart,145DMAICprocess,153employeeinvolvement,153–156fishbonediagram,139–140,141

flowchart,151–153histogram,145–147Paretochart,140–143scatterdiagram,147–151validaterootcauseofproblem,153

Pokayoke(mistakeproofing),71Potentialfailuremodeandeffectanalysis(PFMEA),177–180

brainstorming,180inputsandresults,177steps,179–180

Problempeople,40Problem-solvingteam,35Productdesign,177,226–227Pullsystem,191,211

QQuality

5Sand,87asspecializedfunction,55–56

Quality,elementsbuiltintoproductorservice,69–74cellular(cell)manufacturing,72–73documentation,69mistakeproofing(pokayoke),71multiprocesshandling(multimachinehandling),72nextoperatorasacustomer,70nodefectpassedforward,71self-checks,70separatemanfrommachine,71sourceinspection,70standardwork,69stopandfix,73–74successivechecks,70visualmanagement(visualfactory),70–71

R

Radarchart,88,90,212Restaurants,226Retailbanking,225–226Riskprioritynumbers(RPNs),179,187Roadblockstoleantransformation,7–10Rootcauseanalysis(RCA),167–168

S

S

Scatterdiagram,147–151considerations,151example,150procedure,148–149whentouse,148

Scientificthinking,63Self-checks,70Self-managedteam,35Setupreduction,189–191

assessmentof,208benefits,191description,189resourcerequirements,191steps,191

Shingoprocess,17–18,21anchordraggers,17culturalenablers,17flywheeleffect,17LAME,17

Singleminutedieexchange(SMED),5SIPOCchart,seeSuppliers,inputs,process,outputs,andcustomerschartSixSigma

Leaneffortscoupledwith,20matrix,31removingroadblocksin,10

SOP,seeSupportorientedprocessSourceinspection,70Standardwork,126–134

areasofstandardization,126assessmentof,205–206cycletime,128definition,127sequence,128–131

operatorbalancesheet,129,132processcapacitychart,129,131processinstructiondocument,128–131standardizedworkchart,129,133standardizedworkcombinationtable,129,134timeobservationchart,129,130

standardwork-in-process,132takttime,127–128

Stopandfix,73–74Suggestionschemes,42Suppliers,inputs,process,outputs,andcustomers(SIPOC)chart,13–15,169

processidentificationchart,14turtlechart,15

System,definitionof,77

TTakttime,127–128Team

decisionandconsensusbuilding,41–42consensusbuilding,41teammembertraits,41–42tipsforreachingconsensus,41–42

dynamics,36–39closing/adjourning,39forming,36norming,38performing,38–39storming,37–38

management,34–35cross-functionalteam,35functionalteam,35objectives,35problem-solvingteam,35self-managedteam,35virtualteam,35

TechniquestochangetoLeanculture,27–44coachingandmentoring,33–34

brainstorming,34jobdescription,33lifelonglearning,34

conflicts,40–41cross-training,27–28

advantage,28description,27reducingbottlenecks,27

handlingproblempeople,40ideaboard,43on-the-jobtraining,30–33

evaluatethetrainingdeliveredandthelessonslearned,32–33mainaspects,30preparethetrainee,32preparethetrainingmaterialsandthetrainer,32

safeworkingenvironment,44stepstoimplementcross-training,28–30

operatorskillmatrix,29skillassessmentlevelguide,32skillsetrequired,28visualcross-trainingrecord,28

suggestionschemes,42

teamdecisionandconsensusbuilding,41–42consensusbuilding,41teammembertraits,41–42tipsforreachingconsensus,41–42

teamdynamics,36–39closing/adjourning,39forming,36norming,38performing,38–39storming,37–38

teammanagement,34–35cross-functionalteam,35functionalteam,35objectives,35problem-solvingteam,35self-managedteam,35virtualteam,35

Theoryofconstraints(TOC),20Toolsystemassessment,seeLeantoolsystemassessmentTotalproductivemaintenance(TPM),78,206–207

assessmentof,206–207causeandeffectmatrixtoprioritizeequipmentforTPMimplementation,117definition,114implementation,123–124jobsafetyanalysis,116losseseliminatedby,115manufacturingequipmentTPMspecification,116–123overallequipmenteffectiveness,124–125preparation,116,118resourcerequirementsforimplementation,115steps,115

Totalqualitymanagement(TQM),6ToyotaProductionSystem(TPS),3Turtlechart,15

UUnionissues(kaizen),161Unusedtalent,60

V

Value,designingproductsfor,226–227Values,idealbehaviorsand,50Valuestreammap(VSM),169–174,203

assessmentof,203customerloop,170,172,173elements,170exercise,173howtodraw,169–172iconsanddataboxes,174leadtimedatabar,172,173manufacturingloop,171,172,173materialresourceplanningloop,173starburstsymbol,172,173supplierloop,171,172,173

Virtualteam,35Visualfactory,70,81–85Visualworkplace,78–85

definition,79examples,79–85transferringvitalinformationintovisualdevices,79

W

Wastes,seeNinewastes(muda)Whitecoatleadership,improvementleadershipversus,18–22

bettermanagementpractice,19culturaltransformation,19humility,19infrastructure,20meritsystem,19prevailingstyleofmanagement,19Shingotransformationalprocess,21theoryofconstraints,20

WIFMresolution(whatisinitforme?),24Workinprocess(WIP),110,132,211

X

X–Ygraph,147

AbouttheAuthor

SureshPatelisaformertechnicaldirectorandoperationsexcellenceexecutive.HeholdsaBEdegreeinelectricalengineeringfromM.S.UniversityofBaroda,India,amaster’sdegreeinproductiontechnologyfromSouthBankUniversity,London, and an MBA degree from the University of Texas at Brownsville,Texas. He is qualified as a Certified Reliability Engineer, Certified QualityEngineer,andCertifiedManagementSystemsAuditorcertifiedbytheAmericanSocietyforQuality.

Inhislongcareerspanningmorethanfourdecades,hehasdevelopedawiderange of products/processes and has helped in establishing six manufacturingplants in India and fiveU.S. plants inMexico. Startingwith India, his careerpath has enabled him to work in industries in the UK, Denmark, Belgium,Canada,U.S.,China,Mexico,andChile.Hiscareerhasbeenenriched throughholding key positions with MNCs like Gestetner, Motorola, United LightingTechnologies,EatonCorporation,andFiatGlobal.

Patel’s practical expertise and interests include establishment of BusinessExcellence Strategies starting from product quality strategies, qualityimprovement tools deployment, and execution, leading to improvements inproduct/process delivery performance and reduction in product escapes andproduct/process variation through Lean Six Sigma and overall businessexcellenceemployingLeadershipandResults“Triades”asdefinedinMBNQAUSA. Patel’s other interests include supply chainmanagement,manufacturingmanagement,andbuildingtechnologicalcapabilitiesinmanufacturingfirms.