Best Management Practices for SMEsPresented by:Dr. Vinod KumarFeb 12, 2002

*

Number of People Employed in Manufacturing Firms*Number of PeopleNumber of BusinessesPercent Employed

0-4130,046395-961,1671810-1962,8971920-9967,05719100-49916,475 4500+ 4,923 1________Total342,565100*Source: Small Business Administration, 1996

A Typical Small BusinessServing a few customersMake-to-order operationsSeldom build to stockRarely able to forecastHundreds of part numbersKeeping customer happy through High Quality, Fast Delivery, and Good Price Enviable value-added ratios

2.bin

3.bin

Lean...A Working DefinitionA systematic approach to identifying and eliminating waste (non-value-added activities) through continuous improvement by flowing the product at the pull of the customer in pursuit of perfection

Quoted from the MEP Network

Another Lean Definition Doing more with less:MaterialsElectricitySpacePaperworkTransportationWasteEffort

Lean manufacturing techniquesTotal organizational buy-inSales, production, inventory planningTotal quality managementLean Enterprise Key DriversVision

Chart1

108

107

108

107

106

108

108

108

104

102

108

Sales, Production, Inventory Management

Sales

Sales

108

107

108

107

106

108

108

108

104

102

108

Sales, Production, Inventory Management

Lean

Lean

108

107

106

107

108

108

108

107

108

107

108

107

106

108

108

108

108

109

Goal

Actual

Lean Manufacturing Techniques

Quality

Quality

106106106106

107107107107

108108108108

108108108108

108108108108

107107107107

108108108108

107107107107

108108108108

106106106106

107107107107

108108108108

108108108108

Total Quality Management

TOB

TOB

106

107

108

108

108

107

108

107

108

107

106

108

108

108

104

103

109

Total Organizational Buy-in

all charts

1234

Lean Manufacturing TechniquesTotal Organizational Buy-inSales, Production, Inventory ManagementTotal Quality Management

LMTGoalActualTOBGoalActualSPIPGoalActualTQMGoalActual

Value stream mapping108Vision106PQR analysis108SPC106

Takt time107Action plan107Forecasting107Best practices107

One-piece flow106Policy deployment108Production smoothing108Process control108

Pull system107Enfranchisement108Kanban107Poka-yoke108

SMED (setup)108Performance-based pay108Supermarket106Waste reduction108

OEE108Skills training107Visual pull signals1085-S107

Flow velocity108CI culture108Capacity planning108ISO 9000 structure108

Productivity (labor cost)107Kaizen promotion office107Standard WIP108Quality assurance107

Facility layout108Morale108Inventory turns104Problem-solving tools108

Standard work107Visuals/communication107Product introduction102Supplier quality106

Jidoka (autonomation)108Lean training106Delivery performance108Information flow107

Machine reliability107Change management108First-pass quality108

TPM106WIIFM (incentives)108Prevention vs. detection108

Value-added ratio108Safety focus108

Line balancing108Profitability104

Handling reduction108Team building103

Sustainment of gains108Effective leadership109

Right-sized equipment109

all charts

Goal

Actual

Lean Manufacturing Techniques

Total Organizational Buy-in

Sales, Production, Inventory Management

Total Quality Management

Lean Manufacturing Techniques012345678910Value Stream MappingTakt timeOne-piece flowPull systemSMED (setup)OEEFlow velocityProductivity (labor cost)Facility layoutStandard workJidoka (autonomation)Machine reliabilityTPMValue-added ratioLine balancingHandling reductionSustainment of gainsRight-sized equipment

1 x Weekly

50,000 pieces weekly

Warehouse

Telecommunications

Inventory

Veneer prep planning

Shipping

Shipscommon carrier

Clipper

Long pine is hardto handle, slowsdown theoperation

Butt joint

CT calculated per 100

Fleecebacker

CT calculated per 100Butt joint tape runs upside down28 m/min

Sand

CT calculated per 10023 m/min(greatly depends onlength)

Package

100 pieces per bag20% waste betweenFB and pack

Staging

Total staging area27,000 ft2; thisproduct requires4,050 ft2 (15%)

CT 240 sec

SU N/A

UT 2-3 shifts/week

7,000 pieces/shift(should be 13,500)

I5,000pieces

CT 700 sec

SU 5 min

UT 90% D/S

10,000 pieces/shift

CT 575 sec

SU 3 min

UT 80% D/S

12,200 pieces/shift

CT 240 sec

SU 5 min

UT 100%/D 80%/S

12,750 pieces/shift

CT 333 sec

SU 3 min

UT 100%/D 40%/S

9,000 pieces/shift

I4 rolls

I21 rolls

I3,000pieces

I25,000ft2

I250,000ft2

15 min

1 day

4 hour

2 hour

1 day

1 day

1 day

2 hr

Value StreamAnalysis

Planning

Daily lineups(work assignments)

Note: 50% yield on log run pine

Warehouse

Warehouse

Warehouse

Warehouse

Warehouse

Warehouse

Warehouse

Telecommunications

Packaging

Value Added vs. Non-value AddedValue added: Transforms raw material and information into parts or products

Non-value added: Consumes resources but does not contribute directly to the production of materials or product

Typical Value-added % of Lead TimeValue-added activities 5%Non-value added activities 95%

Chart2

5

95

Sheet1

5

95

Sheet1

Typical Value-added %of Lead Time

Sheet2

Sheet3

Chart3

106106106106

107107107107

108108108108

108108108108

108108108108

107107107107

108108108108

107107107107

108108108108

106106106106

107107107107

108108108108

108108108108

Total Quality Management

Sales

Sales

108

107

108

107

106

108

108

108

104

102

108

Sales, Production, Inventory Management

Lean

Lean

108

107

106

107

108

108

108

107

108

107

108

107

106

108

108

108

108

109

Goal

Actual

Lean Manufacturing Techniques

Quality

Quality

106106106106

107107107107

108108108108

108108108108

108108108108

107107107107

108108108108

107107107107

108108108108

106106106106

107107107107

108108108108

108108108108

Total Quality Management

TOB

TOB

106

107

108

108

108

107

108

107

108

107

106

108

108

108

104

103

109

Total Organizational Buy-in

all charts

1234

Lean Manufacturing TechniquesTotal Organizational Buy-inSales, Production, Inventory ManagementTotal Quality Management

LMTGoalActualTOBGoalActualSPIPGoalActualTQMGoalActual

Value stream mapping108Vision106PQR analysis108SPC106

Takt time107Action plan107Forecasting107Best practices107

One-piece flow106Policy deployment108Production smoothing108Process control108

Pull system107Enfranchisement108Kanban107Poka-yoke108

SMED (setup)108Performance-based pay108Supermarket106Waste reduction108

OEE108Skills training107Visual pull signals1085-S107

Flow velocity108CI culture108Capacity planning108ISO 9000 structure108

Productivity (labor cost)107Kaizen promotion office107Standard WIP108Quality assurance107

Facility layout108Morale108Inventory turns104Problem-solving tools108

Standard work107Visuals/communication107Product introduction102Supplier quality106

Jidoka (autonomation)108Lean training106Delivery performance108Information flow107

Machine reliability107Change management108First-pass quality108

TPM106WIIFM (incentives)108Prevention vs. detection108

Value-added ratio108Safety focus108

Line balancing108Profitability104

Handling reduction108Team building103

Sustainment of gains108Effective leadership109

Right-sized equipment109

all charts

Goal

Actual

Lean Manufacturing Techniques

Total Organizational Buy-in

Sales, Production, Inventory Management

Total Quality Management

Quality System ManagementSpokes of TQM wheel symbolize a few critical indicators used to measure how well a company has addressed the quality aspects of doing business.Some Routine TQM Tools

Spaghetti diagramValue stream mappingLinearity charts (productivity and waste)Ishikawa diagram (cause and effect)Quality mapsProcess flow diagramsPareto analysis

MudaWaste

Activities that absorb resources but create no value

Antidote: Lean thinking

Waste Causes (In no particular order)Facility layoutExcessive setup timesIncapable processPoor preventive maintenanceUncontrolled work methodLack of training BoredomProduction planning/schedulingLack of workplace organization Lack of supplier quality and reliabilityLack of concern (accountability)

Waste Causes (continued)

Passing on defective partsNot communicating improvementsOverproductionInventoriesMotionNon-value-added processesTransportationWaitingCounting

*

Arrive at work

Drive to work

Eat Breakfast

Make lunch

Take shower

Yes

no

Press snooze button

Alarm clock rings

Getting to work

Process Flow Chart

Deployment Flow Chart

_1028971689.doc

Pours coffee

Removes

coffee cup

Pays for

coffee

Washes cup

Dishwasher

Drinks coffee

Takes order

for coffee

Seats

customer

Makes coffee

Greets

customer

Enters

restaurant

Cook

Waitress

Customer

_1028971858.doc

Pours coffee

Removes

coffee cup

Pays for

coffee

Washes cup

Dishwasher

Drinks coffee

Takes order

for coffee

Seats

customer

Makes coffee

Greets

Customer

Customer

Enters

restaurant

Cook

Waitress

Customer

_1028971899.doc

Pours coffee

Removes

coffee cup

Pays for

coffee

Washes cup

Dishwasher

Drinks coffee

Takes order

for coffee

Seats

customer

Makes coffee

Greets

Customer

Customer

customer

Enters

restaurant

Cook

Waitress

Customer

_1028971853.doc

Pours coffee

Removes

coffee cup

Pays for

coffee

Washes cup

Dishwasher

Drinks coffee

Takes order

for coffee

Seats

customer

Makes coffee

Greets

customer

Enters

restaurant

Cook

Waitress

Customer

_1028971624.doc

Pours coffee

Removes

coffee cup

Pays for

coffee

Washes cup

Dishwasher

Drinks coffee

Takes order

for coffee

Seats

customer

Makes coffee

Greets

customer

Enters

restaurant

Cook

Waitress

Customer

Spaghetti Diagram

Pareto Chart Example

Chart1

48.2647058824

44.3235294118

5.4411764706

5.2941176471

4.6764705882

4.6176470588

2.4117647059

2.3529411765

2.2058823529

Minutes per day

Embark Downtime Causes

Sheet1

34 data pointstotals29-Jan28-Jan20-Jan19-Jan16-Jan15-Jan14-Jan13-Jan12-Jan7-Jan6-Jan5-Jan2-Jan30-Dec24-Dec23-Dec22-Dec19-Dec18-Dec17-Dec16-Dec15-Dec12-Dec11-Dec10-Dec9-Dec8-Dec4-Dec3-Dec2-Dec1-Dec26-Nov25-Nov24-Nov

reruns (infeed)48.31454555253045300020350110555779725701153580110018111953646322930530

setup time per day44.341501835174158726711612530814048551950751936101759962401535255037010

mechanical (seal booth)5.465120

jamb ups (seal booth)5.3715745911135210762956453839343924

jamb ups (buffing room)4.7149858244102646104684724572846

jamb ups (fancoater 2,4)4.62775269444664417964105275461110

grader (outfeed)2.415251032

mechanical (printer)2.450101010

mechanical (oven #1)2.2372

&CEmbark Downtime Nov 24-Jan 29

Sheet1

Minutes per day

Embark Downtime Causes

Sheet2

Sheet3

Quality Map

Ishikawa Diagram Example

Reasons for re-runs at Embark

Materials

Machines

Manpower (people)

Method

Management

Mother NatureFlat jambs (edges rough)Off-shore pineA splits inside step isroughBowed woodRequires lots of attentionSorting out flaws at printer corners is notergonomically soundCorners require too muchattention, other things getmissedNarrow applicator rolls transferink incorrectly to rabbitPrinter splattersStick and rag method ofcleaning splatterLighting a feed stationmay not lend itself tosorting out potentialreworkLeaky roof (cardboardcontainment)Viscosity variation in fancoating when it rains(humidity?)

Chart2

106

107

108

108

108

107

108

107

108

107

106

108

108

108

104

103

109

Total Organizational Buy-in

Sales

Sales

108

107

108

107

106

108

108

108

104

102

108

Sales, Production, Inventory Management

Lean

Lean

108

107

106

107

108

108

108

107

108

107

108

107

106

108

108

108

108

109

Goal

Actual

Lean Manufacturing Techniques

Quality

Quality

106106106106

107107107107

108108108108

108108108108

108108108108

107107107107

108108108108

107107107107

108108108108

106106106106

107107107107

108108108108

108108108108

Total Quality Management

TOB

TOB

106

107

108

108

108

107

108

107

108

107

106

108

108

108

104

103

109

Total Organizational Buy-in

all charts

1234

Lean Manufacturing TechniquesTotal Organizational Buy-inSales, Production, Inventory ManagementTotal Quality Management

LMTGoalActualTOBGoalActualSPIPGoalActualTQMGoalActual

Value stream mapping108Vision106PQR analysis108SPC106

Takt time107Action plan107Forecasting107Best practices107

One-piece flow106Policy deployment108Production smoothing108Process control108

Pull system107Enfranchisement108Kanban107Poka-yoke108

SMED (setup)108Performance-based pay108Supermarket106Waste reduction108

OEE108Skills training107Visual pull signals1085-S107

Flow velocity108CI culture108Capacity planning108ISO 9000 structure108

Productivity (labor cost)107Kaizen promotion office107Standard WIP108Quality assurance107

Facility layout108Morale108Inventory turns104Problem-solving tools108

Standard work107Visuals/communication107Product introduction102Supplier quality106

Jidoka (autonomation)108Lean training106Delivery performance108Information flow107

Machine reliability107Change management108First-pass quality108

TPM106WIIFM (incentives)108Prevention vs. detection108

Value-added ratio108Safety focus108

Line balancing108Profitability104

Handling reduction108Team building103

Sustainment of gains108Effective leadership109

Right-sized equipment109

all charts

Goal

Actual

Lean Manufacturing Techniques

Total Organizational Buy-in

Sales, Production, Inventory Management

Total Quality Management

Lean manufacturing techniquesTotal organizational buy-inSales, production, inventory planningTotal quality managementLean Enterprise Key DriversVision

Managing ChangeFive Critical Needs for Bringing Change:VisionSkill (training)Incentive (acknowledge efforts, recognize accomplishments, offer feedback)ResourcesAction plan

13.bin

Thank You

*

*