Title: "Make Green, Go Green, by Going Lean
1"Make Green, Go Green, by Going Lean
- Presented By Paul V. Burnett
- October 2007
2Paul V. Burnett, BSME, MBA
- IBM
- John Deere
- Ford Motor Company
- Detroit Diesel Corporation
- Applied Materials
- Sanmina-SCI
- RSM McGladrey
3- How to Go Green?
- How to Go Lean?
- Why?
4Doing nothing is not an option!
- Governor Arnold Schwarzenegger signed into law
emission reduction targets for California
- By 2010, reduce GHG emissions to 2000 levels,
- By 2020, reduce the GHG emissions to 1990 levels,
- By 2050, reduce GHG emissions to 80 percent below
1990 levels
5Green and Lean
- 15-30 of a manufacturing companys monthly
energy bill creates greenhouse gases.
- The energy management within a facility -
benchmark competitors.
- Lean methodologies can be used to reduce waste in
the consumption of energy within a manufacturing
facility.
- The ultimate goal - eliminate equipment not
needed in the process.
- If elimination is not possible, minimize the use
- plot energy consumption to predict maintenance
schedules and replacement cycles.
6Analysis of Electric Industry CO2 Impacts
- The electric industry cannot provide substantial
reductions in CO2 emissions in the near future to
meet goals
- Limited potential to switch to greener energy
near-term
- CO2 reduction must come from reducing demand
- supported by new energy efficient technologies
- conservation programs
- A market-based collaborative systematic approach
to demand reduction is a critical success factor
(profit potential)
7The Economic Case For Change
- Asset performance management can reduce energy
consumption by 6 to 11.
- DOE has established a minimum 10 energy
reduction guideline as attainable through the
application of proper maintenance and technology
solutions.
8G.A.S. Index Global Asset Sustainability Index
- G.A.S. Index Availability Performance
Quality Energy Efficiency
- Availability All downtime / Scheduled time
- Performance Actual output for scheduled time /
Design output for scheduled time
- Quality Total production minus defects or
rework / Total production
- Energy Efficiency Design energy
consumption/Actual energy consumption
9Example Motor Efficiency
76,000 Watts
1HP .746 kWatts
15,400 Watts (17.4)
10Motor Efficiency Savings
- Energy Savings 90kW x 8,000 hrs./year x
(1-(.828/.94)) 87,336 kWh/yr.
- At an average cost of 11 cents per kWh, the
estimated savings would be 9,607 per year.
- Motor operating cost
- (100 HP x .746 kW/HP x 8,000 hrs. x .11/KWh ) /
.94 efficiency 69,838 per yr.
11Repair v. Buy
- Break even analyses must be based on the
increased cost of purchasing a new, more energy
efficient equipment versus the energy consumption
reduction. - The cost energy today ranges from 10-13 cents per
kilowatt-hour.
12Lean Definition
- A philosophy of production that emphasizes the
minimization of the amount of all the resources
(including time) used in the various activities
of the enterprise. - - APICS
Dictionary, 10th ed.
13Lean Enterprise
- An enterprise with a focus on waste elimination
and the customers needs in all parts of its
operations, manufacturing and administration.
Emphasis is given to lean structures and
processes, flexibility of response and methods
and techniques to continually seize new
opportunities as they arise. - - APICS Lean
SIG
14Early Lean Processes
- Mass Production
- Early 1900s
- Ford Motor Company was a pioneer
- Assembly line production
- High volume production
- Limited number of products
- Significant cost reductions
15Today
- More than 96 of all U.S. companies have less
than 250 employees
- Global competition / low cost labor
- Demands by customers
- Higher quality
- Innovation
- Mass customization
- Flexibility
- Lower Costs
- Limited resources
- Source U.S. Bureau of Census, 2004
16What is Lean?
- It is NOT
- Collection of techniques or a methodology
- Reduced staffing or low inventories
- It IS
- A philosophy of manufacturing
- Totally different way of thinking
- A different value system
- Seeks to eliminate waste (non-value added
activities to the customer)
- Emphasis on flow manufacturing
17What is Lean?
Lean Production
Total Quality Management (TQM)
Six Sigma Cellular Manufacturing Business Proces
s Improvement (BPI) Just in Time Theory of Const
raints Zero Defects SPC TQC Kanban
18Lean Characteristics
- Focus is on the improvement of resource
utilization
- ? Equipment setup time reduced
- ? Scheduled machine maintenance
- ? Orderly, clean workplace
- ? Pull production being used
- ? JIT inventory control
- ? Factory layout in work cell arrangement by
products
- ? Active error elimination
- ? Improved quality, etc.
19The Importance of Waste Elimination
- Lean deals with the elimination or reduction of
many types of non-value-added activities, often
referred to as waste
- ? The driving force for waste elimination is
improved value in the products and services
customers buy
20Seven Popular Wastes
- Overproduction
- Waiting
- Excessive transportation
- Inappropriate processing (the hidden factory)
- Unnecessary inventories
- Unnecessary motion
- Defects
- Taiichi Ohno Toyota Production System
21The Nature of Wastes
- 1. Overproduction
- Target and achievement unclear
- Processes not statistically capable
- 2. Waiting
- Operators waiting
- Operators slower than production line
- 3. Excessive Transportation
- Widely spaced equipment waiting
- Forklifts not available when needed
22The Nature of Wastes (continued)
- 4. Inappropriate Processing
- Variability in operators performance
- Processes not statistically capable
- 5. Inventory
- Large safety stocks
- Variable procurement lead times
23The Nature of Wastes (continued)
- 6. Motion
- Double handling
- Non-standard layouts
- Equipment widely spaced from each other
- 7. Defects
- Low material yields
- Excessive process variability
24Correcting Wastes
- 1. Overproduction
- Eliminate by reducing setup times.
- Synchronizing quantities and timing between
processes.
- Make only what is needed now.
- 2. Waiting
- Eliminate through synchronizing work flow.
- Balancing uneven loads with flexible workers and
equipment.
25Correcting Wastes (continued)
- 3. Excessive Transportation
- Establish layouts and locations to make transport
and handling unnecessary, if possible.
- 4. Inappropriate Processing
- Why should this item be made?
- Why is each process necessary?
- Are any processes being performed that are not
part of the work flow?
26Correcting Wastes (continued)
- 5. Inventory
- Reduce by shortening setup times.
- Improving work skills.
- Smoothing fluctuations in demand for the
product.
- Reducing all the other wastes reduces the waste
in stocks.
- 6. Motion
- Study motion for economy and consistency.
- Economy improves productivity, and consistency
improves quality.
- Improve the motions, then mechanize or automate.
Otherwise, there is a danger of automating waste.
27Correcting Wastes (continued)
- 7. Defects
- Develop the production process to prevent
defects.
- Eliminate the need for inspection. At each
process, produce no defects.
- Design processes to be failsafe (Poka yoke).
- Quality processes yields quality products
automatically.
28- Can you think of other actions to eliminate waste
in your company?
29Leadership Function
- Initiate needed change by identifying a vision
- Aligning employees to that vision
- Motivating to achieve that vision
30Leadership
Lean Change Infrastructure
Champion CEO Plant Management/President Vice Pr
esident
Project Training Plans ________________________
__________________________________________________
__________________________________________________
_______________________________________________
Vision Lean Strategy Value No Waste
Flow Pull Standard Work JIT
Sponsors Manufacturing Engineering Quality
Lean Office
Facilitator
Facilitator
Facilitator
Team
Team
Team
Team
Team
Team
31Transparent Workplace
32Transparent Workplace
- Define Processes
- Value-Added Activities
- A Value-Added Step
- Value versus Non-Value-Added
- Value-Stream Mapping
- Typical Process Flow Analysis
- Visual Order The Five Ss
- Visual Control
33Transparent Workplace
Processes Definition
- A particular method of doing something which
involves a number of steps, activities, or
operations
- Processes are found in manufacturing service
industries
- Example
Manufacturing
Grind
Turn
Mill
Drill
Office
Type Contract
Obtain Signature
Type Envelope
Mail
34Process Map
Total Time 10 Days Value-Added Time 6 minutes
2
Production Control
Weekly Orders
Weekly Orders
1
Supplier
Customer
Weekly Schedule
Daily
Daily
4
Stamping
Weld
Assembly
Paint
Shipping
3
I
I
I
I
Staging
1 Day
1 Day
2 Days
3 Days
1 Day
2 Days
50 sec
40 sec
90 sec
120 sec
60 sec
5
Process Time Line
35Transparent Workplace
Value-Stream Mapping Process
- Map customer requirements (orders)
- Map order information flows
- Map physical product/material flows
- Map plant/office information flows
- Add a process time line
- Summarize current state
- Ask questions at each step to determine waste or
non-value-added areas
36Transparent Workplace
Summarize Current State
- The of value-creating time
- The number of units of inventory required to
support a production unit
- Total travel distance versus value-creating
distance
37Transparent Workplace
What Are Value-Added Activities?
- Add value to products services that customers
are willing to pay for
- Improvements that change a products or services
form, fit or function
- Other activities use resources but add no value
- Some non-value-added activities may be necessary
- Based on current knowledge or technology
- Long term goal - Eliminate
- Remaining non-value-added activities should be
eliminated now!
38Transparent Workplace
A Value-Added Step
- A process that physically changes the work
passing through it that makes it more valuable to
the customer
- A step requested by the customer - they are
willing to pay for it
39Transparent Workplace
Value versus Non-Value-Added
- Value-Added Activities
- Entering order
- Ordering materials, supplies
- Preparing drawings
- Assembling
- Shipping to customers
- Processing customer deposits
- Examining patients
- Filing insurance claims
- Dispensing event tickets
- Fueling airplane
- Non-Value-Added Activities
- Waiting/sorting
- Moving
- Kitting/staging
- Counting
- Inspecting
- Checking
- Recording
- Obtaining approvals
- Testing
- Reviewing
- Copying
- Filing
- Revising/reworking
- Tracking work
- Charlene B. Adair Bruce A. Murray,
- Breakthrough Process Redesign
40Value Stream Costing
41Traditional Accounting and Lean Controls
42Costs Outside the Value Stream
- Identify tasks not related to the Value Stream
- Exp. - ISO 9000
- These costs are not allocated to the Value
Stream
- They are treated as sustaining costs of the
business
- Budgeted
- Controlled
- No need for full absorption costing
- Value Stream costing proves relevant, accurate
cost info about the Value Stream
43Transparent Workplace
Value-Stream Mapping (VSM)
- Observe record the flows of orders, materials,
goods and information for a product family
- Product family A group of product variants
passing through similar processing steps that use
common equipment
- Mapping identifies waste situations for
improvements
44- What are some value-added
non-value-added activities
at your company?
45Transparent Workplace
Visual Order The Five Ss
- To eliminate waste, you must first find it
- Visual order makes waste evident and is a good
starting point for managing resources
- Toyota Production - Five Ss as the method for
exposing waste poor utilization of resources
46Transparent Workplace
Visual Order The Five Ss
- Sort
- Set in order
- Shine
- Standardize
- Sustain
47Transparent Workplace
Lockheed Boeings Six Ss
SORT
SUSTAIN
6 S
STRAIGHTEN
SAFETY
SHINE
STANDARDIZE
48Transparent Workplace
The Six Ss
- Sort Classify tools, parts, instructions into
necessary unnecessary
- Set in Order Make it visible easy to use 3
Es easy to see, easy to get easy to return
- Shine Conduct cleanup to identify
abnormalities
- Standardize Put a system in place to readily
identify abnormal conditions
- Safety Identify eliminate dangerous
hazardous conditions
- Sustain Make a habit of properly maintaining
following standard practices
49Transparent Workplace
Visual Control
- Awareness of whats happening
- Manpower Skill levels, performance, continuous
training
- Machines Develop Maintenance schedules and use
them
- Materials Demand Signals indicating shortages
shadow boards for location of tools
- Methods Standard Worksheets and Operating
Procedures
- Measurements Performance trends
- Display schedule
- Quality targets
- Reductions in setup lead times
50Pull versus Push Production Strategy
Lean Principles
Value
Value Stream
Flow
Pull
Perfection
51Pull
-
- No one upstream should produce any good or
service until the customer downstream asks for
it
- Kanban
Lean Principles
Value
Value Stream
Flow
Pull
Perfection
52Push
- Build product to forecast
- Excess inventory
- Poor utilization distribution of product
- Filled distribution channels
- 50 of all books manufactured are shredded
Lean Principles
Value
Value Stream
Flow
Pull
Perfection
53Pull
- Design
- Schedule based on actual demand signals
- Produce exactly what the customer wants
- Flow takes place throughout the supply chain, not
just inside your production facility
Lean Principles
Value
Value Stream
Flow
Pull
Perfection
54Pull
- Benefits
- High throughput
- Excellent protection against stock-outs
- Higher flexibility
- Less congestion
- Shorter lead times
- Higher customer service
Lean Principles
Value
Value Stream
Flow
Pull
Perfection
55Perfection
- Begins with visualizing the perfect process
- Continuous process to remove waste by eliminating
effort, time, space and defects
Lean Principles
Value
Value Stream
Flow
Pull
Perfection
56Final Thoughts Lean and Green
- There is a social responsibility component to
saving energy and reducing the amount of CO2
emissions.
- Green as a marketing tool.
- Select an small area with high visibility and a
manageable number of variables for the first
G.A.S. Assessment and Lean project.
- The journey is never-ending and definitely not
easy (especially at first) but the results are
well worth the effort.
57 58- Paul V. Burnett, BSME, MBA
- RSM McGladrey, Inc.
- Senior Consultant - Operations and Financial
- 221 3rd Ave SE, Suite 300
- Cedar Rapids, IA 52401
- 319.298.5298