Principles of Lean Manufacturing with Live Simulation

1
Principles of Lean Manufacturing with Live
Simulation
2
Course Agenda

• Welcome
• Introduction to Simulation
• Round 1 of Simulation
• Introduction to Lean Manufacturing
• Standardized Work, 5S System, Visual Controls,
  and Plant Layout
• Round 2 of Simulation
• Teams, Quick Changeover, Batch Reduction, POUS,
  and Quality at the Source
• Round 3 of Simulation
• Pull/Kanban, Cellular Flow, and TPM
• Round 4 of Simulation
• Implementation
• Course Evaluation

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360vu Lean Web Sites

• http//www.360vu.com
• For firms
• http//www.360vu.net
• For MEP centers only

4
Recommended Readings

• Lean Thinking by Jim Womack
• Becoming Lean by Jeffrey Liker
• The Machine That Changed the World by Jim Womack
  and Daniel T. Jones
• The Goal by Eli Goldratt
• World Class Manufacturing The Next Decade by
  Richard Schonberger
• Others can be found on the Lean website

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Course Agenda

• Welcome
• Introduction to Simulation
• Round 1 of Simulation
• Introduction to Lean Manufacturing
• Standardized Work, 5S System, Visual Controls,
  and Plant Layout
• Round 2 of Simulation
• Teams, Quick Changeover, Batch Reduction, POUS,
  and Quality at the Source
• Round 3 of Simulation
• Pull/Kanban, Cellular Flow, and TPM
• Round 4 of Simulation
• Implementation
• Course Evaluation

6
Orientation
Orientation
to Buzz Electronics Enterprises (BEE)
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Product Catalog
Buzz Electronics Enterprises
8
Buzz Electronics Enterprises
The Blue Avenger
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Buzz Electronics Enterprises
The Red Devil
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BEE
The Bottom Line
The Blue Avenger
Sells for 20
Materials cost 5.00
The Red Devil
Sells for 30
Materials cost 7.50
11
Production Process Orientation
BEE

• Sales Representative Processes Customer Order
• Production Scheduler Generates Factory Order
  from forecast
• Kitter(s) Organizes raw materials for Factory
  Orders
• Material Handler Moves product between ALL
  workstations

• Spring Assembler Inserts Springs
• Resistor Assembler Inserts Resistors
• LED Assembler Inserts LEDs
• Diode Assembler Inserts Diodes

Assembly

• Inspector Conducts functional tests
• Reworker Repairs failed boards
• Warehouse/Ship Clerk Matches boards to Customer
  Orders
• Instruction Crib Attendant Controls work
  instructions
• Production Supervisor Supervises production
• Industrial Engineer Monitors production process
• Trucker Ships products to the customer

12
Production Facility Orientation
BEE
Sales Office
Production Control
Kitting Area
Shipping Dock
Finished Goods Whse.
Rework Area
WIP Storage
Diode Assembly
Inspection Area
LED Assembly
Resistor Assembly
Spring Assembly
13
Circuit Board Orientation
BEE
Blue and Red Boards
A
B
C
D
E
1
2
3
4
5
EXAMPLE 1) Insert spring into C3
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Product Components Orientation
BEE
Springs
Resistors
Diodes
LEDs
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Product Routing
BEE
Blue
LED
Springs
Resistor
Diodes
x1
x5
x1
x2
Red
Springs
x5
16
BEE
Circuit Board Assembly Example
Red Devil
A
B
C
D
E
1
2
3
4
5
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Production Batching
BEE
The Blue Avenger
6 per batch
4 per batch
The Red Devil
18
BEE
Production Scheduling Process
Shipments to customers
Customer order forms
Customer orders (demand)
Factory order forms
Finished Goods Warehouse
Production forecast
19
Customer Service Targets
BEE
Promised shipments to customers
Promised shipments to customers
4 minutes after order
5 minutes after order
All orders are filled first-in, first-out (FIFO)
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Buzz Electronics Enterprises
Company Policies

• All shifts are 20 minutes
• Keep busy at all times
• Yell if you need parts
• Handle all parts first-in, first-out (FIFO)
• Only the material handler can move parts
• Stay at your workstation
• The boss is always right!

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Course Agenda

• Welcome
• Introduction to Simulation
• Round 1 of Simulation
• Introduction to Lean Manufacturing
• Standardized Work, 5S System, Visual Controls,
  and Plant Layout
• Round 2 of Simulation
• Teams, Quick Changeover, Batch Reduction, POUS,
  and Quality at the Source
• Round 3 of Simulation
• Pull/Kanban, Cellular Flow, and TPM
• Round 4 of Simulation
• Implementation
• Course Evaluation

22
Round One Buzz Electronics

• Buzz Electronics is a traditional manufacturing
  company.

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Round One Debrief

• Discuss results
• Discuss the process
• Lessons learned
• Relationship to real world
• What if scenarios
• Continuous improvement

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Course Agenda

• Welcome
• Introduction to Simulation
• Round 1 of Simulation
• Introduction to Lean Manufacturing
• Standardized Work, 5S System, Visual Controls,
  and Plant Layout
• Round 2 of Simulation
• Teams, Quick Changeover, Batch Reduction, POUS,
  and Quality at the Source
• Round 3 of Simulation
• Pull/Kanban, Cellular Flow, and TPM
• Round 4 of Simulation
• Implementation
• Course Evaluation

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Mass Production
Material
Diodes
LEDs
Springs
Shipping Warehouse
ReceivingWarehouse
Storage
Repair
Kitting
Testing
Ship
Value-Added Time Minutes Time in Plant Weeks
ORDER
CASH
26
History of Manufacturing
People
Product
Work Environment
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Reduced Lead Time

• One of the most noteworthy accomplishments in
  keeping the price of Ford products low is the
  gradual shortening of the production cycle. The
  longer an article is in the process of
  manufacture and the more it is moved about, the
  greater is its ultimate cost.
• Henry Ford, 1926

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Lean Is Market Driven

• Every morning in Africa, a gazelle wakes up. It
  knows it must run faster than the fastest lion or
  it will be killed. Every morning a lion wakes
  up. It knows it must outrun the slowest gazelle
  or it will starve to death.

It doesnt matter whether you are a lion or a
gazelle when the sun comes up, you had better
be running.
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Defining Lean

• Lean is
• A 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.
• The MEP Lean Network

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Definition of Value-Added

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

• Non-Value-Added
• Any activity that does not add market form or
  function or is not necessary. (These activities
  should be eliminated, simplified, reduced, or
  integrated.)

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Lean Eliminating Waste
Value-Added

• Non-Value-Added
• Overproduction
• Waiting
• Transportation
• Non-value-added processing
• Excess inventory
• Defects
• Excess motion
• Underutilized people

Typically 95 of all lead time is non-value-added.
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Brainstorm Wastes

• What wastes were apparent in Buzz Electronics?

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Eight Wastes
Overproduction
motion
Inventory
Transportation
Waiting
defects
Underutilized People
Non-Value-Added Processing
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Overproduction

• Making more than is required by the next process
• Making earlier than is required by the next
  process
• Making faster than is required by the next
  process
• Causes of overproduction
• Just-in-case logic
• Misuse of automation
• Long process setup
• Unlevel scheduling
• Unbalanced workload
• Over engineered
• Redundant inspections

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Inventory Waste

• Any supply in excess of a one-piece flow through
  your manufacturing process
• Causes of excess inventory
• Need for buffer against inefficiencies and
  unexpected problems
• Product complexity
• Unleveled scheduling
• Poor market forecast
• Unbalanced workload
• Misunderstood communications
• Reward system
• Unreliable shipments by suppliers

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Defects

• Inspection and repair of material in inventory
• Causes of defects
• Weak process control
• Poor quality
• Unbalanced inventory level
• Deficient planned maintenance
• Inadequate education, training, or work
  instructions
• Product design
• Customer needs not understood

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Processing Waste

• Effort that adds no value to the product or
  service from the customers viewpoint
• Causes of processing waste
• Product changes without process changes
• Just-in-case logic
• True customer requirements not clearly defined
• Over-processing to accommodate downtime
• Lack of communication
• Redundant approvals
• Extra copies or excessive information

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Waiting Waste

• Idle time created when waiting for?
• Causes of waiting waste
• Unbalanced workload
• Unplanned maintenance
• Long process setup times
• Misuses of automation
• Upstream quality problems
• Unlevel scheduling

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People Waste

• The waste of not using peoples mental, creative,
  and physical abilities
• Causes of people waste
• Old guard thinking, politics, the business
  culture
• Poor hiring practices
• Low or no investment in training
• Low pay, high turnover strategy

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Motion Waste

• Any movement of people or machines that does not
  add value to the product or service
• Causes of motion waste
• Poor people or machine effectiveness
• Inconsistent work methods
• Unfavorable facility or cell layout
• Poor workplace organization and housekeeping
• Extra busy movements while waiting

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Waste of Transportation

• Transporting parts and materials around the plant
• Causes of transportation waste
• Poor plant layout
• Poor understanding of the process flow for
  production
• Large batch sizes, long lead times, and large
  storage areas

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Lean Building Blocks
Continuous Improvement
Cellular/Flow
Pull/Kanban
TPM
Quick Changeover
Quality at Source
POUS
Standardized Work
Batch Reduction
Teams
Value Stream Mapping
5S System
Visual
Plant Layout
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Course Agenda

• Welcome
• Introduction to Simulation
• Round 1 of Simulation
• Introduction to Lean Manufacturing
• Standardized Work, 5S System, Visual Controls,
  and Plant Layout
• Round 2 of Simulation
• Teams, Quick Changeover, Batch Reduction, POUS,
  and Quality at the Source
• Round 3 of Simulation
• Pull/Kanban, Cellular Flow, and TPM
• Round 4 of Simulation
• Implementation
• Course Evaluation

44
Round Two Company Instruction

• Learn how to implement new Lean techniques
• Standardized Work
• 5S System
• Visual Controls
• Plant Layout

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Standardized Work

• Operations safely carried out with all tasks
  organized in the best known sequence, and using
  the most effective combination of these
  resources
• People
• Materials
• Methods
• Machines

46
Work Place Organization

• A safe, clean, neat arrangement of the workplace
  provides a specific location for everything, and
  eliminates anything not required.

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Elements of a 5S Program

• Sort Perform Sort Through and Sort Out, by
  placing a red tag on all unneeded items and
  moving them to a temporary holding area. Within
  a predetermined time the red tag items are
  disposed, sold, moved or given away. When in
  doubt, throw it out!
• Set in Order Identify the best location for
  remaining items, relocate out of place items, set
  inventory limits, and install temporary location
  indicators.

• Shine Clean everything, inside and out.
  Continue to inspect items by cleaning them and to
  prevent dirt, grime, and contamination from
  occurring.
• Standardize Create the rules for maintaining
  and controlling the first three Ss and use
  visual controls.
• Sustain Ensure adherence to the 5S standards
  through communication, training, and
  self-discipline.

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Visual Controls

• Simple signals that provide an immediate
  understanding of a situation or condition. They
  are efficient, self-regulating, and
  worker-managed.
• Examples
• Kanban cards
• Color-coded dies, tools, pallets
• Lines on the floor to delineate storage areas,
  walkways, work areas, etc.
• Andon lights

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Plant Layout
Raw Stock
QC
Rec.
Ship
ScrewMachine
Shear
QC
Stamp
Assembly
Brake
Mill
Lathe
Drill
Finish
Weld
Grind
Parts Stock
50
Course Agenda

• Welcome
• Introduction to Simulation
• Round 1 of Simulation
• Introduction to Lean Manufacturing
• Standardized Work, 5S System, Visual Controls,
  and Plant Layout
• Round 2 of Simulation
• Teams, Quick Changeover, Batch Reduction, POUS,
  and Quality at the Source
• Round 3 of Simulation
• Pull/Kanban, Cellular Flow, and TPM
• Round 4 of Simulation
• Implementation
• Course Evaluation

51
Round Two Buzz Electronics

• Buzz Electronics begins its Lean Transformation.
• Changes in the organization
• Standardized Work
• 5S System
• Visual Controls
• Plant Layout

52
Round Two Debrief

• Discuss results
• Discuss the process
• Lessons learned
• Relationship to real world
• What if scenarios
• Continuous improvement

53
Lean Building Blocks
Standardized Work
5S System
Visual
Plant Layout
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Course Agenda

• Welcome
• Introduction to Simulation
• Round 1 of Simulation
• Introduction to Lean Manufacturing
• Standardized Work, 5S System, Visual Controls,
  and Plant Layout
• Round 2 of Simulation
• Teams, Quick Changeover, Batch Reduction, POUS,
  and Quality at the Source
• Round 3 of Simulation
• Pull/Kanban, Cellular Flow, and TPM
• Round 4 of Simulation
• Implementation
• Course Evaluation

55
Round Three Company Instruction

• Learn to implement more new Lean techniques
• Teams
• Quick Changeover
• Batch Reduction
• Point Of Use Storage (POUS)
• Quality at the Source

56
Lean Workforce Practices

• Teams
• With rotation of highly specified jobs
• Cross-trained and multi-skilled employees
• Who can work many operations within a cell and
  operations in different cells
• Continuous improvement philosophy
• Process quality, not inspection
• Use of participatory decision-making
• Quality Control Circles, team-based
  problem-solving, suggestion systems, etc.

57
Quick Changeover

• Definition The time between the last good piece
  off the current run and the first good piece off
  the next run.
• Before Shigeo Shingos Single Minute Exchange of
  Die (SMED) improvements, basic setup tasks and
  related time breakdowns

Percent of time of changeover
Preparation, after-process adjustment, checking,
storing, and moving materials, parts, and tools
30
Removing and mounting of parts and tools
50
Machine measurements, settings, and calibrations
5
15
Trial runs and adjustments
58
Impact of Batch Size Reduction
Batch and Queue Processing
Process C
Process A
Process B
10 min.
10 min.
10 min.
30 min. for total order, 21 min. for first piece
Continuous Flow Processing
Process B
Process A
Process C
12 min. for total order, 3 min. for first part
59
Batch Size Reduction

• The best batch size is one piece flow, or make
  one and move one!

60
Point Of Use Storage (POUS)

• Raw material is stored at workstation where used
• Works best if vendor relationship permits
  frequent, on-time, small shipments
• Simplifies physical inventory tracking, storage,
  and handling

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Quality at the Source

• Source Inspection Operators must be certain that
  the product they are passing to the next work
  station is of acceptable quality.
• Operators must be given the means to perform
  inspection at the source, before they pass it
  along.
• Samples or established standards are visible
  tools that can be used in the cell for such
  purposes.
• Process documentation defining quality inspection
  requirements for each work station may need to be
  developed.

62
Course Agenda

• Welcome
• Introduction to Simulation
• Round 1 of Simulation
• Introduction to Lean Manufacturing
• Standardized Work, 5S System, Visual Controls,
  and Plant Layout
• Round 2 of Simulation
• Teams, Quick Changeover, Batch Reduction, POUS,
  and Quality at the Source
• Round 3 of Simulation
• Pull/Kanban, Cellular Flow, and TPM
• Round 4 of Simulation
• Implementation
• Course Evaluation

63
Round Three Buzz Electronics

• Buzz Electronics continues its Lean
  Transformation.
• More changes in the organization
• Teams
• Quick Changeover
• Batch Size Reduction
• Point Of Use Storage (POUS)
• Quality at the Source

64
Round Three Debrief

• Discuss results
• Discuss the process
• Lessons learned
• Relationship to real world
• What if scenarios
• Continuous improvement

65
Lean Building Blocks
Cellular/Flow
Pull/Kanban
TPM
Quick Changeover
Quality at Source
POUS
Standardized Work
Batch Reduction
Teams
5S System
Visual
Plant Layout
66
Course Agenda

• Welcome
• Introduction to Simulation
• Round 1 of Simulation
• Introduction to Lean Manufacturing
• Standardized Work, 5S System, Visual Controls,
  and Plant Layout
• Round 2 of Simulation
• Teams, Quick Changeover, Batch Reduction, POUS,
  and Quality at the Source
• Round 3 of Simulation
• Pull/Kanban, Cellular Flow, and TPM
• Round 4 of Simulation
• Implementation
• Course Evaluation

67
Round Four Company Instruction

• Learn to implement more new Lean techniques
• Pull / Kanban
• Cellular / Flow
• Total Productive Maintenance (TPM)

68
Push versus Pull Systems

• Push System
• Resources are provided to the consumer based on
  forecasts or schedules

• Pull System
• A method of controlling the flow of resources by
  replacing only what has been consumed

69
Pull System

• Pull System is a flexible and simple method of
  controlling or balancing the flow of resources
• Eliminating waste of handling, storage,
  expediting, obsolescence, repair, rework,
  facilities, equipment, excess inventory
  (work-in-process and finished)

• Pull System consists of
• Production based on actual consumption
• Small lots
• Low inventories
• Management by sight
• Better communication

70
Pull System Flow Diagram
Supplier
Customer
Fin. Goods
Raw Matl.
Process B
Process A
Process C
Information Flow
Part Flow
Kanban Locations
71
Cellular Manufacturing

• Linking of manual and machine operations into the
  most efficient combination to maximize
  value-added content while minimizing waste.

Punch
De-burr
Cut to size
Form
Package
Sand
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Refining the Cell Five Step Process

• Group products
• Measure demands establish Takt time
• Review work sequence
• Combine work in balance process
• Design cell layout

73
Step 1 Group Products
Processing Steps
Product
Products with similar processing requirements
are grouped into product families
74
Step 2 Establish Takt Time

• Takt Time Demand Rate
• Takt Time (Work Time Available Number of
  Units Sold)
• Takt Time (1200 seconds 115 boards) 10.4
  sec/board
• Cycle Time Takt Time Minimum Number of People
• Goal Produce to Demand

75
Step 3 Review Work Sequence

• Observe sequence of tasks each worker performs
• Break operations into observable elements
• Identify value-added versus non-value-added (NVA)
  elements and minimize NVA
• Study machine capacity, cycle times and
  changeover times

76
Step 4 Combine Work to Balance Process
Unbalanced Line
Balanced Line
Seconds
Seconds
Operations
Operations
Takt Time 10 seconds
77
Step 5 Design and Construct Cell

• Design goals
• Flexible layout
• Lot size 1
• Point of Use Storage (POUS)
• Visual management
• Mixed models
• Simplify flow
• Integrate process operations
• Materials flow one way

• Minimize materials handling
• Concentrate on value-added motion
• Establish material replenishment procedure
• Make use of people 100
• Promote visibility and flexibility
• Operators stand for flexibility

78
Transition to Flexibility
Traditional
Optimal
Assembly Line
79
Total Productive Maintenance (TPM)

• Systematic approach to the elimination of the six
  major equipment losses
• Setup and adjustment
• Breakdowns
• Idling and minor stoppages
• Reduced speed
• Startup
• Defects and rework

• Enlisting the participation of all employees to
  create an environment that fosters improvement
  efforts in safety, quality, cost, delivery, and
  creativity
• Charting or analyzing equipment performance to
  identify root cause of problems, and implementing
  sustainable improvements

80
Course Agenda

• Welcome
• Introduction to Simulation
• Round 1 of Simulation
• Introduction to Lean Manufacturing
• Standardized Work, 5S System, Visual Controls,
  and Plant Layout
• Round 2 of Simulation
• Teams, Quick Changeover, Batch Reduction, POUS,
  and Quality at the Source
• Round 3 of Simulation
• Pull/Kanban, Cellular Flow, and TPM
• Round 4 of Simulation
• Implementation
• Course Evaluation

81
Round Four Buzz Electronics

• Buzz Electronics continues its Lean
  Transformation.
• Changes in the organization
• Pull / Kanban
• Cellular / Flow
• Total Productive Maintenance (TPM)

82
Round Four Debrief

• Discuss results
• Discuss the process
• Lessons learned
• Relationship to real world
• What if scenarios
• Continuous improvement

83
Lean Building Blocks
Cellular/Flow
Pull/Kanban
TPM
Quick Changeover
Quality at Source
POUS
Standardized Work
Batch Reduction
Teams
5S System
Visual
Plant Layout
84
Course Agenda

• Welcome
• Introduction to Simulation
• Round 1 of Simulation
• Introduction to Lean Manufacturing
• Standardized Work, 5S System, Visual Controls,
  and Plant Layout
• Round 2 of Simulation
• Teams, Quick Changeover, Batch Reduction, POUS,
  and Quality at the Source
• Round 3 of Simulation
• Pull/Kanban, Cellular Flow, and TPM
• Round 4 of Simulation
• Implementation
• Course Evaluation

85
Continuous Improvement

• Old Adage
• If you always do what you always did, youll
  always get what you always got.
• Competitive Corollary
• If the other guy gets better, youre going to
  get less.

86
Lean Building Blocks
Continuous Improvement
Cellular/Flow
Pull/Kanban
TPM
Quick Changeover
Quality at Source
POUS
Standardized Work
Batch Reduction
Teams
5S System
Visual
Plant Layout
87
Barriers to Improvement

• If we all know we need to improve, the question
  becomes why dont we?

88
Keys to Success

• Prepare and motivate people
• Widespread orientation to Continuous Improvement
  and quality, train and recruit workers with
  appropriate skills
• Create common understanding of need to change to
  Lean
• Involve employees
• Push decision-making and system development down
  to the lowest levels
• Train and truly empower people

• Share information and manage expectations
• Identify and empower champions, particularly
  operations managers
• Remove roadblocks (i.e., people, layout, systems)
• Make system both directive yet empowering

89
Keys to Success (continued)

• Execute pilot projects prior to rolling out
  culture across organization (e.g., model lines,
  kaizen blitzes) after early wins in operations,
  extend across entire organization
• Foster an atmosphere of experimentation
• Willingness to take risks (safety nets)
• Patience, tolerance of mistakes, etc.

• Install enlightened and realistic performance
  measurement, evaluation, and reward systems
• Do away with rigid performance goals during
  implementation
• Measure results, not number of activities or
  events
• Tie long-term improvements to key macro-level
  performance targets (e.g., inventory turns,
  quality, delivery, overall cost reductions)

90
Implementation Success Factors

• Unyielding leadership
• Strategic vision, based on Lean Enterprise as
  part of company strategy
• Observation of outside successes and failures
• Ability to question everything
• Deep commitment to excellence

91
Benefits of Lean
Percentage of Benefits Achieved
0 25 50 75 100
Lead Time Reduction
Productivity Increase
WIP Reduction
Quality Improvement
Space Utilization
92
Typical Objections

• How should you deal with these objections to
  Lean?
• It takes too much discipline.
• It takes too long to implement.
• My process is too complex, I have to deal with
  too many uncontrollable variables, like late
  supplier shipments, sick people, etc.
• My process requires a large batch size.
• It doesnt make sense in my industry.
• Its unclear to me how Lean will work with my
  MRP system.

93
Getting Started Value Stream Mapping

• A simple, visual approach to
• Focusing on a product family
• Creating a clear picture of current material and
  information flow associated with that product
  family
• Identifying Lean tools and techniques that can
  improve flow and eliminate waste
• Incorporating those ideas in a new picture of how
  material and information should flow for that
  product group
• Creating an action plan that makes the new
  picture a reality for that product family

94
Lean Building Blocks
Continuous Improvement
Cellular/Flow
Pull/Kanban
TPM
Quick Changeover
Quality at Source
POUS
Standardized Work
Batch Reduction
Teams
Value Stream Mapping
5S System
Visual
Plant Layout
95
Conclusion

• Lean
• Simple and visual
• Demand driven
• Inventory as needed
• Reduce non-value-added
• Small lot size
• Minimal lead time
• Quality built
• Value stream managers

• Traditional
• Complex
• Forecast driven
• Excessive inventory
• Speed up value-added work
• Batch production
• Long lead time
• Inspected-in
• Functional departments

96
Thank You.