Lean Principles and Applications

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Lean Principles and Applications

• Pawley Institute
• 2005

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Pawley Institute

• Institute was created at the behest and financial
  contribution of Mr. Dennis Pawley to develop a
  lean curriculum and advance lean learning for OU
  students.
• To date, there are three OU schools
  participating
• SBA
• SEHS
• SECS
• Kevin Yamada Executive Director

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Pawley Institute

• Similar to major corporations, universities must
  remain competitive to produce a better
  productfuture employees. Theres a great need
  to expand educational opportunities to students
  nationwide. As we look forward to the next
  century, America can only remain a leader in
  manufacturing through joint efforts between
  universities and corporations. Thats why
  developing specific curricula to meet those
  challenges are so important

Dennis Pawley 2002
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Pawley Institute

• Mission
• Give Oakland University, its students and
  graduates, and the community a competitive
  advantage through education, research, and the
  application of lean principles and practices.

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Firsts

• First OU course offered specifically on the
  subject of Lean.
• First time in OUs history that three schools are
  teaching and attending a common course.
• First time an OU course has combined the
  disciplines of human resource development,
  business systems and engineering systems in a
  dynamic (lean) learning curriculum.
• First time real life team projects are conducted
  with an interdisciplinary mix of students from
  each school.

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Lean Fundamentals

• History
• Philosophy
• Definitions
• Myths

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Tip of the tip of the Iceberg

• Introduction to lean philosophy
• Build awareness
• Familiarity with some terms
• Begin a change in thinking

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Tip of the tip of the Iceberg

• Introduction to lean philosophy
• Build awareness
• Familiarity with some terms
• Begin a change in thinking
• Beyond the surface
• Internalization of concepts
• Deep understanding of current reality
• Create a change-receptive culture
• Recognize and attack causes of waste
• Never ending quest for perfection

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A Brief History of Lean

• Originally known as the Toyota Precepts, the
  development of the Toyota Production System (TPS)
  is often associated with five people
• Sakichi Toyoda (family name)
• Kiichiro Toyoda
• Eiji Toyoda
• Taiichi Ohno
• Shigeo Shingo

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A Brief History of Lean

• Originally known as the Toyota Precepts, the
  development of the Toyota Production System (TPS)
  is often associated with five people
• Sakichi Toyoda (family name)
• Kiichiro Toyoda
• Eiji Toyoda
• Taiichi Ohno
• Shigeo Shingo
• In 1933, Kiichiro Toyoda (son of founder, Sakichi
  Toyoda) formed Toyota Motor Co. as a spin off
  from Toyoda Spinning and Weaving, a successful
  manufacturer of fabrics that introduced the
  concepts autonomation and JIT. In April 1936,
  production of the Toyota Model AA began.

11
A Brief History of Lean

• Originally known as the Toyota Precepts, the
  development of the Toyota Production System (TPS)
  is often associated with five people
• Sakichi Toyoda (family name)
• Kiichiro Toyoda
• Eiji Toyoda
• Taiichi Ohno
• Shigeo Shingo
• In 1933, Kiichiro Toyoda (son of founder, Sakichi
  Toyoda) formed Toyota Motor Co. as a spin off
  from Toyoda Spinning and Weaving, a successful
  manufacturer of fabrics that introduced the
  concepts autonomation and JIT. In April 1936,
  production of the Toyota Model AA began.
• However, prior to the official launch of Toyota
  Motor Company, the historic pilgrimage by
  Kiichiro was made to the Ford Rouge complex in
  Dearborn, MI.

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A Brief History of Lean

• In 1943, Ohno joined Toyota Motor Co. after
  working at the Toyoda Spinning and Weaving. He
  led the refinement of TPS for the next 40 years.
  He too visited US auto plants and noted then that
  American autoworkers were nine (9) times more
  productive than their Japanese automotive counter
  parts.
• Based on the high productivity of Japanese
  textile workers, Toyota concluded that the
  disparity was not in the people but in the system
  of production.

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A Brief History of Lean

• At that time, sharp contrasts existed between
  Ford and Toyota
• At Ford
• Each assembly plant specialized in its own
  product family.
• Rouge alone produced 7000 similar vehicles/day.
• Product oriented (pre-lean) layouts were
  abandoned for mass production based on process
  villages, each with their own large stockpiles
  or batches of materials.
• At Toyota
• Based on limited post-war resources Toyota Motor
  plant produced a variety of vehicles, primarily
  trucks, in small volumes of 40/day.
• By 1950, after 13 years, only a total of 2700
  vehicles were produced.
• Again, due to their post- war economy, it was not
  feasible to carry large stockpiles and it was
  absolutely essential to convert invested capital
  to revenue as quickly as possible.

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A Brief History of Lean

• Due primarily to these external forces, Toyota
  executives came up with a completely different
  way of thinking about manufacturing.
• From 1950 to 1970 Toyota began to lead the way by
  developing their own alternative to the Ford
  (mass) production system.
• TOYOTA PRODUCTION SYSTEM
• (TPS)

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A Brief History of Lean

• The term lean was introduced in a landmark
  Sloan Management Review (1988) article about the
  future of the automobile by John Krafcik and was
  based upon a 5 year/5 million MIT study of 90
  automotive plants in 17 countries.
• The (inevitable) book published in 1991
  summarizing this study, The Machine that Changed
  the World, by Womack, Jones, Roos, coined the
  term lean production to describe the Toyota
  Production System (TPS).

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Todays Missions

• Ford Motor Company
• Mission
• Ford is a worldwide leader in automotive and
  automotive related products and services as well
  as in newer industries such as aerospace,
  communications and financial services.
• Our mission is to improve continuously our
  products and services to meet our customers
  needs, allowing us to prosper as a business and
  to provide a reasonable return to our
  stockholders, the owners of our business.

• Toyota Motor Manufacturing
• Mission
• Add value to customers and society.
• As an American company, contribute to the
  economic growth of the community and the US.
• As an independent company, contribute to the
  stability and well being of team members and
  partners.
• As a Toyota group company, contribute to the
  overall growth of Toyota.

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Lean Philosophy

• Never ending quest for perfection and a
  continuous, systematic elimination of waste
  (muda) and its root causes.
• Constantly shortening the (lead or cycle) time
  required by streamlining the flow of production
  throughout the value stream.
• from customer order to delivery of
  product/service
• from design concept to customer satisfaction
• Seek to maximize operational efficiency,
  throughput, flexibility, quality, costs and
  responsiveness by increasing the effectiveness of
  people, equipment and systems.
• An overriding respect for people and appreciation
  of human creativity.

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Definition of Lean

• The systematic approach in identifying and
  eliminating waste, or non-value added-activities
  through continuous improvement by moving the
  product at the pull of the customer in pursuit of
  perfection NIST/MEP (28)
• An operating philosophy in which the best
  quality, cost and delivery of a product or
  service is achieved through shortening the
  production flow by eliminating waste Toyota
  (26)
• Give the customer what they want when they want
  it, and don't waste anything Anonymous (14)
• A strategy for remaining competitive through the
  endless pursuit of waste elimination Gemba
  Research (12)
• Standardized thinking Flinchbaugh (2)
• Steak Yamada (1)

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Paradox of Lean

• Stop production when necessary so that production
  never has to stop.
• Standards change all the time.
• One (unit) at a time is more effective than
  batch.
• Maximizing unit efficiencies does not maximize
  overall efficiency.
• Dont make something unless a customer has
  ordered it.
• Team members, not industrial engineers, develop
  standardized work.
• Continually seek perfection, even though we know
  we will never achieve it.

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Myths and Misconceptions

• Lean
• is a Japanese philosophy.
• concepts and principles apply only to the
  automotive industry or manufacturing.
• means busting unions and getting rid of people.
• is the magic pill cure for all business and
  industry problems.
• is just a flavor of the month, passing fad.
• is a grass roots program.

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DefinitionValue Add vs. Non Value Add

• Value Add Anything that changes or further
  transforms a product, sub-assembly, information
  or service into something that the customer is
  willing to pay for.
• Non Value Add Any activity that absorbs or
  consumes resources (e.g.- material, time,
  equipment, people, paper, space) without creating
  value. Typically, two (2) types.
• Type 1 can be eliminated immediately
• Type 2 due to current state, cannot yet be
  eliminated

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Non Value Add Waste muda

• Waste exists in hundreds of forms in virtually
  every workplace causing slower production,
  decreasing efficiency, blocking growth and
  consuming resources, and is traditionally broken
  into 7 components
• Waste is often difficult to see because
• people appear to be busy
• sub-optimization of process villages vs.
  optimizing entire value streams
• comfort in legacy systems and old habits
• more is better

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Value Add vs. Non Value Add
1. ______ Delivery of supplies Just In Time (JIT)
from the supplier to the plant. 2. ______
Locating the proper tools and equipment needed to
changeover for the next operational run. 3.
______ Having operators collect SPC data and
fill out quality forms. 4. ______ Performing
open heart surgery on a patient 5. ______
Inspecting product for defects so they dont
reach the customer 6. ______ Moving a patient
from the operating room to cardiac rehab. 7.
______ Final assembly of gears to be located in
differential case. 8. ______ Billing the cell
phone customer for services rendered.
NVA
NVA
NVA
VA
NVA
NVA
VA
NVA
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Value Add vs. Non Value Add
VA 5
NVA 95
25

• True cost is the size of a plum seed
• Taiichi Ohno
• The father and chief architect
• of the Toyota Production System

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Definition of 7 Wastes 1

• Over productionahead of demand
• Waitingfor information, materials, people,
  equipment, etc., causing inefficient use of time
• Transportationconveyance of materials, product,
  paperwork, etc., more than is necessary
• Over-processing...often associated with
  overkill, includes any form of inspection
• Inventorieshaving more than absolute minimum.
• Motionof people more than necessary to complete
  task
• Defects or Rework
• Knowledgedisconnection which inhibits flow of
  knowledge, ideas and creativity

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Non Lean vs. Lean Culture

• Non Lean
• Production is based on anticipated need
• Infinite capacity is assumed
• Bottlenecks are hidden and lead times expanded
• More and faster is better
• Overproduction is good
• If it aint broken, dont fix it
• Dont stop production
• Fire fight, but dont stop to fix the root
  cause of the problem
• Front line workers are responsible for output

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Non Lean vs. Lean Culture

• Non Lean
• Production is based on anticipated need
• Infinite capacity is assumed
• Bottlenecks are hidden and lead times expanded
• More and faster is better
• Overproduction is good
• If it aint broken, dont fix it
• Dont stop production
• Fire fight, but dont stop to fix the root
  cause of the problem
• Front line workers are responsible for output

• Lean
• Make next persons job easier
• Produce only what is needed when it is needed
• Overproduction is evil
• If it aint broke, improve it
• Never pass on a defect
• Work on root causes
• Managers/supervisors are responsible for enabling
  workers to do their jobs more effectively

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• Running Toyota is like trying to pull a handcart
  up a steep hill -- there's always tremendous
  danger. If we relax, even for a moment, we could
  lose momentum and be thrown to the bottom."  
• Fujio Cho
• CEO - Toyota

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• What do you see?

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• What lean thinkers see

muda