Five Steps to Lean

1
Five Steps to Lean

• Define end-customer value for a specific
  product
• specific capabilities
• specific price
• specific time
• Identify entire value stream for each product
  and eliminate waste
• product realization
• order fulfillment
• production
• Make the remaining value steps flow
• no waiting, downtime, scrap within or between
  steps
• continuous flow instead of batch-and-queue

2
Five Steps to Lean (continued)

• Design and provide what the customer wants only
  when the customer wants it let the customer pull
  the product from the value stream
• Pursue perfection
• by refining definition of value
• getting value to flow faster

3
Old System for MakingStretch Wrappers
Sawing
Storage of raw materials
Machining
Welding
Subassembly
Storage of finished goods
Storage of incoming components
Storage of parts in process
Storage of Painted Frames
Crating
Touch-up
Final Assembly
Frame Painting
4
Evils of Batch-and-Queue

• Increases work-in-process inventory
• Hides inefficiencies, lost opportunities
• Lengthens replenishment cycle
• Creates finished good inventory
• Slows customer response time
• Risks obsolete products

5
New Continuous Flow System
Incoming materials
Frame painting
Ship finished goods
6
One Cells Continuous Flow
Frame Painting
Sawing
Machining
Welding
Final assembly work
Subassembly of roll carriage
Subassembly of control module
Testing and shipping
7
Old System for Processing Orders
Purchasing
Sales staff
Regional Sales Coordinator
Quoting
Order entry/scheduling MRP master schedule
Production work orders
Engineering. Applications
Design and BOM
Production expediters
Credit checking
8
New Continuous Flow Systemfor Processing Orders
Order entry/Credit checking
Scheduling by product
Eng. app. by product
Sales
Purchasing by product
Quick response team for price quotations
Mfg.
9
Old and New Systems for Developing New Products
Product definition
Purchasing
Marketing
Ind. Eng.
Engineering Specs
Team Leader
Design in concurrent Development
Mech. Eng.
Launch
Elec. Eng
Mech. Eng.
Elec. Eng.
Mfg. Eng.
Mfg. Eng.
Ind. Eng.
10
Outcomes

• Number of shipped machines doubled
• Produce a machine in half the space
• Number of defects fell from 8 per machine to .8
• Better understanding of costs
• Assigned freed-up workers to Kaikaku team
• MRP used only to provide suppliers with
  long-term production forecasts
• Kanban system used to order parts
• S-Series was developed in ¼ time of
  predecessor, ½ of engineering hours

11
Lean Production Principles -Henderson and Larco
Lean Production
JIT Production
Workplace safety, order, cleanliness
Six Sigma Quality
Pursuit of Perfection
Empowered Teams
Visual Management
12
The Toyota 5S System

• Sort - Separate out all items that are
  unnecessary and eliminate them complete from
  the workplace.
• Straighten - Arrange all essential items so that
  that the are clearly marked and easily
  accessed, e.g., kanban squares.
• Scrub Scrub all machines and the work
  environment to maintain immaculate cleanliness
• Systematize Make cleaning and organizing a
  routine practice as part of the work day
• Sustain Sustain commitment to the previous
  four steps and provide a constantly improving
  process

13
JIT Production

• JIT production means build to customer demand
• Single piece flow means there is a maximum of
  one piece between each operation
• Value-added activities should move along
  without interruption, and non-value-added
  activities eliminated (aided by process-mapping)
• Takt time is the drum beat of consumption
• All tasks should take about the same time.
  Rebalance them if demand fluctuates or
  workers are absent. Multi-skilled workers
  facilitate this.
• Kanban links customer demand to final assembly,
  and then to internal and external suppliers
  (synchronization)
• Changeover time should equal one takt time for
  final assembly operations

14
Takt Time
If customers order 100 products per day, what is
the takt time? If customers order 80 products per
day, what is takt time? If customers order 120
products per 8 hour shift, what is takt
time? What if some workers are idle part of the
time? What if some workers build inventory in
front of their work stations?
15
Visual Management

• Scoreboards, e.g., output compared to goals,
  sales and profits to date, quality, inventory
  turns, training schedules
• Kanban cards, kanban squares, shadow boards
• Flow through racks
• Limited number of rework bays
• Color-coded lines, parts
• Andon lights