Lean Enterprise 101: A Short Course

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Lean Enterprise 101 A Short Course
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Lean Enterprise Overview
Lean Enterprise An Integral component of
Operational Excellence where the Lean Principles
are applied to the entire company, and external
value chain -- Customers and Suppliers

• Why Lean and Why Now?
• Lean is not new, Toyota has been doing over 40
  years
• Integral part of an Operational Excellence
  strategic plan
• Customers are asking for it, some are forcing it

• Purpose of this Lean Module?
• Describe Lean Enterprise fundamentals
  principles
• Understand basic Lean Enterprise tools
• Outline the elements of a Lean Enterprise system
• Provide a basis for Lean Enterprise
  implementation

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History of Lean Thinking
Craft
Toyota Production System OHNO
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Lean Enterprise Fundamentals
Why go Lean?

• Improve Processes for
• Increased Market Share
• Profitability
• Cash Flow
• Competitive Advantage
• Future Growth in an Ever Changing Market

• Benefits of a Lean Enterprise
• Bigger return on Participative Pay Program
• Easier completion of daily tasks
• Better communication
• Improved morale
• Easier to schedule work
• Less clutter in workplace
• Right parts available when you need them

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Lean Enterprise Fundamentals
What is the essence of Lean?
The activity of creating processes which are
highly responsive and flexible to customer demand
requirements. The central concept of Lean is the
identification and elimination of all forms of
waste.
Lean Principles
1) Specify value in the eyes of the customer 2)
Identify value stream and eliminate waste 3)
Make value flow at pull of the customer 4)
Involve empower employees 5) Continuously
improve in pursuit of perfection
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Changing Market Reality

• Cost Profit Selling Price

Selling Price - Cost Profit
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A Powerful Marriage
Lean Experts
Black Belts

• Waste elimination
• Flow, Flow, Flow
• Pull of the customer

• Variation reduction
• Scrap / rework elimination
• Process control

Speed
Accuracy

Successful Integration and Deployment will Yield
Dramatic Improvements
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The Lean Enterprise House
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Identify and Link the Value Chain
The pieces of the chain are already there.
Support
Engineering
Production
Customer
Suppliers
Materials
Test
Administration
Make each process efficient and effective,
linking those processes into an interdependent
chain focused on flow and creating value for the
customer.
Supplier Engineering Production Test
Customer
Customer
Administration Materials Support
F L O W
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The Value Stream
Information Stream
C U S T O M E R
V A L U E
Market Sales
Design
Suppliers
Manu- facturing
Assy Test
Material Flow
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Defining Value
Value Added Activity An activity that Changes
the size, shape, fit , form, or function of
material or information (done right the 1st time)
to meet customer requirements.
Value Added
Required Waste
Pure Waste Idle!
Non-Value Added Activity All other activities
that take time or resources or does not satisfy
customer requirements
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Lean Mission Statement

• Develop the Ability
• To Recognize and Identify Waste
• To Have the Courage to Call It Waste
• To Have the Desire to Eliminate It
• Eliminate the Waste
• Understand That Waste Simply
• Raises Cost
• Produces No Corresponding Benefit
• Threatens All of Our Jobs

You cant Eliminate What You Cant Find
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The Seven Wastes

• Waste Of
• Defects
• Overproduction
• Transportation
• Waiting
• Inspection (mass)
• Motion
• Processing (Too Much)

Ask Why? Five Times to Fix it so it never comes
back!
The largest and most difficult waste to find is
time... and one can never get it back ... -
Henry Ford
D.O.T. W.I.M.P.
If we eliminate these wastes We can increase
output and shrink lead time
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Conceptual Grasp of Lean

• CADENCE
• The measure or beat of movement.

FLOW A smooth uninterrupted movement.
BALANCE Arrange so that one set of elements
exactly equals another.
SYNCHRONIZE To cause to operate with exact
coincidence in time and rate.
FLEXIBILITY Ready capability to adapt to
new, different or changing requirements.
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Takt Time
Available Time Customer Demand
TAKT Time
Example - Product demand 2000 units per month
or 100 units per day Available work time per day
6.5 hours or 390 mins per day
390 mins 100 units
TAKT time
3.9 mins/unit
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Shingo Model
Operations
Processes
Processes
Space Time
Operations
Analyze Separately, Solve Together
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Dissect the Current Condition

• THE ACTIVITY OF THE PRODUCT
• As a percent of total product thru-put time, what
  is the measure of actual value added time?
• THE ACTIVITY OF THE OPERATOR
• As a percent of the total available work time,
  what is the measure of actual value added time?
• THE FLEXIBILITY OF THE OPERATION
• What is the time required to change-over
• -Machine Setup -Level of
  Cross Training
• -Process Changeover -Ease of Operation
• THE METHOD OF MEASURING PERFORMANCE
• What are the current set of problems?
• What are the vital operating statistic of the
  operation?

CONCENTRATE ON THE FUNDAMENTALS!
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Activity Of The Product
What are the four things the PRODUCT can be doing?
Storage
Total Thru-put Time
Transport
Inspect
Process
Which Element(s) Adds Value?
50 - 80 of the Gain in Lean is WASTE elimination!
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Example - Activity of the Product
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Activity of the People
Pure Waste
Full Work Analysis
Required Waste
Value Added
Which Element(s) Adds Value?
The Key to Sustaining the Gains Building Blocks
of Standard Work
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Adding Value
Which Activities Add Value?

• Work waiting for other work to be batch processed
• Work in the in-basket / stockroom
• Company specified testing / sign off
• Loading work in a test fixture or chamber to be
  processed
• Moving from one operation to another operation
• Customer specified testing
• Cleaning parts before processing
• Waiting for previous parts to finish
• Inspecting a part after an operation

• Value Added
• Customer Cares
• Changes the thing
• CORRECT THE FIRST TIME!

If not value-added, then what type of waste is it?
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Will Lean Help You?
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Definitions
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Spaghetti Chart
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Lean Cell Design - Product Flow
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Quick Set-up Flexibility
Shingos SMED (Single Minute Exchange of Dies)
1. Identify Work Content as Internal and
External Activity
Ext
Int
Ext
2. Convert Internal to External Activity
Ext
Int
Ext
3. Eliminate or Reduce all Remaining Activity
Ext
Int
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Elements of Setup

• Preparation and Organization
• Mounting and removing tools, dies, fixtures,
  components, load programs
• Centering, locating, dimensioning, alignment
• Trial runs, tweaking, tuning, and adjustments

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How Does TPM Differ FromRegular Maintenance?

• It is a proactive, team approach for maintenance
• It is the responsibility of everyone, not just
  the maintenance department
• Ensures safety and effective operation of
  equipment
• Keeps equipment from breaking down
• Planned repairs rather planned failure
• Prevents deterioration and prolongs the life
  cycle of the equipment

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Stages of Maintenance
The goal is to get to Scheduled Maintenance
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Standardized Operations

• Purpose
• Create a consistent method to measure how safely
  and efficiently high quality low cost products
  can be manufactured
• Goal
• Arrange people, materials, and capital within a
  facility so that waste is eliminated

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Build in a Quality Plan
Will SPC be used on line and where? Has a FMEA
been performed on Process? Are Countermeasures in
place for line stops? Is the quality system
linked through the value stream? Does the Process
conform to all governing procedures? Have all
Documentation Updates to change process been
performed?
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Lean Material Replenishment
All the activity associated with the
replenishment system is non-value added (waste)
since it does not physically transform, convert
or change the shape or functionality of the
product to meet customer requirements. Target for
improvement should be to eliminate or streamline
each activity associated with the replenishment
system, while retaining or developing the ability
to obtain what is needed, when needed, in the
amount needed.
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Hybrid Material Solutions

• MRP without Kanban
• All push no Pull
• all system planning assumes execution as planned
• the only consumption-based pull in for unplanned
  usage

• Kanban without MRP
• All Pull no Push
• hard to pull from long lead time suppliers or
  batch processes
• hard to manage calculations of Kanban when
  demand changes
• System designed with historical data may not fit
  unknown future

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Kanban / MRP Integration
Forecast
Production Planning
Demand Management
Rough Cut Capacity Planning
Master Scheduling
MRP Planning
BOMs
MRP
Current Inventory
On Order
Routings
Purchasing
Pull Signal
Suppliers
Pull Signal
Kanban Pull
Warehouse
POU Stores
POU Stores
Ship
Final Assy
Sub Assy
Pull Signal
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Do you ever . . .

• Help somebody find or return a tool?
• Wonder which document is the latest?
• Lose your pen on your desk or bench?
• Spend time looking for something just filed?
• Wonder how others do this process?
• Fill in for peers and wonder how they set up
  tests?
• Wonder how you are doing on group goals?
• Wonder what your priorities are?

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Visual Management System

• The use of signs, measurements, pacing
  devices, real-time visual / audible feedback via
  counters, signals, cards (KANBAN), color-coding,
  speakers, alarms, clean and orderly, downtime
  clocks, facilities and other aids to allow for...
• The easy difference between
• Normal (LEAN GOOD) conditions
• AND
• Abnormal (WASTEFUL HARMFUL) conditions
• Abnormalities are made obvious and ugly so as to
  compel correction through effective counter
  measures

Good Visual Control Allows Problems No Place To
Hide
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The Five Ss
Purpose Methodology for creating and maintaining
an organized, clean high performance workplace.

• Components
• Sort
• Get rid of what is not needed.
• Storage
• Arrange and Identify for ease of use.
• Shine
• Clean Daily. Clean up whats left
• Standardize
• Eliminate cause, Standard methods.
• Sustain
• Set discipline, plan, schedule

• Areas of Concern
• Operators
• Materials
• Machines
• Methods
• Information

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Five S Scoring Criteria
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Displays and Controls

• Visual Displays
• Communicate important information, but do not
  control what people or machines do.
• Make up the first two levels of the pyramid.
• Visual Controls
• Communicate information so that activities are
  performed according to standards.
• Make up the top four levels of the pyramid.
  

Visual displays and controls create a common
visual language in the workplace
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Levels of the Visual Business
Prevent Abnormalities (Error-Proof)
Stop Abnormalities (Prevent defects from moving
on)
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Visual Control
Warn about Abnormalities (Build in alarms)
Build Standards into the Workplace
Visual Display


Share Standards at the Site
Share Information
Safety
WORKPLACE ORGANIZATION
Sort, Store, Shine, Standardize, and
Sustain 5S Workplace Organization
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Total Employee Involvement
NEW REALITY WITH TEI
Lean
By Involving People
We Empower People to Grow the Business
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Lean Principles
1) Specify value in the eyes of the customer 2)
Identify value stream and eliminate waste 3)
Make value flow at pull of the customer 4)
Involve empower employees 5) Continuously
improve in pursuit of perfection
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Sustaining Performance

• Identify the source of current problem set
• - Parts - Process
• - People - Design
• Develop a rolling top 10 action list
• Segregate and classify identified problems
• easy, moderate, difficult
• we control, we do not control
• low, medium, and high cost
• low, medium, and high benefit
• Identify 10 problems that must be corrected in
  the next 90 days

• Monitoring the vital statistics
• Daily and hourly scheduled quantities
• Daily and hourly output quantities
• Daily assigned direct and indirect labor
• Daily attend direct and indirect labor
• Daily overtime hours allowed
• Average labor content per unit
• Daily planned and actual cycle time
• Planned and actual throughput time
• Daily line stop minutes
• Daily defect free pieces

How do we create a Management System that
Sustains Continuous Improvement? (Refer to
SQS)
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Video Look At Things In A New Way
Joel Barker Video here