Post on 03-Jun-2018
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Introduction to Lean
Manufacturing
Module:
Causes of Excess Product Costs
Dr. Douglas L McWilliams
Department of Industrial TechnologyCollege of Technology
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What is manufacturing?
The activities of making or processing a raw material intoa finished product
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What is manufacturing?
Supply Chain
Raw
Material
Suppliers
Tier 2
SuppliersTier 1
Suppliers
Company
XYZ Customers
Manufacturing
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What is lean manufacturing
Originated from the Toyota Motor Company.Originated from the Toyota Motor Company.Lean manufacturing is also known as the Toyota Production SystemLean manufacturing is also known as the Toyota Production System
It is a management philosophy of production that emphasizes theIt is a management philosophy of production that emphasizes the
minimization of the amount of all the resources (including time)minimization of the amount of all the resources (including time) usedused
in the various activit ies to produce a good or servicein the various activit ies to produce a good or service
It involves identifying and eliminatingIt involves identifying and eliminating nonnon--valuevalue (waste) added activi ties(waste) added activi ties
which increase product costwhich increase product cost
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How does lean manufacturing classifymanufacturing activities?
Value-added Critical activities to produce the product or service
Non-value added
Essential activities to win the customers business Unnecessary activities that must be eliminated
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What are some causes of excessive product cost?
Seven common wastes Overproduction
Waiting
Excessive Transportation Inappropriate Processing
Unnecessary Inventories
Unnecessary Motion
Defects
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What are the causes of muda?
1. Overproduction Target and achievement unclear
Excessive lead time and storage times
2. Waiting
Operators waiting
Operators slower than production line
3. Excessive Transportation
Widely spaced equipment Forklifts not available when needed
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What are the causes of muda?
4. Inappropriate Processing
Variability in operators performance Processes not statistically capable
5. Inventory
Large safety stocks
Variable procurement lead times
6. Motion
Double handling
Non-standard layouts Equipment widely spaced from each other
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What are the causes of muda?
7. Defects Low material yields
Excessive process variability
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How does lean manufacturing eliminate muda?
Provides a way to specify value Line up value-creating actions in the best sequence
Conduct these activities without interruption
Produce them whenever someone request them
Perform them more and more effectively
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What are the five basic principles of lean
manufacturing?
1. Value2. Value stream mapping
3. Flow
4. Pull
5. Perfection
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What are the benefits of lean manufacturing?
Concept Traditional Lean
Inventory Asset Waste
Ideal EOQ Large One
People Utilization High Varies
Work Scheduling Build to forecast Build to demand
Labor Costs Variable Fixed
Work Groups Functional departments Cross-functional teams
Accounting Traditional Throughput
Quality End of process On-line process
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What are the benefits of lean manufacturing?
Key Element Traditional Lean
Travel Distance 500'-4000' 100'-400'
Queues 12-30 3-5
Throughput Time Weeks HoursInventory Turns 3-10 15-60
Supervision Difficult Easy
Quality Feedback Days MinutesSkill Range Narrow Broad
Scheduling Complex Simple
Equipment Utilization 85%-95% 70%-80%
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What are the benefits of lean manufacturing?
Performance GM Toyota
Inventory turnover 4 200
Lead time 3 months 2 days
Setup time 4 hours 10 minutes
Lot size 5000
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What are the results of lean manufacturing?
Lead Time reduced by 90%
Productivity increased by 50%
Work-In-Process reduced by 80%
Quality improved by 80%
Space Utilization reduced by 75%
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Acknowledgments
The author wishes to acknowledge the support from theSociety for Manufacturing Engineers - Education
Foundation, SME-EF Grant #5004 for Curriculum Modules
in Product Lifecycle Management.