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Lean Enterprise:

Andreas Kuura 8b

Made in the USA

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License/ Conditions of Use

• Permission is given to download and present this material royalty-free for corporate in-house use, professional meetings, and similar activities, provided that:

1. No changes are made in it

2. Attendees pay no fee for admission beyond those necessary to cover the cost of attendees' meals plus rental of the meeting facility (as is common for professional societies) but they may not include a profit.

• The notes pages may be photocopied and distributed royalty-free provided that no changes are made in them.

A lean enterprise presentation suitable for a one-day workshop can be purchased from Levinson Productivity Systems, P.C.

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Overview

• It can be proven unequivocally that lean enterprise originated in the United States (not in Japan, as is commonly believed).

• Change management benefits:• Unquestionable bottom-line results:

sell lean to upper management in "the language of money."

• American workers are more likely to buy into "Made in the USA" concepts than kaizen, poka-yoke, jidoka, etc.

• Technical benefits:• Historical principles are still valid and

they are now fundamental elements of what we call lean enterprise.

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Outline

• Background: military origins of quality and productivity concepts

• Benjamin Franklin's lean enterprise concepts influence on Henry Ford

• Frank Gilbreth and motion efficiency• Frederick Winslow Taylor and scientific

management• Henry Ford and the lean enterprise

• Ford's bottom line: sell lean to upper management in "the language of money"

• Lean techniques at the original Ford Motor Company

• Ford and supply chain management• Ford and ISO 14000• Ford and solutions to today's health care crisis

• Conclusion

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Military Origins of Productivity and

Quality Techniques

"The United States government has already spent millions and used many of the best of minds on the subject of motion study as applied to war; the motions of the sword, gun, and bayonet drill are wonderfully perfect from the standpoint of the requirements of their use. This same study should be applied to the arts of peace." Frank Gilbreth, 1911, Motion Study

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Muda (Waste) = von Clauzewitz's Friction

• General Carl von Clausewitz's On War (1831) defined friction as "…the force that makes the apparently easy so difficult. … countless minor incidents— the kind you can never really foresee— combine to lower the general level of performance, so that one always falls short of the intended goal."

• Henry Ford (Moving Forward, 1930): "It is the little things that are hard to see— the awkward little methods of doing things that have grown up and which no one notices. And since manufacturing is solely a matter of detail, these little things develop, when added together, into very big things."

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Motion Efficiency and Setup Time Reduction

• The ability to shoot more quickly at someone who was shooting back was a powerful incentive for armies to develop these techniques.• The musket cartridge, with its premeasured

powder charge, externalized the setup operation (a key concept of SMED) of measuring out each charge of gunpowder. This was being done 400 or more years ago.

• Loading drills prescribed the "one best way," or standard, for loading muskets. Soldiers were (per von Steuben's drill manual of 1779) to count a second between each motion: a forerunner of takt time?

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More on Takt Time

• The concept of rhythmic timing, or getting everyone to work at the same pace, is very old.• Drums everyone marches at the

same speed. (Synchronous flow manufacturing's drum-buffer rope)

• Sailor's songs on wooden ships provided rhythm for group tasks.

• Music coordinates some very complex performances:

• Ballet dancers perform different routines that must, however, keep pace with one another.

• Marching bands can make very complex formations during, for example, football halftime performances.

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Benjamin Franklin's Lean Enterprise

Concepts

"Nothing has happened in our history to render out of date the business philosophy of Benjamin Franklin. Poor Richard's Almanac is still the best business compendium."

—Henry Ford, 1922. Ford Ideals

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Franklin on Inventory

• Purchasing departments are sometimes measured on their ability to get "good deals" from suppliers. Franklin warned of what is likely to happen:

"You call them goods; but, if you do not take care, they will prove evils to some of you. You expect they will be sold cheap, and, perhaps, they may [be bought] for less than they cost; but, if you have no occasion for them, they must be dear to you."

• Readers of The Goal will appreciate this concept!• Principle adopted by Henry Ford

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The Value of Time

• "If time be of all things the most precious, wasting time must be,' as Poor Richard says, 'the greatest prodigality;' since, 'Lost time is never found again; and what we call time enough always proves little enough:' • Readers of Goldratt and Cox's The

Goal will recognize this concept as, "Time lost at the constraint is lost forever."

• F.W. Taylor identified the false economy of maximizing tool life instead of cutting (production) rate.

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The Value of Time, contd.

• Henry Ford, 1922, My Life and Work: "If a device would save in time just 10 per cent. or increase results 10 per cent., then its absence is always a 10 per cent. tax.

Save ten steps a day for each of twelve thousand employees and you will have saved fifty miles of wasted motion and misspent energy."