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Transcript of Lean Management - An Introduction - Slides
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Productivity Improvement Through Lean Management
A Joint Program Delivered by
- an Introduction
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About APPC
• Andhra Pradesh Productivity Council (APPC) is an autonomous tripartite non-profit making body set up in the year 1958 by the Government of Andhra Pradesh.
• The Council activities are guided by a Governing Body comprising of Govt. Representatives, Employees, Employers and Eminent Persons from Industry, Educational Institution.
• APPC has successfully completed 50 years of its existence and contributed to Productivity Practices and Knowledge Management among Industries, Agriculture, Rural Development, Services Sector and Education in the Country particularly in the State of Andhra Pradesh.
• Over the years, the APPC has spread its activities into various Sectors like Distance Education, Micro Enterprise Development, Employment Generation through Skill upgradation, Promotion and Strengthening of Women SHGs, Collaborative Arrangements with Foreign Universities, Establishment of innovative projects like Training Cum Production Centre (TCPC), Jan Shikshan Samsthan (JSS) etc. besides Techno Management Consultancy
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Vision of APPC
Promotion of Productivity Awareness and Quality of Work Life towards improving resource utilization and standard of living for national growth
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About Confluence
• Confluence Business Solutions Pvt. Ltd. Is an
eleven years old organization.
• We are into Consulting and training services
• We provide consulting on strategy
deployment, breakthrough improvement,
implementing Business excellence models and
establishing various Management Systems
• We conduct in-house and open workshops on
process improvements techniques likes 5S,
Kaizen, LEAN,TPM,BSC and Six Sigma. Also we
help in deployment of the same.
• Where any expertise is required by the client
organization, Confluence augments its
resources to help achieve the objectives.
• We are a team of ten people.
• Our Registered Office is in Padmaraonagar
where as our Corporate Office at Habsiguda.
Both in Secunderabad.
Vision
“To become one of the best process consulting companies in the world”.
Mission
Act as Catalyst for Client Organizations and individuals to help them realize potential
and achieve their objectives HIGHER, FASTER and SURER
Values
Being truthful in our deeds
Value entitlement to all
our stakehol
ders
Follow Ethical
Business Practices
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Service Portfolio
Training and Certifications
Six Sigma Professional Certifications
Customized Trainings
Managerial Development Programs
Consulting
Confluence
Enabling Operational Excellence
Strategy Deployment –Balanced Scorecard
Breakthrough Improvement Services such as Six Sigma, Lean, TPM, BPR, BPM
Business Excellence Models
Management Systems Implementation
Resource Augmentation
Competent Resource Support for driving Breakthrough
Improvement Initiatives
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Objectives of this Program
• Provide an Overview of Lean Management Concepts
• Appreciation of the concepts
Primary Training Goal – To Understand the approach to Productivity
Improvement through lean tools
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Topics
1 About Management and Productivity
3 Seven Wastes
4 Overview of Lean Tools
5 Benefits of Lean Management
6 Implementation of Lean Management Philosophy
7 Question and Answers and Feedback
2 Introduction to Lean Management
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MANAGEMENT AND PRODUCTIVITYRealizing More
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Meaning of Productivity
Oxford Dictionary Meaning:
state or quality of being productive the effectiveness of productive effort, especially in industry,
as measured in terms of the rate of output per unit of input
In Economics, Productivity is defined as:
The amount of output per unit of input (labor, equipment, and capital).
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Measures of Productivity
In a factory productivity is measured based on the number of hours
it takes to produce a good.
In the service sector productivity is measured based on the revenue
generated by an employee per month/ annum or divided by his/her salary
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Goal of a Business Organization
PROFITS
Now and In Future…
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How to Generate Profits?
• By selling the products and services to the customers to address their requirements (needs and expectations).
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… and what else?
All actions in the organization needs to be productive.
Productivity is the act of bringing an
organization closer to its goal. Every action that
brings the organization closer to it’s goal is
productive. Every action that doesn’t bring the
organization closer to it’s goal is not productive.
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Profit Measurement
Net Profit = Sale Price – Cost Price
Net Profit = Sale Price – (RM Cost + Operating Cost)
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Profit Maximization
Net Profit =
Sale Price – ( RM Cost + Operating Cost )
Not in our Control Only thing to be
Controlled
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Profit Maximization
Operating Cost
Salaries and Wages
Rentals
Power
Consumables
Admin Expenses
Financial Expenses
Maintenance Expenses
Depreciation
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Profit Maximization
Is there any better way to reduce Operating Cost?
Improve Productivity
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Productivity Improvement
How do we improve Productivity?
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Importance of Productivity Improvement
Why Should we improve Productivity?
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Why Should we “Improve Productivity”
Competition
“Only the BEST Survives”
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The Jungle Principle
Every morning in Africa, a gazelle wakes up. It knows it must run faster than the fastest lion or it will be killed. Every morning a lion wakes up. It knows it must outrun the slowest gazelle or it will starve to death.
It doesn’t matter whether you are a lion or a gazelle — when the sun comes up, you had better be running.
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Self Assessment
• Please list the activities and the time you spend on each of the activity on an average day.
• Be honest in your times, as the data you put in is important for identification of improvement goals.
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Urgency Vs Importance
CrisisHigh
Productive
Routines Trivial
Urgent Not Urgent
Import
ant
Not Im
port
ant
Planning, AnalysisImprovement, etc.
Tea Breaks, Sudden Visitors, etc.
Immediate Dispatches, Emergencies, etc.
Reporting, reviews, approvals, etc.
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Urgency Vs Importance
Urgent Not Urgent
Import
ant
Not Im
port
ant
Are reactive, cause stress & reduce
Productivity
Result in efficient
working and
improve
productivity
Trivial
Time wasters and reduce
productivity
Routines
Highly dangerous,
as they give us a
false feeling of being
busy. Don’t
contribute to
Productivity
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What is Value?
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Value Adding Activities
• Activities which are essential as they result in transformation or change of products/ services.
• In other words for which customer is ready to pay.
• These activities include those which are done right first time.
• Examples of such activities include:– Production
– Procurement
– Research and Development
• These are core functional activities
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Non Value Adding Activities
• Activities that are considered not required or not essential for production and delivering of product or services to customers to meet their needs and expectations.
• Typically these activities include those for which customer is not willing to pay.
• Examples of Non Value Adding Activities include:– Rejections
– Reworks/ Reprocessing
– Wastage
– Delays
– Movement
– Idling
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Value Enabling Activities
• These includes activities that are not essential to meet the customer needs and expectations but include those activities that help in performing value added activities better and more efficiently.
• Typically such activities include– Planning
– Analysis
– Improvements
– Goal setting
– Training and skill building
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Imagine you get a lottery of lot of money.
What will you Do?
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Investment Vs Spend
• Investment gives returns in future
• Builds Wealth
• Spending or Expense doesn’t give any return in future
• Reduces Wealth
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Time
All of us have one God Given Lottery
What do we do with Time?
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Urgency Vs Importance
Urgent Not Urgent
Import
ant
Not Im
port
ant
Are reactive, cause stress & reduce
Productivity
Result in efficient
working and
improve
productivity
Trivial
Time wasters and reduce
productivity
Routines
Highly dangerous,
as they give us a
false feeling of being
busy. Don’t
contribute to
ProductivityDelegate
Automate Avoid
Invest your time
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Productive Activities for Managers
• Planning
• Analysis and identifying improvement opportunities
• Setting goals for self/ team
• Working focused improvement initiatives
• Self training
• Training team members
• Relationship building
• Motivating team members
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Tools Used
• Balanced Scorecard
• Lean Tools
• Six Sigma Tools
• TPM Tools
• Theory of Constraints
• Business Process Management
BLST2B Approach
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LEAN PHILOSOPHYDelivering More with Less
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History of Manufacturing
Pre-industrial 1890 Mass 1920 Lean 1980
Peo
ple
•Craftsmen perform all aspects of task
•Self-taught or apprentice-ship training
•Employees contribute minimally to total product
•Training for limited skills
•Management makes decisions
•Clusters of employees working in teams
•Extensive, continuing training
Pro
du
ct
•Customized, non-standard products
•Variation in quality
•Standardized, focused on volume not quality
•Focus on internal/external customer
Wo
rk
En
viro
nm
ent •Independence, discretion
•Variety of skills
•Responsibility
•Limited skills and knowledge
•Repetitive, mind-numbing work
•Little discretion, simplified tasks
•Some discretion, group effectiveness, empowerment, team accountability, work cells
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Reduced Lead Time
“One of the most noteworthy accomplishments in keeping the price of Ford products low is the gradual shortening of the production cycle. The longer an article is in the process of manufacture and the more it is moved about, the greater is its ultimate cost.”
— Henry Ford, 1926
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About Lean Philosophy
Lean philosophy is about the principles, practices, and tools to create precise customer value – goods and services with higher quality and fewer defects – with less human effort, less space, less capital, and less time than the traditional system
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Lean Tools
• 5 S
• Value Stream Mapping
• Cross – Functional Training
• Visual Management
• Spaghetti Chart
• Kaizen (means improvements, happens at process level)
• Kaikaku (means transformation, happens at system level)
• Standardizedwork
• Poka-Yoke (means mistake proofing)
and others…
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Defining Lean
Lean is:
“A systematic approach to identifying and eliminating waste (non-value-added activities) through continuous improvement by flowing the product at the pull of the customer in pursuit of perfection.”
— The MEP Lean Network
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Definition of Value-Added
Value-Added
Any activity that increases the market form or function of the product or service. (These are things the customer is willing to pay for.)
Non-Value-Added
Any activity that does not add market form or function or is not necessary. (These activities should be eliminated, simplified, reduced, or integrated.)
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Lean = Eliminating Waste
Typically 95% of all lead time is non-value-added.
Value-Added Non-Value-Added
• Overproduction
• Inventory
• Waiting
• Motion
• Transportation
• Rework
• Over Processing
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Brainstorm Wastes
What wastes were apparent in your company?
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Seven Wastes
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Overproduction
• Making more than is required by the next process
• Making earlier than is required by the next process
• Making faster than is required by the next process
• Causes of overproduction:
– Just-in-case logic
– Misuse of automation
– Long process setup
– Unlevel scheduling
– Unbalanced workload
– Over engineered
– Redundant inspections
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Inventory Waste
• Any supply in excess of a one-piece flow through your manufacturing process
• Causes of excess inventory:
– Need for buffer against inefficiencies and unexpected problems
– Product complexity
– Unleveled scheduling
– Poor market forecast
– Unbalanced workload
– Misunderstood communications
– Reward system
– Unreliable shipments by suppliers
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Defects
• Inspection and repair of material in inventory
• Causes of defects:
– Weak process control
– Poor quality
– Unbalanced inventory level
– Deficient planned maintenance
– Inadequate education, training, or work instructions
– Product design
– Customer needs not understood
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Over Processing Waste
• Effort that adds no value to the product or service from the customers’ viewpoint
• Causes of over processing waste:
– Over-processing to accommodate downtime
– True customer requirements not clearly defined
– Product changes without process changes
– Lack of communication
– Redundant approvals
– Extra copies or excessive information
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Waiting Waste
• Idle time created when waiting for…?
• Causes of waiting waste:
– Unbalanced workload
– Unplanned maintenance
– Long process setup times
– Misuses of automation
– Upstream quality problems
– Unlevel scheduling
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Motion Waste
• Any movement of people or machines that does not add value to the product or service
• Causes of motion waste:
– Poor people or machine effectiveness
– Inconsistent work methods
– Unfavorable facility or cell layout
– Poor workplace organization and housekeeping
– Extra “busy” movements while waiting
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Waste of Transportation
• Transporting parts and materials around the plant
• Causes of transportation waste:
– Poor plant layout
– Poor understanding of the process flow for production
– Large batch sizes, long lead times, and large storage areas
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People Waste
• The waste of not using people’s mental, creative, and physical abilities
• Causes of people waste:
– Old guard thinking, politics, the business culture
– Poor hiring practices
– Low or no investment in training
– Low pay, high turnover strategy
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Lean Building Blocks
Quick Changeover
Standardized Work Batch Reduction Teams
Quality at Source
5S SystemVisual Plant Layout
POUS
Cellular/ FlowPull/ Kanban TPM
Continuous Improvement
ValueStreamMapping
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Standardized Work
Operations safely carried out with all tasks organized in the best known sequence, and using the most effective combination of these resources:
• People
• Materials
• Methods
• Machines
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Work Place Organization
A safe, clean, neat arrangement of the workplace provides a specific location for everything, and eliminates anything not required.
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Elements of a 5S Program
Seiri (Sort) — Perform “Sort Through and Sort Out,” by placing a red tag on all unneeded items and moving them to a temporary holding area. Within a predetermined time the red tag items are disposed, sold, moved or given away. “When in doubt, throw it out!”
Seiton (Set in Order)— Identify the best location for remaining items, relocate out of place items, set inventory limits, and install temporary location indicators.
Seiso (Shine) — Clean everything, inside and out. Continue to inspect items by cleaning them and to prevent dirt, grime, and contamination from occurring.
Seiketsu (Standardize) — Create the rules for maintaining and controlling the first three S’s and use visual controls.
Shit Suke (Sustain) — Ensure adherence to the 5S standards through communication, training, and self-discipline.
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Visual Controls
Simple signals that provide an immediate understanding of a situation or condition. They are efficient, self-regulating, and worker-managed.
Examples:
• Kanban cards
• Color-coded dies, tools, pallets
• Lines on the floor to delineate storage areas, walkways, work areas, etc.
• Andon lights
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Plant Layout
Brake
Screw
Machine
Raw Stock QC Rec. Ship
ShearQC
Assembly
Parts Stock
Stamp
Mill Lathe Drill
FinishWeld Grind
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Lean Building Blocks
Standardized Work
5S SystemVisual Plant Layout
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Lean Workforce Practices
• Teams
– With rotation of highly specified jobs
• Cross-trained and multi-skilled employees
– Who can work many operations within a cell and operations in different cells
• Continuous improvement philosophy
• Process quality, not inspection
• Use of participatory decision-making
– Quality Control Circles, team-based problem-solving, suggestion systems, etc.
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Quick Changeover
• Definition: The time between the last good piece off the current run and the first good piece off the next run.
• Before Shigeo Shingo’s Single Minute Exchange of Die (SMED) improvements, basic setup tasks and related time breakdowns:
Percent of time of changeover
15%
5%
30%
50%
Preparation, after-process adjustment,
checking, storing, and moving materials,
parts, and tools
Removing and mounting of parts and tools
Machine measurements, settings, and
calibrations
Trial runs and adjustments
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Batch and Queue Processing
Impact of Batch Size Reduction
10 min. 10 min.
30+ min. for total order, 21+ min. for first piece
10 min.
Process
AProcess
B
Process
C
Process
BProcess
AProcess
C
Continuous Flow
Processing
12 min. for total order,
3 min. for first part
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Batch Size Reduction
The best batch size is one piece flow, or: “make one and move one!”
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Point Of Use Storage (POUS)
• Raw material is stored at workstation where used
• Works best if vendor relationship permits frequent, on-time, small shipments
• Simplifies physical inventory tracking, storage, and handling
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Quality at the Source
• Source Inspection: Operators must be certain that the product they are passing to the next work station is of acceptable quality.
• Operators must be given the means to perform inspection at the source, before they pass it along.
• Samples or established standards are visible tools that can be used in the cell for such purposes.
• Process documentation defining quality inspection requirements for each work station may need to be developed.
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Lean Building Blocks
Quick Changeover
Standardized Work Batch Reduction Teams
Quality at Source
5S SystemVisual Plant Layout
POUS
Cellular/FlowPull/Kanban TPM
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Push versus Pull Systems
Push System
Resources are provided to the consumer based on forecasts or schedules
Pull System
A method of controlling the flow of resources by replacing only what has been consumed
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Pull System
Pull System is a flexible and simple method of controlling or balancing the flow of resources
Eliminating waste of handling, storage, expediting, obsolescence, repair, rework, facilities, equipment, excess inventory (work-in-process and finished)
Pull System consists of:
• Production based on actual consumption
• Small lots
• Low inventories
• Management by sight
• Better communication
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SupplierProcess
B
Fin.
Goods
Raw
Matl.
Process
ACustomer
Process
C
Pull System Flow Diagram
Kanban Locations
Part Flow
Information Flow
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Cellular Manufacturing
Linking of manual and machine operations into the most efficient combination to maximize value-added content while minimizing waste.
Sand
Punch
Cut to size De-burr
FormPackage
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Refining the Cell: Five Step Process
1. Group products
2. Measure demands — establish Takt time
3. Review work sequence
4. Combine work in balance process
5. Design cell layout
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Step 1: Group Products
Products with similar processing requirements are grouped into product families
Processing Steps
Product
Insert Springs
Insert Diodes
Insert 1k Resistors
Insert Light
Insert 100k Resistors Test
Red × × × × ×
Blue × × × × ×
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Step 2: Establish Takt Time
Takt Time = Demand Rate
Takt Time = (Work Time Available ÷ Number of Units Sold)
Takt Time = (1200 seconds ÷ 115 units) = 10.4 sec/unit
Cycle Time ÷ Takt Time = Minimum Number of People
Goal: Produce to Demand
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Step 3: Review Work Sequence
• Observe sequence of tasks each worker performs
• Break operations into observable elements
• Identify value-added versus non-value-added (NVA) elements and minimize NVA
• Study machine capacity, cycle times and changeover times
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Step 4: Combine Work to Balance Process
0
5
10
15
20
A B C D E
0
5
10
15
20
A B C D E
Takt Time = 10 seconds
Unbalanced Line Balanced Line
Operations
Seco
nd
s
Operations
Seco
nd
s
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Step 5: Design and Construct Cell
• Design goals:
–Flexible layout
–Lot size = 1
–Point of Use Storage (POUS)
–Visual management
–Mixed models
• Simplify flow
– Integrate process operations
–Materials flow one way
• Minimize materials handling
– Concentrate on value-added motion
– Establish material replenishment procedure
• Make use of people 100%
– Promote visibility and flexibility
– Operators stand for flexibility
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Lean Building Blocks
Quick Changeover
Standardized Work Batch Reduction Teams
Quality at Source
5S SystemVisual Plant Layout
POUS
Cellular/FlowPull/Kanban TPM
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Continuous Improvement
Old Adage:
“If you always do what you always did, you’ll always get what you always got.”
Competitive Corollary:
“If the other guy gets better, you’re going to get less.”
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Lean Building Blocks
Quick Changeover
Standardized Work Batch Reduction Teams
Quality at Source
5S SystemVisual Plant Layout
POUS
Cellular/FlowPull/Kanban TPM
Continuous Improvement
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Barriers to Improvement
If we all know we need to improve, the question becomes: why don’t we?
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Keys to Success
• Prepare and motivate people
– Widespread orientation to Continuous Improvement and quality, train and recruit workers with appropriate skills
– Create common understanding of need to change to Lean
• Involve employees
– Push decision-making and system development down to the “lowest levels”
– Train and truly empower people
• Share information and manage expectations
• Identify and empower champions, particularly operations managers
– Remove roadblocks (i.e., people, layout, systems)
– Make system both directive yet empowering
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Keys to Success (continued)
• Execute pilot projects prior to rolling out culture across organization (e.g., model lines, kaizen blitzes): after early wins in operations, extend across entireorganization
• Foster an atmosphere of experimentation
– Willingness to take risks (safety nets)
– Patience, tolerance of mistakes, etc.
• Install “enlightened” and realistic performance measurement, evaluation, and reward systems
– Do away with rigid performance goals during implementation
– Measure results, not number of activities or events
– Tie long-term improvements to key macro-level performance targets (e.g., inventory turns, quality, delivery, overall cost reductions)
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Implementation Success Factors
• Unyielding leadership
• Strategic vision, based on Lean Enterprise as part of company strategy
• Observation of outside successes and failures
• Ability to question everything
• Deep commitment to excellence
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Benefits of Lean
Lead Time Reduction
0 25 50 75 100
Percentage of Benefits Achieved
Productivity Increase
WIP Reduction
Quality Improvement
Space Utilization
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Typical Objections
How should you deal with these objections to Lean?• “It takes too much discipline.”• “It takes too long to implement.”• “My process is too complex, I have to deal with too many
uncontrollable variables, like late supplier shipments, sick people, etc.”
• “My process requires a large batch size.”• “It doesn’t make sense in my industry.”• “It’s unclear to me how Lean will work with my MRP
system.”
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Getting Started —Value Stream Mapping
A simple, visual approach to:
• Focusing on a “product family”
• Creating a clear picture of current material and information flow associated with that product family
• Identifying Lean tools and techniques that can improve flow and eliminate waste
• Incorporating those ideas in a new picture of how material and information “should” flow for that product group
• Creating an action plan that makes the new picture a reality for that product family
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Lean Building Blocks
Quick Changeover
Standardized Work Batch Reduction Teams
Quality at Source
5S SystemVisual Plant Layout
POUS
Cellular/FlowPull/Kanban TPM
Continuous Improvement
ValueStreamMapping
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Conclusion
Lean• Simple and visual• Demand driven• Inventory as needed• Reduce non-value-
added• Small lot size• Minimal lead time• Quality built• Value stream
managers
Traditional
• Complex
• Forecast driven
• Excessive inventory
• Speed up value-added work
• Batch production
• Long lead time
• Inspected-in
• Functional departments
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OEE Graph
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Feedback
+ Job production specific inputs
Case studies to be included
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Learning and then not acting on what you learn is like plowing and then never planting.
- unknown
Albert W. Daw Collection