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PEMP EMM515
Lean Metr cs & Future State VSM
Session 15
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Session Objectives
Fundamentals of Lean Metrics.
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The metrics that best suit your organization depend a great deal on
. ,
step1 of the Value Stream Management process, will guide you indetermining the appropriate metrics. Here are some basic metrics
that most companies will find useful:
Inventory turns.
Days of inventory on-hand.
Defective parts per million (DPPM) or sigma level.
Total value stream WIP.
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Lean Metrics: The Fundamentals
Total c cle time or total value addin time VAT .
Total lead-time.
.
On time delivery. Overall equipment effectiveness.
First-time-through capability.
Health and safety record (including OSHA record able and
reportable incidents).
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Lean Metrics: The Fundamentals
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Premiere Manufacturin Case Stud Ste 5
Lean Metrics: The Fundamentals
After reviewing the list of common metrics and customers
requirements, Premieres core implementation team drafts a list
of the metrics that will work best for tracking progress toward the
targets. The team reviews the metrics with management and gains
- -.
determined during current-state mapping.
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Lean Metrics: The FundamentalsMetric Baseline
Total value stream WIP inventory 17,040 units
Total product cycle time 170 seconds
Total value stream lead time 34 days
Defective PPM external 45
Uptime 84 percent
Figure- 5.3 Metrics and baseline measurements.
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Lean Metrics: The Fundamentals
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Lean Metrics: The Fundamentals
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Lean Metrics: The Fundamentals
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Lean Metrics: The Fundamentals
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Lean Metrics: The Fundamentals
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Lean Metrics: The Fundamentals
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Lean Metrics: The Fundamentals
Discussion Topics to Help Identify Wastes
Before proceeding to the next step mapping the future state it isimportant to identify as much as you can in the value stream. As
you examine the current state map from the case study, and your
own current state map, look for obvious forms of waste. Take this
o ortunit to review what ou have learned so far with our own
core implementation team, keeping track of questions as they arise.
Here are some observations and questions from the case study to get
.
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Lean Metrics: The Fundamentals
1. The total value stream c cle time or the value addin
time is 170 seconds. Yet the lead-time through the valuestream is 34 days! Why?
2. There is 10 days of inventory between the machining and
deburring operations. Why?
3. How might you gain extra capacity without additional
capital investment?
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Lean Metrics: The Fundamentals
4. In traditional manufacturing environments there is often a
reluctance to perform changeovers. What impact does this have
on levels of WIP inventory?
5. In the Premiere Manufacturing case study, production
schedules are being delivered daily to each process. Processes are
inde endentl makin roduct, whether the downstream rocessrequires it or not. Why are there so many production schedules?
6. What if the machining cycle time were equal to the takt time.
Why would this be problematic?
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Lean Metrics: The Fundamentals
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Lean Metrics: The Fundamentals
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Lean Metrics: The Fundamentals
-. , ,
and production control icons, and the communications arrowsbetween them, in the same positions as you did on the current-state
map:
Draw the customer icon in the upper right corner. Draw the supplier icon in the upper left corner.
Draw the production control icon between the customer and
supplier icons
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Lean Metrics: The Fundamentals
Draw the communications arrows running from the customericon to the production control icon and from the production
.
Label the arrows to show order and forecast frequencies
production control and the supplier. Be sure to make any
adjustments to reflect changes in forecast or ordering
requenc es you may ave nego a e s nce you comp e e ecurrent-state map.
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ean e r cs: e un amen a s
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2. Now add the shipping information:
Draw the shipping icon in the appropriate place.
Draw a truck between the shipping icon and the customer icon, with
a e very arrow runn ng rom s pp ng o e cus omer. n er e
frequency with which products are shipped to the customer inside the
truck icon.
Draw a truck icon between the supplier icon and the icon
representing the most upstream operation, with a delivery arrow
running from the supplier to the operation. Enter the frequency withwhich the supplier ships raw materials inside the truck icon.
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e ow e cus omer con, en er e cus omer requ remen s
(quantities).
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Lean Metrics: The Fundamentals
Steps to Designing a Future State that Includes Customer
Demand Elements
The steps shown below outline the process for designing the
u ure-s a e p an o mee cus omer eman .
1. Determine takt time and pitch.
2. Determine whether you can meet demand using current
production methods.
3. Determine whether you need buffer and safety inventories.
4. Determine whether you need a finished-goods supermarket.
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5. Determine which improvement methods you will use.
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Lean Metrics: The Fundamentals
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Lean Metrics: The Fundamentals
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Lean Metrics: The Fundamentals
Obstacle Solution
Fluctuations in customer demand Buffer inventory
Internal problems throughout the process Safety inventory
na y o sus a n a con nuous ow
from the
Most downstream operation to the
customer
n s e -goo
supermarket
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Premiere Manufacturing Case Study- Step 6, Demand Stage:
Determine which improvement methods to use
The team decides that the following improvement methods will help make it
1. 5S system: Improving flow and eliminating obvious wastes byimplementing the 5S system will pave the way for additional
improvements.
2. Quick changeover: The 60-minute changeover at machining presents a.
changeover (QCO) methods will help make the process faster and flexible
enough to satisfy demand.
3. Autonomous maintenance: After the 5S system is implemented at eachlocation autonomous maintenance will be introduced at machining to
eliminate the small e ui ment roblems that hurt overall rocess
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reliability.
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Based on its discussions with operators, the team believes it can achieve
Improving programming and tooling maintenance to eliminate the need for
deburrin - one o erator re uired.
Distributing the work of the three remaining operations between two operators.
Reducing change over time in machining to 15min.
Achievin chan eover time of less than one minute incrimping/testing/marking.
The team decides that the value stream should operate with three
operators. A t oug t e personne requ rement was ca cu ate as 2.7operators at a total cycle time of 150 seconds, there is simply too much
for ust two o erators. The o erator balance chart for the future state is
M.S Ramaiah School of Advanced Studies - Bangalore 35
shown in Fig 6-2.
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Premiere Manufacturing Case Study Step 6, Flow Stage:
ontro ng pstream ro uct on
Team members are confident that reconfiguring the old line into a
process w wo ce s s a goo way o sus a n ow. ey e eve
that pulling this off will require in-process supermarkets prior to
machining and between machining and crimping/testing/marking. Akanban system will also be critical to sustaining flow. The team
decides to defer mapping this until it focuses on leveling production,
when it will have a better handle on how material will actuall flow
through the value stream to meet customer demand.
In the meantime, the team draws two in-process super markets on
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the future state map in the positions mentioned above.
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Premiere Manufacturing Case Study Step 6, Flow Stage:
Determinin Which Im rovement Methods to use.
The team has already identified some improvements necessary forachieving targets. Now it reconsiders its list of improvement
methods and draws icons at the appropriate places on the future-
state map. Here is the list of the improvement methods the team
flow;
1. 5S, TPM, autonomous maintenance, and CO at machinin .
2. Standardized work at the crimping/testing/marking cell.
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3. QCO at the crimping /testing/marking cell.
4. 5S at the crimping/testing/marking cell (to address problemswith new layout) and at shipping.
By identifying TPM as an improvement method, the core
implementation team in the Premiere Manufacturing case
s u y s no ca ng or a rue, p an w e n a ve, u
an isolated application of TPM methods.
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The team decides that the value stream requires the following types of
kanbans in the following locations:
1. Withdrawal kanbans that will tell the runner how many units should bepulled from the finished-goods supermarket and staged in shipping.
2. Production kanbans that tell operators in the crimping/testing/marking
cell how many units must be produced to replenish those pulled from the
- .
3. Signal kanbans at the in-process supermarket between machining and the
crim in /testin /markin cell that tell the machinin o erator how man
units have been pulled from the supermarket.
4. Signal kanbans just upstream of machining that tell the supplier how
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many un ts ave een pu e rom raw mater a nventory.
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The team decides that machining will produce in batches of 96 to 192
units. The batch size, a multiple of the 24-unit pack-out quantity, will
depend on the number of signal kanbans that have accumulated after the
machining and the crimping/testing/marking cell.
e eam ec es o wa o raw e cons represen ng e an ans.
will add the signal kanban icons when it maps material and information
flow in machining. It will add the withdrawal kanban and production
kanban icons when it maps the runners route.
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Heijunka or Paced Withdrawal?
e team ec es to mp ement e un a or t e o ow ng reasons:
1. A heijunka box, a device used to implement a heijunka system,
prov es a great means o v sua y contro ng w t rawa an ans.
2. The team talks about the likelihood of creating one value streamto produce #4, #6, #8, and #10 hoses, because the processes are so
similar. Given this likelihood, the team reasons that it would be wise
such a big change when the value stream begins to produce fourhoses instead of two.
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The team draws a hei unka box icon below the roduction control icon
with a manual communication arrow running from production control
to the heijunka box. The entire pull system begins here. Since the ratio
,
will place kanban cards in the heijunka box in such a way that premieremakes two lots of #4 hoses for every lot of #6 hoses that it
produces(figure 6-3).
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Premiere Manufacturing Case Study- Step 6, leveling Stage:
eterm ne t e route o t e runner, map mater a an n ormat on ow,
and improvement methods.
unner s rou e, s ep
Now the team begins to draw the runners route:
. s c gure rawn enea e e un a ox con represen s e runner.
2. A team member draws a withdrawal kanban icon half way between the
icon re resentin the runner and the icon re resentin the finished oods
supermarket. A dashed arrow running from the runner icon to thesupermarket icon is added. The arrow bisects the withdrawal kanban
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,
1. Team draws a dashed arrow from finished goods supermarketicon to the shi in icon to re resent the next le of the
runners route.
2. Just beneath the dashed arrow, the team draws a supermarketparts icon and a physical material pull icon to show that the
runner pulls parts from the supermarket to the stage of
.
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Runners route, step 3
The team draws a production kanban icon just above and slightly to the right
of the icon representing the crimping/testing/marking cell.
e eam raws a as e arrow runn ng rom e s pp ng con o e
crimping/testing/marking cell icon. The arrow bisects the production kanbanicon.
unner s route, step
The team draws a dashed arrow from the crimping/testing/marking icon to the
finished goods supermarket icon. This is all that is required to show that therunner transfers finished goods from crimping/testing/marking cell to
supermarket.
Runners route, step 5
After the runner transfers finished goods to the finished goods supermarket, hereturns to the heijunka box to retrieve the withdrawal kanban from the next slot.
The team draws a dashed arrow from the finished goods supermarket icon to
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the heijunka box icon to document this last leg of the runners route.
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You may wonder where the runner gets the production kanbans.
Production kanbans are attached to containers of finished goods. When a
runner pulls a container of finished goods from a supermarket to stage,
container. The production kanban is then used to initiate replenishment
of the inventory that has just been pulled.
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Mapping material and information flow in machining:
.
pulling required parts from the supermarket between the cell and machining.
This is shown on the map by drawing a supermarket parts icon and a manual
crimping/marking/testing cell icon.
.
the in-process supermarket, the operator will also pull a signal kanban from
the container and place it in a special holder on the side of the supermarket
ow rac . e mac n ng opera or w re r eve s gna an ans w en e or s e
delivers the parts to the supermarket flow rack. To illustrate this part of the
plan the team draws a manual communication arrow and a signal kanban icon
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rom supermar e con o mac n ng con.
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Note: Even though machining is not overproducing parts, a material
pus arrow s st rawn etween t e operat on an t e n-process
supermarket just down-stream. This indicates that the productionschedule in machinin is not based strictl on what the
crimping/marking/testing cell has just pulled from the in-process
supermarket.
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3. The machining operator will be responsible for pulling containers
from the raw materials supermarket just upstream. To illustrate this
plan, the team draws a manual material pull icon and a supermarket
parts icon between the supermarket icon and the machining icon.
4. The machining operator will also be responsible for pulling the
signal kanbans from raw material containers and placing the signal
.
responsible for collecting the signal kanbans and taking them back to
the suppliers plant. To illustrate this part of the plan, the team draws
a kanban post icon between the supermarket icon and the suppliertruck icon. A manual communication arrow and a signal kanban icon
are drawn runnin from the kanban ost icon to the su lier icon.
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