australean presentation edition

Andrew Manic

Business Consultant

Purpose of this presentationLean Enterprise - Presentation

Learn why organizations must transform from being mass producers to lean producers

Present Lean Enterprise as a core key strategy Learn the concepts of Kaizen and Standardized

Work Learn about the different types of waste and how to

eliminate them Learn the tools of a Lean Enterprise Understand how your business will transform into a

Lean Enterprise

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 in Africa, 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.

Unknown

Survival

What is the Definition of a Lean Enterprise ?

Lean Enterprise

Lean Enterprise - Definition

A Lean Enterprise is an organization that operates with minimal waste (both manufacturing and overhead processes), thus providing a seamless flow of value added activities to meet and surpass customer expectations

Differences between a Mass Producer and a Lean Producer

Lean Enterprise – Mass Producers vs Lean Producers

Lean Enterprise Process

• Customer initiated actions only - Kanban• Flexibility , quick reaction to market changes,

cost effective and with minimal stress • Processes responsive, linked and predictable -

Short lead time• Minimum inventory• Continuous pursuit of perfection - Teams• Systematic elimination of waste• Optimized value stream• Systematic preventive maintenance • Set up not an issue• Visual controls - Self managed and simple• Predictable and consistent quality

Batch Process

• Push system - MRPII drives actions• Limited flexibility - High stress and costs

to meet market changes• Processes not linked or predictable - Long

lead time and quality problems• Inventory a safeguard and an asset• One time process improvement projects• Allowance for scrap• Suppliers not part of the team• Corrective maintenance rather than

preventive• Shop floor control through reports• Rework

Business activities are independent and unfocused Business activities are linked and focused

Lean Enterprise – Mass Producers vs Lean ProducersProcess Differences

Mass Producers vs Lean Producers Mass manufacturing systems can no longer compete, their processes are

very wasteful thus very costly Mass manufacturing systems have very slow response times to customer

needs, high costs, and poor quality products – value stream destruction Mass producers don’t know where their problems are – firefighting ! Lean Enterprise systems facilitate very fast response to customer needs,

low costs, and high quality products – value stream optimization The Lean Enterprise focuses on systematic waste removal, root cause

problem solving, and continuous improvement

Lean Enterprise – Mass Producers vs Lean Producers

The reason for change

Lean Enterprise - Change

Change - What has changed in the business world? The market and business dynamics have changed dramatically in the last five years

• Strong competition.

• Extraordinary price pressures.

• Quality is a given.

• Continuous need for rapid innovation.

• Widespread communications about choice, competition and

prices.

• Continued need to increase people’s skill levels to remain

marketable.

Therefore, we need to understand this environment and decide on a course of action

New basic dynamics include:


Many Major Markets Require a Substantial Price Cut Each Year

Automotive and Appliance To stay at same profit level, we

must cut costs To do nothing is to go out of

business!


What if your main competitor looked like this?Toyota Group Supplier

Measure ResultsManufacturing Lead Time 4 hours

Delivered Quality 3 PPM

Delivery Performance 99+%

Inventory Turns > 50

Changeover Time· Assembly· Stamping/Molding

< 1 minute< 10 Min.


The Lean CompanyLean companies typically achieve:

• 50% space reduction

• 50 inventory turns per year

• 50% productivity gain

• Short cycle time paper handling processes (1 hour or less)

• Large cash flow due to reduced inventory and Kanban use

• Real cost tracking based on Activity Based Costing rather than by allocation or standards

• Capital investment needs reduced to 50%

• Near zero defective product returns from the customer

• 98% to 100% on-time delivery to customer’s want date

They become the companies against whom to compete


Why Lean Enterprise ?

Everybody Wins !


Employees are empowered and part of improvement teams. The employees have a much broader knowledge of the product and the workplace. The Lean Workplace is a much cleaner, organized, safer, and happier environment to work in.

Customers win because high quality, low cost product is delivered on time

Management win because product is shipped on time, the company is making financial gains, and there is an overall positive attitude within the company

If we do not become a Lean Enterprise ...

Our company will likely share the same fate as the dinosaurs!

Why Lean Enterprise ?

There is an obvious need for dramatic change !


Lean Enterprise – Critical Success Factors

Critical Success Factors

Optimize the Value Streams that exist within your organization !

Transform your business into a Lean Enterprise !

A relentless pursuit of perfection and systematic waste elimination is fundamental !

Total employee involvement ! Top down drive !


Lean Enterprise provides a framework for production using machinery and labor as efficiently as possible

Lean Enterprise is based on the core belief of continuous improvement is required in all business processes

Lean Enterprise is a strategic business system… and a state of mind

Lean Enterprise is very simple in concept, but difficult to implement

The single most important factor in implementing Lean Enterprise is you


Key Points

Lean Enterprise – The Value Stream

The Value Stream

Definition of a Value Stream A Value Stream is defined as all of the

activities that currently exist, both value added and non-value added, that are required to bring a product through the main flows essential to every product: The production flow from raw material into

the arms of the customer The design flow from concept to launch


Mapping the Value Stream

A detailed Value Stream Mapping exercise will provide insight as to where the waste exists, and will also provide a roadmap for the overall improvement process – waste elimination is fundamental

Use Kaizen and Standardized Work as a tool for waste elimination


Kaizen and Standardized Work

Lean Enterprise: Kaizen and Standardized Work

KAIZEN is:

The Japanese word for continuous improvement in small, incremental steps

A process that eliminates waste (Muda) and therefore enables the realization of JIT

A way of life


Improving Value to Customers by Continuously Improving the PROCESS by which Business is

Conducted


Map things as they are

Measure

Flow value added

activities and train

Measure againCelebrate the

accomplishments

Eliminate what does not add

valueStart here

KAIZEN - The process


Ten Kaizen Principles Get Rid Of Old Assumptions Don’t Look For Excuses, Find Ways To Make It Happen Say ‘NO’ To The Status Quo Don’t Worry About Being Perfect - Even If You Only Get

It Half Right, Start Now It Doesn’t Always Cost Money To Do Kaizen If Something Is Wrong, Fix It On The Spot Good Ideas Come When The Going Gets Toughest Ask ‘WHY’ Five Times To Get To The Root Cause Look For Wisdom From Ten People Rather Than One Never Stop Doing KAIZEN


Why The Kaizen Events ? To create a positive attitude to change and

success To introduce all personnel within the

business unit to the benefits of a Lean Enterprise System

To introduce a continuous improvement culture to all levels of the organisation


Why The Kaizen Events ? To create a high profile, explosion of

activity to kick start lethargy out of Business Units

Break down long established Trends Focus on enhancing product quality,

delivery, and price; this type of focus will enable this company to SURVIVE in a highly competitive global marketplace


Why The Kaizen Events ? To involve the total workforce within the

organisation in multi-functional team building, working to meet the business needs and exceed customer expectations

NONE OF US ARE AS SMART AS ALL OF US !


5 main reasons for KAIZEN

• Safety Improvements

• Efficiency/Shorten lead times

• Cost Reductions

• Quality Improvements

• Improve workability


Why is Kaizen important ?

Without waste elimination and continuous improvement, your business will eventually fail !


Standardized Work Standardized Work is a tool for Kaizen It is the starting point for the improvement

process and is a tool for the elimination of waste

Standardized Work documents the steps of a process or operation that are required to manufacture a product or service

Standardized Work charts must be developed for all processes and provide the method for analysis and implementation of Kaizen


Standardized Work - ExampleLean Enterprise: Kaizen and Standardized Work

Why is Standardized Work important ?

Understanding the process and documenting the steps leads to low cost, high quality, and short lead time

It provides a baseline for continuous improvement

It is the basis for Kaizen


Waste Elimination

Lean Enterprise: Waste Elimination

Definition of Waste Waste is any factor in the production process that does not add value Your customers will not pay for non value added activity Waste makes it impossible to meet customer requirements in an efficient manor Waste is an extremely large cost We must lower our costs by total elimination of waste


Waste Waste does not “just happen” Mass manufacturing production systems (job shop mentality) create and generate waste Waste is created by design

design of products design of production processes design of overhead processes design of factory layouts

Mass manufacturing systems create enormous communication problems and also generate the seven main wastes


Eliminate the Seven Wastes ! Waste of

– Overproduction– Waiting– Conveyance (Transportation)– Processing itself– Stock on Hand (Inventory)– Movement– Making Defective Products


Waste Definitions

Overproduction- Producing larger quantities than needed, or at a faster rate than is required


Overproduction Lean Enterprise: Waste Elimination

Waste Definitions

Waiting- When people or machines stand idle waiting for a previous operation to be completed


Waiting Lean Enterprise: Waste Elimination

Waste Definitions

Transportation - Moving the product from where it was produced to where it is needed. The distance and time are wastes


TransportationLean Enterprise: Waste Elimination

Waste Definitions

Processing - Processing work that isn’t needed


Waste Definitions

Stock on Hand - Excess product that cannot be immediately consumed


Stock On Hand Lean Enterprise: Waste Elimination

Waste Definitions

Movement - Any movement of people or machines that does not add value to the product


Movement Lean Enterprise: Waste Elimination

Waste Definitions

Making Defective Product - Making a product that is defective, the materials, labor, and machine time used to correct the defect raises the total cost of the product


Rework Lean Enterprise: Waste Elimination

Inventory is Evil


MRP Customer ResponsivenessFORECAST

MACH MACH MACH PAINTRAW

MATERIAL

Sub Sub Assy 1 Assy 1Assy1 Assy2

SHIP

Assy 1 Assy 1 Assy 1 Assy 1

ORDER RAW MATERIAL CUSTOMER

ORDER TO SHIP RESPONSE TIME = 8 TO 12 WEEKS

WIP WIPWIPWIP

WIP WIPWIPWIP

WIP FININV

WIPWIP


Eliminate MRP as a Production Control Tool

MRP

For Production Control

Use MRP only for planning


Inventory is like a river, when water level is

lowered, boulders have to

be dealt with

Scrap

Long set ups

Absenteeism Lack of teamwork

Machine downtime

Imbalanced lines

Quality problems

not capableProcesses

Maintenance issues

Productivity Problems

Suppliers’ issues

Inventory Level

Inventory Hides Problems

Reducing inventory levels brings problems to the surface and forces their resolution


Waste creates Waste !

Lean Enterprise: Waste Identification

In Summary Waste Reduction will: Improve Quality Improve Productivity Improve Delivery (Short Lead Times) Reduce Inventory Levels Reduce Space Requirements

Reduction of Total Cost of Operations


6 Tools of Lean Production

Lean Enterprise: 6 Tools of Lean Production

Lean Production Tools

Products are built“Just In Time”,only to customerdemand

JIT production

Six Sigma qualityis built into theproduct and theprocess

Six sigma quality

Visual Management to track performance and open the company to all people

Visual Management

There is arelentless pursuitof perfection

Pursuit of Perfection

Empowered Teams

Shop floor teams are empowered to make key decision

The workplace issafe, orderly, andimmaculatelyclean

Workplace safety, order,

cleanliness

Lean Enterprise: 6 Tools of Lean Production




Visual Management



Empowered Teams




cleanliness

JIT production

Lean Enterprise: 6 Lean Tools – JIT Production


Six sigma quality

TAKT TIMEProduce at the Customer’s purchase rate

ONE PIECE FLOWEliminate ALL excess inventory

PULL PRODUCTION“Customers” reach upstream to “Suppliers”

TOTAL WASTE ELIMINATION IS FUNDAMENTAL !

The 3 basic laws of JIT Production


TAKT TIME


The Definition Of TAKT Time Takt is a German word meaning meter

or rhythm It dictates the rate of production or

units per hour It is a calculation based on customer

demand and available production time


Takt Time Calculation TAKT TIME is the :

TIME AVAILABLE (SECONDS)TIME AVAILABLE (SECONDS) THE NUMBER OF THE NUMBER OF SOLD SOLD UNITSUNITS

Using SOLD units reinforces the concept of making only what you need; no over

production, driven by demand


Takt Time ExampleMinutes Seconds

Total Time Available in a Workday 486 29,160Less Morning Meeting 5 300Less Morning Work Break 10 600Less Lunch Break 30 1,800Less stretch (exercise) time 6 360Less Cleanup (5s) Time 5 300Less Toilet Time 10 600

Total Work Time Available in a Workday 420 25,200

Number of Units Sold to the Customer Each Day 290

Takt Time Calculation :Total Work Time Available in a Workday 25,200 Number of Units Sold to the Customer Each Day 290

Takt Time = 87 seconds


Important uses of Takt Time This time reference should not only be used

in production, but also in: The design of new products The design of new processes The design of jigs, fixtures, and dies The purchasing of equipment


Why is Takt Time Important ? If you produce at a rate slower than

takt, you will eventually lose your customer!

If you produce at a rate faster than takt, you will overproduce which is a very large cost!


ONE PIECE


FLOW

Definition of One Piece Flow

Having only one piece of work in process stock between production steps

Requires time balance between operations Requires discipline and strict adherence to

work standards


Batch Continuous Flow

From: The Toyota Production System

A comparisonLean Enterprise: 6 Lean Tools – JIT Production

Most of the existing productivity problems that exist are due to

inefficient processes NOT inefficient operators !


Don’t Batch …..Lean Enterprise: 6 Lean Tools – JIT Production

Produce One Item at a TimeLean Enterprise: 6 Lean Tools – JIT Production

In Line Inspection Every Customer in a Process has:

a right to expect perfect material that exceeds the spec

an obligation to inspect the material before use

an obligation to inform the previous step in the process of any problem

an obligation to stop the process until any problem has been resolved


Lot size of 1 Your customer is the next step in the process. Your customer needs one item

at a time Give to your customer, exactly what they

need ( 1 item), exactly when they need it, done perfect every time


Determine Location of Parts• Make it easy for operators to pick them up

• Eliminate wasted motions

• Consider even the smallest parts

• Arrange the parts in order of work sequence

• Have the parts within easy reach


Develop Part Delivery SolutionsLean Enterprise: 6 Lean Tools – JIT Production

Tools used in developing a One Piece Flow workcell

• Cycle Time Analysis

• Percent Loading Chart

• Standardized Work


Why is One Piece Flow Important ? Work in-process stock is minimized Quality defects can be seen quicker Cost of overproduction is minimized Levels demand or burden for the supplier Shop floor space is effectively utilized Lead times (total time to produce) are

minimized Customer orders are filled quickly


Total Productive Maintenance

TPM

A key enabler to JIT Assembly and JIT Manufacturing


A process in which equipment (tools, jigs, dies, machinery) is maintained on an ongoing, systematic basis

Definition of TPMLean Enterprise: 6 Lean Tools – JIT Production

• Preventative Maintenance

• Operators Maintenance

• Technicians Maintenance

• Corrective Maintenance

• Machine Performance Evaluation

Elements of TPMLean Enterprise: 6 Lean Tools – JIT Production

TPM TPM is critical to successful JIT operations;

UNSCHEDULED downtime must be driven to zero

There is very little WIP in a JIT environment. If a machine breaks down, the entire closely linked line will quickly come to a halt

TPM is a long term savings that is mandatory for JIT operations

Ceasing TPM can provide a short term saving that will be a large, negative annuity for the future

Crisis Maintenance may cost 10 times more than TPM, this is a hidden cost


Why TPM

Full implementation of JIT WILL NOT BE ACHIEVED unless TPM principles are adopted and strictly applied to all manufacturing related equipment


Single Minute Exchange of Dies or Quick Changeovers

(SMED)


Definition of a Changeover

Changing dies, cutting tools, or operation methods according to changes in specifications. We call a line or cell that can make these changes quickly “flexible and robust”


Changeover time is the time that lapses between the last finished product of one type and the first good product of another type or model

Changeover time is the sum of internal and external changeover times

External time refers to the changeover (setup) time spent while the process is running

If the process must be stopped to perform the changeover task, this is internal time

It’s important to convert internal into external changeovers

SMEDLean Enterprise: 6 Lean Tools – JIT Production

Eliminate Adjustments All adjustable settings can be maladjusted Positive positioning and alignment is the only

certain way to assure quality The best adjustment is no adjustment

SMEDLean Enterprise: 6 Lean Tools – JIT Production

Height Coding


Slow Tool Change Must use many tools to changeover


Rapid Tool ChangeAllen wrenches welded to screws


Rapid Tool ChangeQuick locking system

(cam actuated)


Design for Manufacturing & Assembly

DFMA


A conscious process of making design decisions only after fully evaluating the manufacturing processes, tools, quality control measures and equipment impacts


Definition of DFMA

Use the shortest design cycle times Listen to customer described needs Listen to manufacturing describe how they

would like to build such a device Repeat the customer - manufacturing - design

cycle frequently Bring Purchasing, Materials, and Quality

personnel into process at early, proper point Minimize or eliminate curtain operations

Ovens for curing Outside operations such as heat treat,

plating

DFMALean Enterprise: 6 Lean Tools – JIT Production

Why DFMA ?

By using DFMA rules, high product quality and quick delivery can be built into the design of the product

By using DFMA rules, low manufacturing cost and low inventory carrying cost can be achieved


PULL PRODUCTION


Definition of Kanban A visual management tool which is used as a time

reference for making a part when it is needed, in the quantity needed. Kanban is a key facilitator of Just-In-Time production

Kanban provides visual instructions for production AND transportation

Prevents under/over production


Production Kanban Board


KanBan Supermarkets


FIFO Control


Why is Pull Production important ? Customer focus - Only produce what is needed,

when it is needed ! Systematic reduction of Inventory

Aids in root cause problem solving Frees up Cash to invest in job generating, cash

generating projects Quicker response to customer needs Frees up floorspace to add new cash generating

projects Aids in developing a more organized workplace




JIT production


Six sigma quality


Visual Management



Empowered Teams




cleanliness

Lean Enterprise: 6 Lean Tools – Safety, Order, Cleanliness

Definition of the 5S’s “5S” is Toyota’s process for maintaining cleanliness and

order in the workplace Separate: Clearly separate necessary

things and eliminate the unnecessary ones Sorting: Neatly arrange and identify things

for ease of use Sweeping: Maintain order and cleanliness Standardized Cleanup:Constantly maintain

and reinforce the above Strict: Make this practice a way of life


The 5 S principal was coined by Toyota to describe in

more detail what is meant by proper housekeeping


Separate Keep only the minimum of what Keep only the minimum of what

is needed for a task and discard is needed for a task and discard anything elseanything else

Analyse what is available for the task, determine what is required to complete the task, and discard what is unnecessary. Anything extra is wasteful. For example, having extra tools, materials, pencils, and paper, is waste and should be eliminated


Separate items that are not needed !Lean Enterprise: 6 Lean Tools – Safety, Order, Cleanliness

Why is separation important ?

Effective process managementEffective process management Waste reduction (Inventory, WIP, Raw Waste reduction (Inventory, WIP, Raw

Material) saves costs and timeMaterial) saves costs and time


Sorting Once the minimum requirement is Once the minimum requirement is

determined, there must be “a place determined, there must be “a place for everything and everything in for everything and everything in its place”its place”

Assign a location for all essential items. Make the work place self-explanatory so everyone knows what goes there. Thus, eliminate the confusion and the lost time associated with hunting for items out of their proper place


Sorted for ease of useLean Enterprise: 6 Lean Tools – Safety, Order, Cleanliness

Everything has a placeLean Enterprise: 6 Lean Tools – Safety, Order, Cleanliness

Shadow Boards for ease of useLean Enterprise: 6 Lean Tools – Safety, Order, Cleanliness

Why is sorting important ?

The operators are working to a Takt time – The operators are working to a Takt time – they do not have extra time to search for parts, they do not have extra time to search for parts, materials, tools, work instructions, or other materials, tools, work instructions, or other documentationdocumentation


Why is sorting important ? Reduces searching and motion wastes:

searching for parts, tools returning parts, tools

Critical for reduction in changeover times ! Easier to train new employees Makes the work environment more visual Aids in the standardisation of the workplace


Sweeping - Cleaning Everything should be cleanEverything should be clean Once the work is organised and arrangements are

completed, items must be kept clean so they can be easily obtained and used with no fumbling or lost time


Sweeping - Cleaning Every DayLean Enterprise: 6 Lean Tools – Safety, Order, Cleanliness

Why is cleaning important ? Reduces product quality issuesReduces product quality issues Saves time when using tools, fixtures Saves time when using tools, fixtures Machines run more consistentlyMachines run more consistently Promotes a safe work environmentPromotes a safe work environment Increases employee morale and pride in the Increases employee morale and pride in the

workplaceworkplace Customer appeal and approvalCustomer appeal and approval


Standardised Cleanup The working environment The working environment

should be as clean as possibleshould be as clean as possible Hygiene usually complements the other aspects of

detailed housekeeping. Effective organisation and work arrangement is reinforced by keeping everything as clean as possible


Standardised Cleanup Housekeeping Checklist Please: Clean all debris (dirt, wood, metal chips, etc) from the floor, from the benches, and under the machines/work areas. Wipe down the machines to remove all dirt, dust, and oil. Wipe down all fixtures and remove metal chips. Every bin (storage, components, reject, waste) should have a marked, designated area. Place all bins in the appropriate marked, designated area. Every pallet, trolley, and lifter should have a marked, designated area. Place every pallet, trolley, and lifter in the appropriate marked, designated area. All of the cleaning supplies should have a marked, designated area. Place all of the cleaning supplies in the appropriate marked, designated areas. Place all of the tools in the correct location on the shadowboards. Clean the Kanban location and make sure all items are in the appropriate, designated areas (with cards attached).


Standardised Cleanup Housekeeping Checklist Please: Are there any items (documentation, parts, gloves, pencil, masks, etc) that do not have a designated area? Clean and place these items in the proper location. Sweep walk ways and surrounding areas and make sure they are clean and not obstructed. Waste and reject bins should not be overflowing. Place all dangerous items (fluids, gases, goods) in the proper storage location. Place all safety gear in the proper location. Make sure the fire exits and doors are marked and not obstructed. Make sure the fire equipment is labeled and accessible. Make sure the work instructions and documentation is in the proper location. Blue lines are for stock items, red lines are for scrap/rejects, yellow lines are for outlining work areas and non stock items. Red bins are for scrap/rejects.


Assign people to specific areasLean Enterprise: 6 Lean Tools – Safety, Order, Cleanliness

Why is standardised cleanup important ?

Maintains consistent orderliness and Maintains consistent orderliness and cleanliness in the workplacecleanliness in the workplace

Provides guidelines for DAILY cleanupProvides guidelines for DAILY cleanup Avoids “once a year” cleaning sessionsAvoids “once a year” cleaning sessions


Strict - Discipline The other Four SThe other Four S’’s must be s must be

pursued with strict disciplinepursued with strict discipline We must follow the rules and make them a habit.

From observation, it seems the fifth S has been the hardest one to follow. Things start out organised, arranged and clean, but over time become messy. Daily discipline will greatly enhance the Five S tool


Tool RoomLean Enterprise: 6 Lean Tools – Safety, Order, Cleanliness

Everything has a place !Lean Enterprise: 6 Lean Tools – Safety, Order, Cleanliness


5S and Quality

Welding Operation

Lean Enterprise: 6 Lean Tools – Safety, Order, CleanlinessThis buildup can create variation at the weld point

Drilling and Tapping Operation

Lean Enterprise: 6 Lean Tools – Safety, Order, CleanlinessThis swarf can cause variation in the angle of the drilled hole

Drilling and Tapping Operation


This build-up ….

can create variation here


which cause variation within the

product and…

creates the need for inspection at final

assembly !

An organised, clean workplace: has higher productivity produces fewer defects meets deadlines better is a much safer place to work creates a happier work environment promotes communication


Lean Enterprise Depends on Everyone’s Active Involvement

Every member of the organization MUST follow the Five S principles before results will be noticed and

sustained on a daily basis




JIT production


Six sigma quality




Empowered Teams




cleanliness

Visual Management

Lean Enterprise: 6 Lean Tools – Visual Management

Definition of Visual Control

Is the use of signals, charts, measurements, diagrams, lights, and signs to clearly define

the normal or desired conditions and to expose the abnormal undesired conditions


Monitoring :

• Efficiency

• Quality PPM

• 24 hours turnaround DIFOT

• Monthly Housekeeping Score

• Scrap Amount

• Equipment Availability

Visual ControlLean Enterprise: 6 Lean Tools – Visual Management

Keeping Track of :

• New Ideas and Projects

• The 3 Projects In Progress

• Completed Projects ...

• and their Results

Visual ControlLean Enterprise: 6 Lean Tools – Visual Management

Hourly Production MonitoringLean Enterprise: 6 Lean Tools – Visual Management

Visual KanBan SystemLean Enterprise: 6 Lean Tools – Visual Management

Visual Display to ensure FIFOLean Enterprise: 6 Lean Tools – Visual Management

Color Coating of Dies / Visual ExplanationsLean Enterprise: 6 Lean Tools – Visual Management

Visual Warning !


Andon A signal, light, bell or music alarm triggered

by an operator confronted with a non-standard condition

A non-standard condition includes tool failure, machine failure, bad part, lack of parts, can not keep up or when an error needs correction

An andon is a signal for IMMEDIATE help to prevent line stop


Andon lights


Why is a Visual Workplace important ?• to know what your goals are

• Clarity of Communication

• Clarity of Baseline for Continuous Improvement

• Ease of Training

• Ease of Compliance to Standards, Regulations

• Pride in Workplace

• Customer Appeal and Approval

• Bottom Line Improvement




JIT production





Empowered Teams




cleanliness

Visual Management

Six sigma quality

Lean Enterprise: 6 Lean Tools – Six Sigma Quality

Definition of Six Sigma

Six Sigma is a problem solving process used to:

• reduce variation in processes and products

• reduce the cost of poor quality

• improve capacity and productivity

• improve quality, cost, cycle time, and financial results

• attack variation and defects

• insure a predictable factory


• defining critical business metrics

• defects per unit

• cost of poor quality

• throughput

• tracking them

• improving them by proactive process improvement

• utilizing data/facts, not guessing

Six Sigma is characterized byLean Enterprise: 6 Lean Tools – Six Sigma Quality

Sigma refers to Process Capability

2 308,5373 66,8074 6,2105 2336 3.4

PPM

ProcessCapability

Defects per Million Opp.


Sigma refers to Process Capability

2 69.1%3 93.32%4 99.379%5 99.9767%6 99.99966%

% Non-Defective


The focus is to prevent any defects from passing to the next downstream customer

“Self Stop” for quality problems Machine detected defects Operator detected defects (operators shut down line)

Mistake proofing (poke yoke) Six Sigma process control

Use of Statistical Process Control True root cause problem solving and action plans

Use of 5 Whys Personnel trained in problem solving methods Root cause analysis not to find blame but rather to

understand what happened

Building Quality into the product & the processQuality is built into the product and process; not inspected


5 Why’s and 1 How 1. Why did the machine stop ? - There was an overload and the fuse blew 2. Why was there an overload ? - The bearing was not sufficiently lubricated 3. Why was it not lubricated sufficiently ? - The lubrication pump was not pumping sufficiently 4. Why was it not pumping sufficiently ? - The shaft of the pump was worn and rattling 5. Why was the shaft worn out ? - There was no strainer attached and metal scrap got in




JIT production








cleanliness

Visual Management

Six sigma quality

Empowered Teams

Lean Enterprise: 6 Lean Tools – Empowered Teams

Definition of Empowerment


To authorize others to make decisions within dictated boundaries

Tools and Rules

Before empowerment can truly exist, employees must have the tools and rules

to make them successful !


Tools and Rules Tools:

Machines that are in excellent working condition

Machines that are process capable Tools, jigs, and fixtures that facilitate one

piece flow A Kanban system that is in proper working

condition Component’s that are within spec An organization structure that supports the

ideas of the workforce and responds to their problems


Tools and Rules Rules:

Management must establish and enforce the boundaries in which the people must operate work schedules adherence to the visual management system adherence to the company housekeeping

program work to takt - no batch production, no

overproducing, etc Work standards must be created and enforced

line balance, work instructions, following BOM’s


Set the employees up for success: Provide adequate numbers of well maintained

equipment that are process capable Provide adequate and proper training Jointly establish expectations Delegate authority and responsibilities.

(Superior is still responsible) Delineate boundaries Hold employees accountable


Why is Empowerment important ?

Employees are the most valuable asset Employees are bright, educated, experienced, and

capable of much more than they are presently doing

Decisions made as low in the organization as possible are made with a better, less filtered, more relevant set of data


Why is Empowerment important ? The value-added work is done low in the

organization. Decisions done at that level will increase the level of ownership felt by all employees and the organization will reap the benefits

JIT / Lean Manufacturing requires personnel flexibility

Multi functional employees Few job classifications Extensive cross training With empowerment, everybody wins !




JIT production







cleanliness

Visual Management

Six sigma quality

Empowered Teams


Lean Enterprise: 6 Lean Tools – Pursuit of Perfection

Pursuit of perfection is driven by continuous improvement via systematic waste elimination. The continuous improvement activities should be driven by: optimizing all of the value streams that

exist within the organization using Six Sigma techniques to

systematically eliminate quality problems total employee involvement top down drive


Suggestions systems There are processes in place enabling operators to implement

changes Measurement of changes implemented per week and outcomes Operators’ meet weekly to review problems and challenges There is a process that: enables operators to request suggested

improvements and causes the rest of the company’s organizations to respond to such requests

Operators’ meet every day to evaluate prior day performance as well current day production program

Continuous improvement teams Operators visit customers for quality problems

ActivitiesLean Enterprise: 6 Lean Tools – Pursuit of Perfection

develop an organizational structure that will facilitate change and continuous improvement

have an ongoing review procedure in place to review future plans and achievements

utilize some type of assessment tool to analyze the present situation relate the improvements back to key performance indicators and the

Strategic Plan actively participate and aggressively drive the pursuit of perfection

activities move away from a Pursuit of Perfection Program and migrate to a

Pursuit of Perfection culture this culture is formed by managements ability to enforce boundaries,

by managements active involvement in the improvement process, and leading by example (doing not talking)

Role of ManagementLean Enterprise: 6 Lean Tools – Pursuit of Perfection

Value Stream Mapping Drive toward the future state

Radar Chart 12 x 12 measurement system Ranking an area or workcell based on 6

LE tools Visual production data – P Chart,

Productivity, Uptime %

Examples of Assessment ToolsLean Enterprise: 6 Lean Tools – Pursuit of Perfection

Lean Assessment Chart

7.506.60

6.10

6.20

4.563.80

4.00

5.50

0123456789

101. Workplace safety, Order and Cleanliness

2. Just in Time Production

3. Six Sigma quality built into the product and theprocess.

4. Empowered teams

5. Visual management

6. Continuous Pursuit of Perfection

7. Overall company organization and managementstyle

8. Company support functions

LE ratingMaximum rating

Radar ChartLean Enterprise: 6 Lean Tools – Pursuit of Perfection

Inventory Turns

3.0

5.0

7.0

9.0

11.0

13.0

15.0

17.0

# Turns

P roduction Turns 13.1 11.5 11.2 12.4 12.9 12.3 13.4 13.4 13.0 14.3 14.6 14.3 16.3Factored Turns 22.1 28.0 37.8 156.6 154.0 95.2 43.7 49.6 72.6 69.6 379.5 339.5 138.3Total Turns including FIFO 8.6 8.0 7.9 8.6 8.8 8.5 9.0 9.0 8.7 9.2 9.3 9.0 9.5YE Goal 12.9 12.9 12.9 12.9 12.9 12.9 12.9 12.9 12.9 12.9 12.9 12.9 12.9

Mar-98 Apr-98 May-98 J un-98 J ul-98 Aug-98 Sep-98 Oct-98 Nov-98 Dec-98 J an-99 Feb-99 Mar-99

Customer PPM

-

100

200

300

400

500

600

700

800

PPM

Total Shipments 510,781 442,629 515,285 586,126 575,791 218,689 442,886 463,755 434,075 310,000 489,975 492,000 594,175 Gross Returns 266 145 179 155 195 82 154 163 159 92 127 121 159 No Defects Found 53 22 36 20 30 13 26 33 32 22 23 20 32 Net Returns 213 123 143 135 165 69 128 130 127 70 104 101 127 P P M Gross 521 328 347 264 339 375 348 351 366 297 259 246 268 P P M Net 417 278 278 230 287 316 289 280 293 226 212 205 214 Y/END Goal 100 100 100 100 100 100 100 100 100 100 100 100 100


On-Time Delivery to Customer Want Date

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

On Time % 76.0% 74.0% 72.0% 68.0% 67.0% 68.0% 70.0% 74.0% 87.0% 92.0% 92.0% 95.0% 95.0%

YE Goal % 90.0% 90.0% 90.0% 90.0% 90.0% 90.0% 90.0% 90.0% 90.0% 90.0% 90.0% 90.0% 90.0%

Mar-98 Apr-98 May-98 Jun-98 Jul-98 Aug-98 Sep-98 Oct-98 Nov-98 Dec-98 Jan-99 Feb-99 Mar-99

Cost Performance

0%

20%

40%

60%

80%

100%

120%

Var

Cos

t % P

rod

Sal

es

200

400

600

800

1,000

1,200

1,400

1,600

Fixe

d O

H $0

00's

Var Cost % Sales 78.7% 72.8% 80.6% 80.1% 68.9% 67.6% 72.1% 112.0% 70.9% 81.6% 72.5% 79.4% 75.1%YE Goal % 64.5% 64.5% 64.5% 64.5% 64.5% 64.5% 64.5% 64.5% 64.5% 64.5% 64.5% 64.5% 64.5%Net Fixed OH $ 825 795 712 965 817 172 978 769 840 844 660 850 1,269 YE Goal $ 733 733 733 733 733 733 733 733 733 733 733 733 733


Tracking systemLean Enterprise: 6 Lean Tools – Pursuit of Perfection

Lean Enterprise ScorecardCell: DishlexDate: 4/9/99

JIT Production System Visual Management 0 1 2 3 4 5 6 7 8 9 10Flow 0 1 2 3 4 5 6 7 8 9 10 Visual hourly production 81 Piece Flow/Line Balance (operators) 7 Visual ideas and actions 6Multi-skilling at each operation 1 Visual Kanban system (internal, external, and customer) 8Tracking of employee skill base 0 Visual Kanban procedures 4In Line Inspection 7 Visual quality measures 31 piece flow cell development (physical) 8 Visual SOP 7Movement of "suppliers/subassy" online 5 Visual Skill Base/Achievement 0Summary Score: Flow 5 Standardized White Board Measurement System 0

Visual line identification 0Kanban 0 1 2 3 4 5 6 7 8 9 10 Visual tracking of efficiency 0Internal Supply Kanban establishment 0 Use of Pull Squares 6External Supply Kanban establishment 5 Summary Score: Visual Management 4Customer Supply Kanban establishment 8Process established for correcting Kanban errors 2Summary Score: Kanban 4 6 Sigma Quality System 0 1 2 3 4 5 6 7 8 9 10

Use of SPC 0Quick Changeovers 0 1 2 3 4 5 6 7 8 9 10 Quality standards posted 1Establishment of Shadowboards 7 Establishment and use of SOP 5Changeover Times 4 On line PPM level 2Multi-skilling at each changeover location 1 Reject process identified and used 1Summary Score: Quick Changeovers 4 Customer complaint feedback system established 0

Use of Poke Yoke 0Total Productive Maintenance 0 1 2 3 4 5 6 7 8 9 10 Use of Autonomation 0Preventative Maintenance Plan 1 Summary Score: 6 Sigma Quality System 1% of Equipment currently being systematically maintained 0Operators Maintenance Plan 0% of operators trained on the Operators Maintenance Plan 0 Empowered Teams 0 1 2 3 4 5 6 7 8 9 10Technicians Maintenance Plan 1 Daily team meetings (no management involvement) 5Corrective Maintenance Process established and used 1 Decisions made regarding production 5Average time to correct a line problem 1 Decisions made regarding line balance 6Overall Equipment Effectiveness Measurement Process 0 Involvement with quality issues 1Overall Equipment Effectiveness Measurement 0 Customer visits/involvement 0Summary Score: Total Productive Maintenance 0 Ability to stop production 7

Summary Score: Empowered Teams 40 1 2 3 4 5 6 7 8 9 10

Flow 5Kanban 4 Pursuit of Perfection 0 1 2 3 4 5 6 7 8 9 10Quick Changeovers 4 Established suggestion system 3Total Productive Maintenance 0 Ongoing To-Do List/Future action plan 4Summary Score: JIT Production 3 Plan for cycle time reduction 1

Continuing operator education 3Safety, Order, Cleanliness 0 1 2 3 4 5 6 7 8 9 10 Established system to monitor/track improvements 7Workplace safety 7 Feedback system to management regarding improvements 15s scorecard measure 6 Summary Score: Pursuit of Perfection 3Summary Score: Safety, Order, Cleanliness 7

0 1 2 3 4 5 6 7 8 9 10Overall Lean Enterprise Score : 4


Why is continuous improvement important ?

Continuous improvement (as apposed to a single improvement) is the vehicle that drives the future success of a business !


Review of Kaizen Objectives Time and BALANCE all processes Eliminate waste of parts movement Eliminate waste of people movement Eliminate excess inventory Achieve ‘one piece flow’ Implement 5s program, and Visual Control

Lean Enterprise – Kaizen Event Review

WIP PARTS TRAFFICPROCESS VALUE/NV (UNITS) (METERS)

1 Printing V2 Building V 12 1.20 3 Staking V 1.04 4 Insert Cam V 6 0.70 5 Bridge V 4 6 Riviting V 8 0.60 7 Adjust Screw NV 0.37 8 Gapping NV 15 0.50 9 Loading V 0.20

10 Coiling V 50 3.40 11 Bracket V 2 0.70 12 Front Plate V 106 2.50 13 Setting V 3 0.70 14 Calibration ? 3 1.00 15 Cooling V 14 1.10 16 Cold Check V 10 17 Tank 2 V 10 0.60 18 Cooling V 7 19 Packing V 1.90

WIP Parts TrafficTOTALS 250 16.51

An Example of the Kaizen Process - Process Mapping

An Example of the Kaizen Process - Spaghetti/Layout Before

An Example of the Kaizen Process - Spaghetti/Layout After

CELEBRATE YOUR SUCCESS !

An Example of the Kaizen Process - Day 4 Requirements cont.

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