History of Manufacturing
CRAFT
Made to customer specification
Each product unique
Quality dependent on skill of worker
MASS PRODUCTION
Interchangeable parts
Division of labor-Frederick Taylor
Standardized work (time study + standard)
High volume, low variety
LEAN PRODUCTION
High variety, small batch size, 3k sigma quality
What is LEAN?
“Lean is the elimination of anything not absolutely required to create a
quality product or service, on time, to our customers.”
LEAN has fundamentally different business logic.
LEAN is based on eliminating unnecessary action.
LEAN links value activity in a continuous sequence.
“Only a small fraction of total time and effort in an organization adds
value for end customer!”
Why LEAN?
Severe Competitions in all walks of business. Firms face challenge in
improving the economy. Every little saving will improve the bottom line for
every available resource to perform the task. Option: cost reduction is
critical to our survival and prosperity (cost dictated by the market price-
imposed for us). Cost activities involved (VA+NVA).
LEAN - Some Myths
LEAN is a factory thing
LEAN will not work here
We tried it, it is another kaizen event
5S is all about cleaning up our office or workstation
We're different, it can't apply to our business
It is an excuse to take our jobs away
Zero inventory
LEAN System - Benefits
The Hard Ones (Typical)
15% growth in 1 year
Productivity increment in one year
20% space reduction
30% time delivery reliability
28% throughput lead time reductions
Improved supplier performance
Improved customer quality
Progressive MUDA elimination
The Soft Ones
Flexible structures assigned to business goals
Roles & Responsibilities assigned to business goals
Process-driven culture
Individual drivers of achievements
Increased employee ability and morale
Visual abnormal situations
Flexible application of resources for best return
Believable process of success
LEAN Principles
Specify what creates value from the customer’s perspective
Identify all steps across the whole value stream
Make those actions that create the value flow at the pull of the
customer
Involve and empower employees
Strive for perfection by continually eliminating the successive layers
of waste
What is Value?
Value is what the customer wants, when they want it, in the
expected quantity and quality
To establish the “customer's wants,” employ the QFD (Quality
Functional Deployment) technique
To analyze customers' wants, use the KANO model
KANO Model Classify characteristics as Basic, Performance, and
Delighted Ask two questions:
1. What if the characteristic is present?
2. What if the characteristic is absent?
o If + = good & - = bad, it is Basic
o If + = neutral & - = bad, it is Need
o If + = good & - = neutral, it is Delighter
Define Values in the Eyes of Customer
What product/service?
What attribute/features?
What quality levels?
What delivery?
Rate
Response time expectations
Are we measuring it? If yes, how?
What is a Value Stream?
A value stream involves all the steps in a process, both value-
added and non-value-added, required to complete a product or
service from beginning to end.
What is a Value Stream Map?
Visual representation of a value stream or the work process
Pencil & paper tool which tells of gaps
Identifies waste & problems with the process
Establishes a common language to document a process
Provides a blueprint for improvement
What is WASTE?
Any activity that DOES NOT increase the material form or
function of the product or service based on the critical customer
requirements.
These are things the customer is NOT willing to pay for.
Here's the text from the image converted to words:
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.)
Where is the Waste?
Defects: Incomplete or incorrect information
Overproduction: Making extra copies, more than needed
Transportation: Moving reports from one location to another
Waiting: Waiting for approval signatures
Inventory: Large backlogs of unprocessed closing packets, high
volume of unread emails in inboxes
Motion: Searching for files and reports in filing cabinets, looking for
lost documents and files on desktops
Processing: Large batches, complexity to complete tasks
Examples:
1. Excessive Emails - too many people copied on emails.
2. Excessive Signatures - too many approvals required.
3. Unnecessary Reports - reports no longer used.
Typically, 95% of all lead time is non-value added.
Prerequisites of Value Stream Mapping:
Understanding the Process
Information and Material Flow
Data-Driven Decision Process
Taiichi Ohno’s 7 Wastes (muda)
Types of waste:
Overproduction
Waiting time
Transport
Process
Inventory
Motion
Defective goods
7 Service Wastes
Delay – customers waiting for service.
Duplication – having to re-enter data, repeat details, etc.
Unclear communication – lacking clarity, leading to wasted time or
incorrect execution.
Incorrect inventory – being out-of-stock or unable to locate
stock/data.
Opportunity lost to retain or win customers.
Errors in the service transaction, lost orders, etc.
Getting the run-around from one department to another.
The 5S’s
The 5S’s are simple but effective methods to organize the workplace. The
methodology does, however, go beyond this simple concept and is
concerned with making orderly and standardized operations the norm
rather than the exception. Posters bearing the 5S terms can be found on
the walls of Japanese plants and are a visual aid to organizational
management.
The Japanese Origins
Seiri (Sort) This requires the classifying of items into two categories,
necessary and unnecessary, and disposing or removing the latter.
Seiton (Straighten) Once Seiri has been carried out, Seiton is
implemented to classify by using proper storage areas for all items. This
helps to keep the workplace clean and tidy, with specified maximum
levels of stock at hand.
Seiso (Shine) Seiso means cleaning the working environment. It can help
in the spotting of potential problems as well as reducing the risk/injury by
clearing away the potential causes of accidents.
Seiketsu (Systematise) This means keeping one’s person clean, by
such means as wearing proper working clothes, safety glasses, gloves,
etc., and maintaining a clean and tidy working environment. It can also
mean standardisation of the work carried out in Seiri, Seiton, Seiso.
Shitsuke (Self-discipline) Shitsuke means self-discipline. It may be
viewed as a philosophy, with employees being established and agreed
upon rules at all times. By thinking about how to act Shitsuke, they will
develop discipline for adhering to these rules without being told.
Push Production/Distribution Systems
A push system produces finished goods inventory in advance of customer
demand using a forecast of sales.
Parts and subassemblies are "pushed" through the operating system
based on a predefined schedule that is independent of actual customer
demand.
A traditional automobile factory and distribution system is a good example
of a push system.
TAKT Time
The available operating time to satisfy customer demands.
Establishes the pace, beat, or cadence of the process.
TAKT time is used to balance the various loads and identify the
bottlenecks in the process.
Flow
Using one-piece flow by linking all of these activities and processes into
the most efficient combination makes value, minimizing work-in-progress
inventories. This prevents waste, hence adding value to your product.
Here's the text from the image converted to words:
Pull
Pull = response to the customer's rate of demand i.e. the actual
customer demand that drives the supply chain.
Based on a supply chain view from downstream to upstream
activities where nothing is produced by the upstream supplier until
the downstream customer signals a need.
Perfection
The journey of continuous improvement.
Producing exactly what the customer wants, exactly when,
economically.
Perfection is an aspiration, anything and everything is able to be
improved.
Summary
Lean manufacturing was developed by the Japanese.
Lean manufacturing seeks to eliminate waste in order to reduce
costs and improve quality.
Lean principles are applied in various industries: Manufacturing
Industries (e.g., Automotive), Service Industries (e.g., Healthcare),
and Government Services (e.g., Military).
Works on 2 key principles:
o Continuous Improvement
o Respect for People
Utilises various tools and techniques: Toyota Production System,
Identifying 7 Wastes (Muda).
Utilises 5S methodology.