Monday, October 22, 2007

34.Implementing a Quick Changeover / SMED Program

As many organizations begin their journeys toward a lean enterprise, they are finding the road to be difficult and filled with obstacles. The question that is most asked is where to begin.

While the market is increasingly demanding more customized products, manufacturers are under constant pressure to reduce costs. Non-fulfillment of orders more frequently results in losing business to the competition. Combine these factors with the high cost of inventory and the need to increase productivity, and it becomes obvious that mastering quick changeover is essential to an organization’s survival.

As an organization begins a Lean implementation, its ultimate goal is to produce according to customer demand (takt time) while utilizing ”one piece flow.” For this to happen, machines need to be set-up more often, highlighting the need to reduce set-up time. Reducing set-up time results in increased production, better quality parts, and a more flexible workplace.
SMED / Quick Changeover, like other Lean tools, requires a committed effort from within the organization. One of the major pitfalls organizations fall into is the desire to rush in to a changeover program with very little or no upfront planning. With limited time and resources, the program is doomed for failure. The other common mistake is failure to document and standardize the process. Finally and most importantly, management must demonstrate a full commitment to the program. If the changeover program is not a high priority to management, then it will not be a priority to anyone else.

Preparing for Analysis

As an organization prepares for the program, it must first ask the question: why are we doing this? The obvious reason is always to reduce costs, but cost reduction and improved profitability will come as a result of inventory reduction, smaller batch sizes, increased plant capacity, quicker response time to customers, and better use of employees. Goals for each of these need to be set and reported to the entire organization. This early preparation will greatly benefit a changeover implementation. Also a critical step, the organization must determine which area or process will be attacked first. Value stream mapping is an effective technique for identifying bottlenecks and prioritizing areas of improvement.

The next step is to form an implementation team. The composition of the team is very important to its success. Determining factors should include knowledge, interest, ability to work with others, and, of course, enthusiasm. The team will have regular members that attend every meeting and are directly involved with the changeover: set-up technicians, line mechanics, operators, supervisors, and manufacturing and quality engineers. The other members will consist of representatives from other departments within the organization. They will not have to attend every meeting but will have a role to play, especially when their areas are being addressed. Some examples (but not a comprehensive list) of other areas to be represented include Finance, Human Resources, Manufacturing, Materials, Purchasing, and Planning.

After the team is formed, each member needs to be trained in the principles of SMED / Quick Changeover, basic problem solving, root cause analysis, and (often overlooked) proper procedures for conducting meetings. A well-developed training program that includes interactive exercises is beneficial for the team as it begins to meet regularly and to analyze the changeover process.

When the daily meetings begin, ground rules need to be set. Every meeting will have a leader and an agenda; tasks will be assigned and minutes taken. Structured, well-run meetings will reduce the implementation time and will increase participation and the quality of ideas.

Analysis

The first step in the analysis is to videotape every detail of the entire changeover process from cleanup to set-up. The only exceptions are normal breaks such as lunch. It is important that the changeover being filmed is a normal changeover. If anything abnormal occurs, the changeover needs to be refilmed. (NOTE: A simple setup of a camcorder on a tripod is sufficient. You won’t need to bring Steven Spielberg in on this one.) .

The next step is to create a baseline of the process. Each detail of the changeover process must be identified and listed. The video should be reviewed several times until the team is sure that they have identified and listed everything that takes place.

After every detail is documented, the team members will conduct a brainstorming session in which each element on the list will be analyzed and classified into one of four categories.

Eliminate - Is the step really necessary?

Externalize - Remember, the key is not so much reducing the total amount of labor as reducing the length of time the line is down. One way to reduce downtime is to externalize tasks to the maximum extent possible. “Externalization” means performing changeover tasks either before or after the changeover, “externally” to the changeover time. One common activity that takes place during changeover is that the operator will collect the various change parts required. If this is done during the changeover, it will extend changeover time. This is something that can be done ahead of time so that all the required parts are available the moment they are needed.

Simplify - Any elements that cannot be eliminated or externalized need to be simplified where possible. This will include the elimination of tools, use of slots and keyholes, quick connectors, and the like. As part of simplification, all adjustments must be made measurable. This may be done with digital position indicators, scales, or scribe marks.. Gauges also may be used, but these are “tools” and should be avoided wherever possible.

No Change - Finally, there will be many elements for which no improvements are possible. This is okay, but they need to be identified as such. Periodically, they should be re-examined in case process changes, new ideas, or new technologies allow improvement.

Once each step has been classified, they then need to be prioritized. A good method to follow is to classify each one as an A, B, or C. A items can be done immediately. B items require a bit more time to implement for varying reasons. C items are the long-range items such as new equipment.

This is the point at which some organizations end the process. When organizations go this far and do not implement any of the ideas, they are in essence adding a ninth waste to the 8 wastes of manufacturing. Instead of walking away with nothing more than improvements on paper, the team should now develop an action plan with each task assigned to team members with a due date. Status of every item should be reported at each meeting.

The new process should then be documented and each operator trained. The new procedure will become standard for that set-up. The SMED / Changeover program should also have a SOP generated for the next event. As the organization improves each setup after this, new members should be brought in and trained until everyone in the organization has been trained in changeover process improvement. Eventually, the organization will be become a true Lean Enterprise where everyone routinely contributes to process improvements.

Though the high cost of downtime always justifies changeover reduction, the process can be a very painful and daunting one. Many times companies have tried and failed to develop a successful SMED / Quick Changeover program. Using the ideas and steps outlined in this article will certainly improve the likelihood of success.

33.Quick Changeover / SMED: An Overview

Recently, I was reviewing the incredible statistics that were produced by the recipients of the 2003 Shingo Prize for Manufacturing Excellence. Despite encompassing a variety of industries, all of the winning organizations demonstrated the same results in their continuing efforts to achieve World Class status. Just some of their accomplishments were:

- 65% reduction in scrap
- 80% reduction of cycle times
- 66% reduction in manufacturing floor space
- 80% reduction in rework


The Shingo Prize, which Business Week calls “The Nobel Prize of Manufacturing,” was established in 1988 to recognize North American companies that achieve World Class Status. The prize was named after Dr. Shigeo Shingo, the Japanese Industrial Engineer often referred to as an “engineering genius.” Dr. Shingo revolutionized manufacturing by creating many of the practices that make up the Toyota Production System, now referred to as Lean Manufacturing. While Dr. Shingo’s accomplishments are numerous and his system well proven, organizations often struggle to comprehend and implement his system.

In the process of developing JIT while working for Toyota in 1962, Dr. Shingo was able to reduce the set-up time for a 1000-ton press from four hours to one and a half hours. Shortly thereafter he was asked by management to further reduce the set-up time to three minutes. He developed an approach that was in complete contrast to traditional manufacturing procedures. In a few short months, he accomplished his goal, reducing the time from hours to a single digit. Hence, Single Minute Exchange of Dies or SMED was born. Even more remarkable, no capital spending was required. Based on his vast experience, this method to analyze the changeover process enabled the people performing the changeover to find out why the changeover took so long, and how this time can be reduced. In many cases, his system can reduce changeover and setup times to less than ten minutes.

In modern times with rapidly increasing diversity and smaller batch sizes, using setup time reduction to improve cash flow and profitability is becoming critical to the survival of manufacturers. Many companies spend more than 20% of their planned production time on changeovers. The basic concept of SMED is to reduce machine setup time, which directly results in smaller batch sizes for parts, allowing the manufacturer to produce only what is demanded by the customer. A smaller batch size also translates to lower WIP inventory holding costs in the form of:

- Less floor space required
- Less money tied up in inventory
- Less labor required to manage the inventory
- Less scrap due to part obsolescence


Dr. Shingo’s SMED System consists of the following 4 phases:

- Mixed phase
- Separated phase
- Transferred phase
- Improved phase


The method's strength is its systematic analysis of what is actually done and how time is spent during the changeover activity.

Dr. Shingo’s approach was to isolate and identify the setup time as two entities: internal setup time and external setup time. His simple approach to achieving a quick setup and changeover of the dies consists of the following steps:

- Separating internal and external setup as it exists.
- Converting internal to external setup.

- Streamlining all aspects of the setup operation.

Internal operations are those that are done while the machine (or line) is shut down. External operations are those that can be done while the machine is running. Externalizing operations reduces downtime, which is the major cost associated with setup or changeover. (It is not labor, as some might assume.) Streamlining involves eliminating unnecessary operations as a first step followed by instituting process changes to shorten or eliminate other operations.

Shingo’s classic "A Revolution in Manufacturing: The SMED system" should be required reading for anyone involved in manufacturing. In the book, Dr. Shingo describes how he developed SMED and how the reader can apply the same techniques to any industrial process. In his book, Shingo gives many practical illustrations of application of the SMED concept to a variety of different processes. There are many photos and sketches that supplement the text.

One common objection to SMED is its metalworking industry focus. It is true that Dr. Shingo's experience was in such industries, and the illustrations in the book are of machines like stamping presses, lathes, and other heavy metal-working equipment. But the basic principles behind SMED are universal, and the system has been used to successfully reduce setup and changeover times in many types of industries.

A good analogy to the concept of SMED or quick changeover is changing an automobile tire. Changing a tire typically takes between seven and fifteen minutes. Just list the number of operations involved. Now, why can a pit crew change four tires in a few seconds during an auto race? Some of the reasons are:

- They are prepared.
- They have the right tools immediately available.
- The tires only have one bolt each.
- They undergo continuous training.


The reason they have all of these things in place should be the same reason any manufacturing organization should implement a SMED or Quick changeover program: they are in a fierce competition!

In the Lean toolbox, SMED / Quick Changeover is one of the most rewarding programs that a manufacturing organization can utilize.The benefits include lower inventories, faster deliveries, and improved efficiency. Above all, you will see an increase in the morale, pride, and overall attitude of your employees. Whether your changeovers involve setting up a machine or are less traditional, SMED can reduce your changeover time. And this will ultimately result in more productivity, satisfied customers, and increased profits.

Monday, October 15, 2007

32.Value Stream Analysis: Mapping the Current State

A current state value stream map will enable you to see the complete door-to-door flow in your facility and to identify and prioritize areas for improvement. Before you create a current state map, you should have already identified the value stream you want to analyze. You will need the a pencil and paper (or laptop) and a stopwatch for obtaining time samples.

Below is a list of the information you will be collecting at each process step:

1.C/T Cycle Time – how often a part is completed by a process. Use a stopwatch if necessary. (In some cases, machines will give you this information).
2.C/O Changeover time – the time required to switch from producing one product type to another type.
3.Uptime – the percentage of time in which a machine or process is available on demand.
4.EPEI (production batch sizes) - the batch size expressed in time (days, etc.). EPE stands for “every part every _____.”
5.Number of operators
6.Number of product variations
7.Pack Size – the number of items in a shipment
8.Working Time (minus breaks)
9.Scrap Rate

Begin with the customer’s requirements. Draw the outside source symbol to indicate the customer’s location to which your product ultimately goes. Draw a data box and record the customer requirements (units required/month, pack size, etc.). There may be multiple customers. Next, continue working backwards with the step just before product arrives at the customer, the shipping method. Again, using the appropriate icon, note how frequently product is shipped to your customer(s).

Next, go to your shipping process and draw a process box for shipping. Collect any of the relevant process data and enter it in a data box. Before the shipping operation, draw an inventory icon and indicate how much inventory is waiting for shipment.

You are now ready to analyze the production processes. In door-to-door value stream mapping, you do not necessarily need to map each process step. The process box should indicate one area of material flow. The process box stops wherever processes are disconnected and material flow stops. Note that there may be some (not very significant) WIP inventory between processing steps within an area of material flow, but you should still use one processing box.

NOTE: In door-to-door Value Stream Mapping, if there are distinctly different process steps with WIP in between and transfer between steps in batches, then each step gets its own process box.)

Working backwards, create process boxes for each area of material flow. Collect and note all appropriate process data, and show inventory in between process boxes. The last step in the product flow portion of a current state value stream map is to show the transportation of incoming materials and the supplier(s), again using the outside source symbol.

After the physical product flow portion is complete, you need to create the information flow portion of the current state value stream map. This portion is drawn above the physical flow, and it generally begins with the customer’s requirements again. Using process boxes and information boxes, map the information flow from the customer’s requirements back to your supplier(s). For example, your customer gives you a monthly forecast (information box), which is fed into your production control system (process box). The production control system creates a forecast for raw materials that you give to your suppliers.

Lastly, you must tie in your information to your physical product flow. For each physical process step, ask each operator how he/she knows what to work on next. This is a key question that will reveal how effective the information flow is. Draw an arrow from the information flow item that answers this question to the physical flow process box. For example, if there is an assembly operation that is based on a weekly schedule, draw a line with an arrow from the weekly schedule to the assembly process box. Then ask the question, "where does the weekly schedule come from?" The answer is typically production control. Another example is your shipping process. Your shipping process might be based on sales orders entered into your system; draw a line from your sales order system to your shipping process box. After you've done this for all of your physical processes, your current state value stream map is complete.

31.Identifying Your Value Streams

Identifying the entire value stream for each product or product family in your business is the first step toward eliminating waste. There are three things you will need to understand before you can identify your value stream:

1. What is value?
2. What is a value stream?
3. What is their significance?

Simply put, value is what your customers are willing to pay for. And a value stream is the set of all the actions required to bring a product to the customer. In the value stream, there are actions that create value and actions that create no value. Among the actions that do not create value, there are some that are unavoidable due to current technology, and there are others that can be eliminated immediately. Eliminating actions that create no value is very significant because it will have a dramatic effect on your company’s bottom line.
Now that you know the definitions, how do you begin to identify the value streams in your business? There are three major steps to identifying your value streams:

1. Group your products into product families whenever possible.
2. Select one of your products/product families to be analyzed.
3. Take a walk through from the customer back to materials in receiving.

Grouping Your Products

Grouping your products is usually a very simple process. Make a table like Table 1 below. Along the left column, list all of your products. Along the top row, list all of your processes/equipment. Place an “X” in each cell where a product uses process. While adjustments will likely need to be made later, this will take you a long way in identifying your product families.


Selecting A Product Family

There are different criteria you can use for selecting the first product family to be analyzed. This depends on your business situation. Some criteria you might consider are:
1. Highest Product volume in $
2. Highest Product volume in units
3. Products with the highest defect rates
4. Products with the highest customer return rate
5. Products that visit the most processes (You will find that most changes you will make in Value Stream Analysis of a product will apply to many products/product families).

Making the Initial Walk-Through

When you make the initial walk-through, begin with the customer and work backwards. As you walk through, consider how customer orders are processed, how work on the shop floor is triggered, how orders are transmitted upstream, how materials are supplied, and how products get from the last step in the process to the customer.

After walking through, you will be well on your way to identifying and gaining a rudimentary understanding of your value stream. The next step is to create a current state value stream map, which will give you a more detailed picture of your value stream.

30.One Piece Flow

One-Piece flow is one of the most important principles of lean manufacturing. Yet, many people still do not understand what it truly means to achieve one-piece flow. Let us begin by discussing terminology. There are several basic terms used to describe one-piece flow. The most common are as follows:

- One Piece flow
- Single Piece Flow
- Continuous Flow
- Make One - Move One
- Flow Manufacturing

Each of the above terms describes the same key element of the Toyota Production System, illustrated in the diagram below. As you can see, "Continuous Flow" is a shown as a key element of the pillar, "Just-in-Time."

Thus, one-piece flow is a tool that will help a manufacturer achieve true just-in-time manufacturing. That is, the right parts can be made in the right quantity at the right time. In the simplest of terms, one-piece flow means that parts are moved through operations from step-to-step with no WIP in between either one piece at a time or a small batch at a time. This system works best in combination with a cellular layout in which all necessary equipment is located within a usually U-shaped cell in the sequence in which it is used. To achieve true one-piece flow, equipment must have basic stability:

Highly capable processes.

Processes must be able to consistently produce good product. If there are many quality issues, one-piece flow is impossible.

Highly repeatable processes.

Process times must be repeatable as well. If there is much variation, one-piece flow is impossible.

Equipment with very high (near 100%) uptime.

Equipment must always be available to run. If equipment within a manufacturing cell is plagued with downtime, one-piece flow will be impossible.

One-piece flow is usually associated with low-mix, high-volume manufacturing environments. However, one-piece flow also lends itself to high-mix, low-volume environments. It is usually achieved by creating mixed model or group technology cells, in which a number of products run through a particular cell utilizing one-piece flow. Although every organization has unique challenges, one-piece flow can be achieved through proper application of the principle

29.Types of Manufacturing Cells

Since the mid-1990's, almost every factory I've been to has had or has claimed to have had manufacturing cells in one form or another. I have seen everything from true continuous-flow cells (very rare) to a bank of like machines brought together to form a "cell." In most cases, however, management would often admit that they haven't seen the kind of improvements they expected from implementing such cells. Let's look at common types of cells and how (and whether) they fit into a lean manufacturing environment.

1. Functional cells - Functional cells are cells consisting of like equipment. For example, a factory that does primarily machining operations might have a bank of lathes together in a "turning cell." Another example would be a cell consisting of several sets of like test equipment. These cells are called "functional cells" because they perform a specific function (as opposed to manufacturing a complete product, assembly, etc.).

Though there are exceptions, in most cases functional cells do not fit into a lean manufacturing environment. In a factory consisting of functional cells, product often travels from cell-to-cell, to have various operations done. Functional cells often create a haven for several types of muda:

· Inventory – WIP Inventory often accumulates in front of equipment and/or processes in a functional cell.

· Transportation – Product often moves from cell to cell throughout the factory.

· Waiting – Product often waits long periods of time without being operated on.

· Over-production – Functional cells usually have large, expensive equipment. Emphasis is usually on keeping the machine running. However, there is usually little emphasis on quick changeover. This causes a tendency to overproduce for economies-of-scale’s sake.

· Over-processing – Large, expensive equipment is often used where smaller equipment should be used.

· Defects – Because operators are generally process focused and are usually not aware of the bigger picture (i.e., the completed product), quality suffers in a functional cell. Defects are often created and not detected until much later in the process.

2. Group Technology (or Mixed Model) Cells - These are the least understood of the types of cells. Many people mistake Group Technology cells for Functional cells when in fact they are most closely related to Product-focused cells; that is perhaps the reason many now call Group Technology cells "Mixed Model" cells, showing emphasis on the product. These are cells in which a series of operations for several products takes place. The products are often very similar, and the operations are very similar for each product (though not usually identical). This type of cell can work very well within a lean manufacturing environment, particularly if the organization is characterized by high-mix, low volume products. In such organizations, it is rarely possible to have product-focused cells.

3. Product Focused Cells – Cells that are product-focused typically run one type of product through a series of operations. These are often thought of as the ideal lean manufacturing cell. They are perfect for low mix, high volume environments.

Hopefully, this article can help clear up many of the misconceptions surrounding manufacturing cells. Functional cells, which contain equipment that performs an identical process, are generally incompatible with lean manufacturing. On the other hand, Group Technology (or mixed model) and Product-Focused cells work well for the lean producer. For a high-mix environment, group technology cells, which generally run product families through a series of similar operations, are more appropriate. For a low-mix environment, product-focused cells are ideal. Whether you use Product-focused or Group Technology cells, the most important factor is whether or not you create continuous flow. To learn how best to do that, read our article "Implementing Continuous Flow Manufacturing Cells."

28.Cellular Manufacturing

Customers demand variety and customization as well as specific quantities delivered at specific times; a lean producer must remain flexible enough to serve its customers' needs. Cellular manufacturing allows companies to provide their customers with the right product at the right time. It does this by grouping similar products into families that can be processed on the same equipment in the same sequence. To successfully maintain "one piece flow" in their manufacturing cells, companies employ quick changeover techniques.

A cell is a group of workstations, machines or equipment arranged such that a product can be processed progressively from one workstation to another without having to wait for a batch to be completed and without additional handling between operations. Cells may be dedicated to a process, a sub-component, or an entire product. Integral to the manufacturing operations of a lean producer, cells are conducive to single-piece and one-touch manufacturing methods. Cells may be designed for administrative as well as manufacturing operations.

Cellular manufacturing is an approach that helps build a variety of products with as little waste as possible. Equipment and workstations are arranged in a sequence that supports a smooth flow of materials and components through the process, with minimal transport or delay. Cellular manufacturing can help make your company more competitive by cutting out costly transport and delay, shortening the production lead time, saving factory space that can be used for other value-adding purposes, and promoting continuous improvement by forcing the company to address problems that block just-in-time (JIT) production.

A work cell is a work unit larger than an individual machine or workstation but smaller than the usual department. Typically, it has 3-12 people and 5-15 workstations in a compact arrangement. An ideal cell manufactures a narrow range of highly similar products. Such an ideal cell is self-contained with all necessary equipment and resources. Cellular layouts organize departments around a product or a narrow range of similar products. Materials sit in an initial queue when they enter the department. Once processing begins, they move directly from process to process (or sit in mini-queues). The result is very fast throughput. Communication is easy since every operator is close to the others. This improves quality and coordination. Proximity and a common mission enhance teamwork.

The benefits of cellular manufacturing include:

· WIP reduction
· Space utilization
· Lead time reduction
· Productivity improvement
· Quality improvement
· Enhanced teamwork and communication
· Enhanced flexibility and visibility

There are many misconceptions regarding cellular manufacturing. To read more about the types of cells, read our article “Types of Manufacturing Cells.”

Thursday, October 11, 2007

27.Systems Change Principles:

Large-Scale Systems Change:
A Five-Phase Process for Envisioning, Planning, Implementing and Sustaining Change

Decomposition of Generic Implementation Model

1.0 Stakeholders and Social Infrastructure

1.1 Identify stakeholders (including “communities of practice”) and analyze stakeholder interests (assuming a mix
of common and competing interests)

1.2 Form representative Design/Implementation Team(s with identified Champions from among leaders in stakeholder groups
(including reciprocal contracting withChampions)

1.3 Identify existing forums and communication channels

1.4 Identify missing or unstable forums and communication channels (gaps inthe Social Infrastructure)
1.5 Targeted chartering and other mechanisms to address gaps in theSocial Infrastructure

2.0 Shared Vision and Strategic Plan

2.1Summarize Current State data/research (in a presentational format) 2.2Develop initial text of potential Shared Vision (facilitated with identified thought leaders) and including vision on substance and vision on the change process

2.3Facilitate single or multiple stakeholder forums to calibrate/adjust the draft Shared Vision

2.4Identify preliminary set of implementation milestones, with associated resources and responsibilities – to form a Strategic Plan 2.5Identify relevant metrics and feedback processes

2.6Calibrate/adjust Strategic Plan based on stakeholder input and identify key domains for negotiations

3.0 Negotiated Change

3.1 Build capability for interest-based bargaining as appropriate
3.2 Facilitate interest-based negotiations among key stakeholders – seeking mutual gains agreements within bounds of regulatory and other
constraints
3.3 Ensure appropriate constituent ratification or calibration of agreements
3.4 Document and “error proof” formal and informal agreements, anticipating potential “disconnects” in implementation

4.0 Implementation

4.1 Launch an appropriate mix of top-down restructuring and bottom-up engagement across relevant forums and channels for communications (with a continuing commitment to avoidsurprises)
4.2 Utilize “Leader as Teacher” interventions to build capability and
foster commitment 4.3 Track relevant metrics, open issues and other key data
4.4 Anticipate “disconnects” inimplementation and ensure appropriate mechanisms to learn from the disconnects in a non-blaming,constructive way

5.0 Sustained Change

5.1 Ongoing feedback, calibration, and incremental adjustment
5.2 Hand-off mechanisms for leadership transitions
5.3 Periodic review and renewal for more substantial adjustments

LaMarsh 4x3 “Managed Change” Model

A. Identify the Change
1.1 ANALYZE THE CURRENT STATE
1.2 DEFINE THE DESIRED STATE
1.3 ASSESS THE DELTA STATE

B. Prepare to Change
2.1 SPONSORS
2.2 CHANGE AGENTS
2.3 TARGETS
3.1 CULTURE
3.2 HISTORY
3.3 RESISTANCE

C. Plan the Change
4.1 COMMUNICATIONS SYSTEM
4.2 LEARNING SYSTEM
4.3 REWARD SYSTEM

D.Implement the Change: Build the Change Strategies and Tactics into an overall change plan

E. Monitor the Change: Watch, Measure and Adapt as the change is changing

Lean implementation strategies

Top-Down “Re-engineering”

Many meanings:
- Range from a pretext forrestructuring and downsizing toa systematic review ofoperations with comprehensiveprocess mapping

Key quote:
-“if it’s not broke, break it”

Roots:
-Roots in private and publicsectors, including “re-inventinggovernment”
-First driven by economic crisisin 1980’s, now seen as aprocess for system change

Archetypical Example:
-GE “workout” process

Bottom-up “Kaizen”

Many meanings:
-Range from suggestion systems(kaizen-teian) to an underlyingphilosophy and a way of life

Key quote:
-“many small improvements buildlong-term transformation capability”

Roots:
-Post WWII Japan, beginning withquality circles (QC), statisticalprocess control (SPC), and just-in-time (JIT) delivery practices
-Increasingly seen from a systems perspective --Total Quality Management (TQM), Six Sigma,Lean Enterprise

Archetypical Example:
-Toyota Production System (TPS)

Sunday, October 7, 2007

26.TOYOTA PRODUCTION SYSTEM

Often professionals say that they want to learn about TPS because they want to attain a specific result. They say:

· “We want reduced labor and material costs,” or
· “We want increased productivity,” or
· “We want higher quality,” or
· “We want better employee motivation.”

Many professionals have been lead to believe that transplanting the “mysterious secrets” of TPS into their American businesses will solve all of the problems their companies are facing.

So, today, I am going to tell you the “secret” of TPS, from my experience. This secret can be applied to:

· Any industry
· Any work-site situation
· Any culture

The “mysterious secret” of TPS is common sense. You have probably heard this “mysterious secret” from your parents and teachers, since the time you were born. It is the basic principle of: “Do it right the first time!” Now, you know everything! But, seriously, let me explain a little further, how “to do it right the first time.” It is through “ONE-BY-ONE CONFIRMATION:”

· From the smallest detail of a process
· To the most complex scope of your company

Now, you know the whole secret! It is just common sense!
How did Toyota discover this mysterious common sense secret of
ONE-BY-ONE CONFIRMATION? In 1934, in the early days of the development of Toyota’s first vehicle, Kiichiro Toyoda decided to duplicate the Chevrolet six-cylinder engine. Under the direction of
Kiichiro Toyoda, the Toyota group worked from the experience they had in simple castings for the loom business. However, the intricate coring for the intake and exhaust chambers was beyond their experience.
They quickly studied other foreign and domestic systems to develop suitable cores, and modeled their designs after those they had studied. Kiichiro’s group rationalized that by using these best practices of foreign and domestic methods, they would be able to sustain consistency.
Eventually, the casting process began to improve, and many castings (maybe 300) were produced. The machinists anxiously awaited to process these castings on the newly acquired equipment. They proceeded to immediately process and stockpile the completed, shiny machined heads as evidence of their skill and fine equipment.

However, the first engines made with these heads failed to achieve the expected performance. Kiichiro had not verified, from the beginning, if the actual production castings met the required design shape to produce the horsepower target.
This created a big concern for Kiichiro. Should he order his workers to re-work the castings to save the potential loss? What would you have done? Kiichiro realized that his initial focus had not been narrowed down to basic system verification, or one-by-one confirmation. He recognized the costly lesson of not confirming
the quality at each step of the process. This did not just mean quality of zero defects. This also meant verification of each process in relation to the preceding and following processes, as a whole system.
He realized that he must stop the perception of “It’s OK to just repair poor quality!” If not, his company would repeatedly suffer from

· rework,
· repair, and
· thus, low quality.

He took a stand that has become a Toyota trademark. This was the beginning of learning “how to wait.” Confirming processes one-by one, step-by-step, and not proceeding with the next step until requested, was the original start of the “just-in-time” philosophy, which I will talk more about later.

AVOIDING “MURI” THROUGH STANDARDIZED WORK

So you ask, “How do I provide a work environment that encourages one-by-one confirmation?” I say, “By avoiding ‘MURI,’ or UNREASONABLENESS, through STANDARDIZED WORK.”
First, a STANDARD CONDITION must be defined to assure quality. Then every process and function must be reduced to its simplest element for examination. Next the process must be standardized to achieve the STANDARD CONDITION. These simple work elements, or STANDARDIZED WORK sequences, must be set up and
combined, one-by-one. In manufacturing, this includes:

· Work Flow, or Logical directions to be taken,
· Repeatable Process Steps and Machine Processes, or Rational methods to get there, and
· Takt time, or Reasonable lengths of time and endurance allowed for a process.
STANDARDIZED WORK encourages the close, one-by-one examination of

First, Ergonomic and Safety questions
Second, Quality issues
Third, Productivity, and
Finally, Cost benefits

When everyone knows the STANDARD CONDITION, and the
STANDARDIZED WORK and sequences, the results are clear:

· Employee morale is heightened,
· Higher quality is achieved,
· Productivity is improved, and
· Costs are reduced.

These simple elements can be isolated and changed quickly, as needed.
STANDARDIZED WORK is COMMON SENSE. It is not a Toyota phenomenon:

· A speaker uses STANDARDIZED WORK, called an outline
· A chef uses STANDARDIZED WORK, called a recipe
· A coach uses STANDARDIZED WORK, called a game plan

AVOIDING “MURA” THROUGH JUST-IN-TIME SYSTEMS

So you say, “OK, I have put into place the strictly defined STANDARDIZED WORK. But how do I make it flexible, while avoiding “MURA,” or “INCONSISTENCIES” in the system?”
My answer: Through JUST-IN-TIME Systems. JUST-IN-TIME Systems are based on

· Little or no inventory,
· Supplying the production process with the right part, at the right time, in the right amount, and
· First-in, first out flow.

JUST-IN-TIME systems create a “pull system.” In a “pull system,” each department withdraws from the preceding departments, and ultimately from the outside supplier. Simply told:

· The Assembly line “makes a request to,” or “pulls from” the Paint Shop, which pulls from Body Weld.
· The Body Weld Shop pulls from Stamping.
· At the same time, requests are going out to suppliers for specific parts, for the vehicles that have been ordered.
· Small buffers accommodate minor fluctuations, yet allow continuous flow.

The connection of information flow within this Parts and Material Flow becomes the NERVE CENTER of the Production System. As requests are met, the supplied parts are used in a first-in, first-out flow, which enables quality to be tracked. When a preceding process does not receive a request, it does not make more parts. If parts or material defects are found in one process, the JUST-IN-TIME SYSTEMS force the problem to be quickly identified and corrected. The JUST-IN-TIME SYSTEM reinforces ONE-BY-ONE CONFIRMATION, in which

· Quality is confirmed at every step, through first-in, first-out flow,
· Cost is reduced by eliminating the need for warehousing, as well as the expense
of scrapping warehoused parts that are found to be defective. The need
for extra labor costs is also eliminated.
· And maximum productivity is a result when the right parts and materials aresupplied at the right time and in the right amount.
This includes Total Productive Maintenance of machinery.

The 3 M’s I have just reviewed bring a more complete perspective to improving manufacturing.

First, MURI focuses on the preparation and planning of the process, or what can be avoided proactively. And, then, MURA focuses on implementation and the elimination of fluctuation at the operations level, such as quality and volume. The third — MUDA — is discovered after the process is in place and is dealt with reactively. It is seen by variation in output. It is the role of Management to examine the MUDA, or waste, in the processes and eliminate the deeper causes by considering the
connections to MURI and MURA of the system. The MUDA – waste – and MURA – inconsistencies – must be fed back to the MURI, or planning, stage for the next project.

The continuous cycle of self-examination allows for the outcomes to continuously improve. This brings in Management’s responsibility:

· to provide and improve a flexible system, and
· to connect the workforce and the customer.

A key to providing a flexible system, is not to be afraid to stay in a “ready for anything” mode. Holding large buffers does not allow you to “be ready for anything.”

The JUST-IN-TIME concept, I have just described, allows for flexibility. But it is the Human Factor that makes it flexible, while keeping it consistent. Your workforce determines the success or failure of your plant, or business. It is your people, not the machinery

· Who have the common sense and experience to recognize when something is not right, and change it,
· Who can think and solve problems,
· Who are the representatives of the car-buying public, and bring this insight onto the job with them everyday.It is the people in your workforce who, when given the authority and power, will look for ways to:

· Utilize the JUST-IN-TIME system to
· Improve the STANDARDIZED WORK processes, and, thereby,
· ELIMINATE WASTE.

It is your people who will implement ONE-BY-ONE CONFIRMATION. And it is up to you, as Management, to encourage your people – AND YOURSELVES – not to be afraid to “stay ready for anything.”

THE CUSTOMER

Now, you are saying, “Yes, but my systems are already in place. Sure, if I could start from scratch, I could ‘do it right the first time.’ But my business is already running at full speed! What can I do at this point?”
Kiichiro Toyoda was faced with that situation in 1936. He had hurriedly competed to win a truck contract with the government and had not set up his systems “right the first time.”

After winning the contract, he had to backtrack and fix problems as they arose.However, in addition to fixing the problems, he tracked and examined the problems and began putting improvements in place that would keep these problems from recurring. He used what, today, we would call “kaizen” — or improvement — teams.In the first year, Kiichiro made 800 improvements, in his systems that had already been running at full speed. Improvement can be started at any point, no matter what or where problems occur.You can do this by:

· Encouraging your workforce to practice one-by-one confirmation, then
· Listening to your workforce,
· Trusting your workforce, and
· Supporting your people.You must recognize the value of “the customer on the line.” Your workforce is not only
· Your company’s bridge to your CUSTOMER and
· Your suppliers’ bridge to the CUSTOMER, but also
· They are customers, who want everything “done right the first time.”

When everyone “does it right the first time,” it translates into

1. High quality, which is built-in
2. Highly motivated employees —because they are proud of what they do, and
3. Satisfied, repeat customers.

MANAGEMENT’S CHALLENGE

I have a departing thought that I would like you to consider as you set out to improve your companies’ outcomes. Consider the Deming Cycle, we know as “Plan, Do, Check, Action,” or “P.D.C.A.”.The “Plan - Do - Check” part of this cycle is pretty clear. But the “Action,” part,to me, is the will or motivation of Management. Management must:

· Keep challenging the organization
· Look at the result, and see a better way, and
· Lead the organization to plan again, do again and, again, check the outcome.I would further draw a connection between P.D.C.A. and the 3 M’s.
· PLAN means to avoid MURI, or unreasonableness
· DO means to avoid MURA, or to control inconsistencies
· CHECK means to avoid MUDA, or to find waste in outcomes
· ACTION indicates the will, motivation, and determination of the Management

Toyota’s founders had the desire to find a better way, like ONE by ONE
CONFIRMATION, and to establish a company culture for future generations.

As a result, this ultimately translates into:
· Increased Productivity, and
· Reduced Cost.

Process-by-process, part-by-part, vehicle-by-vehicle:
· EVERYONE wants to “do it right the first time,” and
· Everyone wants to be encouraged to “do it better the next time.”

Saturday, October 6, 2007

25.Performance Metrics

Metrics Drive Behavior

􀂾 Based off of a true story from Continental Airlines after bankruptcy in 1990’s
􀂾 Cost cutting became the major company strategy
􀂾 Airline rewarded pilots for keeping fuel consumption low
􀂾 Behavior - Pilots skimping on air conditioning and flying more slowly
􀂾 Performance - Unhappy customers and behind schedule flights
􀂾 Results - Valuable customers moved on to competitors

Amazon’s Corporate Score-card

Key Goal: Make online shopping preferred mode for all types of goods
Fast and Free shipping for all types of products


Customer
􀂾 Failed Fast Track
􀂾 Order cycle time mean and standard deviation
Cost/Unit
􀂾 Throughput per labor hour
􀂾 Units shipped per labor hour
Quality
􀂾 Inventory Record Defect Rate
Operations
􀂾 Received and Shipped units and backlog
􀂾 Ex (S&OP adherence)
Safety
􀂾 Lost Time Incidents and Rate
􀂾 Record-able Incidents and Rate

Other Financial and Vendor negotiation metrics

Traditional vs. Lean Metrics
Complex, low volume assembly in aerospace


TRADITIONAL

Jobs behind schedule metrics
􀂾 Focus on accountability and individual performance
􀂾 Assumes every job is equally important
􀂾 Assumes individual efficiency drives overall performance

Behavior using traditional metrics
􀂾 Perform “easy” jobs first to improve metric (temporarily)
􀂾 Out-of-sequence work
􀂾 “I completed my work…why should I help someone else”
􀂾 Focus on every problem

LEAN

Flow metrics
􀂾 Focus on global rather thanlocal optimum
􀂾 Assumes some jobs more critical than others
􀂾 Assumes team drives overall performance

Behavior using lean metrics
􀂾 Work jobs in optimal sequence
􀂾 Identify gaps in skills
􀂾 Teamwork
􀂾 Focus only on problems that impact overall performance

Linking Lean Principles and Manufacturing Measurables



24.Design For Manufacturing

DFM Guidelines

􀂾 Use standard components
􀂾 Minimize number of parts
􀂾 Develop modular, multi-functional, multi-use designs
􀂾 Consider tolerance for variations in process (portability)
􀂾 Keep in mind current process capability
􀂾 Design for ease of handling
􀂾 Recognize design testability is a requirement for manufacturability
􀂾 Involve the manufacturing team in each of the above

Metrics for DFM

􀂾 Time to Market (Right First Time is ideal)
􀂾 Number of Iterations between design and manufacturing teams until they “get it right”
􀂾 Lead time
“The product [design] community should be measured on how manufacturable the design is. The metrics should be on the manufacturing floor.”– Chip McDaniels, Ford.

DFM Examples

􀂾 In the design of microelectronics, memories tend to have manufacturing defects which affect yields. A DFM oversightcan lower the yield of the chip critically. If designers would have had manufacturing in mind, they could have included a suitable amount of redundancy to cover for the defects. Every redesign/workaround could cost the company over $1M and 12 weeks turnaround.

􀂾 In the design of complex communication modules at HRL Laboratories, regular meetings are scheduled between design and manufacturing (process) engineers to hash out the capability in the clean room and make sure designers do not send impossible masks to the clean room for production. It is not unusual to have up to 8 formal and informal meetings with the process engineers through a 10 week design cycle!

23.ERP/MRP

What is ERP?

􀂾 Enterprise Resource Planning
􀂾 Computer Software, again, either homegrown or commercial
􀂾 Manages all business activities - Production, Sales, Procurement,
Finance, Supply-chain, Human Resources, etc.
􀂾 Promises to reduce waste, improve efficiency, provide greater visibility
into your company’s health, etc. etc. etc.

- ERP/MRP initiatives can be a threat to lean/six sigma
initiatives in that they soak up limited support resources
for large-scale systems change

- ERP/MPR initiatives can be a complement to lean/six
sigma initiatives in that they provide essential IT
infrastructure – particularly from a jidoka standpoint

- Unfortunately, many ERP/MRP initiatives are not
designed to adjust on the basis of PDCA, Kaizen
improvement processes

- ERP/MRP cannot make up for bad business processes
􀂾 If fused properly to business processes, ERP/MRP can be
strategic tools enabling business success

22.Hoshin Planning /Policy Deployment


What is Hoshin Planning?


Hoshin (def.) – A statement of desired outcome for a year, plus means of
accomplishing that outcome, and for measuring the accomplishment.


“Hoshin Kanri”
• Shining metal or compass
• Ship in a storm on the right path
• Strategic policy deployment


Hoshin Planning (def.) – The process used to identify and address
critical business needs and develop the capability of employees, achieved
by aligning company resources at all levels and applying the PDCA cycle
to consistently achieve critical results.


Plant Level Key Indicator Board


21.Kaizen-Teian Improvement Systems

(Kaizen): improvement

(Teian): proposal

Characteristics of Kaizen-Teian:
􀂾 Gradual and continuous accumulation of small improvements
􀂾 Focus on team of collaborators (vs. team of experts/consultants),
engage the entire workforce
􀂾 Promote a maintained progress (vs. lack of continuity)
􀂾 Implement incremental improvements in small steps (vs. big leaps)
􀂾 Is a building block of a typical lean organization. (The other building
block is identifying waste in operations.)
􀂾 Typical setting: a small team of 8-20 people from all levels and
functions/departments of the organization identifying, analyzing, and
implementing a project in a matter of 4-5 day

















4-Stage Implementation of Kaizen at Algonquin Automotive

Stage 1: Kaizen Kick-off
􀂾 Highly visible, formal, structured implementation 1 year -18 months
􀂾 Kaizen events inspired by Toyota: 1-3 days when the lines are stopped
􀂾 Each meeting was carefully documented, and follow-up meetings were held.
􀂾 Full of energy: all improvements were encouraged by management.

Stage 2: Kaizen Attenuated
􀂾 Effort “collapsed under its own weight”, causing kaizen to receive lower
priority
􀂾 Workers focused on getting production out of the door. Taking an hour out of
work was viewed as infeasible.

Stage 3: Quiet Resurrection
􀂾 Individuals in various departments started kaizen efforts on an ad-hoc basis
􀂾 Non-coordinated, scattered efforts across the organization

Stage 4: Kaizen Returns
􀂾 Both the organization and depts recognize individuals’ kaizen efforts
􀂾 Standardized kaizen documentation and performance measurements
􀂾 More focused on direct groups; little inter-departmental communication

Friday, October 5, 2007

20.Support Function Alignment

Support-Function Analysis

Three Potential Roles
- Regulator/Enforcer
-Policies, laws, contractual agreements
- Service Provider
- Administration of programs and activities
- Change Agent
- Systems change implementation and procedural fairness

Sample Support Functions
- Human Resources
- Finance
- Materials/Purchasing
- Quality
- Maintenance/ Engineering
- Information Systems

Support-Function Exercise: Roles

Form sub-groups for the following support functions:
- Human Resources
- Finance
- Materials/Purchasing
- Quality
- Maintenance/ Engineering
- Information Systems

Assess what you understand to be the "current state" and the "desired state" for this support function when it comes to lean / six sigma implementation – for each the three roles listed in the following support material.

Sample Activities/Competencies --HR

Role Regulator/Enforcer
Sample Activities: EEO, OSHA, ADA, Collective Bargaining Contract
Sample Competencies: Legal/technical Detail oriented Risk adverse

Service Provider
Sample Activities:Benefits, Recruiting, Compensation, Technical training
Sample Competencies:Procedure oriented Consistent

Change Agent
Sample Activities: Champion for effective Work Groups, OD, Culture change
Sample Competencies:Innovative/flexible Proactive Risk taking


Sample Activities/Competencies --Finance

Regulator/Enforcer
Sample Activities :Budget compliance, tax and audit regulations
Sample Competencies :Legal/technical Detail oriented Risk adverse

Service Provider
Sample Activities :Payroll and information systems, financial reports
Sample Competencies :Procedure oriented Consistent


Change Agent
Sample Activities :Champion for Total Cost, Linking ERP and process improvement, Work Group analysis of performance data
Sample Competencies :Innovative/flexible Proactive Risk taking

Sample Activities/Competencies – Materials/Purchasing

Regulator/Enforcer
Sample Activities :Material storage rules and regulations, Global purchasing terms and condition
Sample Competencies :Legal/technical Detail oriented Risk adverse


Service Provider
Sample Activities :Delivery of parts and materials, Schedule management
Sample Competencies :Procedure oriented Consistent


Change Agent
Sample Activities :Champion for Material Flow and Just-In-Time Delivery
Sample Competencies :Innovative/flexible Proactive Risk taking

Sample Activities/Competencies – Information Systems

Regulator/Enforcer
Sample Activities :Adherence to Standards,Protocols, and Policy
Sample Competencies :Legal/technical ,Detail oriented ,Risk advise


Service Provider
Sample Activities :System maintenance,upgrades, and protection
Sample Competencies :Technical Information Systems expertise Customer/service mindset


Change Agent
Sample Activities :Champion forManufacturingResource Planning(MRP) and EnterpriseResource Planning(ERP) systems
Sample Competencies : Innovative/flexible ,Proactive ,Risk taking

19.Front-Line Leadership

Attributes of Front-Line Leaders

- Conceptual Thinking (Sense-making)
- Initiative (Visioning)
- Communication Skills (Relating)
- Discipline (Inventing)

Front-line Leadership Illustrated

Necessary Attributes as seen from a plant manger’s perspective:
- Ability to look at a process and identify opportunities for improvement – creativity (Sense-making)
- Action oriented (Visioning)
- Effectively deal with interpersonal conflicts (Relating)
- Build consensus among team members (Relating)
- Perseverance and patience (Inventing)
- Flexibility to change (Inventing)
- Ability to deal with ambiguity (Inventing)

Methods for developing key attributes:
- Keep using the "5 why" process to teach them to dig into processes and start to see improvement opportunities
- Coach them through developing solutions to problems on the floor based on lean fundamentals
- Ensure they are properly trained so they have a framework for problem solving and acting independently
- Measure progress and provide regular feedback
- Provide resources to help with the challenges of start-up

Utilizing Front-line Leadership (a real world story):

- Team leader X was part of the initial planning for the cell roll out for the first lean cell in the plant. As the cell started up, interpersonal conflicts developed between cell members. Many
of the conflicts were a result of changes in layout and
workstation space as a result of cell start up. In addition, all the team members were sharing work instead of working individually and it became apparent that some work rules would
have to change.

- Team leader X was unable to effectively deal with the conflicts and keep the team moving forward. Team leader X couldn't cope with the amount of change within the cell. All
the rules for the hourly workers had to be re-established. Someone had to make the call.

Utilizing Front-line Leadership (a real world story, continued):

- The cell stagnated and the morale of the team members suffered. The HR manager and the production manager started spending a lot of time with employee grievances; this hurt
productivity. Team leader X was moved to another team and team leader Y started in the cell. Team leader Y had very good interpersonal skills and dealt with the cell conflicts that had not
been resolved. Morale within the cell improved noticeably. Productivity improved as well. Team leader X moved on to another cell that had established work rules and was successful as a lead in that area.

Utilizing Front-line Leadership (a real world story,concluded):

- The morale of the story: CULTURAL CHANGE IS DIFFICULT; YOU NEED A GOOD LEADER
- When you move into a lean cell structure, you can plan the 80%
solution and "just do it" or you can plan the 100% solution and you'll never change. front-line leadership must be capable of working through the 20% that you couldn't foresee during the planning process. This is a much more difficult task for senior leads because all the little work rules that developed over the years must be re-established. When you change the way people work by rolling out a lean cell, something as simple as the placement of the coffee pot is a really big deal. These are the issues that will stop your initiative --if you have a leader who can resolve them, great. If not, you must coach your leader. If your leader can't deal with the ambiguity of an 80% solution, you must step in.

18.Active and Passive Opposition to:Lean/Six Sigma


Reactions/Resistance to Change

- Resistance is predictable and understandable
- Why do we resist change?

1) It’s new and different --full of uncertainty
2) It feels like it’s being imposed
3) There are specific parts of the change that I don’t like

- How do we resist change?

1) Suppressed anger --Shut down, don’t listen, sit there fuming
2) Displaced anger --Don’t get mad, get even
3) Outward anger --Emotional outburst

- What can we do?

1) Ask questions --learn more about what is involved
2) Look for opportunities --are there aspects of the change that could help make things
better? How many options can we generate?
3) Be clear about specific concerns or issues --consider who might have similar concerns and who might have opposite preferences.
4) Build agreements that take into account everyone’s interests

Caution

- Accelerated implementation will generate gaps inleadership behaviors
+ Some people will move ahead quickly, grasping new "operating
assumptions" and others will "not even know what they don’t know"
+ The logic of becoming "lean" can create significant pressure on individuals
+ Be hard on the problem – such as tangible waste in the system – not the people

- Remember the words of Dr. Deming:
Don’t blame the people – fix the syste
- For exceptions --individuals who really can’t make the change -ensure fair systems for performance management

- This module can help in two ways:
1.The "Transition Curve" can be a useful tool for individual self- assessment or feedback/coaching
2.The "Transition Curve" can also be useful for overall stakeholder analysis in planning for systems change


17.Heijunka Product & Production Leveling

Heijunka Key Concepts


Heijunka is defined as "The distribution of production volume and mix evenly over time"


Heijunka converts uneven Customer Pull into even and
predictable manufacturing process ¾ Heijunka is generally used in combination with other key Lean principles to stabilize value flow

Heijunka is a core concept that helps bring stability to a
manufacturing process

The Need for Heijunka

There are a number of reasons for implementing Heijunka:

Product Leveling
+large batches of the same product may reduce set-up times and
changeovers, but usually result in:
- long lead times,
- swelling inventories
- greater opportunities for defects.

- excessive idle time and/or overtime.
+ An even mix of products is critical to avoiding these impacts


Production Leveling
- Remember the "Beer Game"? Fluctuationsn demand ( Boller or "Bullwhip" Effect) are often highly amplified and delayed throughout the supply chain.
- Responding to fluctuating customer demand can result in increased overtime or idle time.
- Variable production schedules can be stressful = Unhappy workers.
- A more level production volume eases these complications

16. 7 waste

Waste elimination is one of the most effective ways to increase the profitability of any business. Processes either add value or waste to the production of a good or service. The seven wastes originated in Japan, where waste is known as “muda." "The seven wastes" is a tool to further categorize “muda” and was originally developed by Toyota’s Chief Engineer Taiichi Ohno as the core of the Toyota Production System, also known as Lean Manufacturing. To eliminate waste, it is important to understand exactly what waste is and where it exists. While products significantly differ between factories, the typical wastes found in manufacturing environments are quite similar. For each waste, there is a strategy to reduce or eliminate its effect on a company, thereby improving overall performance and quality.

The seven wastes consist of:

1. Overproduction.

Simply put, overproduction is to manufacture an item before it is actually required. Overproduction is highly costly to a manufacturing plant because it prohibits the smooth flow of materials and actually degrades quality and productivity. The Toyota Production System is also referred to as “Just in Time” (JIT) because every item is made just as it is needed. Overproduction manufacturing is referred to as “Just in Case.” This creates excessive lead times, results in high storage costs, and makes it difficult to detect defects. The simple solution to overproduction is turning off the tap; this requires a lot of courage because the problems that overproduction is hiding will be revealed. The concept is to schedule and produce only what can be immediately sold/shipped and improve machine changeover/set-up capability.

2. Waiting

Whenever goods are not moving or being processed, the waste of waiting occurs. Typically more than 99% of a product's life in traditional batch-and-queue manufacture will be spent waiting to be processed. Much of a product’s lead time is tied up in waiting for the next operation; this is usually because material flow is poor, production runs are too long, and distances between work centers are too great. Goldratt (Theory of Constraints) has stated many times that one hour lost in a bottleneck process is one hour lost to the entire factory’s output, which can never be recovered. Linking processes together so that one feeds directly into the next can dramatically reduce waiting.

3. Transporting

Transporting product between processes is a cost incursion which adds no value to the product. Excessive movement and handling cause damage and are an opportunity for quality to deteriorate. Material handlers must be used to transport the materials, resulting in another organizational cost that adds no customer value. Transportation can be difficult to reduce due to the perceived costs of moving equipment and processes closer together. Furthermore, it is often hard to determine which processes should be next to each other. Mapping product flows can make this easier to visualize.

4. Inappropriate Processing

Often termed as “using a sledgehammer to crack a nut,” many organizations use expensive high precision equipment where simpler tools would be sufficient. This often results in poor plant layout because preceding or subsequent operations are located far apart. In addition they encourage high asset utilization (over-production with minimal changeovers) in order to recover the high cost of this equipment. Toyota is famous for their use of low-cost automation, combined with immaculately maintained, often older machines. Investing in smaller, more flexible equipment where possible; creating manufacturing cells; and combining steps will greatly reduce the waste of inappropriate processing.

5. Unnecessary Inventory

Work in Progress (WIP) is a direct result of overproduction and waiting. Excess inventory tends to hide problems on the plant floor, which must be identified and resolved in order to improve operating performance. Excess inventory increases lead times, consumes productive floor space, delays the identification of problems, and inhibits communication. By achieving a seamless flow between work centers, many manufacturers have been able to improve customer service and slash inventories and their associated costs.

6. Unnecessary / Excess Motion

This waste is related to ergonomics and is seen in all instances of bending, stretching, walking, lifting, and reaching. These are also health and safety issues, which in today’s litigious society are becoming more of a problem for organizations. Jobs with excessive motion should be analyzed and redesigned for improvement with the involvement of plant personnel.

7. Defects

Having a direct impact to the bottom line, quality defects resulting in rework or scrap are a tremendous cost to organizations. Associated costs include quarantining inventory, re-inspecting, rescheduling, and capacity loss. In many organizations the total cost of defects is often a significant percentage of total manufacturing cost. Through employee involvement and Continuous Process Improvement (CPI), there is a huge opportunity to reduce defects at many facilities.

In the latest edition of the Lean Manufacturing classic Lean Thinking, Underutilization of Employees has been added as an eighth waste to Ohno’s original seven wastes. Organizations employ their staff for their nimble fingers and strong muscles but forget they come to work everyday with a free brain. It is only by capitalizing on employees' creativity that organizations can eliminate the other seven wastes and continuously improve their performance.

Many changes over recent years have driven organizations to become world class organizations or Lean Enterprises. The first step in achieving that goal is to identify and attack the seven wastes. As Toyota and other world-class organizations have come to realize, customers will pay for value added work, but never for waste.

15. Value Stream Mapping

Value stream improvement, sometimes called “flow level kaizen,” is the best tool for identifying and planning opportunities for process kaizen. People often mistake value stream mapping for process mapping. Process mapping simply involves mapping any process. Value stream mapping involves mapping information and product flow for a given value stream. The mapping is done in such a way that allows one to visualize the current state and to plan and implement a future state with measurable goals.

Before value stream mapping was popular in the United States, organizations utilized process kaizen tools while largely ignoring their effect on the entire value stream. This led to successes in individual areas without the ability to demonstrate significant improvement to the value stream as a whole. Value stream mapping allows organizations to target the right areas for process kaizen and to track, measure, and demonstrate the effects that process kaizen improvements will have.

How does it do this? Firstly, current state value stream mapping allows an organization to identify waste and sources of waste. It forces people to ask why things are done a certain way, which uncovers many opportunities for improvement. The current state provides a baseline from which people can work to create a lean future state.

Future state mapping is a process by which organizations identify a lean future condition. This future condition includes things like continuous flow manufacturing wherever possible, supermarkets or FIFO lanes (depending on the degree to which the products are custom) where continuous flow is not possible, and level production. Finally, they identify the types of process improvements that need to be made to achieve the future state. We recommend conducting a brainstorming session to identify such improvements.

After the future state has been created, a critical part of value stream mapping is creating an implementation plan. Based on the future state map, an implementation plan identifies each activity required to achieve the future state, the responsible team/individual, and the due date. Activities on an implementation plan will typically include kaizen events and "Six Sigma" type projects. Targeting such activities improves their bottom-line effectiveness since each activity will be leading to value stream improvement.

Value Stream Mapping is primarily a planning tool. It allows an organization to identify waste and sources of waste for a given value stream, systematically create a lean future state with less waste, and plan the implementation of the future state.

14.Maintenance/Skilled Trades Work Groups

Maintenance/Skilled Trades Defined

What is Maintenance?
􀀹 Repair function performed by skilled trades in the traditional
manufacturing model
􀀹 Can include PREVENTATIVE and REACTIVE maintenance

What are Skilled Trades Work Groups?
􀀹 Skill-based groups who perform maintenance tasks specific to
their area of expertise
􀀹 Ex: electricians, mechanics, millwrights, pipe fitters, tool makers,
plumbers, etc.
􀀹 Traditionally not involved directly in assembly processes (e.g., equipment operators)

13. 5S & Waste Walks

5S Definitions

1. Sort (Seiri)
- Remove all unnecessary items.
2. Set (Seiton)
- Make all necessary items easily accessible.
3. Shine (Seiso)
- Clean and inspect area.
4. Standardize (Seiketsu)
- Establish standards and maintain performance.
5. Sustain (Shitsuke)
- Continually improve. Integrate 5S into culture.

Eliminate Excess with Waste Walks

Waste Walks
􀂾 Utilized during “Sort” phase of 5S.
􀂾 Identify material that has not been used for one month.
􀂾 Mark excess materials with a “Red Tag.”



Red Tag Materials
􀂾 Evaluate all tagged materials.
􀂾 Properly process material and remove from work space.

12.The PDCA Continuous Improvement Cycle

Common Disconnects in Industry


Technical Factors

􀂾 BIG “P”DCA – Overplanning

􀂾 Team gets stuck in planning cycle
– try to confirm beliefs in planning whereas lean model confirms
beliefs in check


􀂾 LITTLE “P”DCA – Underplanning
􀂾 Missing experimental hypothesis: no “why”.

􀂾 Things work well for reasons beyond understanding with no
knowledge of what worked and why.

􀂾 The hypothesis is not validated.


Social Factors
􀂾 Constrained resources and improper training cause PDCA to begin and
end at “Do”.

11. ANDON Response Systems

Andon Defined


1. Japanese for light or lantern (orig).

v

2. “A system to surface and solve problems as they occur.”
(Jamie Flinchbaugh, COO Cobra Motorcycles)

v

3. In Lean Systems, it is part of the “Jidoka” value
of "autonomation" or "automation with a human
touch.“ It is the value to "stop and respond to
every abnormality."

v

4. A cord, signal, light, bell,music alarm, triggered by
an operator confronted with a non-standard
condition.

10. Standardized Work

Why Standardized Work?

􀂾 Provides a basis for employee training
􀂾 Establishes process stability
􀂾 Reveals clear stop and start points for each process
􀂾 Assists audit and problem solving
􀂾 Creates baseline for kaizen
􀂾 Enables effective employee involvement and pokayoke
􀂾 Maintains organizational knowledge


Disconnects & Misconceptions

􀂾 Standardized work is sometimes mistaken to be a static
work process
􀂾 Workers may feel threatened that their jobs are at risk and
therefore may not participate fully in optimizing the
process
􀂾 Standardized work may not show immediate results due to
other factors:
- worker attrition
- additional training requirement
- improvement cycle just beginning

9.Supply Chain Alignment

Characteristics of Effective Supply Chains

- Customer focus
- Open avenues of communication within and between corporations
- Investment in technology that enables supply chain management
- Performance measurement and competitive benchmarking

As the economy changes, as competition becomes more global,
it’s no longer company vs. company but supply chain vs. supply
chain.
Harold Sirkin, VP Boston Consulting Group

8.Six Sigma Systems Principles

Concept:

The Goal: To produce goods and services at a Six Sigma level. As your organization moves toward Six Sigma quality, you will:
- eliminate defects
- reduce production and development costs ¾reduce cycle times and inventory levels
- increase profit margin and improve customer satisfaction

The Vision: Drive industries to design and produce products/services to Six Sigma standards.

The Strategy: Use a data-driven structured approach to attack defects to improve the sigma level of your goods and services.

Application:

Useful in any enterprise that provides products or services for companies

7.Forecast “push,” customer “pull,” and hybrid models

Attributes of a "push" System

- Manufacturing activities are planned based on a market forecast rather than actual customer demand.

- Implicitly this means:

- There is an emphasis placed on a central planning function
- Service levels are assured by increasing or decreasing finished goods inventory levels.
- The system optimzes “efficiency” rather than “effectiveness” by leveloading the factory.
- Material flows through the factory in batches following a prescribed routing sheet attached to the work order.
- There is a heavy reliance on heuristics to compensate for the inherent complexty of the optimization problems encountered.
- “planning horizons” and “fences” are used to adjust the production plan on a weekly or monthly basis based on the forecast.
- Distinction between dependant and ndependent demand.

Attributes of a "pull" System

- Manufacturing plan is based on actual customer demand “pull”.

- Implicitly this means:
- Control of manufacturing execution is at the working level.
- Service levels are assured by increasing or decreasing kanban levels between workstations (WIP).
- The system is optmized for “effectiveness” which is achieved through continuously improving “efficiency”.
- Material flows through the factory based on visual queues triggered by customer “pull” from the final kanban.
- The system requres a very hands-on management style.
- Culmination of all lean principles. Kanban, Andon, Kaizen, 5S,

Hybrid Model

"The issue is not to make a choice between MRP and JIT, but to make the best use of both techniques." – Karmarker (1989)

6.Sustainability

Three Perspectives on Sustainability

-Sustainability of a lean implementation initiative
-Sustainability of a product/service
-Sustainability of the environment

All have common “lifecycle” perspective

How Do We Implement Lean/Six Sigma in a Sustainable Way?
Leadership
- Top-down reinforcement
- Training
- Involvement
- Establish lean as corporate culture, not as a “flavor-of-the- month” initiative

Process Design
- Involve key stakeholders in implementation
- Have diverse representation in team—operators, managers, finance, logistics, manufacturing, etc.

Measuring Sustaining Efforts

Process
- Quantity of Kaizens
- Capacity/Resourcesfreed up
- Variance x Bar,R,Cpk

Business
- New model cycles
- Inventory turns
- Cash flow
- Stock price

5.Machining Operations-Cycle Time

Cycle Time
The time to complete a task or collection of tasks

Throughput
The desired process throughput is inverse takt time.

Yield
The amount of product during a processing cycle


Once the unit cycle times are known, then what? Go Lean!

* Where are we?
- Determine process bottlenecks

* Where are we going?
- Ability to forecast process capacity based on cycle time at the narrowest bottleneck
- Assess bottleneck cycle times to prioritize continuousimprovement/lean initiatives…why improve cycle time?

+ Continuous improvement may displace workers, as a reduction in cycle time often results in making more, faster, with fewer resources.
+ There needs to be a plan for dealing with changing resource requirements.

* How will we get there?
- Combine cycle time with takt time and available work time to schedule production and labor allocation.
- Create a detailed action plan that aligns all activities.

4.Takt Time

Takt Time: Defined

GENERAL DEFINITION: Takt Time is the desired time that it takes to make one unit of production output.**


*CUSTOMER DRIVEN: Available Operating Time / Customer Demand

e.g.--8 hours of Daily Operating Time / 4 units of daily demand = Takt Time of 2 Hours


*OPERATION DRIVEN: Available Operating Time / “Forecasted” Demand

e.g.– 8 hours of Daily Operating Tme / 5.7 units of forecasted demand = Takt Time of 1.4 Hours

Nominally this is an initial design variable that dictates the architecture of the entire manufacturing operation

Takt Time differs from Cycle Time, which is the actual time it takes to make one unit of production output.


http://www.strategosinc.com/takt_time.htm http://www.isixsigma.com/dictionary/Takt_Time-455.htm

3.Preventive Maintenance

Challenges to Implementing Preventive Maintenance

Technical Factors

- Breakdown maintenance preventive maintenance in the short-term
- Under-trained technicians can cause more damage than they prevent

Social Factors

- Organizations are frequently structured in ways that promote local optimums ( cost, shiftly output goals, etc.)
- The benefitd of preventive maintenance are not always well understood
- The focus on minimizing maintenance costs has to shift to maximizing overall organizational performance

2.Team/Work Group Structure and Roles

Team Leader Role

1. Plan, schedule and facilitate team meetings.
2. Facilitate communications between shifts and teams.
3. Solve problems using authority delegated.
4. Plan and coordinate team actes, ensure proper job rotation
5. Plan and provide or arrange for team member training (OJT or classroom).
6. Promote safety, quality and housekeeping.
7. Promote and ensure constant improvement in the team (e.g., quality, cost and efficiency).
8. Obtain materials and supplies for the team.
9. Be knowledgeable of all operations within team, provide coverage for team members who are away from the work area (i.e., absent, relief, emergency, first aid, etc.)
10. Maintain team records, such as overtime scheduling/equalization, preventative maintenance, attendance, traning, etc.
11. Participate in management meetings and communicate the needs of the team.
12. Participate in the evaluation of team members, however, does not have the final word.
13. Responsible for the morale and performance of the team.
14. Schedule vacation of group members.
15. Check on health and welfare of group members.
16. Encourage group to meet responsibilities.
17. Promote suggestion process.
18. Other tasks as determined by the work team.

1.Lean Thinking


Definition: "Becoming ‘lean’ is a process of eliminating waste with the goal of creating value."


Note : This stands in contrast to definitions of lean that only focus on eliminating waste, which is too often interpreted as cost cutting – independent of its impact on value delivery

Two mindsets :

"Mass Production" Mindset
- Producer "push"
- Movement of materials
- High volume
- Inspection
- Expert-driven
- Decomposition
- Periodic adjustment

"Lean Enterprise" Mindset
- Customer "pull"
- Flow of value
- Flexible response
- Prevention
- Knowledge-driven
- Integration
- Continuous improvement

A Lesson From History

- 150 car makers in Indiana since the turn of the century --only 3 doing final assembly of cars in Indiana today (Honda, Subaru, and Toyota)

- Leading manufacturer --Auburn Motors --established an assembly line, but it was fixed for chassis --moving manually from one set of saw horses to another --and they resisted abandoning wood for steel in body frames

- What will people in the future say about a plant that had some group meetings, some new measurabes, some preventative maintenance, somen-station process control, some reduced in-process inventory, and some coordination among production, imaintenance and engineering?

Historical context: mergence of lean
Selected Elements of Toyota Production SystemImplemented over Three Decades:

- “Pull” vision
- Kanban (card) system
- Production leveling
- Reduced set-up time (Shingo)
- Jidoka (people giving wisdom to machines)
- Statistical Process Control (SPC)
- Quality Circles
- Kaizen (continuous improvement based onknowledge)
- Poka-yoke (error proofing)
- Adnon (visual display)

Case Example – Kanban:
1950s First kanban experiments
1960s Kanban introduced company-wide
1970s Kanban distributed across suppliers


Lean thinking: A mental model Womak and Jones:

- Specify value
- Identify the value stream
- Make value flow continuously
- Let customers pull value
- Pursue perfection

.......

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