Value and Waste www.facebook.com/EgyptianLeanStore
Understanding Value $ Cash !! Value !! Customer Low Cost Your CompanyHigh Quality Profit Availability Repeat Business Growth
Value-Added vs Non Value-AddedValue-Added- Changes fit, form and function of product or service- Transformation step has value to customer (customer would bewilling to pay for it)- It is done right the first timeNon Value-Added- Everything elseNecessary - Has to occur to produce product or serviceUnnecessary - Does not have to occur to produce product or service
WasteHow often have you used the expressions: “That was a waste of time!” or“That was a waste of money!” or “That was a waste of effort!”
Eliminating WasteSo what can we do to eliminate waste?We first need to identify what is & is not waste, then we canlook at ways of eliminating or at least reducing waste.
Identifying Waste Operational ActivityValue added Oper ations- Any process that changes the nature, shape or characteristic ofthe product in line with customer requirementse.g. Pressing, welding, heat treatment. This is where we make a profit!
Identifying Waste Operational ActivityNon -Value added Oper ationsWork carried out which is necessary under current conditions, butdoes not increase product value.e.g. Inspection, tool change, maintenance. This is where we make a loss!
Operation timeThe objective is to raise the ratio of Value added operations toNon-value added operations and eliminate waste. OPERATOR TIME VALUE WASTE NON-VALUE ADDED ADDED MORE TIME FOR NON-VALUE VALUE OTHER ACTIVITIES ADDED ADDED
Elimination of Waste Waste is everywhere!The elimination of waste is a massive opportunity!! Lean Strategy is the best way to eliminate waste
Flow Manufacturing We know that there is a direct link between flow and costElimination Improved = of Waste FlowImproved Decreased = Flow CostDecreased New Business Cost = Sustainable Profits
Understanding Value and Waste- To go Lean and stay Lean, you continually need to understandcustomers and what they value.- To satisfy customers, you will need to eliminate or at least reducethe wasteful activities for which your customers would not wish topay.- To do this, Lean leader Toyota identified three key areas to address:muda, mura, and muri. 12
Lean Manufacturing Wastes- When people think of waste in manufacturing they usually onlythink about all of the scrap material that gets thrown away or ifyour lucky recycled, they often forget about all of the other actionsthat waste our time, our resources and our MONEY..- When someone who has had some contact with Lean Manufacturingtalks about waste they are often talking about Muda, or the sevenwastes (or 8+ wastes depending on your definitions), but theyoften forget the other wastes defined within the Toyota ProductionSystem; Mura and Muri. 13
Muda (the 7 waste)Muda is any activity or process that does not add value, a physicalwaste of your time, resources and ultimately your money. Thesewastes were categorized by Taiichi Ohno within the Toyotaproduction system, they are;Transport; the movement of product between operations, andlocations.Inventory; the work in progress (WIP) and stocks of finished goodsand raw materials that a company holds.Motion; the physical movement of a person or machine whilstconducting an operation. 14
Muda (the 7 waste)Waiting; the act of waiting for a machine to finish, for product toarrive, or any other cause.Overproduction; Over producing product beyond what the customerhas ordered.Over-processing; conducting operations beyond those that customerrequires.Defects; product rejects and rework within your processes.Talent; failing to utilize the skills and knowledge of all of youremployees.Resources; failing to turn off lights and un-used machinesBy-Products; not making use of by-products of your process 15
Transportation- Material/parts movement- Unnecessary moving or handling of parts.- Handling equipment moving with no parts.- Raw material batch sizes not matching production batch size.- Material stored a long way from point of use. 16
Waste of Transportation: Example Employee walks 35 feet to next station 32 times per dayAvg. walking pace = .227 seconds per foot.227 seconds x 35 feet = 7.9 seconds per trip7.9 seconds x 32 times = 252.8 seconds per day252.8 seconds x 260 working days = 18.3 hours per year18.3 hours x $20 per hour = $366 per year spent for employee towalk to next stationIf stations were 6 feet apart, the amount paid to walk to nextstation would only be $63
Inventory- Inventory makes control difficult and obscures the opportunity forimprovement.- Delays action in dealing with faults and defects- Reduces need to face up to fast tool changeovers- Imbalance in facility capability- Goods can become damaged or obsolete- Creates unnecessary searching and movement of materials- Takes up space 18
Waste of Inventory: Example Company rents warehouse space to hold extra inventoryNeed 4,000 square feet to hold inventoryWarehouse space costs $4.00 per square foot per month4,000 square feet x $4.00 = $16,000 per month$16,000 x 12 months = $192,000 per year for storage
Waiting- Waiting for material- Waiting for maintenance- Waiting for tool change- Waiting for quality checks- Waiting for next station 21
Waste of Waiting: Example Employee waits 20 seconds for previous operation to finish each part20 seconds x 60 parts per hour = 20 minutes per hour spent waitingfor parts20 minutes x 8 hours per day = 2.67 hours per day spent waiting2.67 hours x 260 days per year = 694.4 hours per year spent waiting694.4 hours x $20 per hour = $13,888 spent on employee waiting forprevious operation
Overproduction- Making more than the customer needs- Making in large batches- Overrunning an unstable process- To produce more than is required- To produce before required 23
Over-processing- Wrong choice of equipment- Bad definition of customers needs.- Useless operations- Excessive movement in process cycle- Too frequent inspections- Excessive set-up or downtime- Bottlenecks- Unbalanced process 24
Defects- Scrap- Rework- Trimming- Rejects- Recalls- Defects are the primary metrics in Six Sigma strategies. 25
Talent- Non use of people- Skills- Communication- Creativity 26
Mura (Waste of Unevenness)Mura is the waste of unevenness or inconsistency, but what does thismean and how does it affect us? Mura creates many of the sevenwastes that we observe, Mura drives Muda! By failing to smoothour demand we put unfair demands on our processes and peopleand cause the creation of inventory and other wastes.One obvious example is production processes where the manageris measured on monthly output, the department rushes like mad inthe final week of the month to meet targets, using up componentsand producing parts not actually required. The first week of themonth is then slow due to component shortages and no focus onmeeting targets. 27
Muri (waste of Overburden)Muri is to cause overburden, by this we mean to give unnecessarystress to our employees and our processes.This is caused by Mura and a host of other failures in our system suchas lack of training, unclear or no defined ways of working, thewrong tools, and ill thought out measures of performance. 28
Mura, Muri and MudaFinally Mura causes Muda, the seven wastes are symptoms of ourfailure to tackle Mura and Muri within our processes not the rootcause!Lean Manufacturing is about the removal of waste; but not just Muda(non-value adding steps), it is about removing Mura and Muri too.In fact by concentrating on solving Mura and Muri you prevent thecreation of Muda.By working on Just in Time (JIT) principles with Heijunka,Kanban and other techniques you enable production smoothingand flow; removing the causes of Mura, unevenness. The otherlean tools such as 5S help you to remove other causes ofoverburden removing Muri, overburden. 29
Typical symptoms of Waste- Excessive Cycle, Lead or Flow Time- Excessive costs- Poor quality- Inflexible production systems- Late deliveries- Excessive inventories- Dependency on work-around methods- Reactive fire-fighting- Daily management by exception
Wastes Effect Overproduction discourages a smooth flow of production and leads toOver production excessive work in process inventory. This increases overall delivery times . Inventory Adds cost, requires space, hides process defects, can encourage damage. Adds time & cost and can be a safety issue. Motion Creates excessive lead time, causes bottlenecks, causes additional time & Waiting cost. Leads to increased time & cost to transport & search, and increased Defects Transportation due to accidents. Can result in scheduled work time being longer than needed, Parkinson’sOver processing Law in project task execution, increases in time & cost. Defects Defects can lead to additional time and cost, and more critically it can reduce customer confidence. Overproduction is considered the "mother of all wastes" since it can lead to increases in all the other forms of waste.
Lean Enterprise Principles CONTROL MEASURE1. Specify value in the eyes of the customer.2. Identify the value stream and eliminate waste.3. Make value flow at the pull of the customer.4. Involve and Empower employees.5. Continuously improve in pur suit of per fection. IMPROVE ANALYZE