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Lean in a Lean Economy

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Presentation on Implementing Lean Manufacturing during the Great Recession. EMS Consulting Group, Inc. www.emsstrategies.com

Presentation on Implementing Lean Manufacturing during the Great Recession. EMS Consulting Group, Inc. www.emsstrategies.com

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  • 1. Lean Manufacturing in a Lean Economy Darren Dolcemascolo EMS Consulting Group, Inc. Copyright EMS Consulting Group, Inc. 2008
  • 2. Lean Manufacturing in a Lean Economy• You will learn: – The need to become lean today – Benefits you can expect by implementing a lean initiative – Principles and steps of implementing a lean program – Critical success factors—the reasons that lean ideas fail in so many companies, and how to avoid these pitfalls Copyright EMS Consulting Group, Inc. 2008
  • 3. Presentation Agenda1. Lean Manufacturing Principles and Benefits2. The Lean Implementation Process3. Pitfalls/Critical Success Factors4. Q&A Copyright EMS Consulting Group, Inc. 2008
  • 4. The TPS TPS Diagram House Goal: A System Based on a Structure Highest Quality, Lowest Cost, Shortest Lead Time Best Safety, High Moral•Not a set of Techniques Just In Time Jidoka Built-in-Quality Right part-•Structural System Right amount- Right Time •Line Stop•The house is strong only if the: •Efficiency •Flow •Visual • Roof is strong •Takt Time •Pull Controls •Error Proofing • Pillars are strong •Quick Changeover •Andon •5 Whys • Foundation is strong Operational Stability • People are strong Standardized Work TPM•A weak link weakens the whole system Kaizen Leveled Production Toyota Production System Copyright EMS Consulting Group, Inc. 2008
  • 5. Lean Manufacturing Overview• Value - A capability provided to a customer at the right time at an appropriate price, as defined in each case by the customer. Features of the product or service, availability, cost and performance are dimensions of value.• Waste - Any activity that consumes resources but creates no value. Copyright EMS Consulting Group, Inc. 2008
  • 6. Lean Manufacturing Overview• Lean Manufacturing is an operating philosophy that focuses on the elimination of the seven wastes: – Overproduction – Excess inventory – Defects – Non-value added processing – Waiting – Excess motion – Transportation Copyright EMS Consulting Group, Inc. 2008
  • 7. What does Lean do? Total Lead Time LeanTransformation Total Lead Time Value-Creating Time Non-Value-Creating Time (waste) Copyright EMS Consulting Group, Inc. 2008
  • 8. Lean Manufacturing Overview Measure Initial Lean Conversion Continuous Improvement Labor Productivity Double Double Again Production Throughput 90% reduction 50% reduction TimesInventories Throughout 90% reduction 50% reduction Errors Reaching 50% reduction 50% reduction Customers Scrap 50% reduction 50% reduction Time to Market / New 50% reduction 50% reduction Product DevelopmentLean Thinking, Womack and Jones, 1996 Copyright EMS Consulting Group, Inc. 2008
  • 9. Lean Conversion Process“The greatest enemy to tomorrow’s success is sometimes today’s success.” - John Maxwell Copyright EMS Consulting Group, Inc. 2008
  • 10. Current State of Our Economy• Credit Crisis: Difficult for Businesses to Obtain Credit to – Meet Payroll – Purchase Raw Materials – Grow as a company• Unemployment on the Rise• Major Recession Copyright EMS Consulting Group, Inc. 2008
  • 11. How Can Lean Help?• Current Economic Conditions create an opportunity for lean thinking – a need to go lean based on survival!• Applying lean principles will create the following: – Shorter Lead-Times to Customers – Net Decrease In Inventory- Frees Up Cash – Productivity Growth- increases capacity without additional capital/hiring – Quality Improvement- lowers costs and attracts additional business Copyright EMS Consulting Group, Inc. 2008
  • 12. How Can Lean Help: Shorter Lead Times• Benefits to Operation – Ability to Quote Jobs Faster – Ability to Process Orders Faster – Ability to Get Orders to Production Faster – Ability to Process Jobs Through Production Faster• Competitive Advantages – Attract more business – Get paid faster/rely less on credit Copyright EMS Consulting Group, Inc. 2008
  • 13. How Can Lean Help: Decrease in Inventory• Benefits to Operation – Freed up floor-space – Freed up cash• Competitive Advantages – Have cash on hand for expansion of business or to handle short-term ―down‖ periods Copyright EMS Consulting Group, Inc. 2008
  • 14. How Can Lean Help: Productivity Growth• Benefits to Operation – Lower Product Costs – Increased Capacity• Competitive Advantages – Increased profitability – Ability to compete on price due to lower costs – Attract more business Copyright EMS Consulting Group, Inc. 2008
  • 15. How Can Lean Help: Quality Improvement• Benefits to Operation – Lower Product Costs – Better Quality Product Produced• Competitive Advantages – Increased profitability – Attract more business Copyright EMS Consulting Group, Inc. 2008
  • 16. How Can Lean Help: Bottom Line• Lean thinking will help a company become self-reliant: – Fuel for growth by producing better quality, lower cost products with the shortest lead times. – Ability to Grow without relying on the availability of credit from financial institutions. Copyright EMS Consulting Group, Inc. 2008
  • 17. Lean Conversion Process: Lean Thinking• Specify value – can only be defined by the ultimate customer• Identify the value stream – exposes the enormous amounts of waste• Create flow – reduce batch size and WIP• Let the customer pull product through the value stream – make only what the customer has ordered• Seek perfection – continuously improve quality and eliminate waste Copyright EMS Consulting Group, Inc. 2008
  • 18. Value Stream Approach• Select Product Family• Create current and future state maps• Develop and manage action plan using Project Management approach Copyright EMS Consulting Group, Inc. 2008
  • 19. Planning Tool: Value Stream Mapping• Definitions - Current State Map – Map showing information and product flow as it is currently done. - Future State Map - Map showing an attainable information and product flow with significantly less waste than that of the current state. Copyright EMS Consulting Group, Inc. 2008
  • 20. Value Stream Mapping• Purpose of Mapping – To identify and eliminate waste in the value stream.• End Product of VSM – Picture of ―future state‖ with an action plan to achieve it. – Prioritized Projects Copyright EMS Consulting Group, Inc. 2008
  • 21. Value Stream Mapping: Current State• Begin mapping at the end of the process (customer) and work backwards.• Then, map the information flow from your customer back to your supplier.• Connect the two. Copyright EMS Consulting Group, Inc. 2008
  • 22. Current State Value Stream MapRaw Matl. Production Control CustomerSupplier MRP Units/dayUnits/day Information Flow Material Flow Process A Process B Process C Value Creating Time = I Data I Data I Data 180 seconds Lead Time = 18 days Copyright EMS Consulting Group, Inc. 2008
  • 23. Value Stream Mapping: Future State Elements• Flexibility• Short Lead-Time• Connected Processes• Flow Loops• Simplified Information Flow• Awareness of the Customer Requirement• Scheduling one point in the value stream Copyright EMS Consulting Group, Inc. 2008
  • 24. Kaizen Event Approach• Kaizen Event Overview – 3 to 5 day breakthrough event – ―Working level‖ participants w. facilitator – Appropriate for use with several lean tools – Appropriate for new implementations and for continued improvement Copyright EMS Consulting Group, Inc. 2008
  • 25. Kaizen Events• Typical Tools – 5S – SMED (Single Minute Exchange of Die) – TPM (Total Productive Maintenance) – Mistake Proof (Poka-Yoke) – Visual Controls – One-Piece Flow/Takt Time/Layout Copyright EMS Consulting Group, Inc. 2008
  • 26. Kaizen Events• Kaizen Event Process – Educate (1/2 – 1 day) – Lean with emphasis on particular tool – Set goals – Map out baseline – Brainstorm ideas – Select ideas and formulate future state – Develop plan to implement future state (Implement as much as possible immediately- during event.) Copyright EMS Consulting Group, Inc. 2008
  • 27. Kaizen Events• Advantages – Exciting experience for all involved – Can Accomplish Improvement Rapidly – Participants learn a great deal – Skeptics can be won over – Valuable tool for implementing aspects of a value stream improvement Copyright EMS Consulting Group, Inc. 2008
  • 28. Kaizen Events• Disadvantages – Improves points in the process but without VSM approach, does not lead to flow across the enterprise – Action list at the end often is ignored- important to meet weekly until complete. – Tendency to revert to old methods after the event. – No lasting cultural change. – Tendency to judge events on short-term cost savings only Copyright EMS Consulting Group, Inc. 2008
  • 29. Where to Start- Toyota’s 4 P’s?1. Philosophy – Hold an off-site meeting of top leaders and define your company’s vision2. Process – Begin implementing a connected value stream.3. People – Train and indoctrinate your people into the new lean way of thinking, effecting culture change.4. Problem Solving – Train people in a problem- solving methodology and give them time to meet in groups and solve problems. Copyright EMS Consulting Group, Inc. 2008
  • 30. Typical Approach that Works1. Perform an assessment and develop an overall plan for implementation. Create a Company X Production System based on an assessment.2. Select some key items/pilot projects for process improvement (based on an assessment) and implement kaizen/5S.3. Combine VSM approach with problem solving and 5S training. a) Use the Value Stream Mapping approach to identify improvement projects (both kaizen and ―six sigma‖ projects) b) Roll out 5S implementation and basic problem solving training plant-wide to build momentum. Copyright EMS Consulting Group, Inc. 2008
  • 31. Typical Approach that Works4. Implement the projects/roll out lean training in small bites in conjunction with projects5. Continue expanding by value stream (or department), whichever makes more sense.6. Extend across entire organization.7. Create a Lean Promotion Function.8. Develop a growth strategy for additional business.9. Extend Lean to Your Suppliers. Copyright EMS Consulting Group, Inc. 2008
  • 32. Pitfalls/Barriers• Too much compromise/Lack of Leadership Commitment to Lean• Tendency to Revert Back to Old Ways when setbacks occur• Tendency to use TPS/Lean as a Cookbook• Tendency to make surface changes without applying lean principles properly (customizing to suit the situation)• Short-Term Thinking at the Expense of Long Term Copyright EMS Consulting Group, Inc. 2008
  • 33. Roles in Change Process Executive Sponsor Resources AccountabilityLean Coach Process Owner Value Stream Team Copyright EMS Consulting Group, Inc. 2008
  • 34. Leadership• Top management support /commitment is critical for successful lean transformation.• Support and commitment means not only lip service but $$, resources, making difficult decisions, and eliminating roadblocks.• Middle managers down to team leaders must become change agents- the transformation from skeptic to teacher does not happen overnight. Copyright EMS Consulting Group, Inc. 2008
  • 35. Lean Coach/Teacher• Internal or external lean expert that teaches but does not do the work. The lean coach: – Leads model line programs – Leads value stream mapping – Leads kaizen events – Teaches lean tools and philosophy through courses and improvement events – Coaches leaders at all levels – Develops the lean operating system (metrics, principles, assessment approaches) – Internally promotes the lean transformation. – Externally learns and brings back new ideas. Copyright EMS Consulting Group, Inc. 2008
  • 36. Key Ingredients of Change Structure Participation & • Organization Ownership • Documents • Roles/Resp Committed, Knowledgeable Change Lasting Leadership Effort Results Accountability Learn by doing Education & mentoringToyota Way Fieldbook, Liker and Meier, 2005 Copyright EMS Consulting Group, Inc. 2008
  • 37. Culture Change• Education and changing metrics alone will not drive culture change• Seeing/Experiencing is believing.• Lean must be tried and the word must be spread through successes in pilot projects.• Strong leadership is necessary to drive culture change. Copyright EMS Consulting Group, Inc. 2008
  • 38. Recap• The Current Economy is a compelling reason to implement lean• Lean thinking will help a company become self- reliant: – Fuel for growth by producing better quality, lower cost products with the shortest lead times. – Ability to Grow without relying on the availability of credit from financial institutions.• Lean Requires a Systematic Implementation Approach• Lean Requires Strong Leadership Copyright EMS Consulting Group, Inc. 2008
  • 39. Lean Conversion Process“Perfection is not attainable, but if we chase perfection, we can catch excellence.” - Vince Lombardi Copyright EMS Consulting Group, Inc. 2008
  • 40. Questions?Copyright EMS Consulting Group, Inc. 2008