Waste is any activity that consumes time, resources, or space but does not add any value to the product or service. What is Waste?
constraints on performance improvement Lack of funds, resources, time and personnel are the top four constraints that companies experience in achieving measurable improvements in business performance. Lack of Funds 43% Limited Resources 42% Lack of Time 40% Lack of Qualified Personnel 32%
Specify value : Specify value from the standpoint of the end customer by product family. Identify the value stream : Identify all the steps in the value stream for each product family, eliminating whenever possible those steps that do not create value. 5 principles of lean
Create flow : Make the value-creating steps occur in tight sequence so the product will flow smoothly toward the customer. Let the customer pull product through the value stream: Make only what the customer has ordered. 5 principles of lean
Seek perfection : As value is specified, value streams are identified, wasted steps are removed, and flow and pull are introduced, begin the process again and continue it until a state of perfection is reached in which perfect value is created with no waste. 5 principles of lean
Improve quality: In order to stay competitive in today’s marketplace, a company must understand its customers' wants and needs and design processes to meet their expectations and requirements. Eliminate waste: Waste is any activity that consumes time, resources, or space but does not add any value to the product or service. Four Goals of lean
Reduce time: Reducing the time it takes to finish an activity from start to finish is one of the most effective ways to eliminate waste and lower costs. Reduce total costs: To minimize cost, a company must produce only to customer demand. Overproduction increases a company’s inventory costs due to storage needs. Four Goals of lean
overproduction (occurs when production should have stopped) Waiting (periods of inactivity) Transport (unnecessary movement of materials) Extra Processing (rework and reprocessing) Inventory (excess inventory not directly required for current orders) Motion (extra steps taken by employees due to inefficient layout) Defects (do not conform to specifications or expectations) The Seven Forms of Waste
Overproduction : Producing more/sooner than the Internal or External customer needs. Waiting :Long periods of inactivity for people, information, machinery or materials. Transportation :Excessive movement of people, information or materials. The Seven Forms of Waste
In appropriate processing: Using the wrong set of tools, procedures or systems. Unnecessary Inventory: Excessive storage and delay of information or products. The Seven Forms of Waste
Motion : people or equipment moving or walking more than is required to perform the processing. Defects : Frequent errors in paper work,product quality problems etc.. The Seven Forms of Waste
meets the minimum requirements by performing quality assurance . MATERIAL MANAGEMENT
Value Stream Mapping Lean Thinking diagnostic tool that allows you to: Visualize work “See the waste” (barriers to flow) Focus on improvements Value Stream = steps (value added and non-value added) that are required to complete a service from beginning to end
Value Added vs. Non-Value Added Value added activities The customer is willing to pay money for the process Work that changes the market form, fit or function Non-value added activities Should be eliminated, simplified, reduced, or integrated whenever possible Two types of non-value added activities: Required for business Not required for business
Continuous focus on increasing value added activities
If value added activities are increased by 10% = gain of only 2%!
Focus on reducing non-value added activities by 10% = gain of 8% value added!
20% 80% Non-Value Added
Steps to achieve lean systems The following steps should be implemented in order to create the ideal lean manufacturing system:
Design a simple manufacturing system
Recognize that there is always room for improvement
Continuously improve the lean manufacturing system design
Design a simple manufacturing system A fundamental principle of lean manufacturing is demand-based flow manufacturing. In this type of production setting, inventory is only pulled through each production centre when it is needed to meet a customer’s order. The benefits of this goal include decreased cycle time less inventory increased productivity increased capital equipment utilization There is always room for improvement The core of lean is founded on the concept of continuous product and process improvement and the elimination of non-value added activities. “The Value adding activities are simply only those things the customer is willing to pay for, everything else is waste, and should be eliminated, simplified, reduced, or integrated”. Improving the flow of material through new ideal system layouts at the customer's required rate would reduce waste in material movement and inventory. Continuously improve A continuous improvement mindset is essential to reach a company's goals. The term "continuous improvement" means incremental improvement of products, processes, or services over time, with the goal of reducing waste to improve workplace functionality, customer service, or product performance.