AustraLEAN presentation Edition

Andrew Manic
Business Consultant

Purpose of this presentation
Lean Enterprise - Presentation
• Learn why organizations must transform from being
mass producers to lean producers
• Present Lean Enterprise as a core key strategy
• Learn the concepts of Kaizen and Standardized
Work
• Learn about the different types of waste and how to
eliminate them
• Learn the tools of a Lean Enterprise
• Understand how your business will transform into a
Lean Enterprise

Every morning in Africa, a gazelle wakes
up; it knows it must run faster than the
fastest lion or it will be killed.
Every morning in Africa, a lion wakes up; it
knows it must outrun the slowest gazelle or
it will starve to death.
It doesn’t matter whether you are a lion or a
gazelle: When the sun comes up, you had
better be running.
Unknown
Survival

What is the Definition of a
Lean Enterprise ?
Lean Enterprise

Lean Enterprise - Definition
• A Lean Enterprise is an organization that
operates with minimal waste (both
manufacturing and overhead processes),
thus providing a seamless flow of value
added activities to meet and surpass
customer expectations

Differences between a Mass
Producer and a Lean Producer
Lean Enterprise – Mass Producers vs Lean Producers

Lean Enterprise Process
• Customer initiated actions only - Kanban
• Flexibility , quick reaction to market changes,
cost effective and with minimal stress
• Processes responsive, linked and predictable -
Short lead time
• Minimum inventory
• Continuous pursuit of perfection - Teams
• Systematic elimination of waste
• Optimized value stream
• Systematic preventive maintenance
• Set up not an issue
• Visual controls - Self managed and simple
• Predictable and consistent quality
Batch Process
• Push system - MRPII drives actions
• Limited flexibility - High stress and costs
to meet market changes
• Processes not linked or predictable - Long
lead time and quality problems
• Inventory a safeguard and an asset
• One time process improvement projects
• Allowance for scrap
• Suppliers not part of the team
• Corrective maintenance rather than
preventive
• Shop floor control through reports
• Rework
Business activities are independent and unfocused Business activities are linked and focused
Process Differences

Mass Producers vs Lean Producers
• Mass manufacturing systems can no longer compete,
their processes are very wasteful thus very costly
• Mass manufacturing systems have very slow response
times to customer needs, high costs, and poor quality
products – value stream destruction
• Mass producers don’t know where their problems are
– firefighting !
• Lean Enterprise systems facilitate very fast response
to customer needs, low costs, and high quality
products – value stream optimization
• The Lean Enterprise focuses on systematic waste
removal, root cause problem solving, and continuous
improvement

The reason for change
Lean Enterprise - Change

Change - What has changed in the business world?
The market and business dynamics have changed dramatically in the last five
years
• Strong competition.
• Extraordinary price pressures.
• Quality is a given.
• Continuous need for rapid innovation.
• Widespread communications about choice, competition and
prices.
• Continued need to increase people’s skill levels to remain
marketable.
Therefore, we need to understand this environment and
decide on a course of action
New basic dynamics include:

Many Major Markets Require a
Substantial Price Cut Each Year
• Automotive and Appliance
• To stay at same profit level, we
must cut costs
• To do nothing is to go out of
business!

What if your main competitor looked like this?
Toyota Group Supplier
Measure Results
Manufacturing Lead Time 4 hours
Delivered Quality 3 PPM
Delivery Performance 99+%
Inventory Turns > 50
Changeover Time
· Assembly
· Stamping/Molding
< 1 minute
< 10 Min.

The Lean Company
Lean companies typically achieve:
• 50% space reduction
• 50 inventory turns per year
• 50% productivity gain
• Short cycle time paper handling processes (1 hour or less)
• Large cash flow due to reduced inventory and Kanban use
• Real cost tracking based on Activity Based Costing rather
than by allocation or standards
• Capital investment needs reduced to 50%
• Near zero defective product returns from the customer
• 98% to 100% on-time delivery to customer’s want date
They become the companies against whom to
compete

Why Lean Enterprise ?
Everybody Wins !
• Employees are empowered and part of improvement
teams. The employees have a much broader
knowledge of the product and the workplace. The
Lean Workplace is a much cleaner, organized, safer,
and happier environment to work in.
• Customers win because high quality, low cost product
is delivered on time
• Management win because product is shipped on time,
the company is making financial gains, and there is an
overall positive attitude within the company

If we do not become a Lean Enterprise ...
Our company will likely share the same fate
as the dinosaurs!
Why Lean Enterprise ?
There is an obvious need for
dramatic change !

Lean Enterprise – Critical Success Factors
Critical Success Factors

• Optimize the Value Streams that exist within
your organization !
• Transform your business into a Lean
Enterprise !
• A relentless pursuit of perfection and
systematic waste elimination is fundamental !
• Total employee involvement !
• Top down drive !

• Lean Enterprise provides a framework for production
using machinery and labor as efficiently as possible
• Lean Enterprise is based on the core belief of continuous
improvement is required in all business processes
• Lean Enterprise is a strategic business system… and a
state of mind
• Lean Enterprise is very simple in concept, but difficult
to implement
• The single most important factor in implementing Lean
Enterprise is you
Key Points

Lean Enterprise – The Value Stream
The Value Stream

Definition of a Value Stream
• A Value Stream is defined as all of the
activities that currently exist, both value added
and non-value added, that are required to
bring a product through the main flows
essential to every product:
• The production flow from raw material into
the arms of the customer
• The design flow from concept to launch

Mapping the Value Stream
• A detailed Value Stream Mapping exercise
will provide insight as to where the waste
exists, and will also provide a roadmap for the
overall improvement process – waste
elimination is fundamental
• Use Kaizen and Standardized Work as a tool
for waste elimination

Kaizen and
Standardized Work
Lean Enterprise: Kaizen and Standardized Work

KAIZEN is:
• The Japanese word for continuous
improvement in small, incremental
steps
• A process that eliminates waste
(Muda) and therefore enables the
realization of JIT
• A way of life

Improving Value to Customers
by Continuously Improving the
PROCESS by which Business is
Conducted

Map things
as they are
Measure
Flow value
added
activities and
train
Measure again
Celebrate the
accomplishments
Eliminate what
does not add
value
Start
here
KAIZEN - The process

Ten Kaizen Principles
• Get Rid Of Old Assumptions
• Don’t Look For Excuses, Find Ways To Make It Happen
• Say ‘NO’ To The Status Quo
• Don’t Worry About Being Perfect - Even If You Only Get
It Half Right, Start Now
• It Doesn’t Always Cost Money To Do Kaizen
• If Something Is Wrong, Fix It On The Spot
• Good Ideas Come When The Going Gets Toughest
• Ask ‘WHY’ Five Times To Get To The Root Cause
• Look For Wisdom From Ten People Rather Than One
• Never Stop Doing KAIZEN

Why The Kaizen Events ?
• To create a positive attitude to change and
success
• To introduce all personnel within the
business unit to the benefits of a Lean
Enterprise System
• To introduce a continuous improvement
culture to all levels of the organisation

• To create a high profile, explosion of
activity to kick start lethargy out of
Business Units
• Break down long established Trends
• Focus on enhancing product quality,
delivery, and price; this type of focus will
enable this company to SURVIVE in a
highly competitive global marketplace

• To involve the total workforce within the
organisation in multi-functional team building,
working to meet the business needs and exceed
customer expectations
NONE OF US ARE AS
SMART AS ALL OF US !

5 main reasons for KAIZEN
• Safety Improvements
• Efficiency/Shorten lead times
• Cost Reductions
• Quality Improvements
• Improve workability

Why is Kaizen important ?
• Without waste elimination and continuous
improvement, your business will eventually
fail !

Standardized Work
• Standardized Work is a tool for Kaizen
• It is the starting point for the improvement
process and is a tool for the elimination of
waste
• Standardized Work documents the steps of a
process or operation that are required to
manufacture a product or service
• Standardized Work charts must be developed
for all processes and provide the method for
analysis and implementation of Kaizen

Standardized Work - Example

Why is Standardized Work important ?
• Understanding the process and
documenting the steps leads to low cost,
high quality, and short lead time
• It provides a baseline for continuous
improvement
• It is the basis for Kaizen

Waste Elimination
Lean Enterprise: Waste Elimination

Definition of Waste
• Waste is any factor in the production
process that does not add value
• Your customers will not pay for non value
added activity
• Waste makes it impossible to meet
customer requirements in an efficient
manor
• Waste is an extremely large cost
• We must lower our costs by total
elimination of waste

Waste
• Waste does not “just happen”
• Mass manufacturing production systems (job shop
mentality) create and generate waste
• Waste is created by design
• design of products
• design of production processes
• design of overhead processes
• design of factory layouts
• Mass manufacturing systems create enormous
communication problems and also generate the seven
main wastes

Eliminate the Seven Wastes !
• Waste of
– Overproduction
– Waiting
– Conveyance (Transportation)
– Processing itself
– Stock on Hand (Inventory)
– Movement
– Making Defective Products

Waste Definitions
• Overproduction- Producing larger
quantities than needed, or at a faster rate
than is required

Overproduction

Waste Definitions
• Waiting- When people or machines stand
idle waiting for a previous operation to be
completed

Waiting

Waste Definitions
• Transportation - Moving the product from
where it was produced to where it is
needed. The distance and time are wastes

Transportation

Waste Definitions
• Processing - Processing work that isn’t
needed

Waste Definitions
• Stock on Hand - Excess product that cannot
be immediately consumed

Stock On Hand

Waste Definitions
• Movement - Any movement of people or
machines that does not add value to the
product

Movement

Waste Definitions
• Making Defective Product - Making a
product that is defective, the materials,
labor, and machine time used to correct the
defect raises the total cost of the product

Rework

Inventory is
Evil

MRP Customer Responsiveness
FORECAST
MACH MACH MACH PAINT
RAW
MATERIAL
Sub Sub Assy 1 Assy 1
Assy1 Assy2
SHIP
Assy 1 Assy 1 Assy 1 Assy 1
ORDER RAW MATERIAL CUSTOMER
ORDER TO SHIP RESPONSE TIME = 8 TO 12 WEEKS
WIP WIPWIPWIP
WIP WIPWIPWIP
WIP FIN
INV
WIPWIP

Eliminate MRP as a Production Control Tool
MRP
For Production Control
Use MRP only for planning

Inventory is like
a river, when
water level is
lowered,
boulders have to
be dealt with
Scrap
Long set
ups
Absenteeism Lack of
teamwork
Machine
downtime
Imbalanced
lines
Quality
problems
not capable
Processes
Maintenance
issues
Productivity
Problems
Suppliers’
issues
Inventory
Level
Inventory Hides Problems
Reducing inventory levels brings problems to the
surface and forces their resolution

Waste creates
Waste !
Lean Enterprise: Waste Identification

In Summary Waste Reduction will:
• Improve Quality
• Improve Productivity
• Improve Delivery (Short Lead Times)
• Reduce Inventory Levels
• Reduce Space Requirements
Reduction of Total Cost of Operations

6 Tools of
Lean Production
Lean Enterprise: 6 Tools of Lean Production

Lean Production
Tools
Products are built
“Just In Time”,
only to customer
demand
JIT
production
Six Sigma quality
is built into the
product and the
process
Six sigma
quality
Visual Management
to track performance
and open the
company to all
people
Visual
Management
There is a
relentless pursuit
of perfection
Pursuit of
Perfection
Empowered
Teams
Shop floor teams
are empowered to
make key decision
The workplace is
safe, orderly, and
immaculately
clean
Workplace
safety, order,
cleanliness
Lean Enterprise: 6 Tools of Lean Production

Lean Production
Tools
Products are built
“Just In Time”,
only to customer
demand
Visual Management
and open the
company to all
people
Visual
Management
There is a
relentless pursuit
of perfection
Pursuit of
Perfection
Empowered
Teams
Shop floor teams
are empowered to
make key decision
The workplace is
safe, orderly, and
immaculately
clean
Workplace
safety, order,
cleanliness
JIT
production
Lean Enterprise: 6 Lean Tools – JIT Production
Six Sigma quality
is built into the
product and the
process
Six sigma
quality

• TAKT TIME
Produce at the Customer’s purchase rate
• ONE PIECE FLOW
Eliminate ALL excess inventory
• PULL PRODUCTION
“Customers” reach upstream to “Suppliers”
TOTAL WASTE ELIMINATION IS FUNDAMENTAL !
The 3 basic laws of JIT Production

TAKT TIME

The Definition Of TAKT Time
• Takt is a German word meaning meter
or rhythm
• It dictates the rate of production or
units per hour
• It is a calculation based on customer
demand and available production time

Takt Time Calculation
• TAKT TIME is the :
TIME AVAILABLE (SECONDS)TIME AVAILABLE (SECONDS)
THE NUMBER OFTHE NUMBER OF SOLDSOLD UNITSUNITS
• Using SOLD units reinforces the concept of
making only what you need; no over
production, driven by demand

Takt Time Example
Minutes Seconds
Total Time Available in a Workday 486 29,160
Less Morning Meeting 5 300
Less Morning Work Break 10 600
Less Lunch Break 30 1,800
Less stretch (exercise) time 6 360
Less Cleanup (5s) Time 5 300
Less Toilet Time 10 600
Total Work Time Available in a Workday 420 25,200
Number of Units Sold to the Customer Each Day 290
Takt Time Calculation :
Total Work Time Available in a Workday 25,200
Number of Units Sold to the Customer Each Day 290
Takt Time = 87 seconds

Important uses of Takt Time
• This time reference should not only be used
in production, but also in:
• The design of new products
• The design of new processes
• The design of jigs, fixtures, and dies
• The purchasing of equipment

Why is Takt Time Important ?
• If you produce at a rate slower than
takt, you will eventually lose your
customer!
• If you produce at a rate faster than takt,
you will overproduce which is a very
large cost!

ONE PIECE
FLOW

Definition of One Piece Flow
• Having only one piece of work in process
stock between production steps
• Requires time balance between operations
• Requires discipline and strict adherence to
work standards

Batch Continuous Flow
From: The Toyota Production System
A comparison

Most of the existing productivity
problems that exist are due to
inefficient processes NOT
inefficient operators !

Don’t Batch …..

Produce One Item at a Time

In Line Inspection
• Every Customer in a Process has:
• a right to expect perfect material that
exceeds the spec
• an obligation to inspect the material
before use
• an obligation to inform the previous step
in the process of any problem
• an obligation to stop the process until any
problem has been resolved

Lot size of 1
Your customer is the next step in the
process. Your customer needs one item
at a time
Give to your customer, exactly what they
need ( 1 item), exactly when they need
it, done perfect every time

Determine Location of Parts
• Make it easy for operators to pick them up
• Eliminate wasted motions
• Consider even the smallest parts
• Arrange the parts in order of work sequence
• Have the parts within easy reach

Develop Part Delivery Solutions

Tools used in developing a One Piece
Flow workcell
• Cycle Time Analysis
• Percent Loading Chart
• Standardized Work

Why is One Piece Flow Important ?
• Work in-process stock is minimized
• Quality defects can be seen quicker
• Cost of overproduction is minimized
• Levels demand or burden for the supplier
• Shop floor space is effectively utilized
• Lead times (total time to produce) are
minimized
• Customer orders are filled quickly

Total Productive
Maintenance
TPM
A key enabler to JIT Assembly and JIT Manufacturing

A process in which equipment (tools, jigs,
dies, machinery) is maintained on an
ongoing, systematic basis
Definition of TPM

• Preventative Maintenance
• Operators Maintenance
• Technicians Maintenance
• Corrective Maintenance
• Machine Performance Evaluation
Elements of TPM

TPM
• TPM is critical to successful JIT operations;
UNSCHEDULED downtime must be driven to
zero
• There is very little WIP in a JIT environment. If a
machine breaks down, the entire closely linked line
will quickly come to a halt
• TPM is a long term savings that is mandatory for
JIT operations
• Ceasing TPM can provide a short term saving that
will be a large, negative annuity for the future
• Crisis Maintenance may cost 10 times more than
TPM, this is a hidden cost

Why TPM
Full implementation of JIT WILL NOT
BE ACHIEVED unless TPM principles
are adopted and strictly applied to all
manufacturing related equipment

Single Minute Exchange of
Dies or Quick Changeovers
(SMED)

Definition of a Changeover
Changing dies, cutting tools, or operation
methods according to changes in
specifications. We call a line or cell that
can make these changes quickly “flexible
and robust”

• Changeover time is the time that lapses
between the last finished product of one type
and the first good product of another type or
model
• Changeover time is the sum of internal and
external changeover times
• External time refers to the changeover (setup)
time spent while the process is running
• If the process must be stopped to perform the
changeover task, this is internal time
• It’s important to convert internal into external
changeovers
SMED

Eliminate Adjustments
• All adjustable settings can be maladjusted
• Positive positioning and alignment is the only
certain way to assure quality
• The best adjustment is no adjustment
SMED

Height Coding

Slow Tool Change Must use many
tools to changeover

Rapid Tool Change
Allen wrenches
welded to screws

Rapid Tool Change
Quick locking system
(cam actuated)

Design for Manufacturing
& Assembly
DFMA

A conscious process of making design
decisions only after fully evaluating the
manufacturing processes, tools, quality
control measures and equipment impacts
Definition of DFMA

• Use the shortest design cycle times
• Listen to customer described needs
• Listen to manufacturing describe how they
would like to build such a device
• Repeat the customer - manufacturing - design
cycle frequently
• Bring Purchasing, Materials, and Quality
personnel into process at early, proper point
• Minimize or eliminate curtain operations
• Ovens for curing
• Outside operations such as heat treat,
plating
DFMA

Why DFMA ?
• By using DFMA rules, high product
quality and quick delivery can be built
into the design of the product
• By using DFMA rules, low
manufacturing cost and low inventory
carrying cost can be achieved

PULL
PRODUCTION

Definition of Kanban
• A visual management tool which is used as
a time reference for making a part when it is
needed, in the quantity needed. Kanban is a
key facilitator of Just-In-Time production
• Kanban provides visual instructions for
production AND transportation
• Prevents under/over production

Production Kanban Board

KanBan Supermarkets

FIFO Control

Why is Pull Production important ?
• Customer focus - Only produce what is needed,
when it is needed !
• Systematic reduction of Inventory
• Aids in root cause problem solving
• Frees up Cash to invest in job generating, cash
generating projects
• Quicker response to customer needs
• Frees up floorspace to add new cash generating
projects
• Aids in developing a more organized workplace

Lean Production
Tools
Products are built
“Just In Time”,
only to customer
demand
JIT
production
Six Sigma quality
is built into the
product and the
process
Six sigma
quality
Visual Management
and open the
company to all
people
Visual
Management
There is a
relentless pursuit
of perfection
Pursuit of
Perfection
Empowered
Teams
Shop floor teams
are empowered to
make key decision
The workplace is
safe, orderly, and
immaculately
clean
Workplace
safety, order,
cleanliness
Lean Enterprise: 6 Lean Tools – Safety, Order, Cleanliness

Definition of the 5S’s
“5S” is Toyota’s process for maintaining cleanliness and
order in the workplace
• Separate: Clearly separate necessary
things and eliminate the unnecessary ones
• Sorting: Neatly arrange and identify things
for ease of use
• Sweeping: Maintain order and cleanliness
• Standardized Cleanup:Constantly maintain
and reinforce the above
• Strict: Make this practice a way of life

The 5 S principal was coined
by Toyota to describe in
more detail what is meant
by proper housekeeping

Separate
• Keep only the minimum of whatKeep only the minimum of what
is needed for a task and discardis needed for a task and discard
anything elseanything else
• Analyse what is available for the task, determine
what is required to complete the task, and discard
what is unnecessary. Anything extra is wasteful.
For example, having extra tools, materials,
pencils, and paper, is waste and should be
eliminated

Separate items that are not needed !

Why is separation important ?
• Effective process managementEffective process management
• Waste reduction (Inventory, WIP, RawWaste reduction (Inventory, WIP, Raw
Material) saves costs and timeMaterial) saves costs and time

Sorting
• Once the minimum requirementOnce the minimum requirement
is determined, there must beis determined, there must be ““aa
place for everything andplace for everything and
everything in its placeeverything in its place””
• Assign a location for all essential items. Make the
work place self-explanatory so everyone knows
what goes there. Thus, eliminate the confusion and
the lost time associated with hunting for items out
of their proper place

Sorted for ease of use

Everything has a place

Shadow Boards for ease of use

Why is sorting important ?
• The operators are working to a Takt time –The operators are working to a Takt time –
they do not have extra time to search for parts,they do not have extra time to search for parts,
materials, tools, work instructions, or othermaterials, tools, work instructions, or other
documentationdocumentation

Why is sorting important ?
• Reduces searching and motion wastes:
• searching for parts, tools
• returning parts, tools
• Critical for reduction in changeover times !
• Easier to train new employees
• Makes the work environment more visual
• Aids in the standardisation of the workplace

Sweeping - Cleaning
• Everything should be cleanEverything should be clean
• Once the work is organised and arrangements are
completed, items must be kept clean so they can
be easily obtained and used with no fumbling or
lost time

Sweeping - Cleaning Every Day

Why is cleaning important ?
• Reduces product quality issuesReduces product quality issues
• Saves time when using tools, fixturesSaves time when using tools, fixtures
• Machines run more consistentlyMachines run more consistently
• Promotes a safe work environmentPromotes a safe work environment
• Increases employee morale and pride in theIncreases employee morale and pride in the
workplaceworkplace
• Customer appeal and approvalCustomer appeal and approval

Standardised Cleanup
• The working environmentThe working environment
should be as clean as possibleshould be as clean as possible
• Hygiene usually complements the other aspects of
detailed housekeeping. Effective organisation and
work arrangement is reinforced by keeping
everything as clean as possible

Standardised CleanupHousekeeping Checklist
Please:
 Clean all debris (dirt, wood, metal chips, etc) from the floor, from the benches, and under the machines/work areas.
 Wipe down the machines to remove all dirt, dust, and oil.
 Wipe down all fixtures and remove metal chips.
 Every bin (storage, components, reject, waste) should have a marked, designated area.
 Place all bins in the appropriate marked, designated area.
 Every pallet, trolley, and lifter should have a marked, designated area.
 Place every pallet, trolley, and lifter in the appropriate marked, designated area.
 All of the cleaning supplies should have a marked, designated area.
 Place all of the cleaning supplies in the appropriate marked, designated areas.
 Place all of the tools in the correct location on the shadowboards.
 Clean the Kanban location and make sure all items are in the appropriate, designated areas (with cards attached).

Standardised CleanupHousekeeping Checklist
Please:
 Are there any items (documentation, parts, gloves, pencil, masks, etc) that do not have a designated area?
 Clean and place these items in the proper location.
 Sweep walk ways and surrounding areas and make sure they are clean and not obstructed.
 Waste and reject bins should not be overflowing.
 Place all dangerous items (fluids, gases, goods) in the proper storage location.
 Place all safety gear in the proper location.
 Make sure the fire exits and doors are marked and not obstructed.
 Make sure the fire equipment is labeled and accessible.
 Make sure the work instructions and documentation is in the proper location.
 Blue lines are for stock items, red lines are for scrap/rejects, yellow lines are for
outlining work areas and non stock items. Red bins are for scrap/rejects.

Assign people to specific areas

Why is standardised cleanup
important ?
• Maintains consistent orderliness andMaintains consistent orderliness and
cleanliness in the workplacecleanliness in the workplace
• Provides guidelines for DAILY cleanupProvides guidelines for DAILY cleanup
• AvoidsAvoids ““once a yearonce a year”” cleaning sessionscleaning sessions

Strict - Discipline
• The other Four SThe other Four S’s must be’s must be
pursued with strict disciplinepursued with strict discipline
• We must follow the rules and make them a habit.
From observation, it seems the fifth S has been the
hardest one to follow. Things start out organised,
arranged and clean, but over time become messy.
Daily discipline will greatly enhance the Five S
tool

Tool Room

Everything has a place !

5S and Quality

Welding Operation
This buildup can
create variation at
the weld point

Drilling and Tapping Operation
This swarf can cause
variation in the angle of
the drilled hole

Drilling and Tapping Operation
This build-up ….
can create variation here

which cause
variation within the
product and…
creates the need for
inspection at final
assembly !

An organised, clean workplace:
• has higher productivity
• produces fewer defects
• meets deadlines better
• is a much safer place to work
• creates a happier work environment
• promotes communication

Lean Enterprise Depends on
Everyone’s Active Involvement
Every member of the organization
MUST follow the Five S principles
before results will be noticed and
sustained on a daily basis

Lean Production
Tools
Products are built
“Just In Time”,
only to customer
demand
JIT
production
Six Sigma quality
is built into the
product and the
process
Six sigma
quality
Visual Management
and open the
company to all
people
There is a
relentless pursuit
of perfection
Pursuit of
Perfection
Empowered
Teams
Shop floor teams
are empowered to
make key decision
The workplace is
safe, orderly, and
immaculately
clean
Workplace
safety, order,
cleanliness
Visual
Management
Lean Enterprise: 6 Lean Tools – Visual Management

Definition of Visual Control
Is the use of signals, charts, measurements,
diagrams, lights, and signs to clearly define
the normal or desired conditions and to
expose the abnormal undesired conditions

Monitoring :
• Efficiency
• Quality PPM
• 24 hours turnaround DIFOT
• Monthly Housekeeping Score
• Scrap Amount
• Equipment Availability
Visual Control

Keeping Track of :
• New Ideas and Projects
• The 3 Projects In
Progress
• Completed Projects ...
• and their Results
Visual Control

Hourly Production Monitoring

Visual KanBan System

Visual Display to ensure FIFO

Color Coating of Dies / Visual Explanations

Visual Warning !

Andon
• A signal, light, bell or music alarm triggered
by an operator confronted with a non-standard
condition
• A non-standard condition includes tool failure,
machine failure, bad part, lack of parts, can not
keep up or when an error needs correction
• An andon is a signal for IMMEDIATE help to
prevent line stop

Andon lights

Why is a Visual Workplace important ?
• to know what your goals are
• Clarity of Communication
• Clarity of Baseline for Continuous Improvement
• Ease of Training
• Ease of Compliance to Standards, Regulations
• Pride in Workplace
• Customer Appeal and Approval
• Bottom Line Improvement

Lean Production
Tools
Products are built
“Just In Time”,
only to customer
demand
JIT
production
Six Sigma quality
is built into the
product and the
process
Visual Management
and open the
company to all
people
There is a
relentless pursuit
of perfection
Pursuit of
Perfection
Empowered
Teams
Shop floor teams
are empowered to
make key decision
The workplace is
safe, orderly, and
immaculately
clean
Workplace
safety, order,
cleanliness
Visual
Management
Six sigma
quality
Lean Enterprise: 6 Lean Tools – Six Sigma Quality

Definition of Six Sigma
Six Sigma is a problem solving process used to:
• reduce variation in processes and products
• reduce the cost of poor quality
• improve capacity and productivity
• improve quality, cost, cycle time, and financial results
• attack variation and defects
• insure a predictable factory

• defining critical business metrics
• defects per unit
• cost of poor quality
• throughput
• tracking them
• improving them by proactive process improvement
• utilizing data/facts, not guessing
Six Sigma is characterized by

Sigma refers to Process Capability
2 308,537
3 66,807
4 6,210
5 233
6 3.4
σ PPM
Process
Capability
Defects per
Million Opp.

Sigma refers to Process Capability
2 69.1%
3 93.32%
4 99.379%
5 99.9767%
6 99.99966%
σ % Non-Defective

• The focus is to prevent any defects from passing to the
next downstream customer
• “Self Stop” for quality problems
• Machine detected defects
• Operator detected defects (operators shut down line)
• Mistake proofing (poke yoke)
• Six Sigma process control
• Use of Statistical Process Control
• True root cause problem solving and action plans
• Use of 5 Whys
• Personnel trained in problem solving methods
• Root cause analysis not to find blame but rather to
understand what happened
Building Quality into the product & the process
Quality is built into the product and process; not inspected

5 Why’s and 1 How
1. Why did the machine stop ?
- There was an overload and the fuse blew
2. Why was there an overload ?
- The bearing was not sufficiently lubricated
3. Why was it not lubricated sufficiently ?
- The lubrication pump was not pumping sufficiently
4. Why was it not pumping sufficiently ?
- The shaft of the pump was worn and rattling
5. Why was the shaft worn out ?
- There was no strainer attached and metal scrap got in

Lean Production
Tools
Products are built
“Just In Time”,
only to customer
demand
JIT
production
Six Sigma quality
is built into the
product and the
process
Visual Management
and open the
company to all
people
There is a
relentless pursuit
of perfection
Pursuit of
Perfection
Shop floor teams
are empowered to
make key decision
The workplace is
safe, orderly, and
immaculately
clean
Workplace
safety, order,
cleanliness
Visual
Management
Six sigma
quality
Empowered
Teams
Lean Enterprise: 6 Lean Tools – Empowered Teams

Definition of Empowerment
To authorize others to make decisions
within dictated boundaries

Tools and Rules
Before empowerment can truly exist,
employees must have the tools and rules
to make them successful !

Tools and Rules
Tools:
• Machines that are in excellent working
condition
• Machines that are process capable
• Tools, jigs, and fixtures that facilitate one
piece flow
• A Kanban system that is in proper working
condition
• Component’s that are within spec
• An organization structure that supports the
ideas of the workforce and responds to their
problems

Tools and Rules
Rules:
• Management must establish and enforce the
boundaries in which the people must operate
• work schedules
• adherence to the visual management system
• adherence to the company housekeeping
program
• work to takt - no batch production, no
overproducing, etc
• Work standards must be created and enforced
• line balance, work instructions, following
BOM’s

Set the employees up for success:
• Provide adequate numbers of well maintained
equipment that are process capable
• Provide adequate and proper training
• Jointly establish expectations
• Delegate authority and responsibilities.
(Superior is still responsible)
• Delineate boundaries
• Hold employees accountable

Why is Empowerment important ?
• Employees are the most valuable asset
• Employees are bright, educated, experienced, and
capable of much more than they are presently
doing
• Decisions made as low in the organization as
possible are made with a better, less filtered,
more relevant set of data

Why is Empowerment important ?
• The value-added work is done low in the
organization. Decisions done at that level will
increase the level of ownership felt by all
employees and the organization will reap the
benefits
• JIT / Lean Manufacturing requires personnel
flexibility
• Multi functional employees
• Few job classifications
• Extensive cross training
• With empowerment, everybody wins !

Lean Production
Tools
Products are built
“Just In Time”,
only to customer
demand
JIT
production
Six Sigma quality
is built into the
product and the
process
Visual Management
and open the
company to all
people
There is a
relentless pursuit
of perfection
Shop floor teams
are empowered to
make key decision
The workplace is
safe, orderly, and
immaculately
clean
Workplace
safety, order,
cleanliness
Visual
Management
Six sigma
quality
Empowered
Teams
Pursuit of
Perfection
Lean Enterprise: 6 Lean Tools – Pursuit of Perfection

Pursuit of perfection is driven by continuous
improvement via systematic waste
elimination. The continuous improvement
activities should be driven by:
• optimizing all of the value streams that
exist within the organization
• using Six Sigma techniques to
systematically eliminate quality problems
• total employee involvement
• top down drive

• Suggestions systems
• There are processes in place enabling operators to implement
changes
• Measurement of changes implemented per week and outcomes
• Operators’ meet weekly to review problems and challenges
• There is a process that: enables operators to request suggested
improvements and causes the rest of the company’s organizations to
respond to such requests
• Operators’ meet every day to evaluate prior day performance as well
current day production program
• Continuous improvement teams
• Operators visit customers for quality problems
Activities

• develop an organizational structure that will facilitate change and
continuous improvement
• have an ongoing review procedure in place to review future plans
and achievements
• utilize some type of assessment tool to analyze the present situation
• relate the improvements back to key performance indicators and the
Strategic Plan
• actively participate and aggressively drive the pursuit of perfection
activities
• move away from a Pursuit of Perfection Program and migrate to a
Pursuit of Perfection culture
• this culture is formed by managements ability to enforce boundaries,
by managements active involvement in the improvement process,
and leading by example (doing not talking)
Role of Management

• Value Stream Mapping
• Drive toward the future state
• Radar Chart
• 12 x 12 measurement system
• Ranking an area or workcell based on 6
LE tools
• Visual production data – P Chart,
Productivity, Uptime %
Examples of Assessment Tools

Lean Assessment Chart
7.50
6.60
6.10
6.20
4.563.80
4.00
5.50
0
1
2
3
4
5
6
7
8
9
10
1. Workplace safety, Order and Cleanliness
2. Just in Time Production
3. Six Sigma quality built into the product and the
process.
4. Empowered teams
5. Visual management
6. Continuous Pursuit of Perfection
Overall company organization and management
style
8. Company support functions
LE rating
Maximum rating
Radar Chart

Inventory Turns
3.0
5.0
7.0
9.0
11.0
13.0
15.0
17.0
# Turns
Production Turns 13.1 11.5 11.2 12.4 12.9 12.3 13.4 13.4 13.0 14.3 14.6 14.3 16.3
Factored Turns 22.1 28.0 37.8 156.6 154.0 95.2 43.7 49.6 72.6 69.6 379.5 339.5 138.3
Total Turns including FIFO 8.6 8.0 7.9 8.6 8.8 8.5 9.0 9.0 8.7 9.2 9.3 9.0 9.5
YE Goal 12.9 12.9 12.9 12.9 12.9 12.9 12.9 12.9 12.9 12.9 12.9 12.9 12.9
M ar-98 Apr-98 May-98 Jun-98 Jul-98 Aug-98 Sep-98 Oct-98 Nov-98 Dec-98 Jan-99 Feb-99 Mar-99
Customer PPM
-
100
200
300
400
500
600
700
800
PPM
Total Shipments 510,781 442,629 515,285 586,126 575,791 218,689 442,886 463,755 434,075 310,000 489,975 492,000 594,175
Gross Returns 266 145 179 155 195 82 154 163 159 92 127 121 159
No Defects Found 53 22 36 20 30 13 26 33 32 22 23 20 32
Net Returns 213 123 143 135 165 69 128 130 127 70 104 101 127
PPM Gross 521 328 347 264 339 375 348 351 366 297 259 246 268
PPM Net 417 278 278 230 287 316 289 280 293 226 212 205 214
Y/END Goal 100 100 100 100 100 100 100 100 100 100 100 100 100
M ar-98 Apr-98 May-98 Jun-98 Jul-98 Aug-98 Sep-98 Oct-98 Nov-98 Dec-98 Jan-99 Feb-99 Mar-99
On-Time Delivery to Customer Want Date
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
On Time % 76.0% 74.0% 72.0% 68.0% 67.0% 68.0% 70.0% 74.0% 87.0% 92.0% 92.0% 95.0% 95.0%
YEGoal % 90.0% 90.0% 90.0% 90.0% 90.0% 90.0% 90.0% 90.0% 90.0% 90.0% 90.0% 90.0% 90.0%
Mar-98 Apr-98 May-98 Jun-98 Jul-98 Aug-98 Sep-98 Oct-98 Nov-98 Dec-98 Jan-99 Feb-99 Mar-99
Cost Performance
0%
20%
40%
60%
80%
100%
120%
VarCost%ProdSales
200
400
600
800
1,000
1,200
1,400
1,600
FixedOH$000's
Var Cost %Sales 78.7% 72.8% 80.6% 80.1% 68.9% 67.6% 72.1% 112.0% 70.9% 81.6% 72.5% 79.4% 75.1%
YE Goal % 64.5% 64.5% 64.5% 64.5% 64.5% 64.5% 64.5% 64.5% 64.5% 64.5% 64.5% 64.5% 64.5%
Net Fixed OH $ 825 795 712 965 817 172 978 769 840 844 660 850 1,269
YE Goal $ 733 733 733 733 733 733 733 733 733 733 733 733 733
M ar-98 Apr-98 M ay-98 Jun-98 Jul-98 Aug-98 Sep-98 Oct-98 Nov-98 Dec-98 Jan-99 Feb-99 M ar-99
Tracking system

Lean Enterprise Scorecard
Cell: Dishlex
Date: 4/9/99
JIT Production System Visual Management 0 1 2 3 4 5 6 7 8 9 10
Flow 0 1 2 3 4 5 6 7 8 9 10 Visual hourly production 8
1 Piece Flow/Line Balance (operators) 7 Visual ideas and actions 6
Multi-skilling at each operation 1 Visual Kanban system (internal, external, and customer) 8
Tracking of employee skill base 0 Visual Kanban procedures 4
In Line Inspection 7 Visual quality measures 3
1 piece flow cell development (physical) 8 Visual SOP 7
Movement of "suppliers/subassy" online 5 Visual Skill Base/Achievement 0
Summary Score: Flow 5 Standardized White Board Measurement System 0
Visual line identification 0
Kanban 0 1 2 3 4 5 6 7 8 9 10 Visual tracking of efficiency 0
Internal Supply Kanban establishment 0 Use of Pull Squares 6
External Supply Kanban establishment 5 Summary Score: Visual Management 4
Customer Supply Kanban establishment 8
Process established for correcting Kanban errors 2
Summary Score: Kanban 4 6 Sigma Quality System 0 1 2 3 4 5 6 7 8 9 10
Use of SPC 0
Quick Changeovers 0 1 2 3 4 5 6 7 8 9 10 Quality standards posted 1
Establishment of Shadowboards 7 Establishment and use of SOP 5
Changeover Times 4 On line PPM level 2
Multi-skilling at each changeover location 1 Reject process identified and used 1
Summary Score: Quick Changeovers 4 Customer complaint feedback system established 0
Use of Poke Yoke 0
Total Productive Maintenance 0 1 2 3 4 5 6 7 8 9 10 Use of Autonomation 0
Preventative Maintenance Plan 1 Summary Score: 6 Sigma Quality System 1
% of Equipment currently being systematically maintained 0
Operators Maintenance Plan 0
% of operators trained on the Operators Maintenance Plan 0 Empowered Teams 0 1 2 3 4 5 6 7 8 9 10
Technicians Maintenance Plan 1 Daily team meetings (no management involvement) 5
Corrective Maintenance Process established and used 1 Decisions made regarding production 5
Average time to correct a line problem 1 Decisions made regarding line balance 6
Overall Equipment Effectiveness Measurement Process 0 Involvement with quality issues 1
Overall Equipment Effectiveness Measurement 0 Customer visits/involvement 0
Summary Score: Total Productive Maintenance 0 Ability to stop production 7
Summary Score: Empowered Teams 4
0 1 2 3 4 5 6 7 8 9 10
Flow 5
Kanban 4 Pursuit of Perfection 0 1 2 3 4 5 6 7 8 9 10
Quick Changeovers 4 Established suggestion system 3
Total Productive Maintenance 0 Ongoing To-Do List/Future action plan 4
Summary Score: JIT Production 3 Plan for cycle time reduction 1
Continuing operator education 3
Safety, Order, Cleanliness 0 1 2 3 4 5 6 7 8 9 10 Established system to monitor/track improvements 7
Workplace safety 7 Feedback system to management regarding improvements 1
5s scorecard measure 6 Summary Score: Pursuit of Perfection 3
Summary Score: Safety, Order, Cleanliness 7
0 1 2 3 4 5 6 7 8 9 10
Overall Lean Enterprise Score : 4

Why is continuous improvement important ?
Continuous improvement (as apposed to a
single improvement) is the vehicle that
drives the future success of a business !

Review of Kaizen Objectives
• Time and BALANCE all processes
• Eliminate waste of parts movement
• Eliminate waste of people movement
• Eliminate excess inventory
• Achieve ‘one piece flow’
• Implement 5s program, and Visual Control
Lean Enterprise – Kaizen Event Review

WIP PARTS TRAFFIC
PROCESS VALUE/NV (UNITS) (METERS)
1 Printing V
2 Building V 12 1.20
3 Staking V 1.04
4 Insert Cam V 6 0.70
5 Bridge V 4
6 Riviting V 8 0.60
7 Adjust Screw NV 0.37
8 Gapping NV 15 0.50
9 Loading V 0.20
10 Coiling V 50 3.40
11 Bracket V 2 0.70
12 Front Plate V 106 2.50
13 Setting V 3 0.70
14 Calibration ? 3 1.00
15 Cooling V 14 1.10
16 Cold Check V 10
17 Tank 2 V 10 0.60
18 Cooling V 7
19 Packing V 1.90
WIP Parts Traffic
TOTALS 250 16.51
An Example of the Kaizen Process - Process Mapping

An Example of the Kaizen Process - Spaghetti/Layout Before

An Example of the Kaizen Process - Spaghetti/Layout After

CELEBRATE YOUR SUCCESS !
An Example of the Kaizen Process - Day 4 Requirements cont.

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