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Lean enterprise building blocks Tools and Systems for Increasing Productivity.

The main focus of these projects as well as the consulting work that Dr. Maleki has done was on improving operational efficiencies including safety, quality, productivity, and reducing cost. An integral part of Dr. Maleki’s work with most businesses has been needs assessment which served as the foundation for identifying opportunities for improvement and subsequently providing technical assistance and when appropriate, design and delivery of training materials.

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Lean enterprise building blocks Tools and Systems for Increasing Productivity.

  1. 1. Presenter Reza Maleki, Ph.D., P.E., C.Mfg.E. Senior Business Advisor LEAN ENTERPRISE BUILDING BLOCKSLEAN ENTERPRISE BUILDING BLOCKSLEAN ENTERPRISE BUILDING BLOCKSLEAN ENTERPRISE BUILDING BLOCKS Tools and SystemsTools and SystemsTools and SystemsTools and Systems for Increasingfor Increasingfor Increasingfor Increasing ProductivityProductivityProductivityProductivity
  2. 2. EDUCATION Ph.D. Engineering M.S. and B.S. Industrial Engineering/Management PROFESSIONAL REGISTRATION AND CERTIFICATIONS Registered Professional Industrial Engineer Certified Manufacturing Engineer Lean Certified Practitioner Certification in Lean Leadership Academic Associate of Avraham Y. Goldratt Institute Introductions Reza Maleki
  3. 3. PROFESSIONAL WORK EXPERIENCE Higher Education Served in Universities in Minnesota, North Dakota, Wisconsin, and South Dakota Also served as a visiting professor at Kazakh British Technical University, in Almaty Kazakhstan. Consulting and Training Have worked with companies in Minnesota, North Dakota, South Dakota, Kentucky, Michigan, and Wisconsin. Other Professional Experience Technology Transfer Director Director of Allied Manufacturing Center Senior Business Advisor, Impact Dakota, Fall 2013-Present Introductions
  4. 4. Impact Dakota, North Dakota’s MEP An Affiliate of the National Institute for Standards and Technology
  5. 5. Introductions Guests and Participants Students Name Degree program enrolled in Previous degrees Other Guests and Participants Your Name Title Work experience – years, companies All Guests and Participants Experience with LEAN (training, education, applications) What do you hope to accomplish as a result of attending this training (personal and professional)
  6. 6. Topics Covered PART I Productivity - Input/output Model Approaches to Improving Productivity PART II Lean Building Blocks: 5s, Visual System, Standard Work, Quick Changeover, Plant Layout, Cellular Manufacturing, Quality at Source, Value Stream Mapping, Root Cause Analysis and Problem Solving PART III Lean Building Blocks: Managing Flow (emphasis on pull system and Theory of Constraints) SUMMARY QUESTIONS AND ANSWERS
  7. 7. LEAN ENTERPRISE BUILDING BLOCKSLEAN ENTERPRISE BUILDING BLOCKSLEAN ENTERPRISE BUILDING BLOCKSLEAN ENTERPRISE BUILDING BLOCKS Tools and SystemsTools and SystemsTools and SystemsTools and Systems for Increasingfor Increasingfor Increasingfor Increasing ProductivityProductivityProductivityProductivity PART I Productivity – Input/Out Model
  8. 8. Productivity - Input/output Model Examples of Business and Industry Projects
  9. 9. ENTERPRISE Transformation Processes Input Output People Capital Energy Materials Goods Services Startup Company Productivity - Input/output Model
  10. 10. ENTERPRISE Transformation Processes Regardless of the size, managing all processes and information flow across and among the functions impacts productivity Input Output People Capital Energy Materials Goods Services Productivity - Input/output Model Productivity = Output / Input
  11. 11. PROCESS DECISION PROCESS PROCESS PROCESS Y N Observe, Document, and Analyze Processes Productivity - Input/output Model General Approach to Improving Productivity
  12. 12. PROCESS DECISION PROCESS PROCESS PROCESS Y N Develope Recommendations for Improved Processes Productivity - Input/output Model General Approach to Improving Productivity
  13. 13. Develope Recommendations for Improved Processes Productivity - Input/output Model General Approach to Improving Productivity How? Lean Approach
  14. 14. Lean Definition Lean has been defined in many ways …… A systematic approach to identifying and eliminating waste (non-value added activities) through continuous improvements in pursuit of perfection. Key Term: None-value added activities (as opposed to value-added activities) What is Lean About?
  15. 15. Lean Definition Value Added Non-Value Added Any activity that increases the market form or function of the product or service. (These are things the customer is willing to pay for) Any activity that does not add market form or function or is not necessary. (These activities should be eliminated, simplified, reduced, or integrated) Typically 95% of all lead time is due to non-value added activities
  16. 16. Waste Waste (Muda in Japanese) 8BasicWastes Defects D Over-production O Waiting (for parts or resources) W None or under-utilized employee talent N Transportation T Inventory I Motion M Extra Processing E Typically 95% of all lead time is due to non-value added activities
  17. 17. How to Improve Productivity? Typically 95% of all lead time is due to non-value added activities
  18. 18. Improving Productivity The good news - Most process improvements are no/low cost in nature! The key is to separate VALUE ADDED and NON-VALUE ADDED activities (wastes) in a PROCESS. This step is very helpful in identifying areas for improvements. Total Time Process
  19. 19. Improving Productivity The good news - Most process improvements are no/low cost in nature! The key is to separate VALUE ADDED and NON-VALUE ADDED activities (wastes) in a PROCESS. This step is very helpful in identifying areas for improvements. Total Time Adding Value Waste
  20. 20. Using various LEAN tools and techniques to improve productivity through eliminating or reducing of wastes. Adding Value Waste Total Time Improving Productivity
  21. 21. Improving Productivity Using various LEAN tools and techniques to improve productivity through eliminating or reducing of wastes. Adding Value Waste Total Time
  22. 22. Improving Productivity Using various LEAN tools and techniques to improve productivity through eliminating or reducing of wastes. Reduction and/or elimination of wastes also offer the added advantage of SHRINKING THE TIME required to deliver a product or service. Adding Value Waste Total Time
  23. 23. Total Time $ $ Total Time Cash Flow + Other Competitive Advantage Improving Productivity
  24. 24. LEAN for all Business Processes - Communication
  25. 25. LEAN for all Business Processes - Communication AS IT WAS MANUFACTURED AS FIELD SERVICE INSTALLED IT WHAT THE CUSTOMER WANTED AS ENGINEERING DESIGNED IT AS SALES ORDERED IT AS MARKETING REQUESTED IT
  26. 26. LEAN for all Business Processes - Design Impacts on Inventory – Warehousing – Space – Material Handling – ERP? How about if you had 200 or more of similar products?
  27. 27. Manufacturing Cost, Price, and Profit Models Traditional Thinking Cost + Profit = Price Lean Thinking Price - Cost = Profit Price Price Price Profit Price Cost Cost Profit Manufacturing (cost) Driven Market Driven Lean is a growth strategy for creating value to the end market thus positioning your organization as the premier provider of choice.
  28. 28. A little of history Lean Manufacturing Lean Basic History (7 minutes) Adam Smith The Wealth of Nations, Division of Labor Eli Whitney Inventor of Cotton Gin, Interchangeable parts Fredrick Taylor One Best way, Scientific Management Henry Ford Moving Assembly Line, Standard Parts Kiichiro Toyoda Automatic Loom, Just-in-Time Edward Deming Quality, Plan-Do-Check-Act Taiichi Ohno Father of Toyota Production System, JIT, Jidoka Jim Womack Lean and Lean Thinking History
  29. 29. History of Manufacturing Pre-industrial 1890 Mass 1920 Lean 1980 People Craftsmen Perform all tasks Self-taught or apprenticeship Employees contribute minimally to total product Limited training Cluster of employees working in teams Extensive continuing training Customer Response Highly responsive Long lead time Non-responsive Build to stock – standard product Extremely responsive Build to demand Short lead times Product Customized, non- standard products Variation in quality Standardized, focused on volume not quality Focus on internal / external customer Work Environment Independence, discretion Variety of skills Responsibility Obey management Repetitive, mind- numbing work Limited skills, knowledge, discretion Some discretion, group effectiveness, empowerment, team accountability, work cells
  30. 30. Manufacturing Systems Metrics Craft Mass Lean Cost High Low Low Quality High Low High Delivery Long Short Short Volume Low High Demand Variety High Low High
  31. 31. LEAN ENTERPRISE BUILDING BLOCKSLEAN ENTERPRISE BUILDING BLOCKSLEAN ENTERPRISE BUILDING BLOCKSLEAN ENTERPRISE BUILDING BLOCKS Tools and SystemsTools and SystemsTools and SystemsTools and Systems for Increasingfor Increasingfor Increasingfor Increasing ProductivityProductivityProductivityProductivity PART II Waste Reduction and Lean Building Blocks
  32. 32. Lean Building Blocks An integral part of LEAN Enterprise Certification Program Lean Building Blocks is an integral part of LEAN Enterprise Certification Program (LECP). The LECP helps businesses build internal capacity by providing their workforce with a working knowledge of the principles and practices that help with improving COST, QUALITY, and DELIVERY. Lean tools, systems, and principles are applicable not just to manufacturing but also to other businesses as well
  33. 33. Lean Building Blocks An integral part of LEAN Enterprise Certification Program The LEAN Enterprise Certification Program (LECP) includes: 9 learning modules; about ½ day each Supplemental readings Jeopardy style game (quiz) for each module Practice Exam 2-day kaizen (project) events National LECP exam administered by the Society of Manufacturing Engineers.
  34. 34. Lean Enterprise Certification Concepts and Structure The foundation of personal development and professional growth begins with understanding three Lean concepts: Principles: focuses on the strategic transformation of an entire enterprise. Systems: integrates Lean knowledge with leadership experience. Tools: focuses on the fundamentals of Lean from a tactical perspective.
  35. 35. Process after removing Wastes Lean Building Blocks Tools, Systems, and Principles for Improving Productivity Original Process
  36. 36. Waste Waste (Muda in Japanese) 8BasicWastes Defects D Over-production O Waiting (for parts or resources) W None or under-utilized employee talent N Transportation T Inventory I Motion M Extra Processing E Typically 95% of all lead time is due to non-value added activities
  37. 37. Waste
  38. 38. Waste - Defects Inspection and repair of material in inventory Causes of Defects o Weak process control o Deficient planned maintenance o Inadequate education/training/work instructions o Product design o Customer needs not understood
  39. 39. Waste - Over-production Making more than is required by the next process Making earlier than is required by the next process Making faster than is required by the next process Causes of Overproduction o Just-in-case Logic o Misuse of automation o Long Process Set-up o Un-level scheduling o Unbalanced work load Lucy and Ethel Fighting a Losing Game (00:47 minutes)
  40. 40. Waste - Waiting Idle time created when waiting for parts, materials, machines, information, help, etc. Causes of Waiting o Unbalanced work load o Unplanned maintenance o Long process set-up times o Misuses of automation o Upstream quality problems o Un-level scheduling
  41. 41. Waste - None or Underutilized People The waste of not using people’s abilities (mental, creative, physical, skill) Causes of Underutilized People o Old guard thinking, politics, the business culture o Poor hiring practices o Low or no investment in training o Low pay, high turn over strategy
  42. 42. Waste - Transportation Transporting parts and materials around the plant Causes of Transportation Waste o Poor plant layout o Poor understanding of the process flow for production o Large batch sizes o Long lead times o Large storage areas
  43. 43. Waste - Inventory “Any supply in excess of a one-piece flow through your manufacturing process” Causes of Excess Inventory o Protects the company from inefficiencies and unexpected problems. o Unleveled scheduling o Poor market forecast o Unbalanced workload o Unreliable shipments by suppliers o Misunderstood communications o Reward system
  44. 44. Waste - Inventory Inventory “hides” problems Inventory cost a lot of money Reduction of inventory without solving of problems causes wreckage What Happens if you reduce Inventory?
  45. 45. Waste - Motion Movement of people or machines that does not add value to the product or service. Causes of Motion Waste o Inconsistent work methods o Poor people/machine effectiveness o Unfavorable facility or cell layout o Poor workplace organization and housekeeping o Extra “busy” movements while waiting
  46. 46. Waste - Extra Processing Effort that adds no value to the product or service from the customers’ viewpoint Causes of Extra Processing o Product changes without process changes o True customer requirements undefined o Lack of communication o Redundant approvals o Extra copies/excessive information
  47. 47. Waste Waste (Muda in Japanese) 8BasicWastes Defects D Over-production O Waiting (for parts or resources) W None or under-utilized employee talent N Transportation T Inventory I Motion M Extra Processing E LEAN BuildingLEAN BuildingLEAN BuildingLEAN Building Blocks includeBlocks includeBlocks includeBlocks include ToolsToolsToolsTools,,,, SystemsSystemsSystemsSystems, and, and, and, and PrinciplesPrinciplesPrinciplesPrinciples that help with reduction and/or eliminationthat help with reduction and/or eliminationthat help with reduction and/or eliminationthat help with reduction and/or elimination of different types of wastes.of different types of wastes.of different types of wastes.of different types of wastes.
  48. 48. Quick Changeover Standardized Work Batch Reduction Teams Quality at Source 5S SystemVisual Plant Layout POUS Cellular ManufacturingManaging Flow TPM Continuous Improvement Value Stream Mapping Root Cause Analysis and Problem Solving Tools LEAN Building Blocks
  49. 49. Cluttered Drawer Disorganized Shipping Area Lean Building Blocks - Workplace Organization (5S) Workplace Examples
  50. 50. Messy Corner Lean Building Blocks - Workplace Organization (5S) Workplace Examples
  51. 51. Do Not Forget The Garage and Kitchen Lean Building Blocks - Workplace Organization (5S) Workplace Examples
  52. 52. Lean Building Blocks - Workplace Organization (5S)
  53. 53. A workplace that is: Clean, Organized, Orderly Pleasant Is The foundation for all other improvement activities Resulting in: Fewer accidents Improved efficiency Improved quality Workplace control And therefore… Reduced waste, and Reduced cost Lean Building Blocks - Workplace Organization (5S) The Fundamental Strength
  54. 54. Lean Building Blocks - Workplace Organization (5S) Workplace Examples
  55. 55. Lean Building Blocks - Workplace Organization (5S) Workplace Examples 5S – Ideas That Work (3 minutes)
  56. 56. Lean Building Blocks - Workplace Organization (5S) In-class Exercise The 5S Numbers Game
  57. 57. A visual device is a mechanism or thing intentionally designed to influence, guide, direct, limit or even guarantee our behavior by making vital information available as close to the point-of-use as possible to anyone and everyone who needs it without speaking a word. The modern gas pump is so highly visual that, with a little help from you, it easily substitutes for the gas attendant and the cashier. A visual workplace is self-ordering, self-explaining, self-regulating, and self-improving; where what is supposed to happen does happen, on time, every time, day or night – because of visual devices. Lean Building Blocks - Visual Systems
  58. 58. Lean Building Blocks - Visual Systems Make your process better by making it more visual for everyone to clearly see Lean Visual Workplace is similar to your favorite games – you always know the score and what’s happening
  59. 59. In Lean, standardized work (also called standard work) is the cornerstone of any continuous improvement effort. Lean Building Blocks - Standardized Work
  60. 60. Standard (baseline) Standard (revised) Standard (revised) Standards are the basis for comparison (before/after) With no standards you can’t objectively tell what has changed or what has improved “Where there is no standard, there can be no kaizen.” Taiichi Ohno, Vice-president, Toyota Motor Corporation Lean Building Blocks - Standardized Work
  61. 61. Toyota Production System House of Lean STANDARDIZED WORK is the Foundation for Improvement. Lean Building Blocks - Standardized Work
  62. 62. Lean Building Blocks - Standardized Work Why Use Standard Work (2:40 minutes)
  63. 63. Lean Building Blocks - Quick Changeover Changeover - The elapsed time from when the last part of the current run is completed until the work center starts running the first good piece of the next run. Current Run Setup Next Run Setup Improved Setup Opportunities
  64. 64. Other Examples Paint Systems Presses Emission Control Testing Pizza Shops Other Fast Food Places Making Coffee at Home Getting Dinner Ready for Thanksgiving Changing Tire on Your Car Changing Tires: Ferrari F1 Pit Stop Perfection (00:47 minutes) Lean Building Blocks - Quick Changeover
  65. 65. Changing Tires: Ferrari F1 Pit Stop Perfection (00:47 minutes) Lean Building Blocks - Quick Changeover
  66. 66. Single-Minute Exchange of Die (SMED) SMED History (3:30 minutes) Lean Building Blocks - Quick Changeover Shigeo Shingo Approach also Known as SMED
  67. 67. External Setups Internal Setups External Setups Internal Setups Internal Setups Internal Setups External Setups External Setups External Setups Step 1 Step 3Step 2 External Setups SMED Methodology (a three-step process) Lean Building Blocks - Quick Changeover Shigeo Shingo Approach also Known as SMED
  68. 68. Reduce Transportation of Tools, Parts, and Materials An example of No/Low Cost Solution Lean Building Blocks - Quick Changeover
  69. 69. Lean Building Blocks - Quick Changeover
  70. 70. Lean Building Blocks - Plant Layout Straight-line Flow Pattern when possible Backtracking kept to a Minimum Predictable Production Time Little In-process materials storage Open Floor plans so everyone can see what is going on Bottlenecks under control Workstations close together Minimum of material handling Easy adjustment to changing conditions Principles of a Good Layout
  71. 71. Lean Building Blocks - Plant Layout An example of Spaghetti Diagram (also known as flow diagram)
  72. 72. Operator travelled 3,215 ft. to get first good piece. 98 minutes from last good piece of previous run to first good piece of this run. Lean Building Blocks - Plant Layout An example of Spaghetti Diagram (also known as flow diagram)
  73. 73. Lean Building Blocks - Plant Layout Retail Example
  74. 74. Lean Building Blocks - Plant Layout Retail Example
  75. 75. Lean Building Blocks - Plant Layout Manufacturing Example
  76. 76. Lean Building Blocks - Cellular Manufacturing Cellular Manufacturing is a model for workplace design, and has become an integral part of lean manufacturing systems. Cellular Manufacturing is based upon the principals of Group Technology, which seeks to take full advantage of the similarity between parts, through standardization and common processing.
  77. 77. 1. Group products 2. Assess demand, establish takt time 3. Review work sequence 4. Balance work load 5. Design cell layout Lean Building Blocks - Cellular Manufacturing Cell Design Process
  78. 78. Lean Building Blocks - Cellular Manufacturing Cell Design Process
  79. 79. Lean Building Blocks - Cellular Manufacturing Cell Design Example
  80. 80. Before – Parts are processed and moved between different departments in large lots After – Parts are completed within the sell in small lots Lean Building Blocks - Cellular Manufacturing Cell Design Example
  81. 81. Lean Building Blocks - Cellular Manufacturing Cell Design Example
  82. 82. Lean Building Blocks - Quality at Source Own Process End of Line Final Inspection Customer Source Inspection - Operators must be certain that products they pass to the next work station are of acceptable quality. Main focus should be on PROCESS QUALITY, not inspection Inspection tools: o Operators have the means to perform inspection at the source, before they pass it along o Visible samples or established standards The Relative Cost of Fixing Defects
  83. 83. Lean Building Blocks - Quality at Source The Relative Cost of Quality (and Manufacturing) during Product Development Cycle
  84. 84. Lean Building Blocks - Value Stream Mapping A value stream involves all the steps in a process, both value added and non value added, required to complete a product or service from beginning to end. Finished ProductRaw Material Stamping Welding Assembly Value Stream Process 1 Process 2 Process X
  85. 85. Lean Building Blocks - Value Stream Mapping Product Family Start with a single product family Current State Understanding how things currently operate. This is the foundation for the future state Future State Designing a lean flow Develop Implementation Plan Developing a detailed plan of implementation to support objectives (what, who, when) Conceptual View Product family Current state drawing Future state drawing Work plan & implementation Standardizefor futureimprovements
  86. 86. Lean Building Blocks - Value Stream Mapping Example: Current State MLT (PLT) = Process Time + Inventory Retention Time
  87. 87. Lean Building Blocks - Value Stream Mapping Example: Future State MLT (PLT) = Process Time + Inventory Retention Time
  88. 88. Lean Building Blocks - Value Stream Mapping Example: Future State Break Future State into “Loops”
  89. 89. Other Tools / Topics Deming’s PDCA and A3 Thinking Affinity Diagram Five Why 5W (what, why, where, when, who) 2H (how, how much) FMEA (Failure Mode and Effect Analysis) Value Engineering Mistake Proofing and Jidoka Ishikawa’s B7 Tools Root Cause Analysis and Problem Solving Tools
  90. 90. Deming’s PDCA Root Cause Analysis and Problem Solving Tools You Can’t manage what you don’t measure. If you can’t describe what you are doing as a process, you don’t know what you are doing. (W. Edward Deming) Data collection and analysis is the foundation for continuous improvement efforts. Deming is also known for his PDCA cycle for problem solving.
  91. 91. Plan (Stage 1) o Define the REAL problem o Determine the root cause o Generate alternative solutions o Decide which alternative to use Do (Stage 2) o Implement the solutions on a test basis Check (Stage 3) o Evaluate results and see if the problem was REALLY solved o Goals achieved? Act (Stage 4) o Institutionalize improvement o Continue the cycle with new problems in Stage 1 Take action based on what you learned in the check (study) step: If the change did not work, go through the cycle again with a different plan. If you were successful, incorporate what you learned from the test into wider changes. Use what you learned to plan new improvements, beginning the cycle again. Deming’s PDCA is a quality improvement model consisting of a logical sequence of four repetitive steps for continuous improvement and learning Deming’s PDCA Root Cause Analysis and Problem Solving Tools Data collection and analysis is essential at every stage
  92. 92. Importance of Data Collection and Information Sharing Root Cause Analysis and Problem Solving Tools Versions of a Process At Least Three Versions What you think it is... What you would like it to be... What it actually is...
  93. 93. Mistake Proofing (Poke-Yoke) Root Cause Analysis and Problem Solving Tools The term poka-yoke comes from the Japanese words poka (accidental mistake) and yoke (prevent). Also known as mistake-proofing or error-proofing. Shigeo Shingo developed poka-yoke while working at Toyota in the 1960’s. He made a clear distinction between an error and a defect. Errors are inevitable - people are human and cannot be expected to concentrate all the time on the work in front of them or to understand completely the instructions they are given. Defects are avoidable – and result from allowing a mistake to go undetected. The principle behind poka-yoke is to design your process so that mistakes are impossible or at least easily detected and corrected. Preventing Problems Before they Happen
  94. 94. Mistake Proofing (Poke-Yoke) - Example Root Cause Analysis and Problem Solving Tools
  95. 95. Mistake Proofing (Poke-Yoke) - Examples Root Cause Analysis and Problem Solving Tools
  96. 96. File Cabinet Customer (supplier): Office equipment user Potential Error: File cabinet tipping over due to multiple top drawers open Poka-Yoke: Only one drawer can be opened at a time Mistake Proofing (Poke-Yoke) - Example Root Cause Analysis and Problem Solving Tools
  97. 97. Mistake Proofing (Poke-Yoke) - Example Root Cause Analysis and Problem Solving Tools Highway Bridges Clearance Signs Customer (supplier): Drivers of tall vehicles Potential Error: Vehicles crashing into bridge, tunnel, parking facility, etc. Poka-Yoke: Signs or devices to inform driver of vehicle height restrictions Over-height vehicle is detected by OVDS Electronic signal warns the driver (visual and audio)
  98. 98. Mistake Proofing (Poke-Yoke) - Example Root Cause Analysis and Problem Solving Tools
  99. 99. Mistake Proofing (Poke-Yoke) - Example Root Cause Analysis and Problem Solving Tools The parts have to be between 0.210” - 0.190”
  100. 100. Mistake Proofing (Poke-Yoke) - Example Root Cause Analysis and Problem Solving Tools
  101. 101. LEAN ENTERPRISE BUILDING BLOCKSLEAN ENTERPRISE BUILDING BLOCKSLEAN ENTERPRISE BUILDING BLOCKSLEAN ENTERPRISE BUILDING BLOCKS Tools and SystemsTools and SystemsTools and SystemsTools and Systems for Increasingfor Increasingfor Increasingfor Increasing ProductivityProductivityProductivityProductivity PART II Lean Building Blocks Managing Flow and Theory of Constraints
  102. 102. Quick Changeover Standardized Work Batch Reduction Teams Quality at Source 5S SystemVisual Plant Layout POUS Cellular ManufacturingManaging Flow TPM Continuous Improvement Value Stream Mapping Root Cause Analysis and Problem Solving Tools LEAN Building Blocks
  103. 103. 1 2 3 4 1 2 3 4 1 2 3 4 5 6 5 $ $ $ HIGH MEDIUM LOW Flexibility $ Invested Raw Materials Finished Goods Work-In-Process Lean Building Blocks - Managing Flow Inventory Overview
  104. 104. Inventory as a hedge against uncertainties and problems Excess inventory is the root of all evil (Kiyoshi Suzaki, The New Manufacturing Challenge) Inventory Hides Waste Lean Building Blocks - Managing Flow Inventory Overview
  105. 105. Inventory is a measure of total manufacturing effectiveness Lean Building Blocks - Managing Flow Inventory Overview
  106. 106. Inventory Overview - The Strategic Nature of Inventory The size of your inventory relates directly to the percent of your lead time that is non-value-added!
  107. 107. The size of your inventory relates directly to the percent of your lead time that is non-value-added! How to Transition ? Applying lean tools and methodologies including pull/kanban system Inventory Overview - The Strategic Nature of Inventory
  108. 108. Key Inventory Measure ࡵ࢔࢜ࢋ࢔࢚࢕࢘࢟ ࢀ࢛࢘࢔࢙ ൌ ࡭࢔࢔࢛ࢇ࢒ ࡯࢕࢙࢚ ࢕ࢌ ࡳ࢕࢕ࢊ࢙ ࡿ࢕࢒ࢊ ࡭࢜ࢋ࢘ࢇࢍࢋ ࡻ࢔ ࢎࢇ࢔ࢊ ࡵ࢔࢜ࢋ࢔࢚࢕࢘࢟ Company Inventory Turns Turn Days Average U.S. Manufacturer 7 - 8 45 - 52 Harley Davidson 21 17 Black & Decker 37 10 Average U.S. Grocery Store 50 7 Toyota 80 - 100 3.7 – 4.7 7-11 Stores 300 + ~ 1 Inventory Overview - The Strategic Nature of Inventory
  109. 109. Batch and Queue Production is based on anticipated need dates (forecast). High utilization and high efficiency drive performance. Bottlenecks are hidden and lead times expanded. Maintaining flow is costly. Information Flow Parts Flow CustomerProcess B Supplier Raw Process A Process C WIP WIP FG Push System Batch and Queue Push vs. Pull System Lean Building Blocks - Managing Flow
  110. 110. Parts Flow CustomerProcess B Supplier Process A Process C Pull System Production is based on actual consumption rates. Collapsing lead times; simplified scheduling. Improving flow drives performance. Material flow is regulated by a visual system which is also referred to as a “kanban” system. FGRM Information Flow Kanban Push vs. Pull System Lean Building Blocks - Managing Flow
  111. 111. Lean Building Blocks - Managing Flow o Empty space o Empty containers o Kanban cards o Trigger boards o Electronic signals o Computer signals o Etc. Signals used to operate the pull system Signal to Produce or Convey Includes information about: What, When, Where, How Much May include outside suppliers Can take many forms Kanban
  112. 112. 1. When the oil reaches the white level reordering occurs 2. Kanban card containing reordering information Lean Building Blocks - Managing Flow Kanban Examples
  113. 113. The Vending Machine A great illustration to show how a pull system works is the vending machine. In a typical scenario, the customer pulls product from the vending machine – the exact item, quantity wanted, and at the time it is needed. Then, the supplier replenishes only the items that need to be replaced. Lean Building Blocks - Managing Flow Kanban Examples
  114. 114. Lean Building Blocks - Managing Flow Kanban Examples Pull-Kanban Simple Demo (1:03 minutes)
  115. 115. o Kanban signals o Empty space o Kanban cards o Internal suppliers o External suppliers Setups Lot sizes Machine breakdowns Other disruptions Pull-Kanban Simple Demo (1:03 minutes) Lean Building Blocks - Managing Flow Kanban Examples
  116. 116. An information system for: Controlling and improving the flow of materials and information Allocating resources based on actual consumption not on forecasted demand. A Pull System is Flexible and Simple Eliminates waste of handling, storage, expediting, obsolescence, repair, rework, facilities, equipment, excess inventory (work-in-process & finished). Provides visual control of resources. Pull and Kanban together define the concept of Just-in-Time Lean Building Blocks - Managing Flow Kanban Examples
  117. 117. Pull and Kanban together define the concept of Just-in-Time Lean Building Blocks - Managing Flow Pull/Kanban and Just-in-Time
  118. 118. Lean Building Blocks - Managing Flow Push vs. Pull - Do You Push or Pull?
  119. 119. Lean Building Blocks - Managing Flow Push vs. Pull
  120. 120. Lean Building Blocks - Managing Flow Push vs. Pull
  121. 121. What is Kanban: To Do, Doing, Done (00.54 minutes) Lean Building Blocks - Managing Flow Use of Kanban Throughout the Supply Chain
  122. 122. 1 2 3 4 5 6 Raw Materials Finished Goods Work-In-Process Constraint Operation The constraint operation determines overall capacity of production line. It is the weakest link! Pipeline Analogy Which part of the pipe is restricting the flow? Would making parts A or D bigger help? Lean Building Blocks - Managing Flow Managing Constraint Operations
  123. 123. 1 2 3 4 5 6 Raw Materials Finished Goods Work-In-Process Constraint Operation The constraint operation determines overall capacity of production line. It is the weakest link! To protect the constraint capacity, when needed, a buffer to protect the against fluctuations might help so it is never idle, and maximum potential capacity can be maintained. Lean Building Blocks - Managing Flow Managing Constraint Operations
  124. 124. Three critical questions related to the constraint operation: Where is the constraint? Why is it the constraint? What must be done so that it is no longer the constraint? In order to increase capacity of the production line (value stream), the constraint operation must be studied and measures put in place to remove all waste (e.g., scrap, setup time, downtime, wait time) Lean Building Blocks - Managing Flow Managing Constraint Operations
  125. 125. In-class Exercise Theory of Constraints Lean Building Blocks - Managing Flow Managing Constraint Operations
  126. 126. Quick Changeover Standardized Work Batch Reduction Teams Quality at Source 5S SystemVisual Plant Layout POUS Cellular ManufacturingManaging Flow TPM Continuous Improvement Value Stream Mapping Root Cause Analysis and Problem Solving Tools LEAN Building Blocks SUMMARY
  127. 127. Presenter Reza Maleki, Ph.D., P.E., C.Mfg.E. Senior Business Advisor LEAN ENTERPRISE BUILDING BLOCKSLEAN ENTERPRISE BUILDING BLOCKSLEAN ENTERPRISE BUILDING BLOCKSLEAN ENTERPRISE BUILDING BLOCKS Tools and SystemsTools and SystemsTools and SystemsTools and Systems for Increasingfor Increasingfor Increasingfor Increasing ProductivityProductivityProductivityProductivity Reza Maleki * RezaM@ImpactDakota.com * (701) 367-8664

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