Lean Case Study summarising savings made for an SME over an 8 month period.

1. Change
Without it, at best we remain the same,
with it, comes the opportunity to improve!!
Vative - Truly Innovative 21-Aug-09 1

2. Previous Findings
Findings of VSM/VSD start 2009 :
Implement KANBAN for internal production processes feeding main
line (Implemented)
Controlled FIFO between processes (Implemented)
Finished Goods supermarket may be able to reduce in size with the
introduction of a new level planning system (Implemented)
Investigate supermarket feasibility by 80/20 analysis (Completed)
Reduce or eliminate batch building and move to single piece flow to
reduce overall inventory (Implemented)
Improve final testing cell utilization and procedure
Optimize layout to group together logical work cell (Implemented)
Reduce compressor defect rate
The current process has an excellent Kanban system for store
materials
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3. Action Plans - Production LBHC link
Audit Date 14th January 2009
Functional Area Production
Opportunity 1. Standardisation and consolidation of processes
2. Process orientation improvements to flow within work cells
3. Pull System implementation through production
Other
4. Transparency of processes
5. Continuous Improvement circles
6. Associate involvement and empowerment
Improvement idea 1. Implement 5S, conduct time studies and develop Standard
Operating Procedures for main processes
2. Improved production material flow and consolidate logical
process steps to form balanced work cells
3. Implement KANBAN for production area. Work towards single
piece flow systems with FIFO between stations
other
4. Implement Lean metrics, OEE monitoring and establish KPIs.
Understand customer demands, set targets & monitor
5. Implement continuous improvement program and empower teams
to improve without management
6. Provide vision planning and goals for business
Timing for implementation 16/03/2009 to 12/08/2009 (5 months)
Responsible person Vative - Steven Farrugia
Approved by
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4. Project details
Project commencement date: 16/03/2009
•80/20 analysis
•Time studies and labour planning for all main production
•CAD Layout of plant and layout planning for optimisation
•Grouping of logical work cells and labour balancing
•Implementation of SOPs throughout production main processes
•Analysis of production Kanban system requirements
•Training and implementation of complete Kanban System including
2 bin systems in production
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5. Lean Business Health Check
Areas assessed were – Production and Associate Involvement
Overall Audit Results
Current
Process Orientation Last Audit
100%
Associate Involvement 80%
Pull System
and Empowerment 60%
40%
20%
Continuous
0% Perfect Quality
Improvement
Transparent Processes Flexibility
Standardization
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6. Health Check findings
1. Business processes are extremely flexible
2. Well established pull systems
3. Great process orientation
4. Some establish quality systems
Further overall opportunities are:
• Standardisation and consolidation of processes
• Transparency of processes
• Continuous Improvement circles
• Associate involvement and empowerment
LBHC link
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7. Total Project Savings
Total project savings:
• Reduced process time by 30.1% reduction (Target 10%
reduction)
• Reduction in Work In Progress by 83% 576 to 98 pieces
(target 80% reduction)
• Reduce lead time through production process by 92%
from 31.2 days to 2.5 days (target 85% reduction)
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8. Project Teams
The following teams implemented specific projects:
Team 1A Production
Team 1B Final Packaging
Team 2A Stores
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9. Team 1A
Production Colour Coded Kanban System
Production/Assembly
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10. Project Scope and Objectives
Opportunity Statement:
Setup permanent work stations for each area
Introduce a color code system for each work station
Reduce Work In Progress inventory
Reduce process times
Reduce chance of missing tools
Project helps (Quality, Cost & Delivery):
Waiting times, Defects, Motion, Inventory & Space
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11. Project Steps
Implementation Steps:
1. Plan layout of production work stations considering process flow
2. Remove all unwanted items from work areas using white tags
3. Arrange all work stations using color coding system
4. Work out what tools were needed for each station and order tools
5. Set up shadow boards for tools and color code tools to match
stations
6. Assist in setting up 2 bin system for materials at each station
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12. Project Outcomes
Planned Improvements:
1. Reduced process time by 10% (actual 30.1% reduction)
2. Reduction in Work In Progress by 50% (actual 83% reduction)
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13. Project Outcomes
Before After
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14. Project Outcomes
Before After
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15. Project Outcomes
Before After
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16. Project Outcomes
Before After
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17. Project Outcomes
Before After
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18. Some Other Improvements
Vacuum pump saving
Innovation of shop floor to combine
heat cell and cold tank assembly
station utilizing existing vacuum
pump and eliminating the need to
buy a second vacuum pump.
Saving = approx. $1500
Mobile Gluing Unit
Innovation of shop floor to make the
hot glue machine mobile to allow for
flexibility and storage under
workstation. This makes the unit
easily accessible when it requires
refilling.
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19. Team 1B
Improved process layout
Final Assembly & Packaging Area
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20. Project Scope and Objectives
Opportunity Statement:
Reduce packaging time
Optimise packing flow and efficiency
Optimise inventory qantities, locations and layout
Project helps (Quality, Cost & Delivery):
Waiting times, Motion, Inventory & Space
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21. Project Steps
Implementation Steps:
1. Plan new layout
2. Relocate shelf and table
3. Optimise layout to support single piece flow
4. Shelf setup
5. Container dispense for systematic supply of parts
6. Container labelling and relocation
7. Floor marking and min/max levels
8. Implement 2 bin systems
9. Final modifications, measure savings and presentation
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22. Project Outcomes
Planned Improvements:
1. Reduced process time by 39% (actual 58% reduction 13 to 6 min)
2. Reduction in travel disctance 15% (actual 75% reduction 53m to
13m)
3. Reduced time to restock supplies (Savings including in above)
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23. Project Outcomes
Before After
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24. Project Outcomes
Before After
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25. Team 2A
Implement 2 Bin Production Supply System
Stores
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26. Project Scope and Objectives
Opportunity Statement:
Reduce inventory in production areas
Reduce lead time to supply parts
Create milkrun replenishment system to eliminate waiting time for
materials
Project helps (Cost & Delivery):
Waiting times, Overproduction, Motion, Inventory, transport & Space
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27. Project Steps
Implementation Steps:
1. 80/20 analysis of parts supply from stores to production
2. Establish Bill Of Materials for each station and calculate
replenishment qty for each part type for each station
3. According to calculations select appropriate bin sizes and
determine color coding for each station, then purchase materials
as required
4. Design trolley for empty bin holding location and train all staff how
to use new system
5. Setup and label all bins with part no., qty, location and station
number and then fill with correct qty of parts
6. Setup and train involved people about milkrun
7. Measure project savings and present to management
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28. Project Outcomes
Planned Improvements:
1. Reduced Work In Progress 80% (actual 83% reduction 576 to 98
pieces)
2. Reduction in lead time to replenish parts 50% (actual 63%
reduction 2 hours to 44 minutes)
3. Reduced space used by excess WIP and materials by 20%
(actual 20% savings from 15 work stations to 12 work stations)
4. Cleaner and tidier work stations (See pictures)
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29. Project Outcomes
Before After
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30. Project Outcomes
Before After
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31. Project Outcomes
Before After
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