© Operational Excellence Consulting. All rights reserved.
Lean Manufacturing

2© Operational Excellence Consulting. All rights reserved.
Learning Objectives
1. Understand the key concepts and principles of Lean
2. Acquire knowledge on the common Lean methods and
tools and their applications to eliminate waste and
create more value for customers
3. Identify ways to develop “Kaizen eyes” to look for
improvement opportunities
4. Describe the various Lean roles
5. Define the critical success factors for sustaining a
Lean culture
Copyrights of all the pictures used in this presentation are held by their respective owners

3© Operational Excellence Consulting. All rights reserved.
Outline
1. Introduction to Lean Manufacturing
2. Key Concepts & Principles of Lean
3. Common Lean Methods & Tools
4. Ways to develop “Kaizen Eyes”
5. Lean Roles
6. Sustaining a Lean Culture
NOTE: As this is a PREVIEW, only
selected slides are shown. To download
the complete presentation, please visit:
http://www.oeconsulting.com.sg

4© Operational Excellence Consulting. All rights reserved.
What is Lean?
• Value stream as primary work unit
• Focused on improving process performance
• Clear view of end state
• Wide range of Lean tools are available
• Learn-by-doing approach to performance
improvement and capability-building
• Lean is a management philosophy based
on the Toyota Production System (TPS)
• Eliminate everything that does not add value
(waste) in the customer’s eyes
Objective
Focus and
scope
Approach
and tools

5© Operational Excellence Consulting. All rights reserved.
What Lean IS NOT
• Laying off employees by the bus load
• Delivering less or working harder
• Outsourcing or offshoring
• A cost reduction program
• Just a set of “tools” like 5S, kaizen events, etc.
• Automation or buying a monstrous ERP system
• Winning a Shingo Prize so as to look Lean

6© Operational Excellence Consulting. All rights reserved.
Toyota’s Philosophy
• Provide world class quality and service
• Develop employee potential through mutual trust
and cooperation
• Reduce cost through elimination of waste
• Develop a flexible production system that can
respond to changes in market demand

7© Operational Excellence Consulting. All rights reserved.
Lean vs. Traditional Thinking
Traditional Thinking
 Large batches
 Low unit costs
 Work at full capacity
 Tight Schedules
 High WIP inventories
 High level of specialization
 Long cycle times
Lean Thinking
 Small batches
 Total system cost
 Work at necessary capacity
 Flexible schedules
 Low WIP inventories
 Cross-training
 Short cycle times

8© Operational Excellence Consulting. All rights reserved.
Stability
Heijunka Standardized Work Kaizen
Just-In-Time
• Continuous flow
• Takt time
• Pull system
• Flexible workforce
Jidoka
• Separate man &
machine work
• Abnormality
Identification
• Poka yoke
• Visual Control
Goals:
highest quality,
lowest cost, shortest lead times
Involvement
Lean Management Framework
(a.k.a. Toyota Production System)
Source: Adapted from Toyota Production System
Stability
Standardization
Just-In-Time
Jidoka
Involvement
1
2
3
4
5
1
2
3 4
5
Focuses on
Quantity and
“Flow”
Focuses on
Quality and
Prevention

9© Operational Excellence Consulting. All rights reserved.
Lean Manufacturing System
• TPS is built on two main pillars:
 Just-In-Time: It refers to the manufacturing and conveyance of
only what is needed, when it is needed, and in the amount
needed.
 Jidoka: The ability to stop production lines in the event of
problems such as equipment malfunction, quality issues, or late
work. Jidoka helps prevent the passing of defects, helps identify
and correct problem areas using localization and isolation.
Underlying this management philosophy is the concept
that “Good Thinking Means Good Product.”

10© Operational Excellence Consulting. All rights reserved.
Lean has been adopted in many different
environments since its creation
Toyota
Automotive
Industrial products
High fashion
Medical
devices
Consumer
products
Aerospace
Shipbuilding
Pharma
Food
production
Pulp
and paper
Chemicals
Airlines
Railways
Naval operations &
maintenance
Hospital
Insurance
Banking
Retail Store
Upstream E&P
High Tech
Consulting
Law Firms
Hospitality
ITO/BPO
Services
Process
industries
Manufacturing
Time
Complexity

11© Operational Excellence Consulting. All rights reserved.
What does Lean in manufacturing and
process industries look like?
Automotive
•Production
•Inventory
management
Aerospace
•Engine overhaul
•Spare parts
Application Common Issues Typical Solutions
•Throughput
•Equipment downtime
•Rework and re-
inspection
•Inventory costs
•Turnaround time
•Obsolescence costs
•One-piece Flow/Pull
systems
•Equipment reliability
•Elimination of defects
•Inventory optimization
•Process streamlining
•Standardized operating
procedures
•Spare parts
management
Process
•Materials
management
•Asset management
•Material wastages
•Equipment availability
•Elimination of defects
•Reduction of unplanned
downtime
Source: Operational Excellence Consulting Research

12© Operational Excellence Consulting. All rights reserved.
Lean & Six Sigma
• Lean improves the “flow”
by eliminating waste
• Six Sigma improves the
process by reducing
variation
Combining Lean
with Six Sigma
results in smooth
and steady flow

13© Operational Excellence Consulting. All rights reserved.
Methods to Increase Productivity
How to Increase
Productivity?
Quantitative
Approach
More Staff
More Machines
Work Longer
Qualitative
Approach
Work Harder
Eliminate Waste
& Simplify
Focus of
Lean
Let’s work smarter!

14© Operational Excellence Consulting. All rights reserved.
Work versus Waste
Value Add
Non-Value Add:
Incidental Waste
Non-Value Add:
Pure Waste
Focus here for
improvement

15© Operational Excellence Consulting. All rights reserved.
Value Defined
Value-Added Activities
 An activity that changes the size, shape, fit, form or function of the
material or information
 Customer wants it (meets customer requirements)
 Done right the first time
Non-Value Add: Incidental Waste
 No value created but required by current thinking
 No value created but required by process limitations
 No value created but required by current technology
 No value created but required by government/business regulations
Non-Value Add: Pure Waste
 Consume resources but creates no value for the customer
 Could be stopped and it would be invisible to the customer

16© Operational Excellence Consulting. All rights reserved.
Cost Reduction Principle
Cost Plus Principle
COST 1
SALES
PRICE
1
PROFIT
1
Present
COST 2
PROFIT
2
Future
SALES
PRICE
2
Cost Reduction Principle
COST 1
SALES
PRICE
1
PROFIT
1
Present
COST 2
PROFIT
2
Future
SALES
PRICE
2
Higher profit is
achieved by
increasing sales price
Higher profit is
achieved by reducing
cost (waste) while
maintaining sales price

17© Operational Excellence Consulting. All rights reserved.
Eight Lean Wastes in Manufacturing
Over-production
Producing sooner, faster or in
greater quantities than
customer demand
Inventory
Raw material, WIP or finished
goods which is not having
value added to it
Transportation
Unnecessary movement of
people or parts between
processes
Defects
Work not done right the first
time such as scrap and
rework
Over-processing
Processing beyond the
standard required by the
customer
Motion
Unnecessary movement of
people, parts or machines
within a process
Intellect
Not using employees full
intellectual contribution
Waiting
People or parts that wait
for a work cycle to be
completed
Waste

18© Operational Excellence Consulting. All rights reserved.
Lean Thinking Philosophy
Identify and eliminate all activities that are waste.
Focus on optimal flow throughout the process.
Focus on creating value for customers.
Current
State
Future
State
Identify
Waste “True North”
Value Added Time = Lead Time
Full of Waste,
Variation, and
Rigidity
Eliminate
Waste

19© Operational Excellence Consulting. All rights reserved.
Lean Principles
1. Specify value – from the standpoint of the end
customer
2. Identify the value stream – all process steps across
departmental boundaries (the value stream),
eliminating steps that do not create value
3. Make value flow continuously – eliminate causes of
delay, such as batches and quality problems
4. Let customers pull value – avoid pushing work onto
the next process or department; let work and supplies
be pulled as needed
5. Pursue perfection – through continuous improvement

20© Operational Excellence Consulting. All rights reserved.
4Ms
• Operations safely carried out with all task
organized in the best known sequence and by
using the most effective combination of
resources
 Man
 Machine
 Method
 Material
Man
MachineMaterial
Method
Stability

21© Operational Excellence Consulting. All rights reserved.
5S
• Focuses on effective workplace organization
and standardization. It allows us to easily spot
variation from standard operating conditions.
• Cleaner, safer work
environment
• Organized, user friendly
workstations
• Open up space and
reduce clutter
Stability
Sort
Set In OrderShine
Standardize
Sustain

22© Operational Excellence Consulting. All rights reserved.
Visual Controls
• Visual elements on the production floor allow everyone
to “know the score” and they make out of standard
situations immediately obvious.
• Enables everyone to
‘see’ how we’re
performing
• Helps highlight
problems, or variances
from standard
• Encourages employee
involvement and open
discussions
Process Costs
Product Profitability
100%
Revenue
Rework
On TimeCycle Time Reduction WIP Backlog
Internal Quality
Stability

23© Operational Excellence Consulting. All rights reserved.
Market Demand = 220,000 Units Per Year
Takt Time = 27 Seconds
Lathe Mill Mill InspectDrill
Drill
TestDrillPack
1 2 3 4 5
10 9 8 7
6
27
Seconds 27
Seconds
Inspect
27
Seconds
Cellular Layout
Stability

24© Operational Excellence Consulting. All rights reserved.
Total Productive Maintenance (TPM)
• Total Productive Maintenance (TPM) is a series
of methods to keep equipment running
• The goals of TPM include:
 Zero unplanned downtime
 Zero speed losses
 Zero defects
 Zero accidents
 Minimum life cycle cost
TPMintheOffice
Safety&Environmental
Management
AutonomousMaintenance
PlannedMaintenance
FocusedImprovement
EarlyEquipment
Management
QualityMaintenance
Education&Training
5S & Visual
Management
TPM Goals:
Zero Defects, Zero Breakdowns,
Zero Accidents
Stability

25© Operational Excellence Consulting. All rights reserved.
Heijunka (Load Leveling)
Level out the workload - Work like
the tortoise, not the hare
Standardization

26© Operational Excellence Consulting. All rights reserved.
Kaizen (Continuous Improvements)
• A system involving every employee that is based on
making little changes on a regular basis, anywhere
changes can be made.
• Continuous small
improvements
• Changes are
implemented quickly
• Everyone gets involved
Source: "The Idea Generator” by Norman Bodek
Standardization

27© Operational Excellence Consulting. All rights reserved.
One-Piece Flow/Pull system
• The optimally Lean process
is characterized by “One-
Piece Flow”
 No work-in-progress inventory
costs
 No quality defect
 Shortest cycle time
 No waste
Just-In-Time

28© Operational Excellence Consulting. All rights reserved.
Quick Changeover (Set-up Reduction)
• Single Minute Exchange of Dies (SMED)
 A series of techniques for changeovers of production machinery
in less than ten minutes (single digit minutes)
• Set-up Reduction Program Goals
 To achieve smaller lots
 To maintain consistent quality
 To minimize inventory
 To reduce lead times
 To address frustration of setup personnel
Just-In-Time

29© Operational Excellence Consulting. All rights reserved.
Quick Changeover:
Basic SMED Principles
• Identify internal vs.
external changeover
tasks
• Analyze each task’s real
purpose and function
• Focus on no/low cost
solutions
• Aim to eliminate
changeover time
Just-In-Time

30© Operational Excellence Consulting. All rights reserved.
Flexible Workforce
• The ability of the workforce to “flex” to other jobs as
demand fluctuates within the system, and the efforts the
organization undertakes to ensure this occurs
• Improve worker skill set
• Maximize organizational
flexibility
• Focused training and
development plans
• Allow the ability to flex to
our customer’s demands
Just-In-Time

31© Operational Excellence Consulting. All rights reserved.
Poka-Yoke (Mistake Proofing)
• Poka-yoke is a Japanese
term that means "mistake-
proofing"
• Poka-yoke refers to
techniques that make it
impossible to make
mistakes.
• Poka-yoke helps people and
processes work right the first
time.
Jidoka

32© Operational Excellence Consulting. All rights reserved.
Andon
• A visual control device in a
production area
 Typically a lighted overhead
display
 Gives the current status of
the production system
 Alerts team members to
emerging problems
• Serves as warning system
to signal and identify
problems in the process
Jidoka

33© Operational Excellence Consulting. All rights reserved.
Hoshin Kanri (Policy Deployment)
• A planning tool that helps us identify the key
focus points and strategies we will use to steer
us towards our vision.
• Enables everyone to ‘see’
where we’re going and
our plans to get there
• Build plan and strategies
as a team
• Shared responsibility for
getting results
Vision
Key Result Areas
Key Result Measures
Key Strategies
Involvement

34© Operational Excellence Consulting. All rights reserved.
• Creates an end-to-end view of the system
• Demonstrates interaction between material/work and information flow
• Provides a common visual language for understanding a complex system
Supplier Management
Control
Customer
Work & Information Flow
Information flow
Value stream mapping provides an overview
of the end-to-end production process

35© Operational Excellence Consulting. All rights reserved.
Eight Steps of Problem Solving
Identify the problem
Understand Present Situation
Identify Root Cause
Plan Improvement
Implement Improvement
Confirm Results
Standardise Improvement
Review & Follow-up
PLAN
ACT
CHECK
DO

36© Operational Excellence Consulting. All rights reserved.
Lean Leadership & Kaizen
Flow Kaizen
(Value Stream
Improvement)
Process Kaizen
(Waste Elimination)
Senior
Management
Front Lines
Focus
Plan
DoCheck
Act

37© Operational Excellence Consulting. All rights reserved.
Chairman Cho of Toyota:
Three Keys to Lean Leadership
• Go See
 “Sr. Mgmt. must spend time
on the plant floor.”
• Ask Why
 “Use the “Why?” technique
daily.”
• Show Respect
 “Respect your people.” Fujio Cho
Chairman of Toyota Motor Corporation

38© Operational Excellence Consulting. All rights reserved.
A Simple Lean Implementation Roadmap
Create
Awareness
Build
Capability
Operations
Management
&
Improvement
Lean Thinking
Training
Lean
Leadership
Training
Build Lean
Activity Board
Kaizen #1:
5S
Kaizen #2:
Waste
Elimination
Value Stream
Mapping for Key
Processes
Train-the-
Trainer
Training
Information Sessions
for Whole Organization
Senior
Management
Awareness
Kaizen #3:
Standardization
Month 1
Lean Methods &
Tools Training
Month 3Month 2
Daily Management Meeting
Lean Update in
Monthly
Newsletter &
Intranet

39© Operational Excellence Consulting. All rights reserved.
Sustaining a Lean Culture
• Management commitment
• Alignment to vision and mission
• Availability of resources
• Address “what is in it for me”
• Success measures and KPIs
• Management review
• Rewards and recognition

© Operational Excellence Consulting. All rights reserved.
About
Operational Excellence
Consulting

41© Operational Excellence Consulting. All rights reserved.
About Operational Excellence
Consulting
• Operational Excellence Consulting is a management
training and consulting firm that assists organizations in
improving business performance and effectiveness.
• The firm’s mission is to create business value for
organizations through innovative operational excellence
management training and consulting solutions.
• OEC takes a unique “beyond the tools” approach to enable
clients develop internal capabilities and cultural
transformation to achieve sustainable world-class excellence
and competitive advantage. For more information, please visit
www.oeconsulting.com.sg

© Operational Excellence Consulting. All rights reserved.
END OF PRESENTATION
For more presentations and guides,
please visit:
www.oeconsulting.com.sg