History of ManufacturingCRAFT• Made customer specific• Each product is unique• Variable quality /expensiveMASS• Interchangeable –Whitney• Division of labor-Fredrick Taylor• Assembly lines and flow variety-FordLEAN• High variety• Small batches• Six sigma quality
What is LEAN?• “Lean is the elimination of anything not absolutely required to deliver a quality product or service, on time, to our customers.”• LEAN is fundamentally different business logic• LEAN is based on eliminating unnecessary action• LEAN links value activity in a continuous sequence• “Only a small fraction of total time and effort in an organization adds value for end customer”
Why LEAN?• Severe Competitions in all walks of business• Firms face reduction in margins to keep the market share• Every little saving will improve the economy• Time for every available resource to perform the best• Operation cost reduction is critical to our survival• Profits =price-cost (price dictated by the market and cost incurred by us)• Cost = activities involved (VA+NVA)
LEAN- Some myths• LEAN is a factory thing• LEAN will not work here• We tried it, it is another kaizen event• 5S is all about cleaning up your office or workstation• We are different, it can’t apply to our business• Its an excuse to take our jobs away• Zero inventory
LEAN System -BenefitsThe Hard ones (typical)• 15% growth in 1 year• 12% Productivity increment in one year• 20% space saving in one year• 90% on time delivery in full• 28% throughputs lead time reductions• Improved supplier performance• Improved customer quality• Progressive MUDA elimination
LEAN System -BenefitsThe Soft ones• Flexible structures assigned to business goals• Roles & Responsibilities assigned to business goals• Process driven culture• Visual demonstration of achievements• Increased employee ability and morale• Visual abnormal situations• Focused application of resources for best return• Believable prediction of results
LEAN Principles• Specify what creates value from customer’s perspective• Identify all steps across the whole value stream• Make those actions that create the value flow at the pull of the customer• Involve and power emplyoees• Strive for perfection by continually eliminating the successive layers of waste
What is Value?• Value is what the customer wants, when they want it in the expected quantity and quality• To establish the “customers wants” employ the QFD (Quality functional deployment) technique• To analyze the customers wants using KANO model
KANO Model• Classify Characteristics as Basic, performance and delighter• Ask two questions1. What if the characteristics is present?2. What if the characteristics is absent?• If 1=neutral, & 2=bad it is basic• If 1=good & 2=neutral, it is delighter
Define values in the eyes of customer• What product / service?• What attribute / features?• What quality levels?• What delivery?- Rate- Response time expectations• Are we measuring it? If yes, how?
What is a Value Stream?A value stream involves all the steps in a process, bothvalue added and non value added, required to complete aproduct or service from beginning to end. What is a Value Stream Map?• Visual Representation of a Value Stream or the work process• Pencil & Paper Tool with lots of post its• Helps Reveal Waste & Problems with the Flow• It Establishes a common language to document a process• Provides a blueprint for improvement
What is WASTE?Any Activity that DOES NOT increase theMarket Form or Function of the Product orService based on the Critical CustomerRequirements. These are things the customer is NOT willing to pay for. 13
Value AddedAny activity that increases the market form or function ofthe product or service. (These are things the customer iswilling to pay for.) Non-Value AddedAny activity that does not add market form or function oris not necessary. (These activities should be eliminated,simplified, reduced, or integrated.) 14
Where is the Waste? • Defects – incomplete or incorrect information • Overproduction – releasing work before next process can work on them, unbalanced work loads • Waiting – unbalanced work loads, slow system response, incomplete information, approvals • Not Utilizing Employees – old guard thinking, politics, high turnover, low investment in training • Transportation – poor layout, poor flow • Inventory – large batches, complexity to complete task • Motion – poor organization, no standard work • Excess Processing – excess communication, lack of communication, unnecessary approvals, customer requirements are not clearly understoodTypically 95% of all lead time is non-value added 15
Prerequisites of Value Stream Mapping•Understanding the Process•Information and Material Flow•Data Driven Decision Process 94% if Failures are due to Poor Systems 6% are caused by Worker Mistakes 16
Taiichi Ohno’s 7 Wastes (muda) types of waste: overproduction waiting time transport process inventory motion defective goods
7 Service Wastes• Delay – customers waiting for service.• Duplication – having to re-enter data, repeat details etc.• Unnecessary movement - poor ergonomics in the service encounter.• Unclear communication – having to seek clarification, confusion over use of product/service.• Incorrect inventory – out of stock.• Opportunity lost – to retain or win customers.• Errors – in the transaction, lost/damaged goods.
The 5S’s• The 5S‘s are simple but effective methods to organise the workplace.• The methodology does however, go beyond this simple concept, and is concerned with making orderly and standardized operations the norm, rather than the exception.• Posters bearing the 5S terms can be found on the walls of Japanese plants, and are a visual aid to organisational management.
The Japanese Origins• Seiri Sort • This requires the classifying of items into two categories, necessary and unnecessary, and disregarding or removing the latter.• Seiton Straighten • Once Seiri has been carried out Seiton is implemented to classify by use, and arrange items to minimise search time and effort. The items left should have a designated area, with specified maximum levels of inventory for that area.• Seison Shine • Seison means cleaning the working environment. It can help in the spotting of potential problems as well as reducing the risk of fire/injury by cleaning away the potential causes of accidents.
The Japanese Origins• Seiketsu Systematise • Seiketsu means keeping ones person clean, by such means as wearing proper working clothes, safety glasses, gloves and shoes, as well as maintaining a clean healthy working environment. It can also be viewed as the continuation of the work carried out in Seiri, Seiton, and Seison.• Shitsuke Sustain – Shitsuke means self-discipline. • The 5 S‘s may be viewed as a philosophy, with employees following established and agreed upon rules at each step. By the time they arrive at Shitsuke they will have developed the discipline to follow the 5 S‘s in their daily work.
Lean Building Blocks KAIZEN Pull/Kanban Cellular/Flow TPM Quality at Source POUS Quick Changeover Standardized Work Batch Reduction Teams Value 5S System Visual Plant Layout Stream Mapping Principles for ImplementingLean Manufacturing
Push Production/Distribution Systems• A push system produces finished goods inventory in advance of customer demand using a forecast of sales.• Parts and subassemblies are “pushed” through the operating system based on a predefined schedule that is independent of actual customer demand.• A traditional automobile factory and distribution system is a good example of a push system.
TAKT time• The available operating time to satisfy customer demands• Establishes the pace, beat or cadence of the process• TAKT time is used to balance the various loads and identify the bottlenecks in the process
Flow• Using one piece flow by linking of all the activities and processes into the most efficient combinations to maximize value-added content while minimizing waste.• The waiting time of work in progress between processes is eliminated, hence adding value more quickly.
Pull• Pull = response to the customer’s rate of demand i.e. the actual customer demand that drives the supply chain.• Based on a supply chain view from downstream to upstream activities where nothing is produced by the upstream supplier until the downstream customer signals a need.
Perfection• The journey of continuous improvement.• Producing exactly what the customer wants, exactly when, economically.• Perfection is an aspiration, anything and everything is able to be improved.
Summary• Lean manufacturing was developed by the Japanese.• Lean is a philosophy that seeks to eliminate waste in all aspects of a firm’s production activities.• Lean is principally associated with manufacturing industries but can be also equally applicable to both service and administration processes.• Works on 5 basic principles.• Cornerstone of Lean is the Toyota Production System.• Considers 7 Wastes (muda).• Utilises 5 S methodology.