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Agenda
• Who am I?• Batch Production vs. Lean Thinking• Principles of Lean Thinking• Benefits of Lean• Lean Manufacturing Techniques
Dumitru Lucian Arsene• Manager with 12 years experience in Production management,
Strategic Planning and Lean Manufacturing implementation. • Successfully completed over 20 continuous improvements projects to
increase productivity, reduce lead times, improve on-time delivery, reduce inventory, increase inventory turns, improve stock accuracy, eliminate wastes and fluctuation, exceed customer expectations.
Professional BackgroundPullmaster Winch Plant Supervisor 09/07 – 05/09Teleflex Canada Production Supervisor 01/02 – 09/07
Promoted from OperatorLeoni Wiring Systems Plant Manager 01/00 – 11/01 Solectron Production Manager 06/98 – 01/00
Promoted from Production SupervisorOmnitex Production Supervisor 08/94 – 06/98
Mechanical engineer
Lean Achievements• Increased on-time delivery from 40% to 90% at Pullmaster;• Reduced manufacturing lead-time from 4-6 weeks to 3-5 days,
converting functional departments in work cells, at Pullmaster;• Increased inventory turnover from 5.5 to 10.2, reducing raw
inventory from $3 million to 1.6 million at Pullmaster;• Improved stock accuracy from 60% to 90% at Teleflex and Leoni
using Kanban and perpetual inventory stock;• Implemented 5S in Work cells: Pullmaster, Teleflex Canada, Leoni;• Reduced manpower required to operate work cells by 30% at
Pullmaster and Teleflex Canada, by 15-20%: Leoni and Solectron;• Reduced WIP by 80% at Pullmaster, 50% to 70% at Teleflex by
implementing small lots and one piece flow;• Improved efficiency by 25% at Leoni and Pullmaster using SMED
and Group Technology and 20-30% at Teleflex using line balancing and Standardized work;
• Reduced quality defects from 50,000 ppm to 300-4,000 ppm at Pullmaster, Teleflex, Leoni and Solectron using autonomation.
Lean Thinking and Manufacturing Process
Improvement
Understanding the Problems, Fixing the Processes, and Using
Your People to Make it stick
Batch Manufacture
• Machine Utilisation Improved– Increasing the batch quantity produces the most
effective use of the machine between changeovers
• Improved Quality– Small well defined tasks allow lower skilled operators to
produce quality parts
Best and most efficient use of people and machines;
Basic Characteristics of Batch Production
• Production lot sizes as big as possible• Layout according to Machine type• Long changeover times• Holding safety inventory for production
problems • Detailed work division• Single-skilled workers• Control based quality• Management based on central planning• Production planning based on sales
forecasts• Point efficiencies• Priority of capacity utilization
Process 2
WITH SMALLER LOTS
Process 1
Process 2
A B A B
A+B
A B A B
A+B A+B A+B
Mass Production
A B
A+B
Process 1
B BB B BB
Problems With Batch Production
• Long delivery times• Weakness in responding to customer demands• Increase in inventories• Decrease in quality• Increase in non value adding activities• Work becoming more complex everyday• Increasing hierarchy and bureaucracy• Additional costs• Difficulty in adapting to variations• Long term planning necessity • More capital reqirement
Lean Thinking
• Focus change –– Lean Thinking is an approach that aims Lean Thinking is an approach that aims
to get rid of all the wastes (fats) that to get rid of all the wastes (fats) that bring a burden to the system.bring a burden to the system.
– From machine and people utilisation to performing
Value Adding operations,– Value adding: any operation that changes the
component, as that is what the customer pays for.
The components spend more of their time having value added
Batch and Push Manufacturing
Lead Time : for the whole lot 30 ++ minutes
Process A: 10 minutes Process B: 10 minutes Process C: 10 minutes
One Piece Flow
BB B B B
All processes are 1 minute, 3 consecutive processes and lot size ( batch ) of 10
BBB B C CC C
B C
3 min. 12 min.
Continous Flow “produce one,
deliver one”Lead Time: 12 minutes
Which is best?
Run factories, not machines
• The aim of factories is not to ensure all machines and people are constantly working
• The aim of factories is to produce components in the most efficient manner, and this achieved by spending the least time performing non-value adding activities.
The GOAL
• As competition increases getting Lean is compulsory• Producing only the products demanded by the
customer• At the exact time the customer demands• By consuming less resources• And focusing on the activities that create value for the
customer
Basic Principle of Lean Thinking
Value is :Product and/or service with definite specifications,for which the customer is ready to pay for, and that meets the customer’s requirements in a given period of time, with a definite price.
Value is created by the producer and can only be defined by the customer.
Value and WasteValue adding work
Waste ( Muda )
Unavoidable waste ( Incidental work )
•• 3 Types of Activities 3 Types of Activities in a Value Stream:in a Value Stream:
• Value Adding– Transformation of raw material to product according to the customers’ demands
• Necessary Non-Value Adding– Die change, adjustment, get/drop tool
• Non-Value Adding– waiting, counting, sorting, defect, rework
DECREASE
ELIMINATE
Wastes
• Overproduction
• Defects in product
• Inventories
• Unnecessary motion of people
• Excessive transportation of material
• Waiting people, machines and products
• Inappropriate processing
• Inappropriate use of people
WASTES
2. WASTE OF A DEFECT
• This type of waste occurs when a product does not conform to proper specifications. This can result in rework or scrap.
Primary CausePrimary Cause
• Inadequate error-proofing and quality checks
• Poor instructions and training• Poor communication between
customer and manufacturer• Lack of standard work• Inadequate supplier quality• Need for adjustments
1. WASTE OF OVERPRODUCTION
This waste is caused by producing more product than the customer wants to buy.
Primary CausePrimary Cause
• Batch production
• Building to a forecast (scheduled
production)
• Traditional productivity
measurements
• Long set-up times
WASTES
3. WASTE OF INVENTORY
• This type of waste leads to waste of materials, parts, and assembled goods.
Primary CausesPrimary Causes
• Batch production method• Long set-up times• Lack of continuous flow of
product and people• Push production system• Unnecessary product flow• Bottlenecks
4. WASTE OF MOTION
• This is waste caused by non-value added movement of people and machines.
Primary CausesPrimary Causes
• Inefficient flow design
• Inefficient procedures
• Lack of standardized work practices
WASTES5. WASTE OF
TRANSPORTATION
• This type of waste results from the unnecessary movement of material or product.
Primary CausesPrimary Causes
• Inefficient facility layout
• Lack of continuous flow
• Non-value added operations
• Batch mentality
6. WASTE OF WAITING
• This type of waste results from the unnecessary delay of processing material or product.
Primary CausesPrimary Causes
• Lack of continuous flow
• Non-value added operations
• Long set-up times
• Production runs too long
• Poor scheduling
WASTES
7. WASTE OF OVERPROCESSING
• This is waste caused by unnecessary processes and operations.
•• Primary CausesPrimary Causes
• Use expensive high precision equipment where simpler tools would be sufficient.
• Lack of attention to changes in what is needed
• Not properly identifying customer needs
• Variations due to lack of standard work and due to variations in types of products produced
8. WASTE OF A PERSON
• This waste is caused whenever a person engages in any of the previous wastes.
Primary CausePrimary Cause
• Lack of effective relationships or communication between employees, supervisors and managers
• Lack of employee education, awareness and involvement
Examples of Waste
• Watching a machine run• Waiting for parts• Counting parts• Producing parts that aren’t needed• Moving parts over long distances• Storing inventory• Looking for tools or parts• Machine breakdown• Rework and scrap• Products that don’t meet the needs of customers
The Causes of Waste
• Insufficient working methods• Long changeovers• Insufficient processes• Lack of training• Insufficient maintenance• Long distances• Lack of leadership
Represents the 3 critical management tasks a specific product ( goods and / or services ) should pass through :
Value Stream
• Problem Solving : Starting with concept, continuing with detailed design and engineering and ending with the launch of production
• Information Management : Starting with order, continuing with detailed scheduling and ending with delivery to the customer
• Physical Transformation : Starting with raw material, continuing with production and ending with the realization of the final product.
R & D Planning Production Distribution Sales
R & D Planning Production Distribution Sales
Lead Time
Model
In Plant Value Stream
MÜŞTERİTEDARİKÇİSiparişemri
Siparişemri
PROSES
1
PROSES
1
PROSES
1
Production programme
PLANLAMA
MRP
minutesminutes
weeksweeks
SUPPLIERORDER
PLANNINGORDER
CUSTOMER
PROCESS PROCESS PROCESS
Lead Time
design production delivery
The GOAL
Value Adding Activity Waste (Muda)
To Decrease Lead timeTo Decrease Lead time
To Increase Value Added Time %To Increase Value Added Time %
The GOAL
• Financial gains by freeing up resources• Producing according to real demand instead
of forecasts• Providing customer satisfaction• Providing traceability of quality• Reducing unnecessary part inventories• Reducing the risk of being outdated• Reducing fluctuation due to promotions
When we decrease the lead time by eliminating wastes:
Manufacturing Lead time
99 % 1%Time
A typical manufacturing company
Time90 % 10 %
Lean Manufacturing ApproachValue Added
Waste (Muda)
99.5 % 0.5 %
Improvement results with traditional methods
Time
Produce one - deliver one without waiting
Continous Flow
• By performing the real value creating steps consecutively, transform the raw material into a product and deliver it to the end user
• Perfect every step (KAIZEN)– capable – right every time (6 SIGMA)
– available – always available (TPM)
– appropriate – flexible and at the desired scale ( LEAN )
Batch and Push Manufacturing
Lead Time : for the whole lot 30 ++ minutes
Process A: 10 minutes Process B: 10 minutes Process C: 10 minutes
One Piece Flow
BB B B B
All processes are 1 minute, 3 consecutive processes and lot size ( batch ) of 10
BBB B C CC C
B C
3 min. 12 min.
Continous Flow “produce one,
deliver one”Lead Time: 12 minutes
Continous Flow
• Ford, 1913, model T – Continous flow at the final assembly– Sequential layout of machines – 90% resource savings – Same model for 19 years
• Today;– Demand for small lots– Continous flow for all products– Adaptation to fluctuations in customer demand– High product variability demanded by the
customer
Example : Batch Production
Material Warehouse
FinishedGoods
Warehouse
Packaging Painted Parts Storage Touch up
Semi Finished Product WarehouseParts
Warehouse
Cut to length Lathe Welding
Semifinished product
assembly
Final Assembly
Painting
Example : Flow Production
Product A CellIncomingPartsWarehouse
FinishedGoods Warehouse
PAINTING
Space gained for new products
Gains :
50% decrease in workforce,
45% decrease in space
94% decrease in lead time
Product B Cell
Product C Cell
Product D Cell
All steps demand from the previous
Pull
• Producing what the next process (customer) demands, at the desired quantity ( not more / not less ) and at the desired time ( not before or later ).
• Following all steps backwards starting from the end customer’s demand
• A simple way to put production under control
Pull System
CUSTOMER
I demand one now
I need one more
RAW MATERIAL
Value should flow, at the time,for the products,and at the speed,demanded by the customer.
Here you are
Here you are
Here you are
Here you are
I need one more
I need one more
Benefits of Pull Systems
• Resources are only allocated to products that are demanded
• No inventories are formed on the value chain• Financial turnover ( cash flow ) speeds up• Regulates the value stream according to the
customer• Problems like ; Obsolete finished goods
inventory at hand; rework or scrapping of products due to design changes; discount campaigns for undemanded products, do not arise.
... What if a machine breaks down?
... What if there are defective parts among the products?
... What if the deliveries are late?
ALL STOP !!
Assembly
Tier 2 Supplier
Painting
Welding
Stamping
Tier 1 Supplier
Main Distributor
Dealer
Lean Flow
Current State
Future State
Perfection ( Ideal State )
Original State
Perfection
Principles of Lean Thinking - Summary
1. VALUE : Specify value for the product2. VALUE STREAM : Identify the value
stream for every product family3. FLOW : Make the identified value flow4. PULL : Make the customer pull the value5. PERFECTION : Manage towards
perfection.
To avoid focusing solely on the technics ,To avoid focusing solely on the technics ,
always repeat the principles !always repeat the principles !
BenefitsParameters GainsProduct Design Lead Time 75%
Manufacturing Lead time 90%
Productivity 100%
Defects 80%
Inventories 90%
Area used 50%
Work Accidents 50%
New Investments Too little
Gains
Reduction in scrap and rework
Reduction in overtime
Increase in delivery performance
Reduction in inventories
Increase in present product sales
Bringing outsourced production in the plantAdding extra value to the products
Reduction in support function department costs
Improvement in cash flow
Reduction in manpower costs
New products
SHORT TERM MIDDLE TERM LONG TERM
New sales via better service
Utilization of freed up space
Reduction in obsolete inventories
Lean Company Model
JIT AUTONOMATION
LEAN MANUFACTURING
SYSTEM
LEAN LEADERSHIP
Lean Supply Chain
Development
Lean organization
and processes
Respect for People and Mutual Trust
ONE PIECE FLOW-SMALL LOTS
LEAN MANUFACTURING TECHNIQUES
5 S
KAIZEN
KANBAN
JIT/PULL
VISUAL CONTROL
TPM
SMED
REDUCING INVENTORY
STANDARD WIP
WORK CELL TAKT TIME
VALUE STREAM MAPPING
STANDARDIZEDWORK
“The key to lean is in the thinking and not just in the tools”James WOMACK
5 S
The 5-S Workplace•Sort needed & unneeded items.
Red tag unneeded items.•Put things in proper places,
arrange and label.•Clean up the workplace.
•Standardize the 1st 3 S’s.Document Methods & maintain cleanliness.
•Make 5-S a part of the job.
SORT
SET IN ORDER
SHINE
STANDARDIZE
SUSTAIN
Stick to it! Grade it! Improve it!
5S Program
• Remove unnecessary items.• Clear workplace.• Save space.• Save time for motion.• Standardized procedures.• Organized activities.• Improve safety.• Improve up time.• Team building start point.
• Daily workforce involvement,sustained resource allocation.
• Minimal investment for storagelocations and identification.
• Regular audits required tosustain.
5-S
Benefits Constraints
TAKT TIME• TAKT Time reflects the rate at which customers buy our
products;• Takt time is calculated by dividing the real available time by the
quantity of goods sold each day:
Daily effective minute = TAKT TimeDaily customer demand
• The actual amount of members needed to build a product at a given TAKT TIME:
The sum of the Cycle Time = No. of operators required Divided by the TAKT TIME
TAKT Time benefits
Having a TAKT time affords the ability to do the following:
• Compete in a marketplace where the demand and cost of product is being dictated by the customer.
• Pull the product down the line.• Monitor the production rate at intervals that are much
smaller than the TAKT time (pro-active approach). When issues are found that stop the series of work steps to be completed on time, they can be dealt with in a concise documented manner.
• Build without overtime.• Determine the correct number of production workers
required.• Affords targeted costing (both from labour and product).• Control cost more effectively.
Value Stream Mapping Current State Value Stream
ShippingAssembly 2Assembly 1S. Weld 2S. Weld 1Stamping
Production Control
MRP
Weekly Schedule
Daily Ship Schedule
Production Lead Time = 23.5 daysValue Added Time = 184 secs
State StreetAssembly
Forecast
Daily Order
Daily
MichiganSteel
Forecast
Weekly Order
2 x Week
II I I I I
Value Stream PlanProduct Value PersonFamily Stream Measurable Monthly Schedule inBusiness Objective Goal ChargeObjective 1 2 3 4 5 6 7 8 9
ImproveProfitabilityIn Steering Brackets
V S Manager JimDate 03/02/2003
Product FamilySteering Brackets
Pacemaker *Continuous flow from
weld to assembly Zero WIP John*Kaizen to 168 secs < 168 s/t Dave*Eliminate weld
changeover < 30 sec c/o Sam*Uptime weld #2 100% Mike*Finished goods pull 2 days FG Sue*Materials handler Pull Schedule James
routesStamping*Stamping Pull 1 day inventory Fred
+ pull schedule*Stamping changeover batch size Tim
300/160 piecesc/o < 10 min
Supplier*Pull coils with daily delivery Graham
daily deliveryr < 1.5 days ofcoils at press
Check progress and
stabilise
Future State Value Stream
Production Lead Time = 4.5 daysValue Added Time = 166 secs
Shipping
Production Control
State StreetAssembly
Forecast
Daily Order
Daily
Daily Order
Weld and Assembly CellStamping
MichiganSteel
Forecast
Daily Order
Daily
Ask the key
questions
Value Stream MappingCurrent State
44d55m
738
Steps
Time
Steel
DELTA STEEL
Stamping
GAMMA STAMPING
Warehouse Cross Dock
Wipers
BETA WIPERS
Assembly
Dist. Centre
Cross Dock
ALPHA MOTORS
Amplification
F E D C B A
%
40
30
20
10
0
F E D C B A
Quality & Deliveryppm
2000
1500
1000
500
0
F E C A
%
10
5
0
AssemblyWipersStamping
SteelDist. Centre
16d55m
398
Steps
Time
Amplification
F E D C B A
%
40
30
20
10
0
Quality & Deliveryppm
2000
1500
1000
500
0
F E C A
%
10
5
0
F E D C B A
DELTA STEEL
GAMMA STAMPING BETA WIPERS ALPHA MOTORS
Future State 2Flow and Pull between Plants
Time reduced
from 49 to 20 days
Ideal StateValue Stream Compression
Dist. Centre
3d55m
308
Steps
Time
Amplification
F E D C B A
%
40
30
20
10
0
Quality & Deliveryppm
2000
1500
1000
500
0
F E C A
%
10
5
0
F E D C B A
Steel
EPSILON STEEL
Assembly
ALPHA MOTORSSUPPLIER PARK
WiperCell
StampingCell
Time reduced from 20 to 5
days
WORK CELLS
• Group dissimilar machines in manufacturing cell to produce family of parts
• Work flows in one direction through cell
• One worker tends several machines
• Cycle time adjusted by changing number of workers
12
12 3
4
5
6
7
8 910
11
A BCRaw materials
Cell1 Cell 2 Cell 3
Assembly
1212
11
22
33
44
55
66 77
88
99
1010
1111
A B C Raw materials
Assembly
Original Process Layout
Cellular Layout Solution
WORK CELLS Benefits• Cellular manufacturing achieves the benefits of flow
based manufacturing • This simplifies material flow compared to a traditional
process layout• Ownership and responsibility for a product rests with the
operators of the cell• Shorter Lead Time• Improved Quality - Quicker problem identification• Improved Quality - Less potential rework or scrap• Less Material Handling• Improved Coordination• Reduced Inventory• Departmental conflicts eliminated• Simplified Scheduling• Less Space Required
STANDARDIZED WORK
. There can be no improvement without the basis of standard work.
When normal and abnormal work activities are undifferentiated, waste almost inevitably occurs. Standardized Work, on the other hand, provides an efficient framework in which to perform our jobs.
‘Standardized Work’ is a general phrase which refers to all of the standards (quality, safety, procedural) used in the process of carrying out routine operations.
Standard work provides a consistent routine and a basis for improvement.
Three elements are important: Takt time/Cycle time, Work sequence and Standard Work in Process (SWIP).
Standard Work-in-Process• The MINIMUM amount of Work-In-Process required to allow the
operator continued performance of Standard Work.• By standardizing the WIP, we can find a way to reduce it.• Shortened LEAD Time• Quick capture of quality problems• Unnecessary WIP eliminated• Potentially less staffing in cell• Members do more of VA process• Members become multi-functional
• The aim is one-piece-flow
Reducing Inventory
• Reducing Inventories
• In traditional manufacturing, inventories are seen as assets
• Inventories provide a safety buffer, and result from maximizing machine utilization
• JIT views inventory as waste
• Inventory is evidence of poor design, poor coordination, and poor operation of a manufacturing system
• Inventory Hides Problems
Reducing Inventory
Inventory leveldefects / rework
capacity
set-up
planning labour force
downtime
supply / material flow
KANBAN
•• KanbanKanban card indicates standard quantity of productioncard indicates standard quantity of production•• Derived from twoDerived from two--bin inventory systembin inventory system•• KanbanKanban maintains discipline of pull productionmaintains discipline of pull production•• Production Production kanbankanban authorizes productionauthorizes production•• Withdrawal Withdrawal kanbankanban authorizes movement of goodsauthorizes movement of goods• Used when one-piece flow cannot be achieved
Kanban
• Visual Refill /Replenishment Systems:
• A visual replenishment system is one in which tools such • as cards, lights, grids, squares, flags or other visual means• are used to signal the need for re-supply of materials, parts• or supplies. (“KANBAN” = Signal to control WIP)
Determining Number of Kanbans
No. of Kanbans =No. of Kanbans =average demand during lead time + safety stockaverage demand during lead time + safety stock
container sizecontainer size
NN == dLdL + + SSCCwherewhere
NN = number of = number of kanbanskanbans or containersor containersdd = average demand over some time period= average demand over some time periodLL = lead time to replenish an order= lead time to replenish an orderSS = safety stock= safety stockCC = container size= container size
Line balancing
• Time and labour variables are the basis of line balancing.• They are interrelated and are determining the cost of the
producing a product.• If one person is doing a part, the processes are done in
sequence. By adding persons, the throughput time will be reduce and all the operations are done in the same time. The throughput time is the longest operation time.
• To balance the line, one operator may do 2 faster operation or we may move some steps from the longest operation to other operations.
SMED
• SMED is a process for dramatically and methodically reducing set-up or changeover times.
• Will enable significant reduction of lot sizes.
SMED Principles
• Setup time is the time between parts when the machine is idle and operator is doing a changeover.
• Separate internal setup from external setup• Convert internal setup to external setup• Streamline all aspects of setup• Perform setup activities in parallel or eliminate them.
SMED
• Set-up delays causes:
Searching;Walking;Poor Schedule information;No checklist;Lack of calibration;Missing toolsWaiting;
SMED
Setup Reduction methods:- Parallel setup tasks: ideally, two people can do the job in half the time.- Using quick-attachment devices: one-turn bolt attachment devices, attachments with fixed holders and pins, clamping devices,- Eliminate adjustments: shims with fixed-position holders on machines, accommodating variable-height dies without making adjustments,- Improve external setups: store fixtures, holders, plates, toolsnear machines, prepare setup kits and carts, improve material handling.
TPM
• Small lot production with little inventory requires equipment that:– Doesn’t break down– Doesn’t produce defects– Performs well
• Breakdown maintenance– Repairs to make failed machine operational
• Preventive maintenance– System of periodic inspection & maintenance to keep
machines operating• TPM combines preventive maintenance & total quality concepts• TPM seeks to find the root causes of equipment problems, and
fix them
TPM
Preventive Maintenance ElementsMaintain normal operating conditions• Maintain equipment requirements• Keep equipment and facilities clean and organized• Monitor equipment daily• Schedule preventive maintenance• Manage maintenance information• Use predictive (condition-based) maintenance
Role of Operators– Keep machine clean– Routine lubrication and adjustments– Visual inspection (cracks, oil leaks)– Be aware of unusual sounds, heat, vibration, etc.
Benefits Of Lean Production
1. Reduced inventory
2. Improved quality3. Lower costs4. Reduced space
requirements5. Shorter lead time6. Increased
productivity
7. Greater flexibility8. Better relations with
suppliers9. Simplified scheduling
and control activities10. Increased capacity11. Better use of human
resources12. More product variety
• Item potential improvement• Floor Space 29%• Scrap 46%• QC Rejects 95%• Rework 72% • Work-in-Process 59%• Setup Time 66%• Manpower 32%• Equipment Required 34%• Lead Time 56%• Distance Parts Travel 54%• Cycle Time 18%• Finished Goods Inventory 43%• Down Time 52%
Metrics / Expectations (examples)
(Source: Kaizen Institute)