Lean Manufacturing in a Lean Economy

Darren DolcemascoloEMS Consulting Group, Inc.

Lean Manufacturing in a Lean EconomyYou will learn:The need to become lean todayBenefits you can expect by implementing a lean initiativePrinciples and steps of implementing a lean programCritical success factorsthe reasons that lean ideas fail in so many companies, and how to avoid these pitfalls

Presentation AgendaLean Manufacturing Principles and BenefitsThe Lean Implementation ProcessPitfalls/Critical Success FactorsQ&A

Not a set of TechniquesStructural SystemThe house is strong only if the: Roof is strong Pillars are strong Foundation is strong People are strongA weak link weakens the whole systemThe TPS House DiagramA System Based on a Structure

Goal: Highest Quality, Lowest Cost, Shortest Lead TimeBest Safety, High MoralTPSJust In TimeRight part-Right amount-Right Time

JidokaBuilt-in-QualityLine StopEfficiencyVisual ControlsError ProofingAndon5 Whys

Operational StabilityStandardized Work TPM KaizenLeveled ProductionFlowTakt TimePullQuick Changeover

Toyota Production System

Lean Manufacturing OverviewValue - A capability provided to a customer at the right time at an appropriate price, as defined in each case by the customer. Features of the product or service, availability, cost and performance are dimensions of value.

Waste - Any activity that consumes resources but creates no value.

Lean Manufacturing OverviewLean Manufacturing is an operating philosophy that focuses on the elimination of the seven wastes:Overproduction Excess inventory Defects Non-value added processing Waiting Excess motion Transportation

What does Lean do?Value-Creating TimeNon-Value-Creating Time (waste)Total Lead TimeTotal Lead TimeLean Transformation

Lean Manufacturing OverviewLean Thinking, Womack and Jones, 1996

Lean Conversion Process

The greatest enemy to tomorrows success is sometimes todays success.

- John Maxwell

Current State of Our EconomyCredit Crisis: Difficult for Businesses to Obtain Credit toMeet PayrollPurchase Raw MaterialsGrow as a companyUnemployment on the RiseMajor Recession

How Can Lean Help?Current Economic Conditions create an opportunity for lean thinking a need to go lean based on survival!Applying lean principles will create the following:Shorter Lead-Times to CustomersNet Decrease In Inventory- Frees Up CashProductivity Growth- increases capacity without additional capital/hiringQuality Improvement- lowers costs and attracts additional business

How Can Lean Help: Shorter Lead TimesBenefits to OperationAbility to Quote Jobs FasterAbility to Process Orders FasterAbility to Get Orders to Production FasterAbility to Process Jobs Through Production FasterCompetitive AdvantagesAttract more businessGet paid faster/rely less on credit

How Can Lean Help: Decrease in InventoryBenefits to OperationFreed up floor-spaceFreed up cashCompetitive AdvantagesHave cash on hand for expansion of business or to handle short-term down periods

How Can Lean Help: Productivity GrowthBenefits to OperationLower Product CostsIncreased CapacityCompetitive AdvantagesIncreased profitability Ability to compete on price due to lower costsAttract more business

How Can Lean Help: Quality ImprovementBenefits to OperationLower Product CostsBetter Quality Product ProducedCompetitive AdvantagesIncreased profitability Attract more business

How Can Lean Help: Bottom LineLean thinking will help a company become self-reliant:Fuel for growth by producing better quality, lower cost products with the shortest lead times.Ability to Grow without relying on the availability of credit from financial institutions.

Lean Conversion Process: Lean ThinkingSpecify value can only be defined by the ultimate customer Identify the value stream exposes the enormous amounts of waste Create flow reduce batch size and WIP Let the customer pull product through the value stream make only what the customer has ordered Seek perfection continuously improve quality and eliminate waste

Value Stream ApproachSelect Product FamilyCreate current and future state mapsDevelop and manage action plan using Project Management approach

Planning Tool: Value Stream Mapping Definitions- Current State Map Map showing information and product flow as it is currently done.- Future State Map - Map showing an attainable information and product flow with significantly less waste than that of the current state.

Value Stream MappingPurpose of MappingTo identify and eliminate waste in the value stream.End Product of VSMPicture of future state with an action plan to achieve it.Prioritized Projects

Value Stream Mapping: Current StateBegin mapping at the end of the process (customer) and work backwards. Then, map the information flow from your customer back to your supplier.Connect the two.

Current State Value Stream MapProcess CDataCustomerUnits/dayProductionControlMRPProcess BDataProcess ADataRaw Matl.Units/daySupplierMaterial FlowInformation FlowIII

Value Creating Time = 180 secondsLead Time = 18 days

Value Stream Mapping: Future State ElementsFlexibilityShort Lead-TimeConnected ProcessesFlow LoopsSimplified Information FlowAwareness of the Customer RequirementScheduling one point in the value stream

Kaizen Event ApproachKaizen Event Overview3 to 5 day breakthrough eventWorking level participants w. facilitatorAppropriate for use with several lean toolsAppropriate for new implementations and for continued improvement

Kaizen EventsTypical Tools5SSMED (Single Minute Exchange of Die)TPM (Total Productive Maintenance)Mistake Proof (Poka-Yoke)Visual ControlsOne-Piece Flow/Takt Time/Layout

Kaizen EventsKaizen Event ProcessEducate (1/2 1 day) Lean with emphasis on particular toolSet goalsMap out baselineBrainstorm ideasSelect ideas and formulate future stateDevelop plan to implement future state (Implement as much as possible immediately- during event.)

Kaizen EventsAdvantagesExciting experience for all involvedCan Accomplish Improvement RapidlyParticipants learn a great dealSkeptics can be won overValuable tool for implementing aspects of a value stream improvement

Kaizen EventsDisadvantagesImproves points in the process but without VSM approach, does not lead to flow across the enterpriseAction list at the end often is ignored- important to meet weekly until complete.Tendency to revert to old methods after the event.No lasting cultural change.Tendency to judge events on short-term cost savings only

Where to Start- Toyotas 4 Ps?Philosophy Hold an off-site meeting of top leaders and define your companys visionProcess Begin implementing a connected value stream.People Train and indoctrinate your people into the new lean way of thinking, effecting culture change.Problem Solving Train people in a problem-solving methodology and give them time to meet in groups and solve problems.

Typical Approach that WorksPerform an assessment and develop an overall plan for implementation. Create a Company X Production System based on an assessment.Select some key items/pilot projects for process improvement (based on an assessment) and implement kaizen/5S.Combine VSM approach with problem solving and 5S training.Use the Value Stream Mapping approach to identify improvement projects (both kaizen and six sigma projects)Roll out 5S implementation and basic problem solving training plant-wide to build momentum.

Typical Approach that WorksImplement the projects/roll out lean training in small bites in conjunction with projectsContinue expanding by value stream (or department), whichever makes more sense.Extend across entire organization.Create a Lean Promotion Function.Develop a growth strategy for additional business.Extend Lean to Your Suppliers.

Pitfalls/BarriersToo much compromise/Lack of Leadership Commitment to LeanTendency to Revert Back to Old Ways when setbacks occurTendency to use TPS/Lean as a CookbookTendency to make surface changes without applying lean principles properly (customizing to suit the situation)Short-Term Thinking at the Expense of Long Term

Roles in Change ProcessLean CoachExecutive SponsorProcess OwnerValue Stream TeamResourcesAccountability

LeadershipTop management support /commitment is critical for successful lean transformation.Support and commitment means not only lip service but $$, resources, making difficult decisions, and eliminating roadblocks.Middle managers down to team leaders must become change agents- the transformation from skeptic to teacher does not happen overnight.

Lean Coach/TeacherInternal or external lean expert that teaches but does not do the work. The lean coach:Leads model line programs Leads value stream mappingLeads kaizen eventsTeaches lean tools and philosophy through courses and improvement eventsCoaches leaders at all levelsDevelops the lean operating system (metrics, principles, assessment approaches)Internally promotes the lean transformation.Externally learns and brings back new ideas.

Key Ingredients of ChangeChange EffortLearn by doingEducation &mentoringAccountabilityCommitted, KnowledgeableLeadershipStructureOrganizationDocumentsRoles/RespParticipation &OwnershipLasting ResultsToyota Way Fieldbook, Liker and Meier, 2005

Culture ChangeEducation and changing metrics alone will not drive culture changeSeeing/Experiencing is believing.Lean must be tried and the word must be spread through successes in pilot projects.Strong leadership is necessary to drive culture change.

RecapThe Current Economy is a compelling reason to implement leanLean thinking will help a company become self-reliant:Fuel for growth by producing better quality, lower cost products with the shortest lead times.Ability to Grow without relying on the availability of credit from financial institutions.Lean Requires a Systematic Implementation ApproachLean Requires Strong Leadership

Lean Conversion Process

Perfection is not attainable, but if we chase perfection, we can catch excellence.

- Vince Lombardi

Questions?