Principles of Lean Manufacturing with Live

Simulation

presented by Impact Washington

Assisting Washington companies to help them be globally competitive

– Bottom line improvements– Top line growth– Strategic development and

implementation

Impact Washington

Helping to build a strong 21st century manufacturing industry in Washington

Course ObjectivesBy the end of this class you will be able to:• Define Lean.

• Identify the “Eight Wastes.”

• Differentiate between Value-Added and

Non-Value-Added activities.

• Apply various Lean implementation tools in a

simulation setting.

• Describe how Lean Principles can impact the

success of your organization.

WelcomeIntroduction to Lean ManufacturingImplementing Lean• 5S, Point of Use Storage, Visual Controls, Plant Layout, Quick

Changeover, TPM, Batch Reduction, Quality @ SourceImplementing Lean • Pull/Kanban, Cellular Flow, Standardized WorkImplementationOpen Discussion

Course Agenda

History of ManufacturingPe

ople

Prod

uct

Wor

k En

viro

nmen

t

Pre-industrial 1890 Mass 1920 Lean 1980

• Craftsmen perform all aspects of task

• Self-taught or apprenticeship training

• Employees contribute minimally to total product

• Training for limited skills• Management makes

decisions

• Clusters of employees working in teams

• Extensive, continuing training

• Customized, non-standard products

• Variations in quality

• Standardized, focused on volume, not quality

• Focused on internal/external customer

• Independence, discretion• Variety of skills• Responsibility

• Limited skills and knowledge

• Repetitive, mind-numbing work

• Little discretion, simplified tasks

• Some discretion, group effectiveness, empowerment, team accountability, work cells

“One of the most noteworthy accomplishments in keeping the price of Ford products low is the gradual shortening of the production cycle. The longer an article is in the process of manufacture and the more it is moved about, the greater is its ultimate cost.”

Henry Ford, 1926

Cycle Time

Monday 7:00 PMBoat docks loaded with iron ore and conversion begins

Tuesday 10:55 AMOre conversion complete and foundry processes continue

Tuesday 12:55 PMCast into cylinder blocks, cooling and cleaning begins

Tuesday 5:05 PMFirst machining operation begins, 58 operations in 55 minutes

Tuesday 6:00 PMBlock enters assembly

Tuesday 7:45 PMMotor assembly complete, shipped to car assembly factory

Wednesday 8:00 AMMotor enters car assembly line

Wednesday 12:00 PMDealer takes delivery of car and payment received

Ore to payment in 41 hours including 12 hours shipping

The Ford Motor Company, River Rogue Factory, 1926 Peak Year Production 2.1 Million Model “T” Chassis 1923

High Velocity Manufacturing

GOOD

CHEAPFAST

PICK ANY TWO

Defining LeanLEAN : the systematic and relentless elimination of waste in all forms resulting in:

Improved quality Lower costs Faster delivery

Introduction to Lean Manufacturing

Value AddedAny activity that increases the market form or function of the product or service. (These are things the customer is willing to pay for.)

Non-Value AddedAny activity that does not add market form or function or is not necessary. (These activities should be eliminated, simplified, reduced, or integrated.)

Definition of Value Added

Value-Added Time : MinutesTime in Plant : Weeks

ReceivingWarehouse

Kitting

Springs Diodes

Storage

Repair

Testing

ShippingWarehouse

Ship

Material

ORDER CASH

LEDs

Mass Production

Value-Added

Typically 95% of all lead time is non-value-added.

Overproduction Waiting Transportation Non-value-added processing Excess inventory Defects Excess motion Underutilized people

Non-Value-Added

Lean = Eliminating Waste

Overproduction Waste

• Making more than is required by the next process

• Making earlier than is required by the next process

• Making faster than is required by the next process

• Causes –– Just-in-case logic– Misuse of automation– Long process setup

Introduction to Lean Manufacturing

Waiting Waste

• Idle time created when waiting for…?

• Causes –– Unbalanced scheduling / workload

– Unplanned maintenance

– Long process setup times

Introduction to Lean Manufacturing

Transportation Waste

• Transporting parts and materials around the plant

• Causes –– Poor plant layout

– Poor understanding of the process flow for production

– Large batch sizes, long lead times, and large storage areas

Introduction to Lean Manufacturing

Non-Value Added Processing Waste

• Effort that adds no value to the product or service from the customers’ viewpoint

• Causes –– Overproduction– Poor understanding of customer

requirements– Lack of communication

Introduction to Lean Manufacturing

Excess Inventory Waste

• Any supply in excess of a one-piece flow through your manufacturing process

• Causes –– Just- in-case logic– Poor market forecast– Reward system

Introduction to Lean Manufacturing

Defect Waste

• Inspection and repair of material in inventory

• Causes of defects– Weak process control– Inadequate education/training/work instructions– Product design

Introduction to Lean Manufacturing

Excess Motion Waste

• Any movement of people or machines that does not add value to the product or service

• Causes –– Inconsistent work methods

– Unfavorable facility or cell layout

– Poor workplace organization and housekeeping

Introduction to Lean Manufacturing

Underutilized People Waste• The waste of not using people’s mental,

creative, and physical abilities

• Causes – – Old ways of thinking, politics, the business

culture

– Low or no investment in training or development

Introduction to Lean Manufacturing

Buzz Enterprises

Buzz Electronics

and

BuzzSaw

Welcome to Buzz Electronics

• What were your impressions of Buzz?• What did you think of the processes?• What could be changed?• How does this relate to your company?

Round One: Debrief

Quick Changeover

Standardized Work

Batch Reduction Quality at Source

5S System Visual Controls

Plant Layout

Point of Use Storage

Cellular/FlowPull/Kanban

TPM

ValueStreamMapping

Lean CultureContinuous Improvement

Lean Building Blocks

A safe, clean, neat, arrangement of the workplace

provides a specific location for everything, and

eliminates anything not required.

5S – Workplace Organization

5. Sustain

1. Sort

4. Standardize

3. Shine

2. Set in Order

Elements of a 5S Program

Implementing Lean: Part I

Have you…• …ever had to work in a crowded work

area?• Wasted time looking for parts/tools that

were misplaced?• Had parts or tools that were not

needed?• Wasted time walking to pick up a tool or

a part?

What is 5S?

Organizational behavior….not housekeeping?

5S

Sort

Sweep

Self-Discipline

Standardize

Simplify

What are the benefits of 5S?

What the Experts SayClean factories…..

• Have higher productivity• Produces fewer defects• Meets deadlines better• Safer place to work

What the Experts Say

• Reduced setup• Reduced defects• Reduced waste• Reduced delays• Reduced injuries• Reduced breakdowns

5S-Sort

Sort

Sweep

Self-Discipline

Standardize

Simplify

Separates the necessary from the unnecessary. Remove all items from the workplace not needed for “current” production.

5S-Sort

Red Tag Method

Things are tagged as red or yellow.

Red means it is out of here.

Yellow means I’m not sure.

Red Tag draws attention so problems are not forgotten

Questions to Ask

• Is this item needed?• Is it needed in the quantity• If it is needed, does it need to be located

here?• Is it unsafe?• Is the item obsolete?

5S-Simplify

Sort

Sweep

Self-Discipline

Standardize

Simplify

A place for everything….and everything in its place

Items are arranged so they are easy to use and easy to find

Simplify

Simplify

Step #1 - Find the “best” location. Wasted motion to use and replace tools should be minimized

Step #2 - Make it obvious when things are out of place

Yellow Tagged Items Need to Find a Home

Simplify-Ways to Make Out of Place Things Obvious

• Divider lines• Labels-Color Coding Is Effective• Shadow boards

Sort

Sweep

Self-Discipline

Standardize

Simplify

Sweep

Constantly reviewing area to ensure the area is kept clean.

5S

Sort

Sweep

Self-Discipline

Standardize

Simplify

Standardize

Create guidelines for maintaining the improved conditions

StandardizeStep #1-Create guidelines for conditions of Sort, Set, and Shine.

What might these guidelines look like?

Standardize

Step #2-Create standards. When and how to perform cleaning tasks.

What are ways to ensure the standards are followed.

Standardize

Step #3-Make the standard guidelines visual.

Why?What are some ways?

Standardize

Step #4-Maintain and monitor the 5S conditions

What is the best way to make sure this happens

Sort

Sweep

Self-Discipline

Standardize

Simplify

Self-Discipline

Making 5S a habit

RequiresSupport from managementOngoing, company wide communicationMaking it part of daily workTotal employee involvement

SORTING SIMPLIFYING SWEEPING STANDARD-IZING

SELF-DISCIPLINE

Level 5 Focus on Prevention

Employees are continually seeking improvement opportunities.

A dependable, documented method has been developed to provide continual evaluation, and a process is in place to implement improvements.

Area employees have devised a dependable, documented method of preventative cleaning and maintenance.

Everyone is continually seeking the elimination of waste with changes documented and information shared.

There is a general appearance of a confident understanding of, and adherence to, the 5S principles.

Level 4 Focus on Consistency

A dependable, documented method has been established to keep the work area free of unnecessary items.

A dependable, documented method has been established to recognize in a visual sweep if items are out of place or exceed quantity limits.

5S agreements are understood and practiced continually.

Substantial process documentation is available and followed.

Follow-through with 5S agreements and safety practices is evident.

Level 3 Make it Visual

Unnecessary items have been removed from the workplace.

Designated locations are marked to make organization more visible.

Work/break areas and machinery are cleaned on a daily basis. Visual controls have been established and marked.

Working environment changes are being documented. Visual control agreements for labeling and quantity levels established.

5S agreements and safety practices have been developed and are utilized.

Level 2 Focus on Basics

Necessary and unnecessary items are separated.

A designated location has been established for items.

Work/break areas are cleaned on a regular scheduled basis. Key items to check have been identified.

Methods are being improved, but changes haven’t been documented.

A recognizable effort has been made to improve the condition of the workplace.

Level 1 Just Beginning

Needed and not needed items are mixed throughout the workplace.

Items are randomly located throughout the workplace.

Work place areas are dirty, disorganized and key items are not marked or identified.

Work place methods are not consistently followed and are undocumented.

Workplace checks are randomly performed and there is no visual measurement of 5S performance.

Before After

Before After

Before After

Before After

Before After

After

After

How Does 5S...

Reduce setup time??

How Does 5S...

Reduce Defects??

How Does 5S...

Reduce Waste??

How Does 5S...

Reduce Delays??

How Does 5S...

Reduce Injuries??

How Does 5S...

Reduce Breakdowns??

Sort —

Perform “Sort Through and Sort Out,” by placing a red tag on all unneeded items and moving them to a temporary holding area. Within a predetermined time the red tag items are disposed, sold, moved or given away. “When in doubt, throw it out!”

Elements of a 5S Program

Set in Order —

Identify the best location for remaining items, relocate out of place items, set inventory limits, and install temporary location indicators

Elements of a 5S Program

Shine —

Inspect items by cleaning them and returning them to their proper location.

Elements of a 5S Program

Standardize —

Create the rules for maintaining and controlling the first three S’s and use visual controls

Elements of a 5S Program

Sustain —

Ensure adherence to the 5S standards through communication, training and self-discipline

5S Photos

Elements of a 5S Program

• Raw material is stored at workstation where used

• Works best if vendor relationship permits frequent, on-time, small shipments

• Simplifies physical inventory tracking, storage, and handling

Point of Use Storage

• Deliver directly to the line

• Use small, reusable, visible parts containers

• Locate parts close to operators

• Consume parts from front, replenish from rear

• Kit low volume parts/sub-assemblies

• Standardize quantities/standard WIP

• Establish parts/water levels visually

• Work to eliminate inspection, receiving, transportation

Point of Use Storage

P.O.U.S.

• Simple signals that provide an immediate understanding of a situation or condition. They are efficient, self-regulating, and worker-managed.

• Examples:– Color-coded dies, tools, pallets– Lines on the floor to delineate storage areas,

walkways, work areas, etc.– Andon lights

Visual Controls

ProcedureI. Purpose - To establish standard policy and procedures defining correct action to be taken when approaching intersection.II. Definitions - Intersection - Crossroads where more than one road join or connect.- Road - Surface for vehicular travel.- Car - AutomobileIII. Procedure 1)When approaching intersection slow vehicle and bring to complete stop. 2)Verify, by looking, that no other cars are approaching from left. Verify, by looking, that no other cars are approaching from right. Verify, by looking, that no other cars are approaching from left again. 3) Proceed with caution. Note, if any cars are approaching from either direction, wait until car passes and start at step 2.

ProcedureI. Purpose - To establish standard policy and procedures defining correct action to be taken when approaching intersection.II. Definitions - Intersection - Crossroads where more than one road join or connect.- Road - Surface for vehicular travel.- Car - AutomobileIII. Procedure 1)When approaching intersection slow vehicle and bring to complete stop. 2)Verify, by looking, that no other cars are approaching from left. Verify, by looking, that no other cars are approaching from right. Verify, by looking, that no other cars are approaching from left again. 3) Proceed with caution. Note, if any cars are approaching from either direction, wait until car passes and start at step 2.

Bad Example of Visual Controls

Good Example of Visual Controls

Rec Ship

Screw Machin

e

Q C

Assembly

Finish Parts Stock

Drill

Q C

Plant Layout

Rec Ship

Screw Machin

e

Q C

Assembly

Finish Parts Stock

Drill

Q C

Plant Layout

Raw Stock Q C

Screw Machin

eStamp

MillLath

e

FinishGrind

Drill

Rec Ship

Screw Machin

e

Q C

Assembly

Finish Parts Stock

Drill

Q C

Plant Layout

Raw Stock Q C

Screw Machin

eStamp

MillLath

e

FinishGrind

Drill

Shear

Brake

Weld

Rec Ship

Screw Machin

e

Q C

Assembly

Finish Parts Stock

Drill

Q C

Plant Layout

Raw Stock Q C

Screw Machin

eStamp

MillLath

e

FinishGrind

Drill

Shear

Brake

Weld

The Economic Order Quantities (EOQ) model determines the most economic lot/batch size for a production run.

Fixed Cost Increasing

Lot/Batch SizeEOQ

Changeover Cost

Inventory Carrying Cost

Changeover Cost + Inventory Carrying Cost

Variable

Cost

Setup Time Drives Batch Size

• Definition: Changing over a process to produce a different product in the most efficient manner.

• Steps in a Changeover (taken from Shigeo Shingo’s Single Minute Exchange of Dies)

Percent of time of changeover

50%

15%

30%

5%

Preparation, after-process adjustment, checking, return to storage of parts, tools, fixtures, move materials

Removing parts, blades, jigs, etc.; mounting same for next lot, move materials

Machine settings, measurements

Making trial pieces and adjusting

Quick Changeover

Preliminary Step 1 Step 2 Step 3Internal and

External Setup not differentiated

Separate Internal and

External Setup

Convert Internal Setup to External

Setup

Streamline all aspects of Setup

operations

Ext

Int

Ext

Int

Ext

Ext

Int

Int

Ext

Int

Ext

Int

Process Walk

Analysis

Preparation

Standardization

Jigs

Management of parts and tools

Parallel operations

Clamps

Less adjustments

Mechanization

Transition Steps to Quick Changeover

• Shorter Lead Time• Less Material Waste• Fewer Defects• Less Inventory• Lower Space Requirements• Higher Productivity• Greater Flexibility

Benefits of Quick Changeover

• Systematic approach to the elimination of equipment downtime as a waste factor

• Enlisting the intelligence and skills of the people who are MOST familiar with the factory machines: the equipment operators

• Charting/analyzing equipment performance to identify root cause of problems, and implementing permanent corrective actions

Total Productive Maintenance (TPM)

10 minutes

10 minutes

• Batch & Queue Processing

Lead Time: 30+ minutes for total order21+ minutes for first piece

10 minutes

ProcessA

ProcessB

ProcessC

ProcessB

ProcessA

ProcessC

• Continuous Flow Processing

12 min. for total order3 min. for first part

Impact of Batch Size Reduction

Ideal lot size is one, but if that’s not possible…

Velocity• If you can reduce the lot size, the parts will

flow through the manufacturing process faster

Flexibility• If you can reduce the lot size, the more variety

in demand the system can handle

The Ideal Lot Size

The necessity of training farm hands for first-class farms in the fatherly handling of farm livestock is foremost in the minds of farm owners. Since the forefathers of the farm owners trained the farmhands for first-class farms in the fatherly handling of farm livestock, the farm owners feel they should carry on with the family tradition of training farm hands of first-class farms in the fatherly handling of farm livestock because they believe it is the basis of good fundamental farm management.

How Many F’s?

• Operators must be certain that the product they are passing to the next workstation is of acceptable quality.

• Operators must be given the means to perform inspection at the source, before they pass it along.

• Samples or established standards are visible tools that can be used in the cell for such purposes.

• Process documentation defining quality inspection requirements for each workstation may need to be developed.

Quality at the Source

Level 1:Inspection byindependentinspectors

Level 2:Self-Inspection by operators

Level 3:Successive-Inspection (at next process)

Level 4: Source Inspection

Level 5: UpstreamProcess Control

CHECKPRODUCT

DETECTERRORS

PREVENTERRORS

• Independent Inspection

• Operator Inspection

• Next Operator Inspection• Mistake-proofing on “product”

• Mistake proofingon “errors”

• Standardization

• Advancedtechniques

• Checking processvariation vs. errors

• Suppliers neverpass on errors

Levels of Quality System

Using the Lean concepts you’ve learned, what changes can we make to improve Buzz?

• 5S System

• Point of Use Storage

• Visual Controls

• Plant Layout

• Quick Changeover

• TPM

• Batch Reduction

• Quality at the Source

Review

• What improvements were made at Buzz?

• What problems still exist?

• What can we change next to continuously improve the process?

• Do you see how these principles can be applied to your company?

Round Two: Debrief

• Pull/Kanban

• Cellular Manufacturing/Flow Production

• Standardized Work

More Lean Techniques

Push System- Resources are provided to the

consumer based on forecasts or schedules.

Pull System- A method of controlling the flow of

resources by replacing only what has been consumed.

Push vs. Pull Systems

Pull System is a flexible and simple method of controlling/balancing the flow of resources.– Eliminates waste of handling, storage, expediting, obsolescence,

repair, rework, facilities, equipment, excess inventory (work-in-process and finished)

Pull System consists of:– Production based on actual consumption– Small lots– Low inventories– Management by sight

– Better communication

Pull System

• Signal to authorize production

• Subsequent process calls for the product

• Produce only the quantity withdrawn

Kanban

Information Flow

Supplier

RawMatl

ProcessA

ProcessB

Fin. Goods

Kanban Locations

ProcessC

Customer

Parts Flow

Kanban photos

Pull System Flow Diagram

Step 1: Group products. Collect data and analyze work flow.

Step 2: Establish Takt time. Measure demands

Step 3: Review work sequence.

Step 4: Balance the Process. Combine work in balanced process.

Step 5: Design cell layout.

Continuous Flow Production – 5 Steps

Collect Data and Analyze Work Flow

• Conduct a Parts Quantity (PQ) Analysis

• Prepare a Process Flow Analysis

• Group products with similar routings

• Determine possible cells for product groupings

• Evaluate capacity bottlenecks and equipment that can be shared or dedicated

Step 1: Group Products

Takt Time - the Rate of Customer Consumption/Demand Rate

Takt Time = Work Time Available

GOAL: Produce to Demand

1200 Seconds 115 Units = 10.4 Sec/UnitTakt Time =

Number of Units Sold (demand)

At Buzz:

Step 2: Establish Takt Time

• Observe sequence of tasks each worker performs

• Break operations into observable elements

• Identify value added versus non-value added (NVA) elements and minimize NVA

• Study machine capacity, cycle times and changeover times

Step 3: Review Work Sequence

0

5

10

15

20

A B C D E

Operation

Unbalanced Line

Takt Time = 10 seconds

Seconds

Option 1: Parallel OperationsCycle time divided by takt time equals number of identical operations

Option 2: Serial OperationsSplit Operation B into two different process steps.

Option 3: Work Transfer Transfer part of work content from Operation D to Operation E.

Step 4: Balance Process

Traditional

OptimalAssembly Line

Step 5: Design and Construct Cell

Moving to Cellular Manufacturing/Flow Production

Inv Inv

Inv

Inv

C

DE

BInvA

A

InvA

AInv

A

Inv

Inv

Inv

InvB

B

Inv InvB Inv

C

C

C

C

Inv

Inv Inv Inv Inv

E

E

E

D

D

DD

Dept “A” Dept “B” Dept “C”

Dept “E”Dept “D”

DE

C

BA

DE

C

BA

Stage 1Production in Specialized Departments

Stage 2Production in Product Cell

Stage 4Production in Compact Cell with One-Piece Flow

and Separation Man/Machine

Stage 3Production in Compact Cell with One-Piece Flow

ConsistentProcess

DesiredResults

Defines operations safely carried out with all tasks organized in the

best known sequence using the most effective combination of these

resources:

• People

• Materials

• Methods

• Machines

InconsistentProcess

InconsistentResults

Without Standardized Work – there can be no sustained improvements

Standardized Work

Implementing Lean: Part I

Standardized Work

• Pull/Kanban

• Cellular Manufacturing/Flow Production

• Standardized Work

Buzz Enterprises continues its Lean transformation.

• 5S System• Point of Use Storage• Visual Controls• Plant Layout

• Quick Changeover• TPM• Batch Reduction• Quality at the Source

Round Three: Buzz Enterprises

• What improvements were made at Buzz Electronics?

• Do you see how these principles can be applied to your company?

• “What if” scenario

• Is continuous improvement still possible?

Round Three: Debrief

A simple, visual approach– Helps you visualize the total system rather than the

single process level

– Links the material and information flows

– Provides a common language for all participants

– Develops a blueprint for implementation of the future state

– Ties Lean concepts and techniques together

Getting Started: Value Stream Mapping

Prepare and motivate people

– Widespread orientation to CI, quality, training and recruiting workers with appropriate skills

– Create common understanding of need to change to Lean

Employee involvement

– Push decision-making and system development down to the “lowest levels”

– Trained and truly empowered people

Share information and manage expectations

Keys to Success

Identify and empower champions, particularly operations managers- Remove roadblocks (i.e. people, layout,

systems)

- Make system both directive yet empowering

Atmosphere of experimentation – Tolerating mistakes, patience, etc.

Keys to Success (Continued)

Install “enlightened” and realistic performance measures, evaluation and reward systems- Do away with rigid performance goals during

implementation- Tie improvements (long-term) to key macro level

performance targets (i.e., inventory turns, quality, delivery, overall cost reductions)

The need to execute pilot projects prior to rolling culture out across organization (e.g. model lines, kaizen event)

Keys to Success (Continued)

• Focus improvement in a targeted area usually for a one-week period of time

• Managers, engineers and operators work together on the shop floor

• Changes are identified and made during the workshop

Kaizen Event

• Unyielding leadership

• Strategic vision based on Lean enterprise as part of company strategy

• Observe outside successes and failures

• Ability to question EVERYTHING

• Deep commitment to EXCELLENCE

Implementation Success Factors

Lead Time Reduction

0 25 50 75100

Percentage of Benefits Achieved

Productivity Increase

WIP Reduction

Quality Improvement

Space Utilization

Benefits of Lean

“If you always do what you always did,

you’ll always get what you always got.”

For more information on how Impact Washington can help your company thrive, visit

www.impactwashington.org