1 Lean Thinking MGMT 511. 2 Lean Thinking A philosophy Principles Practices For the design,...

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Lean Thinking

MGMT 511

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Lean Thinking

• A philosophy

• Principles

• Practices

• For the design, operation, management, control and continuous improvement of a production system.

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Objectives of Lean

• Produce the …– Highest quality– At the lowest possible cost– Within a short cycle time

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Lean

• Pioneered and developed by Toyota

• TPS – Toyota Production System

• Womack and Jones invented the name Lean

• 3 important principles– Minimize waste– Continuous improvement– Respect for workers

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Lean

• Lean is a philosophy that recognizes waste as the primary driver of cycle time, cost, and quality

• and employs techniques to continually drive out waste in processes.

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Waste is ‘anything other than the minimum amount of equipment,

materials, parts, space, and worker’s time, which are absolutely essential to

add value to the product.’

— Shoichiro Toyoda President, Toyota

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Becoming lean is the process of eliminating waste with the goal of creating value.

It is not just about waste, it is also about value.

Lean

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ContrastTraditional Lean

• Producer “push”

• Movement of materials

• High volume

• Inspection

• Expert-driven

• Decomposition

• Periodic adjustment

• Large lot sizes

• Statistical Quality Control

• Customer “pull”

• Flow of value

• Flexible response

• Prevention

• Knowledge-driven

• Integration

• Continuous improvement

• Lot size of 1

• Quality at the source

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Statistical Quality Control

Traditional Lean

• Inspection is expensive

• Infer from samples to save costs

• Inspect quality into the product

• Why? Can’t anyone do it?

• Inference implies risk of errors. Why are defects acceptable?

• Build it into the product

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Historical Context• Selected elements of the TPS implemented

over 3 decades– Pull– Kanban (card) system– Production leveling– Reduced set-up time– Kaizen (continuous improvement)– Poka-yoke (error proofing)– Adnon (visual display)

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Example – Kanban

1950’s – First Kanban experiments

1960’s – Kanban introduced company-wide

1970’s – Kanban introduced to suppliers

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5 Principles of Lean

• Customer value: precisely specify value by product and service

• Value stream: identify the stream for each product or service

• Flow: no interruption• Pull: customer pulls value• Pursue Perfection: don’t compete

Source: Womak and Jones

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Value Definition

• Define customer needs

• Opposite of waste

• Use as metric

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Value Stream Analysis

• Value Stream Map

• Critically assess Value-Added at each step

• Eliminate or minimize Non-Value-Added activities.

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Value Added Activities

• Product or service is transformed into a state required for the customer.

• Activities for which the customer is willing to pay.

• VA

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Non-Value Added Activities

• Activities which consume resources but create no value in the eyes of the customer.

• Customer is not willing to pay for these.

• NVA

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Non-Value Added but Needed (or Necessary) Activities

• Activities causing no value added, but…

• Which cannot be eliminated based on current state of technology or thinking.

• NVA-N

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Flow

• Continuous flow through the value stream.

• Make each product, each day, in direct proportion to demand.

• Move from traditional batching to small lot (or 1 unit) flow.

• Stability through reliability, quality and standardized work

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Pull

• Pull the product through the value stream

• Authorize production – customer demand drives the process

• Cap WIP

• Kanban – signaling for required parts as they are needed

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Perfection

• Create a clear vision of perfection– Production ideals– Customer value

• Make waste visible and evident

• Problem solve

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What is Waste

• Any activity that is not adding value in the creation process of the product or service.

• Non-value added

• Non-value added but necessary

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7 Types of Waste

• Defects in outputs• Overproduction: not needed• Inventories: for consumption or processing• Unnecessary Processing• Unnecessary Movement of people• Unnecessary Conveyance of output.• Waiting – for information, people, equipment

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The Hidden Factory

• Stockrooms

• Material movers and moving equipment

• Expeditors

• Scrap

• Rework

• Obsolescence

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Commonly Used Tools

• 5 S

• The visual factory

• Kaizen

• Poka Yoke

• Total Productive Maintenance (TPM)

• Single minute exchange of die (SMED)

• Takt time

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5 S

• Simplify or Sort (seiri) – needed vs. unneeded items

• Straighten or Set (seiton) – keep in correct place• Scrub or Shine (seiso) – keep clean and tidy• Stabilize or Standardize (seiketsu) – use standard

methods• Sustain or Self-Discipline (shitsuke) – do not fall

back to old way of doing things

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The Visual Factory

• Make problems visible

• Charts to show performance

• Visual production and schedule boards

• Kanban (visible card signal)

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Kaizen

• Continuous Improvement

• Improvements may be small

• However, many small improvements over time add up to major improvement

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Common Poka-Yoke Examples (from John Grout’s Poka-Yoke Web Page)

“Mistake Proofing”

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Total Productive Maintenance (TPM)

• Impact on waste - breakdowns, setups, reduced speed

• TPM – Identify ways to maximize equipment effectiveness

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Single Minute Exchange of Dies(SMED)

• Original term now extended to all setup time reduction efforts

• Fast setup or change-over

• Allows flexible use of machines – smaller lot sizes, reduced inventory

• Cost reduction

• More effective use of machines

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Takt Time

• The rhythm of flow through a value stream

• Available weekly, daily or shift time– Divided by…

• Anticipated average weekly, daily or shift demand

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Factory Physics

• Increase the velocity of flow of material

• Increasing flow is accompanied by reduction in inventory

• As velocity increases, the cost of the hidden factory decreases

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Benefits of Lean

• Cost savings

• Revenue increases

• Investment savings

• Workforce improvements

• Uncovering problems

36Transparency Masters to accompany Operations Management, 5E (Heizer & Render) 12S-13 © 1998 by Prentice Hall, Inc.

A Simon & Schuster CompanyUpper Saddle River, N.J. 07458

Push versus Pull

• Push system: material is pushed into downstream workstations regardless of whether resources are available

• Pull system: material is pulled to a workstation just as it is needed

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5 Tools for Improving Flow

• Process observation sheet

• Process flow diagram (we have done)

• Physical process map

• Time Value Map

• Takt Time (we have discussed)



• Management philosophy of continuous and forced problem solving

• Supplies and components are ‘pulled’ through system to arrive where they are needed when they are needed.

What is Just-in-Time?



• Attacks waste– Anything not adding value to the product

• Customer’s perspective

• Exposes problems and bottlenecks– Caused by variability

• Deviation from optimum

• Achieves streamlined production– By reducing inventory

What Does Just-in-Time Do?



• Traditional: inventory exists in case problems arise

• JIT objective: Eliminate inventory• JIT requires

– Small lot sizes– Low setup time– Containers for fixed number of parts

• JIT inventory: Minimum inventory to keep system running

Inventory

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Lean

• Continues from Just-in-time discussed in the text.

• Most recent approach to reducing waste and speeding the flow of product or service to the customer.

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What Lean is Not

• A quick fix.

• Easy to do.

1 Lean Thinking MGMT 511. 2 Lean Thinking A philosophy Principles Practices For the design,...

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