1. Lean MethodologyValue Creation Joe Kalchbrenner Date 7/25/06

2. What is Lean?

Lean Thinking redefine(s) the work of functions, departments, and firms so they can make a positive contribution to value creation and speak to the real needs of employees and customers at every point along the stream.

Lean Thinking: Banish Waste and Create Wealth in your Corporation, Womack,James P.;Jones,Daniel T.

3. Why Lean?Lean is becoming a CPI buzzword

Lean manufacturing is keyProcess Industries Center for Manufacturing Excellence, PICME, January 2005 reports 20 to 30% cost savings

Competitive Advantage for the Process Industries AIChE Nov. 2005 Annual Mtg. Cincinnati OH

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4. EEliminate Waste Reduce Cost FFaster Time To Market - Pull SShorter Lead Time - Flow IImproved Quality Operator Control IImprove customer responsiveness and satisfaction CCreate A Design, Sales, Order Entry, Procurement, And production System In Each Product/Market LLocate the Value Stream Near Your Internal And External Customers - Location Goals of Lean 5. History of Lean, and its Main Elements

Lean terminology was coined by James Womack and Daniel Jones, in the book:

• Lean Thinking: Banish Waste and Create Wealth in Your Corporation .

Lean is based on the Toyota Production System (TPS) that Taiichi Ohno and Shigeo Shingo developed for Toyota after WWII

Toyota embraced TPS and used Material and Information Flow Mapping to establish flow, eliminate waste and add value

Material and Information Flow Mapping Value Stream Mapping (VSM) is used to depict thecurrentandfuturestates of the value stream as an early step of developing and implementing lean systems

5S- Sort, Set in Order, Shine, Standardize, and Sustain

Kaizen, (continuous improvement) Frederick Taylor c. 1900, time study

Kanban, (pull system) for controlling WIP

6. Concept of Waste

Waste is anything other than theminimum amount of equipment, materials, parts, space, and workers time which are absolutely essential to add value to the product

7. The Seven Wastes People Process Product Problems Inefficient layouts Lack of proximity of machines Off-line resources Motion Defects Inventory Transportation Overproduct ion Waiting Time Operator waiting time Long setups and lead times Large batches Making without demand signals Smoothing forecasts/cust. demands Long cycle times Reduced efficiency High overall lead times Costly rework Long delays for rectification Dissatisfied customers High raw material inventory High work-in-process inventory High finished goods inventory Unnecessary movement Extra handling Overprocessing 8.

Does this describe your work area?

Space is crowded

Unneeded items are stacked between work stations

Excess inventory and equipment make it difficult to move, work and improve

Equipment is dirty and collection point for miscellaneous materials

Lean and You 9. Before 5-S After 5-S 10. Lean and you benefits of 5S

A place for everything

Everything in its place

• area identification (queue, racks, scrap, etc.)

• operator facilities (lockers, information boards, etc.)

Everything visible

• location identification (tools, instruction, etc.)

Everyone cleans and checks for damage and problems

Benefits:

• Safety/Quality

• Attacks Waste

• Develops a Sense of Pride

11. Lean and Fluor

Enabling methodology for faster, reliable facility start-ups - reduces risks and expedites return on investment for new production.Executed in parallel with FEED/EPC activities to maximize life-cycle value.

Proprietary methodology to identify, quantify, and validate plant improvements for existing plants. On-going partnering alliance designed to improve the performance of plant assets in existing plants with substantial on-going cost savings to customers. PlantREADY. Fluors suite of total maintenance solutionsdesigned to improve total asset performance. 12. Credits

Enterprise Services Group

O&M Business

Lean Manufacturing

Mr. Tim Finigan

13. Accessorize and Add Value

Walk the Walk

Talk the Talk