Problem - 1

Lean Manufacturing An OverviewLeanHalf the hours of human effort in the factoryHalf the defects in the finished productOne-third the hours of engineering effortHalf the factory space for the same outputA tenth or less of in-process inventoriesSource: The Machine that Changed the World Womack, Jones, Roos 1990LEAN is not a bolt on technique, more a way of life leading to new thinking and a total change in culture.6 August 2015222 Term lean coined by John Krafcik, one of the research members on Jim Womacks MIT team for the 5 year study.Lean ManufacturingIt is a manufacturing philosophy which shortens the time line between the customer order and the product shipment by eliminating waste. CustomerOrderWasteProductShipmentTimeCustomerOrderProductShipmentTime (Shorter)Business as UsualWasteLean Manufacturing6 August 2015333 The sooner product ships, the sooner Cedar Works gets paid The faster material moves through the system Less money tied up in inventory in the system4Lean thinkingThe basics of Lean Thinking is the customer first

How do we do that? By creating thinking people

And how do we do that? By creating workplaces that are more human and encourage people to thinkWho wants what...CustomerLow CostHigh QualityAvailabilityYour CompanyProfitRepeat BusinessGrowthCash !!

Value !!wastevalue creationWORKWaste is anything that does not add value to product or service.

6 August 2015555 What we have here is a pretty fundamental relationship. Each party wants something; the customer and Cascade. The essential ingredients that make the whole thing go are: Value to the Customer Profit to Cascade These are the two fundamentals that MUST be there for a company to grow and thrive. If only one side of this flow takes place, the company will soon be out of business; if the customer does not receive adequate value if the company doesnt make sufficient profit As for value to the customer, what determines if the customer is getting good value? Answer: Desired product and features at low cost. As for Cascade, what determines how much profit you make? Answer: Sales Price - Cost to produce

Transition to next slide Cost of Non-Quality

Researches across the world suggest that cost of non-quality can go up as much as 10% - 30% of gross turnover of a manufacturing organization depending on size and complexity. In other words, if we could implement lean management in an organization through deploying techniques of value stream mapping and waste reduction, the bottom-line may enhance by as much as 30% of the organizations turnover.

6 August 2015662346Cost per UnitQualityProfit per UnitCost of non-quality could be as high as 10%-30% of firms revenueLesser down timeLesser reworkLesser customer complaintLesser leakagesLesser paper workQualityTRANSITION OF QUALITY, COST & PROFIT

6 August 20157Preventing Poor Quality (Comparison)Failure Costs Internal ExternalFailure CostsRepair CostsRepair CostsAppraisal CostsAppraisal CostsPrevention CostsPrevention CostsBefore Quality Cost AlignmentAfter Quality Cost AlignmentBenefit

6 August 20158Lean HistoryIn 1945, Toyoda challenged Taiichi Ohno to learn how to compete with US Automakers not on building large volumes of similar models, but many models in low volume.Ohno was given 3 years to develop a system to achieve this goal.Ohno went to the US and studied Ford mass assembly processes at the Rouge River Plant.Ohno learned a lot from this experience, but felt Ford stopped short of a better system.Ohno also studied the supermarket concept of ordering and replenishing stock by a signal system. This resulted in Ohno applying the KANBAN concept to the system he would develop

9Cont. Lean HistoryIt took Ohno over 20 years to develop the system that became known as The Toyota Production System (TPS)It took until the 1974 Oil Crisis before outsiders and others in Japan really took notice of the TPS system that Ohno built and the way it was allowing Toyota to compete when others were faltering.Lean Manufacturing came to the US with James Womacks Book, The Machine That Changed The World in 1990.Focused on Toyota Production System Concepts and Why Toyota was able to so successful over US Auto Manufacturers.

10Types of Work Identifying WasteValue Adding (VA):Any activity that directlyadds value to the productIncidental Work (NVA),but unavoidable with currenttechnology or methods. Any work carried out that doesnot increase product valueWasteAn activity that does not addvalue to the product and hencesomething that you dont wantto be doing, hence Waste.6 August 201511116 August 201512The Lean Enterprise Research Centre (LERC 2004) at Cardiff Business School highlighted that for most production operations, the value added and non value added activities are as follows 5% of activities add value 35% are necessary non value added activities 60% add no value at all It shows that in organizations irrespective of its size, large or small, it is absolutely crucial to eliminate waste in order to increase profit or Return on investment (ROI).

Focus on Waste 13

6 August 20157 Forms of WasteTypesof WasteDEFECTWAITINGOVER PROCESSINGMOTIONINVENTORYTRANSPORTATIONOVERPRODUCTIONRepair orReworkAny wasted motionto pick up parts or stack parts. Also wasted walkingWasted effort to transportmaterials, parts, or finished goods into or out of storage, or between processes.Producing morethan is needed before it is neededMaintaining excessinventory of raw matls,parts in process, orfinished goods.Doing more work thanis necessaryAny non-work timewaiting for tools, supplies, parts, etc..6 August 2015141414 Discuss each Ask for examples of each type from different work areas at Cedar Works.

Transition to Mercury Marine video.

After video, tee up introduction of Cedar Works Production System and Lean Manufacturing. So what do you think it will take for Cedar Works to steadily eliminate waste, or NVA from their operations?? DiscussionWaste of Overproduction

If you make more product than is required by the next process, make it earlier than is required by the next process, or make product faster than is required by the next process, you overproduce.Waste of OverproductionExtra handling

Extra space

Extra interest charges

Extra defects

Extra overheadExtra peopleExtra paperworkExtra inventory

15Waste from Waiting times

Operator or machine idle time.

Causes of Waiting WasteUnbalanced work load & un-level schedulingUnplanned maintenanceLong process set-up timesUpstream quality problem.16Waste of Transportation

Transporting parts and materials around the plant without adding valueCauses:Poor plant layoutPoor understanding of the process flow for productionLarge batch sizes, long lead times, and large storage areas.17Processing Waste

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

Causes:Product changes without process changesTrue customer requirements undefined Over processing to accommodate downtime

18Inventory WasteMaintaining excess inventory of raw materials, parts in process, or finished goods.Causes of excess inventoryProtects the company from inefficiencies and unexpected problems. Product complexityUnbalanced workload, unleveled schedulingPoor Market forecastUnreliable shipments by suppliers

19Waste of motionAny movement of people or machines without adding valueCauses:Poor people/machine effectivenessInconsistent work methodsUnfavorable facility or cell layoutPoor workplace organization and housekeeping

20Waste from product defects

All the time and cost incurred due to getting something wrongCauses:Weak process controlPoor product & process designDeficient planned maintenanceInadequate education/training/work instructionsMisunderstood Customer needs.21Lean Principles - Being Fast, Flexible, Economic 5 principles of Lean

Value - specify what creates value from the customers perspective.The value stream identify all the steps along the process chain.Flow - make the value process flow. Pull - make only what is needed by the customer (short term response to the customers rate of demand).Perfection - strive for perfection by continually attempting to produce exactly what the customer wants.6 August 201522THE VALUE STREAMThe value stream is the sequence of processes from raw material to the customer that create value.

The value stream can include the complete supply chain.

Value stream mapping is an integral aspect of Lean.6 August 201523Using the value stream mapping toolUnderstanding how things currently operate. Our Baseline!Product/Service Familyplan and implementationcurrent state drawingfuture state drawingDesigning a lean flow. Our vision!The Goal of Mapping6 August 201524Some of the commonly used tools / techniques, methods in Lean Manufacturing are: PDCA CycleConcentration DiagramsPaired Comparisons Impact DiagramsForced Field Diagrams5 Whys5W+1HKaizenJIT / Kanban SystemQuality CircleIshikawa Diagram / Fishbone Diagram5STPM SMEDPOKE-YOKEFMEACWQISix SigmaGlass Wall Management Mini Company Technique

FIVE S (5S)5 S is an integrated Japanese concept for proper housekeeping and they call it as workplace management. According to them effective work place management calls for five steps viz., organising, neatness, cleaning, starndardisation and discipline. Japanese in their language call these steps as SEIRI, SEITON, SEISO, SEIKETSU and SHITSUKE.

So the name 5S is arrived at taking the first letter S of all these five activities.

SEIRI - Organising or re-organisingSEITON - NeatnessSEISO - CleaningSEIKETSU - StandardisationSHITSUKE - Discipline