To Lean, or Not To Lean?o-o-o-o-o-o-o-o

Is That The Question?

Presented by

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The Long Island Forum For TechnologyNovember 19, 2014

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The Challenges

Is Lean for everyone?

Which “flavor” of Lean is best? Formal culture change aka TPS? Tools and Problem solving?

What is Lean, anyway?

Who benefits?

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The Challenges Too busy to engage? Don’t think the payback is

there? Heard it is too complicated?

“We cannot stop production to train?” “We are just a job shop! It does not apply to small runs,

and constant change!” “Why would I do that in the office?” “Ours is a regulated industry. We have to follow

documented instructions, so we cannot do those things!” “I have to have that much inventory in case the line goes

down!” “…and who is going to maintain that?”

…and what about the private owner who is satisfied with what he or she has?

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The LONG ISLAND LandscapeCategory Jobs Companies JOBS COMP.

avg emp % Cum % Cum

Computer and Electronic Product Manufacturing 12,553 292 43.0 17.8% 9.0%Chemical Manufacturing 12,419 133 93.4 35.37% 13.1%Fabricated Metal Product Manufacturing 7,678 513 15.0 46.24% 29.0%Food Manufacturing 6,256 292 21.4 55.10% 38.0%Miscellaneous Manufacturing 4,788 397 12.1 61.88% 50.3%Machinery Manufacturing 4,353 190 22.9 68.04% 56.2%Printing and Related Support Activities 4,071 374 10.9 73.81% 67.7%Transportation Equipment Manufacturing 3,847 124 31.0 79.26% 71.6%Plastics and Rubber Products Manufacturing 2,677 87 30.8 83.05% 74.3%Furniture and Related Product Manufacturing 2,553 241 10.6 86.66% 81.7%Electrical Equipment, Appliance, and Component Mfg. 2,378 79 30.1 90.03% 84.1%Paper Manufacturing 1,926 56 34.4 92.76% 85.9%Nonmetallic Mineral Product Manufacturing 1,398 127 11.0 94.74% 89.8%Textile Product Mills 759 72 10.5 95.82% 92.0%Apparel Manufacturing 712 68 10.5 96.82% 94.1%Wood Product Manufacturing 673 67 10.0 97.78% 96.2%Textile Mills 531 35 15.2 98.53% 97.3%Beverage and Tobacco Product Manufacturing 501 37 13.5 99.24% 98.4%Leather and Allied Product Manufacturing 194 9 21.6 99.51% 98.7%Primary Metal Manufacturing 179 24 7.5 99.77% 99.4%Petroleum and Coal Products Manufacturing 165 18 9.2 100.00% 100.0%

70,611 3,235 21.8

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The LONG ISLAND LandscapeCategory Jobs Companies JOBS COMP.

avg emp % Cum % Cum

Computer and Electronic Product Manufacturing 12,553 292 43.0 17.8% 9.0%

Chemical Manufacturing 12,419 133 93.4 35.37% 13.1%

Fabricated Metal Product Manufacturing 7,678 513 15.0 46.24% 29.0%

Food Manufacturing 6,256 292 21.4 55.10% 38.0%

Miscellaneous Manufacturing 4,788 397 12.1 61.88% 50.3%

Machinery Manufacturing 4,353 190 22.9 68.04% 56.2%

Printing and Related Support Activities 4,071 374 10.9 73.81% 67.7%

Transportation Equipment Manufacturing 3,847 124 31.0 79.26% 71.6%

Plastics and Rubber Products Manufacturing 2,677 87 30.8 83.05% 74.3%

Furniture and Related Product Manufacturing 2,553 241 10.6 86.66% 81.7%

Electrical Equipment, Appliance, and Component Mfg. 2,378 79 30.1 90.03% 84.1%

Our Landscape on LI

3,200 Manufacturing companies (+/-)

71,000 employees (+/-)

75% of companies have 25 employees or less

Therefore, 2,400 companies = 35,000/40,000 jobs 800 companies = 36,000/31,000 jobs

Note: 2013 Data, NIST: have/have not

The Survey Says….

2013 & 2014 Manufacturing surveys report:

Reduction of costs and overhead is the most popular business strategy reported by almost 60% of M & D company executives

More than 60% stated that profitability, controlling costs/overhead and growth are the three top goals for 2013 and 2014

76% of respondents stated they had not yet implemented any Lean principles or Continuous Improvement program!

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Note: Grassi & Co., Inc.

The Irony

Lean has roots in the US Perfected in Japan

Documented very well A common language and terms for all to use

We struggle to use one of the most successful management techniques, to the level that Japanese competitors do!

How come?

What are we talking about?

8US Hist. TWI

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The Principles of Lean

1. Specify value from the standpoint of the end customer

2. Identify all the steps in the value stream, eliminating whenever possible those steps that do not create value

3. Make the value-creating steps occur in tight sequence so the product will flow smoothly toward the customer

4. As flow is introduced, let customers pull value from the next upstream activity

5. As value is specified, value streams are identified, wasted steps are removed, and flow and pull are introduced, begin the process again until a state of perfection is reached in which perfect value is created with no waste

The Machine That Changed The World, Womack, 1990

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The Principles of Lean

1. Identify Value

3. Create Flow

4. Establish Pull

2. Map the Value Stream

5. Seek Perfection

The Machine That Changed The World, Womack, 1990

Continuous Improvement

RC CI exp

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Definitions

Value - 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 .

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What is Lean?

Lean focuses on eliminating waste in processes (i.e., the waste of work in progress and finished good inventories)

Lean is not about eliminating people

Lean is about expanding capacity by reducing costs and shortening cycle times between order and ship date

Lean is about understanding what is important to the customer

Lean is about making employees better, and better, and better!

Shingo US Syn.

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Types of Waste

Overproduction

Excess inventory

Defects

Non-value added processing

Waiting

Underutilized people

Excess motion

Transportation

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Lean isn’t Just for the Plant…the Office can create Just as Much Waste in Time and Manpower

Office or Administrative Waste includes: Disorganization Communication Barriers Poor Hand Offs Useless Information Discarded knowledge

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Lean Tools and Techniques

5s & Visual Controls

Kaizen

Root Cause Analysis

(5 Why‘s; Brainstorming: Fishbone)

Value Streams

Pull Manufacturing

Mistake Proofing

Quick Changeover (SMED)

Theory of Constraints

Human Factors

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5S and Visual Control

5 Elements of 5S Why 5S? Waste Workplace observation Sort Straighten Shine Standardize Sustain Visual Factory

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Why 5S?

• To eliminate the wastes that result from “uncontrolled” processes.

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After 5S

Clear, shiny aisles Color-coded areas Slogans & banners Reduced work in process

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Before

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After

Before

After

After

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Kaizen

Kaizen (Ky’zen)

“Kai” means “change”

“zen” means “good (for the better)”

Gradual, orderly, and continuous improvement

Ongoing improvement involving everyone

Speed of implementation – create small victories

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How to Kaizen

Identify

Plan – identify what to change and how to do it

Do – execute the improvement

Check – ensure the improvement works

Act – future and ongoing improvements

Repeat

Total focus on a defined process or task to create radical improvement in a short period of time

Dramatic improvements in productivity, quality, delivery, lead-time, set-up time, space utilization, work in process, workplace organization, etc., result

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Kaizen Blitz - Agenda Day 1: Setting the scene

Meet the team, do some training, set SMART goals

Day 2: Observe the current process

Flowchart, identify waste, identify root causes

Day 3: Develop the future state process

Brainstorm and flowchart (typically the longest day!)

Day 4: Implement the new process

Plan, communicate, implement, modify

Day 5: Report and analyze

Performance vs. expectations

Before

After

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Before

After

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Root Cause Analysis

ROOT CAUSE =

The contributing “factors” that, if corrected, would prevent recurrence of the identified problem

The “factor” that caused a problem or defect and should be permanently eliminated through process improvement

The “factor” that sets in motion the cause and effect chain that creates a problem

The “true” reason that contributed to the creation of a problem, defect or nonconformance

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What is root cause analysis?

A standard process of:

identifying a problem

containing and analyzing the problem

defining the root cause

defining and implementing the actions required to eliminate the root cause

validating that the corrective action prevented recurrence of problem

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Hints about root causes

One problem may have more than one root cause

One root cause may be contributing to many problems

When the root cause is not addressed, expect the problem to reoccur

Prevention is the key!

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But who’s to blame?

The “no blame” environment is critical

Most human errors are due to a process error

A sufficiently robust process can eliminate human errors

Placing blame does not correct a root cause situation

Is training appropriate and adequate?

Is documentation available, correct, and clear?

Are the right skill sets present?

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What is a Cause-Effect Diagram?

A Cause-Effect (also called “Ishikawa” or “Fishbone”) Diagram is a Data Analysis/Process Management Tool used to:

Organize and sort ideas about causes contributing to a particular problem or issue

Gather and group ideas Encourage creativity Breakdown communication barriers Encourage “ownership” of ideas Overcome infighting

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Allow team members to specify where ideas fit into the diagram Clarify the meaning of each idea using the group to refine the ideas. For

example:

Cause-Effect Diagram

Materials

Incorrect Quantity

Incorrect BOLWrong Destination

Methods

Late Dispatch

Shipping DelaySpillage

EnvironmentShipping

Problems

Traffic Delays

Weather

Equipment

Wrong Equipment

Dirty EquipmentBreakdown

People

DriverAttitudeDispatcher

Wrong Directions

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5 Why’s

Ask “Why?” five times

Stop when the corrective actions do not change

Stop when the answers become less important

Stop when the root cause condition is isolated

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The Value Stream

A Value Stream is the set of all actions (both value added and non value added) required to bring a specific product or service from raw material through to the customer.

• “Whenever there is a product (or service) for a customer, • there is a value stream. The challenge lies in seeing it.”

• 3 enterprise value streams: Raw Materials to Customer - Manufacturing Concept to Launch - Engineering Order to Cash - Administrative Functions

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Value Stream Mapping

Helps you visualize more than the single process level

Links the material and information flows

Provides a common language

Provides a blueprint for implementation

More useful than quantitative tools

Ties together lean concepts and techniques

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Value Stream Mapping

● Follow a “product” or “service” from beginning to end, and draw a visual representation of every process in the material & information flow. The result is the “current state”

● Then, draw (using icons) a “future state” map of how value should flow.

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The Current State

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The Current State

Typical Results

80 – 90% of total steps are waste from standpoint of end customer.

99.9% of throughput time is wasted time.

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The Future State

Completed in a day with the same team Focused on:

Creating a flexible, reactive system that quickly adapts to changing customer needs

Eliminating wasteCreating flowProducing on demand

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The Future State

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Push Vs. Pull Scheduling

Push Scheduling Traditional approach

Usually work order driven

Very transactional (Kitting and Issuing material)

Completed items typically move in batches

Difficult to keep work priorities synchronized

“Piles” of inventory on the production floor is the most visible characteristic

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Push Vs. Pull Scheduling

Pull scheduling Coordinated production

Driven by demand (pulled through system)

Nothing is produced by the upstream supplier until the downstream customer signals a need.

The rate of production for each product is equal to the rate of customer consumption

Extensive use of visual triggers (production/withdrawal kanbans)

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Scrap

Work in process inventory level(hides problems)

Unreliable Vendors

Capacity Imbalances

Inventory Hides Problems

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ScrapUnreliable Vendors

Capacity Imbalances

WIP

Lowering Inventory Reveals Problems

Accommodate lower inventory levels by:

• Reducing variability• Eliminating waste• Streamlining production and material flows• Accurate information

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A philosophy that rejects batch, lot or mass processing as wasteful.

States that product should move (flow) from operation to operation, only when it is needed, in the smallest increment.

One piece is the ultimate (one-piece-flow)

One Piece Flow

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Japanese word for “sign, card, billboard”

Authorizes production from downstream operations based on physical consumption

May be a card, flag, visual signal, etc.

Used often with fixed-size containers

Kanban quantities are a function of lead-time and consumption rate

Kanban

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Kanban Example

Front Bin EmptyProduct Consumed

Signal ReorderKanban Replenished

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Kanban Example

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Kanban Squares

X X X

XXX

Flow of workFlow of information

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Pull System

Sub

Sub

Fab

Fab

Fab

Fab

Customers Final Assy

Vendor

Vendor

Vendor

Vendor

....

Production Schedule

Leveled assembly instructions

A

AC

AB

Vendor

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Poke Yoke & Mistake Proofing● The use of process or design features to prevent errors or

their negative impact

● Also known as Poka yoke, Japanese slang for “avoiding inadvertent errors”

● Inexpensive

● Very effective, provides quick feedback 100% of time

● Based on simplicity and ingenuity

● Errors that leave the factory are VERY expensive!

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What Causes Defects?

1. Poor procedures or standards

2. Machines

3. Non-conforming material

4. Worn tooling

5. Human Mistakes

Except for human mistakes these conditions can be predicted and corrective action can be implemented to eliminate the cause of defects.

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3 Rules of POKA YOKE

Don’t wait for the perfect POKA YOKE. Do it now!

If your POKA YOKE idea has better than 50% chance to succeed…Do it!

Do it now….improve later!

Everyday Examples

New lawn mowers are required to have a safety bar on the handle that must be pulled back in order to start the engine. If you let go of the safety bar, the mower blade stops in 3 seconds or less.

Fueling area of car has three error-proofing devices: 1. insert keeps leaded-fuel nozzle from being inserted 2. tether does not allow loss of gas cap 3. gas cap has ratchet to signal proper tightness and

prevent over tightening.

Removable memory (thumb flash drives) cannot be inserted unless the drive is oriented correctly. The contact surfaces within the drive occupy only one-half the height of the insert. A solid block occupies the other half which must mate with the contacts of the receptacle.

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Everyday ExamplesWhich dial turns on the burner?

Stove A

Stove B

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Quick Changeover & SMED?

Single Minute Exchange of Dies is changing process tooling in 9 minutes or less.

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Why SMED?

Reduced inventories.

Improved productivity.

Higher quality levels.

Increased safety.

Improved flexibility.

Reduction in throughput time.

Improve operator capabilities.

Lower manufacturing costs.

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Changeover Definitions

Changeover time is the total elapsed time between the last unit of good production of the previous run, at normal line efficiency, to the first unit of good production of the succeeding run, at full line efficiency.

Changeover is the total process of converting a machine or line from running one product to another

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Traditional approach

Setup is given and fixed Therefore,

Use highly skilled setup personnel Minimize product variety Combine lots Make large batches

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Another way

Setups CAN be improved! Small lot production REQUIRES short setups Setup time reductions up to 90% are common

Goal is to make less, reduce WIP and storage, impact unit cost!

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The SMED Process

Preliminary Stage – Observe and Record. Stage 1 – Separate internal and external

activities. Stage 2 – Convert internal activities to

external activities. Stage 3 – Streamline all activities. Stage 4 – Document internal and external

procedures.

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Theory of Constraints

Any system can produce only as much as its critically constrained resource

60 unitsPer day

70 unitsPer day

40 unitsPer day

60 unitsPer day

Constraint

Maximum Throughput = 40 units per day

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Significance of Bottlenecks

Maximum speed of the process is the speed of the slowest operation

Any improvements will be wasted unless the bottleneck is relieved

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Theory of Constraints

Purpose is to identify constraints and exploit them to the extent possible

Identification of constraints allows management to take action to alleviate the constraint in the future

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Drum Buffer Rope

Drum-Buffer-Rope for Shop Floor Control Drum: The Pace Setting Resource - constraint Buffer: The amount of protection in front of the

resource Rope: The scheduled staggered release of material to

be in line with the Drum’s schedule.

60 70 40 60

Constraint(Drum)

Rope

BufferA Pull System

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Five Steps Of TOC

1. Identifying the constraint

2. Decide how to exploit the constraint

3. Subordinate everything else to the decision in step 2

4. Elevate the constraint

5. Go back to step 1, but avoid inertia

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Measurements Get Attention

We don't know what we don't know

We can't act on what we don't know

We won't know until we search

We won't search for what we don't question

We don't question what we don't measure

Hence, We just don't know

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Numbers Matter

If we cannot express what we know in numbers, we don't know much about it

If we don't know much about it, we cannot control it

If we cannot control it, we are at the mercy of chance

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Human Factors

Rewards & Recognition

Effective Teams

Effective Meetings

Leadership Styles

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Your Organization Can Benefit from Teams

Team output usually exceeds individual output.

Complex problems can be solved more effectively.

Creative ideas usually are stimulated in the presence of other individuals who have the same focus, passion, and excitement.

Teams both appreciate and take advantage of diversity.

Support arises among team members.

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Leadership & Leadership Style

Dissatisfied and Disconnected

40% of workers feel dissatisfied and disconnected from their employers.

About one out of every four workers are simply showing up to collect a paycheck.

Two out of every three workers do not identify with or feel motivated to drive their employer's business goals and objectives.

Management is not viewed as an asset.

Source: The Conference Board

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Leadership & Leadership Style

Employees’ dissatisfaction extends to leadership

Almost half the leadership is viewed as uninvolved and hands off.

15% are in a leadership position because of their job skills and not management skills.

Only 30% are viewed as strong leaders.

Source: The Conference Board

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The LEAN LEADER’S Role:

LEADERS MUST BE TEACHERS

Take time to teach

Share and Transfer ideas, skill and understanding

LEADERS BUILD TENSION, NOT STRESS

Provide energy that can move people to action

Have a vision of the future; a hatred of the current reality; skills and actions to close the gap between the two

LEADERS ELIMINATE FEAR AND COMFORT

Support an environment that encourages experimentation

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The LEAN LEADER’S Role:

LEADERS LEAD THROUGH VISIBLE DEMONSTRATION, & PARTICIPATION, NOT PROCLAMATION

Pull the organization through the change process

Participate in waste walks, kaizen events, problem solving, actively with the staff

Directly observe how Lean is being understood and applied first hand, not through second hand reports of a walk through

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Am I Walking the Talk?

Employees believe what their leaders do!

“What leaders say” must match “what they do”

High Say/Low Do

High Say/High Do

Low Say/Low Do

Low Say/High Do

Always

Never Do Always

Say

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The End

(or really only the beginning…)

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Questions?

Contact Information:

rcurtis@lift.org

631-846-2733 (office)

516-848-8307 (cell)