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Lean Operations House Building Game

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Presentation on theme: "Lean Operations House Building Game"— Presentation transcript:

1 Lean Operations House Building Game
The transition to Lean Ops The Paradigm of Lean Operations: The ideal Basic philosophy of Lean Ops Lean tools for synchronization & waste reduction Driving Continuous Improvement through Visibility J.A. Van Mieghem/Operations/Lean Ops

2 Paradigm of Lean Operations: In Search for the Holy Grail
The ideal Process = Synchronization of all flows 1 x 1 production on demand defect free At lowest possible cost Waste = Gap between ideal and actual How do we sync at lowest cost? > Synchronization or Lean Tools How do we set up a system to continually reduce waste ? Answer to questions: Lean tools for synchronization Visibility for quality at source Human infrastructure for continuous improvement House Game Improvements: What did your team do? + Which metrics did this impact? > batching: define Transfer batch: reduces T Load batch: reduces R J.A. Van Mieghem/Operations/Lean Ops

3 Improvement as a process
OPNS454 Week 9: Improvement and Innovation Improvement as a process 3/31/2017 The Ideal Operation perfectly synchronized with demand at lowest cost D = deviation from ideal = waste, variability, inflexibility = opportunity for improvement The Actual Operation Continuous Improvement Process Increase visibility of D Andon pulls, workplace organization Exploratory stress Process measurement, visual management Remind them of lean ops philosophy discussed in the core class + role of visibility (later, automation may reduce this) and employee involvement in kaizen (standardization will reduce this) Reduce D Root cause analysis & problem solving mindset Waste reduction (Lean tools) Variability reduction (Six Sigma, TQM) OPNS454 © Van Mieghem

4 The architect behind Lean Operations:
The architect behind Lean Operations: Toyota’s Taiichi Ohno and waste elimination “Toyota Production System: Beyond Large-Scale Production” by Taiichi Ohno Lean operations has been defined as “a business system for organizing and managing product development, operations, suppliers, and customer relations that requires less human effort, less space, less capital, and less time to make products with fewer defects to precise customer desires, compared with the previous system of mass production.” J.A. Van Mieghem/Operations/Lean Ops

5 There are three elements of work
Value Added Activity Work or time that directly increases the value of the product in the eyes of the customer (e.g. Assembly of parts) What the customer is paying for Value Added Activity Waste Work or time that does not add any value to a product Waste is sometimes called "muda", from the Japanese for waste Waste Objective The objective is to maximise the proportion of value added activity by eliminating waste and incidental activity Elements of work Incidental Activity Incidental Activity Work or time that does not directly add customer value, but which is currently necessary to maintain operations (e.g. small movements to reach for material for assembly)

Over-production: To produce sooner, faster, or in greater quantities than actual customer demand Waiting: People or materials that wait for other work to be completed Transportation: Unnecessary movement of materials or people between processes Over-processing: Processing beyond the standard required Inventory: Material which is not having value added to it Rework: Repetition or correction of a process Motion: Unnecessary movement of materials or people within a process Over-production Making parts on a piece rate basis to fully load individual machines Intellect Failure to make full use of the whole team’s experience and knowledge Motion Walking around the factory looking for something or fetching equipment Waiting Mortgage applications piling in a desktop in tray 8 Rework Documenting the same information in several places for a new hospital patient Transportation Transferring finished goods to off-site packing and then freighting onto customers Inventory Excess stock of drugs or equipment in clinical areas Over-processing Polishing a luxury walnut dashboard to a mirror finish on both sides

7 Lean Tool #1: cut batch sizes An illustrative example
Consider the following 4-step process: What is: The bottleneck: The process capacity or maximal R: The theoretical flow time Tth The minimal amount of inventory needed to run at capacity: Ith Call this scenario 1, the best. Let’s now consider what happens if we have (transfer) batches A 1 min/job Resource 1 B Resource 2 C Resource 3 D Resource 4 J.A. Van Mieghem/Operations/Lean Ops

8 Lean Tool #1: cut batch size ABCD example continued
Batch Shop (Batchsize = 4) Flow Shop (Batchsize = 1) A B C D Elapsed Time 1 T 2 3 4 5 T = I = R = = scenario ? A B C D 1 2 3 4 6 5 8 7 1 2 Elapsed Time 3 4 9 6 5 8 7 1 2 1 3 2 4 4 3 6 5 9 6 5 8 7 1 2 1 3 2 4 T 8 7 9 T = I = R = J.A. Van Mieghem/Operations/Lean Ops

9 Synchronization requires smaller batch sizes or even 1x1
Changeover / setup / batch related costs must be reduced if batch size is to be decreased S. Chopra/Operations/Lean Ops

10 Lean Tool #2: process on demand = pull Just-In-Time operations
JIT = have exactly what is needed, in the quantity it is needed, when it is needed, where it is needed. “hand-to-mouth” material flow needed by whom? J.A. Van Mieghem/Operations/Lean Ops

11 Lean Tool #2: Synchronization with demand:
Lean Tool #2: Synchronization with demand: customer demand pulls product Supplier inputs outputs Process Customer PUSH: Inputs availability triggers execution Supplier inputs outputs Process Customer PULL: Outputs need triggers execution J.A. Van Mieghem/Operations/Lean Ops

12 Lean Tool #2: how make pull system in house game?
Production control Roof cut Base cut FA Base assembly J.A. Van Mieghem/Operations/Lean Ops

13 Lean Tool #2: Pull Implementation: Kanban Production Control Systems
Processing center i Processing center i + 1 WIP Job J.A. Van Mieghem/Operations/Lean Ops

14 Lean Tool #3: Quality at the Source
Defects Own Station Next Station End of Line Final End User’s Found at: Inspection Hand $ $ $ $ $ Impact to the Very Minor Rework Significant Warranty Company Minor Delay Resched. Rework costs of work Delay in Adminis tra Delivery tive costs Additional Reputation Inspection Loss of Market Share J.A. Van Mieghem/Operations/Lean Ops

15 Reducing Waste: Quality at the Source
Fool-proof/Fail-safe design (Poka-Yoke) Inspection Self Automated (Jidoka) Line-stopping empowerment (Andon) Line-stopping empowerment Poka Yoke and Jidoka Trouble! Approach for operators • Preventative • If trouble, STOP! • If defective don't pass Approach for machines A mistake-proofing system prevents errors and defects Stop line when defects are detected or machine breaks down J.A. Van Mieghem/Operations/Lean Ops

16 Lean Tool #4: Flexible Resources & Standardized Work
Cross training of workforce allows resource pooling Use of IT in services Standardisation helps a system be highly flexible to respond to variability – ball boys and girls have very standardised processes but the ball can go anywhere … J.A. Van Mieghem/

5S is a structured approach to systematically clean and organize the workplace to support a lean working environment Waste identification and elimination Maintenance of improved condition Sort Set in order Shine Sustain Standardize Check what is needed and get rid of what is not used Place each item in its optimal position in the workplace and employ visual management Keep the area and equipment always clean. Set a cleaning program Improve and maint-ain the first 3 "S" by improving the en-vironment: visual controls standard machine improvements standard procedures for all similar areas Employ systems to monitor 5S and ensure that it is constantly maintained Objectives Organize the workplace with the aim to Identify and eliminate waste Maintain and continuously improve the workplace/equipment Improve morale and increase worker involvement

18 Lean Tool #5: Heijunka Mixed Level/Balanced Production
Batch Production Schedule Mixed Production Schedule (AAAABBBB..) (ABAB...) Product April April A B FGI FGI Stress: this is only for multi-product settings Role of setup/changeover time reduction Role of frozen schedules Role of mixed pickups/logistics time time J.A. Van Mieghem/Operations/Lean Ops

19 SILS: shipping in line sequence
SILS: shipping in line sequence Business Mall adjacent to Russelsheim’s LeanField From first signal from Opel for the assembled car with the Sender 1 (body shop) info, there are The first Lear part which is to assemble is the forward lamp wiring harness, which has a variance of 66 different part numbers. Exhibit 10 shows that Lear has about 130 minutes to provide the forward lamp wiring harness in line sequence to the assembly station F1-01 in Opel’s Leanfield, marked in Exhibit 11. The wiring harnesses are produced in Gödöllö, Hungary, which is km away. The wiring harness manufacturing is labor intensive, so offshore production is necessary due to lower wages. It is clear that SILS is not possible from Gödöllö within 130 minutes. From Gödöllö the parts have to be shipped in containers to a location close by where the parts have to be picked in sequence. Picking in sequence out of a total variance of 66 different containers takes a while, on average 1 minute per wiring harness. If we have the total quantity of parts in mind which have to be delivered in sequence to the final assembly line it is clear that Opel is not able to place 66 bins just for these wiring harnesses in front of their line, not to mention the backup bins. In order to bring down the logistic costs, the key is to bundle shipments with other parts. Lear has a facility in Gustavsburg which is 10 km away from the Opel plant. For transport we have to calculate 30 min. due to traffic uncertainties. At first glance, this looks feasible but Opel has assigned receiving docks to each of their lines to keep the cross line traffic very low as we can see in Exhibit 11. In line F1/Trim1 Lear has just the mentioned forward lamp wiring harness to SILS. Bundled shipments from Gustavsburg are impossible and single shipment is too expensive. Opel took this dilemma into consideration when planning its Leanfield and placed a business mall just next to the Leanfield (Figure 11). A shuttle service is operating between them. Now, a bundle shipment with other parts of other suppliers is possible. Opel has outsourced the business mall and the shuttle service to a third party, but they operate on behalf of the individual supplier. J.A. Van Mieghem/Operations/Lean Ops

20 Lean Tool #6: From Functional Layout to Product Cell organization
Production Control Roof Cut Base FA Assy Department 1 Production Control Production Control Production Control Cell 1 Department 2 Department 2 Roof Cut Roof Cut Roof Cut Base Cut Base Cut Base Cut Production Control Roof Cut Base FA Assy Production Control Roof Cut Base FA Assy Department 2 Department 2 FA FA FA Base Assy Base Assy Base Assy Cell 2 Cell 3 J.A. Van Mieghem/Operations/Lean Ops

21 Towards a system of continuous improvement: Increase Problem Visibility– Lower water to expose rocks
Scrap & Rework Missed Due Dates Too Much Space Late Deliveries Poor Quality Machine Downtime Engineering Change Orders Long queues Too much paperwork 100% inspection Inventory J.A. Van Mieghem/Operations/Lean Ops

22 Visibility: Time plays the role of Inventory in Lean Service Operations
Instead of I, look at promising 2 weeks to customers But Track internally whenever T > 13 days, + Investigate + Reduce sigma. J.A. Van Mieghem/Operations/Lean Ops

23 Towards a system of continuous improvement: Kaizen Tools
Reduce variability Standard operating procedures Increase visibility of waste and quality at source Line-stopping empowerment (Andon) Quality inspection: Self & Automated (Jidoka) Fool-proof/Fail-safe design (Poka-Yoke) Targeted improvements: root cause analysis (6 Why’s) Active worker involvement Time for experimentation Supplier involvement Exploratory stress Human infrastructure & process measurement and review (visual management) J.A. Van Mieghem/Operations/Lean Ops

24 Learning Objectives Lean Operations
Paradigm of Lean Operations: Strive for the ideal by eliminating waste This is a total business management system Synchronization Tools Reduced batch sizes Pull production control systems (vs. push)—JIT & Kanban control Quality at the source Resource pooling Level loading (Heijunka) Layout: Cellular operations Set up a System for Continuous Improvement Reduce variability (standard operating procedures) Increase visibility (river analogy) Improve human infrastructure J.A. Van Mieghem/Operations/Lean Ops


26 Sears (SHC) does actually have a whole social media team who handles their Twitter and Facebook accounts.  They are VERY pro-active on those accounts.  SHC contracts out to Viewpoints, which is the company I work for.  We run the MySears, MyKmart and Craftsman Community platforms for them, and handle customer service in a pro-active way on those accounts Along with the senior customer service reps, and folks at corporate, MySears is very fortunate to have a handful of associates or call center employees who pop on to assist, as well.  They are not paid, but are influencers who receive an "Advisor" recognition badge for their help.  We wish we had more folks like these, as their contributions are most helpful.  Here are a few threads that we would consider "wins" for SHC, as the site helped solve an issue or complaint for a particular customer: This member was all over the board complaining about the Sears "Lifetime Warranty" on Tools.  He ended up connecting with the VP of Tools through the site, something that would be impossible without utilizing social media:  Someone who visited having issues with their washer:  One of the above mentioned "Advisor" that help.  This member who offered his suggestion is actually a retired service techinician who hangs out a bunch on the site: 

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