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Lean Overview and Simulation

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1 Lean Overview and Simulation
Good morning, welcome to Lean Manufacturing Overview and Live simulation. My name is _________________ and I will be leading the lecture portion for today’s course. Give brief introduction of yourself. We also have from Georgia Tech ____________________. Could you please introduce yourselves to the group.” “Great, why don’t we take a minute and have everyone in the class introduce themselves. Please tell us your name, position, and expectations from the training day.” “Thanks. Today we are tasked to teach you a lot of different ideas and concepts but most importantly I want you all to have a fun learning experience. We have structured the day so that we are not sitting in the room the whole day listening to an instructor. We designed this course so that the concepts learned in the classroom are applied with a simulation.” “If you have any questions, please ask them. Before we get started I just want to take a minute to mention some logistical information. The bathrooms are located ______, if you need a phone they are located ______ and most importantly lunch will be provided for you today.” Transition: ”Let’s get started.” Lean Manufacturing Training Series Lean Overview ©2003 Georgia Tech Research Corporation. All Rights Reserved. LO-30813

2 Workshop Staff Instructor
President and Owner, Buzz Electronics Enterprises “As I mentioned earlier I will be delivering the lecture portion of the course. And ______________ will have role of the President and Owner of Buzz Electronics Enterprise.” “The first simulation is to help demonstrate a traditional manufacturing environment. After we are done with each round we will return to the classroom to understand specific concepts and implement these concepts in the next round. By end of the day you should have been able to experience the total impact of lean principles to an operation.” Transition: “Before we get started I would like to give you a brief description of services that Georgia Tech provides.”

3 EDI Services Advanced Technology Development Center (ATDC)
Economic Development Services Business and Industry Services “For over 40 years, Georgia Tech's Economic Development Institute (EDI) has offered an array of services. The goal of the institute is to promote the growth of business and industry in Georgia. Primarily we work with small to medium size businesses but of course we also have helped the larger companies in Georgia.” “Georgia Tech’s Economic Development Institute has a full range of services for Georgia industry. For example, we have a group dedicated to supporting the start-up of advanced technology firms. The most notable example is Mindspring. “Economic Development Services assists Georgia's communities and economic developers. This group conducts specialized professional development courses, performs economic development research, helps communities in Georgia with growth, and also assists with relocation or expansion of companies.” “Business and Industry Services provides training, technical assistance, and assessments to manufacturers, service companies, education organization and other industry groups. We offer a productive team approach to facing the business challenges of the global marketplace while finding solutions to business concerns.”

4 Business & Industry Services
Energy Environmental Information Technology Marketing and Strategic Planning Process Productivity Quality & International Standards Lean Enterprise “We provide business and industry services in seven primary areas:” Energy Management Environment Management Information Technology Marketing and Strategic Planning Process Productivity (Human Resource assistance) Quality & International Standards Lean Enterprise Transition: “Through our field offices, we become assessable to all regions in Georgia.”

5 Regional Field Office Network
Albany Athens Augusta Brunswick Carrollton Cartersville Columbus Dalton Douglas Dublin Gainesville Griffin Macon Newnan Rome Savannah Warner Robins (229) (706) (706) (912) (770) (770) (706) (706) (912) (478) (770) (770) (478) (770) (706) (912) (478) “As you can see, our field offices are located all over the state. Within the Lean Enterprise group, we have people throughout the state of Georgia. At the end of the day we will leave our business cards. We also have provided a list of telephone numbers of all the regional field offices in your manual.” Transition: “Great, now that you have a better understanding of all the different services that Georgia Tech can offer you, let’s discuss what this course is all about.”

6 Learning Objectives Learn techniques to improve profitability.
Experience the impact of Lean practices on a production process. Learn techniques for reducing inventory levels. Learn how to eliminate waste. “These are the learning objectives for this course: By the end of the course, you will have learned techniques to dramatically improve profitability. You will have experienced the impact of Lean Manufacturing practices on a production process. You will have learned techniques for reducing inventory levels. And you will have learned how to eliminate waste in order to improve manufacturing operations. Transition: “More specifically at the end of day you should have learned the following.”

7 You Will Learn About The differences between traditional and lean manufacturing Identifying areas of waste The impact of waste reduction on: Productivity Quality Profitability Customer Satisfaction “You will learn the differences between traditional manufacturing and lean manufacturing and will understand the origin of lean manufacturing and its benefits. Second, you should clearly understand the different types of wastes that create barriers to your company performing efficiently. Third, through the simulation, we are going to show you how you can impact your bottom line by reducing common wastes. During the simulation we will focus on improving the following metrics: productivity, quality, profitability and customer satisfaction.” Transition: “Now that you understand the objectives of this course, let’s discuss the format.”

8 Workshop Agenda Introduction & Orientation Production Round 1
Lean Background Lean Tools 1-6 Production Round 2 Lean Tools 7-12 Production Round 3 How to Implement Lean Summary with Q&A Break Lunch Break Break “We just went through the introduction. In a minute will have _______________, President of Buzz Electronics Enterprise, give you a brief description of the company and your job assignment for the first production round.” After the first production round, we will be alternating between lecture and production rounds. As you can see we will have three more lectures and two more production rounds. Throughout the lectures we will be discussing various lean manufacturing principles and applying those principles to the different rounds.” “At the end of the day, we will summarize and have time to answer any remaining questions.” Transition: “As I mentioned earlier, we have a simulation to demonstrate the different concepts you will be learning. You have been recruited to be operators for Buzz Electronics Enterprises. Before we start working, _______________ wanted to give you a brief orientation to Buzz Electronics and hand out the job assignments.

9 Lean Overview and Simulation
Orientation to Buzz Electronics Enterprises (BEE) Note to President: Use an authoritative and powerful tone. Be very possessive, using ‘my’, ‘mine,’ and ‘I’, but never ‘our’ or ‘we.’ Use warnings and gold stars or ‘at-a-boys’ for reprimanding and rewarding people who ask questions or answer questions or if you think someone should be rewarded. You should be dressed as a ‘stuffy’ and uptight executive. “Good morning.” “As _____________ (instructor) mentioned, my name is ____________ and I am the President of Buzz Electronics Enterprises, also known as BEE. I built this company from the ground - up. It is my pride and joy. I feel and of course all the management feel the same way, right ____________ (instructor), that everything is running smoothly and the best it will ever be. Your sole purpose today is to work for me. Yesterday’s crew was released because they couldn’t get results. My HR Manager has assured me that this crew will be different. I am expecting a lot out of you and after today’s orientation you will be well trained and start working without any problems.” “I hope you are all ready to work and to work hard to make me some money. Our motto at Buzz Electronics Enterprises is “Show me the Money.” Transition: “Before we start working I am going to give you an in-depth orientation on my products, my operations, and your jobs. By the end of this orientation you should be knowledgeable of my products and your job function. Please no questions. It’s very distracting to me and a waste of your time since you are not getting paid for this training. Ok, let’s get started.”

10 Buzz Electronics Enterprises
Product Catalog “First I would like to discuss the products that my company produces. They are highly sophisticated electronic boards used in the security industry and of course have been recognized by Consumer Reports as being the best. I have my salesperson sell to the every day users, commercial and to sophisticated users such as NASA and federal agencies. Besides our company motto: “Show me the money.” I also stress Quality and On-time delivery.” Transition: “The first product I will discuss is the blue avenger. I hope you all are paying attention because this is important information and I am not going to repeat myself.”

11 Basic model for every day use The Blue Avenger
“The blue avenger is our bread and butter. This product is used by our customers for basic, everyday use in home security systems. The residential market is the primary end user for the Blue Avenger. This is the most popular model. What do you expect since I developed and designed it? It’s the higher volume product in my line. It’s simple, but practical, and sells easily on the market. Transition: “The next product is a more recent version of the blue avenger with added features.”

12 Industrial model for commercial use The Red Devil
“The red devil, as I mentioned, is a more updated model. It was my ‘pet’ project about 5 years ago. It’s a lower volume line for my business but a higher margin product. It’s more expensive but it offers more features. The red devil is primarily used in retail and commercial sites and occasionally in higher income residential areas like the one I live in.” Transition: “The last model is the best of all! It’s going to put Buzz Electronics on the map.”

13 for the sophisticated user
The Gold Buzz Premium model for the sophisticated user “This model was designed specifically for users that have sophisticated security systems such as NASA, certain government agencies, and other high tech industries. I feel, no actually I know, this model is going to take us over the top in sales. The Gold Buzz Model is going to put this company on the map. Whoever builds this model you better make sure to pay attention and make it right.” Transition: “____________ (instructor), went to some silly seminar about how we should show our employees the cost of the product and from that seminar suggested incorporating this slide into our orientation. Personally, I don’t think it’s any of your business but I try listen to my employees once in awhile.”

14 The Bottom Line The Blue Avenger The Red Devil The Gold Buzz
Sells for $20 Materials cost $5.00 The Red Devil Sells for $30 Materials cost $7.50 The Gold Buzz Sells for $50 Materials cost $10.00 Labor Cost = $7.50/person/shift Facilities Cost = $10.00/table/shift “I want to make sure you all understand that this information is highly confidential and proprietary. Therefore I better not hear you talk about this on the floor or with your families or any of your friends.” Read slide. We’ve done a lot of thinking about the layout and processes in this plant. I believe that our costs are at the lowest we can get them. Transition: Now I think you are ready for your job assignments.

15 BEE Production Process Orientation
Sales Representative Production Scheduler Kitter(s) Material Handler Spring Assembler Resistor Assembler LED Assembler Diode Assembler GoldBuzz Assembler Inspector Reworker Warehouse/Shipping Clerk Packager Industrial Engineer(s) Instruction Crib Attendant Processes Customer Orders Generates Factory Orders from forecast Organizes raw materials for Factory Orders Moves product between ALL workstations Inserts springs Inserts resistors Inserts LEDs Inserts diodes Produces complete board Conducts functional tests (all boards) Repairs failed boards Matches boards to Customer Orders Packages finished product Perform engineering functions Controls work instructions Note to President: The job assignments must be done first thing in the morning after everyone has arrived. See Job Assignment Form to help fill the attendees for the jobs. “This is a list of jobs required to produce my boards. I am going to call your name and assign you a job task. If you have questions, read your manual or the work instructions that I personally wrote. Remember you waste my time with questions and that means less money in your pocket.” Assign jobs quickly with no explanation. When you get to the Material Handler Assignment: “_____________, is the Material Handler. If anyone needs material or needs something moved to the next station I want you to yell, “Yo, ________. To make sure you all understand that instruction, let’s practice.” Have the group yell, Yo, ________. “Good, I am glad you can follow some directions.” Continue assigning jobs. “If I didn’t call your name could you please raise your hand.” Just in case someone was not on the roster. If you missed someone go ahead and assign them a job at that time. Transition: “Now that you have your job assignment I want to show you the layout of the operations.”

16 BEE Production Facility Orientation
Sales Office Production Control Finished Goods Whse. WIP Storage LED Assembly Spring Shipping Dock Kitting Area GoldBuzz Assembly Inspection Rework Area “This is my shop floor, designed by me over years of hard work and experience. It’s brilliant, it’s spectacular, it’s another work of art. As you can see, my shop floor is very streamlined and all the stations are strategically placed to have the highest level of efficiencies. From the layout you can find your station or refer to your manual.” Transition: “Now that you know where your work station is located, we can start talking about assembling my parts. Its so simple a child could it.” Diode Assembly Resistor Assembly

17 BEE Circuit Board Orientation
Blue, Red, or Gold Boards A B C D E 1 2 “First of all if you see a red dot or a blue dot or a gold dot in upper left hand corner of the board that designates the type of board .” Question: “For example, _____________ (pick someone from the group), what type of board is this? “Right, it’s a Red Devil. Very good. I can see you are all catching on. Maybe I won’t have to fire you like I did the last group.” “I have put together work instructions that tell you exactly what to do for each job function. There should be no confusion at all.” To Instructor: “Have these people taken a competency test?” “I would like to make sure that everyone can assemble. Let’s read the top row together. A, B, C, D, E. Ok. Sounds pretty good. Now let’s read the column with the numbers: 1,2, 3, 4, 5. Good. I think this group may work out.” “Just to make sure you all understand, let’s look at this example. The instructions say to insert a spring into C3. Therefore I look at the top and find the C column, count down to three and insert spring. Nothing to it. “ Point to A2. “________(attendee) what is the location?” Good. Transition: “Let me take a minute to talk to you about the components for the three different models.” 3 4 5 C-3

18 BEE Product Components Orientation
Resistors Diodes Buzzers Transistors Springs Jumpers LED’s - + “This is a list of the parts that you will be working with when you build my boards. We have springs, jumpers, resistors (red and green), diodes, LED’s, Buzzers and Transistors. The Diodes and the LED’s must be inserted in a certain direction because they are polar – like batteries, they have a positive and a negative side. Both have a black stripe which must face a certain direction. Read your instruction carefully when installing those two parts.” Transition: “For even more detail I have some slides that show you what components are used for each model.”

19 BEE Product Routing Test 9v Springs Resistor Diodes LED Test 9v
Blue x1 x5 x1 x2 Test 9v Springs Resistors LED Red x3 x5 x1 TEST 9v “Here is a quick overview of how the different products are routed through my plant.” “For Blue Avengers, 5 springs are inserted, then 1 resistor, 2 diodes, and 1 LED. The board is completed once it is tested. If it doesn’t work-- which better not happen-- then it is transported to the rework station.” “For Red Devils, 5 springs, 3 resistors, 1 LED and tested.” “For Gold Buzz, 8 springs, 3 resistors, 2 Transistors, 1 Jumper, 1 Buzz and tested.” Any questions, refer to your manual.” Transition: “To go even further into instructions. I have an example for you.” Springs Resistors Transistors Jumper Buzzer x8 x3 x2 Gold x1 x1

20 Example Circuit Board Assembly
Red Devil A B C D E 1 2 3 4 5 9v “This is what a finished Red Devil board looks like. We have the 5 springs, 3 resistors, 1 LED, and we test with a 9 volt battery. We have made these instructions as simple as possible we even included a picture of how to tell if the board is good or not.” Transition: “Great, everyone understand what they are doing and how to make the board. Just a couple of more slides and we start working.”

21 Inserting Components To insert components easily, bend the spring backwards and slip the wire in between the coils. DO NOT wrap the wires around the spring.

22 The Red Devil Production Batching 6 per batch 4 per batch The Gold
The Blue Avenger 6 per batch The Red Devil 4 per batch “One item I wanted to make sure I mentioned is the standard lot size. I have done sophisticated and extensive number crunching to figure out the best standard lot size. I’ve looked at the setup required and determined that its most efficient for me to build my Blue Avengers in batches of 6, my Red Devils in batches of 4 and my Gold Buzz in batches of 1.” Transition: “Another point to go over with you is our scheduling process.” The Gold Buzz Hand-crafted 1-at-a-time

23 BEE Production Scheduling Process
Shipments to customers Customer orders (demand) Customer order forms Production forecast Factory order forms Finished Goods Warehouse “I schedule my factory by first having my Production Scheduler release Factory Orders according to my forecast. These Factory Order forms trigger the kitting of parts and production of my boards, which go to Finished Goods.” “At the same time, my Sales Representative is taking Customer Orders and generating Customer Order Forms. These forms are given to my warehouse to ship product to my customer.” Transition: “I want to take a minute an emphasize our strategic goals.”

24 BEE Customer Service Targets
Promised shipments to customers 4 minutes after order Blue 5 minutes after order Red Gold 6 minutes after order “As I mentioned earlier, on-time delivery is extremely important to me. Because it is so important to me, I have mandated that every time a customer calls us with an order we give them a promise date. For Blue Avengers, it’s 4 minutes after the order has been placed, Red Devil is 5 minutes after the order has been placed and for Gold Buzz it’s 6 minutes after the order has been placed. If I tell someone a specific time and date I expect it to happen. If we don’t deliver on time, the late shipments are discounted by 30%. Do you think this would make me very happy? Wait for a response from the group. “Of course not, the last group didn’t make me very happy. That is why I fired them all.” “Yeah, and another thing, no jumping orders or cherry picking of orders. Everything has to be done First-in, first-out.” Transition: “I sure hope you were all paying attention because I expect great results in the first round. To make sure we have success I have a couple of rules to follow.” All orders are filled “first-in, first-out” Late shipments are discounted by 30%

25 BEE Company Policies All shifts are 20 minutes.
Keep busy at all times. Yell if you need parts. Handle all parts first in-first out. Only the material handler can move parts. Stay at your workstation. The boss is always right! Read slide. “Now what is our motto?” Wait for group to reply. “Right, Show me the Money!” Transition: “Let’s get to work, everything is set up in the other room.”

26 Round 1 Let’s Get To Work!! Instructor reviews the results with the group. “____________(President), are you ready to see the results for Round #1?” “Ok, but maybe you better sit down for this.”

27 Results Note to Instructor/Facilitator: To enter data, make sure scoreboardNew.xls is in computer, make sure PowerPoint presentation is normal view. Go to Edit, then click on Links. A window should open, Highlight the file scoreboardNew.xls, Click Open Source. Excel Spreadsheet named Scoreboard will open. Enter data ONLY in the spreadsheet titled as DATA ENTRY. Calculations will be done automatically. Verify results in the spreadsheet titled as SCOREBOARD. NEVER CHANGE ANY INFO ON THIS SHEET; THIS IS THE SHEET WITH ALL THE FORMULAS. Save excel file after you entered information. Go back to LO file, make sure to be in normal view. Click once onto spreadsheet on slide (should see white boxes highlighting object). After spreadsheet is highlighted right click the mouse. Click onto “Update Link,” you should see that spreadsheet updated. Page down to second spreadsheet and highlight object, right click, update link. You need to update each slide every time you make a change in the excel file. Note to instructor: For the first round, explain the results and calculations without the president so that everyone has a understanding of the metrics. Also don’t forget to have people fill out the student scoreboards. Put the formulations for the calculations on a flipchart to hang up to remind everyone how the calculations were derived. “The first item we measured was manufacturing cycle time or lead-time. This number was calculated by our IEs. Remember the yellow post-it notes on the boards? That is what the IE’s calculated the cycle time from; how long did take the part to get through the whole process, from production scheduler to warehouse.” “For the first round, our manufacturing cycle time was _____ for the Blue Avenger, ____ for the Red Devil, and ____ for Gold Buzz.” “The next metric we are using is on-time delivery. This is calculated by the number of units on-time divided by demand. On-time percentage for the Blue Avenger was _____% on time, for Red Devils ____% on-time and for Gold Buzz we had ____% on-time. Those percentages are not good. Remember every time we had a late order, that order was discounted by 30%.” “We also started with WIP (work-in-process) on the line. Some people may call this ‘wetting the line’. For Blue we had 18 units throughout the process, Red Devil we had 8 pieces and Gold 2 pieces. We started with some WIP, but we ended the round with A LOT of WIP. For Blue Avengers we had ____, Red Devil ____, and for Gold Buzz___.” Transition: “Now we need to see what type of financial impact this had on BEE. How much money do you think we made?”

28 Results “Before we talk about profits, we need to look at our sales dollars and total costs.” “For the Blue Avenger we ended up with ____units sold, that includes late and on-time, Red Devil ____ units sold, and Gold Buzz ____ unit(s) sold. The sales are calculated on the # of units shipped x sales price. Our sales dollars generated equaled _____. ” Question: Does anyone remember the sales prices for the different models?” Wait for a response. “Right, Blue sold for $20, Red Devils sold for $30, and Gold sold for $50. Next, we need to know the total cost to produce the items. This consists of material, labor and overhead. The material costs are calculated by adding the number of completed units x the cost to make them. If we refer to our manual (slide #14), we know it costs $5.00 in materials for the Blue, Red costs $7, and Gold Buzz materials cost ” “Next we need to calculate the direct labor costs. This is calculated by adding up the number of employees x the pay rate, which is $7.50 / shift.” “We also need to calculate the cost for overhead, or the facility costs, which is the number of tables times the cost of tables. We discussed earlier that each table costs $10.00.” “We add up the cost for materials, labor, facilities and the cost of late shipments to get the total cost. For Round one our total cost was ____.” “To calculate the profit we have to subtract the total costs from sales $. For round one our profits were ____.” Call the President in to review the results. Read through the results and have the President make shocking remarks about the results. “___________ (instructor), I would like to share with the group some lean manufacturing principles that I feel may help increase the profits for BEE. Is that ok with you?” President: “Well, I am willing to try anything to make more money. These principles better work or you will have to hire some new people. President leaves classroom to help with simulation. Transition for Instructor:” We have a lot of work ahead of us. Wed better get started.”

29 Lean Manufacturing Agenda
A Manufacturing Background Lean Manufacturing Foundation: Waste Reduction Lean Manufacturing: Basic Concepts Further Concepts “I mentioned earlier that we would rotate the lecture portion with the simulation rounds. The agenda for the different lectures is listed here:” “First we will discuss the history of manufacturing and the definitions for lean, then discuss the different types of wastes that you find in traditional manufacturing plants. We’ll also discuss the impact of having a good housekeeping culture, the differences between traditional vs. lean layouts, and the benefits of point-of-use storage, setup time reduction, and batch size reduction. We’ll also talk about using takt time to balance the line.” “After the 2nd round, we’ll talk about visual controls, quality at the source, standardized work, workforce and management practices, pull systems, and total productive maintenance.” Transition: “Before we start talking about a lean manufacturer, let’s talk about traditional manufacturers.”

30 Profile of a Traditional Manufacturer
Characteristics of your operation: “What do you think were some characteristics of the first round at Buzz Electronics?” Note: Use a flipchart or whiteboard to capture characteristics. Transition: “Great! Some of these points are definitely characteristics of a traditional company but let me give you some more examples.”

31 Profile of a Traditional Manufacturer
Inventory built to forecast Inventory used to satisfy customer demand Excessive work in process (WIP) Large batch sizes Focused on a small piece Cost-cutting focus Department/work center efficiency measures “A traditional manufacturer typically builds to a forecast, which means that if a customer calls, product is pulled from inventory to satisfy the customer. Also, if you walk in a traditional manufacturing plant you usually see a lot of work-in-process.” Question: “Why do you think traditional manufacturers build so much to inventory and have a lot of WIP?” “A lot of times the reason companies build WIP and inventory is because they are hiding or trying to make up for a process problem. For example a machine has a lot of downtime. Therefore, whenever it’s able to run, the production manager runs the heck out of it. Another big reason is if someone is measuring the machine efficiencies. It looks a lot better on the books if we keep running the machine even if we do not need the parts. ” “Another characteristic is large batch sizes. This is sometimes caused by having long setups and low confidence level in the ability to complete the work without scrap or on time.” Question: “ How many of you have said to yourself, ‘If it takes four hours to setup this machine, I am going to run the whole week’s or month’s worth so that I don’t have to setup up for this product again.’?” “You know, if I had 4 hours setup I would probably say the same thing. That is why later we will discuss the importance of setup time reduction.” “A big characteristic of a traditional manufacturer is that departments work independently of each other and there is a lot of finger pointing done. Also, department managers are focused solely on reducing cost in their areas and not concerned about what effect the changes they are making will have on other areas downstream or upstream.” Transition: ” Let’s talk about how manufacturers evolved these characteristics.”

32 Manufacturing History
Customer Requirements 1800’s 1900’s 1700’s Time 2000 • High volumes/High Inventories • Cost cutting focus/Efficiency • Mass production/Automation • Assembly lines/Divided labor TRADITIONAL • Custom-made, one at a time • Highly skilled craftsperson • Non-standardized work • Non-interchangeable parts CRAFT “If we take a look at the history of manufacturing, we have two distinct periods. The first is the era of craft manufacturing, which is a time before the industrial revolution. Characteristics during the craft era were highly skilled workers using hand tools, with no standardization. Also these manufacturers were titled as masters in there profession because they went through a rigorous training program of being an apprentice, journeyman, and then finally a master.” “Once the industrial revolution started in England around 1733, this moved manufacturers into a more modern world; we can classify this era as the mass production era. Or we will refer to these manufacturers as the traditional manufacturers. During this period, new inventions were changing the way of life. Historians state that one of the most influential inventors during the American industrial revolution was Eli Whitney, who presented the U.S. government with a new way to manufacturer a certain commodity.” Question: “Does anyone know what that product was?” “Right, Eli Whitney developed the concept of building muskets with machines instead of building muskets by hand. Eli Whitney’s idea of interchangeable parts was a brand new concept which would begin the industrial revolution in America. Obviously, during the late 18th century and through the 20th century there were many inventions that contributed the success of manufacturers. The next person who is most famous for mass production is Henry Ford. He didn’t invent the idea of mass production, but he took it to the next level.” “Henry Ford was an entrepreneur and a visionary. He wanted to manufacturer cars that were large enough for the family, constructed of good materials and had such a low price that everyone making a good salary would be able to own a car. So how did Henry Ford make this happen? He used his ingenuity to take the assembly-line method of production to new heights of productivity and efficiency. He did this by standardizing work and divided labor into classified workers. Unfortunately, other characteristics of the traditional manufacturer were high volumes to offset costs and standard costing focused on efficiencies of machinery, which promoted high inventories.” “Henry Ford did an excellent job sharing information with other companies. Unfortunately, he became complacent with the Model T and refused to innovate and produce more of what customers wanted. That is what caused him to fall from the top.” Transition: “Understanding the history of manufacturing allows us to understand the requirements of manufacturing today.”

33 Global competition is driving Customers to seek and expect:
Manufacturing Today Global competition is driving Customers to seek and expect: Speed Quality And Flexibility At the Lowest Prices Question: Does anyone know what Henry Ford’s famous saying was regarding the Model T? “Right, you can have any color that you want as long as its black. How would you like it if a salesperson said that to you? I know if a salesman said that to me I would say thank you very much but no thanks. As customers we expect companies to have the product available when we want it, with the different options and colors we want, good quality and most of all with the lowest price.” “As consumers we are more educated than ever but that means we also expect more. This need for more for less has started the change in how companies manufacturer products.” Note: Use Flip Chart. Write on the flipchart Profit + Cost = Selling Price on one line and then leave some space and write Selling Price – Cost = Profit. Make sure to cover Selling Price – Cost = Profit until you talk about it. “Traditional Manufacturing is sometimes referred to as a seller’s market. Companies would determine how much profit they wanted, which, plus the cost, equaled the selling price. It’s easy to apply this concept if you have a company that is a monopoly or during the introduction of new technology. For example, cell phones. When cell phones were first introduced they were selling for $2500. Now you can get some cell phones free when you buy the service.” “As we move into the next generation of manufacturing and more educated customers, the past cost equation (Profit plua Cost equals selling price) doesn’t work. As consumers we set the selling price; no longer do companies set the price except for new technology. Now we have the selling price minus the cost equals profits. This is called the buyer’s market.” Question: “If this is the new equation, selling price minus cost equals profit, how does a company increase their profits?” “Right, through reducing their costs.” Transition: “Since we have moved to a Buyer’s market, we need to figure out a new approach to manufacturing.”

34 Manufacturing History
Customer Requirements 1800’s 1900’s 1700’s Time 2000 Lean Manufacturing Another Approach? • Custom-made, one at a time • Highly skilled craftsperson • Non-standardized work • Non-interchangeable parts CRAFT • Mass production/Automation • Assembly lines/Divided labor • High volumes/High Inventories • Cost cutting focus/Efficiency TRADITIONAL “For a long time American manufacturers were “fat and happy,” especially during the 50’s and 60’s. As I mentioned earlier, we were in the Seller’s Market. If they made it, someone bought the product.” “During the 50’s and 60’s, it was difficult for the Europeans or Japanese because they were rebuilding from the war. Actually the Europeans grabbed onto the ideas that Henry Ford developed and started to become mass producers. The Japanese also tried these concepts but just were not successful. Therefore, they started “tweaking” methods of mass production to develop a system that worked for them. Especially since they didn’t have the large market the US had at the time during the 50’s and 60’s, they needed to become more competitive and flexible to meet consumer demands. The most famous Japanese manufacturer to develop a new approach was Toyota. But it took this company about 30 to 40 years to become a leader in the automotive industry. Another contributing factor was that they had the help of two famous Qualititians, Juran and Demming. These two qualititians tried to educate Americans during the 50’s on the importance of quality, but no would listen. They went to Asia and the Japanese grabbed hold of these principles and ran with them. “ “The major time that consumers really asked for something specific or challenged the manufacturers was during the 70’s or the oil crisis. Consumers wanted smaller and more fuel efficient cars. Consumers started noticing foreign manufacturers that met their needs and started buying their products. This started the move toward a Buyer’s Market. Not until the mid-80’s did the US manufacturers notice that there was a different approach to manufacturing products and that is really when companies started evolving into lean manufacturing. Transition: “So what is lean manufacturing?”

35 What is Lean Manufacturing?
concept by TPS; terminology by Womack an umbrella for good business practices a strategy for decreasing the time between order placement AND delivery of goods or services “As I mentioned earlier, Toyota took the concepts from mass manufacturing and started tweaking the process to create something called the Toyota Production System. This approach utilized less human effort, smaller and more flexible machinery, a flexible workforce and kept smaller amounts of inventory on-hand.” “The name Lean Manufacturing was actually coined by James Womack. James Womack conducted a study using graduate students from MIT (Mass. Institute of Technology). The purpose of this study was to gather data to prove or disprove which type of manufacturing system was the best. From this data, James Womack proved that the companies that implemented this system were more profitable, quicker to respond to market changes, had higher delivery ratings and produced what the customer wanted.” Transition: “Lean is defined many ways but we have adopted the definition from APICS.”

36 NIST Definition A systematic approach to
identifying and eliminating waste (non-value added activities) through continuous improvement by flowing the product at the pull of the customer in pursuit of perfection. -- The MEP Lean Network “Part of our funding comes from the National Institute of Standards and Technology's (NIST) Manufacturing Extension Partnership (MEP) program. EDI is the MEP center for Georgia.” “The definition that is used by this group is the concentration on eliminating the non-value added activities to create flow of the product by the pull of the customer in pursuit of perfection.” Transition: “The last definition is the one that Georgia Tech has created.”

37 “Where’s the bottleneck in my company?”
Lean Thinking Lean Thinking begins with the SYSTEM “A group of interacting, interrelated, or interdependent elements forming a complex whole.” American Heritage Dictionary, rd Edition “Where’s the bottleneck in my company?” “A Lean Thinker’s view is to look at a company as a holistic system. Everything interacting, interrelated or interdependent, which forms a complex whole.” “When implementing lean you don’t just focus on one particular area on the manufacturing shop floor, but look at the whole system and approach the areas that are bottlenecks or problematic areas that hold you back from accomplishing your goals.” Transition: “Lean does not have to be complex. Always remember the ultimate goal is eliminating wastes.”

38 Lean Manufacturing Agenda
A Manufacturing Background Lean Manufacturing Foundation: Waste Reduction Lean Manufacturing: Basic Concepts Further Concepts Transition Slide: “Let’s move on to the next bullet on our agenda, Waste Reduction. As I mentioned, Lean focuses on reducing wastes.”

39 Foundation of Lean Manufacturing
Waste identification and reduction Value adding vs. non-value adding 5S Layout/Flow Point-of-Use Storage Setup Time Reduction Batch Size Reduction “In the next couple of minutes we are going to discuss identification of waste, VA and NVA, Housekeeping and layout and flow.” Transition: “First let’s talk about Waste.”

40 What’s Stopping Industry?
Waste!!! NOTE: Bring up the title first, ask the question, then bring up the answer. Question: “ What is stopping you from getting rid of the duplication and redundancy in your processes.” Note: Take a minute to get feedback and record on flipchart. Transition: “The best place to start is to define waste.”

41 Waste Defined Does NOT add value
Does NOT result in conformance to customer specs Customer would NOT pay for it! “Waste is anything that does not add value to the process or any activity that does not conform to customer’s specification. Most importantly, waste is any activity that the customer is not willing to pay for.” Transition: “To make it easier to identify waste we have two key definitions.”

42 Value Added Transform materials to product Meets customer expectations
Customer would pay for it! “Our first definition is value-added activities. Value-Added activities are any activities that transform the materials into products to meet the customer’s expectations. It’s easy to think of it as what the customer is willing to pay for.” Question: During the last round, what would you classify as VA? “Right, actually inserting springs or diodes or LED or resistors into the board.” Transition: “Great, now that we understand the definition of value-added activities, we need to understand the definition of non-value added activities.”

43 Non-Value Added Does not add value Is not necessary
Should be eliminated, simplified, reduced, or integrated “The opposite of value-added activities is non-value added activities. These are activities that take time and resources but do not add value to the product. For example, waiting for material to be delivered to an operation. Question: “Can you name some NVA that you saw during the last round? “Right, waiting for orders, waiting for an operation, getting up from the workstation to get instructions, movement of material are just a few examples of NVA activities. Most importantly, these are the activities that you want to eliminate from your processes.” Transition: “We can further classify the wastes so that we can find them easily in your company.”

44 Studying Waste VALUE ADDED Drilling Machining Cutting Welding
Assembling Parts Painting NON-VALUE ADDED Storing Set - ups Inspecting Moving Conveying Waiting Deciding Reworking Traveling Transporting Paperwork “Remember, value-added activities are activities that transform the materials into the end product and that the customer is willing to pay for.” Question: “What would be some examples of VA in your facilities?” Write answers on Flipchart. “Exactly, drilling would be VA, actual cutting of the part in a machine.” “Non-value added activities are activities that do not add value but take up time, resources and money. Examples of that are the eight types of waste that we just talked about.” Question: “Can anyone, without looking at your book, name off the eight types of wastes?” “Great, sometimes we have activities that we classify as non-value added but are difficult to totally eliminate. For example, transportation. You still need to get the materials from the receiving dock to the line. If you can’t eliminate this step, the question should be how can you reduce it as much as possible.” Transition: “Let’s take another look at what could be value-added and non-value added activities.” NON-VALUE ADDED BUT ESSENTIAL

45 Where is Waste? Overproducing Defects - Rework or Scrap Inventory
Waiting of parts/people/machines/ paperwork Transportation of parts, people, paper Extra Processing Motion of people, machines Unused employee ideas “Overproducing is when you make more, or move ahead or faster than the next process. Companies typically overproduce to hide the ‘rocks’ in the water. For example, long setup times or wanting to avoid setups, low confidence level in machinery, and justification of an expensive machinery. This is really one of the worst type of wastes because it leads to excessive inventories, excessive transportation, and potential for scrap.” “Defects is another type of waste because it wastes materials, and both person and machine hours making bad product, inspecting bad product and segregating it from good, and correcting bad product. “Another type of waste is inventory. Inventory is a waste if you are holding excessive amounts of WIP between processes, raw materials, and finished goods. All this extra inventory causes companies to use cash to fund the interest of these materials or products. This is called carrying cost. Inventory is also difficult to reduce because holding extra inventories protects companies from uncertainties and inefficiencies such as long setup times, unpredictable suppliers, and lack of flexibility. “Waiting for parts, people, machines, and paperwork is a big waste. It delays the time that we can complete a process and causes frustrations.” “Unnecessary transportation causes us to spend time on money moving inventory around the plant multiple times versus the least amount.” “Extra-processing or over-processing are activities that are done over and above the customer requirements or unnecessary steps that do not add value. For example, a customer asked for a widget with two holes but we engineered the part to have three. Another example may be washing parts because they became dirty sitting in inventory.” “Motion is a waste when a person or a machine has a movement that does not add value to the product. For example, walking 5 steps to get material versus having the material at the point of use.” “The last type of waste is the worst of all because it is not utilizing employees’ ideas. The employees who have worked or work in a particular area have the answers to the problems or know where the waste is in the process. We need to make sure to tap into those resources.” Transition: “We have focused primarily on wastes on the manufacturing floor but wastes are throughout plants.”

46 Non-Value Adding activities Value Adding activities
Waste in Your Plant Product Leadtime 95% 5% Traditional Focus Lean Focus “Waste is everywhere on the shop floor, in the administrative areas, everywhere. All these wastes cause extra time to produce the product (known as lead-time) to be excessive. If we followed a product through a plant from the time the raw materials were received to the time the product was shipped, we would see a lot of non-value added activities occurring. That is what the red represents: non-value added activities such as materials sitting in inventory, parts being moved multiple times, waiting for materials, etc. The green represents the value added activities. As you can see the value added activities are only little slivers of time. “If we grouped all the non-value added activities, it would total to 95% of the total time to produce the product. And if we grouped all the value added activities together it would be only 5% of the total time. So what does that mean in real numbers? Let’s say the time that we receive materials to the time to ship took 10 days. Only half a day of these 10 days is spent transforming the materials into the final product. Wow! All the other time is the non-value added activities.” Question: “If we look back over time, where has management or support staff focused to improve the process?” “Right, on the value-added activities or making the machines run faster. The Lean approach tackles the non-value added activities or the 95% of waste that is taking up all the time.” Transition: “The first step to reducing waste is having an organized workplace.” Note to Instructor: If you have time, develop a process flow for the red devils. Have the group give approximate times for travel, queue time, and assembly of one piece. Add up the value added time and it should be a small percentage of the 20 minutes. Use 20 minutes because typically no one gets a red devil out in less than 20 minutes. You can even prepare for this by having your IE’s take times of activities during the first round. Note to Instructor: Another option is to draw on a flipchart a circle and showing that 12% in VA (pie) and 88% is NVA which represents Toyota’s non-value added / value added makeup. And stress that they have been trying to reduce waste for years and continuing driving up their VA%’s. Non-Value Adding activities Value Adding activities

47 Lean Manufacturing Agenda
Lean Background Lean Manufacturing Tools 1-6 Lean Manufacturing Tools 7-12 How to Implement Lean Transition Slide: “Let’s move on to the next bullet on our agenda, Lean Manufacturing Tools. As I mentioned, Lean focuses on reducing wastes and these tools help.”

48 Lean Manufacturing Tools
Layout/Flow Point-of-Use Storage Setup Time Reduction Batch Size Reduction Using Takt Time to Balance “In the next couple of minutes we are going to discuss READ TOPICS.” Transition: “First let’s talk about 5S, which is good housekeeping practices.”

49 5S A safe, clean, neat arrangement of the workplace which provides a specific location for everything and eliminates anything not required. “5S is a 5-step philosophy that can be defined as the foundation that creates a culture for Lean Manufacturing. Good housekeeping exposes the problems and allows you to find the root cause of a problem faster. For example, if there is a puddle of oil and housekeeping is not done a regular basis, how would someone know the source of the oil leak? They wouldn’t, but if the area is cleaned every day, you have a greater chance of catching the oil leak. Also, good housekeeping improves employee morale, safety, and quality of the parts.” Transition: “Let’s define the five steps in 5S.”

50 A Place for Everything 5S results in a place for everything and everything in its place. What is missing from the usual industrial environment? CLUTTER! Note how easy it is to find something out of place. It’s immediately visible, without having to know anything about production operations.

51 5S Workplace Organization
Sort Set in Order Shine Standardize Sustain Question: “Can I see a raise of hands of how many keep a clean and orderly work area or have a manufacturing floor that is clean?” “Well, if you have to look for anything, then it is waste.” “The first step is to sort items that you use and that you don’t use. The items that you do not use, throw away or store in remote location. When in doubt, throw it out.” “The second step is to take what is left and to organize the tools in designated locations or “set in order.” For example, lines on the floor, signs hung from the ceiling, tool boards. If there is not a designated space for something, then it should not be in the work area. Everything should have a place and everything in its place.” “The third step is to give the area a good cleaning, “shine,” and then instill cleaning on a daily basis to maintain the area.” “The fourth step is to standardize the process throughout the company. For example, develop cleaning checklists, make work assignments and develop safety checklists.” “The last step is to develop an infrastructure to sustain the organization and develop management’s commitment by using 5S auditing boards. Audit an area to take action if the area is not maintained or congratulate if the area has sustained the improvements.” Transition: “Can you think of some more benefits of good housekeeping?” Wait for some answers.

52 Benefits of 5S Removes safety hazards
Eliminates waste caused by disorder Searching for parts and tools Highlights abnormal situations Working with poorly-maintained equipment Increases employee morale and pride Impresses current/potential customers “Good housekeeping helps to remove safety hazards and eliminates clutter in the area that could cause someone to search for tools. Also, good housekeeping highlights problems faster. I mentioned the oil leak earlier. Another example is if an area is marked off for a specific amount of WIP and the area has more or less that would tell me that we have an unbalanced line.” Question: “How many people want to work in a dirty area?” “I know I don’t want to. If people have a clean and safe work environment, morale increases and so does pride in the company.” “Also, another benefit is impressing potential customers.” Question: “What would you think of a potential supplier if their plant was dirty and unorganized?” I probably wouldn’t have the highest level of confidence. Transition: “Good housekeeping is an important way to help you uncover wastes and improve your processes.”

53 Layout/Flow The physical positioning of processes, departments, equipment, and work areas to optimize an organization’s effectiveness in achieving its operating objectives. “The next concept that we will discuss before the next round is layout and flow.” “The definition is the physical positioning of processes, departments, equipments and work areas to achieve the most efficient flow. Ultimately, you want to do this throughout the plant.” Transition : “Did you think the layout in the last round had the most efficient flow?”

54 Traditional Layout/Flow
Departmental Specialty “Right, the layout was not the best. It caused excess material handling, poor communications and excessive WIP.” “Many manufacturing operations are not too different than Buzz Electronics. Traditional manufacturers use a functional layout like this one. Machines performing similar functions are grouped together. Physical departments often form around these functions. The arrows depict material movement throughout the facility.” “A traditional layout creates its own chaos. For example, due to the separation of department, a complex schedule is created. A schedule must be developed for each department in an attempt to ensure that departments are working on the “right part at the right time.” How often do you think that happens? The more complex the system becomes, the more difficult it is to manage and the less responsive it becomes. So what is created are hot orders. Question: “ How many have a system for ‘hot’ orders?” “Other results of a traditional layout are large lot sizes and excessive material handling. Of course, it doesn’t make sense to make only ten and then have someone transport 10 parts across the plant.” “Another common problem is poor communication between departments regarding issues. People are physically separated from those with whom they need to regularly communicate to resolve problems or concerns.” “Also specialized workers were created due to the separation of departments which limits the flexibility of the workforce.” Transition: “The traditional type of layout causes plants to work in departmental silos, causing department supervisors to focus on their specific areas and not the total product flow.”

55 Lean Layout/Flow Product Focus
“To eliminate the unnecessary wastes with the traditional/functional layout, Lean focuses on organizing a plant layout by product. For example, all the machinery that deals with product A would be grouped together and the same for the remaining products. Question: “What is the advantage of grouping machinery/processes by product families?” Allow time for answers. “Some benefits are flexibility, responsiveness, reduction in lead-time, reduction in inventories, smaller lot sizes, and cross training of employees, to name just a few.” Transition: Next, let’s talk about point-of-use storage.”

56 Point-of-Use Storage Raw materials stored where used
Frequent, small shipments from vendors Requires trustworthy workforce Simplifies physical inventory tracking “Point-of-use-storage means that you locate the raw materials needed at the point of use. This concept eliminates the non-value added activities in handling the raw materials excessively. It is very important when redesigning a layout that you consider all the materials used so that you have a storage place that is in close proximity.” Question: “How could we have applied this concept during the simulation?” “Right, we could have stored the springs at the spring assembly workstation, the resistors at that workstation and so on.” Transition: “Let’s take a look at additional benefits of point-of-use-storage.”

57 Point-of-Use Storage of Parts
This tilted shelf is used to provide all the parts needed for an assembly area. Note the 5S aspects: labels, dividers, yellow marks for maximum and red for minimum inventory. All the parts needed are right at the work area. You might also see point-of-use storage using shipping containers. This works especially well with small parts.

58 Printer Cart with Paper Storage
This is a rolling printer cart with four storage drawers for different paper types, such as plain, letterhead, pre-punched, and legal. A controlled amount of replacement paper is always within easy reach. (Photographed at the Georgia Tech Regional Office in Macon).

59 Benefits of Point-of-Use Storage
Reduces material handling requirements Easier to determine raw material needs Reduces waiting for parts “As I mentioned, point-of-use storage reduces the material handling of parts. Also, because the materials are stored at the workstation, operators and management have a better idea of the usage and when materials need to be ordered. Traditionally, materials are stored in the warehouse and you would only know you didn’t have materials when you went to pull the raw materials for the next job. Point-of-use-storage allows you to become more proactive and helps eliminate unnecessary material shortages. It also eliminates most of waiting for parts. ” Transition: “Let’s talk about additional tools that we need to give the workforce to create a culture of continuous improvement.”

60 Setup Time The time from the last good product of the previous run to the first consistently good product of the next run. Gathering necessary items Exchanging parts Positioning parts Making adjustments “The definition for setup time is the time from the last good product of the previous run to the first consistently good product of the next run. Setup time includes gathering necessary items, exchanging parts, positioning parts, and making adjustments. An easy way to relate setup to time reduction is to car racing.” Question: “Where do car racers usually lose the race?” “Right. In the pit. Therefore, race car drivers have had a group of people study the process and reduce the pit-stop time to seconds. We can relate this to our production floor. Where do we lose the manufacturing race? Well, if we have setups that take longer than 10 minutes.” “Setup time is important and a necessity. If you reduce your batch sizes and you do not reduce your setup time, you will have a lot of frustrations and problems. Reducing your setup time allows you the flexibility to produce what the customer needs rather than planning how to avoid setups.” Transition: “Let’s look at some more benefits for reducing setup time.”

61 Benefits of Setup Time Reduction
Increases overall capacity Improves machine uptime Reduces start-up waste Makes smaller batches economical Reduces lead time “As I mentioned, by reducing your setup time, you have more flexibility. You also gain more capacity, and will have the ability to perform more setups without hindering the production schedule. It also improves quality through reducing start-up waste. Another important benefit is that it will reduce your lead-time.” Transition: “The next concept that we are going to discuss is Batch Size Reduction.”

62 Batch Size Reduction …Producing smaller amounts between runs
Kathy, reducing batch size was a great idea! Is it me or does this seem inefficient? Large Batches are a result of operations being set up to produce or work in departments or batches. The concept over the past 50 years or so has been to output a product or service by dividing the work into departments (silos). This worked well when there wasn’t much variety and you were producing one product but market demands began to push new products and versions, while manufacturing stayed the same. Today companies are producing batches (order quantities) that they feel are economically sound. (Balance between WIP levels, downtime on equipment due to Set-Ups, and throughput). There is a balance, but in general the more you can move toward a “One-Piece Flow” concept the better the flow of material. This means lower costs. Notice: we just discussed Set-Up Reduction prior to talking about Batch Size Reduction. There is a reason for this. Question: Why do you think it is important to understand and utilize Setup Reduction prior to Batch Size Reduction? That’s right! Reducing Batch Sizes (order quantity sizes) means that you will have more production run changes or more set-ups. Set-ups are non-value added time and so unless you reduce the amount of time that each set-up takes you are likely to reduce your throughput when applying Batch size reduction. One-Piece Flow Large Batch Size

63 Benefits of Batch Size Reduction
Reduces overall lead time Reduced WIP and inventory costs Less impact from quality problems Easier to maintain FIFO/lot control Greater flexibility Less reliance on forecasts “Reducing your batch sizes helps you reduce the amount of WIP on the floor, which equals less capital or inventory. It also helps reduce your lead-time.” “By reducing your batch size, you reduce your lead-time because now you have reduced the WIP that sometimes hides problems and cause delays. Now you are able to find the bottlenecks in your process quicker to allow product to flow. Also, smaller batch sizes help maintain first-in-first-out and lot control. And as I mentioned and showed through the example, smaller batch sizes control the number of defects. This allows greater flexibility and less reliance on forecasts.” “If you reduce your batch size, it is extremely important to reduce your setup time or smaller batch sizes will not be effective.” Transition: “The last concept we will discuss before the next production round is the use of takt time to balance operations.”

64 Takt Time Speed at which a product must be manufactured in order to satisfy customer demand Calculated Value “Takt is a German word that means beat. That is exactly what takt time is--the ‘beat’ at which the customer buys the product. Takt time is the rate at which product must be produced to meet the customer’s requirements. It is a calculated value that takes into consideration the time available for work and customer demand.” Transition: “Let’s take a look at the takt time calculation.”

65 = = Takt Time Calculation Time Available Takt Time Demand Takt Time
Example: Time Available = 8 hours per day Demand = 100 widgets per day “The calculation for takt time is the available amount of time divided by demand.” “This example uses uses 8 hours available, that means that an operator has 8 hours to work. It does not include scheduled breaks, lunch or other scheduled downtime, such as cleanup times. Available time on a shift is often less than 8 hours because of this.” “The daily demand for this example is 100 widgets.” “8 hours divided by 100 widgets equals 0.08 hours. If you take 0.08 hours times 60, it gives you the time in minutes, 4.8.” “Great, but what does this all mean? Well, if you remember that takt time is the rate at which the customer is buying the product, that means we need to produce at that same rate. This tells us that the customer is buying a product every 4.8 minutes. Therefore, we need to make a product every 4.8 minutes.” Question: Use flipchart. “For example, if my takt time is 4.8 minutes and I produce at a rate of 2 minutes. What am I doing?” Right, I am over-producing and making inventory. Question: Use flipchart. “If my takt time stayed the same, 4.8 minutes and I produced at a rate of 6 minutes. What is happening?” “Exactly, I will have a ton of late orders and not able to meet the customer’s demand. The goal is obviously to balance the operations to the takt time. It’s extremely important to be flexible and adjust if the takt time does change.” Transition: “Let’s take a closer look at using takt time.” Takt Time = 8 hours 100 widgets 0.08 hours 4.8 minutes

66 Takt Time/ Cycle Time Bar Chart
1.8 1.5 1.2 .9 .6 .3 Takt time = 1.35 Minutes This is an example of a Takt time/Cycle time bar chart. Cycle time is shown for each operator using the bars. Takt time is shown with the dotted line. The idea is to shift operations until all operators are working within the takt time. This eliminates bottlenecks and balances operations. If takt time changes (and it will vary), you should calculate the new takt time and compare it again to operations. OP

67 Benefits of Takt Time Indicates what is required of process
Provides target for production Paces production to demand Used to determine resource needs Used to balance production process “The biggest benefit of takt time is understanding your customers’ requirements and when they need the product. This allows you to balance your operations accordingly, to make sure you can meet your customer demands and meet your production targets. As mentioned before, you are working at a steady pace versus a ‘hurry up and wait’ mentality. Using takt time can help you determine the number of operators you may need or the number of pieces of equipment.” “Takt time is an essential tool to use when balancing lines and operating efficiently.” Transition: “We have covered 5S, Layout/flow, Point-of-use storage, setup time reduction, batch size reduction, and using takt time. Do you think we can brainstorm using these concepts to make the next round better?”

68 How can Round 1 be improved?
Question How can Round 1 be improved? “Remember we only produced ____ units, our on-time delivery was ____ and our profits were ____. What can we do to improve those measurables? My job is on the line because ______ expects these metrics to improve.” Note to Instructor: Have topics listed on a flip chart prepared beforehand. Record related ideas on the flipchart. Let the group know that they will have 5 minutes to brainstorm the ideas. Suggest that they call out ideas and you will add them to the flipchart. At the end of 5 minutes (use the timer), spend no more than another 10 minutes going through the ideas to see if the group wants to implement them. If group wants to change layout, try and help them organize their thoughts so they are not wasting time or eliminating people. “All these ideas are great but we have to get permission from the big ‘Kahuna’ before we can implement them.” Note to President: Principles discussed: Craft/Traditional/Lean Manufacturing, VA & NVA, 8 Types of Waste, 5S, Layout/Flow, Point-of-Use Storage, Setup time Reduction, Batch Size Reduction, and Takt Time. If the group comes up with an idea, pressure them to either explain the concept or the benefit of implementing that idea. Changes allowed for Round #2: No Instruction Crib  No Kitters New layout  Eliminate Production reports No WIP Area  Fix Packaging Machine (SUR) No Material Handler  Balance operations from takt time/cycle time The group will suggest visual controls, or other items that will be discussed next. Make up a story but you can’t have them implement those items until they are discussed in the lecture.

69 Question (Cont’d) Note to Instructor: Read ideas to president, or have people quickly justify their ideas individually. “I have been reading in that brochure you gave me, _______, that I should learn to trust and listen to my employees. So, I am going to give you this next opportunity to make some money. But realize if we don’t have profits, I can’t afford to have you working for me anymore. Let’s get to work.” Transition: “I sure hope that _________(president) attends that seminar. He/she can really use the help.”

70 Round 2 Let’s Get To Work!! Instructor:
“________, we made improvements but I still think you should sit down for these results.”

71 Results Instructor reads results for Round #2.
Note to Instructor/Facilitator: To enter data, make sure scoreboardNew.xls is in computer, make sure PowerPoint presentation is normal view. Go to Edit then click on Links. A window should open, Highlight the file scoreboardNew.xls, Click Open Source. Excel Spreadsheet named Scoreboard will open. Enter data ONLY in the spreadsheet titled as DATA ENTRY. Calculations will be done automatically. Verify results in the spreadsheet titled as SCOREBOARD. NEVER CHANGE ANY INFO ON THIS SHEET; THIS IS THE SHEET WITH ALL THE FORMULAS. Save excel file after you entered information. Go back to LO file, make sure to be in normal view. Click once onto spreadsheet on slide (should see white boxes highlighting object). After spreadsheet is highlighted right click the mouse. Click onto “Update Link,” you should see that spreadsheet updated. Page down to second spreadsheet and highlight object, right click, update link. You need to update each slide every time you make a change in the excel file. Instructor reads results for Round #2.

72 Results Instructor reads results for Round #2.
President: “You made improvements but not enough! Cycle times are still long, on-time deliveries are pretty much non-existent still and profits like this are going to run me out of business.” “_______, (instructor) since I did see some improvements, I am going to allow you to teach the group some more lean principles. I am going to review that brochure you gave me about how to manage people effectively and get some lean training myself. It does seem to be working, but we have to do more!” Transition/Instructor: “Thank you ______, I promise I won’t let you down.”

73 Lean Manufacturing Tools 1-6
Layout/Flow Point-of-Use Storage Setup Time Reduction Batch Size Reduction Using Takt Time to Balance Try to get a rousing “Yes”! Someone will point out, though, that it is not enough. DID IT WORK?

74 Lean Manufacturing Agenda
Lean Background Lean Manufacturing Tools 1-6 Lean Manufacturing Tools 7-12 How to Implement Lean “We have some more lean manufacturing concepts to discuss, which might help us improve even more.”

75 Lean Manufacturing Tools 7-12
Visual Controls Quality at the source Standardized Work Workforce/management practices Pull Systems – Make to Order Total Productive Maintenance (TPM) Transition Slide: “During this lecture we will discuss visual controls, quality at the source, standardized work, workforce/management practices, pull systems, and total productive maintenance (or TPM).”

76 Visual Controls Simple visual signals Efficient Self-regulating
Worker managed “Visual controls should be simple. They should allow someone to walk into an area and have a immediate understanding of the situation or condition. If someone has to think about a visual control, it’s probably too complicated. Visual controls are efficient and should be low maintenance. Operators should be able to manage and change visual controls when necessary.” Transition: “When I think of visual controls I think of universal signs that everyone understands. When I have traveled to foreign countries, international visual signs are a must for me to get around.”

77 Types of Visual Controls
Lights Cards Inventory “Visual controls can be in a form of a light. Some companies have installed lights to help identify machine status. A green light indicates the machine is running, a yellow light shows if a supervisor is needed, and a red light indicates the machine is not running.” “Cards such as kanban cards can be helpful to indicate when to produce more product, re-order points, etc.” “Inventory or raw materials may be stored in such a way to indicate that, when an item gets below a certain level, it’s time to re-order.” Transition: “The next slide has more examples of visual controls.”

78 Types of Visual Controls
Red Zone Yellow Zone Green Zone Part # Shaft Standard Pack: 100 pcs. Number of Signals: 10 Part # Clutch Standard Pack: 30 pcs. Number of Signals: 15 Information “Easy to recognize signals include a hazard symbol, a no-smoking symbol, and a control chart. Other signals include a kanban board and standard work instructions. Some easy ones to think of include a stop light, stop sign, and traffic signs, all of which must be understood immediately. Other visual controls I have seen are painted footprints to show the operator’s routine and shadow boards. Shadow boards outline the tools stored on the board, so when the tool is taken you know exactly what was taken and where it needs to be put back.” “Visual controls are meant to help simplify the situation and help the operations run smoothly.” Transition: “Let’s look at a few examples, then review the benefits of visual controls.”

79 Visual Control in an Office Setting
Most of us have seen this kind of board at one time or another. It visually signals whether someone is in their office or out. As long as people update the board on a regular basis, it saves time by not having to look for someone.

80 Visual Control in a Factory
In the aerospace industry, it’s critical that mechanics know where all their tools are to avoid foreign object damage. This is another type of “shadow board” to clearly and visually indicate when any tools are missing.

81 Benefits of Visual Controls
Immediate understanding of condition Improved safety and housekeeping Reduced potential defects Reduced work-in-process Self-regulating Easy to use “The biggest benefit of visual controls is that it allows someone an immediate understanding of an area or situation. For example, you may walk into a cell and immediately understand the operator’s routine because there are foot prints on the floor or a layout of the area indicating the operator’s routine.” “Another extremely important benefit is that visual controls can help you improve safety and housekeeping. Visual controls can help you do this by having a place for everything and everything in its place.” “Visual controls will help you control defects or highlight defects through pictures/jigs that you have put in place. And visual controls will help reduce your work-in-process because there is now a clearly marked space and accurate number of the maximum amount of WIP. If there is more WIP in that space than allowed, you know you have a problem.” “Most importantly, visual controls are self regulating and easy to use.”

82 Pass Fail Quality at the Source
Places responsibility for quality on the worker doing the job Promotes doing the job right the first time Pass Fail “The next concept we will discuss is quality at the source. This means placing the responsibility for quality on the worker doing the job. A good motto to have is, “don’t make or pass bad parts on to the next process.” Actually, Quality is considered one of the pillars of Lean manufacturing. It is essential to have good quality parts because in a Lean environment making bad parts is a waste, as it consumes time and resources that could have been spent making good parts.” “For operators to take this responsibility, they must be given the tools and time to inspect the parts before passing the parts to the next operation.” Question: “In the last round who knew if the part was good or not?” “Right, the only person was the inspector and if it was bad, the rework person fixed the problem.” Ask the person who was the Reworker: “How did you rework the boards? And how easy was it?” Transition: “What do you think the benefits are from quality at the source?” Allow group time to give answers.

83 Benefits of Quality at the Source
Reduces need for rework Prevents work on defective product Simplifies prevention and repair of defects “Exactly, not passing or not producing bad parts reduces the need for rework and prevents adding labor and materials to a defective part. Also, it’s easier to fix a problem at the source of assembly versus using someone with less expertise in the process. The goal should be to build quality into the product.” Transition: “The next concept that we are going to discuss is Standardized Work.”

84 Standardized Work Where there is no Standard, there can be no Kaizen Masaaki Imai Three Elements of Standard Operations: Standard Operations Sheet Clean Grind Takt Time Work Sequence Standard WIP 1 2 Machine 4 Read quotation by Masaaki Imai (Author of Kaizen) During WWII, skilled mechanics and machinists were sent to the battle fields, leaving behind men and women who were unfamiliar with the equipment and operation to backfill those positions. This possibly was the beginning of Standard Operations in Japan TPS - There are three components/elements of Standardize Work. Takt – The first standard is to determine is what is needed. What is the ultimate expectation in meeting the customers needs? This is the takt time, the “beat” at which the customer is buying the product. Work Sequence – Once Takt is determine, we still have a problem. There are differences in the way people & machines perform. Thus the need for defining a Standard Work Sequence. This will provide the benchmark for improvement to occur. Standard WIP – once a standard has been established for man and machines, we need to establish the standard for material. Specifically this is called Standard WIP. Make it Visible! 6 5 3 QA Debur Drill Takt Time Cyc Time Std WIP Quality Chk Safety Focus # of Emp 4 min 4 min = 6 2

85 Why the Emphasis on Standardization?
It is the foundation for continuous improvement (promotes Kaizen) Makes MBWA more effective Builds trust Improves Training/Cross Training Encourages/provokes “How can this work even – better?” thinking among employees Promotes team environment Remember, your goal is to build a environment that will allow for ongoing improvement!! If you are going to “build” something, what do you need? You need a solid foundation. Making improvements to shop-floor operations that aren’t standardized is like building a house on sand instead of solid ground. Standardized Operations makes it easier to identify improvement as well as to carry forward those improvements throughout the facility (benchmark). As a supervisor, your job is to be on the floor as much as possible monitoring the operations; being available to identify and remove obstacles. This is frequently called WBWA or “management by walking around.” It is much easier to monitor something that is consistently done from work station to work station and from operator to operator. Visual standards builds trust between the operator and the supervisor as well as between other operators because of shared knowledge. It also makes cross-training easier, because there is a specific way to do a job. Think back to the training on bending the spring to insert components. If operators are doing the same job the same way from work station to work station, don’t you think that they would be more apt to identify a better way of doing things? Because everyone agrees on how to do a certain job, you have better communication, which means better teamwork! Continue to revise the standard; IMPROVE!!!

86 Workforce Practices Cross-trained employees Multi-skilled workers
Employee problem-solving teams Team-based cells Continuous improvement philosophy These require effective leadership, a culture change, and respect for the workforce! “Cross-trained and multi-skilled employees allow management to become flexible. People can be immediately moved where they are needed versus used to produce parts that are not needed.” Question: “Does anyone remember the last type of waste we discussed?” “Right, not using employee ideas. It is so important to listen to the employees. But we must also give them problem solving tools and techniques to make the improvements and help them sustain these improvements. By giving the employees these tools, they are more likely to solve the problems on their own, work in teams and develop a philosophy of continuous improvement.” Transition: “Let’s review in more depth the benefits of good workforce practices.”

87 Benefits of Workforce Practices
Increased morale and job security Quicker response to schedule changes Efficient handling of problems Improved communication, cooperation, and trust Better understanding of the “big picture” Increased acceptance of management decisions Increased flexibility “As I mentioned earlier, by involving employees and giving them the tools they need, they will have a better outlook on the job. Also, employees and management will be able to respond quicker to changes or ‘hiccups’ in the process. This improves communication, cooperation, and trust because everyone understands the goal and targets they are working toward. I think a big advantage is that employees that solve problems and deal with management on a daily basis understand management decisions better and understand the ‘big picture’. This concept is essential to a successful implementation of lean.” Transition: “Now that we understand the benefits of having the workforce involved, what type of management support do we need?”

88 Management Practices Must be a partnership NOT a quick fix
Requires discipline Requires senior management commitment Avoids “yet another program” syndrome “We need a lot of help and support from management. Management needs to understand that Lean Manufacturing is not a quick fix. Remember, it took Toyota years to develop a system and they are still working at improving this approach. A disciplined approach is required.” “Also, if you look at the companies that have had the most success with Lean, they are companies that have commitment from senior management. That is a key factor. Senior management committed to lean understand that this is not another ‘flavor’ of the month but the next generation in manufacturing. Another key point to note is that Senior Management that understand Lean Manufacturing also understand that there are going to be some bumps in the road but they know that this is the best approach. Ultimately, it will make their company the best. Some great books to read about lean successes are Lean Thinking and Becoming Lean. “ Transition: Let’s look at one the biggest wastes in manufacturing – work in process and inventory.

89 The Waste of Work-in-Process
Ties up capital Decreases flexibility Increases opportunity for scrap Requires more physical space Lowers customer satisfaction “Work-in-process, or WIP, ties up capital that could be used elsewhere, decreases production flexibility, increases the opportunity for scrap through obsolescence or damage, requires more physical space for storage and warehousing, and ultimately lowers customer satisfaction.” Transition: “So we’ve established that excessive WIP is a bad thing. Now let’s talk about how to control it.”

90 1 2 3 Push vs. Pull Systems Push System
Schedules production based on forecast Pull System End-of-line authorizes production to replace only what has been consumed 1 2 3 Product Flow Signal Flow “Before we talk about a Pull system, we need to talk about the traditional system, which is a push system. A push system is a replenishment system that has production and purchase orders initiated by projected demand. The push system continues to produce orders regardless of whether consumption is taking place or not. Also within this system, processes operate under the philosophy of ‘make as much as you can as fast as you can.’ The result of the push system is high inventories, large lot sizes, management by fire fighting, poor communication, moving materials multiple times, long lead-time and (due to the excessive inventories) a potential for obsolete or damaged parts.” “A pull system is driven by customer demand rather than a forecast. The customer pulls the product from the final process step. The final process then communicates through a signal to the previous operation that parts were used and need to be replenished. It’s a rippling effect because that process communicates to the previous process step they need more parts and so on. Also, this system works at a steady pace and does not produce until the next process needs a part.” Question: “ In the first round were you working in a push system or pull system?” Transition: “Definitively a push system. Let’s take a closer look at the characteristics of a push system.”

91 Characteristics of a Push System
“Have you ever been overstocked with parts or materials you didn’t need but short of items you needed desperately? This poor guy is getting a delivery he doesn’t need, but somebody somewhere has determined that he’s supposed to need it. “This frequently happens due to a number of characteristics common to push systems:” “First, the schedule is driven by what we predict will be needed, rather than actual demand. Managers tend to emphasize machine utilization. The goal is to produce as much as possible to cover overhead, regardless of market demand. The same thing happens with materials. The push to use raw materials generates lots of work-in-process, which increases throughput time. Long throughput and lack of flexibility make it hard to respond quickly to changes and special needs A push system takes more management effort to balance the line and keep the right product on track.” Transition: “A push system is driven by forecast and a pull system is driven by actual customer demand. Now, let’s take a look at characteristics of a pull system.”

92 Characteristics of a Pull System
“As I mentioned, in a pull system the customer is driving the pace of production. The pull system controls the WIP through Kanban cards or other types of signals. A kanban could represent one piece or a batch size. It is the amount of WIP that is needed to maintain a steady pace and buffer the delay in response time between processes. This minimizes the WIP and also exposes the problem areas faster. This creates an atmosphere that allows quick adjustment to customer changes or problems that may occur.” Instructor, ask the students: “So why are we looking at a picture of a woman shopping in a grocery store – what’s that got to do with manufacturing?” “What we now call Pull Systems in manufacturing were originally inspired by supermarkets. When Taiichi Ohno of Toyota visited the US in the 1950s, he marveled at the information flow used to keep supermarket shelves full, and adapted the concept of a customer choosing an item from a retail setting to manufacturing.” Transition: “What are some other advantages of a pull system?”

93 Benefits of a Pull System
Manufactures only what is needed Improves communication of customer needs Provides common system for moving material Eliminates scheduling complexities Reduces lead time and WIP Inventory counts quick and easy Pull systems provide many benefits: The plant manufactures only the product needed by the customer, so excess inventory is reduced or eliminated. It improves internal communication of customer needs through visual controls. It provides a common system for moving material. Pull systems eliminate the need for complex scheduling by utilizing kanban cards or min/max levels. It reduces lead time and WIP. Inventory counts are completed quickly by counting the number of pull signals (or kanbans). “To summarize the benefits of Pull systems, you are only making what is needed which results in lower inventories, less WIP, reduced lead-times and flow created within the production line. By using a pull system, you will improve communications through the Kanban cards or the visual signals that alert a process that they need to start producing a part “ Transition: “The next slide demonstrates a pull system with kanban cards.”

94 X X X 1 2 3 How Does Pull Work? Signal Flow Product Flow
Note to Instructor you will manually have to click through this slide. To help the group understand this concept, you may want to pull boards from the kit and have a visual demonstration with boards and kanban cards. Further explanation at this point eliminates some of the confusion in the last round. “If I click once, it demonstrates I am pulling material out of stock because I have a customer order. That leaves an ‘X’ or a kanban signal to operation #2 that #3 needs more parts. Operation #3 pulls the part from Operation #2 and that leaves an ‘X’ or kanban signal for Operation #2. Operation #2 pulls parts and Operation 1 now has an ‘X’ or kanban signaling that they need more materials.” “Just remember, a pull system is working to the customer demand, each operation is producing as parts are pulled. This means no building ahead and it may mean that an operation sits idle because the next process downstream has a longer cycle time. That’s ok because it highlights the bottlenecks and the need for improvements.” Transition: “The last lean technique we will cover is total productive maintenance.”

95 Total Productive Maintenance
Basic Principles: Lean production is not possible without highly reliable equipment. Proactive, productive maintenance eliminates equipment-related waste and improves equipment reliability. Proactive, productive maintenance is a shared responsibility.

96 Benefits of TPM 2 - 5 Years: Unplanned downtime 50-60%
Breakdown costs % Spare parts costs % Product defects % Lead times % On time deliveries % Review the results shown on this slide (taken from a survey of companies who have fully implemented TPM). Transition: Do you think we can improve Round 2 by incorporating the concepts that we just learned? Let’s brainstorm and see what ___________ will let us implement.

97 How can Round 2 be improved?
Question How can Round 2 be improved? Note to Instructor: Have topics listed on a flip chart prepared beforehand. Improvement ideas in this section do not fit so readily into the categories, so just make a list on the flip chart. Let the group know that they will have 5 minutes to brainstorm the ideas. Suggest that they call out ideas and you will add them to the flipchart. At the end of 5 minutes (use the timer), spend no more than another 10 minutes going through the ideas to see if the group wants to implement them. If group wants to change layout again, try and help them organize their thoughts so they are not wasting time or eliminating people. During the brainstorming of possible improvements, introduce the use of a takt time/cycle time bar chart to help level the workload. If possible, use actual data the Industrial Engineers have collected during Round 2. Use a flip chart to demonstrate the bar chart. You may have to facilitate the discussion on leveling. This should take no more than 10 minutes even with questions and discussion. “__________, I think we have some great ideas that will definitely make a difference.” Note to President: Principles just learned: Visual Controls, Quality at the Source, Standardized Work, Workforce/management practices, Pull Systems, Total Productive Maintenance Changes for round #3: Refine layout to cell configuration Eliminate Production Scheduler Use visual templates Gold inspects own product Eliminate Reworker Cross-training Leveling to remove bottleneck based on takt time Reduce batch size to one Introduce pull with kanban squares

98 Question (Cont’d) Note to Instructor: Read ideas to president.
“ You know, some of these ideas are really interesting. We sure need to see some improvement or we’ll be out of business.” NOTE: President announces export Gold boards, which will absorb any “excess” production. Be sure to be supportive of lean because you are seeing improvement.

99 Round 3 Let’s Get To Work!! Instructor:
NOTE: Intervals between the first 10 Customer Orders shorten in this Round so delivery can be faster. NOTE: Remind workers that as many Gold Buzz as they can complete can be exported immediately. “Great job everyone, we definitely made an improvement. Let’s take a look at the results.”

100 Results Instructor read slide.
Note to Instructor/Facilitator: To enter data make sure scoreboardNew.xls is in computer, make sure PowerPoint presentation is normal view. Go to Edit then click on Links. A window should open, Highlight the file scoreboardNew.xls, Click Open Source. Excel Spreadsheet named Scoreboard will open. Enter data ONLY in the spreadsheet titled as DATA ENTRY. Calculations will be done automatically. Verify results in the spreadsheet titled as SCOREBOARD. NEVER CHANGE ANY INFO ON THIS SHEET, THIS IS THE SHEET WITH ALL THE FORMULAS. Save excel file after you entered information. Go back to LO file, make sure to be in normal view. Click once onto spreadsheet on slide (should see white boxes highlighting object). After spreadsheet is highlighted right click the mouse. Click onto “Update Link,” you should see that spreadsheet updated. Page down to second spreadsheet and highlight object, right click, update link. You need to update each slide every time you make a change in the excel file. Instructor read slide.

101 Results Instructor Read Slide.
President: “The profits improved dramatically!. So did our other measures. Great job!”

102 Lean Manufacturing Agenda
Lean Background Lean Manufacturing Tools 1-6 Lean Manufacturing Tools 7-12 How to Implement Lean Transition Slide: “We’ve discussed the background of manufacturing and a number of lean tools and techniques. Next, we’re going to discuss how to implement lean concepts within your company. But first, let’s do a quick review of the last concepts we learned.”

103 Manufacturing History
Customer Requirements 1800’s 1900’s 1700’s Time 2000 • Mass production /Automation • Assembly lines / Divided labor • High volumes / High Inventories • Cost cutting focus / Efficiency TRADITIONAL • Reduced WIP Reduced inventories • Multi-skilled workforce • Production based on demand LEAN • Custom-made, one at a time • Highly skilled craftsperson • Non-standardized work • Non-interchangeable parts CRAFT “We started with craft manufacturing, which had the characteristics of highly skilled workers but no standardization, and items were typically expensive. The industrial revolution moved us into the next phase, traditional or mass manufacturing. In a traditional company you would usually see high inventories, specialized labor, high volumes and a focus on machine or operator efficiencies. Lean manufacturing is the new generation. Lean manufacturers utilize employees to solve problems, have less WIP, shorter lead-times, and produces what the customer wants, which causes the company to have less inventory.” Transition: “Let’s take a closer look at the differences between Lean and Traditional Mfg.”

104 Lean vs. Traditional LEAN Simple and visual Demand driven
Inventory as needed Run by value adders Small lot sizes Minimal lead time TRADITIONAL Complex Forecast driven Excessive inventory Overhead run Batch production Long lead time “Lean manufacturing stresses working ‘smarter versus harder’ and how we can solve problems with our brains and equipment that we have versus buying a new ‘cash hog.’ The biggest difference is that lean allows you to react to customer demand, where traditional manufacturers had so much inventory and were so focused on large batch sizes that if a change occurred, it was a nightmare. The change would cause frustration and a lot of extra cost.” Transition: “Most importantly, we need to think how lean effects a company versus a department.”

105 Where Lean Applies Product Lead Time
Administrative Total Quality Product Development Metrics “Lean Manufacturing is a holistic approach to eliminate waste throughout the whole system. Lean manufacturing is not limited to one department or the manufacturing shop floor. Lean concepts should be incorporated throughout the business from product development to shipping product out the door. “ “Sometimes we try to focus on the shop floor because it is easier to see immediate results, but to become a Lean Enterprise you must eliminate all the wastes throughout your system.” “More importantly, don’t do projects just to say that you did a improvement project. Project implementation must be done with a logical and systematic approach. If not, what is going to happen is you will become discouraged and will not see the results, or you could potentially cause another area to have problems.” Transition: “So how do you get started with the implementation of lean?” Operations Supply Chain Inventory Management A holistic approach to eliminating waste in the entire system

106 Value Stream Mapping • Determining the product families •
Product Family Determining the product families Current - State Understanding how the shop Drawing floor currently operates. (Foundation for future state.) FUTURE - STATE Designing a lean flow & how DRAWING to get there. First, you must know where to start. That’s where value stream mapping comes in. The current state map provides details of where your operation currently stands. Just as we did today, you then brainstorm various lean techniques you can put in place to solve problems or make improvements. The future state map visually records these potential improvements, allowing you to prioritize projects and plan for implementation. Once the improvements have been made, the “future state” you have achieved becomes the current state of your organization. You then repeat the process. REPEAT DO IT! Implementation

107 Movement of Production Movement of Finished Goods
Value Stream Map Icons Supplier/Customer C/T = 20 sec S/U = 10 min Uptime = 90% Process General Icons Process Outside Sources Data Box Operator Kaizen Burst Material Flow I 1 X daily Movement of Production Materials Movement of Finished Goods Inventory Truck Shipment Rail Shipment A B C A B C F I F O First in/First out Supermarket Buffer Pull of Materials Information Flow These are typical icons for value stream mapping, but they are not set in stone. Ultimately, they are all made up, so you can add icons as long as you clearly communicate what they mean. Ship Schedule daily Manual Information Flow Electronic Information Flow Look Production Schedule Production Instruction Card Leveling Box R B G Material Withdraw Card Kanban Post Signal

108 Current State Map: Buzz Electronics
Resister 1 person C/O = 60 CT 20 Kitting 2 people C/o 0 CT = 50 Spring C/O 60 CT = 15 Test C/O = 0 LED CT = 10 Ship 30 Secs 5 Red, 5 Blue Supplier C/O = 40 Diode I 30 64 7 6 12 4 Customer Production Control Buzz Industrial Engineer Sales 20 Min Forecast Factory Order Forms Production Reports Quality Report Shipping Report Customer Orders Order every 10 Sec 300 sec 640 sec 20 sec 50 sec 30 sec 60 sec 40 sec 70 sec 120 sec 0 sec 10 sec 15 sec Lead Time = 1425 sec TAKT Time = 10 Sec This is an example of the information a current state value stream map contains. Typically these are hand-drawn. But many people are immediately transferring them to an electronic drawing to facilitate communication. The current state map shows all the information about the product and information flows so you can see what’s actually happening. Processing Time = 195 sec

109 How to Get Lean by Cutting Waste
Understand WHAT and WHERE waste exists Map value streams Measure each process Identify non-value added activities Create a PLAN to eliminate waste IMPLEMENT plan to eliminate waste MEASURE and review results, then REPEAT “First you need to understand and identify the waste. This can be done through value stream mapping. This process is looking at a product family from receiving of materials to shipping and the information flow that occurs. This allows you to analyze a situation and develop a plan.” “Next, develop a plan to eliminate waste that is aligned with your company’s strategic goals and objectives. Most importantly, get your executive management’s support and commitment.” “After you have a plan, don’t sit in a room and analyze when it would be best to get started. Just go out and start following your plan of projects and start implementing. Before you start implementing, though, always make sure you have a baseline to measure where you started and the improvement you have made. Repeat and repeat. I’ll tell you the first projects will be a mixture of results but you must continue to tweak projects to become a Lean Manufacturer/Enterprise. Remember, Toyota has been doing this for over 50 years and they have improvement events at least once a month to improve areas that they had a project on maybe 6 months ago. Never think that once you have a success or improvement that you can’t go back and improve. You must continually improve because as time changes so do customer requirements, employees, and so on. Remember to go for the base hits, not the home runs.” Transition: “Let’s review the building blocks of lean.”

110 Lean Building Blocks Continuous Improvement Pull/Kanban Cellular/Flow
TPM Quality at Source POUS Batch Reduction Standardized Work Setup Reduction Teams Value Stream Mapping 5S System Visual Plant Layout The lean enterprise uses a variety of lean tools and techniques. We start with basic lean concepts, then move on to more advanced approaches. But all of the techniques are valuable and can be used over and over again.

111 Summary Continuous improvement in steps
Tried many ideas and made adjustments Cut lots of waste and increased capacity Shared information and cross-trained employees Changed our management style Bottom line benefits: Improved service to the customer (throughput) Reduced work-in-process inventory Increased profits! “Let’s summarize what we’ve done today:” We made continuous improvements in steps throughout the day. We tried many new ideas and made adjustments. We cut lots of waste to streamline the process to create flow. We shared information and cross-trained employees. And we changed our management style. We showed bottom line benefits to becoming more lean which resulted in a higher customer service level, reduced WIP and increased profits. Transition: “What items should you take back to your plant? The first one is that you had fun today and learned a great deal about lean manufacturing.”

112 Ideas to Take Back Lean Manufacturing does work
Gain buy-in from top management Form a team to lead implementation Build employee awareness and buy-in “Besides having a fun day, you learned that lean manufacturing principles do work and it can work in your company. Just be sure to take the time to understand how and to develop a plan. “As you are implementing lean, you need buy-in from top management. This is a must for a success implementation. Form a team to help develop an implementation plan and to follow through with the plan. Most companies that have implemented lean have involved everyone and have done a lot of communication regarding what is lean, what the strategy is, how they fit into the picture, how they will be involved, and upper management commitment.” Transition: “If you want to learn more about lean or how to get started we have a few suggestions.”

113 To Learn How Lean Fits Your Plant
Call Georgia Tech for a free consultation Read books on lean manufacturing Ask us for an on-site Executive Briefing Tour a plant Have the Lean Overview presented in your plant Learn, Plan, Implement, Succeed! “Call Georgia Tech. We want to help you and are more than willing to visit your plant. State funding allows us to provide free one-day assessments. If you need further help, we can provide training and coaching. If you need help discussing lean with your top management, we can provide an on-site Lean Manufacturing Executive Briefing. It lasts approximately 3 hours and explains the benefits of lean and what we can offer to management. Read books. That is a good way to get started. Some good books are: The Machine that Changed the World by James Womack Lean Thinking by James Womack The Goal by Eli Goldratt Becoming Lean by Jeffery Liker These are just a few books that can help. And we can also come to your plant to teach this course to help get you started.” Question: “How are you going to get started or apply these concepts to your plant?” Note to instructor: Record answers on a flipchart; these should be your leads or follow-up calls. Transition: “As I have mentioned, we can help you get started. Besides this course, Georgia Tech offers much more support for implementation of Lean Manufacturing.”

114 How Georgia Tech Can Help
Lean Manufacturing Executive Briefing Attend a network meeting Lean Manufacturing Courses On-Site Coaching Services Assisting your suppliers “As I mentioned, we can conduct an executive briefing for your management or arrange for a free one-day assessment. Sometimes the EDI Network Meetings have a lean topic. We can also conduct this course or courses on value stream mapping, 5S, setup time reduction, continuous flow work cells, pull systems, supply chain management, and total productive maintenance. Not only do we have courses, but we can help you implement these concepts.” Question: “Do any of you have questions about today’s training or about how to get started?” Take time to answer questions. “Great! Before you leave, we need you to fill our your evaluations and then I will hand you your certificate. If you have any questions, we have left our business cards out for you to take and please feel free to give us a call. Thanks for a great day.”

115 Please complete your evaluation form!

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