Kaizen: continuing improvement Dr. Ron Tibben-Lembke SCM 462

Kaizen A philosophy of continually improving all areas. Personal life, home life, social life, working life Workplace: continuous improvement involving everyone- managers and workers alike Quality: There is very little agreement on what constitutes quality. In its broadest sense, quality is anything that can be improved. When speaking of “quality” one tends to think first in terms of product quality. When discussed in the context of KAIZEN strategy nothing could be further off the mark. The foremost concern here is with the quality of people. … Building quality into people means helping them become KAIZEN conscious. Masaaki Imai – Kaizen, 1986, McGraw-Hill. Pp. xx-xxi, xxiii

Kaizen How to measure and define quality? Other side of the coin is KAIZEN Nobody can dispute the value of improvement These improvements will lead to improvements in quality and productivity Quality = anything that can be improved Products and services, The way people work, way machines are used

Who started it all? July 1950, Deming 8-day seminar on statistical quality control July 1954 J.M. Juran seminar on quality-control management. First time QC dealt with from the overall management perspective

SDSA  PDSA PLAN DO STUDY ACT

Toyoda’s Ambitious Plans Post-WWII Japanese industry in ruins “Catch up to Americans in 4 years!” Toyoda made delivery trucks and motorcycles, and not many of either

First two Toyotas imported to U.S. 1957, the early years

Elimination of Waste Knew they wouldn’t beat U.S. with product innovation, concentrated on licensing patents, and producing more efficiently Costs prevented mass-production, volume strategy of American firms. Must reduce waste & cost Shigeo Shingo (at right) & Taiichi Ohno, pioneers

Waste Waste is ‘anything other than the minimum amount of equipment, materials, parts, space, and workers’ time which are absolutely essential to add value to the product. --Shoichiro Toyoda President, Toyota Motor Co.

7 Types of Waste (Ohno 1988) Overproduction Time on Hand Transportation Waste of Processing itself Stock on Hand - Inventory Movement Making Defective Products

Couldn’t Emulate GM GM huge batches in huge factories Japan’s area is 10% less than California and 70% agricultural. Put entire population of CA into 30% of state, then add 6 times as many people. (and you thought LA was crowded). Land extremely expensive Sprawling factories not an option

Small Batches GM’s large batches require large amounts of storage space. GM produces in large batches because of significant setup costs. If Toyota had the same large setup costs, it could never afford small batches. Reduce setup cost to reduce batch size. GM didn’t think of doing this.

Setup Reduction Can’t afford to do huge runs Have to produce in small batches SMED: Single Minute Exchange of Dies under ten minutes Toyota Die Change: 3 hours down to 3 minutes

Setup Reduction Techniques Internal setups – line has to be down External setups – can be done while production continues Make internal setups into External Eliminate Adjustments Eliminate the Setup

Ask ‘Why’ 5 Times 5W = 1H 1. Why did the machine stop? Overload and fuse blew 2. Why the overload? Not lubricated 3. Why not lubricated? Oil pump not pumping? 4. Why not pumping? Pump shaft worn out. 5. Why worn out? No screen, scrap got in

Two Pillars of Toyota System Just-in-Time: produce the right parts, at the right time, in the right quantity Autonomation: ‘Automation with a human touch’ (make machine mistake-proof)

Just-in-Time Downstream processes take parts from upstream as they need. Like an American Supermarket: Get what you want when you want it in the quantity you want.

Kanban Japanese for ‘signboard’ Method for implementing JIT In order to produce, you need both material to work on, and an available kanban. Each work station has a fixed # kanbans.

Kanban Worker 2 finishes a part, outbound moves over 2 has a blue tag avaliable, so 2 gets another part to work on: 2 takes off 1’s green tag giving it back to 1, and puts on her blue tag and moves it into position. Flow of work 3 2

Kanban When 3 finishes a part, Finished parts move over one spot He has to have a red tag available to put on, He gets a part from 2’s outbound pile, And gives the blue back to 2 Flow of work 3 2

Kanban When 3 finishes a part, Finished parts move over one spot He has to have a red tag available to put on, He gets a part from 2’s outbound pile, And gives the blue back to 2 3’s production will be taken by 4, offstage right. Tag goes back into 3’s bin Flow of work 3 2

Kanban Red finishes his part next. But 4 hasn’t freed up any of the red kanbans, so there is nothing for 3 to work on now. 3 could maintain his machine, or see if 4 needs help

How is this Different? Processes can become idled (blocked) or starved This makes you painfully aware of problems in your system. Material moves through the system so quickly no in-process recordkeeping is needed.

Importance of Flow Ohno was very clear about this: “Kanban is a tool for realizing just-in-time. For this tool to work fairly well, the process must be managed to flow as much as possible. This is really the basic condition. Other important conditions are leveling the product as much as possible, and always working in accordance with standard work methods. -- Ohno, 1988, p. 3

Total Quality Management Not a lot of parts to sift through to find a good one Can’t afford high defect rates Since low WIP, get quick feedback on errors

WIP Level Less WIP means products go through system faster reducing the WIP makes you more sensitive to problems, helps you find problems faster Stream and Rocks analogy: Inventory (WIP) is like water in a stream It hides the rocks Rocks force you to keep a lot of water (WIP) in the stream

Lowering Inventory Reduces Waste WIP hides problems

Lowering Inventory Reduces Waste WIP hides problems

Lowering Inventory Reduces Waste Reducing WIP makes problem very visible STOP

Lowering Inventory Reduces Waste Remove problem, run With less WIP

Lowering Inventory Reduces Waste Reduce WIP again to find new problems

Poke-Yoke Dr. Ron Tibben-Lembke

Shigeo Shingo

Non-slip screws

Computer Poka-Yokes

Other Poka-Yokes ATMs that beep to take your card out Can’t get any cash until your card is out Indentations in surgery trays Lawn mowers stop running when you let go of bar 3.5” disks only go in one way

Cross Training To maintain the flow, workers have to be able to help out as needed Rotate workers through jobs: Keep skills sharp (managers too - prove they know what they’re doing) Reduce boredom & fatigue Expand understanding of overall picture Increase potential for new ideas

Suppliers Buyer & Supplier form JIT partnerships JIT partnerships eliminate: Unnecessary activities In-plant inventory In-transit inventory Poor suppliers

Characteristics of JIT Partnershps Few, nearby suppliers Supplier just like in-house upstream process Long-term contract agreements Steady supply rate Frequent deliveries in small lots Buyer helps suppliers meet quality Suppliers use process control charts Buyer schedules inbound freight

Supplier Relationships American model: keep your nose out of my plant. Gain info to force price cuts Lack of trust between suppliers Firm encourages suppliers to share knowledge, because they don’t worry about competing Firm helps supplier increase quality, reduce costs

Employee Input Employee has a brain, why not use it? Quality circles look for ways to improve Emphasis on Continuous Process Improvement

Preventative Maintenance Unexpected loss of production is fatal to system and must be prevented Additional maintenance can prevent downtime, or minimize length of interruptions, when they do occur