1. 1 © The Delos Partnership 2005 Application of Lean- Integration Related to Factory

2. 2 © The Delos Partnership 2005 Lean is elimination of waste Run Set up Set up Receive Suppliers Inspect Store Pick Set up Set up Queue Inspect Operation 10 Queue Set up Set up Run Operation 20 Inspect Store Queue Inspect Store Customers Operation 30

3. 3 © The Delos Partnership 2005 Acceptable Quality 5 % Defect level = 50,000 ppm 2 % Defect Level = 20,000 ppm 0.02 % Defect Level = 200 ppm 3.4 Parts Per Million = 6 sigma

4. 4 © The Delos Partnership 2005 Quality Tools required Simpler ideas force higher quality Quality is in the process not the product Operators need to do root cause analysis to identify process problems –Hence pareto charts –Histograms –Run charts

5. 5 © The Delos Partnership 2005 Quality problems identified from the process charts Problems

6. 6 © The Delos Partnership 2005 Reduce Process Variability Eliminateproblems Reduce the variation

7. 7 © The Delos Partnership 2005 Economic Order Quantity Minimum Cost

8. 8 © The Delos Partnership 2005 Set up- Definition The time taken between the completion of the last good quality piece and the start of production of the next good quality piece Time can be categorised into –External set up time –Internal set up time

9. 9 © The Delos Partnership 2005 SMED – how to achieve Take a video Record all activities related to change-over Record as internal or external Set up group of operators Brainstorm ways to reduce internal, or convert internal to external Implement Do it again and again

10. 10 © The Delos Partnership 2005 Set Up Reduction Set Up Reduction StageStepTimeChangeover TypeImprovements TotalStepInternalExternalWaste Startup0’.00” 1 Clean Hopper with air blower 32’00” A smaller hooper than 150kg ? 2 Get cleanser to put in hopper 34’00”2’00”Relocate cleanser 3 Keep cleaning injector 52’00”18’00”Avoid walking to switch 4 Feed ABS pigment to hopper 60’00”8’00”Unnecessary? 5 Use air blower to clean hopper 67’00”7’00”Cassette type min- hoppers ? 6 Do a free shot to inject plastic into mould 96’50”29’50”Moulds with 25 kg too large. Unnecessary step ProcessColour ChangeResponsibleA JonesItemHousing MachineMitsubishiMeasured ByB BrownChangeover time96’50”

11. 11 © The Delos Partnership 2005 Set –up Time reduction Objective is –Smaller Batch sizes –Quicker Lead Times –More flexibility It is not to –Fill up with extra production –Reduce people

12. 12 © The Delos Partnership 2005 Today’s job shop environment Drilling Department Turning Department Sanding Department Finishing Department Goods Out

13. 13 © The Delos Partnership 2005 Tomorrow’s flow environment Flow Line 1 Flow Line 2

14. 14 © The Delos Partnership 2005 Review Material Flows Kitting area Kitting area Kitting area Kitting area Production Stores Stores or Work-in-Process ?

15. 15 © The Delos Partnership 2005 Define Systems and Procedures Every material movement needs a transaction Material movement can be recorded by discrete issue or backflush In = + Out = - In = + Out = -

16. 16 © The Delos Partnership 2005 Backflush Technique Backflushing is a technique for downdating inventory Uses Bill of Material to work out what has been used Supports an environment in which works orders are not used Allows bulk replenishment Simplifies material control

17. 17 © The Delos Partnership 2005 Handle Structure with BOM’s at every level ? 12345 Case of Paper Clips 12345 Case of Paper Clips 12346 Cardboard Case 12346 Cardboard Case 12347 Box of 100 Clips 12347 Box of 100 Clips 12351 Label Case 12351 Label Case 12352 Sellotape 12352 Sellotape 12350 Label for Carton 12350 Label for Carton 12360 Paint 12360 Paint 12361 Wire 12361 Wire 12370 Painted clip in box 12370 Painted clip in box 12353 Painted Clip 12353 Painted Clip 12349 Box 12349 Box

18. 18 © The Delos Partnership 2005 How to trigger action VARIETY LOWHIGH VOLVOL LOWWTL HIGHKANBANWTL /KANBAN

19. 19 © The Delos Partnership 2005 Factory – working the plan AND/ OR What do I make next ? Kanban Work To Lists

20. 20 © The Delos Partnership 2005 Kanban Means “visible signal” Replaces need for Work to List Replaced by –Card –Empty square –Tennis Ball –Empty package

21. 21 © The Delos Partnership 2005 Kanban Visible instruction to make or move Highlights problems Requires line balance Requires Andon – traffic light operation Operator responsible for own quality Must not pass on known defects Small batch quantity required

22. 22 © The Delos Partnership 2005 Kanban Works to keep the “Kanban” full When full must stop Do not build extra Result is –less WIP –Improved Quality –Shorter Lead times

23. 23 © The Delos Partnership 2005 Kanban vs WTL Visible feedback Signal driven not date driven –Both require feedback –Good Quality helps both –Problem solving tools should support both –WTL needs MRP and CRP; Kanban needs SOP and RCCP

24. 24 © The Delos Partnership 2005 Eliminate Waste “5 S’s” –Organisation –Orderliness –Cleanliness –Standard Clean up –Discipline Japanese Seiri - sorting, i.e., proper arrangement of all items, storage, equipment, tools, inventory and traffic Seiton orderliness Seiso cleanliness Seiketsu standardization Shitsuke self-discipline

25. 25 © The Delos Partnership 2005 Housekeeping “Pick it up your mother does not work here” Clean, tidy ordered workplace Locations for everything –Tools – shadow boards –Supplies – clear locations –Materials –Gloves, Overalls etc - cupboards

26. 26 © The Delos Partnership 2005 MRP “Spreadsheet” 123456789 Projected Gross Requirements2020402020 Scheduled Receipts3030 Projected Available Balance0 Planned Order Release Weeks Part Number Description : 14356 Red Barrel Lead Time : 3 pds Order Quantity : 30 Safety Stock : 100 Scrap % = 5 10 10 20 20 10 10 -20 -20 10 10-10 20 20 32 32 10 20 20 32 32

27. 27 © The Delos Partnership 2005 -20 -20 Lean ERP “Spreadsheet” 123456789 Projected Gross Requirements2020402020 Scheduled Receipts30 Projected Available Balance0 Planned Order Release Weeks Part Number Description : 14356 Red Barrel Lead Time : 1 pds Order Quantity : 1/1 Safety Stock : 0 Scrap % = 0 10 10 0 0 0 0 0 40 40 0 0 20 20

28. 28 © The Delos Partnership 2005 Challenges for Financial support 1.Eliminate transactions 2.Eliminate Standard Costing 3.Implement Target Costing 4.Move from Profit to Cash Flow reporting 5.Report by Value Stream 6.Implement Monthly Sales and Operations Planning and eliminate the budget. 7.Measure Performance by Performance Measures and not actual versus budget

29. 29 © The Delos Partnership 2005 Eliminate Transactions 1.Invoicing – is this necessary ? 2.Purchase Orders – eliminate three way matching. Pay suppliers on production 3.Works orders – eliminate InspectionPrevention Low Volume High Volume

30. 30 © The Delos Partnership 2005 Where does Value get added ? Budget JulyAugustSeptemberOctoberNovemberDecember Marketing Plan Manufacturing Plan Financial Plan Corporate “Input” Super Corporate Input

31. 31 © The Delos Partnership 2005 Change Minds not just systems Successful change CULTURE TEAMWORK SHARED VISION COMMUNICATION WAYS OF WORKING ACCURACY AND DISCIPLINE POLICIES AND PROCEDURE HARDWARE PLANNING TOOLS LEAN TOOLS AGILE TOOLS SOFTWARE ACCURATE DATA VALID SCHEDULES TOOLS

32. 32 © The Delos Partnership 2005 Integration is the key SimplicityQuality