Introduction to Lean Concepts and Processes

1. Introduction to Lean Concepts and Processes Bill Motley, CEM, CQMgr, PMPProgram Director, Production, Quality & Mfg Curricula Development and Support Center

2. DoD Lean Success Stories • USAF Air Logistics Centers – Shingo Prize Winners 2005 • USN Aviation Depot Jacksonville • USA Letterkenny Army Depot

3. “Lean is a way of thinking – not a list of things to do”. S. Shingo “The big danger is that it becomes a ‘program’ that everyone is doing as a staff exercise but which no one understands and no one believes in. Then it is just another collection of tools without a context. It inevitably will fail”. James Womack “… most attempts to implement lean have been fairly superficial. The reason is that most companies have focused too heavily on tools such as 5S and just-in-time, without understanding lean as an entire system that must permeate an organization’s culture”. Dr. J. Liker

4. The Fathers of TPS • Henry Ford: moving assembly line, waste reduction, flow and cycle time reduction • Drs. Deming and Juran: quality management and process control • Lawrence D. Miles (General Electric 1943): value engineering, value analysis and target costing • Charles Allen: Training Within Industry. Developed for US shipbuilding during WWI. Expanded to US war plants during WWII. Taught to the Japanese by the US occupational forces after WWII. • Shigeo Shingo • Taiichi Ohno

5. What is Lean ? • Lean is the Toyota Production System. • Lean means right thing, right place, right time, right quantity. • Lean systems focus on maximizing the value stream while eliminating all waste. • Lean is a way of thinking that focuses on constantly shortening the order to delivery time by maximizing the flow of information and material while reducing cycle time. • A total system of organizational learning: 1. Never make the same mistake twice 2. Turn implicit (tribal) knowledge into explicit knowledge. 3. Do not reinvent the wheel – reuse knowledge.

6. Value • The customer must be willing to pay for it • It must transform the product • It must be done right the first time • If you pulled this step, would the customer miss it? If no, then why are you doing it?

7. Lean as System • A highly disciplined and organized system of philosophies, management culture and tools. • A pragmatic system that can quickly and flexibly react to the realities of the real world. • Each piece of the system, no matter how small, has a role in the totality of the system – tailor at your own risk. You need to first ask “why” and then “how” when learning about lean concepts. • TPS tools are not final solutions. They are considered “countermeasures” until a better way is developed. • Lean systems, just like all systems, need constant attention or they degrade.

8. Lean is a System • Product Development 3P • Manufacturing Partnering & Core Supplier Development • Supply Chain

9. Production Preparation Process (3P) • Producibility, mistake-proofing & quality are designed-in. • The production system is considered a primary design constraint. Process capability and cycle times are proven. Any process limitations are corrected or the design or requirements are changed. • The production system (layouts, machine configurations and material movement) is planned, simulated, evaluated and improved using 3-D models (shop floor mockups and computer sim before production starts – virtual Kaizen. • 3P is planned and managed using the IPPD process – cross functional participation from the shop floor to the chief design engineer.

10. “Nobody Believes Us” - Toyota executive • Strategic policy deployment (Hoshin kanri) • Respect for people & teamwork • Develop people • Let people use their minds • Entire organization exists to support the people actually doing the work • “Go and see” (genchi-gembustu); actual part, actual place, actual situation • Personally verified, hard data vs. reliance on reports, meetings and computer systems • Process orientation vs. results orientation • Continuous improvement (kaizen) • Develop Countermeasure • Determine root cause • Permanently solve • Repeat The Toyota Way Philosophy

11. Customer Focus at the CORPORATE Level • Safety and Environmental Responsibility • Highest Quality as defined by the customer • Lowest Manufacturing Cost • Shortest Lead Time

12. Lean Priorities at the FACILITY Level 1. Environmental Safety and Occupational Health 2. Quality 3. Productivity 4. Cost

13. Operating Rules for the SHOP FLOOR • Safety First! • Make only what is needed, when it is needed. • Make work and problems visible. Make normal and abnormal situations immediately obvious. • Never produce a defect– Never pass a defect on. Problems are solved in space & time as close as possible to where the problem occurred. “One-by-one confirmation” and “zone control”. • Eliminate all Waste. FOCUS ON FLOW AND CYCLE TIME REDUCTION

14. What is Waste? • Waste is anything that does not add value for the customer or ……… • Anything your customer is not willing to pay for.

15. The Seven Wastes in Manufacturing (Muda) 1.Over-Production--Producing more material than is needed, or before it is needed, or faster than needed, is the fundamental waste in lean manufacturing. It creates or amplifies all the other wastes. 2. ExcessInventories--Material sits, taking up space, costing money, and potentially being damaged or becoming obsolete. Quality and delivery problems are hidden. 3. Waiting-Waiting for material, information, processing and tools increases lead time and cost without adding value to the product. 4. Producing Defective Products--Defective products cause rework, impede work flow and lead to wasteful handling, time, and effort. 5. Wasted Employee Motion—going to get tools, missing parts or information. 6. Transportation--Moving material between work sites does not add value. 7. Over-Processing--Over engineering, redundant inspections, layers of document review, unnecessary requirements.

16. Waste Reduction • Genchi Genbutsu • 5 Why’s • Eyes for Waste • Problem Solving The Toyota Production System Best Quality - Lowest Cost - Shortest Lead Time - Best Safety - High Morale through shortening the production flow by eliminating waste Jidoka (In-station quality) “Make Problems Visible” Just-In-Time “Right part, right amount, right time” People & Teamwork • Selection • Common Goals • Ringi decision making • Cross-trained • Takt time planning • Continuous flow • Pull system • Quick changeover • Integrated logistics • Automatic stops • Andon • Person-machine separation • Error proofing • In-station quality control • Solve root cause of problems (5 Why?) Continuous Improvement Leveled Production (heijunka) Stable and Standardized Processes Visual Management Toyota Way Philosophy

17. STABILITY • Well-trained and multi-skilled workforce • Strong shop floor help and supervision • 5S (6S) • Total Productive Maintenance (TPM)

18. Lockheed Martin’s “6S” Visual Factory & Japanese 5S • SERI • IDENTIFY/SEPARATE NECESSARY FROM UNNECESSARY • SEITON • PLACEMENT/IDENTIFICATION OF NEEDED WORK ITEMS SORT STRAIGHTEN Clearly Distinguish Needed Items From Unneeded Items And Eliminate The Latter Keep Needed Items In The Correct Place To Allow For Easy And Immediate Retrieval Red tag event SAFETY Identify Danger And Hazard SUSTAIN SEISON MAINTAINING A CLEAN WORK PLACE SHINE • SHITSUKE • NOTATIONAL METHOD FOR THE CONFORMANCE TO RULES Keep The Workshop Swept And Clean Maintaining Established Procedures Consistently Applying 6S Methods In A Uniform And Disciplined Manner STANDARDIZE The 5S starts the involvement process and teaches standardization. • SEIKETSU • STANDARDIZATION • FOR EASE OF USE

19. Total Productive Maintenance • The Goals: - Zero breakdowns - Zero defects - All machines functioning optimal • How: - Operator-centered maintenance - Scheduled maintenance that is always conducted - Proper operation & set-up of machinery - Proper selection of machinery; capable, adequate, available - Use of FMEA to know how machines could fail and the effects - Use of predictive maintenance techniques - Use 5S on all machinery

20. Standardized Work • TAKT time • Cellular Plant Floor Layouts • Standardized Work Processes

21. TAKT Time • The available daily production time divided by the daily customer demand. Takt time sets the pace of the production process to match the rate of customer demand; the “heartbeat” of the production system. If our daily order is 900 units and we operate two 450 minute shifts, our Takt time is 900 min/900 units = 1 minute/unit. We should see a product moving past every one minute – another visual indicator. We want our cycle times to be just a little less than our Takt time.

22. 2 3 4 1 Finished goods Raw material Cell Concept Product Layout vice Process Layout • Theory: One piece continuous flow with all required tools and parts at each work station • Benefits: • Improved cycle time • Improved quality • Reduced WIP • Reduced artisan ‘travel’ time • Eliminating NVA activities • Makes problems visible

23. Standardized Work Processes • The goal is repeatability and predictability of the 5Ms. • SW reduces process variability and allows you to find the root causes of problems easier. • Employees improve own work and write own procedures. • Train everyone. Re-train regularly. • Everyone performs the process the same way, every time using checklists or process sheets that contain detailed work instructions, work sequencing, process settings, cycle time, takt time, standard in-process inventory levels, acceptance criteria and job aids. No exceptions. • Your current best practice. Changes with changes in takt time. • A key facilitator of built-in quality. • Repeat continuously. • Very hard to do!

24. Just-in-Time (JIT) • Helps smooth flow • Makes problems visible • Reduces inventory costs • Pull systems react faster than push systems to variability. Just-In-Time is NOT a zero inventory system. You may have to add inventory to maintain flow. We will always make our customer delivery dates. • Only make what is needed • When it is needed – not early, not late • In the smallest amount needed (with the Minimum Materials, Equipment, Labor and Space)

25. B. Productivity: Minimize wasted movement, warehouses, and double handling C. Productivity: Problems are identified and solved real time A. Quality: Work is passed directly to next process with no defects F. Cost: Reduced Inventory Levels D. Lead Time: Shortest supply chain, highest flexibility to satisfy customer demand E. Team Member Morale: Value of work is more visible, recognized Benefits of Creating Continuous Flow The ultimate goal is one-piece flow. Source: Toyota

26. JIT Requires: • Pull instead of Push – you can not pull unless your machines have at least 75% uptime • Heijunka – Production Leveling • Kanban– signals to prepare to change-over and to produce. We use kanban when we can not achieve one-piece flow. Also serve as visual indicators of work flow status. • Delivery to point of use is preferred • World class suppliers who are giving and receiving timely, accurate data • Very high quality; internal and external • Little cycle time and process variability Many firms are moving to Integrated Pull Manufacturing. JIT is used for shop floor execution and MRP is used for forecasting, BOMs, rough-cut capacity planning, and forecasting.This is the Toyota approach.

27. Empties + withdrawal kanban A B C D E F G H Customer Plant Needed components New product Upstream processes replenish what is taken away. Upstream processes can not build without a kanban. Just-In-Time Production and Delivery Downstream processes withdraw only what they need when they need it. Empties + production kanban PULL Supplier Plant

28. 500 of Mod A, 5/10=0.5 .5 x 50 = 25 per day 400 of Mod B, 4/10=0.4 .4 x 50 = 20 per day 100 of Mod C, 1/10=0.1 .1 x 50 = 5 per day Our production schedule would look like this: A B A B A B A B A C…….REPEAT Make one of every type, every shift. We desire a predictable sequence in both our facility and that of our suppliers. Production Leveling/Smoothing(Heijunka) The daily production schedule reflects customer demand by producing in the same volume and product mix as customer demand. Example: The requirement is 1000 subsystems per month (20 days). There are 3 variants of this subsystem. We will need to produce 50 per day.

29. Level LoadingNo inventory peaks or valleys 1. Leveling prevents bulges in our inventory levels and bulges in our suppliers’ inventory levels – helps mitigate the “Bullwhip Effect”. Inventory planning becomes more predictable. 2. If we produce defects in one model, it reduces the number of defects produced before they are detected. 3. Changeovers help prevent worker boredom and repetitive motion injuries. 4. Short set-up/change-over times make this technique possible. 5. The pace should not be too hard or too fast – “muri”. Never overburden people or machines with unreasonable work. Overburden creates variation. 6. No uneven pace or fluctuations in the production schedule – “mura”. 7. #5 and #6 = “Be the tortoise, not the hare”.

30. Setup Reduction • Setup time is the time from the last good part of the previous setup to the first good part of the new setup. • Single minute exchange of die – doing it in less than 10 minutes. • Move from internal to external setups. Do as much as possible while a machine is running. Large lot sizes are the single largest impediment to flow! To reduce lot sizes, we must make small lot sizes economically feasible by reducing setup time.

31. Setup Reduction Machine Stops Machine Starts Internal Setup Activities – Minimize Setups Here Machine Running Part A Machine Running Part B External Setup Activities – Move Setups Here External Setup Activities – Move Setups Here

32. 1945-1954 1955-1964 1970- Present 2- 3 hours 15 minutes < 3 minutes SET UP TIME TOYOTA PRESSING DEPARTMENT

33. A S L T E O R P T DEFECT BREAKDOWN 2 0 CHANGE Machine Automation JIDOKA Production Machines and Systems can DETECT Abnormalities and will STOP Automatically “In-station quality and zone control”

34. The Benefits of Jidoka • Defects are NOT PASSED on to the next process. • Machine work is separated from human work so that team members can operate multiple machines – cells.

35. Machine Andon GREEN - NORMAL OPERATION RED - MACHINE PROBLEM YELLOW - TOOL CHANGE, QUALITY CHECK, ETC.

36. What is Mistake Proofing? (Poka-Yoke) • A control function assisted by internal devices that detect abnormal conditions and errors. • A device or procedure to prevent a defect during order taking or manufacturing; color coding, one-way assembly, limit switches, etc. • Mistake proofing consists of more than just devices, it is a philosophy of design and manufacturing. • The goal is zero defects.

37. Employee Involvement • Kaizen – incremental, continuous improvement; the synergism of hundreds of small changes. Workers have the authority and responsibility to improve their own work methods. Process is the first priority, machinery and information systems come second. • Self-verification of own production and all incoming product. • Employee Suggestions – management must respond NLT 10 days • Hoshin Planning – everyone, at all levels is involved in goal setting and resource allocation. No unfunded mandates.

38. Summary of the TPS (Lean) • It always begins with the customer. • The customer wants the right thing, at the right time, right place, right price, with perfect quality: value. • Value is always the end result of a process. • Each process step must contain zero waste. • To achieve zero waste, each process step much be valuable, capable, available, adequate and flexible. • A truly lean process is a perfect process. • Perfection is not possible, but lean enterprises behave as if it is. • People make it happen – not the tools.

39. Courtesy: Lockheed Martin 21

40. Respect for People & Teamwork • Servant Based Leadership - A happy employee means a happy customer - The system creates most problems. Management owns the system, and therefore has the greatest responsibility for improvement. - Open Book Management – show everyone the big picture • Consensus Management (Hoshin & Nemawashi Processes) - All levels involved in goal setting & resource allocation - Make decisions slowly by consensus; implement rapidly and correctly the first time you do it. No unfunded mandates. - Consensus means all are involved, heard and understood. Decisions start at the bottom. No filtering of input from any level. • Empowerment & Trust - People closest to the work make the decisions - Teams have authority to make decisions within predetermined bounds without prior approval - Layoffs are used as the very last resort to business downturns Salaried managers take the first pay cuts. Any outsourced work brought back. - Wide spans of control

41. Background Information

42. Toyota’s Ideal Production System • Defect free • Batch size of one • Can deliver any product version • Can deliver immediately • Can deliver with zero waste • Provides a physically, emotionally and professionally safe work environment for every employee

43. Each step in a lean production system is: • Valuable • Capable (quality) • Available • Adequate (capacity) • Flexible (short change-over time) All process steps are linked by pull and flow with leveled demand.

44. Lean and Six Sigma • Toyota does not have a Six Sigma program • Toyota starts with asking “Why?” 5 times - they consider the “Why?5X” to be the most powerful problem solving tool - they are well schooled in all the tools of Six Sigma - they believe 90% of problems can be solved without sophisticated statistical tools; use value stream maps, Pareto charts and Why?5X

45. Toyota and Six Sigma • Toyota does not have a Six Sigma program. • Six Sigma usually refers to quality at the individual component level; solder joints, transistors, rivets, hoses, etc., where Six Sigma quality means 3.4 ppm defective or less. • It is generally accepted in the auto industry that Toyota and its best suppliers are currently at the 10 to 100 ppm defective level for finished multi-component subassemblies such as pumps, seats, condensers, electric motors, gear trains and engine controllers, etc.

46. Honda’s BP Waste Reduction Questions Does this idea? • Eliminate waiting • Reduce motion • Reduce material movement • Build in quality • Simplify the process • Promote visibility of problems and the flow of work • Aid training • Support the operator • Reduce costs • Reduce set-ups • Increase flexibility • Eliminate bottlenecks • Create a positive work environment

47. Honda’s COPDS • Clean-up Clean appearance • Organize Logical order • Pick-up Eliminate unneeded items • Discipline Maintain COPDS • Safety Eliminate unsafe conditions

48. Honda’s Shop Floor Measures • Line downtime • Production per manhour • Unit scrap percentage • Manpower required • Line balance • Production efficiency • Material yield • Throughput time • Square feet of floor space required • Inventory levels • Rework percentage • Direct Ship percentage • Material travel distances

49. Toyota’s and Honda’s GEMBA Concept for Managers • Go to the actual place • Understand the actual situation • See the actual problem

50. Kaizen Cycle • Maintain a checklist or standardized work • Identify waste • Determine how to remove the waste • If successful, update the checklist or standardized work • Repeat forever – this is the hard part