Manufacturing Systems: EMP-5179 Module #2: Introduction to Lean Manufacturing & JIT

1. Manufacturing Systems: EMP-5179Module #2: Introduction to Lean Manufacturing & JIT Dr. Ken Andrews High Impact Facilitation Fall 2010

2. Program Overview (Modules & Weeks) 7. Quality at Source 1. Intro. ToManuf. Systems No Class on Nov 8? 2. Lean & JIT 8. Customer Ints. 3. Push vs. PullProcess Impr. 9. QFD & DFM 4. TQ Tools & Techs. 10. Teams & Change No Class on October 11 11. Term Papers 5. Value Stream Maps 12. Final Exam (Dec 13) 6. Manuf. Metrics

3. EMP-5179: Module #2 • Critical Elements of Lean Manufacturing • Just in Time (JIT) • Manufacturing Layouts

4. The Gestation of TPS • Eiji Toyoda visit to Henry Ford’s factory in 1950. • The SMED (Single-digit in Minutes Exchange of Dies) program at the stamping plant. • Deming’s quality movement in Japan. • The Engineers: Taiichi Ohno and Shigeo Shingo • “Japanese” Manufacturing hits America in 1970

5. Increase Profits By Eliminating Waste Just In Time Processing Jidoka: No Defects Passed on Waste Elimination 5S Programme & Standardisation Jidoka Jidoka JIT JIT Flexibility to Make Only What Customer Wants The Toyota Production System (TPS) “Production Smoothing” Foundation

6. Critical Elements of the Lean Enterprise The Lean Factory • Increased Productivity • Reduced WIP • Customer Focus • Reduced Lead-Time JIT Kanban / Demand Pull Cellular / Flow / TAKT Time Visual Systems/5S Quick Changeover Low Variability Batch Reduction Total Quality Contin. Improvement TeamWork Quality at the source Customer Driven Value Stream Mapping QFD Waste Reduction Right Metrics

7. Lean Defined “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 Lean Network

8. The Wheels Lean Manufacturing Techniques Quality Management System Vision Total Organizational Buy-in Sales-Production-Inventory Management

9. The Spokes

10. Sales, Production, Inventory Planning P.Q.R. analysis 10 9 Delivery Performance Forecasting 8 7 6 5 Product Introduction Production smoothing 4 3 2 1 0 Inventory Turns Kanban Standard W.I.P. Supermarket Capacity Planning Visual Pull Signals

11. Total Quality Management SPC 10 Prevention vs. Detection Best Practices 9 8 7 First-pass Quality 6 Process Control 5 4 3 2 Information Flow Poka-Yoke 1 0 Supplier Quality Waste Reduction 5-S Problem-solving Tools Quality Assurance ISO 9000 Structure

12. Lean Manufacturing Techniques Value Stream Mapping™ 10 Right-sized Equipment Takt Time 9 8 Sustainment of Gains One-piece Flow 7 6 Handling Reduction Pull System 5 4 3 2 Line Balancing SMED (Setup) 1 0 Value-added Ratio O.E.E. TPM Flow Velocity Machine Reliability Productivity (Labor Cost) Facility Layout Jidoka (Autonomation) Standard Work

13. Total Organizational Buy-in Vision 10 Effective Leadership Action Plan 9 8 Team Building Policy Deployment 7 6 5 Profitability Enfranchisement 4 3 2 1 Safety Focus Performance based pay 0 W.I.I.F.M. (Incentives) Skills Training Change Management C.I. Culture Lean Training Kaizen Promotion Office Visuals Morale

14. The Not So Perfect Vehicle

15. Did you know? • That Toyota has probably the most efficient supply base in the world • 300 1st tier suppliers - 2-3 per part • Co-located and tightly synchronised by 2-4 hourly milk rounds from Toyota • Conducting joint process analysis together for 30 years • As a result each supplier delivers each part 99.9995% right first time on time!

16. Toyota’s Success Is based on a different business logic: - • Organised to manage the whole value stream for each product family – rather than to manage and optimise each asset and firm in isolation • Pulling the right products through the system quickly as required by the customer – rather than making to forecast and selling from stock to strangers • Based on operational capability and joint process analysis - rather than relying on supplier auctions and big centralised information systems

17. Where to Start? The starting point is to learn to distinguish value creation from waste in your whole value stream • By putting on Muda glasses! • By choosing a product family • By assembling the team and taking a walk together up the value stream • And drawing a map of what you find!

18. Value Added: 5% Non - Value Added: 95%Are Customers willing to pay for this???? Waste Waste = Elements of production that add time, effort and cost but no value • Overproduction • Excess Inventory • Product Defects • Non-value added processing • Wait time • Underutilized labor • Excess motion • Unnecessary Transportation

19. Typical vs. Preferred Approach

20. Identify the Customer • Value added is always determined from the Customer’s perspective. • Who is the Customer? • Every process should be focused on adding value to the Customer. • Anything that does not add value is waste. • Some non-valued added activity is necessary waste (“NVA-R”) • Regulatory • Legal

21. Make as much as possible Overproduction is good Look after your own job If process is good, don’t change Don’t stop the production line Band-aid problems Front-line people are responsible for the production output ????????? Summary: Mass vs. Lean Mass Prodn. Lean Mfg.

22. Basic Elements of Lean Production

23. ERP-5179: Module #2 • Critical Elements of Lean Manufacturing • Just in Time (JIT) • Manufacturing Layouts

24. Time-Based Competition • It is no longer good enough for firms to be high-quality and low-cost producers. • To succeed today, they must also be first in getting products and services to the customer fast. • To compete in this new environment, the order-to-delivery cycle must be drastically reduced. • JIT is the weapon of choice today in reducing the elapsed time of this cycle.

25. Order-to-Delivery Cycle Manufacturing Cumulative Lead Time Distri- bution and Customer Service Custo- mer Places Order Order Entry Engi- neering Design Sched- uling Manufacturing Lead Times Purchasing Lead Times Order-to-Delivery Cycle Mfg. Lead Time = Time in the mfg system

26. JIT Manufacturing Philosophy • The main objective of JIT manufacturing is to reduce manufacturing lead times. • 100% capacity utilization is not the predominant objective. • The result is a smooth, uninterrupted flow of small lots of products throughout production.

27. JIT: Pull System • The downstream process takes the product they need and pulls it from the producer. This customers pull is a signal to the producer that the product has been ordered.

28. JIT: Pull System • Benefits: • Eliminate waste. • Eliminate over production. • Reduce inventory and warehousing costs. • Restrains. • Higher shipping costs per unit. • Needs extensive supplier and system integration.

29. Eliminating Waste in Manufacturing • Make only what is needed now. • Reduce waiting by coordinating flows and balancing loads. • Reduce or eliminate material handling and shipping. • Eliminate all unneeded production steps. • Reduce setup times and increase production rates. • Eliminate unnecessary human motions. • Eliminate defects and inspection.

30. Process Process A B Batch = 10 units; Each Process = 1 minute Batch & Queue Processing Process C 10 minutes 10 minutes 10 minutes Lead Time 30+ minutes for total order 21+ minutes for first piece Continuous Flow Processing Process Process Process A B C 12 min. for total order 3 min. for first part

31. Reducing Inventoriesthrough Setup Time Reduction • Central to JIT is the reduction of production lot sizes so that inventory levels are reduced. • Smaller lot sizes result in more machine setups • More machine setups, if they are lengthy, result in: • Increased production costs • Lost capacity (idle machines during setup) • The answer is: REDUCE MACHINE SETUP TIMES

32. Benefits of JIT • Inventory levels are drastically reduced: • frees up working capital for other projects • less space is needed • Total product cycle time drops • Product quality is improved • Customer responsiveness increases • Scrap and rework costs go down • Forces managers to fix problems and eliminate waste .... or it won’t work!

33. Functional (Process) Layouts are Inefficient Drilling Milling Lathe D D L M L M D D L L M M Grinding G L L M G M Assembly G G L L A A G G A Receiving and Shipping A

34. Process Layout Characteristics • Advantages • Deep knowledge of the process • Common tooling and fixtures • Most flexible -- can produce many different part types • Disadvantages • Spaghetti flow -- everything gets all tangled up • Lots of in-process materials • Hard to control inter-department activities • Can be difficult to automate

35. L G G L M Product Layout G D Part #1 M L A A Receiving Part #2 D M L Shipping Part #3

36. Product Layout Characteristics • Advantages • Easy to control -- input control • Minimum material handling -- frequently linked to the next process • Minimal in-process materials • Can be more easily automated • Disadvantages • Inflexible -- can only produce one or two parts • Large setup • Duplicate tooling is required for all cells

37. Cellular Layout Cell #2 Cell #1 D D M A D A L Cell #3 M M L D L A M

38. Cellular Layout Characteristics • Advantages • Control is simplified • Common tooling and fixtures • Flexible -- can produce many different part types - a part family?? • Disadvantages • Setup ?? • Need to know about many different processes • Requires “single-piece” (continuous) flow

39. Cells with Worker Routes

40. Worker Routes Lengthen as Volume Decreases

41. Cellular Manufacturing • A product- centered series of operations. • Layout: U-shape or semi-circle. • Equipment is movable and placed in close proximity. • Enables quick feedback between operators. • Workers within the cells are cross-trained to perform multiple tasks.

42. Essential Elements of JIT Purchasing • Cooperative and long-term relationship between customer and supplier. • Supplier selection based not only on price, but also delivery schedules, product quality, and mutual trust. • Suppliers are usually located near the buyer’s factory. • Shipments are delivered directly to the customer’s production line. • Parts are delivered in small, standard-size containers with a minimum of paperwork and in exact quantities. • Delivered material is of near-perfect quality.

43. Problem Solving and Continuous Improvement • JIT is a system of enforced problem solving. • One approach is to lower inventory gradually to expose problems and force their solution. • With no buffer inventories to rely on in times of production interruptions, problems are highly visible and cannot be ignored. • The job of eliminating production problems is never finished. • Continuous improvement - a practice the Japanese call kaizen - is central to the philosophy of JIT.

44. Hybrid Approach to Lean (Example) Specials Cells Standard Cells J.I.T. Cells 15% Sales 25% Sales 60% Sales Prototypes Proven CNC All the conditions of the programs standard cell apply plus: Parts that will run Customer forecasts fairly Untested CNC programs again accurate Set-ups are well Customers buying into JIT One of a kind Special Tooling documented programs Quality needs are Vendors support the required Engineered to defined lead times order

45. People Make JIT Work • JIT has a strong element of training and involvement of workers. • A culture of mutual trust and teamwork must be developed. • An attitude of loyalty to the team and self-discipline must be developed. • Another crucial element of JIT is empowerment of workers, giving them the authority to solve production problems.

46. Percentage of Benefits Achieved Space utilization Quality improvements Source: NIST WIP reduction Productivity increase Lead time reduction 0 20 40 60 80 100 Typical Benefits of Applying Lean Thinking

47. Lean: Summary • Lean manufacturing is a conscious strategy • Lean manufacturing is an organization-wide, cross-functional change process • Successful implementation of Lean Manufacturing requires commitment and involvement across all organizational levels. • World Class companies are implementing Lean Manufacturing concepts in addition to Supply Chain Management and Six Sigma.