Lean Manufacturing

1. Kohler Operating System Lean Manufacturing

2. LeanManufacturing Customer Order Driven (Pulled) One-piece Processing Near-Zero, Idle Inventory Quality Problems are Surfaced Traditional Manufacturing Planned and Scheduled (Pushed) Batch Processing Extensive Idle Inventory Quality Problems are Hidden vs

3. TIME PRE R&D A/R MFG DIST PLAN PRE R&D A/R MFG DIST PLAN Time — Source of Competitiveness

4. Lead Time Definition The amount of time it takes to convert raw material into finished goods and ship them to the customer. The elimination of waste will reduce lead-time which has a favorable affect on safety, quality, delivery, cost and productivity.

5. Order Problems/Waste Excess Inventory Problems/Waste Problems/Waste Long Lead Time Excess Inventory Delivery Lead Time Is Affected by Flow

6. TIME Raw Material Finished Goods = Value Added (VA) Time = Non-Value Added (NVA) Time Product Lead Time

7. Reducing Waste Improves Flow

8. Extra Inventory Extra Defects WASTE OF OVERPRODUCTION Extra Space Extra Handling Extra Machinery Extra Paperwork Extra Overhead

9. Sea of Inventory Line Long Lack of Balance Communication Transportation Housekeeping Problems Poor Scheduling Long Setup Quality Time Supplier Absenteeism Problems Machine Delivery Breakdown Excess Inventory Hides Problems

10. Reducing Excess Inventory . . . . . . . . Exposes Problems Raw Material Finished Product to Customer Sea of Inventory Line Long Lack of Communication Balance Transportation Housekeeping Problems Poor Scheduling Long Setup Quality Time Supplier Absenteeism Problems Machine Delivery Breakdown

11. KOHLER Just-in-Time (JIT) Mfg. Producing just what is needed, when it is needed, in the amount needed, with only the minimum required materials, equipment, labor, and space.

12. “Push” vs. “Pull” Material Flow Using an MRP system or other mechanism, work is scheduled and pushed through each stage in the production process in order to meet specified delivery dates for finished products. Push Work at each stage in the production process is pulled through the system by actual demand for final products. Pull THINK:“Bucket Brigade…”

13. JIT Production? Pull Systems? Kanban? … How does it all relate? • “Kanban” • Means “card” in Japanese • It is a “pull” production system and used as the means of production control in JIT • How kanbans work: • When an order to produce a finished product is issued to the plant, workers withdraw components from a “standard container” and build the product. • Each container has a kanban on it, which is sent to the upstream as an authorization to produce. • This in turn activates kanbans at that operation, sent to the next operation upstream, and so on. The process goes all the way to kanbans issued to the vendor to produce and/or ship. • Computer control is unnecessary:

14. Seeing JIT/Kanban at Work Flow Container to be worked on Flag or signal marker

15. JIT Philosophy Requires Strong Partnerships with Suppliers • Characteristics of true JIT buyer-supplier partnerships • JIT requires fast and regular supply • Cost not only factor in vendor selection: quality, flexibility and delivery are also key factors. • Preferred vendors offer small lot sizes, frequent deliveries • JIT requires few to single suppliers to solidify partnerships • Typical Supplier Concerns • Erratic schedules from customer • Impact of small lot sizes - additional transportation costs. • Proximity

16. Characteristics of Systems Well-suited to JIT • Discrete parts produced in a highly repetitive environment. • Fairly smooth demand pattern throughout the year. • Setup times/costs that can be reduced. • High worker flexibility - solve problems • Close proximity to vendors.

17. KOHLER One Piece Flow Product moves from one operation to the next, without interruption, one piece at a time.

18. How to run Lean Operations: Managing Variety • Monthly Production Requirement: • How should production be scheduled for the month?

19. Synchronize: HeijunkaMixed Level/Balanced Production Batch Production Schedule Mixed Production Schedule (AAAABBBB..) (ABAB...) Product Apr/12...............15................ ......30 Apr/12....................15....................30 A B FGI FGI time time

20. Production Control P r o d u c t i o n P r o d u c t i o n P r o d u c t i o n C o n t r o l C o n t r o l C o n t r o l Roof Cut Base Cut R o o f R o o f R o o f B a s e B a s e B a s e C u t C u t C u t C u t C u t C u t Base Assy FA B a s e B a s e B a s e F A F A F A Production Control A s s y A s s y A s s y Production Control Roof Cut Base Cut Roof Cut Base Cut Q C Q C Q C Base Assy Base Assy FA FA Reducing Waste: From Functional Layout to Cells

21. Managing Flows: the Process View • By rethinking the IBM Austin assembly plant and introducing cells, distance traveled by a card was cut from 1.5 miles to 200 yards. Floor space was reduced to half and production tripled with about the same number of workers.

22. Lean Operations for Variety:Putting It All Together • Lean Operations: Striving for Excellence • Efficient Workflow: Cellular Layout • Level Mixed Production: Heijunka • Reduced batch sizes • Pull Execution: Kanbans • Quality at source: Poka-Yoke • Continuous Improvement: Kaizen Flow Synchronization Low Cost Get ever closer to ideal

23. Flow Management Results In: • Quick Problem Detection & Correction • Inventory Reduction • Adaptability to Change • Reduced Lead Times • Improved Delivery • Lower Costs

24. Operating Systems Overview Value Stream Mapping Workshop Planning Basic Improvement Tools Six Sigma Training Business Process Redesign Workplace Organization Team Facilitation Setup Reduction Preventive Maintenance Training to Support Implementation

25. Implementation Reminders • There are no “perfect” organizations • Continuous improvement is the best an organization can do • Progress isn’t linear, neat or easy • No single “process” is right for all organizations • Key elements of KOS must be INTEGRATED...focusing on the customer