Lean Production Lean Manufacturing

1. Lean ProductionLean Manufacturing

2. Lean Production/Lean Manufacturing • JIT Production • Lean Production • Lean Manufacturing • Toyota Production System (TPS) • Pull system The first implementation - Toyota Motor Company, Mr Taiichi Ohno, 50-ties of last century

3. Lean Manufacturing Lean Manufacturing – a strategy of manufacturing based on planned elimination of all waste and on continuous improvement of productivity (p = outputs/inputs) Lean Manufacturing allows to produce more using less resources Lean Manufacturing allows to produce more products with less materials, labour, time and energy Comparing performance at Toyota Takaoka facility with GM Framingham facility (late 80 – ties in 20th century)

4. Lean Manufacturingdates • In early 1950s Toyota Motor Company starts to implement new approach to manufacturing, called today TPS – Toyota Production System • In 1970s – some western companies start to recognize the specific of TPS. The new production strategy was called Just In Time (JIT) • In 1980s – several successful implementation of JIT systems in western companies. • In 1991 „The Machine that Changed the World” was published by Womack, Jones and Roos. They introduced there the term „lean manufacturing” • In 1980s and 1990s JIT/Lean Manufacturing was started to be implemented in all automotive companies in the world and is implementing there until now. Also in other industries (electronic industry, home appliances industry) Lean Manufacturing is successfully implementing. • In 1995 - foundation of The Lean Enterprise Institute in USA • In 1998 „Learning to see. Value Stream Mapping to Create Value and Eliminate Muda” was published by Rother and Shook • In 2004 Liker published the book The Toyota Way: 14 Management Principles

5. Lean Production Goals To improve customer service through producing and delivering the right product, in the right quantity, with the right quality, at the right time and at the right place Lean Production goals: • Zero inventory • Zero defects • Zero breakdowns (zero overdue supplies) • Zero set up times • Zero transportation • Zero lead time (value adding time = lead time) • Lot size = 1

6. Principles of Lean/JIT Production(Robert W. Hall – Zero Inventory) • Make what customer wants • Make how many customer wants • Make immediately when requirement appears • Make with perfect quality • Make without waste • Make with people involvement, empowerment and development

7. Lean Manufacturing perspective on waste • A key principle of the Lean Manufacturing philosophy is never ending effort to eliminate waste • What is waste? Waste is performing any activity that does not add value to the product. • Value is everything for what a customer is ready to pay. • Major sources of waste in production process(jap. Muda): • Waste of overproduction • Waste of waiting • Waste of transportation • Waste of overprocessing • Waste of inventory • Waste of motion • Waste of defects (making products that require rework or must be scrapped) • Wast of underutilization a knowledge of employees

8. Waiting Defects Overproduction WASTE MUDA Transportation Inventory Inappropriate processing Unnecessary motion

9. Waiting Surface Extra work Defects Inventory Handling Overproduction What is overproduction? • Produce more then the next process needs • Produce erlier then the next process needs • Produce quicker then the next process Overproduction

10. The Material Flow Cycle Raw materials - Wood Final product - Boards What percentage of lead time (cycletime) has value adding time in a typical enterprise ?! (<1%, 5%, 10%, 20%, 40%, 60%, 80%)? Zero waste in a process means: Value adding time = Total lead time

11. - Adding value activity - Inventory - No action, waiting - Transportation - Products control ( + + + + ) Process Efficiency Indicator Value adding activities time PEI = ------------------------------- 100% Total inventory time Operations management objective: increase PEI How to increase PEI ? Reduce and eliminateno valueaddingactivities

12. Traditional approach: - work harder, longer and quicker - add devices and people Lean/Kaizen: • improve value stream to eliminate waste Adding value Waste Lead time Traditional and Lean approach in improving productivity

13. Lean Manufacturing and inventory Inventory level InappropriateLay out Unsynchronized production Machines'breakdown Wrong work methods Long set up times Long set up times Defects Inflexibleemployees

14. THE HIGHEST QUALITY, THE LOWEST COST, THE SHORTEST LEAD TIME, THE HIGHEST WORK SAFETY, THE HIGHEST MORALE JUST IN TIME Takt time & One piece flow Kanban SMED Pull system Integrated logistics CONTINOUS IMPROVEMENT • Waste elimination • 5 S • Problem solving, 5”WHY” • Genchi genbutsu PEAPLE & TEAM WORK JIDOKA Andon Poka – yoke TPM 5 WHY HEIJUNKA (SMOOTH PRODUCTION) VISUAL MANAGEMENT WORK STANDARISATION Elements of Lean Manufacturing System/TPS (Toyota House) VISION OF LEAN PRODUCTION SYSTEM

15. 14 Toyota Way Management Principles

16. 14 Toyota Way Management Principles Section I: Long-Term Philosophy (long term thinking) Principle 1. Base your management decisions on a long-termconcept,even at the expense of short-term financial goals. Section II: The rightprocesswill produce the rightresults Principle 2. Create a continuous process flow to bring problems to the surface. Principle 3. Use “pull” systems to avoid overproduction (kanban system) Principle 4. Level out the workload (heijunka) Principle 5. Build a culture of stopping to fix problems, to get quality rightthe first time (jidoka) Principle 6. Standardized tasks and process are the foundation for continuous improvement and employee empowerment. Principle 7. Use visual control so no problems are hidden. Principle 8. Use only reliable, thoroughly tested technology that serves yourpeople and processes. Section III: Add Value to the Organization by Developing your People Principle 9. Grow leaders who thoroughly understand the work, live thephilosophy, and teach it to others. Principle 10. Develop exceptional people and teams who follow your company’s philosophy . Principle 11. Respect your extended network of partners and suppliers bychallenging them and helping them improve. Principle 12 . Go and see for yourself to thoroughly understand the situation Section IV : Continuous solvingrootproblemsdrives organizationallearning Principle 13. Make decisions slowly by consensus, thoroughly consideringall options; implement decisions rapidly (nemawashi). Principle 14. Become a learning organization through relentless reflection(hansei) and continuous improvement (kaizen).

17. Pull system versus push system • Push system – an approach to manufacturing control that pushed materials through processing operations based on a schedule and demand forecasts. An planned order of product or component is „launched” into work centres according to the schedule. • MRP is a push system. • Pull system – an approach to manufacturing control that moves materials based on actual needs at successive work centres. As finished products are made, they pull the appropriate components through processing operations Materials and components are also pulled from suppliers. • Kanban is a pull system.

18. Kanban system Pull control system Kanban system allows to avoid an overproduction Kanban is Japanese word which means – card. In Kanban control system, kanban card is a signal. • Kanban System types: • Single kanban system – only production kanban card • Dual kanban system- production kanban card and transportation kanban • As final assembly line works according to final assembly schedule, the cells, lines and work centers supply the final assembly line in response to pull signal - kanban card. The pull signal:a raised hand, a golf ball, anemptybox(container) • Kanban system creates self regulated circles of customers and suppliers • „Twoboxsystem” used in inventorycontrolisanexample of pullcontrol system. The emptyboxis a signal (order) to produce, fullfill and supply the nextbox (container)

19. Single Kanban System (one card Kanban System) Full container Supplier Customer Cell I Cell II KPII S KP I KP I KP I KPII KPII KPII KPIII KPII KPIII KP I Container with Kanban Card KPII KPII KPII Production Kanban KPII

20. Dual Kanban System (Two Card Kanban System) Outbound stock point Cell I Inbound stock point Cell II Cell I Cell II 5 7 1 KT I KT I 4 6 2 3 KTII KTII KPI KT I KPI Transportation kanban table Production kanban table KPI KPI KTII KTII KTII Container with kanban card KPI Production kanban KPII Transportation kanban KTII

21. Dual card Kanban system • Worker at cell II takes the next container, detaches a transportationcard T and places it in a transportation box • Material handler takes T kanban(s) from transportation box and goes to cell I. • Material handler removes the production kanban from a full container and places it in the production kanban box. • The transportation kanban is fixed to the full container. The full container with T kanban is taken to cell II • The P kanban at cell I authorizes the production and fullfillment the next container. • The P kanban is fixed to the container when it is full. The full container with P-card is moved to outbound stock point.

22. System KANBAN(number of kanban cards calculation) where: K – total number of kanban cards equel to total number containers D – average demand per units of time, planned usage for the parts (units/day) T – time it takes to produce and move a container of parts to the downstream C – capacity of a standard container (in units) G – a safety factor, expressed as a decimal (for example, 0.20 represents a 20% safety factor) The Lean philosophy of always seeking improvement will lead companies to try to decrease inventory. This is done by reducing the number of kanban cards .

23. Example of kanban card

24. AABCAABCAABCAACB AABCAABCAABCAACB AABCAABCAABCAACB KANBAN System Final products assembly line Assembly work station Kanban System Subassembly supplier Kanban System Components supplier Kanban System Materials supplier

25. Pull/Kanban Cellular/Flow TPM Quality at Source POUS Quick Changeover Standardized Work Batch Reduction Teams 5S System Visual Mgmt Plant Layout Value Stream Mapping Principles for Implementing Lean Manufacturing Lean Building Blocks KAIZEN

26. Principles of Lean Implementation • Value. Specify value from the standpoint of the end customer. • Value stream. Identify all the steps in the value stream for each product family, eliminating whenever possible those steps that do not create value. • Flow. Create continuous flow- make the valuecreating steps occur in tight sequence so the product will flow smoothly toward the customer • Pull. As flow is introduced, let customers pull value from the next upstream activity. • Perfection. As value is specified, value streams are identified, wasted steps are removed, and flow and pull are introduced, begin the process again and continue it until a state of perfection is reached in which perfect value is created with no waste.

27. Steps of Lean Manufacturing implementation

28. Value stream mapping “Whenever there is a product for a customer, there is a value stream. The challenge lies in seeing it.” -Learning to See, Lean Enterprise Institute

29. Value stream mapping • Value stream mapping is an inherent method of Lean implementation in an enterprise • Designing the future value stream: • Identify families of products • Identify customer value. • Create a current state value stream map. Recognition of waste • Create a future state value stream map

30. Current state value stream map

31. Future state value stream map Kanban system