Lean Operations

1. Lean Operations • House Building Game • The transition to Lean Ops • The Paradigm of Lean Operations: The ideal • Basic philosophy of Lean Ops • Lean tools for synchronization & waste reduction • Driving Continuous Improvement through Visibility

2. Paradigm of Lean Operations: In Search for the Holy Grail • The ideal Process = • Synchronization of all flows • 1 x 1 • production on demand • defect free • At lowest possible cost • Waste = Gap between ideal and actual • How do we sync at lowest cost? > Synchronization or Lean Tools • How do we set up a system to continually reduce waste ?

3. Improvement as a process The Ideal Operation • perfectly synchronized with demand • at lowest cost D = deviation from ideal = waste, variability, inflexibility = opportunity for improvement The Actual Operation Continuous Improvement Process Increase visibility of D • Andon pulls, workplace organization • Exploratory stress • Process measurement, visual management Reduce D • Root cause analysis & problem solving mindset • Waste reduction (Lean tools) • Variability reduction (Six Sigma, TQM)

4. The architect behind Lean Operations: Toyota’s Taiichi Ohno and waste elimination • “Toyota Production System: Beyond Large-Scale Production” by TaiichiOhno • Lean operations has been defined as “a business system for organizing and managing product development, operations, suppliers, and customer relations that requires less human effort, less space, less capital, and less time to make products with fewer defects to precise customer desires, compared with the previous system of mass production.”

5. There are three elements of work • Value Added Activity • Work or time that directly increases the value of the product in the eyes of the customer (e.g. Assembly of parts) • What the customer is paying for Value Added Activity • Waste • Work or time that does not add any value to a product • Waste is sometimes called "muda", from the Japanese for waste Waste Objective The objective is to maximise the proportion of value added activity by eliminating waste and incidental activity Elementsof work Incidental Activity • Incidental Activity • Work or time that does not directly add customer value, but which is currently necessary to maintain operations (e.g. small movements to reach for material for assembly)

6. THERE ARE 7 CLASSIC TYPES OF WASTE “wormpit” Over-production Making parts on a piece rate basis to fully load individual machines Intellect Failure to make full use of the whole team’s experience and knowledge Motion Walking around the factory looking for something or fetching equipment Waiting Mortgage applications piling in a desktop in tray 8 Rework Documenting the same information in several places for a new hospital patient Transportation Transferring finished goods to off-site packing and then freighting onto customers Inventory Excess stock of drugs or equipment in clinical areas Over-processing Polishing a luxury walnut dashboard to a mirror finish on both sides

7. C D 1 min/job Resource 3 1 min/job Resource 4 A B 1 min/job Resource 1 1 min/job Resource 2 Lean Tool #1: cut batch sizes An illustrative example • Consider the following 4-step process: • What is: • The bottleneck: • The process capacity or maximal R: • The theoretical flow time Tth • The minimal amount of inventory needed to run at capacity: • Ith • Call this scenario 1, the best. Let’s now consider what happens if we have (transfer) batches

8. Batch Shop (Batchsize = 4) Flow Shop (Batchsize = 1) 0 1 2 1 3 2 1 4 3 2 1 T 4 3 2 5 A A B B C C D D 4 3 Elapsed Time 4 3 5 7 5 5 T = I = R = = scenario ? 6 6 4 6 8 9 7 7 5 7 8 8 0 6 8 Lean Tool #1: cut batch size ABCD example continued 0 1 2 3 4 1 2 Elapsed Time 3 4 1 9 2 0 3 1 4 2 1 9 2 0 3 1 4 2 T T = I = R =

9. Synchronization requires smaller batch sizes or even 1x1 • Changeover / setup / batch related costs must be reduced if batch size is to be decreased

10. Lean Tool #2: process on demand = pullJust-In-Time operations JIT = have exactly what is needed, in the quantity it is needed, when it is needed, where it is needed. • “hand-to-mouth” material flow • needed by whom?

11. PUSH: Inputs availability triggers execution Supplier Process Customer inputs outputs PULL: Outputs need triggers execution Supplier Process Customer inputs outputs Lean Tool #2: Synchronization with demand: customer demand pulls product

12. Lean Tool #2: how make pull system in house game? Production control Roof cut Base cut FA Base assembly

13. Kanban Job Processing center i WIP Processing center i + 1 Lean Tool #2: Pull Implementation: Kanban Production Control Systems http://www.toyota.co.jp/en/vision/production_system/video.html

14. Lean Tool #3: Quality at the Source Defects Own Station Next Station End of Line Final End User’s Found at: Inspection Hand $ $ $ $ $ · · · · · Impact to the Very Minor Rework Significant Warranty Company · Minor Delay Rework costs Resched. · · of work Delay in Adminis tra Delivery tive costs · · Additional Reputation · Inspection Loss of Market Share

15. Reducing Waste:Quality at the Source • Fool-proof/Fail-safe design (Poka-Yoke) • Inspection • Self • Automated (Jidoka) • Line-stopping empowerment (Andon) Line-stopping empowerment Poka Yoke and Jidoka Trouble! Approach for operators • Preventative • If trouble, STOP! • If defective don't pass • Approach for machines • A mistake-proofing system prevents errors and defects • Stop line when defects are detected or machine breaks down

16. Lean Tool #4: Flexible Resources & Standardized Work • Cross training of workforce allows resource pooling • Use of IT in services

17. Set in order Sort Shine Standardize Sustain WORKPLACE ORGANIZATION – 5S 5S is a structured approach to systematically clean and organize the workplace to support a lean working environment Maintenance of improved condition Waste identification and elimination • Check what is needed and get rid of what is not used • Place each item in its optimal position in the workplace and employ visual management • Keep the area and equipment always clean. Set a cleaning program • Improve and maint-ain the first 3 "S" by improving the en-vironment: • visual controls • standard machine improvements • standard procedures for all similar areas • Employ systems to monitor 5S and ensure that it is constantly maintained Objectives • Organize the workplace with the aim to • Identify and eliminate waste • Maintain and continuously improve the workplace/equipment • Improve morale and increase worker involvement

18. Lean Tool #5: HeijunkaMixed Level/Balanced Production Batch Production Schedule Mixed Production Schedule (AAAABBBB..) (ABAB...) Product April 1.................15...........................30 April 1....................15.......................30 A B FGI FGI time time http://www.toyota.co.jp/en/vision/production_system/video.html

19. SILS: shipping in line sequence Business Mall adjacent to Russelsheim’s LeanField

20. Production Control Production Control Production Control Roof Cut Roof Cut Roof Cut Base Cut Base Cut Base Cut FA FA FA Base Assy Base Assy Base Assy Lean Tool #6: From Functional Layout to Product Cell organization Department 1 Production Control Production Control Production Control Cell 1 Department 2 Department 2 Roof Cut Roof Cut Roof Cut Base Cut Base Cut Base Cut Department 2 Department 2 FA FA FA Base Assy Base Assy Base Assy Cell 2 Cell 3

21. Too Much Space Missed Due Dates Late Deliveries Too much paperwork Inventory Engineering Change Orders Scrap & Rework 100% inspection Long queues Poor Quality Machine Downtime Towards a system of continuous improvement: Increase Problem Visibility– Lower water to expose rocks

22. Visibility: Time plays the role of Inventory in Lean Service Operations TIME

23. Towards a system of continuous improvement: KaizenTools • Reduce variability • Standard operating procedures • Increase visibility of waste and quality at source • Line-stopping empowerment (Andon) • Quality inspection: Self & Automated (Jidoka) • Fool-proof/Fail-safe design (Poka-Yoke) • Targeted improvements: root cause analysis (6 Why’s) • Active worker involvement • Time for experimentation • Supplier involvement • Exploratory stress • Human infrastructure & process measurement and review (visual management)

24. Learning ObjectivesLean Operations • Paradigm of Lean Operations: • Strive for the ideal by eliminating waste • This is a total business management system • Synchronization Tools • Reduced batch sizes • Pull production control systems (vs. push)—JIT & Kanban control • Quality at the source • Resource pooling • Level loading (Heijunka) • Layout: Cellular operations • Set up a System for Continuous Improvement • Reduce variability (standard operating procedures) • Increase visibility (river analogy) • Improve human infrastructure

26. Sears (SHC) does actually have a whole social media team who handles their Twitter and Facebook accounts.  They are VERY pro-active on those accounts.  SHC contracts out to Viewpoints, which is the company I work for.  We run the MySears, MyKmart and Craftsman Community platforms for them, and handle customer service in a pro-active way on those accounts • Along with the senior customer service reps, and folks at corporate, MySears is very fortunate to have a handful of associates or call center employees who pop on to assist, as well.  They are not paid, but are influencers who receive an "Advisor" recognition badge for their help.  We wish we had more folks like these, as their contributions are most helpful.  • Here are a few threads that we would consider "wins" for SHC, as the site helped solve an issue or complaint for a particular customer: • This member was all over the board complaining about the Sears "Lifetime Warranty" on Tools.  He ended up connecting with the VP of Tools through the site, something that would be impossible without utilizing social media:  http://www.mysears.com/Tools--7018/topics/WARRANTY-ISSUES/posts • Someone who visited having issues with their washer:  http://www.mysears.com/Appliances/topics/Kenmore-3-1-CU-FT-IEC-High-Efficiency-Front-Load-Washer-model-42052/posts?page=1 • One of the above mentioned "Advisor" that help.  This member who offered his suggestion is actually a retired service techinician who hangs out a bunch on the site:  http://www.mysears.com/Dishwashers--3933/topics/Washer-model-number-665-17033402/posts?page=1#post_199551