Tools for Continuous
Improvement and LEAN
Manufacturing
An Introduction to the Principles of
Lean Manufacturing
07/10/2015
Agenda
• Review brief history of manufacturing systems
• Distinguish between mass, craft and lean manufacturing
• Introduce key Concepts of
Lean Manufacturing
• Review the kinds of changes needed to be considered a
lean manufacturer.
Readings
• Chapter 18 of Computer Aided Manufacturing II, Wang, H.P., Chang,
T.C. and Wysk, R. A., Edition (2007 expected)
http://www.engr.psu.edu/cim/ie450/ie450ho1.pdf
• “Building the Lean Machine,” Advanced Manufacturing, January 2000.
http://www.engr.psu.edu/cim/ie450/buildingthelean.pdf
Objectives
• To identify waste elements in a system
• To apply value stream analysis to a complex
engineering/manufacturing system
• To implement 3 M’s in a complex engineering
environment
• To be able to identify and implement the 5Ss of lean
Craft Manufacturing
• Late 1800’s
• Car built on blocks in the barn as workers walked around the
car.
• Built by craftsmen with pride
• Components hand-crafted, hand-fitted
• Excellent quality
• Very expensive
• Few produced
Mass Manufacturing
• Assembly line - Henry Ford 1920s
• Low skilled labor, simplistic jobs,
no pride in work
• Interchangeable parts
• Lower quality
• Affordably priced for the average family
• Billions produced - identical
Lean Manufacturing
• Cells or flexible assembly lines
• Broader jobs, highly skilled
workers, proud of product
• Interchangeable parts,
even more variety
• Excellent quality mandatory
• Costs being decreased through process improvements.
• Global markets and competition.
Exercise
Individually, respond to the following question (3-5 minutes)
What are the most prevalent forms of waste in a job that
you’ve had or in a process (or activity) that you are very
familiar with?
For the assignment that you are doing, would you expect all
process plans to be the same? How different?
Definition of “Lean”
• Half the hours of human effort in the factory
• Half the defects in the finished product
• One-third the hours of engineering effort
• Half the factory space for the same output
• A tenth or less of in-process inventories
Source: The Machine that Changed the World
Womack, Jones, Roos 1990
Presentation
• Asian culture has had a significant impact on the rest of
the world.
– Many words used in our daily languages.
• Martial arts, religion or food.
• Within the business environment.
– Improvement tools (kaizen tools)
– Production philosophies such as Just-in-time.
• Just-in-time philosophy is also known as Lean
Manufacturing.
Presentation
• Another important philosophy is the concept developed
by a Japanese consultant named Kobayashi.
– Based on a methodology of 20 keys leading business on a
course of continuous improvement (kaizen).
• Finally, the production core elements will be presented
in order to focus on improvement actions.
– In addition, a resource rate to measure improvement
results is also explained.
Introduction
• Continuous improvement is a management philosophy
based on employees’ suggestions.
– It was developed in the United States at the end of the
19th century.
• Nevertheless, the most important improvements took
place when this idea or philosophy arrived in Japan.
– Japan was already utilizing tools such as quality circles.
• When they combined these two ideas, kaizen was born.
Introduction
• In 1926 Henry Ford wrote
– “To standardize a method is to choose out of the many
methods the best one, and use it. Standardization means
nothing unless it means standardizing upward.
Today’s standardization, instead of being a barricade
against improvement, is the necessary foundation on which
tomorrow’s improvement will be based.
If you think of “standardization” as the best that you know
today, but which is to be improved tomorrow - you get
somewhere. But if you think of standards as confining,
then progress stops.”
Kaizen vs Reengineering
• Creating an useable and meaningful standard is key to
the success of any enterprise.
• Businesses usually utilize two different kinds of
improvements.
– Those that suppose a revolution in the way of working.
– Those that suppose smaller benefits with less investment.
Final situation
productivity
Kaizen
Reengineering
Initial situation
time
Kaizen vs Reengineering
• The evolution consists of continuous improvements being
made in both the product and process.
• A rapid and radical change (kaikaku) process is
sometimes used as a precursor to kaizen activities.
– Carried out by the utilization of process reengineering or a
major product redesign.
– Require large investments and are based on process
automation.
• In the U.S., these radical activities are frequently
called “kaizen blitzes”.
Kaizen vs Reengineering
• If the process is constantly being improved (continuous
line), the innovation effort required to make a major
change can be reduced (discontinuous line in the left).
– Otherwise, the process of reengineering can become very
expensive (discontinuous line in the right).
Final situation
productivity
Kaizen
Reengineering
Initial situation
time
Improvement philosophies and methodologies
• In order to find the source of a problem, it is important
to define and understand the source and core of the
problem.
• Problem -> Any deviation with respect to the standard
value of a variable (quality and production rate).
– It is necessary to know what the variable objective is
(desired standard) and what is the starting situation in
order to propose a realistic objective.
Improvement philosophies and methodologies
• Three main factors that production managers fear.
– Poor quality.
– Increase of production cost.
– Increase in the lead time.
• Production improvements should be based on the
improvements of processes as well as operations.
– Problems can appear in any of the basic elements that
constitute the production area.
Improvement philosophies and methodologies
• Some example of problems.
– Defects, obsolete work methods, energy waste, poorly
coached workers, low rates of performance in machines
and materials.
• By analyzing the production management history, several
improvement approaches can be identified.
– Just-in-time Methodologies (Lean Manufacturing).
– 20 Keys to Workplace Improvement (Kobayashi).
• The keys to the Japanese success are.
– Simple improvement methodologies.
– Workers respect.
– Teamwork.
Just-in-Time. Introduction
• In accordance with this philosophy principle, nothing is
manufactured until it is demanded, fulfilling the
customer requirements
– “I need it today, not yesterday, not tomorrow.”
• The plant flexibility required to respond to this kind of
demand is total, and is never fully obtained.
– It is critical that inventory is minimized.
• Product obsolescence can make in-process and finished
goods inventory worthless.
Just-in-Time. Introduction
• In 1949 Toyota was on the brink of bankruptcy.
– While in the United States Ford’s car production was at
least 8 times more efficient than Toyota’s.
• The president of Toyota, Kiichiro Toyoda, presented a
challenge to the members of his executive team.
– “To achieve the same rate of production as the United
States in three years.”
• Taiichi Ohno, vice president of Toyota, accepted his
challenge.
– Inspired by the way that an American supermarket works,
“invented” the Just-in-time method.
• With the aid of Shigeo Shingo and Hiroyuki Hirano.
Just-in-Time. Introduction
Thinking
revolution
• Ohno and Shingo wrote their
goal.
Poka-Yoke
Standard
operations
Jidoka
TPM
One-Piece
flow
Multifunctional
workers
Kanban
Leveling
Production
SMED
JUST IN TIME
Workforce optimization
• They developed different
methodologies.
Visual Control
Deliver the right material, in
the exact quantity, with
perfect quality, in the right
place just before it is
needed”.
The 5S
Just-in-Time. Introduction
• The systematic application of all the
methodologies create a new management
philosophy.
Thinking
revolution
The 5S
Standard
operations
Jidoka
TPM
One-Piece
flow
Multifunctional
workers
Kanban
Leveling
Production
JUST IN TIME
SMED
Workforce optimization
Visual Control
Poka-Yoke
– The real value is the knowledge acquired
during its implementation.
• The philosophy developed in Toyota was not
accepted until the end of the sixties.
– Japan in 1973 benefited from the petroleum
crisis and started to export fuel efficient cars
to the United States.
– Since the 1970s, Japan has been the pioneer
of work improvement methodologies.
JIT. Thinking Revolution
• The Western world employed the following
formula to obtain the price of a product.
– Price = Cost + Profit.
– In Japan, mainly Toyota, employed the
following expression.
• Profit = Price – Cost.
Thinking
revolution
The 5S
– Today, this formula is used worldwide.
Standard
operations
Jidoka
TPM
One-Piece
flow
Multifunctional
workers
Kanban
Leveling
Production
SMED
JUST IN TIME
Workforce optimization
Visual Control
Poka-Yoke
• In order to make sure that Toyota would
work like the supermarket it was necessary
to identify and eliminate all business and
production wastes.
JIT. Thinking Revolution
• The real cost is “as big as a seed of a plum
tree.”
Thinking
revolution
The 5S
Standard
operations
Jidoka
TPM
One-Piece
flow
Multifunctional
workers
Kanban
Leveling
Production
SMED
JUST IN TIME
Workforce optimization
Visual Control
Poka-Yoke
– In some cases, manufacturers, let the seed
(cost) grow as big as a tree.
• Managers try to decrease the cost by
cutting some leaves out.
– In reality, it is more efficient to eliminate
tasks that do not add value to the product.
• Reducing the tree to a smaller size is
equivalent to planting a smaller seed.
• The goal of Toyota’s executives was to find
this plum tree seed and work hard to
reduce the cost.
JIT. Seven types of Waste
• Hiroyuki Hirano defined waste as
“everything that is not absolutely
essential.”
– Few operations are safe from elimination.
Thinking
revolution
• He also defined work as “any task that adds
value to the product”.
The 5S
Standard
operations
Jidoka
TPM
One-Piece
flow
Multifunctional
workers
Kanban
Leveling
Production
SMED
JUST IN TIME
Workforce optimization
Visual Control
Poka-Yoke
– In Toyota’s factories outside of Japan, they
required between 5 to 10 times more
operations to produce the same car.
• Shigeo Shingo identified 7 main wastes
common to factories.
JIT. Seven types of Waste
• Overproduction
– Producing unnecessary products, when they
are not needed and in a greater quantities
than required.
Thinking
revolution
• Inventory.
– Material stored as raw material, work-inprocess and final products.
The 5S
Standard
operations
Jidoka
TPM
One-Piece
flow
Multifunctional
workers
Kanban
Leveling
Production
SMED
JUST IN TIME
Workforce optimization
Visual Control
Poka-Yoke
• Transportation.
– Material handling between internal sections.
• Defects.
– Irregular products that interfere with
productivity stopping the flow of high quality
products.
JIT. Seven types of Waste
• Processes.
– Tasks accepted as necessary.
• Operations.
– Not all operations add value to the product.
Thinking
revolution
• Inactivities.
– Correspond to machines idle time or
operator’s idle time.
The 5S
Standard
operations
Jidoka
TPM
One-Piece
flow
Multifunctional
workers
Kanban
Leveling
Production
SMED
JUST IN TIME
Workforce optimization
Visual Control
Poka-Yoke
Inventory is considered the type of waste
with greater impact
JIT. Inventory
• Inventory is a sign of an ill
factory because it hides the
problems instead of resolving
them.
– For example, in order to cope
with the problem of poor
process quality, the size of
production lots is typically
increased.
• Products that will probably
never be used, get stored.
JIT. Inventory
• If the problem that produces
the low quality is solved
inventory could be reduced
without affecting service.
• Sometimes it is necessary to
force a decrease in inventory
in order to identify the
production variability that
necessitated it.
– Then, the work method can be
changed.
Lean Manufacturing
• Lean Manufacturing is the systematic elimination of
waste.
– Lean is focused at cutting “fat” from production activities.
• Lean has also been successfully applied to
administrative and engineering activities as well.
• Many of the tools used in lean can be traced back to
Taylor, Ford and the Gilbreths.
– The Japanesse systematized the development and
evolution of improvement tools.
• Lean Manufacturing is one way to define Toyota’s
production system.
– MUDA is the term chosen when referring to lean. In
Japanese, MUDA means waste.
Lean Manufacturing
• Lean Manufacturing is supported by three philosophies.
– Just-in-time
– Kaizen (continuous improvements)
– Jidoka.
• Translates as autonomation.
• Machinery automatically inspects each item after
producing it, ceasing production and notifying humans if
a defect is detected.
• Toyota expands the meaning of Jidoka to include the
responsibility of all workers to function similarly.
Lean Manufacturing
• Traditional approximations improves the lead time by
reducing waste in the activities that add value (AV).
• Lean Manufacturing reduces the lead time by eliminating
operations that do not add value to the product (MUDA).
95% MUDA
5% VA
Lead Time
98% MUDA
Lead Time
95% MUDA
5% VA
Lead Time
2% VA
90% MUDA
10% VA
Lead Time
20 Keys to workplace improvement
1
7
20
16
14
5
6
4
17
18
2
9 11 12
– They all must be considered in order
to achieve continuous improvement.
• These 20 keys are arranged in a
circle.
8
19 10 13
• Iwao Kobayashi, in 1988, published a
book explaining 20 keys to Workplace
improvement.
15
3
– Shows the relations between the keys
and their influence on the three main
factors.
• Quality, cost and lead time.
20 Keys to workplace improvement
1
Cleaning and
Organizing
9
Maintaining
Equipment
11
Quaility
Assurance
System
20
Leading
Technology
12
Developing
your
Suppliers
7
Zero Monitor
Manufacturing
14
Empowering
Workers to
Make improvements
5
Quick
Changeover
Technology
Quality
4
Reducing
Inventory
6
Method
Improvement
Cost
Lead
time
17
Efficiency
Control
18
Using
Information
systems
2
Rationalizing
the system
• There are four keys
outside the circle.
16
Production
Scheduling
8
Coupled
Manufacturing
15
Cross
Training
19
Conserving
Energy and
Materials
10
Time Control
And
Commitment
13
Eliminating
Waste
3
Improvement
Team
Activities
– Keys 1, 2 and 3 must
be implemented
before the rest.
– Key number 20 is the
result of
implementing the
other 19 keys.
20 Keys to workplace improvement
• Kobayashi divided each key into five levels and set some
criteria to rise from one level to the next.
– Kobayashi offers the steps to reach the final level gradually
rather than attempting to directly reach the top.
20 Keys to workplace improvement
• Kobayashi presents a radar
graphic to show the evolution
of the factory
1
20
2
19
3
18
4
17
– The scoring of each key is
represented.
5
16
6
15
7
14
8
13
9
12
10
11
• Kobayashi recommends to
improve all the keys equally.
– In the radar graphic, the
factory’s scoring will grow
concentrically.
Overall Equipment Efficiency
• To improve the productivity of production equipment
Nakajima summarized the main time losses for
equipment based on the value of three activities.
• Available work time -> Calendar time.
– Fixed time for planned stops -> Preventive maintenance,
operators break.
• The rest of the time is considered load time.
Load time
Calendar time
Planned
stops
Overall Equipment Efficiency
• Six main causes that reduce valid operation time.
– Breakdowns.
• The time that the machine is stopped by repairs.
– Setup and changeovers.
• Corresponds to the change time between models, or
between products of the same model.
– Idling and minor stoppage.
• Loss time caused by the processes´ randomness or by
the worker-machine cycle complexity.
– Reduced speed.
• Caused by the wear of components.
– Defects and reworks.
• Low quality products.
– Starting losses.
• Machine produces defects until it reaches the operation
steady state.
Overall Equipment Efficiency
• These six main losses are grouped.
Load time
Operating time
Useful time
Defects and rework
Starting losses
Idling and minor stoppages
Reduced speed
Breakdowns
Setup and changeover
Overall Equipment Efficiency
• The previous grouped losses define three basic indicator.
– Availability, performance and quality.
– Overall Equipment Efficiency (OEE) = A · P · Q
Load time
Operating time
Overall Equipment
Effeciency
(OEE)
 A P Q
Useful time
Q  Q uality 
processed
P  Performanc
units  defective units
processed
e 
stardard
A  Availabili ty 
units
 100
cycle time  processed
operating
time
load time  breakdown
load time
units
 100
and setup time
 100
Overall Equipment Efficiency
• Objectives predicted for each indicator
by Nakajima.
– More than 90% in the availability.
– More than 95% in the rate of
performance.
– More than 99% in the rate of quality.
• The main advantage of the
implementation of these rates is that
they can show how the improvements
carried out affect directly the
equipment efficiency.
Overall Equipment Efficiency
1,200
1,200
1,000
1,000
0,800
0,800
0,600
0,600
0,400
0,400
A
P
0,200
Startitg situation
Q
A
0,200
P
Transitory improvement
Q
OEE
0,000
OEE
0,000
1
4
7
10
13
16
19
2
25
2
31
3
37
4
4
4
4
52
1
1,200
1,200
1,000
1,000
0,800
0,800
0,600
0,600
0,400
4
7
10
13
16
19
2
25
2
31
3
37
4
4
4
4
52
0,400
A
P
0,200
Permanent improvement
Q
0,200
P
Q
worsening in the OEE rate
OEE
0,000
A
Permanent improvement but
OEE
0,000
1
4
7
10
13
16
19
2
25
2
31
3
37
4
4
4
4
52
1
4
7
10
13
16
19
2
25
2
31
3
37
4
4
4
4
52
Other Tools
• Visual Factory
• Error Proofing
• Quick Change-over
• Total Productive Maintenance
5S Programs
•
•
•
•
•
Seiri (sort, necessary items)
Seiton (set-in-order, efficient placement)
Seison (sweep, cleanliness)
Seiketsu (standardize, cont. improvement)
Shitsuke (sustain, discipline)
Visual Factory
• “Ability to understand the status of a production area in 5
minutes or less by simple observation without use of computers
or speaking to anyone.”
• 5-S
–
–
–
–
–
1S
2S
3S
4S
5S
Sift and Sort
Stabilize
Shine
Standardize
Sustain
(Organize)
(Orderliness)
(Cleanliness)
(Adherence)
(Self-discipline)
Questions?
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