Value Creation Awareness for the EPC Industry

1. Lean Methodology Value Creation Joe Kalchbrenner Date 7/25/06

4. EEliminate Waste – Reduce Cost FFaster Time To Market - Pull SShorter Lead Time - Flow IImproved Quality – Operator Control IImprove customer responsiveness and satisfaction CCreate A Design, Sales, Order Entry, Procurement, And production System In Each Product/Market LLocate the Value Stream Near Your Internal And External Customers - Location Goals of Lean

7. The Seven Wastes People Process Product Problems Inefficient layouts Lack of proximity of machines Off-line resources Motion Defects Inventory Transportation Overproduct ion Waiting Time Operator waiting time Long setups and lead times Large batches Making without demand signals Smoothing forecasts/cust. demands Long cycle times Reduced efficiency High overall lead times Costly rework Long delays for rectification Dissatisfied customers High raw material inventory High work-in-process inventory High finished goods inventory Unnecessary movement Extra handling Overprocessing

9. Before 5-S … After 5-S …