Javier Garcia - Verdugo Sanchez - Six Sigma Training - W4 Lean Intro

/4407 BB W4 Lean intro 06, D. Szemkus/H. Winkler
Lean Manufacturing Principles &
Value Stream Mapping
Introduction
People
Customer
Just in
Time
Quality
Stability
Foundations
Ergonomic
Week 4
Page 2/4407 BB W4 Lean intro 06, D. Szemkus/H. Winkler
Hand craft
Mass production
Lean Manufacturing
• Interchangeable parts (Withney)
• Division of labor (Taylor)
• Assembly lines (Ford)
• Low variety (Ford)
• Labor strife
• High variety
• Small batch sizes
• Focus on quality (ppm)
• Employees engaged
1875 1900 1925 1950 1975 2000
• Made to customer requirements
• Single piece manufacturing ... Each product unique
• Variable quality
• Low inventory
• Expensive ... For rich made only
The History of Manufacturing

• A way of work organization, developed in Japan, which
integrates the knowledge and performance potential of
the employees into the production process.
• The rigid work sharing will be converted into group work.
The employees will get a stronger insight to the
problems and the process flows. They will be motivated
to work on problem solutions.
• Process optimization will be developed and realized by
the employees within the groups.
Lean Manufacturing
• The idea has been developed in Japan, the
name is given in the US.
• Lean is the manufacturing system of the
Japanese automotive industry. It needs less
production factors than the traditional mass
manufacturing.
• With other words, less than half of the
development time and less than the half of
inventories capacities are sufficient for the
production. At the same time more product
variety with higher quality levels can be
offered.
The Idea Lean Manufacturing

• The success of the Lean Manufacturing idea is founded
on the involvement of the employees with teamwork.
• Employees of all areas of the company can be
integrated in teams, e.g. design, research, engineering,
accounting, sales etc.. Depending on the project, the
scope can be planning process, accounting,
manufacturing or sales process.
• Every employee takes over responsibility for his task.
Employee motivation and identification increases while
the defect rate is decreasing.
The Success Factors
Create valuableCreate valuable
Products &Products &
PerformancePerformance
for the Customerfor the Customer
EfficientEfficient
Processes withoutProcesses without
Waiting TimeWaiting Time
Eliminate DefectsEliminate Defects
& reduce Variability& reduce Variability
Optimized Products and Solutions
LEANING
Price On time SIGMA / DPMO
DESIGNING
CapableValue Lean
MASTERING
The Six Sigma Elements
Sales
Customer
Development
Logistic
Production
Quality
Finance
Supplier
Six Sigma and Lean Complement Each Other

Customer Oriented through Business Process ManagementCustomer Oriented through Business Process Management
FinanceMfg LogisticsSales
Materials
Mgmt
Customer
Service
Strategy, Business Plan, ObjectivesStrategy, Business Plan, ObjectivesStrategy, Business Plan, Objectives
CustomerValueMeasures
JustinTime,
ShareofPurchase
CustomerValueMeasuresCustomerValueMeasures
JustinTime,JustinTime,
ShareofPurchaseShareofPurchase
SupplierMeasures
Defective,Delivery,
TotalCost
SupplierMeasuresSupplierMeasures
Defective,Delivery,Defective,Delivery,
TotalCostTotalCost
Application (Product) Development
Order to Delivery
Produce Products
Credit and Collections
Financial Performance Measures
Net Income, Productivity, Cash Flow
Financial Performance MeasuresFinancial Performance Measures
Net Income, Productivity, Cash FlowNet Income, Productivity, Cash Flow
Financial Success
CustomerSatisfactionCustomerSatisfactionCustomerSatisfaction
Financial Success and
Customer Satisfaction are
crossing. Experience shows
that there is friction in the
daily business
Business Processes vs. Organization
A Successful Way with DMAIC
MeasureAnalysis
Measurable
Success
DefineImprove
Control
Metrics
FinancesCustomer
Vision
Strategy
Analysis
Action
Control
Employees
Processes
Success through an integrated Approach… Larry Bossidy

The philosophy of lean manufacturing or of a
production system is based on 5 Principles:
1) Define values in the eyes of the customer
2) Identify the value stream and eliminate waste
3) Make flow at the pull of the customer
4) Involve and empower the employees
5) Continuously improvement in pursuit of perfection
The Lean Principles
Define Phase
Project description and selection of the project leader
•Project selection in respect to product or service
•Scorecard
•Rating of customer needs
•Value Chain Diagram; SIPOC
•Portfolio analysis in respect to competences
•Deficiency analysis to the competitors
•Team building
Measure Phase
Determination of the baseline
Value Stream Mapping (supported by other process maps)
Cycle times / process times
Information flow
Baseline elements: cycle times, change over times, maintenance,
equipment availability and reliability, number of product variants,
theoretical work times, transport distances for products and personal
material yield, first time yield (RTY), WIP, batch sizes, monuments, etc.
The Phases in a Lean Project

Analysis + Improve Phase
Value Stream Mapping (Analysis of the Baseline)
Value Stream Design (Definition of the desired process flow)
Compilation of reasonable metrics
Definition of necessary steps
Elimination of rework
Optimization of material flow
Pull vs. Push; KanBan; One Piece Flow; 5S; Poka Yoke,
Autonomation, Production Smoothing, Waste reduction
Immediately implementation of improvements
Control Phase
Sustain improvements
Regular review of the metrics
Control plan
Visual controls
The Phases in a Lean Project
Lean Manufacturing Elements
Autonomation
Mistake Proofing
Six Sigma Visual Controls
Standard Work TPM
VOC, QFD, Takt
Material Systems
Production
Smoothing
Flow / Pull
People
Customer
Just in
Time
Quality
Stability
Foundations
Ergonomic

Elimination of Waste
7 types of waste (Taiichi Ohno)
1. Due to overproduction
2. Due to waiting and idle
3. Due to transportation
4. Due to inefficient processes
5. Due to unnecessary inventory
6. Due to motion
7. Due to defects (rework)
Waste = Activities which are conducted in an organization but don’t add value
to the final product (NVA = non value adding).
Waste = Activities which are conducted in an organization but don’t add value
to the final product (NVA = non value adding).
After every process step the product will be stored and not transferred to
the next step until a certain quantity have been manufactured.
After every process step the product will be stored and not transferred to
the next step until a certain quantity have been manufactured.
„Batch“ Production
Terms in the Lean Environment

„Single Piece Flow“
A product will be consistently transferred, piece by piece, from one
process step to the next.
A product will be consistently transferred, piece by piece, from one
process step to the next.
„Just in Time“
Means:
At the right time
the right quantity
the right product, material, information
at the right location

• It is a method to control the material flow in
the manufacturing area
• The needed stocks are close to the
manufacturing
• The number of stocks will be continuously
adjusted regarding the changing needs. Not
too much, not too less.
„KanBan“
KanBan means card signal
Available hours
Customer demand
=Takt
„Takt Time“
Is the calculated time frame which is needed to process a
product or a information in order to fulfill the customer
requirements
Calculation of Takt time:

„Cycle Time“
Is the time which is need to perform a
work step / process
Load Chart
0
1
2
3
4
5
6
7
Arbeitsschritt1
Arbeitsschritt2
Arbeitsschritt3
Arbeitsschritt4
Arbeitsschritt5
Arbeitsschritt6
Arbeitsschritt7
Arbeitsschritt8
Arbeitsschritt9
Arbeitsschritt10
Cycle
Takt
Cycle Time & Takt Time
Customer
Customer
„Pull“ from the customer
„Push“ to the customer
„Push - Pull“
Lean Principle 3:
Make flow at the pull of the customer
Lean Principle 3:
Make flow at the pull of the customer

„Visual Controls“
Techniques for a simple control of the
production processes and tools to identify fast
process deviation
* 5S ... cleaning and organization
* Andon ... signals
* KanBan ... signals
* floor markings
* Information & metric boards
* Work instructions
„5 S “ A systematic method in five steps to
organize the work place
1S = “Seiri” = Sorting, put not needed material away
2S = “Seiton” = Storage: a defined place for everything
3S = “Seiso” = Shining: dispose dirt, waste, oil etc.
4S = “Seketsu”= Standardizing: Al rooms and places equal
5S = “Shitsuke” = Sustaining: Regular reviews, control plans

•Work steps
•Safety
•Visual display
•Timing
•Takt time
•A tool for manufacturing of quality products
•Basis for continues process improvements
•Documentation of a standard for a work process
•Own responsibilities of work groups
„Standard Work“
Standard Work means a standardized work
process which includes the following
elements
Is a method for process optimization.
A series of one after the other following activities for
improvements in a predefined area.
This kind of activities can be performed in a time
limited workshop (e.g. 5 days) or over a longer time in
several steps.
„Kaizen“
(KAI = change; ZEN = good)

„Poka Yoke“
A method to design processes in that way, that
the occurrence of defects are not possible
anymore.
This applies to production as well for
administration.
• Equipment can be designed in a way that no defect parts will be
accepted in the process
• Another example, form sheets for creditors and debtors have
different colors
Already during the design phase it has to be evaluated what can go wrong
and what kind of devices are necessary to avoid that!
Already during the design phase it has to be evaluated what can go wrong
and what kind of devices are necessary to avoid that!
„Monument“
Under monument we understand large and not moveable
equipments or work processes. The organizational and / or
technical effort for a simplification or change would be not
acceptable.
Example:
• Large cleaning systems
• Storage equipment
• Production equipment
In a lean environment monuments are undesired, but depending on
the manufacturing process they can be economical reasonable.
In a lean environment monuments are undesired, but depending on
the manufacturing process they can be economical reasonable.

„Spaghetti Chart“
Spaghetti Charts displays the material and information flow
between buildings and areas on the site. A more detailed
illustration of the process is the method Value Stream Mapping
Spaghetti Charts displays the material and information flow
between buildings and areas on the site. A more detailed
illustration of the process is the method Value Stream Mapping
Bldg. A
Area C
Bldg. 2
Bldg. 1
Area B
in
out
Value Stream Mapping, What is it?
Value Stream Mapping is a method for process analysis and
optimization in production and administration:
- Identification/Definition of a process and/or a product group
- Mapping of the current state process (as-is flow)
- Development of a future (desired) process flow
- Development and implementation of change actions
Value Stream Mapping gives you an overview of the entire values
stream from the supplier to the customer in a simple and fast way.
Mainly lead times and process interfaces will be drawn. In combination
with the actual process cycle times the potential improvement
opportunities are linked due to reduction of waiting times. Further
potentials will be identified due to the observation of transport, storage,
WIP, defect rates, etc..

Origin of the Method
Value Stream Mapping is a central part of the
Toyota Production System (TPS).
Within the introduction of Lean Production (Lean
Manufacturing) this is an important element for
process understanding.
The process description is for the Six Sigma
strategy an essential need to recognize the
critical input factors. Value Stream Mapping can
be also included in Six Sigma projects.
Mike Rother researched the value stream
methodology and published it in his book
„Learning to See“ (German version „Sehen
lernen“).
D
M
A
I
C
X bar + Stdev.
„7 cycle Analysis“
Actual data!
Definition:
•Process & Borders
•Product Groups
As-Is Process
mapping
Metric
definition
Baseline
•Value stream
Responsible
•Employee Support +
Training Lean/GB
As-Is Process
Value added / non
value added
Desired Process -
without
waste & over production
Communication
&
Implementation
Presentation &
Approval by the
Management
Comparison As-Is and New
Process
Improvements statistically
significant?
Continuous
Process
Improvement
Additional
projects
Lean/6S
For example:
•Lead times
•Change over times
•Machine available
•Store quantities
•Customer requirements:
•Order quantity
•Lot sizes
•Order cycles
•Cycle times
•Waiting times
•Capacities (Employees per step)
•Transport (Distances + Times)
•WIP
•Quality
•Scrap
•Packaging
•Transport, etc.
Material +
Information
The consistent Strategy

The first Steps…
The complete value chain from the supplier through the customer will be
analyzed. Depending on the company or for simplification certain
process borders (start / end) can be defined.
A segment or a group of products which follow similar process steps will
be analyzed. A product can be also a service!
The material and the information flow will be mapped .
Value stream mapping is a task across functional borders, therefore a
responsible person is needed for this task. This person is responsible for
the understanding and the subsequent implementation of the process
changes. It is beneficial for this task, if the responsible person belongs to
a higher management level.
Mapping the Current State Process (Baseline)
After the definition of the process, the border, a segment or product
group, the achievable goals and a responsible person the current
process will be mapped and analyzed from “ramp to ramp”.
It is recommended, that the process will be followed “upstream” that
means starting at shipping or store. All important information will be
collected and documented.
The actual process metrics will be stored. Depending on the process
steps itself or the type of data, it is may be necessary to measure some
metrics several times „7 cycle analysis“. The advantage is, that we
receive beside the average values also information about the variation.
Helpful for the development of optimized solutions, especial at
competing (oppositional) targets.
The first mapping of the value stream should be sketched by hand with
paper and pencil.

Supplier AG Final assembly
18400 pieces./month
-12000"L"
-6400"R"
Container = 20 pieces
2 Shifts
Raw material
5,2 days
4800 "L"
2400 "R"
1000 "L"
500 "R"
850 "L"
460 "R"
700 "L"
340 "R"
1200 "L"
580 "R"
CT = 2 sec CT = 35 sec CT = 40 sec CT = 62 sec CT = 35 sec
CO = 1 h CO = 10 Min CO = 10 Min CO = Ø CO = Ø
Machine availability =
82 %
100 %
85 %
100 %
100 %
27.600 sec. available 27.600 sec. available 27.600 sec. available 27.600 sec. available 27.600 sec. available
1 Shift 2 Shifts 2 Shifts 2 Shifts 2 Shifts
5,2 days 7,83 days 1,63 days 1,42 days 1,13 days 1,93 days
2 sec 35 sec 40 sec 62 sec 35 sec
Efficiency = 0,0165%
Total CT= 174 sec.
Lead time = 19,14
days
Process 1
1
Process 2a
1
Process 2b
1
Process 3a
1
Process 3b
1
Shipping
Provision
daily
delivery plan
Production Planning
PPS
90/60/30 days
Forecast
weekly planning
Orders
daily
6 weeks
Forecast
One Fax per
Week
Tu. and
Th.
1300 m
Raw material
1 per day
Example: Current State Process (Baseline)
Raw material
5,2 days
4800 "L"
2400 "R"
CT = 2 sec
CO = 1 h
82 %
27.600 sec. available
1 Shift
5,2 days 7,83 days
2 sec
Process 1
1
Process 1
1
Process 2a
14800 pieces „L“
2400 pieces „R“
Process Step 1
This process is producing several parts for different
products.
•E.g. automatic press with automatic coating
•Stock quantity today:
• 4800 finished parts „Left“
• 2400 finished parts „Right“
• 5,2 days raw material
•One worker
•Cycle time: 2 seconds
•Change over time: 1 hour
•Machine availability: 82%
Pusch-System
Explanation of the Metrics

Calculation of the Lead Time
5,2 days lead time results from the information„
5,2 days raw material“
2 seconds out of the cycle time for the process
step
The cycle time of each process step should be in
line with the takt time..
Estimation of the inventory lead time based on the
takt time.
The Takt Time is the calculated time which is needed to process a
product or a information to meet the customer demand.
Raw material
5,2 days
4800 "L"
2400 "R"
CT = 2 sec
CO = 1 h
82 %
1 Shift
5,2 days 7,83 days
2 sec
Process 1
1
Available Working Time
Customer Demand
=Takt Time
Working time:
20 days per month
2 shifts in all production areas
8 hours per shift, if necessary overtime
Two 10 minutes break per shift
During the breaks manually process are stopped
Customer demand:
18.400 pieces per month
12.000 pieces per month „Left“
6.400 pieces pro month „Right“
Customer works with 2 shifts
Shipping container with 20 finished parts per
container
The customer orders are based on container
quantity (several container per order)
Delivery to customer on daily basis per truck
Takt time =
(8 h) – (2 x 10 min) / shift
18.400 pieces / 20 days / month / 2shifts/ day / shift
460 min / shift
460 pieces / shift
27.600 sec / shift
460 pieces / shift
Takt time = 60 sec / piece
Takt time =
Takt time =
Calculation of the Takt Time

Estimation of the Inventory Lead Time
Takt time = 60 sec/piece -> 60 pieces per hour
2 shifts/day with 40 minutes break -> 15,3 hours/day for production
Therefore: 920 pieces can be produced per day!
Inventory lead time =
4.600 pieces + 2.400 pieces
920 pieces/day
The inventory lead time can be calculated based on the takt time. It is also possible to
measure the actual inventory lead times during the Baseline which will be used for the
calculation of the total lead time. (depends on the process, e.g. single piece manufacturing)
Inventory lead time = 7,83 days
Raw material
5,2 days
4800 "L"
2400 "R"
CT = 2 sec
CO = 1 h
82 %
1 Shift
5,2 days 7,83 days
2 sec
Process 1
1
Efficiency = 0,0165%
Total CT= 174 sec.
Lead time = 19,14
days
Process step
Inventory
(days)
Cycle time
(seconds)
Lead time
(days)
1 5,2 5,2
2 2 0,000036
3 7,83 7,83
4 35 0,000634
5 1,63 1,63
6 40 0,000724
7 1,42 1,42
8 62 0,001123
9 1,13 1,13
10 35 0,000634
11 1,93 1,93
Sum: 19,140 174 19,143
Lead time (LT): 19,1
Cycle time in days: 0,003151
Efficiency (Cycle time / LT) 0,0001646
Efficiency in % 0,0165%
Total cycle time
(process time) = 174 sec.
Lead time = 19,1 days
Efficiency = 0,0165
5,2 days 7,83 days 1,63 days 1,42 days 1,13 days 1,93 days
2 sec 35 sec 40 sec 62 sec 35 sec
Calculation of the Total Lead Time

Conclusion out of the Current State Analysis
The process works with a push principle. Parts are produced which
the customer don’t need at this time
Between the process steps we generate a so called WIP (Work in
Process) which needs to be stored!
For this “between” inventory we need space between the machines.
Each process step in the value stream can be considered as an
island.
If a process step produces defective parts you may recognize them
in the following process step.
The total cycle time (process time) is 174 seconds, the total lead
time about 19 days.
The time between purchasing/payment of the raw material and the
payment of the final product is depending on the lead time high.
Guidelines for the creation of a future process
1. Produce according the takt time
2. Establish, where ever possible, a continuous production flow, in the
ideal situation a „Single Piece Flow“
3. Where there continuous flow is interrupted you can use a
Supermarket-Pull System for production control.
4. The production control should be applied only at one process step in
the value stream.
5. If you produce different products, try to distribute these products
equally over the time (planed product mix). The balance will be
controlled by the production control at the “pacesetter” process.
6. Define in your process small and even work portions. This “start pull”
will be controlled by the production control in the “pacesetter”
process.
7. Form the process in a way, that it is possible to produce “every part
every day” (EPE), later every shift, etc..
Based on the 5 Lean principles the following guidelines
will help to change the current process

Example: Possible Future Process
Supplier AG Final assembly
18400 pieces./month
-12000"L"
-6400"R"
Container = 20 pieces
2 Shifts
CT= 2 sec Takt 60 sec 2 days
CO < 10 Min. CT = 55 sec
CO = Ø
100 %
2 Shifts
1,5 days 1,5 days 2 days
2 sec 165 sec Total Cycle Time =
167 sec
Lead Time =
5 days
Process 1
Process
2a - 3b
Shipping
Provision
Production Planning
90/60/30 days
Forecast
weekly planning
Daily
order
6 weeks
Forecas
Daily
order
1 per day
Raw
material
R
O X O X
20
20
20
20
20
LL
Process 2
Change Over Amount of work =
165 sec
Process 2b
Machine
availability
Raw material
Lot Size
Boxes
Rawmaterial
Daily
Overall, production and manufacturing processes in
accordance to lean principles are an industrial
revolution, which are not limited to the automotive
production or to Japan.
The consequences should be similar like the change in
spring 1914. At that time in Detroit, Henry Ford
replaced the hand craft production by an assembly
line. Within some months the time effort for the
assembly of major parts of a car were reduced from
750 to 90 minutes.
Summary

ModellModell PP ModellModell FF
PI
StagingStaging
PI
StagingStaging
PI PI
StagingStaging
PI PIPI PI PI
Work in process
PI PI PI PI
Bld.03
DisassyDisassy
DisassyDisassy DisassyDisassy DisassyDisassy
DisassyDisassy
ReceivingReceiving
DisassyDisassy DisassyDisassy
DisassyDisassy
ModellModell L 2L 2
ModellModell L 1L 1ModellModell SS DisassyDisassy
Back Log
Bld.06
Cleaning
DisassyDisassy
Example: Push System
Receiving
Strip/Split
GB LC
Power Sect.
UnpackUnpack
Modell S
Strip/ Split
Receiving
Strip/Split
GB LC
Power Sect.
UnpackUnpack
Modell L 1
Strip/ Split
Receiving
Strip/Split
GB LC
Power Sect.
UnpackUnpack
Modell L 2
Strip/ Split
Receiving
Strip/Split
NC LC
Power Sect.
UnpackUnpack
Modell P
UnpackUnpack
Modell F
KANBAN
CARD
KANBAN
CARD
VISUAL
CONTROL
ANDON
LIGTH
Priorititationby
ADMINTEAM
S
&
L:B
ld06
P
&
F:B
ld.20A
S
&
L:B
ld
03
P
&
F:B
ld.20A
S
&
L:B
ld
06
P
&
F:B
ld.06
S
&
L:B
ld
03
P
&
F:B
ld.20A
S
&
L:B
ld
02
P
&
F:B
ld.20A
PIPI
StagingStaging
PIPI PIPI
stagingstaging StagingStagingStagingStaging
PIPI PIPI
StagingStaging
PIPI PIPIPIPI PIPI PIPI
Kanban Buffer
Work in process
Receiving
M2
M3 M4
M1
Strip
Split
Cleaning
PIPI PIPI
Example: Pull System

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