Lean Manufacturing

© Operational Excellence Consulting. All rights reserved.
Lean Manufacturing

4© Operational Excellence Consulting. All rights reserved.
Outline
1. Introduction to Lean Manufacturing
2. Key Concepts & Principles of Lean
3. Common Lean Methods & Tools
4. Ways to develop “Kaizen Eyes”
5. Lean Roles
6. Sustaining a Lean CultureThis document is a partial preview. Full document download can be found on Flevy:
https://flevy.com/browse/document/lean-manufacturing-160

Where Did Lean Originate?
Lean Manufacturing
1933
Toyota
founded
WWII
• Post war restrictions caused
depression (MacArthur said Japan was
1/9th of USA)
• Toyota faced the biggest strike in its
history as Toyota struggled to even pay
its employees
1946
Major
strike
• Toyota was a dwarf compared to
American car companies – export was
impossible (In 1950, GM 3,656,000,
Toyota 11,000)
• Capital infrastructure was limited
• Taiichi Ohno, chief engineer at Toyota,
invented an alternative: the Toyota
Production System (TPS)
Taiichi Ohno
starts TPS
1950
Toyota Production System
This document is a partial preview. Full document download can be found on Flevy:

Lean has been adopted in many different
environments since its creation
Toyota
Automotive
Industrial products
High fashion
Medical
devices
Consumer
products
Aerospace
Shipbuilding
Pharma
Food
production
Pulp
and paper
Chemicals
Airlines
Railways
Naval operations &
maintenance
Hospital
Insurance
Banking
Retail Store
Upstream E&P
High Tech
Consulting
Law Firms
Hospitality
ITO/BPO
Services
Process
industries
Manufacturing
Time
Complexity

What does Lean in a service environment
look like?
BANKS
•Mergers and
acquisitions
•Loans application
IT
•Outsourced
managed services
Application Common Issues Typical Solutions
•Differences in
business practices
•Loans approval
process
•Complicated tasks
•Unbalanced capacity
•Manpower utilization
•Process integration and
streamlining
•Fast track processing
for low-risk loans
•Segmenting complexity
•Pooling resources for
economies of scale
•Flexible manpower
systems
TELCO
• Procurement
• Call centre
operations
•Cost-based and capex
management
•Customer service
•Inventory management
•Network sharing
•Channels efficiency
Source: Operational Excellence Consulting Research

What is Lean?
• Value stream as primary work unit
• Focused on improving process performance
• Clear view of end state
• Wide range of Lean tools are available
• Learn-by-doing approach to performance
improvement and capability-building
• Lean is a management philosophy based
on the Toyota Production System (TPS)
• Eliminate everything that does not add value
(waste) in the customer’s eyes
Objective
Focus and
scope
Approach
and tools

Traditional Thinking vs. Lean Thinking
Traditional Thinking
• Large batches
• Low unit costs
• Work at full capacity
• Tight Schedules
• High WIP inventories
• High level of specialization
• Long cycle times
Lean Thinking
• Small batches
• Total system cost
• Work at necessary capacity
• Flexible schedules
• Low WIP inventories
• Cross-training
• Short cycle times

Lean Manufacturing System
 TPS is built on two main pillars:
• Just-In-Time: It refers to the manufacturing and conveyance of
only what is needed, when it is needed, and in the amount
needed.
• Jidoka: The ability to stop production lines in the event of
problems such as equipment malfunction, quality issues, or late
work. Jidoka helps prevent the passing of defects, helps identify
and correct problem areas using localization and isolation.
Underlying this management philosophy is the concept
that “Good Thinking Means Good Product.”

© Operational Excellence Consulting. All rights reserved. 25
Activity: Issues & Challenges
Instructions:
 In groups, brainstorm a list of issues and challenges that you
have encountered in your work areas. Consider the following:
• Mindsets and behaviors
• Processes/Systems
• Materials and information
• Communication
• Common areas and equipment
 List your ideas on the flip chart.
 Present your ideas to the class.
Time: 10 mins

“Waste is anything other
than the minimum
amount of equipment,
materials, parts, space,
and worker’s time which
are absolutely essential to
add value to the product.”
Shoichiro Toyoda
President, Toyota
Definition of Waste

Work versus Waste
 Consume resources but
creates no value for the
customer
 Could be stopped and it
would be invisible to the
customer
Non-Value Add:
Pure Waste
 Transform or shape
material or information
 Customer wants it and
willing to pay for it
 Done right the first time
Value-Added
Activities
 No value created but
required by current
thinking
required by process
limitations
required by current
technology
required by government/
business regulations
Non-Value Add:
Incidental Waste

Lean Wastes in Manufacturing
Over-production
Producing sooner, faster or in
greater quantities than
customer demand
Inventory
Raw material, WIP or finished
goods which is not having
value added to it
Transportation
Unnecessary movement of
people or parts between
processes
Defects
Work not done right the first
time such as scrap and
rework
Over-processing
Processing beyond the
standard required by the
customer
Motion
Unnecessary movement of
people, parts or machines
within a process
Intellect
Not using employees full
intellectual contribution
Waiting
People or parts that wait
for a work cycle to be
completed
WasteWaste

• Waiting for materials or equipment to be
delivered
• Person waiting for machine; machine
waiting for person; person waiting for
person
• Waiting due to quality issues
• Waiting for breakdown to be resolved
• Waiting for instructions, approvals,
information or decisions
• Seeking clarifications (due to unclear
communications)
• Stockouts
Waiting

• Providing higher quality than is necessary
• Repeating the same or similar steps
(redundancy)
• Band-aid reactions to past quality problems
• Removing coating or paint overspray from
an unwanted area
• Unnecessary part/system replacement
• Excessive documentation
• Redundant approvals (checkers checking
on checkers)
Over-Processing

Examples of Value-Added Activities
 Entering orders
 Translating materials
 Creating codes
 Preparing drawings or artwork
 Laying foundations
 Assembling goods
 Shipping to customers

Lean Thinking Philosophy
Identify and eliminate all activities that are waste.
Focus on optimal flow throughout the process.
Focus on creating value for customers.
Current
State
Future
State
Identify
Waste “True North”
Value Added Time = Lead Time
Full of Waste,
Variation, and
Rigidity
Eliminate
Waste

Principle 1:
Specify Value for Our Customer(s)
 Providing the right product, at the right time, in the right
quantity, at the right quality, at the right price, in the right
place in accordance to customers’ requirements
 Customers are willing to pay for these improvements
which can change the form, fit or function of a product or
service

Principle 3:
Make Value Flow
Continuous Flow
- Make One
- Move One
How long to make a pack of 10
units?
Batch Processing How long to make a pack of 10
units?

Common Lean Methods &
Tools
3

Activities that do
not add value
Workload that is
not balanced
Overloading creates burden for the
team members or processes
Source: Toyota Motor Company
The 3 MU’s: Muda, Mura, Muri

Go to “Gemba”, observe, recognize Waste and
take steps to eliminate it
 “Gemba” means the place where the real actions take
place
 It usually refers to the place where employees have
direct contact with customers, e.g. customer service
counter
 “Gemba” is where the value-adding activities to satisfy
the customer are taken place
 One place that is not “Gemba” is a manager’s desk
When was the last time you made your
Gemba walk?

Stability

Stability
 Controlling the key factors of production to ensure stable
processes
 Good housekeeping and efficient workplace organization
(5S)
Stability

Visual Controls
 Visual elements on the production floor allow everyone
to “know the score” and they make out of standard
situations immediately obvious.
• Enables everyone to
‘see’ how we’re
performing
• Helps highlight
problems, or variances
from standard
• Encourages employee
involvement and open
discussions
Process Costs
Product Profitability
100%
Revenue
Rework
On TimeCycle Time Reduction WIP Backlog
Internal Quality
Stability

Total Productive Maintenance (TPM)
 Total Productive Maintenance (TPM) is a series of
methods to keep equipment running
 The goals of TPM include:
• Zero unplanned downtime
• Zero speed losses
• Zero defects
• Zero accidents
• Minimum life cycle cost
TPMintheOfficeTPMintheOffice
Safety,Health&EnvironmentSafety,Health&Environment
AutonomousMaintenanceAutonomousMaintenance
PlannedMaintenancePlannedMaintenance
FocusedImprovementFocusedImprovement
EarlyEquipment
Management
EarlyEquipment
Management
QualityMaintenanceQualityMaintenance
Education&TrainingEducation&Training
5S & Visual
Management
5S & Visual
Management
TPM Goals:
Zero Defects, Zero Breakdowns,
Zero Accidents
Stability

Standardization

Standardization
 Eliminates and highlights process variability
 Learning and adoption of best practices
Standardization

Standard Work Board
Standardization

Heijunka by Product Type
Traditional producer
Lean producer
PRODUCTION SEQUENCE
Product A
Product B
Product C
Product D
Demand per week
Standardization

Kaizen Process
Standardization
Map things
as they are
Measure
Evaluate
Celebrate the
accomplishments
Eliminate what
does not add
value
Start
here
Flow
value added
activities and
train
A CB

Just-In-Time

Just-in-Time (not Just-in-Case) Pillar
 The right material
 At the right time
 At the right place
 In the exact amount
Just-In-Time

Pull System
 Pull System is a flexible and simple method of
controlling/balancing the flow of resources
• Eliminate waste of handling, storage, expediting, obsolescence,
repair, rework, facilities, equipment, excess inventory, etc.
 Pull System consists of:
• Production based on actual consumption
• Small Lots
• Low inventories
• Management by sight (visual management)
• Better communication
Just-In-Time

Supermarket Analogy
1. A carton of milk is removed from shelf
2. A stock person restocks the empty location, but only
brings what shelf can accommodate
3. The supermarket combines visual control, pull system,
Kanban and 5S
Just-In-Time

Calculate Takt Time
 Calculate Takt time (if relevant):
• Total work time = 440 Minutes (7 hours & 20 minutes),
20 days a month
• Total demand = 17,600 units per month
• Takt time = 8,800 ÷ 17,600
= 2 pcs per minute or one pc every 30 secs
Available Work Time
Customer Demand
Takt Time =
Just-In-Time

No/Low Cost Solution: One-Motion Methods
Cam Method
Quick Changeover
Wing Nut Method
Pear-Shaped Hole Method
Tighten
Here
Attach and
Remove
Here
Just-In-Time

Jidoka

Jidoka Pillar
 Quality at source
 Stop and fix problems as they occur rather than pushing
them down the line to be resolved later (problem-
solving)
 Prevention
Jidoka

The source of good quality lies in
Prevention. . . . through:
 PRODUCT DESIGN
 PROCESSES
 MATERIALS
 PEOPLE
. . . Not in Inspection or Correction
Do It Right First Time, Every Time
Quality At SourceQuality At Source
Jidoka

Four Steps in Jidoka
1. Detect the abnormality
2. Stop
3. Fix or correct the immediate condition
4. Investigate the root cause and install a
countermeasure
Jidoka

Poka Yoke – Dual Focus
DefectsMistakesProcess
Prevention
Poka-Yoke that focuses here
works on mistake prevention or
making mistakes impossible.
Detection
Poka-Yoke that focuses here
works on mistake detection,
or making sure mistakes do
not turn into defects.
People and systems do make mistakes.
A portion of mistakes turn into defects.
Jidoka

Andon
 A visual control device in a
production area
• Typically a lighted overhead
display
• Gives the current status of
the production system
• Alerts team members to
emerging problems
 Serves as warning system
to signal and identify
problems in the process
Jidoka

PDCA 5–step Problem Solving Process
1. Define the
Problem
1. Define the
Problem
2. Analyze the
Root Causes
2. Analyze the
Root Causes
3. Define
Solutions
3. Define
Solutions
4. Implement
Solutions
4. Implement
Solutions
5. Check &
Evaluate Results
5. Check &
Evaluate Results
Jidoka

Lean Management Framework
- Involvement
Source: Adapted from Toyota Production System
Stability
Heijunka Standardized Work Kaizen
Just-In-Time
• Continuous flow
• Takt time
• Pull system
• Flexible workforce
Jidoka
• Separate man &
machine work
• Abnormality
Identification
• Poka yoke
Goals:
highest quality,
lowest cost, shortest lead times
Involvement
Stability
Standardization
Just-In-Time
Jidoka
Involvement
1
2
3
4
5
1
2
3 4
5

Small Group Activities
 Small Group Activities (SGA) are
informal, voluntary small groups to
carry out specific tasks, e.g. QC
circles, suggestion groups, safety
groups, ZD movements, etc.
 For employees at all levels to
make incremental improvements
 Useful tools and techniques –
PDCA, 5W1H, Problem-solving
process, root cause analysis, etc.
Involvement

Suggestion System
 A simple suggestions process works as follows:
1. Employee identifies a problem, waste, or an opportunity for
improvement and writes it down
2. Employee develops an improvement idea and discusses it with
his or her supervisor
3. Supervisor reviews the idea within 24 hours and encourages
immediate action
4. Employee implements the idea. If a larger improvement idea is
approved, the employee should take leadership to implement
the idea.
5. Idea is written up on a simple form in less than three minutes
6. Supervisor posts the form to share with and stimulate others
and recognizes the accomplishment
Involvement

Hoshin Kanri Process
Direction of
information flow
Catchball:
Negotiation &
Alignment between
two levels
MD/
Business Unit
MD/
Business Unit
GMGM
Dept ManagerDept Manager
Section
Manager
Section
Manager
EngineerEngineer
Customer
Satisfaction
Feedback
Feedback
Feedback
Feedback
Set up & lead
Kaizen team
to reduce rejects
in Line A-1
To improve
quality
Improve
overall yield
Reduce
defects
Reduce rejects
in Line A-1
Policy OwnerPolicy Owner ObjectiveObjective MeansMeans
To improve
quality
Improve
overall yield
Reduce
defects
Involvement

• Creates an end-to-end view of the system
• Demonstrates interaction between material/work and information flow
• Provides a common visual language for understanding a complex system
Supplier Management
Control
Management
Control
Customer
Work & Information Flow
Information flow
Value stream mapping provides an overview of the
end-to-end production process
Involvement

PDCA Problem Solving
 A systematic approach
to process improvement
 Provides the framework
for a team to carry out
improvement
Plan
DoCheck
Act
Involvement

"As much as 95% of
quality related
problems in the factory
can be solved with
seven fundamental
quantitative tools.”
Dr. Kaoru IshikawaThis document is a partial preview. Full document download can be found on Flevy:

What Are “Kaizen Eyes”?
 Kaizen is continual improvement for the better
 “Kaizen Eyes” see opportunities to improve. These eyes
are a skill that can be developed through technique and
practice.
 The following slides are ways (techniques) to be
practiced. They will help to widen the ability to recognize
opportunity that may not be in full view.

Ways to Develop “Kaizen Eyes” 3
41.Take something apart
42.Do a walkthrough with someone else
43.Study problem solving
44.Quiz suppliers
45.Listen to customers
46.What would you do with unlimited budget?
47.Search help forums
48.Create a checklist
Always be looking for opportunitiesAlways be looking for opportunities
Source: Tom Curtis

Role of Lean Deployment Leader
 Responsible for the deployment of Lean within his/her region,
division or business unit
 Works with leaders of region/division/business unit to determine
their goals and objectives and ensure that they are aligned with the
executives
 Facilitates the identification and prioritization of projects
 Develops a communication plan for the region/division/business unit
 Reports the deployment status to the steering committee
 Selects the project champions
 Remove barriers for the team
 Share best practices

Role of Lean Coach
 Is a Technical Leader
 An expert in Lean tools and concepts
 Trains Lean Practitioners and ensures they are properly applying
the methodology and tools
 Coaches and mentors Lean Practitioners
 Maintains the training material and updates it if necessary
 Works high-level projects, many of which are across geographies,
across divisions or business units
 Assists champions and process owners with project selection,
project management and Lean administration
 Is a consultant to the Lean steering committee
 Assists with deployment challenges
 Shares best practices

Sustaining a Lean Culture
6

Understanding Responses to Change
Critical Mass Direction of Enrollment
Middle
Enrollers
Late
Enrollers
Early
Enrollers
Initiators
Slugs
Die
Hards
5% 15% 30% 30% 15% 5%
Source: The Atlanta Consulting Group, Inc.
Enrollment Curve
It is key to understand and leverage is the rate and pace at which
people adapt to change
It is key to understand and leverage is the rate and pace at which
people adapt to change
Enrollment Curve
Start by focusing
time and effort on
the middle/late
enrollers

“Whether you
think you can,
or you think you
can’t, you’re
right.”
Henry FordThis document is a partial preview. Full document download can be found on Flevy:

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178© Operational Excellence Consulting. All rights reserved.© Operational Excellence Consulting. All rights reserved.
Eight Wastes of Lean
Overproduction
Producing more than what the
customer needs.
Transportation
Moving raw materials or
documents or traveling from one
place to another.
Waiting
Employees waiting for another
process, equipment or person.
Motion
Extra physical/mental motion that
does not add value.
Inventory
Building or storing extra products
that the customer has not
ordered.
Intellect
Not using employees full
intellectual contribution.
Defects
Scrap, rework, data errors or
missing information in documents.
Overprocessing
Adding extra value when the
customer does not require it.

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