Lean Manufacturing Eric Hong Shari Sledge Michelle Woeste Agenda Background Toyota Production System Key Lean Techniques Advantages and Disadvantages People and Customers Economics Changes in Lean Current Lean Practices Case Studies Definition Lean Manufacturing – A way to eliminate waste and improve efficiency in a manufacturing environment Lean focuses on flow, the value stream and eliminating muda, the Japanese word for waste Lean manufacturing is the production of goods using less of everything compared to traditional mass production: less waste, human effort, manufacturing space, investment in tools, inventory, and engineering time to develop a new product Lean and Just-in-Time Lean was generated from the Just-in- time (JIT) philosophy of continuous and forced problem solving Just-in-time is supplying customers with exactly what they want when they want it With JIT, supplies and components are “pulled” through a system to arrive where they are needed when they are needed What is Waste? Waste is anything that happens to a product that does not add value from the customer’s perspective Products being stored, inspected or delayed, products waiting in queues, and defective products do not add value Seven Wastes Overproduction – producing more than the customer orders or producing early. Inventory of any kind is usually waste. Queues – idle time, storage, and waiting are wastes Transportation – moving material between plants, between work centers, and handling more than once is waste Inventory – unnecessary raw material, work-in- process (WIP), finished goods, and excess operating supplies Motion – movement of equipment or people Overprocessing – work performed on product that adds no value Defective product – returns, warranty claims, rework and scrap Origins Lean Manufacturing is sometimes called the Toyota Production System (TPS) because Toyota Motor Company’s Eiji Toyoda and Taiichui Ohno are given credit for its approach and innovations Underlying Principles to TPS Work shall be completely specified as to content, sequence, timing, and outcome Every customer-supplier connection, both internal and external, must be direct and specify personnel, methods, timing, and quantity of goods or services provided Product and service flows must be simple and direct – goods and services are directed to a specific person or machine Any improvement in the system must be made in accordance with the “scientific method” at the lowest possible level in the organization Toyota Production System Since the Toyota Production System requires that activities, connections, and flow paths have built-in tests to signal problems automatically, gaps become immediately evident. Results of the TPS are improvements in reliability, flexibility, safety, and efficiency. These lead to increase in market share and profitability. Timeline Key Lean Manufacturing Techniques 5S Single Minute Exchange of Dies Kanban Cellular Manufacturing 5S Strategy for creating a well organized, smoothly flowing manufacturing process 5S Examples Before After Benefits of 5S Increases organization and efficiency Avoids wasted motion Increases safety Eliminates unnecessary inventory Offers improvements at an inexpensive cost 5S Drawbacks If not fully implemented, may result in “Jive S” Store things Stick to the rules Superficially clean Switch to new fixtures Serve reluctantly Can not be considered an end goal – must be part of a continuous improvement movement Single Minute Exchange of Dies (SMED) Method that focuses on the rapid conversion from manufacturing one product to the next SMED Examples Benefits of SMED Increases throughput by reducing setup times Eliminates setup errors Increases safety Reduces the cost of setups Reduces waiting times and inventory buildups Decreases the required skill level of the operators Kanban A system that uses replenishment signals to simplify inventory management Signals (usually cards) hold product details What to make, when to make it, how much to make, and where to send it Cards stay attached to a bin that holds the product When bin is empty, it is returned to the start of the assembly line for replenishment Full bins are returned to the customer, and the cycle continues Kanban Example Supermarket Ordering System Benefits of Kanban Highly visible systems Simple, effective, and inexpensive Reduces inventory and eliminates stock-outs Improves the quality of service Improves lead times Cellular Manufacturing Dividing the manufacture of products into semi-autonomous and multi- skilled teams known as work cells Cellular Manufacturing Example Functional Layout Cellular Layout Benefits of Cellular Manufacturing Simplifies material flow and management Reduces interdepartmental travel Reduces throughput time Reduces lot sizes Simplifies scheduling Lean Manufacturing Advantages and Disadvantages Advantages: Disadvantages: Increased overall Difficulty involved productivity with changing Reduced amount of processes to floor space required implement lean Reduced principals manufacturing lead Long term time commitment required Improved flexibility Very risky process - to react to changes expect supply chain Improved quality issues while changing over to lean People Transition to Lean is difficult since a company must build a culture where learning and continuous improvement are the norm. Success of lean requires the full commitment and involvement of all employees and of the company’s suppliers. How People Benefit from Lean Element Traditional Lean Improvement Communication Slow & Uncertain Fast & Positive Quality & Coordination Teamwork Inhibited Enhanced Effective Teams Motivation Negative, Extrinsic Positive, Intrinsic Strong Motivation Skill Range Narrow Broad Job Enrichment Supervision Difficult and Easy & Localized Fewer Supervisors Fragmented How Customer’s Benefit from Lean Element Traditional Lean Improvement Response Weeks Hours 70-90% Customization Difficult Easy Competitive Advantage Delivery Speed Weeks-Months Days 70-90% Delivery Erratic Consistent & High Up to 90% Reliability Delivery Large Shipments JIT as Required Locks in JIT Quantities Customers Quality Erratic Consistent & High Delighted Customers House of Lean Economics Reduction of Inventory Less space necessary to hold inventory Reduced Waste Decreased Production Cost Increased market share Able to provide what the customer wants quickly Increased competitive advantage Faster response to the customer Lower Cost Higher Quality Changes in Lean since the beginning Inventory Comparison Inventory Turnover – annual cost of goods sold from the income statement divided by the value of inventory from the balance sheet Quality Control 6 sigma process Combination of old and new ideas 6 ingredients Genuine focus on the customer Data- and fact-driven management Process focus, management, and improvement Proactive management Boundarlyless collaboration Drive for perfection, tolerance failure Lean Maintenance A Simultaneous Approach 6 Tools for Lean Maintenance Visual Controls 5S Seven Wastes Single Minute Exchange of Dies Poka-yoke Total Productive Maintenance Other impacts of Lean Bell South – service industry Management system and operations Control Process management, work measurement, management control, and people development Combines lean and 6 sigma Woburn Safari Parks Feed logistics Animal Resource Planning Background Poli-film America Inc. a division of a German owned company. Manufactures protective masking that prevents abrasion and staining of exposed surfaces during manufacturing and delivery Industries Using Material: Plastics Automotives Construction Electronics Laminates Furniture Textiles High demand product 24/7 production Problems An enterprise resource planning system that encompassed an unstable database The database was untrustworthy account of inventory, hand counts were necessary to confirm the numbers counted by computers Led to many employees spending many hours and led to low processing and limit of work utilization Lack of frequency in supplies and storage – errors in production and set limits Unable to trace items Main concern – program’s ability to adapt to changing processes and production goals while still maintaining inventory traceability real time data with multiple distribution sites Results Chose a new program to implement in later 2003 Greatest impact on company’s inventory flow and order distribution Real time traceability allowed him to cut down on the 2 mil lbs of film and other materials by more than half and maintain a sufficient safety stock for when its time to reorder and restock Benefits through Lean Time and money has seen dramatic cuts Instead of 20 min to fill an order, takes less than 5 min currently Allowed company to expand for more regional coverage Been simplified for reports Reduce time taken to accomplish certain tasks and add more responsibilities Questions?