Tools for Continuous Improvement and LEAN Manufacturing An Introduction to the Principles of Lean Manufacturing 19/04/2017

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. The focus here is on the trends towards smaller lot sizes, more frequent change over and higher flexibility required today.

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 There is no good reference here. The web site is not operational at this time. Hopefully by August 2002, the introductory chapter will be available.

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 Time & Motion studies - Fredrick Taylor Interchangeable parts - Eli Whitney

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 Term “lean” coined by John Krafcik, one of the research members on Jim Womack’s MIT team for the 5 year study. 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. Kaizen Final situation Initial situation time Reengineering productivity

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). Kaizen Final situation Initial situation time Reengineering productivity

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. Deliver the right material, in the exact quantity, with perfect quality, in the right place just before it is needed”. They developed different methodologies. The 5S Visual Control Workforce optimization Poka-Yoke Standard operations Jidoka TPM One-Piece flow Multi- functional workers Kanban Leveling Production SMED JUST IN TIME

Just-in-Time. Introduction Thinking revolution The 5S Standard operations One-Piece flow Poka-Yoke Jidoka TPM JUST IN TIME Workforce optimization Visual Control Leveling Production Kanban Multi- functional workers SMED The systematic application of all the methodologies create a new management philosophy. 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. Today, this formula is used worldwide. In order to make sure that Toyota would work like the supermarket it was necessary to identify and eliminate all business and production wastes. Thinking revolution The 5S Standard operations One-Piece flow Poka-Yoke Jidoka TPM JUST IN TIME Workforce optimization Visual Control Leveling Production Kanban Multi- functional workers SMED

JIT. Thinking Revolution The real cost is “as big as a seed of a plum tree.” 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. Thinking revolution The 5S Standard operations One-Piece flow Poka-Yoke Jidoka TPM JUST IN TIME Workforce optimization Visual Control Leveling Production Kanban Multi- functional workers SMED

JIT. Seven types of Waste Hiroyuki Hirano defined waste as “everything that is not absolutely essential.” Few operations are safe from elimination. He also defined work as “any task that adds value to the product”. 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. Thinking revolution The 5S Standard operations One-Piece flow Poka-Yoke Jidoka TPM JUST IN TIME Workforce optimization Visual Control Leveling Production Kanban Multi- functional workers SMED

JIT. Seven types of Waste Overproduction Producing unnecessary products, when they are not needed and in a greater quantities than required. Inventory. Material stored as raw material, work-in-process and final products. Transportation. Material handling between internal sections. Defects. Irregular products that interfere with productivity stopping the flow of high quality products. Thinking revolution The 5S Standard operations One-Piece flow Poka-Yoke Jidoka TPM JUST IN TIME Workforce optimization Visual Control Leveling Production Kanban Multi- functional workers SMED

JIT. Seven types of Waste Processes. Tasks accepted as necessary. Operations. Not all operations add value to the product. Inactivities. Correspond to machines idle time or operator’s idle time. Inventory is considered the type of waste with greater impact Thinking revolution The 5S Standard operations One-Piece flow Poka-Yoke Jidoka TPM JUST IN TIME Workforce optimization Visual Control Leveling Production Kanban Multi- functional workers SMED

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 2% VA 90% MUDA 10% VA

20 Keys to workplace improvement Iwao Kobayashi, in 1988, published a book explaining 20 keys to Workplace improvement. They all must be considered in order to achieve continuous improvement. These 20 keys are arranged in a circle. Shows the relations between the keys and their influence on the three main factors. Quality, cost and lead time. 20 16 12 11 9 7 14 5 4 8 15 13 10 19 18 17 6 1 2 3

20 Keys to workplace improvement 1 Cleaning and Organizing Quality Cost Lead time 20 Leading Technology 11 Quaility Assurance System 9 Maintaining Equipment 12 Developing your Suppliers There are four keys outside the circle. Keys 1, 2 and 3 must be implemented before the rest. Key number 20 is the result of implementing the other 19 keys. 7 Zero Monitor Manufacturing 16 Production Scheduling 14 Empowering Workers to Make improve- ments 5 Quick Changeover Technology 6 Method Improvement 4 Reducing Inventory 17 Efficiency Control 8 Coupled Manufacturing 18 Using Information systems 15 Cross Training 19 Conserving Energy and Materials 13 Eliminating Waste 2 Rationalizing the system 10 Time Control And Commitment 3 Improvement Team Activities

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 The scoring of each key is represented. 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 Useful time Operating time

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

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 Sift and Sort (Organize) 2S Stabilize (Orderliness) 3S Shine (Cleanliness) 4S Standardize (Adherence) 5S Sustain (Self-discipline)

Questions?