Lean for Process Manufacturing QAD Midwest User Group Meeting Stephen Dombroski – September 2011

Overview of Lean Principles Specific Features of the Process industries Identifying Wastes in Process Industries Applying Lean Tools in Process Manufacturing QAD Tools for Lean in Manufacturing Agenda

Overview of Lean Principles

Origin -Derived from the Toyota Production System (TPS) focused on minimizing waste in the production process Fundamentals -Best Quality -Lowest Cost -Shortest Lead Time -Minimize Waste through the Production Process Traditionally Applied to Discrete Manufacturing Overview of Lean Principles

5

TPS House Two Essential “Pillars” -Just in Time -“Jikoda” – Quality House Center -Motivated People Foundation -Heijunka – Level Production -Standardized Work – Definition of Specific Tasks -Kaizen – Continuous Improvement -Stability – Stable Environment Overview of Lean Principles

The Essence of Lean -Elimination of all Waste -Continuous Improvement -Produce when a customer wants it -Ensuring Quality Major Principles -Value -Value Stream -Flow -Pull -Perfection Overview of Lean Principles

Lean Today - What is Lean Today? A Concept? A Philosophy? A Practice? A Process? Answer: All of the Above -Many ideas and philosophies and how to get there. Overview of Lean Principles

Process Industries – Specific Features

Industries Categorized as Types - Discrete – Typically Assembly Manufacturing Finished product can be broken down to the original parts -Automotive -Electronics -Tools - Process – Flow Production, Reactive Production consisting of formulas and recipes Once it is put together, you cannot take it apart -Processed Foods -Beverages -Chemicals -Paper Products Process Industries – What are They?

11 Process Versus Discrete Manufacturing Industry Discrete Manufacturing Process Manufacturing Examples Automotive Chemicals Electronics Paints Power Tools Processed Foods Industrial Equipment Beverages Home Appliances Paper and Plastic Process Flow Model Many Raw Materials Few Raw Materials Part Variety Material Variety Little Final Differentiation High Final Differentiation Primary Focus Waste Cycle Time and Waste Over Production Defects Yield Losses Lot Size of One Lot Sized Based On Equipment Primary Economic Drivers Labor Productivity Asset Productivity Inventory Reduction Increased Throughput Reduction in Yield Losses

12 Process Versus Discrete Manufacturing Industry Discrete Manufacturing Process Manufacturing Primary Production Factor Labor Equipment Setup, Changeover Processes Machine Setup Time to Clean Process Vessels Tool Availability Time for Temperature Stabilization Time for Pressures to Equilibrate Tools Value Stream Mapping Supply Chain Mapping Standard Work Value Stream Mapping Poka-Yoke SMED Cell Manufacturing Product Wheels 5S

Dynamics of Process Manufacturing -Volume and Variety -Capital (Equipment ) Versus Labor -Processes are Difficult to Stop and Start -Setups and Changeovers are Complex -Inventory Focus – Finished Product versus WIP -Inventory Accessibility (Hidden WIP) -Material Flow Patterns Production Process Flow patterns are reversed between process and discrete Process Industries – Key Characteristics

14 Simple Process Industry Diagram Finished Products Packaging Processing 2 Processing 1 Raw Materials

Typically Fewer Raw Materials Dependent on Raw Natural Resources Equipment Typically Much Larger Equipment a Higher Impact on the Process High Degree of Product Differentiation Process Step based not Work Center based Summary – Key Characteristics of Process Industries

Identifying Wastes in Process Industries

Waste is the Major Principle of Lean and TPS - Identifying and eliminating waste is the key to raising productivity. Waste with Relationship to Costs - Equating Waste with Customer Value - Categorizing Waste People Material Time Identifying Wastes in Manufacturing

Categories of Waste -Waste of Overproduction -Transportation Waste -Waste of Time (Waiting Periods) -Processing Waste -Waste of Inventory -Waste of Movement -Wasted of Defective Material, Yield Loss Identifying Wastes in Manufacturing

Overproduction - Making more product than demand requires -Batch Size or Campaign Size Practices -Process Variations Transportation - All movement of materials within the manufacturing operation -Disconnected Material Flow -Specialty Storage Areas -Facility Design Categories of Waste

Time (Waiting Periods) – Time waiting for material to arrive -Material Delivery -Curing/Hold Time -Inspection Time -Start Up Time Categories of Waste

Processing – Wastes in the Process -Processing necessary to identify potential issues -Inspection -Testing -Laboratory Operations -Rework Operations Inventory – Technically all in-process inventory is waste -Minimize excess amounts -Synchronizing production steps -Rate Synchronizations -Bottleneck Issues -Leftover Material – Heels -Campaign Sizes Categories of Waste

Movement – People Movement, moving from station to station -Time to move through the facility -Operators moving from step to step Defect Material, Yield Loss – Out of spec materials to process or customer standards -Wrong Thickness -Incorrect Potencies -Fat Content -Quality Defects Categories of Waste

Major Lean Principle is Waste -Identifying and Eliminating Waste Key to Successful Lean Practices -Wastes can be detected in both discrete and process environments Wastes Can be Segmented into Categories Waste is anything that can be measured by value Value is also Categorized -Value to the Business -Value to the Customer Summary - Identifying Wastes in Process Manufacturing

Applying the Lean Tools in Process Manufacturing

There are a Variety of Tools or Practices to enable the Lean Concept Traditionally, Lean focused on Discrete Production Most of the Traditional Lean Tools can be Applied to Process Manufacturing Lean is a Concept, Practice and Philosophy

The Traditional Lean Tools are: -Mapping of your processes -Time Management -Continuous Improvement -Organization -Quality -Minimizing Errors -Problem Solving Lean Tools for Process

Value Stream Mapping – Visual Diagram -Process Steps -Flow of Materials, Activities and Time for Each Step Lean Tools for Process

Takt Time -Time Mapping -Time interval in which each process step must be completed to meet customer demand -Processing Time -Hold/Quality Time Kaizen -Japanese term for continuous improvement -Process of constantly looking for improvements in processes -Kaizen is a philosophy Lean Tools for Process

5S – Five Step Process for organizing all areas of the workplace Lean Tools for Process

Jidoka -One of the two Pillars -Philosophy of Quality -If a Quality Issue is detected, activities stop until it is resolved Lean Tools for Process

SMED – Single Minute Exchange of Dies -Philosophy of analyzing all steps to a changeover, setups -Minimize Time and Material Waste -Decreasing changeover time Poka-Yoke -Techniques for minimizing mistakes -Prevention of defective products, bad yields -Prevent equipment from being setup incorrectly -Sensors -Color Coding Lean Tools for Process

Five Whys – Always ask Why? -Philosophy of asking questions to solving a problem -Continue to ask questions -How did a problem occur? -Questions about the solutions so it is a sound solution Standard Work -Specific tasks to be performed in each production step -Operational sequence -Timing -Referred to as “SOP”s, Standard Operating Procedures Lean Tools for Process

TPM – Total Productive Maintenance -Practices of improving how is equipment is operated and maintained Lean Tools for Process

Cellular Manufacturing -Dividing the process into families that require similar steps -Improves Quality -Reduces Changeovers -Reduces Variability -Improves Throughput Heijunka -Production Leveling or Production Smoothing -Load Leveling -Product Wheel Kanban -Process for visually signaling what is needed -What needs to be produced to replace what the customer has purchased Lean Tools for Process

Just-In-Time -One of the two Pillars -Make What is Needed -Make it When it is Needed -Make the Exact Quantity Needed Lean Tools for Process

Lean Tools focus on: -Minimizing Waste -Minimizing Mistakes -Maximizing Utilization -Cost Effectiveness -Better Service to the Customer -Empowering Team Members These can be applied to any type of operation In Essence: Common Sense Business Practices Summary - Lean Tools for Process Manufacturing

QAD Lean Manufacturing

Supports Kanban and flow scheduling Enables tight inventory management Provides complete functionality to establish and execute Kanban processes Integrated visualization tool Most evolved suite of tools Uses the Power of QAD.NET QAD Lean Manufacturing

Buffer/Supermarket Data Identifies Details of Buffer Stock Calculations Kanban Master Maintenance

Kanban Process Workbench

PushPull

42 In many cases, organizations have not integrated Plant Operations into production business processes Plant Operations Challenges Manufacturing Process Shipping & Receiving Engineering Services Direct Materials Production Operators Quality Assurance Sales & Order Entry Production Planning & Scheduling Plant Operations

43 Align plant Operation with production’s goals and objectives The Goal Manufacturing Process Shipping & Receiving Engineering Services Direct Materials Production Operators Quality Assurance Sales & Order Entry Production Planning & Scheduling Plant Operations

Increases on-time delivery performance and responsiveness to customer needs Improves customer satisfaction by allowing for better fulfillment strategies Build to actual demand rather than making stock Reduces working capital by reductions in inventory Values of QAD Lean Manufacturing

Conclusion Midwest User Group Meeting

Lean Principles -JIT -Quality Process Industries Differentiators -Capital vs. Labor Wastes in Process Industries -Eliminating anything that decreases value Lean Tools for Process -Improve Quality -Adding Value QAD Lean Manufacturing -Build to actual demand -Inventory Management Lean is a Practice Summary - Lean for Process Manufacturing

Questions

© 2010 QAD Inc Midwest User Group Meeting 48