Learning to See Waste

Everything you do in your Company is accomplished through a process. Order Materials Setup Equipment Issue paychecks –Even the smallest activities are accomplished through processes.

 Definition : Process: A series of actions or steps toward achieving a particular end. 1. Scope Starting point and ending point. 2. Purpose: Reason why it is being performed. 3. Steps: Actions performed by operators or equipment. 4. Sequence: Order in which the actions are performed. 5. Operators: Operators or equipment that perform the actions. 6. Outcome: A specific result, product or state. 7. Customer: Next process, requestor or end user. Characteristics :

TYPES OF WASTE Over- Production Over Processing Material Movement Waiting Inventory Correction Motion + Underutilization of Employees !!! Taichi Ohno’s Seven Forms of Process Waste

Some Causes Large Batches Poor Communication Long Changeover Time Low Uptimes Lack of Consistent Schedules Forecasts vs. Customer Demand Definition:  Producing More Than Needed  Producing Faster Than Needed  Producing Sooner than Needed Some Characteristics Inventory Stockpiles Extra Racks, Containers Building Ahead Long Lead Times Extra / Oversized Equipment Unbalanced Material Flow Excessive Capacity / Investment Safety Concerns

Some Causes Incapable Processes Incapable Suppliers Insufficient Training Inadequate Tools / Equipment Poor Layouts / Handling Issues Processes Not Under Control High Inventory Levels Some Characteristics Repair and Rework Areas Increased Inspection Missed Shipments / Deliveries Poor Customer / Supplier Relations Reactive Organization Lost Capacity Scrap Premium Freight Reactive Organization Definition: Repair of a Product or Service to Fulfill Customer Requirements

Some Causes Large Lot Processing Inconsistent Schedules Long Changeover Times Lack of Work Place Organization Improper Facility Layout Excess Inventory Definition:  Inconsistent Material Flow.  Unnecessary Movement of Parts. Some Characteristics Multiple Storage Locations Complex Material Flows Wasted Floor Space Large Tanks & Warehouses Inventory Errors Unbalanced Drive Schedule Heavy Duty Barriers & Protection Devices

Definition: Effort Which Adds No Perceived Value to a Product/Customer. Some Characteristics Bottlenecks Lack Boundary Samples or Clear Customer Specifications Endless Refinement Redundant Approvals Extra Copies / Excessive Information Excessive approvals Redundant processes Reports with too much information Reports that you don’t use Some Causes Engineering Change w/o Process Change Decision Making at Inappropriate Levels Ineffective Policies & Procedures Lack of Customer Input Concerning Requirements Engineering Changes

Some Causes Incapable Processes Uncontrolled Bottlenecks Incapable Suppliers Long Changeover Times Local Optimization Inaccurate Forecasts Sub-optimized Raw Material Ordering Efficiency Measures Definition:  Any Supply in Excess of Customer Requirements.  Any Supply which is not having value added to it. Some Characteristics FISH instead of FIFO SMOI Long Lead Time for Engineering Changes Off Line Storage Area Extra Material Handling Resources (People, Equipment, Racks, Storage, Tanks, Space / Systems) Slow Response to Customer Demands Low Inventory Turns

Some Causes Inconsistent Work Methods Long Machine Changeover Times Downtime/Breakdowns Poor Machine / People Effectiveness Lack of Proper Machines Some Characteristics People Waiting for Machines Machines Waiting for People People Waiting for People Waiting for Materials Unbalanced Operations Lack of Concern for Breakdowns Unplanned Equipment Downtime Definition:  People or parts waiting for a work cycle to be completed.  Idle time resulting when two dependent variables are not fully synchronized.

Definition: Any movement of people that does not add value to the product or service. Some Causes Poor Housekeeping Equipment, Office & Plant Layout Lack of Work Place Organization Poor Machine / Operator Effectiveness Inconsistent Work Methods Large Batch Sizes 20 ft. Hint: Don’t confuse motion with work. Some Characteristics Looking to Find Tools Walking for Materials Excessive Reaching / Bending Walking Around Things Moving Thing Out of the Way Machines / Material too Far Apart

TYPES OF WASTE Over- Production Over Processing Material Movement Waiting Inventory Correction Motion Can you spot examples in your work area? + Underutilization of Employees !!!

Value Stream Mapping: A descriptive analysis that helps you to see and understand the complete flow of material and information towards the final product. “Whenever there is a product for a customer, there is a value stream. The challenge lies in seeing it.” Womack and Jones

Why is Value Stream Analysis so important for Lean Processing?  Supports process thinking.  Takes a big picture view – improve the whole vs optimize individual steps.  Shows the connection of material, people, and information flows.  Standard for management to document the whole process.

 Single value stream – factory order to ship  Multi-value stream – order to cash  Enterprise value stream – design, sales, order, produce, ship, bill

Supplier Customer Raw-material inventory Finished-goods inventory Product delivery Supply-chain data Raw- material shipments Product- demand data Process 1 data Process 2 data Process n data Inventory quantity Inventory quantity Inventory quantity Inventory quantity II Raw-material inventory Finished-goods inventory II Process 1Process 2Process nShipping

Supplier Customer Product delivery Supply-chain data Demand- pattern data Process 1 data Process 2 data Process n data Inventory quantity Inventory quantity Inventory quantity Inventory quantity Production control Production schedule Production schedule Production schedule Forecasts Raw-Material Forecasts Orders Raw-material orders Raw- material shipments II Raw-material inventory Finished-goods inventory II Process 1Process 2Process n Shipping NVA VA NVA VA NVA Totals

Completed Future-State Map Supplier Customer Product delivery Raw-material supermarket Process 1Process 2Process nShippingProcess 3 SupermarketIP kanban ChangeoverDowntime Std Work Scrap Std Work C/T reduction Prod Control Daily orders Customer requirement Raw- material shipments max. 5 pieces FIFO max. 5 pieces FIFO

Supplier Customer Product delivery Raw-material supermarket Finished-goods supermarket Process 1Process 2Process nShippingProcess 3 SupermarketIP kanban ChangeoverDowntime Std Work Scrap Std Work C/T reduction Prod Control Daily orders Customer requirement Raw- material shipments Customer Loop Supplier Loop Process Loop 1Process Loop 2

Current-state mapping Lean future-state design Implementation planning & execution  Map the current value stream showing the material and information flows  Measure / observe lean-implementation process data  Identify Opportunities for Improvement  Design the future lean state  Map future-state material & information flows  Segment the flow into “loops” for implementation planning  Develop implementation plan with schedule, owners and measurable milestones and results  Execute plan Top-Level Mapping, Lean Design and Implementation Process Map

 Brown Papers  Spaghetti Diagram (product, people & information movement)  Swim Lane  Standard Work Layout

 Describes a process in a more informal way  Usually done in groups or teams  Shows the “big picture”  Is high touch, low-tech  Identifies strengths and opportunities  Captures the complexity and disconnects of key operational issues  Gets stakeholders involved in process

Yes (10%) No (90%) No (70%) Yes (30%) Order Scheduling Process Strengths Receive copy of Customer Order Report Customer Order Prioritization Process Print machine schedule Develop labor rqmts for schedule OT Graph OT Required? Overtime Scheduling Process 2 1 Call Area Manager to schedule overtime Enter order info. into scheduling system Orders > Capacity? Enter labor rqmts into scheduling system Opportunities Builders: Reviewers Print schedule and distribute hours 2 hours1 hour hours

Time = 88 Days From Request to Configured-to-User … Suppose the “Users” Were Satisfied?  Frictional Interfaces  Too Many Steps  Lots of Rework “Brown Paper” Flow Chart

New (“To-Be”) Flow  Time = 11 to 17 Days (varies w/user needs)  Saved US$1.3M; 784K Was Annual Labor  Flow Simplified  Standardized Configurations  Steps Removed  Friction Removed  Decisions Pushed to Lowest Level Real Benefits From One BE Event including Robust Follow-Up & Sustainment Real Benefits From One BE Event including Robust Follow-Up & Sustainment

Business Travel Expense Reporting Gathers receipts Enters in Excel spreadsheet Tapes receipts to printer paper Prints 2 copies of Excel Spreadsheet Photocopies Excel spreadsheet and receipts. Puts Expense Report in outgoing mail. Files 2 nd copy. Mail goes to Accounting. AP clerk opens and sorts mail. AP clerk verifies numbers, receipts and policy compliance on Expense Report. 25% are returned for correction. AP Clerk puts in mail to Payroll. Payroll enters data into payroll system. Payment appears on employee’s next check. Sales Accounting Payroll

Time Line VA NVA 10 min20 min3 min5 min3 min

Time Line VA NVA 5 min 3 min 300 min12 min 10 min

Time Line VA NVA 2 min 0 min / 480min Yes No 300 min2 min Totals 670 / 1150 min 5 min

A Standard Worksheet is : A scaled diagram of a work area that : shows the locations of all relevant equipment and work steps Identifies work steps in sequential order and travel path of worker. Most useful when designing jobs or work cells.

Date:Page of Manager Or Team LeaderArea Or Process NamePerson Preparing This Sheet Quality Check Safety Precaution Standard Work In Process Takt Time Required Output Net Time Operator Number Core Boring Raw Material B10 B20 B30 B40 B50 Inspection Finished Goods A S I S M A P H. Davidson B. Foot

Date:Page of Manager Or Team LeaderArea Or Process NamePerson Preparing This Sheet Quality Check Safety Precaution Standard Work In Process Takt Time Required Output Net Time Operator Number Core Boring Raw Material B10 B20 B30 B40 B50 Inspection Finished Goods H. Davidson A S I M P R O V E D M A P B. Foot

 Focus on the physical work steps that are performed, not the outputs.  Maps do not loop back because the time marches on. ◦ The customer is still waiting for the output. ◦ Work time cannot be erased and redone.  Gather factual data based on current observations.