Companies must provide customers with world-class quality, delivery and service. Customers won’t accept anything less. The globalization of markets means they don’t have to accept anything less. Toyota Motor CorporationToyota Motor Corporation Sign in the Toyota Factory in Japan

The 5 Principles of Lean Identify the Value Stream –Defined from the customer’s perspective – Document so your organization understands in both a high and detail level your value streams Make Value Flow –Reduce all forms of Waste Wait time or “Que” time Non value-adding steps value- –The objective is continuous flow Pull from External and Internal Customers Provide only when needed

Optimize the Value Stream Remember, you are just a piece of that entire value stream Strive for Perfection Have the courage, wisdom, to continuously pursue and implement improvement opportunities The 5 Principles of Lean

Principles of Lean Resolute focus on the customer by providing: –Right parts –Right time –Right quantities …while reducing non-value added time in a team-based environment of continuous improvement

LEAN MANUFACTURING HOUSE GOAL : Continuously Reduce Cost Highlight Problem Area Build Quality Into Process Produce JIT Flexible Manufacturing Standardized Quality System Level Production Schedules Level Production Processes Level Manpower Requirements Machine Reliability What Is Needed When Needed Amount Needed Pass No Defects To The Next Customer Easy To Do It Right - Hard To Do It Wrong Build Quality Into The Process JIT JIDOKA HEIJUNKA No Value Added Value Added Necessary But No Value Added Production System Philosophy

Lean Thinking What does “Value Added” and “Non- Value Added” Mean?What does “Value Added” and “Non- Value Added” Mean? Well, lets ask ourselves the following: 1.What are our customers expecting from us… 2.What do we expect when we are the customer…

Lean Thinking A systematic approach to the elimination of Waste within the process… …by minimizing non-value added activities while standardizing value- added activities… …through the use of such concepts as: Cellular manufacturing, pull production to assembly lines, robust processes, quick set-up techniques,

Work vs. Waste Work Adds value Moves the process forward Waste Adds delay Adds cost

Waste 1.Overproduction - producing product ahead of schedule. 2.Waiting - workers or product waiting to be processed. 3.Transport - the movement of materials from one location to another. 4.Over processing - as a result of poor tool or product design. 5.Inventories - more material than the absolute minimum. 6.Movement - unnecessary movement by the workers. 7.Defects - scrap or rework. people 8.Untapped creativity, either forgotten or intentional, of the people in the workforce. Eliminate Sources of Waste

Over- Production u Producing over customer requirements, producing unnecessary materials, products.

Waste of Overproduction Value to Customer? Customer is not ready to pay or may never pay for the work done. See the signs: Stacks of Work in Process Old inventory To eliminate this type of waste –Establish a work flow sequence to satisfy the downstream customer –Create workplace norms and standards for each process –Create signal devices to prevent early processing

Waiting u Time delays, idle time. (Non value-added time)

Waste in Waiting (Time) Value to Customer? Customer does not pay us for time when no work is being done. See the signs: Workflow stoppages. Leaving the work area to go get someone or something. To eliminate this type of waste –Make sure that equipment and supplies are available. –Use Kanban to maintain the right level of supplies in the work area. –Do maintenance and setup external to process worktime. –Make sure resources are available for quick approval or eliminate redundant approvals and signatures. –Use man/machine charting to ensure optimization of operator’s time.

Transportation u Multiple, unnecessary and delay in handling.

Waste in Material Movement Value to Customer? Customer pays us to ship but pays us the same if we move it ten times back and forth across the warehouse or only once straight into the truck. Moving material is a IAC cost. To eliminate this type of waste –Make the distance over which something is moved as short as possible. –Eliminate temporary storage or staging locations. See the signs: Temporary stocking and staging locations Material movement without any value added step occurring in between

Over- Processing u Unnecessary processing steps or work elements, procedures. (Non value-added work)

Waste in Processing Value to Customer: Customer will not pay us to do work not included in his requirements. To eliminate this type of waste –Know customer requirements –Create workplace norms and standards that consistently meet customer requirements –Review processes and streamline or eliminate non value added steps whenever possible. See the signs: Repeating and verifying to make sure it is correct. Making it better than required. Example..Customer requires three wraps of tape but using four.

Inventory u Holding or purchasing unnecessary raw supplies, work-in-process and finished goods.

Waste of Inventory Value to Customer: Customer is not ready to pay or may never pay for the inventory. See the signs: Old or obsolete parts Supplies that never got used To eliminate this type of waste –Produce only enough to satisfy the requirements of the customer –Standardize work locations and the number of units per location (Kanban) –Ensure that Work In Process is used before more units are created (Kanban) –Use 5S to organize Note: Extra inventory can be process or personal. People keep extra supplies as a safety net. You may be purchasing items that are hidden throughout the facility. Extra inventory means you have more to manage. If you are looking for an item, you have to move extra inventory to find it.

Motion u Actions of people or equipment that do not add-value to the product.

Waste of Motion Value to Customer: Customer’s do not pay us for movement and handling that do not add value. All motion should add value. To eliminate this type of waste –Flow work processes in a way that reduces motion. –Arrange materials to be accessible at the point of use. –Simplify standardized work sequence to eliminate unnecessary movements –Apply ergonomics. See the signs: Lots of walking or reaching Going to get things

Correction u Producing a part that is scrapped or requires rework.

Waste of Correction Rework!!!! Value to Customer: Customers only pay for product meeting their requirements. Even worse, if these defects escape, it greatly dissatisfies our customer. To eliminate this type of waste –Establish standard work procedures –Create and post job aids –Mistake Proof processes See the signs: Hold material Scrap Double or triple verification steps

Lean Implementation Requires these basics… Document the process Understand the process Manage the process Improve the process Monitor the process

A Toyota view: “We get brilliant results from average people managing brilliant processes. We observe that our competitors often get average (or worse) results from brilliant people managing broken processes.”